Canadian residential real estate future is solid
OTTAWA – January 23, 2008 – The Canadian housing market in 2007 set a number of MLS® sales records, and the re-sale housing market is expected to remain at near record sales levels in 2008, according to The Canadian Real Estate Association.
Annual residential MLS® sales activity totaled 520,747 units in 2007, up 7.6 per cent from 2006 levels. This was the largest annual sales growth since 2002, and the first time transactions via the MLS® systems of real estate boards in Canada have surpassed 500,000 units sold in one year.
“The results in 2007 show the strength and the affordability of the Canadian residential market,” says CREA President Ann Bosley. “The statistics again show just how different the housing markets are in Canada and the United States.
Canadian REALTORS® know that Canadian mortgage lenders correctly see that home prices will continue rising. We know there is still strong competition for mortgage business in Canada.”
Three key economic ingredients will keep Canada’s housing market on a different track from the United States. One is consumer confidence, the second is employment, and third is affordable interest rates. The Bank of Canada cut interest rates on January 22nd because of weaker prospects for Canadian economic growth in 2008. “Those lower interest rates will also help temper the erosion in housing affordability due to additional home price increases,” Bosley added. The Bank of Canada is expected to cut its trend-setting rate again in March.
CREA’s Chief Economist Gregory Klump says that the Canadian housing market in 2008 will pull back from the breakneck pace set in 2007, but this is still forecast
to be the second-busiest year on record in almost all provinces, with residential unit sales reaching an estimated 512,705 units.
Average prices for MLS® home sales are expected to keep setting records in 2008, although prices will increase more slowly as the market becomes more balanced. In most provinces, the market will nevertheless remain historically tight – with the tightest markets being in Saskatchewan and Manitoba. Nationwide, the
average residential price is forecast to increase 5.5 per cent to about $322,700. According to CREA’s Chief Economist, a larger supply of listings will be one of the balancing influences in 2008. New listings are forecast to rise in all provinces except Alberta, where they’re expected to retreat after spiking in late 2007.
“The challenge for the Canadian housing market will be the extent to which employment and consumer confidence may be affected by a slowdown in the U.S. economy,” Ann Bosley adds.
“Slower job growth, not massive layoffs, are forecast for Canada in 2008,” CREA’s Chief Economist Gregory Klump adds. “Consumer confidence may be sideswiped by stock market volatility, and reports that chances of a U.S. economic recession will put the brakes on the Canadian economy. With slower job growth, a low unemployment rate and the absence of widespread layoffs, consumer confidence will bounce back. The domestic economy and the housing market will weather the sub-prime fallout with the help of lower interest rates”.
Wednesday, January 30, 2008
Tuesday, January 29, 2008
City property taxes up 3.75%
2008-01-26 00:00:00.0
By Paul Moloney
city hall bureau
Toronto homeowners will be facing a 3.75 per cent property tax hike this year.
City officials will roll out an $8 billion spending budget for 2008 on Monday that sources say calls for a 3.75 per cent increase – almost identical to last year's 3.8 per cent. On the average home, that translates to about $80 extra.
The perennially cash-strapped city is presenting a balanced budget this year, thanks to a land-transfer tax on home purchases that goes into effect next Friday.
"Unlike in previous years, we want to present a balanced budget on Monday," said Councillor Joe Mihevc.
"It will be the entire budget, not one with a gaping hole."
But the city must pay for many social services, and an economic downturn could quickly derail any budget if welfare rolls rise and the city finds itself paying out more.
Savings that were used to cover social services costs have nearly run out and need to be built back up, said Shelley Carroll, chair of the budget committee. A reserve fund used for that purpose was tapped for $31 million last year and is down to $2.7 million.
"No one wants to end up in a recession, but what we've seen in the last while is a wake-up call that one of those can happen, and that's why you have to have reserves," she said.
Still, this year's budget process is a big change from past years, when the city opened its budget review period not knowing where it would find $300 million or so needed to cover increases in staff wages and materials, debt repayment costs and service enhancements. Last year's budget was $7.8 billion.
The city ended up pleading each year for a financial bailout from the provincial government. The bailouts have averaged $150 million a year over the past five years.
Together with raiding reserves, hiking property taxes and trimming costs, the 11th-hour assistance has allowed the city to scrape by each year.
The proposed solution includes the province taking back social service costs that had been downloaded on the city.
A report on that is expected in April or May.
Municipal politicians have argued the city needed new revenues to take pressure off the property tax, a wish the province granted through changes to the City of Toronto Act. That allowed the city to bring in the land transfer tax, as well as a vehicle registration fee.
The new revenue streams – $175 million this year in total – aren't enough to balance the budget. However, in December the province announced transit funding that will yield $160 million to $200 million for the city.
While the new provincial money was for infrastructure, Toronto has won the right to transfer a chunk of it to the operating budget.
Torstar Syndication Services
Reprinted from Toronto Star, in the "GTA" section.
By Paul Moloney
city hall bureau
Toronto homeowners will be facing a 3.75 per cent property tax hike this year.
City officials will roll out an $8 billion spending budget for 2008 on Monday that sources say calls for a 3.75 per cent increase – almost identical to last year's 3.8 per cent. On the average home, that translates to about $80 extra.
The perennially cash-strapped city is presenting a balanced budget this year, thanks to a land-transfer tax on home purchases that goes into effect next Friday.
"Unlike in previous years, we want to present a balanced budget on Monday," said Councillor Joe Mihevc.
"It will be the entire budget, not one with a gaping hole."
But the city must pay for many social services, and an economic downturn could quickly derail any budget if welfare rolls rise and the city finds itself paying out more.
Savings that were used to cover social services costs have nearly run out and need to be built back up, said Shelley Carroll, chair of the budget committee. A reserve fund used for that purpose was tapped for $31 million last year and is down to $2.7 million.
"No one wants to end up in a recession, but what we've seen in the last while is a wake-up call that one of those can happen, and that's why you have to have reserves," she said.
Still, this year's budget process is a big change from past years, when the city opened its budget review period not knowing where it would find $300 million or so needed to cover increases in staff wages and materials, debt repayment costs and service enhancements. Last year's budget was $7.8 billion.
The city ended up pleading each year for a financial bailout from the provincial government. The bailouts have averaged $150 million a year over the past five years.
Together with raiding reserves, hiking property taxes and trimming costs, the 11th-hour assistance has allowed the city to scrape by each year.
The proposed solution includes the province taking back social service costs that had been downloaded on the city.
A report on that is expected in April or May.
Municipal politicians have argued the city needed new revenues to take pressure off the property tax, a wish the province granted through changes to the City of Toronto Act. That allowed the city to bring in the land transfer tax, as well as a vehicle registration fee.
The new revenue streams – $175 million this year in total – aren't enough to balance the budget. However, in December the province announced transit funding that will yield $160 million to $200 million for the city.
While the new provincial money was for infrastructure, Toronto has won the right to transfer a chunk of it to the operating budget.
Torstar Syndication Services
Reprinted from Toronto Star, in the "GTA" section.
Tuesday, January 22, 2008
Be Mortgage Savvy in 2008
TORONTO, Jan. 22 /CNW/ - The Bank of Canada's decision today to cut its key interest rate by a quarter point comes at a time when a lot of Canadians are wondering how current trends in the overall economy will impact their bottom line. For most of us, our home is our biggest investment and many are reading the headlines wondering what, if anything, they should do with their mortgage.
Gary Siegle, regional manager with Invis suggests some helpful approaches for those who are thinking of buying real estate soon.
For homebuyers looking at getting a variable-rate mortgage, Siegle asserts that this is a good approach in the current interest rate environment. Variable rate mortgages have historically offered greater interest savings over the long term but require homeowners to keep an eye on interest rate trends.
Not sure if you should "lock in" your monthly payment? A variable-rate mortgage will allow you to monitor rates while having the option to convert to a fixed-rate mortgage at a later date.
For homebuyers wanting to go with a fixed rate, this is the mortgage strategy preferred by most borrowers (72 per cent according to a 2007 study by the Canadian Association of Accredited Mortgage Professionals), as it offers stability in a shifting interest rate environment.
Siegle notes that rates on fixed mortgages have been fairly steady in recent weeks, although he adds that mortgage shoppers can't go wrong with a mortgage pre-approval with a rate hold. "If rates drop, you'll benefit from the new, lower rate. If rates on fixed mortgages rise during the rate hold, you still have your original lower rate." A mortgage broker will often be able to obtain a rate hold for a 120 day period.
Gary Siegle, regional manager with Invis suggests some helpful approaches for those who are thinking of buying real estate soon.
For homebuyers looking at getting a variable-rate mortgage, Siegle asserts that this is a good approach in the current interest rate environment. Variable rate mortgages have historically offered greater interest savings over the long term but require homeowners to keep an eye on interest rate trends.
Not sure if you should "lock in" your monthly payment? A variable-rate mortgage will allow you to monitor rates while having the option to convert to a fixed-rate mortgage at a later date.
For homebuyers wanting to go with a fixed rate, this is the mortgage strategy preferred by most borrowers (72 per cent according to a 2007 study by the Canadian Association of Accredited Mortgage Professionals), as it offers stability in a shifting interest rate environment.
Siegle notes that rates on fixed mortgages have been fairly steady in recent weeks, although he adds that mortgage shoppers can't go wrong with a mortgage pre-approval with a rate hold. "If rates drop, you'll benefit from the new, lower rate. If rates on fixed mortgages rise during the rate hold, you still have your original lower rate." A mortgage broker will often be able to obtain a rate hold for a 120 day period.
Thursday, January 17, 2008
Unseasonably High Price Appreciation and Record-Breaking Activity Cap Canada’s Real Estate Market in 2007
TORONTO, January 8, 2008 – Canada’s real estate market posted significant gains in the fourth quarter of 2007 and showed little sign of the traditional seasonal slowdown. Average house prices continued to increase in the fourth quarter with many markets experiencing double-digit gains, according to a House Price Survey report released today by Royal LePage Real Estate Services.
Of the housing types surveyed, detached bungalows increased to $337,555 (+11.6 %), followed by standard two-storey properties, which rose to $399,738 (+11.3%), and standard condominiums, which increased in price to $240,395 (+11.7 %), year-over-year.
“The fourth quarter 2007 was surprisingly strong, with unseasonably high price increases and unwavering demand,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. “The strength of the market was apparent throughout the country, largely due to positive economic fundamentals. The value and export-demand for our natural resources has underpinned high employment rates, providing Canadians with confidence in the future stability of their jobs and their local residential real estate markets.”
The impact of the rise of Canada’s dollar to parity with the US dollar was mitigated by the end of the fourth quarter, as the manufacturing sectors in Ontario and Quebec continued to adjust to the dollar’s appreciation. Buyer activity levels in Central Ontario and Quebec remained strong and steady through the fourth quarter. In fact, Toronto displayed high levels of home buying activity in the fourth quarter, despite the city’s rising house prices, partly related to the introduction of a new land transfer tax that will be implemented on January 1, 2008.
Toronto’s real estate market shattered all previously held records for unit sales in 2007. The momentum from the year’s first three quarters carried over to the end of the year, as robust buyer activity pressured average house prices upwards.
The Royal LePage Survey of Canadian House Prices is the largest, most comprehensive study of its kind in Canada, with information on seven types of housing in over 250 neighbourhoods from coast to coast. This release references an abbreviated version of the survey, which highlights house price trends for the three most common types of housing in Canada in 80 communities across the country. A complete database of past and present surveys is available on the Royal LePage Web site at www.royallepage.ca, and current figures will be updated following the end of the fourth quarter. A printable version of the fourth quarter 2007 survey will be available online on February 15, 2008.
Housing values in the Royal LePage Survey are Royal LePage opinions of fair market value in each location, based on local data and market knowledge provided by Royal LePage residential real estate experts. Historical data is available for some areas back to the early 1970s.
Of the housing types surveyed, detached bungalows increased to $337,555 (+11.6 %), followed by standard two-storey properties, which rose to $399,738 (+11.3%), and standard condominiums, which increased in price to $240,395 (+11.7 %), year-over-year.
“The fourth quarter 2007 was surprisingly strong, with unseasonably high price increases and unwavering demand,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. “The strength of the market was apparent throughout the country, largely due to positive economic fundamentals. The value and export-demand for our natural resources has underpinned high employment rates, providing Canadians with confidence in the future stability of their jobs and their local residential real estate markets.”
The impact of the rise of Canada’s dollar to parity with the US dollar was mitigated by the end of the fourth quarter, as the manufacturing sectors in Ontario and Quebec continued to adjust to the dollar’s appreciation. Buyer activity levels in Central Ontario and Quebec remained strong and steady through the fourth quarter. In fact, Toronto displayed high levels of home buying activity in the fourth quarter, despite the city’s rising house prices, partly related to the introduction of a new land transfer tax that will be implemented on January 1, 2008.
Toronto’s real estate market shattered all previously held records for unit sales in 2007. The momentum from the year’s first three quarters carried over to the end of the year, as robust buyer activity pressured average house prices upwards.
The Royal LePage Survey of Canadian House Prices is the largest, most comprehensive study of its kind in Canada, with information on seven types of housing in over 250 neighbourhoods from coast to coast. This release references an abbreviated version of the survey, which highlights house price trends for the three most common types of housing in Canada in 80 communities across the country. A complete database of past and present surveys is available on the Royal LePage Web site at www.royallepage.ca, and current figures will be updated following the end of the fourth quarter. A printable version of the fourth quarter 2007 survey will be available online on February 15, 2008.
Housing values in the Royal LePage Survey are Royal LePage opinions of fair market value in each location, based on local data and market knowledge provided by Royal LePage residential real estate experts. Historical data is available for some areas back to the early 1970s.
Tuesday, January 8, 2008
Condo Sales Bring 2007 to a Strong Finish!
Source: Toronto Real Estate Board
TORONTO, January 7, 2008 -- Brisk condo sales in December brought the 2007 Greater Toronto Area resale housing market to a strong finish, Toronto Real Estate Board President Maureen O'Neill announced today.
“Typically condominium apartment transactions comprise just over 20 per cent of total sales but in December they accounted for more than a quarter of resale activity,” said Ms. O’Neill. “Condos are often more affordable than other housing options and they show particularly well in winter.”
Increasing by 12 per cent over the previous year to a total of 93,193 sales, 2007 was the best year ever for GTA resale housing activity and December’s 4,646 sales came within two per cent of the best performance for the month, set in 2001.
The average price in December was $394,931, which resulted in an annual increase of seven per cent from the previous year.
The most active areas in December were in the City of Toronto.
Riverdale (E01) saw a 75 per cent increase in transactions compared to December 2006, primarily based on semi-detached home sales.
In the Mimico area of Etobicoke (W06) transactions were up 57 per cent, driven by a significant increase in the sale of condo apartments.
In North York, (C14) sales increased by 44 per cent compared to last December, as a result of strong detached home transactions.
Toronto's Downtown East (C08) experienced a 59 per cent increase compared to the same timeframe a year ago due to strong condominium and semi-detached home sales.
“We saw strong, stable monthly performances throughout 2007, which illustrates that consumers now recognize it’s always a great time to buy or sell their next home,” said Ms. O’Neill.
Toronto REALTORS® are passionate about their work. They adhere to a strict code of ethics and share a state-of-the-art Multiple Listing Service. Serving more than 26,000 Members in the Greater Toronto Area, the Toronto Real Estate Board is Canada’s largest real estate board. Greater Toronto Area open house listings are available on www.TorontoRealEstateBoard.com.
TORONTO, January 7, 2008 -- Brisk condo sales in December brought the 2007 Greater Toronto Area resale housing market to a strong finish, Toronto Real Estate Board President Maureen O'Neill announced today.
“Typically condominium apartment transactions comprise just over 20 per cent of total sales but in December they accounted for more than a quarter of resale activity,” said Ms. O’Neill. “Condos are often more affordable than other housing options and they show particularly well in winter.”
Increasing by 12 per cent over the previous year to a total of 93,193 sales, 2007 was the best year ever for GTA resale housing activity and December’s 4,646 sales came within two per cent of the best performance for the month, set in 2001.
The average price in December was $394,931, which resulted in an annual increase of seven per cent from the previous year.
The most active areas in December were in the City of Toronto.
Riverdale (E01) saw a 75 per cent increase in transactions compared to December 2006, primarily based on semi-detached home sales.
In the Mimico area of Etobicoke (W06) transactions were up 57 per cent, driven by a significant increase in the sale of condo apartments.
In North York, (C14) sales increased by 44 per cent compared to last December, as a result of strong detached home transactions.
Toronto's Downtown East (C08) experienced a 59 per cent increase compared to the same timeframe a year ago due to strong condominium and semi-detached home sales.
“We saw strong, stable monthly performances throughout 2007, which illustrates that consumers now recognize it’s always a great time to buy or sell their next home,” said Ms. O’Neill.
Toronto REALTORS® are passionate about their work. They adhere to a strict code of ethics and share a state-of-the-art Multiple Listing Service. Serving more than 26,000 Members in the Greater Toronto Area, the Toronto Real Estate Board is Canada’s largest real estate board. Greater Toronto Area open house listings are available on www.TorontoRealEstateBoard.com.
Tuesday, January 1, 2008
2008 Market Survey Forecast
TORONTO, December 17, 2007 – After experiencing an exceptional year characterized by strong average house price appreciation and record breaking unit sales, the momentum from 2007 is anticipated to carry over and position Canada’s real estate market for steady, yet moderate growth in 2008, according to the Royal LePage 2008 Market Survey Forecast released today.
Nationally, average house prices are forecast to rise by 3.5 per cent to $317,288 in 2008, while transactions are projected to fall slightly from this year’s record high unit sales to 500,927 (–4.0 %) unit sales in 2008. Despite the year-over-year reduction in unit sales, the number of homes trading hands in 2008 is expected to remain higher than in all years prior to 2007.
“Canada’s housing market in 2008 should continue to thrive on a balanced diet of strong economic fundamentals, including high levels of employment, resilient consumer confidence, modest levels of inflation and the relatively low cost of borrowing money,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “Canada is currently enjoying one of the longest housing market expansions in history; however, as we move into 2008 it is anticipated that slowly eroding affordability will cause demand to ease, allowing the market to move toward balanced conditions, with lower levels of price appreciation, and fewer homes trading hands.”
Ontario and Quebec markets are anticipated to maintain their relative strength and vibrancy throughout next year, weathering stormy financial markets and adjusting well to the high value of the Canadian dollar. The services based industries that have become the backbone of the Toronto and Montreal economies have tolerated the rise of Canada’s dollar to parity very well, despite increasingly price competitive offering from overseas markets.
From coast-to-coast, the homebuyer demographic is anticipated to swell with first-time purchasers, as many flock to take advantage of recently reduced lending rates, longer amortization periods and the resultant manageable mortgage payments.
Added Soper: “The year ahead presents opportunities for those people who have shied away from the frenetic real estate market of the past few years, with its bidding wars and unconditional offers; while prices should continue to rise, they are expected to do so at a more reasonable pace. Canada’s economy is strong, and the desire for home ownership remains a vibrant and attainable goal – real estate remains a solid long term investment.”
Source: Royal LePage
Nationally, average house prices are forecast to rise by 3.5 per cent to $317,288 in 2008, while transactions are projected to fall slightly from this year’s record high unit sales to 500,927 (–4.0 %) unit sales in 2008. Despite the year-over-year reduction in unit sales, the number of homes trading hands in 2008 is expected to remain higher than in all years prior to 2007.
“Canada’s housing market in 2008 should continue to thrive on a balanced diet of strong economic fundamentals, including high levels of employment, resilient consumer confidence, modest levels of inflation and the relatively low cost of borrowing money,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “Canada is currently enjoying one of the longest housing market expansions in history; however, as we move into 2008 it is anticipated that slowly eroding affordability will cause demand to ease, allowing the market to move toward balanced conditions, with lower levels of price appreciation, and fewer homes trading hands.”
Ontario and Quebec markets are anticipated to maintain their relative strength and vibrancy throughout next year, weathering stormy financial markets and adjusting well to the high value of the Canadian dollar. The services based industries that have become the backbone of the Toronto and Montreal economies have tolerated the rise of Canada’s dollar to parity very well, despite increasingly price competitive offering from overseas markets.
From coast-to-coast, the homebuyer demographic is anticipated to swell with first-time purchasers, as many flock to take advantage of recently reduced lending rates, longer amortization periods and the resultant manageable mortgage payments.
Added Soper: “The year ahead presents opportunities for those people who have shied away from the frenetic real estate market of the past few years, with its bidding wars and unconditional offers; while prices should continue to rise, they are expected to do so at a more reasonable pace. Canada’s economy is strong, and the desire for home ownership remains a vibrant and attainable goal – real estate remains a solid long term investment.”
Source: Royal LePage
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