MayDay! MayDay!

Whats all the fuss about? Well it's probably not much of a surprise to you at this stage that the real estate market in Toronto is still performing quite well! So maybe this should be a call out to the winter weather here in May?!? Check out my May 2013 Toronto Real Estate Newsletter...

Quiet Jets On Our Island?

Porters plans to add new, quieter, larger jets to their Island Airport fleet...what are your thoughts? How do the condo owners feel?

Some possible issues:
- Environmental issues to extend the runways (infill);
- Noise pollution as well as air pollution from the non-whisper jets from other private and pubic jets (other jets companies will have a precedent to apply to land their older, louder jets on the island).
- More air traffic that will effect condo owner's views?

www.porterplans.com

April 2013 Toronto Real Estate Newsletter

Market Update
The MEDIA...I am constantly being told by friends and contacts that the our real estate market values are down. You will see below that it is not. It is so important to analyse what you hear and see from the media (and sometimes outright ignore poor reporting of the story). Sales are down, values are up over this time last year. Simple economics will tell you that when sales are down and values are up something is happening, that something is that there are far more buyers than sellers...there is “Demand”. To further peel back the stats, freehold housing is up even more, condos are slower but good product moves well. It seems the key driving factor behind the market is that buyers have embraced the fact that there is a finite amount of land and that there is no room to build more houses in the downtown area.

Here Is The Latest...
There were 7,765 transactions through the TorontoMLS system in March 2013 – down 17 per cent compared to 9,385 transactions in March 2012. While the year-over-year dip in March sales followed the trend that has unfolded since midway through 2012, it is also important to note that the Good Friday holiday was in March this year versus April in 2012.

Generally speaking, there are fewer sales reported on statutory holidays and weekends. In the first quarter of 2013, sales amounted to 17,678 – down by 14 per cent compared to Q1 2012.
“Home ownership remains affordable for a household earning the average income in the Greater Toronto Area. There are many willing buyers in the marketplace today. While some households have put their decision to purchase on hold as a result of stricter lending guidelines or the additional Land Transfer Tax in the City of Toronto, other households simply haven’t been able to find the right house due to a shortage of listings in some market segments,” said Toronto Real Estate
Board President Ann Hannah.

The average selling price in March was $519,879 – up by 3.8 per cent compared to March 2012. The average price in Q1 2013 was $508,066 – up by 3.2 per cent compared to the first quarter of 2012.
“The average selling price and the MLS® Home Price Index Composite Benchmark was up on a year-over-year basis across most home types, especially in the low-rise market segments where supply remains an issue. TREB’s average price forecast  for 2013 remains at $515,000, representing a 3.5 per cent annual rate of growth,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
                                                                                                                                         Source: TREB

March 2013 Toronto Real Estate Market Updarte

Market Update
I have noticed a pick up in activity within the condo market, it is a bit of a surprise as we saw a decline last May through to the end of the year. However, our “spring” market (which begins well before the season of spring) has seen a pick up in activity. The 600-1 mil range is still ripping along within the core. The million plus has actually picked up a bit as well, after a quieter 2012.
Here Is The Latest....
5,759 sales through the TorontoMLS system in February 2013 – a decline of 15 per cent in comparison to February 2012. It should be noted that 2012 was a leap year with one extra day in February. A 28 day year-over- year sales comparison resulted in a lesser decline of 10.5 per cent.
The average selling price for February 2013 was $510,580 – up two per cent in comparison to February 2012.
“The share of sales and dollar volume accounted for by luxury detached homes in the City of Toronto was lower this February compared to last. This contributed to a more modest pace of overall average price growth for the GTA as a whole,” said Toronto Real Estate Board (TREB) President Ann Hannah.
“Stricter mortgage lending guidelines that precluded government backed mortgages on homes sold for over one million dollars and the City of Toronto’s additional upfront land transfer tax arguably played a role in the slower pace of luxury detached home sales,” added Ms. Hannah.
The MLS® HPI Composite Benchmark price covering all major home types eliminates fluctuations in price growth due to changes in sales mix. The Composite Benchmark price was up by more than three per cent on a year-over-year basis in February.
“We will undoubtedly experience some volatility in price growth for some market segments in 2013. However, months of inventory in the low-rise market segment will remain low, resulting in average price growth above three per cent for the TREB market area this year. Our current average price forecast is $515,000 for all home types combined in 2013,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

“416” Area Code : Average sale price: $552,014 ($670 less than this time last year)

Price Up, Sales Down This Fall - November 2012 Market Assessment

Price Up, Sales Down This Fall

So what does this mean? To pull out the crystal ball once again...condo sales are slower, we will likely be looking at a 10%+ decline in value once the numbers are in for the entire fall. On top of this the luxury market has been slow all year, the exception is the 1.5 million dollar multi-residential homes in places like the Annex, which are very strong. The reason for this is that many purchasers are taking advantage of the low interest rates and some have decided to use the home as a principal residence to further lower living expensive and afford a very established neighbourhood. So, what this leaves us with is the 600k-1 million range, which is still moving well. Less buyers on the lookout but good product may have a couple of offers on an offer night...the difference being the sky rocketing sale over asking isn’t prevalent. Note: this is appears to be a Media driven slow down... except for to some extent the condo market, which has seen investors getting out. 

October Overview
6,896 transactions through the TorontoMLS system in October 2012 – a decrease of 7.1 per cent compared to October 2011. There were two more business days in October 2012 versus October 2011. On a per business day basis, transactions were down by 15.6 per cent.*
“Sales have decreased in the second half of this year compared to 2011, especially since the onset of stricter mortgage lending guidelines at the beginning of July. The prospect of higher monthly mortgage payments due to the reduced maximum amortization period has prompted some households to delay their home purchase,” said Toronto Real Estate Board (TREB) President Ann Hannah.
The average selling price for October transactions was $503,479 – up 6.2 per cent compared to October 2011. The MLS® Home Price Index composite benchmark price, which allows for an apples-to-apples comparison in terms of home attributes, was up by 5.1 per cent.
“We continue to see price increases well above the rate of inflation. Active listings have remained low from a historic perspective, so substantial competition between buyers still exists, especially for low-rise homes,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “It should be noted, however, that the annual rate of price increase has been edging lower over the past few months as the market has gradually become better supplied,” continued Mercer. 

*NOTE: The majority of transactions are entered into the TorontoMLS system on business days. There was a mismatch of two business days in September and October of 2012 compared to the same months last year. This is why sales on a per business day basis were noted in releases dealing with these months. The business day anomaly between the two months has now balanced out. 

In addition, CMHC has reported: Canada’s new home market is expected to continue to moderate in the last quarter of 2012 and into 2013. Meanwhile, activity in the existing home market is expected to hold steady, leading to house price growth in line with or slightly below inflation.
Source: TREB

Should We Stop Encouraging Home Ownership? A CBC Article

I just came across this article. I thought it was a fantastic read. It peels back the layers of what factors play into our focus on home purchasing versus renting...

Should we stop encouraging home ownership?

Home ownership is often connected to the notion of living the "American dream." But it is as much a part of Canadian identity as it is in the U.S.
Indeed, statistics show that the percentage of home ownership in Canada is edging close to 70 per cent, which is actually higher than the ratio south of the border at the moment – 65.4 per cent, a 15-year low, according to the most recent data. Many economists believe the Canadian government has played an active role in spurring home ownership, particularly by forming the Canada Mortgage and Housing Corporation back in 1946.
Primarily set up to address Canada's postwar housing shortage, the Crown corporation is now Canada's top mortgage insurance provider and has facilitated the purchase of millions of homes. But not all are convinced of the merits of pushing home ownership and some people question whether that ideal has been romanticized to the detriment of fiscal prudence.
"I don't know that home ownership should be a right and that it should be backed by taxpayer dollars and kind of be the prime mandate of a Crown corporation," says Ben Rabidoux, creator of the Economic Analyst blog, which looks into housing and mortgage trends.
Over at York University's Schulich School of Business, finance prof Moshe Milevsky also believes that too much is sometimes made of owning a home.
"The way I look at it is, I tell people your house is a big fridge," Milevsky says. "Are you romantically attached to your fridge? Do you plan to sell your fridge in 20 years and retire on it? No, it's a fridge, you store things in there.
"It's a place to live. We need it. You enjoy the benefits of it, backyard and so on, but it has to be done in perspective." Milevsky feels there has been a serious rethink now, especially in light of the U.S. housing crash six years ago, over whether home ownership makes sense for a mobile workforce that has to deal with fluctuating property values.
"If you're in your 20s or 30s, not sure what you're going to be doing for a living, and your job is relatively risky, the last thing you want to do is pile on risk," Milevsky suggests.
"But if you're a 42-year-old teacher, have two kids, and your husband has a secure job for some government agency and you know you'll be here for next 25 years, OK, maybe home ownership makes sense because your personal balance sheet is a lot safer, it's a lot more secure.
"It has to be viewed as a portfolio transaction."

Cultural phenomenon

Home ownership in North America is much more of a cultural phenomenon than it is in other parts of the world. About 70 per cent of Europeans rent rather than own, and in some South American countries people don't buy a house unless they have 70 to 80 per cent of the money.
Michael Haan, Canada research chair in population and social policy at the University of New Brunswick, said the differences are in part historical.
In parts of Europe, there was a landed aristocracy where individuals weren't allowed to own homes. But part of the lure of North America — the "New World" — was the promise of free land.
"So what do you do with free land? Well you have to build a house on it. So that mentality has prevailed over time," Haan says.
Also, disposable income in European cities like Paris, London and Amsterdam is quite a bit lower than in North America, and the price of housing in Europe is quite a bit higher.
"So the average individual probably finds housing to be out of reach," Haan says. "Therefore the stigma of not being able to own a home is much lower because it seems everyone within a certain social class is unable to afford a home.
In Canada, after the Second World War, the federal government wanted to help returning soldiers and young families enter the housing market, which is when CHMC came in to being.
Its role was to provide mortgage insurance so lenders wouldn't lose their shirts on a property. But over time, says Rabidoux, "we're asking taxpayers to basically take on the risk to allow people to jump into ownership with the risk being held by somebody else. And I'm not sure that's sound policy."

Inflate house prices

In a recent speech at CMHC's annual meeting, CEO Karen Kinsley said the corporation's housing finance programs "are essential components of Canada's strong and well-functioning housing finance system."
CMHC provides a range of housing options to Canadians, she said, and contributes to a stable housing system in part by addressing gaps in the marketplace left by private sector mortgage insurers.
She also argued that the corporations securitization programs lead to more choice and price competition for Canadian borrowers, adding that these programs and loan insurance have contributed $16 billion to government coffers through the income tax and net income that CMHC passes along.
Kinsley pointed out that the arrears rate of all CMHC-insured loans remains "historically low," and that a recent analysis of their portfolio "confirms that CMHC borrowers are credit-worthy" and that the corporation maintains strong reserves to cover those who fail to meet their mortgage obligations – twice the minimum level required by the Office of the Superintendent of Financial Institutions.
Still, Rabidoux, for one, suggests the CMHC has "absolutely been the key driver in the boom in the ownership rate in Canada," and that this is having an inflationary impact on everyone.
"Without that government support that's allowing people with very little down to jump into the ownership pool, you just would not see the ownership rate expanding the way that it is," he argues. He also believes the CMHC mandate is inherently self-defeating.
"They don't provide affordable housing, they provide affordable financing. And when all you do is provide affordable financing, you inflate house prices."
With CMHC loan mortgage insurance, a prospective homebuyer need only pay five per cent down on a home. Banks will secure a loan because it will be covered by the CMHC insurance.
"Now I don't think that's a healthy dynamic necessarily," Rabidoux says. "I don't think that expanding our ownership rate indefinitely is a good thing."
While not against home ownership per se, Rabidoux believes that at some point housing starts will fall substantially, and that more homes are being built than demographics would warrant.
The problem is the Canadian economy is more reliant on the current housing boom to generate GDP and labour market growth than ever before, Rabidoux says.
"So in my mind what's going to end up happening is when this whole thing turns to normalcy there's going to be a period of readjustment in the economy where there's going to be unfortunately high unemployment and persistently high unemployment.
"What happens when you have a high home ownership rate is it reduces worker mobility and that's a fairly well known phenomenon. So there's that danger as well."

By Mark Gollom

Original Article

15 Brunel Court #626 Condo For Sale

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Virtual Tour: http://www.Obeo.com/746951

  

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