According to a new report from BMO Economics, there won’t be much fanfare in the housing market this year, but there won’t be much cause for concern either. They predict that, through 2012, both prices and sales will be flat.
“While seasonally adjusted sales did manage to rise 1.8 per cent from the prior month in December, sales were up a moderate 4.6 per cent from year-ago levels," according to Douglas Porter, Deputy Chief Economist, BMO Capital Markets. "Most signs continue to indicate that the market is broadly balanced on a national basis. The supply of existing homes for sale is 5.8 months, and the ratio of new listings to sales is also well within long-term norms."
Porter expects 2012 to be a year of moderation. "We look for both sales and prices to be roughly flat this year. That could be just what the policy doctor ordered, allowing incomes to catch up to higher prices."
"While the housing market is showing moderation, it's always important for Canadians to examine ways to reduce overall housing costs," said Katie Archdekin, Head of Mortgage Products, BMO Bank of Montreal.
Right now, as markets begin show signs of moderation, and as interest rates remain fairly low, now is a good time for Canadians to stress test their mortgages, and work towards shrinking their likely sizeable debt load, before the market and the economy change gears downwards.
With slowing economic conditions, many forecasters expect that 2012 will reflect a slowdown in the housing market.
One notable exception to that is Royal LePage, who expects the housing market in 2012 to continue its’ ascent. They forecast moderate growth through this year, with a market slowdown not appearing until 2013.
Wednesday, February 1, 2012
Saturday, January 28, 2012
Why it’s a good time to buy a home
I believe there has never been a better time to buy a home. I’ve been in the industry for 28 years as a lawyer and I haven’t seen so many positive signs for housing, whether you are thinking or buying or locking in a mortgage.
Here’s why:
Mortgage rates at historic lows: They can’t get any lower. Four to five-year fixed mortgages at 3 per cent are unheard of. It is lower than the variable rate that most Canadians have been paying for years. Rates have nowhere to go but up, either later this year or next. If you are paying a variable interest rate, lock in now.
Canada’s appeal: This country has everything going for it — a stable banking and political environment, steady real estate market, the natural resources people want and few social tensions. That makes us a safe haven in a volatile world.
Our immigrant draw: Because of the above, we’re a draw for immigrants, often wealthy ones. When they get here, they need a home. So in my view while the real estate market may level off in some areas of Ontario, it should stay strong in most of the GTA and likely Canada’s other large urban centres as well.
Mortgage defaults: According to CMHC, over 99 per cent of Canadians pay their mortgages on time. It quite a different picture in the U.S. where 7 million homes are in foreclosure and perhaps another 7 million homeowners are under water. This represents almost 15 per cent of all homes. So while the American housing market will likely be weak for the next few years, this should not occur in Canada. Our banks are not dumping homes onto the market, so there is no downward pressure on prices.
Recourse Mortgages: In many U.S. states, if you can’t pay your mortgage, the only thing the bank can do is foreclose; they cannot sue you for any shortfall. So when homes go under water, owners give the keys back to the bank. In Canada, loans are almost all Recourse, meaning if you don’t pay and there is a shortfall, the lender can sue you for the difference. This is another reason why, in my opinion, even if times do get tough, Canadian homeowners will find a way to make the payments until things improve.
Income-to-price ratio: Another misleading statistic is that in major markets, like Toronto, the average price of a home is now 4.6 times the income of the average Canadian. This same statistic was found just before the U.S. and UK markets went into the tank. However, if you look at median incomes of Canadians against the median cost of homes, this average comes down to around 3.5, which is not dangerous. Using averages are wrong. A person receiving social assistance will not buy a home, and should not be included in any relevant statistic.
High consumer debt: The warnings about rising debt ratios must be examined carefully. The Governor of the Bank of Canada is worried that the average personal debt ratio is now 156 per cent in Canada. This means a household making $100,000 per year, owes $156,000, two-thirds of which is mortgage debt. Why is this so bad? At an interest rate of 3 or even 5 per cent, the amount needed to service the debt is manageable. Most people do not pay off their mortgages in one year. Still, this is another good reason to consolidate your debt now, at these low interest rates, and lock in.
No guarantees: Nobody can predict the future and there’s always the possibility of a major economic shock. Yet, in a U.S. presidential election year, politicians will do whatever is necessary to prevent it. If the economy goes into the tank, so do re-election chances. The U.S. is already showing signs of economic recovery.
No matter what, do not take on a monthly payment higher than what you can afford. Meet with your lender or mortgage broker in advance to figure out what you can afford before you start looking for a home. It may be the best time to buy, but you need to buy smart.
Here’s why:
Mortgage rates at historic lows: They can’t get any lower. Four to five-year fixed mortgages at 3 per cent are unheard of. It is lower than the variable rate that most Canadians have been paying for years. Rates have nowhere to go but up, either later this year or next. If you are paying a variable interest rate, lock in now.
Canada’s appeal: This country has everything going for it — a stable banking and political environment, steady real estate market, the natural resources people want and few social tensions. That makes us a safe haven in a volatile world.
Our immigrant draw: Because of the above, we’re a draw for immigrants, often wealthy ones. When they get here, they need a home. So in my view while the real estate market may level off in some areas of Ontario, it should stay strong in most of the GTA and likely Canada’s other large urban centres as well.
Mortgage defaults: According to CMHC, over 99 per cent of Canadians pay their mortgages on time. It quite a different picture in the U.S. where 7 million homes are in foreclosure and perhaps another 7 million homeowners are under water. This represents almost 15 per cent of all homes. So while the American housing market will likely be weak for the next few years, this should not occur in Canada. Our banks are not dumping homes onto the market, so there is no downward pressure on prices.
Recourse Mortgages: In many U.S. states, if you can’t pay your mortgage, the only thing the bank can do is foreclose; they cannot sue you for any shortfall. So when homes go under water, owners give the keys back to the bank. In Canada, loans are almost all Recourse, meaning if you don’t pay and there is a shortfall, the lender can sue you for the difference. This is another reason why, in my opinion, even if times do get tough, Canadian homeowners will find a way to make the payments until things improve.
Income-to-price ratio: Another misleading statistic is that in major markets, like Toronto, the average price of a home is now 4.6 times the income of the average Canadian. This same statistic was found just before the U.S. and UK markets went into the tank. However, if you look at median incomes of Canadians against the median cost of homes, this average comes down to around 3.5, which is not dangerous. Using averages are wrong. A person receiving social assistance will not buy a home, and should not be included in any relevant statistic.
High consumer debt: The warnings about rising debt ratios must be examined carefully. The Governor of the Bank of Canada is worried that the average personal debt ratio is now 156 per cent in Canada. This means a household making $100,000 per year, owes $156,000, two-thirds of which is mortgage debt. Why is this so bad? At an interest rate of 3 or even 5 per cent, the amount needed to service the debt is manageable. Most people do not pay off their mortgages in one year. Still, this is another good reason to consolidate your debt now, at these low interest rates, and lock in.
No guarantees: Nobody can predict the future and there’s always the possibility of a major economic shock. Yet, in a U.S. presidential election year, politicians will do whatever is necessary to prevent it. If the economy goes into the tank, so do re-election chances. The U.S. is already showing signs of economic recovery.
No matter what, do not take on a monthly payment higher than what you can afford. Meet with your lender or mortgage broker in advance to figure out what you can afford before you start looking for a home. It may be the best time to buy, but you need to buy smart.
Rundown city-owned houses up for sale
Leslie Wallace found an anxious crowd waiting yesterday as he arrived at a dilapidated Crawford St. house for one of the shortest open houses in real estate history — half an hour.
More than two dozen potential buyers lined the walkway and spilled onto the street in front of the well-worn Toronto Community Housing property, a detached, three-storey brick home listed for almost $1 million.
“I’ve never seen anything like this,” says Wallace, who’s been selling real estate in central Toronto for 28 years. “The amount of interest in these properties is overwhelming.”
The city is hoping to sell off close to 700 stand-alone houses scattered from Scarborough to Etobicoke to free up cash for much-needed repairs to its decades-old stock of multi-unit assisted housing. And the race is on.
With interest rates at historic lows and a drastically short supply of homes for sale across Toronto, buyers are clearly banking on deals —and a rare chance to live on some of the most desirable streets in the city.
So far city council has approved a sell-off of 27 homes, 10 of which still need approval from the province. Five have sold so far, in the east-end Beach neighbourhood and the city pocketed $3.28 million.
The city has set a Jan. 30 deadline for offers on the three homes Wallace now has listed on Crawford, an eclectic, family friendly street near Christie that stretches south of Queen St. to north of Bloor St.
Two others will hit MLS in the next few weeks.
The properties are being listed in a slow and staggered fashion to not flood the market. And while the properties all need tens of thousands in work, realtors are predicting intense bidding wars.
When it comes to Crawford, it’s clearly not about the house so much as location, location, location.
All three properties back onto major parks — either Christie Pits or Trinity Bellwoods.
In fact, one home — a battered, boarded-up brick semi that’s listed for $495,000 — is tucked so tightly up against sprawling Christie Pits Park that kids could almost jump into the pool from the second-storey bedroom window.
Just a handful of houses to the north is another brick semi that, apart from the serious mould problem in its one bathroom, is remarkably well kept. More stunning is the land it sits on — a 43.6 by 110 foot lot with a private drive big enough to fit a small house.
All three homes are just steps from shopping and the Queen or Bloor Sts. transit lines.
The biggest, the three-storey detached that has drawn so much interest, is crying out for a gutting and is listed at a relatively steep $995,000. It sits on an overgrown 33 by 118 foot lot and can only be shown for half an hour a few times each week so as not to disrupt the three generations of one family who still call it home.
But at Thursday’s supposedly brief showing there was such a rush of interest, Wallace was still struggling to lock the door after an hour. He was just stepping across the hardwood flooring to the foyer when a High Park couple — their teenage daughter in tow — walked in the house and headed up the stairs.
“Even though they all need renovations, people can see that this is a really hot area,” says Wallace, urging the family to be quick. “You’re steps from Ossington, Little Italy, Queen St. West and close to the downtown.
“I’ve had clients says they would just paint and live here — that they don’t need granite countertops because it’s a big house and they like parks.”
The High Park family says otherwise.
“You’d need about 20 (reno) containers and you could easily sink $300,000 to $400,000 into this house,” says the experienced renovator as he, his wife and teenaged daughter give the house a final once-over from the sidewalk.
“Who knows what’s going to happen to the Toronto market,” he says, sizing up the cluttered porch and worn windows. “I prefer High Park, but my kids really want to live here because it’s close to everything.”
Their daughter’s glee is palpable, as is the pain on her parents’ face.
The three head home to crunch some numbers — and talk about booking a return visit for Sunday.
More than two dozen potential buyers lined the walkway and spilled onto the street in front of the well-worn Toronto Community Housing property, a detached, three-storey brick home listed for almost $1 million.
“I’ve never seen anything like this,” says Wallace, who’s been selling real estate in central Toronto for 28 years. “The amount of interest in these properties is overwhelming.”
The city is hoping to sell off close to 700 stand-alone houses scattered from Scarborough to Etobicoke to free up cash for much-needed repairs to its decades-old stock of multi-unit assisted housing. And the race is on.
With interest rates at historic lows and a drastically short supply of homes for sale across Toronto, buyers are clearly banking on deals —and a rare chance to live on some of the most desirable streets in the city.
So far city council has approved a sell-off of 27 homes, 10 of which still need approval from the province. Five have sold so far, in the east-end Beach neighbourhood and the city pocketed $3.28 million.
The city has set a Jan. 30 deadline for offers on the three homes Wallace now has listed on Crawford, an eclectic, family friendly street near Christie that stretches south of Queen St. to north of Bloor St.
Two others will hit MLS in the next few weeks.
The properties are being listed in a slow and staggered fashion to not flood the market. And while the properties all need tens of thousands in work, realtors are predicting intense bidding wars.
When it comes to Crawford, it’s clearly not about the house so much as location, location, location.
All three properties back onto major parks — either Christie Pits or Trinity Bellwoods.
In fact, one home — a battered, boarded-up brick semi that’s listed for $495,000 — is tucked so tightly up against sprawling Christie Pits Park that kids could almost jump into the pool from the second-storey bedroom window.
Just a handful of houses to the north is another brick semi that, apart from the serious mould problem in its one bathroom, is remarkably well kept. More stunning is the land it sits on — a 43.6 by 110 foot lot with a private drive big enough to fit a small house.
All three homes are just steps from shopping and the Queen or Bloor Sts. transit lines.
The biggest, the three-storey detached that has drawn so much interest, is crying out for a gutting and is listed at a relatively steep $995,000. It sits on an overgrown 33 by 118 foot lot and can only be shown for half an hour a few times each week so as not to disrupt the three generations of one family who still call it home.
But at Thursday’s supposedly brief showing there was such a rush of interest, Wallace was still struggling to lock the door after an hour. He was just stepping across the hardwood flooring to the foyer when a High Park couple — their teenage daughter in tow — walked in the house and headed up the stairs.
“Even though they all need renovations, people can see that this is a really hot area,” says Wallace, urging the family to be quick. “You’re steps from Ossington, Little Italy, Queen St. West and close to the downtown.
“I’ve had clients says they would just paint and live here — that they don’t need granite countertops because it’s a big house and they like parks.”
The High Park family says otherwise.
“You’d need about 20 (reno) containers and you could easily sink $300,000 to $400,000 into this house,” says the experienced renovator as he, his wife and teenaged daughter give the house a final once-over from the sidewalk.
“Who knows what’s going to happen to the Toronto market,” he says, sizing up the cluttered porch and worn windows. “I prefer High Park, but my kids really want to live here because it’s close to everything.”
Their daughter’s glee is palpable, as is the pain on her parents’ face.
The three head home to crunch some numbers — and talk about booking a return visit for Sunday.
Tuesday, January 24, 2012
Toronto real estate safe as houses
TORONTO - Eileen Campbell looks around her lovely 900-sq.-ft. downtown Toronto condo and sighs.
For the past seven years, the chef has made her two-bedroom corner unit at 550 Front St. W. really feel like home by gutting the kitchen, installing a quartz counter top and opening up the space.
Campbell, 65, moved west after living in a home in the Beach area, loving that she no longer has to maintain a backyard or shovel snow off a driveway.
And being a foodie, she’s close to hip restaurants along the King West strip. She’s also able to enjoy summers out in her terrace with her little chihuahua — that is, when there isn’t a dust storm from nearby construction of other condos going up along the waterfront.
But retirement is nearing for Campbell and she’s made the decision move again — to a house in the Niagara Region.
Economists forecast Toronto’s booming condo market will experience a crisis in a few years with too much supply and sagging demand, starting in 2013.
So for Campbell, this is the ideal time to sell and is listing her property at $449,800.
“In my mind, if there is that much inventory for people to choose from, would they choose (to buy) a brand-new place or a place that’s been here for a while?” she said. “I don’t want to wait to find out. I’d rather get my equity out now and move onto something else.”
Several of Canada’s biggest banks recently warned about a possible correction in the housing market. Still, prices of homes keep rising, according to the Toronto Real Estate Board (TREB) with mortgage rates remaining low, hovering around 3%.
In fact, the Economist recently declared Canada as one of nine countries where “home prices are overvalued by about 25% or more” and among four countries where prices are in line with those in the United States “at the peak of its bubble.”
While many fear Toronto’s real estate bubble is on the verge of bursting, analyst are cautioning buyers and sellers to relax.
“I do not believe that Toronto, as a whole, is in a bubble,” explains Don Campbell, president of the Real Estate Investment Network. “I think it’s more like a balloon where the air is going to start leaking out.”
Housing will continue to stay strong throughout downtown communities and surrounding areas, such as Leslieville and the Junction, where many newcomers may choose to buy homes because downtown is too expensive, Campbell said. Where there is trouble is the new condo market.
“I believe we’re going to feel an over supply in 2013 because we’ve got a record number of condos coming onto the market in 2012,” he says. “In addition, there have been a lot of development applications put forward to the City of Toronto at the end of December. We’re already starting to see a slowdown in foreign money going into the condo market.”
When those who bought new condos are handed their keys with the intention of immediately flipping the property, they’ll be others doing the same.
“Therefore, you’re going to have an oversupply of the situation come on,” Campbell adds. “That oversupply won’t last for a long time — not like the U.S. — but it’s going to keep a real cap on value.”
Craig Alexander, chief economist for TD Canada Trust, says many first-time home buyers jumped into the real estate market in 2009 because of record-low mortgage rates. The market remained strong in 2010, but it began moderating in 2011.
“I think in the coming year we’ll see the housing market pretty flat,” he predicts.
“I don’t see the likelihood of a major correction coming this year. I do think there’s over-valuation in the market, but I don’t see a major housing bubble in the GTA. I think when we see interest rates rise, we’ll see housing prices decline but it won’t be a dramatic decline.”
The big risk to the so-called bubble occurs when there’s a sharp spike in unemployment or as interest rates shoot up. Alexander figures interest rates should increase by a modest rate — 1% in 2013 and 1% in 2014.
“Torontonians need to be careful not to over-extend themselves because eventually, interest rates will rise,” he said. “I feel like the little boy that cried wolf because every year I tell people that rates could rise and then they don’t. But I always have to remind people that the wolf does show up at the end of the story.”
Richard Silver, the president of the Toronto Real Estate Board (TREB), said the seller’s market has transitioned to a balanced market with more listings now than a year ago.
“Anything that came on the market had multiple offers and buyers had to get a lot more aggressive,” he said.
“They had to get their ducks in a row — like their financing and building inspections and had to make decisions quickly. Now, buyers have more time. They can look around.”
With the new condo sales, it really depends on what is happening in foreign investors, Silver said.
“A lot of (condo deals) happen offshore … that’s a really big part of the market,” he said. “We’re very lucky in Toronto. Right now, there’s a lot of shovels going in the ground. I look at New York and there’s hardly anything being built. Yet, in Toronto, it’s gangbusters.”
TREB had second-best year on record for sales in 2011 with 89,347 — up 4% from the previous year.
According to the real estate board, $465,000 is the average price of a single-family home in 2011. So, what does that get you in the GTA? Surprisingly, not as much as you’d think.
In Toronto, that amount will get you a 800-900-sq.-ft. condo, though it will be renovated and in move-in condition.
“There was only one house that turned up (on a search) – it was on Dufferin, there were no pictures, so it would’ve been an absolute fixer-upper for $465,000,” said Kimball Sarin, a broker with Bosley Real Estate, who has been in the real estate business for a decade. “Whereas this price range for condos, you could get a decent space in move-in conditions. You can sometimes get two bedrooms.”
If you’re looking for a house in Toronto, you’ll likely have to scour Leslieville or the Junction area — places that are roughly 20 minutes outside the downtown core.
“I find people who are looking for only condos don’t even want to discuss moving outwards, they just want to be downtown,” Sarin said. “They’re mostly younger people, 20s-30s typically, first-time buyers. We’re also getting a lot of empty-nesters. People that are going to be selling a larger house.”
Catherine McIsaac, a Sutton Group sales representative, said parts of the 905 are slowly catching up with the rising prices in Toronto. The only detached property available in Oakville was a 1,500-2,000-sq.-ft. three-bedroom family home in the West Oak Trails with an unfinished basement.
In Mississauga, the Marilyn Monroe building — a unique curvy condo tower at 50 Absolute Ave. near Square One — fits in the $465,000 budget. That price fetches a two-bedroom plus den, 997-sq.-ft. unit which costs about $428,400.
With an influx of 100,000 people to the GTA each year, many renters are moving into condos purchased by offshore investors because there aren’t many developers building rental properties anymore.
“There are several new condo developments in the area,” said Tanya Crepulja of Sutton Group Realty. “Condos accounted for about 1/4 of the sales in the GTA, which shows there’s high demand for this type of product.”
The only affordable area for single family homes was in Durham Region. Royal LePage Frank Real Estate sales representative Alexis Appleby said you could get a decent home for around $380,000. And the further you head east towards Oshawa, the cheaper it gets.
York Region, on the other hand, is experiencing a serious lack of inventory.
In Richmond Hill alone, last week there were only 13 freehold houses available for under $500,000 — representing 6.5% of the total number of houses on the market in that area.
“I think that paints a picture of how almost desperate the inventory situation is,” said Jim Common, sales representative for RE/MAX. “The average days on market at this price point is 15 days. There are 200 homes for sale in Richmond Hill — 66 of those are over $1 million. I think interest rates will eventually increase and that will bust the bubble.”
And prices are expected to keep climbing in 2012. According to TREB economist Jason Mercer, he predicts the average price of a home will rise to $480,000 this year.
That makes it tougher for first-time home buyers to save and bank away a down payment for a decent home.
Trellawny Graham, a 32-year-old who works in advertising, bought a house in November. She ended up purchasing a two-bedroom, 1000-square-feet home in Oshawa because that was the only area she could afford.
“I can get so much more for my money,” she said. “I find places closer to (the city) are just double or triple the price and not even as nice as mine. It sits on deep plot of land. I was able to get my house for $185,900. It was just scary to think if I’d ever find a house that I can actually afford to buy.”
Toronto real estate lawyer James Fraser said as worrisome Canada’s housing market is, it is incomparable to the U.S. because Canadian buyers and banks are both prudent.
“Our foreclosure rate has not budged at all during the recession – it’s less than 1%,” he said. “If someone’s thrown out of a job, then that’s going to be an extremely stressful situation and people could lose their houses. But I don’t see the same factors that have devastated the US housing market — I’m not seeing people get into the housing market when they can’t afford it.”
For the past seven years, the chef has made her two-bedroom corner unit at 550 Front St. W. really feel like home by gutting the kitchen, installing a quartz counter top and opening up the space.
Campbell, 65, moved west after living in a home in the Beach area, loving that she no longer has to maintain a backyard or shovel snow off a driveway.
And being a foodie, she’s close to hip restaurants along the King West strip. She’s also able to enjoy summers out in her terrace with her little chihuahua — that is, when there isn’t a dust storm from nearby construction of other condos going up along the waterfront.
But retirement is nearing for Campbell and she’s made the decision move again — to a house in the Niagara Region.
Economists forecast Toronto’s booming condo market will experience a crisis in a few years with too much supply and sagging demand, starting in 2013.
So for Campbell, this is the ideal time to sell and is listing her property at $449,800.
“In my mind, if there is that much inventory for people to choose from, would they choose (to buy) a brand-new place or a place that’s been here for a while?” she said. “I don’t want to wait to find out. I’d rather get my equity out now and move onto something else.”
Several of Canada’s biggest banks recently warned about a possible correction in the housing market. Still, prices of homes keep rising, according to the Toronto Real Estate Board (TREB) with mortgage rates remaining low, hovering around 3%.
In fact, the Economist recently declared Canada as one of nine countries where “home prices are overvalued by about 25% or more” and among four countries where prices are in line with those in the United States “at the peak of its bubble.”
While many fear Toronto’s real estate bubble is on the verge of bursting, analyst are cautioning buyers and sellers to relax.
“I do not believe that Toronto, as a whole, is in a bubble,” explains Don Campbell, president of the Real Estate Investment Network. “I think it’s more like a balloon where the air is going to start leaking out.”
Housing will continue to stay strong throughout downtown communities and surrounding areas, such as Leslieville and the Junction, where many newcomers may choose to buy homes because downtown is too expensive, Campbell said. Where there is trouble is the new condo market.
“I believe we’re going to feel an over supply in 2013 because we’ve got a record number of condos coming onto the market in 2012,” he says. “In addition, there have been a lot of development applications put forward to the City of Toronto at the end of December. We’re already starting to see a slowdown in foreign money going into the condo market.”
When those who bought new condos are handed their keys with the intention of immediately flipping the property, they’ll be others doing the same.
“Therefore, you’re going to have an oversupply of the situation come on,” Campbell adds. “That oversupply won’t last for a long time — not like the U.S. — but it’s going to keep a real cap on value.”
Craig Alexander, chief economist for TD Canada Trust, says many first-time home buyers jumped into the real estate market in 2009 because of record-low mortgage rates. The market remained strong in 2010, but it began moderating in 2011.
“I think in the coming year we’ll see the housing market pretty flat,” he predicts.
“I don’t see the likelihood of a major correction coming this year. I do think there’s over-valuation in the market, but I don’t see a major housing bubble in the GTA. I think when we see interest rates rise, we’ll see housing prices decline but it won’t be a dramatic decline.”
The big risk to the so-called bubble occurs when there’s a sharp spike in unemployment or as interest rates shoot up. Alexander figures interest rates should increase by a modest rate — 1% in 2013 and 1% in 2014.
“Torontonians need to be careful not to over-extend themselves because eventually, interest rates will rise,” he said. “I feel like the little boy that cried wolf because every year I tell people that rates could rise and then they don’t. But I always have to remind people that the wolf does show up at the end of the story.”
Richard Silver, the president of the Toronto Real Estate Board (TREB), said the seller’s market has transitioned to a balanced market with more listings now than a year ago.
“Anything that came on the market had multiple offers and buyers had to get a lot more aggressive,” he said.
“They had to get their ducks in a row — like their financing and building inspections and had to make decisions quickly. Now, buyers have more time. They can look around.”
With the new condo sales, it really depends on what is happening in foreign investors, Silver said.
“A lot of (condo deals) happen offshore … that’s a really big part of the market,” he said. “We’re very lucky in Toronto. Right now, there’s a lot of shovels going in the ground. I look at New York and there’s hardly anything being built. Yet, in Toronto, it’s gangbusters.”
TREB had second-best year on record for sales in 2011 with 89,347 — up 4% from the previous year.
According to the real estate board, $465,000 is the average price of a single-family home in 2011. So, what does that get you in the GTA? Surprisingly, not as much as you’d think.
In Toronto, that amount will get you a 800-900-sq.-ft. condo, though it will be renovated and in move-in condition.
“There was only one house that turned up (on a search) – it was on Dufferin, there were no pictures, so it would’ve been an absolute fixer-upper for $465,000,” said Kimball Sarin, a broker with Bosley Real Estate, who has been in the real estate business for a decade. “Whereas this price range for condos, you could get a decent space in move-in conditions. You can sometimes get two bedrooms.”
If you’re looking for a house in Toronto, you’ll likely have to scour Leslieville or the Junction area — places that are roughly 20 minutes outside the downtown core.
“I find people who are looking for only condos don’t even want to discuss moving outwards, they just want to be downtown,” Sarin said. “They’re mostly younger people, 20s-30s typically, first-time buyers. We’re also getting a lot of empty-nesters. People that are going to be selling a larger house.”
Catherine McIsaac, a Sutton Group sales representative, said parts of the 905 are slowly catching up with the rising prices in Toronto. The only detached property available in Oakville was a 1,500-2,000-sq.-ft. three-bedroom family home in the West Oak Trails with an unfinished basement.
In Mississauga, the Marilyn Monroe building — a unique curvy condo tower at 50 Absolute Ave. near Square One — fits in the $465,000 budget. That price fetches a two-bedroom plus den, 997-sq.-ft. unit which costs about $428,400.
With an influx of 100,000 people to the GTA each year, many renters are moving into condos purchased by offshore investors because there aren’t many developers building rental properties anymore.
“There are several new condo developments in the area,” said Tanya Crepulja of Sutton Group Realty. “Condos accounted for about 1/4 of the sales in the GTA, which shows there’s high demand for this type of product.”
The only affordable area for single family homes was in Durham Region. Royal LePage Frank Real Estate sales representative Alexis Appleby said you could get a decent home for around $380,000. And the further you head east towards Oshawa, the cheaper it gets.
York Region, on the other hand, is experiencing a serious lack of inventory.
In Richmond Hill alone, last week there were only 13 freehold houses available for under $500,000 — representing 6.5% of the total number of houses on the market in that area.
“I think that paints a picture of how almost desperate the inventory situation is,” said Jim Common, sales representative for RE/MAX. “The average days on market at this price point is 15 days. There are 200 homes for sale in Richmond Hill — 66 of those are over $1 million. I think interest rates will eventually increase and that will bust the bubble.”
And prices are expected to keep climbing in 2012. According to TREB economist Jason Mercer, he predicts the average price of a home will rise to $480,000 this year.
That makes it tougher for first-time home buyers to save and bank away a down payment for a decent home.
Trellawny Graham, a 32-year-old who works in advertising, bought a house in November. She ended up purchasing a two-bedroom, 1000-square-feet home in Oshawa because that was the only area she could afford.
“I can get so much more for my money,” she said. “I find places closer to (the city) are just double or triple the price and not even as nice as mine. It sits on deep plot of land. I was able to get my house for $185,900. It was just scary to think if I’d ever find a house that I can actually afford to buy.”
Toronto real estate lawyer James Fraser said as worrisome Canada’s housing market is, it is incomparable to the U.S. because Canadian buyers and banks are both prudent.
“Our foreclosure rate has not budged at all during the recession – it’s less than 1%,” he said. “If someone’s thrown out of a job, then that’s going to be an extremely stressful situation and people could lose their houses. But I don’t see the same factors that have devastated the US housing market — I’m not seeing people get into the housing market when they can’t afford it.”
Wednesday, January 11, 2012
Most Canadians Wrongly Believe Canada is in Recession
There are times that a little bit of information can be a dangerous thing.
This is apparently being reflected by many Canadians in terms of their views and attitudes on the Canadian economy. According to a recent survey sponsored by the Economic Club of Canada, many Canadians believe that we are in recession, when in fact we are not.
The poll found that only 25% of respondents feel optimistic about the economy, which represents a drop of more than 10% from last year. A staggering 70% of respondents believe that the country is experiencing a mild recession, while economists insist that, while the economy faces some challenges currently, we most certainly not in a recession.
It’s no big surprise, really. Everywhere Canadians turn these days there is negative economic data, cautious warnings about slowing economic growth, dwindling consumer spending in the face of elevated household debt levels and employment uncertainty.
Coupled with the constant media attention on the fact that the Euro zone is likely facing a recession, it is not entirely unexpected that Canadians, who may not have access to all the data, or the training to interpret it, may think that the country is in fact, in a recession.
It’s not just misperception either; the findings of this online poll suggest that there is a disconnect between the crunching of numbers, presentation of data, and the way that Canadians actually feel about their economic prospects in general.
While most Canadians do not have economic training, many do feel that they are involved with it- in that they are on the receiving end of the financial impact.
While things are perhaps not optimum, they could be much worse economists argue. Economic growth is slow, but is expected to sluggishly tick along; while unemployment is increasing, it is still lower than it has been in the past. Some pockets of the country are even experiencing a job boom.
The housing market, for instance, continues to outshine and outpace the economy, taking advantage of the sound fundamentals that propel the market for growth. While many expect the market to moderate in 2012, it is still expected to grow at a reasonable pace.
As Leslie Penney, Vice President, APlus Mortgage Group/Mortgage Alliance told Propertywire.ca, people in his local market are, for the most part, generally optimistic: “Personally, I feel that clients here in Newfoundland are pretty upbeat about the economy. Right now the housing market is fairly healthy and employment prospects haven’t been better. So the euphoria of a well to-do economy is in the air here right now. “
“Now, that’s not to say that people still aren’t worried. All you have to do is turn the television on and most of what you see would make you believe the world is experiencing another Great Depression. And many people believe that here in Canada we have it coming to us yet, but in dealing with clients this is where we become crucial.”
As Penney points out too, there is a clear role for Mortgage Professionals to help cut through all the news reports and statistics: “Of course, as professionals, we need to remain upbeat about the economy ourselves. Not to create the notion for our clients that everything is rosy, but to explain and confirm things like how our economy is built on strong financial practices, and that the trouble that we see in other places such as the US and Europe, were brought on by acts of greed and complacency, particularly when it comes to the banking sectors. By doing so I believe we can clarify many of the stories that these people are seeing on television and reading in the newspapers about the world is going to collapse.”
This is apparently being reflected by many Canadians in terms of their views and attitudes on the Canadian economy. According to a recent survey sponsored by the Economic Club of Canada, many Canadians believe that we are in recession, when in fact we are not.
The poll found that only 25% of respondents feel optimistic about the economy, which represents a drop of more than 10% from last year. A staggering 70% of respondents believe that the country is experiencing a mild recession, while economists insist that, while the economy faces some challenges currently, we most certainly not in a recession.
It’s no big surprise, really. Everywhere Canadians turn these days there is negative economic data, cautious warnings about slowing economic growth, dwindling consumer spending in the face of elevated household debt levels and employment uncertainty.
Coupled with the constant media attention on the fact that the Euro zone is likely facing a recession, it is not entirely unexpected that Canadians, who may not have access to all the data, or the training to interpret it, may think that the country is in fact, in a recession.
It’s not just misperception either; the findings of this online poll suggest that there is a disconnect between the crunching of numbers, presentation of data, and the way that Canadians actually feel about their economic prospects in general.
While most Canadians do not have economic training, many do feel that they are involved with it- in that they are on the receiving end of the financial impact.
While things are perhaps not optimum, they could be much worse economists argue. Economic growth is slow, but is expected to sluggishly tick along; while unemployment is increasing, it is still lower than it has been in the past. Some pockets of the country are even experiencing a job boom.
The housing market, for instance, continues to outshine and outpace the economy, taking advantage of the sound fundamentals that propel the market for growth. While many expect the market to moderate in 2012, it is still expected to grow at a reasonable pace.
As Leslie Penney, Vice President, APlus Mortgage Group/Mortgage Alliance told Propertywire.ca, people in his local market are, for the most part, generally optimistic: “Personally, I feel that clients here in Newfoundland are pretty upbeat about the economy. Right now the housing market is fairly healthy and employment prospects haven’t been better. So the euphoria of a well to-do economy is in the air here right now. “
“Now, that’s not to say that people still aren’t worried. All you have to do is turn the television on and most of what you see would make you believe the world is experiencing another Great Depression. And many people believe that here in Canada we have it coming to us yet, but in dealing with clients this is where we become crucial.”
As Penney points out too, there is a clear role for Mortgage Professionals to help cut through all the news reports and statistics: “Of course, as professionals, we need to remain upbeat about the economy ourselves. Not to create the notion for our clients that everything is rosy, but to explain and confirm things like how our economy is built on strong financial practices, and that the trouble that we see in other places such as the US and Europe, were brought on by acts of greed and complacency, particularly when it comes to the banking sectors. By doing so I believe we can clarify many of the stories that these people are seeing on television and reading in the newspapers about the world is going to collapse.”
Monday, January 9, 2012
When is a condo not a condo?
When looking for a condominium, be aware that different buildings may have very different types ownership.
Freehold Units
Most condos are freehold strata units, where typically you have fee simple ownership of your unit. The land as well as common areas are owned collectively by all the owners. With most freehold condos, you pay monthly strata fees for upkeep.
Leasehold Units
Here you have a lease from a landlord for the right to use the unit for a specific number of years. Many leaseholds are created for 99 years, and you may only purchase your unit for the part of the lease that remains.
Co-op Units
With this arrangement you purchase shares in a co-operative association which owns the land and building including individual units and common areas, and you have a leasehold interest in your unit. You usually pay monthly dues to the co-op board to cover the building’s taxes and upkeep.
Condo buying tip
Monthly condo fees can affect how much home you can afford. By choosing a property where the monthly fees are just $200 lower, you can boost your purchasing power by $18,000.
Freehold Units
Most condos are freehold strata units, where typically you have fee simple ownership of your unit. The land as well as common areas are owned collectively by all the owners. With most freehold condos, you pay monthly strata fees for upkeep.
Leasehold Units
Here you have a lease from a landlord for the right to use the unit for a specific number of years. Many leaseholds are created for 99 years, and you may only purchase your unit for the part of the lease that remains.
Co-op Units
With this arrangement you purchase shares in a co-operative association which owns the land and building including individual units and common areas, and you have a leasehold interest in your unit. You usually pay monthly dues to the co-op board to cover the building’s taxes and upkeep.
Condo buying tip
Monthly condo fees can affect how much home you can afford. By choosing a property where the monthly fees are just $200 lower, you can boost your purchasing power by $18,000.
Understanding your credit report and credit score – Part 1
What many prospective borrowers don't realize is that the pricing of mortgages and other loans is based in part on their credit-worthiness. Consumers need to be aware of how their credit is evaluated by lenders, and how they can work to avoid so-called "bruised credit" – people with a lower credit score can find themselves paying a higher interest rate, or even denied access to certain types of loans.
A credit report is a detailed history of how consistently you meet your financial obligations, and provides a picture of your financial health based on your past behaviour. A credit score is a three-digit number, usually between 300 and 900, representing your overall credit-worthiness, based on personal information from your credit report and other sources.
Both your credit report and score are important. When deciding whether or not to grant a mortgage loan, lenders refer to an applicant's credit report and score, along with a range of other factors such as income, employment history, and size of down payment.
The higher your score the more likely you are to be approved for a mortgage and receive favourable rates because the lender considers you to be a better credit risk. Several factors are used by the two main credit agencies in Canada (Equifax Canada and TransUnion Canada) to calculate credit scores:
Debt payment history.
Amounts owed compared to your current credit limits with lenders.
How often you seek new credit.
Length of time you have had credit accounts.
Type of credit, such as car loans, lines of credit, credit cards.
A credit report is a detailed history of how consistently you meet your financial obligations, and provides a picture of your financial health based on your past behaviour. A credit score is a three-digit number, usually between 300 and 900, representing your overall credit-worthiness, based on personal information from your credit report and other sources.
Both your credit report and score are important. When deciding whether or not to grant a mortgage loan, lenders refer to an applicant's credit report and score, along with a range of other factors such as income, employment history, and size of down payment.
The higher your score the more likely you are to be approved for a mortgage and receive favourable rates because the lender considers you to be a better credit risk. Several factors are used by the two main credit agencies in Canada (Equifax Canada and TransUnion Canada) to calculate credit scores:
Debt payment history.
Amounts owed compared to your current credit limits with lenders.
How often you seek new credit.
Length of time you have had credit accounts.
Type of credit, such as car loans, lines of credit, credit cards.
Thursday, January 5, 2012
Why Real Estate Investing Makes Sense
Statistics show that investing in real estate makes a lot of sense. More people have become millionaires owning real estate than any other investment. Many of us know someone who invested in real estate and have become wealthy. Real estate is one of the safest and most profitable means of creating wealth. Banks will even lend money for the purchase of real estate because they know it is one of the safest and most profitable investments available. Here is just some simple reasons why real estate makes sense.
1. Proven Track Record
If you look at the average real estate prices you will see a trend where real estate prices continue to go higher. If one examines real estate prices five years ago compared to today you will see that prices are much higher. The same can be said if one looks back 10, 15 and 20 years back, you will find real estate prices have always increased. Just look at the value of your own home. Most likely it has increased from when you last purchased the home. There is an old saying,” invest in real estate and wait, not wait to invest in real estate.” A smart investor once said, "do whatever it takes but buy one property a year and soon you will be wealthy". Real Estate has always been the greatest wealth-builder in history, unlike the volatile stock market where it’s difficult for the average person to make money. Also as the population continues to grow and more immigrants settle in our great country than the demand for real estate will only continue to grow and push real estate prices higher.
2. Ownership
Real Estate is a tangible asset and you control when to sell. Obviously the longer you keep your investment the great your profits.
3. Leveraging
With a small down payment you have the ability to own a property with little money down that carries. Leverage, plain and simple, is debt; it's using other people's money to buy, which actually allows you to use less of your own money to get more property. This is what is referred to as the “Power of Leveraging”.
4. Capital Appreciation
Appreciation is the increase in value of a property over time due to inflation, supply and demand, capital improvements and other factors. When rents or occupancy rates increase it translates into higher property values. Occasionally we have hot real estate markets which further push real estate prices higher.
5. Mortgage Reduction
While you are receiving rent each month from your tenant you are actually building equity as your mortgage is being paid down. Over time your cash flow is increasing because your rent is increasing but your mortgage is being paid down.
6. Good Overall Returns
The power of Real Estate investing provides investors with stable rents, increased property values, and tax savings.
7. Predictable Revenue
In the long run the cash flow from the real estate investment provides consistent income during our retirement years.
8. Operating Capital
Real Estate provides monthly cash flow to give the investment the ability to withstand economic downturns or temporary shortfalls.
9. Refinancing Opportunities
The power of refinancing allows real estate investors the ability to borrow against the equity in their properties to purchase additional properties. This simple strategy has made many average people become millionaires.
10. Tax Efficiency
Owning real estate has many tax advantages. Investors should speak to their own accountants to determine the best tax strategy for their particular situation. Real Estate is treated more favorable than other investments and taxes are deferred until property is sold.
11. Diversification
Real Estate is a great way to diversify and you still have security, liquidity, and long term appreciation. Which are all the basics of good investing?
12. Efficient & Synergistic
Investing with Invest@Ease provides investors with cost savings and efficiency which is usually unattainable to individual investors if they went at it alone.
13. Flexibility
With Invest@Ease investors can start at their own comfort level, and buy additional investments as they become more comfortable.
14. Bottom Line
Real Estate has a great track record of providing cash flow, tax advantages and appreciation over the long term.
1. Proven Track Record
If you look at the average real estate prices you will see a trend where real estate prices continue to go higher. If one examines real estate prices five years ago compared to today you will see that prices are much higher. The same can be said if one looks back 10, 15 and 20 years back, you will find real estate prices have always increased. Just look at the value of your own home. Most likely it has increased from when you last purchased the home. There is an old saying,” invest in real estate and wait, not wait to invest in real estate.” A smart investor once said, "do whatever it takes but buy one property a year and soon you will be wealthy". Real Estate has always been the greatest wealth-builder in history, unlike the volatile stock market where it’s difficult for the average person to make money. Also as the population continues to grow and more immigrants settle in our great country than the demand for real estate will only continue to grow and push real estate prices higher.
2. Ownership
Real Estate is a tangible asset and you control when to sell. Obviously the longer you keep your investment the great your profits.
3. Leveraging
With a small down payment you have the ability to own a property with little money down that carries. Leverage, plain and simple, is debt; it's using other people's money to buy, which actually allows you to use less of your own money to get more property. This is what is referred to as the “Power of Leveraging”.
4. Capital Appreciation
Appreciation is the increase in value of a property over time due to inflation, supply and demand, capital improvements and other factors. When rents or occupancy rates increase it translates into higher property values. Occasionally we have hot real estate markets which further push real estate prices higher.
5. Mortgage Reduction
While you are receiving rent each month from your tenant you are actually building equity as your mortgage is being paid down. Over time your cash flow is increasing because your rent is increasing but your mortgage is being paid down.
6. Good Overall Returns
The power of Real Estate investing provides investors with stable rents, increased property values, and tax savings.
7. Predictable Revenue
In the long run the cash flow from the real estate investment provides consistent income during our retirement years.
8. Operating Capital
Real Estate provides monthly cash flow to give the investment the ability to withstand economic downturns or temporary shortfalls.
9. Refinancing Opportunities
The power of refinancing allows real estate investors the ability to borrow against the equity in their properties to purchase additional properties. This simple strategy has made many average people become millionaires.
10. Tax Efficiency
Owning real estate has many tax advantages. Investors should speak to their own accountants to determine the best tax strategy for their particular situation. Real Estate is treated more favorable than other investments and taxes are deferred until property is sold.
11. Diversification
Real Estate is a great way to diversify and you still have security, liquidity, and long term appreciation. Which are all the basics of good investing?
12. Efficient & Synergistic
Investing with Invest@Ease provides investors with cost savings and efficiency which is usually unattainable to individual investors if they went at it alone.
13. Flexibility
With Invest@Ease investors can start at their own comfort level, and buy additional investments as they become more comfortable.
14. Bottom Line
Real Estate has a great track record of providing cash flow, tax advantages and appreciation over the long term.
Friday, December 23, 2011
Expect a Fairly Stable Real Estate Market in 2012
Experts are calling for a bit of a mixed bag in Canadian real estate for 2012.
Housing market prognosticators say next year will be marked by bursts of growth in certain hot regional markets throughout the country combined with a cooling trend in other areas, namely that of robust markets such as Toronto.
Look for mixed market signals in Canadian real estate as a market theme in 2012 as cities like Halifax and Edmonton and Calgary will begin to feel a marked increase in demand for real estate purchases, with average price increases beginning late in the year, according to says Vancouver real estate consultant Don Campbell. Toronto’s hot market will start to ease off next year, although its condo real estate market will remain stable.
“Sophisticated homeowners and investors will have to dig a little deeper, especially in 2012 and 2013, to find out how their region is performing because Canada is really going to be a tale of regions over the next few years,” says Campbell, a real estate investor and author. “Where one region is booming, the next may be underperforming.”
Expect price moderation in Toronto in the neighbourhood of five to 10 per cent, says Todd Hirsch, a senior economist with ATB Financial in Calgary. “There could be a little more worry of a small bubble (bursting) in Toronto,” says Hirsch, “because the Ontario economy in 2012 will likely cool off a bit, not tremendously, though. You won’t see a recession.”If you’re thinking the same for Vancouver, think again, advises Hirsch. Given that Vancouver is the destination of choice for Asian investors, prices there will remain far higher than what they are in Calgary and Toronto. This will likely continue into 2012, predicts Hirsch, who expects the Chinese economy will moderate next year although not enough to prevent its citizens from wanting to invest in Canada’s west coast real estate market.
But the markets in Toronto and especially Vancouver, which comprise approximately 40 per cent of Canadian real estate, should be eyed carefully by home buyers or investors. According to Campbell, time lines should run short at 12 to 18 months or long at five years or more as statistics show signs of market turmoil in the medium term (19 months to four years) as interest rates begin to edge up, inventory outstrips population demand. That’s when speculators will try to dump properties and market confidence will be lower. In Calgary and Edmonton expect stable prices, says Hirsch.
Saskatchewan is where you’ll find the best real estate deals in the country with the average house price in Saskatoon running at $320,000. That province also has the lowest unemployment figures in Canada with unemployment pegged at three per cent in Regina.
Halifax and St. John’s are stand alone in Atlantic Canada as those two cities experience an unrivalled economic boom right now. House prices in those cities could actually gain a little in 2012.
As for the rest of Atlantic Canada, notes Hirsch, much of it is a depressed economy in which its rural areas are being hollowed out as residents leave the countryside for jobs in urban areas.Quebec City’s economy is faring not too badly these days as its house prices are undervalued at about one third below the national average.
Still, growth in Quebec will be a bit sluggish in 2012 with no real strong real estate gains. While its economy will be sluggish, keep in mind the province’s housing prices are not as overvalued as in Toronto so you won’t see as much deflationary pressure as in Toronto. While the province is not looking at a recession in 2012, the year will be economically softer.
Strong real estate markets will be in Canadian regions where job growth continues, low unemployment rates continue to drop and where there’s a migration of people with jobs (as opposed to retirees), says Campbell, who cites Halifax, Kitchener/Waterloo/Cambridge, Hamilton, Saskatoon, Edmonton, Calgary, St. John, Dawson Creek and Surrey as having the most stable markets.“Many Canadians will be fooled into thinking that their home value is either increasing or decreasing because of reports that are released discussing the ‘Average Price in Canada,’ “ he says, “producing either a false sense of confidence or a false sense of doom, depending on the report of the month.”
According to CREA, the national housing market is edging closer to being a seller’s market.“The Canadian housing market is proving resilient in the face of ongoing global economic and financial uncertainty, to the benefit of Canadian economic growth,” said Gary Morse, CREA’s president. “That said, some housing markets are picking up, while others are holding steady or consolidating.”
A quarterly economic forecast by TD Economics economist Francis Fong indicates that the low interest rate environment coupled with slowing jobs and income growth, especially in the first six months of 2012, will hold back resurgence in housing activity. Expect a slight pullback in homes sales and prices to the tune of one to two per cent. “Looking ahead, 2012 will likely be a much more subdued year for the housing market,” wrote Fong in her report released this week.
Housing market prognosticators say next year will be marked by bursts of growth in certain hot regional markets throughout the country combined with a cooling trend in other areas, namely that of robust markets such as Toronto.
Look for mixed market signals in Canadian real estate as a market theme in 2012 as cities like Halifax and Edmonton and Calgary will begin to feel a marked increase in demand for real estate purchases, with average price increases beginning late in the year, according to says Vancouver real estate consultant Don Campbell. Toronto’s hot market will start to ease off next year, although its condo real estate market will remain stable.
“Sophisticated homeowners and investors will have to dig a little deeper, especially in 2012 and 2013, to find out how their region is performing because Canada is really going to be a tale of regions over the next few years,” says Campbell, a real estate investor and author. “Where one region is booming, the next may be underperforming.”
Expect price moderation in Toronto in the neighbourhood of five to 10 per cent, says Todd Hirsch, a senior economist with ATB Financial in Calgary. “There could be a little more worry of a small bubble (bursting) in Toronto,” says Hirsch, “because the Ontario economy in 2012 will likely cool off a bit, not tremendously, though. You won’t see a recession.”If you’re thinking the same for Vancouver, think again, advises Hirsch. Given that Vancouver is the destination of choice for Asian investors, prices there will remain far higher than what they are in Calgary and Toronto. This will likely continue into 2012, predicts Hirsch, who expects the Chinese economy will moderate next year although not enough to prevent its citizens from wanting to invest in Canada’s west coast real estate market.
But the markets in Toronto and especially Vancouver, which comprise approximately 40 per cent of Canadian real estate, should be eyed carefully by home buyers or investors. According to Campbell, time lines should run short at 12 to 18 months or long at five years or more as statistics show signs of market turmoil in the medium term (19 months to four years) as interest rates begin to edge up, inventory outstrips population demand. That’s when speculators will try to dump properties and market confidence will be lower. In Calgary and Edmonton expect stable prices, says Hirsch.
Saskatchewan is where you’ll find the best real estate deals in the country with the average house price in Saskatoon running at $320,000. That province also has the lowest unemployment figures in Canada with unemployment pegged at three per cent in Regina.
Halifax and St. John’s are stand alone in Atlantic Canada as those two cities experience an unrivalled economic boom right now. House prices in those cities could actually gain a little in 2012.
As for the rest of Atlantic Canada, notes Hirsch, much of it is a depressed economy in which its rural areas are being hollowed out as residents leave the countryside for jobs in urban areas.Quebec City’s economy is faring not too badly these days as its house prices are undervalued at about one third below the national average.
Still, growth in Quebec will be a bit sluggish in 2012 with no real strong real estate gains. While its economy will be sluggish, keep in mind the province’s housing prices are not as overvalued as in Toronto so you won’t see as much deflationary pressure as in Toronto. While the province is not looking at a recession in 2012, the year will be economically softer.
Strong real estate markets will be in Canadian regions where job growth continues, low unemployment rates continue to drop and where there’s a migration of people with jobs (as opposed to retirees), says Campbell, who cites Halifax, Kitchener/Waterloo/Cambridge, Hamilton, Saskatoon, Edmonton, Calgary, St. John, Dawson Creek and Surrey as having the most stable markets.“Many Canadians will be fooled into thinking that their home value is either increasing or decreasing because of reports that are released discussing the ‘Average Price in Canada,’ “ he says, “producing either a false sense of confidence or a false sense of doom, depending on the report of the month.”
According to CREA, the national housing market is edging closer to being a seller’s market.“The Canadian housing market is proving resilient in the face of ongoing global economic and financial uncertainty, to the benefit of Canadian economic growth,” said Gary Morse, CREA’s president. “That said, some housing markets are picking up, while others are holding steady or consolidating.”
A quarterly economic forecast by TD Economics economist Francis Fong indicates that the low interest rate environment coupled with slowing jobs and income growth, especially in the first six months of 2012, will hold back resurgence in housing activity. Expect a slight pullback in homes sales and prices to the tune of one to two per cent. “Looking ahead, 2012 will likely be a much more subdued year for the housing market,” wrote Fong in her report released this week.
Monday, December 12, 2011
When Is The Best Time of Year to Sell a House?
Is there such a thing as a best time of year to sell a house? Certainly, seasonal factors come into play when trying to sell a home, but there are other things to consider as well, like the tug and pull of supply and demand, as well as unique local market conditions.
No matter when a home goes on the market, one should take a few things under consideration that will likely affect not just the ability to sell a property, but more importantly the ability to get your asking price. Timing, it seems, is everything.
The Economy
While the economy does not follow the predictable ebb and flow of the seasonal changes in real estate and in buyer attention, the economy, it’s state and it’s prospects boil down to property values, and consumer confidence. When the economy is under fire, people are nervous about their jobs. There is generally a reluctance to spend, accumulate debt or make major purchases.
The market will tell you what a home is worth. The problem is, during an economic downturn, the market may value your home lower than you had hoped, or than from when you started.
That may succeed in removing a number of buyers from your pool. For those that must buy a property though, the economy will play less of a factor in the decision to purchase, but it may give them power at the bargaining table, and it may be more difficult to get the desired price. Interest rates figure into this as well. The lower they are, the more your pool of buyers may increase as well, as the cost to borrow comes down and people, in theory can borrow more.
Springtime
In a country like Canada, where there are four distinct seasons, seasonal influences play a large part in creating good selling conditions.
Wintertime brings with it a series of challenges, among them the weather, holiday distractions and lack of interest from buyers.
When the snow thaws though, and greenery re-emerges from the ground, buyers tend to re-emerge as well. The spring tends to be the peak of the market, simply because the timing suits people in general. The weather is more favourable, properties generally can be better displayed, and moves and property closings can more reasonably be managed through the summer months, so for those with families relocating is less disruptive.
According to data, home sales begin in February, with closings peaking through late May, June, July and August- and this has been a consistent trend since the early 2000’s. For sellers then, they will likely have the opportunity to engage more traffic and interest in their homes.
Patience is a Virtue
While the springtime may typically be a more optimal time to sell, there will typically be more competition on the market. Sometimes, if a seller is flexible on their dates, it may be advisable to wait until the spring market to list, simply because of the flood of buyers onto the market. Often, a property will sell for more, and sell much faster because of volume.
As there will be more properties on the market, the seller really needs to take time to make their property stand out, using the slow winter months to actively prepare their homes to list. For some, it can take weeks, or even months to de-clutter and re-organize their properties to best reflect the space, and the positive attributes.
Advise sellers that, even though you may list in the spring, the selling process begins now behind the scenes. Think staging before selling.
No matter when a home goes on the market, one should take a few things under consideration that will likely affect not just the ability to sell a property, but more importantly the ability to get your asking price. Timing, it seems, is everything.
The Economy
While the economy does not follow the predictable ebb and flow of the seasonal changes in real estate and in buyer attention, the economy, it’s state and it’s prospects boil down to property values, and consumer confidence. When the economy is under fire, people are nervous about their jobs. There is generally a reluctance to spend, accumulate debt or make major purchases.
The market will tell you what a home is worth. The problem is, during an economic downturn, the market may value your home lower than you had hoped, or than from when you started.
That may succeed in removing a number of buyers from your pool. For those that must buy a property though, the economy will play less of a factor in the decision to purchase, but it may give them power at the bargaining table, and it may be more difficult to get the desired price. Interest rates figure into this as well. The lower they are, the more your pool of buyers may increase as well, as the cost to borrow comes down and people, in theory can borrow more.
Springtime
In a country like Canada, where there are four distinct seasons, seasonal influences play a large part in creating good selling conditions.
Wintertime brings with it a series of challenges, among them the weather, holiday distractions and lack of interest from buyers.
When the snow thaws though, and greenery re-emerges from the ground, buyers tend to re-emerge as well. The spring tends to be the peak of the market, simply because the timing suits people in general. The weather is more favourable, properties generally can be better displayed, and moves and property closings can more reasonably be managed through the summer months, so for those with families relocating is less disruptive.
According to data, home sales begin in February, with closings peaking through late May, June, July and August- and this has been a consistent trend since the early 2000’s. For sellers then, they will likely have the opportunity to engage more traffic and interest in their homes.
Patience is a Virtue
While the springtime may typically be a more optimal time to sell, there will typically be more competition on the market. Sometimes, if a seller is flexible on their dates, it may be advisable to wait until the spring market to list, simply because of the flood of buyers onto the market. Often, a property will sell for more, and sell much faster because of volume.
As there will be more properties on the market, the seller really needs to take time to make their property stand out, using the slow winter months to actively prepare their homes to list. For some, it can take weeks, or even months to de-clutter and re-organize their properties to best reflect the space, and the positive attributes.
Advise sellers that, even though you may list in the spring, the selling process begins now behind the scenes. Think staging before selling.
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