March saw a multitude of new home sales in the GTA, ultimately tipping Q1 into strong territory, according to new figures released by the Building Industry & Land Development Association (BILD) through a report by RealNet.
Altogether, there were 3,434 new homes and condos sold in March 2011. During Q1 there was a total of 9,374 units sold which signals a drop of 8.5 %, year-over-year.
“Last year, we experienced the new home sales equivalent of March madness as 4,569 new homes were snapped up by homebuyers in a single month. The 3,434 new homes sales in March of this year, albeit down 25 per cent year/year, represents a healthy but much more stable level of activity," said BILD President and CEO Stephen Dupuis.
"While the demand side remains strong, the interplay of factors like the HST and the new mortgage financing rules are certainly keeping the froth factor at bay as the new housing market moves into a state of sustainable equilibrium," he added.
Looking at Q1 completely, RealNet Canada President George Carras pointed out that high-rise sales were steady with those seen in Q1/2010, partly attributed to the $75,000 price differential compared with low-rise. The current high-rise price index sits at $446,965 while the low-rise product is a staggering $522,034 for low-rise product.
"You can't sell what you don't have," Carras explained, noting that as at March 31, 2011, there was only 5.5 months of supply of low-rise new homes. "Active new home inventories are well below the long-term average levels."
Looking at various regions through the GTA, the York area saw the biggest drop, down by 40.7%, followed by Toronto proper at 25.8%. On the other side, the biggest increase was in Halton, where sales increased by 43.1%- which, incidentally is the only region to register an increase.
Tuesday, April 26, 2011
Thursday, April 21, 2011
GTA Prices Up, Sales Down
According to GTA Realtors, April has started off in a promising manner, although sales in the first two weeks have actually dropped by 3% year-over –year. Similarly, there was a drop of 21% year-over-year in the number of new listings
There is hope that April will finish with a bang, though. “Sales activity was quite strong during the first two weeks of April. If this level of activity is sustained for the remainder of the month, we could see April transactions close to last year’s record result. Positive economic news has kept households confident in their ability to purchase and pay for a home over the long term,” said TREB President Bill Johnston.
While listings and sales numbers have dropped, average prices have increased. According to TREB’s report the average selling price for firm deals reported through the first two weeks of April was $483,165; this signals a 12 % increase over the average price of $430,271 year-over -year.
“The number of homes listed for sale so far in 2011 has been below expectations. Market conditions have tightened, resulting in increased competition between home buyers and accelerating rates of average price growth,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
There is incentive to jump into the market now, and they are banking on the lure of price appreciation to bring more sellers to market: “The strong rate of price growth reported for the first two weeks of April should entice more households to list their homes for sale. This would result in more balanced market conditions and more moderate rates of price growth,” continued Mercer.
There is hope that April will finish with a bang, though. “Sales activity was quite strong during the first two weeks of April. If this level of activity is sustained for the remainder of the month, we could see April transactions close to last year’s record result. Positive economic news has kept households confident in their ability to purchase and pay for a home over the long term,” said TREB President Bill Johnston.
While listings and sales numbers have dropped, average prices have increased. According to TREB’s report the average selling price for firm deals reported through the first two weeks of April was $483,165; this signals a 12 % increase over the average price of $430,271 year-over -year.
“The number of homes listed for sale so far in 2011 has been below expectations. Market conditions have tightened, resulting in increased competition between home buyers and accelerating rates of average price growth,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
There is incentive to jump into the market now, and they are banking on the lure of price appreciation to bring more sellers to market: “The strong rate of price growth reported for the first two weeks of April should entice more households to list their homes for sale. This would result in more balanced market conditions and more moderate rates of price growth,” continued Mercer.
Friday, April 8, 2011
TREB Releases Promising March Figures for the GTA
According to the March figures just released for the GTA, March 2011 was the second strongest March on record, with 9,262 sales recorded; a number that is only 11% lower than the records broken last March.
“The strong home sales reported in March and throughout the first quarter of 2011 have been based on a solid affordability picture and improving economic conditions in the GTA and country-wide,” said Toronto Real Estate Board (TREB) President Bill Johnston.
Looking at average selling prices, March 2011 saw prices go up 5% year over year to $456,147. Condos and semi-detached homes saw the greatest increase in price, both rising by 7%.
A general tightening of the market itself contributed to the appreciations in value. “Market conditions were tighter in March compared to last year. With more competition between buyers, we have seen a strong but sustainable rate of price growth,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
“The spring market, in particular the months of March and April, is an ideal time for home owners to list their properties for sale. It is in these critical months where the momentum of demand will cycle to its highest, while the supply of good housing stock will be at its lowest."
"Buyers active since the autumn,who, for whatever reasons, did not secure a purchase become fully keen house hunters at the beginning of the New Year. Already suffering from buyer’s fatigue from several months of searching, these buyers become highly motivated. The problem for them is not their lack of motivation, but the limited supply of property.”
As the spring, and the busy season continues, the question remains- will this uptick in sales, and steady price appreciation continue?
Based on good old fashioned, supply and demand- regardless of what else is going on. “I'm optimistic for Toronto's downtown freehold housing market. In fact, I'm confident enough to predict the ongoing lack of supply will outstrip the burgeoning demand for all of 2011, regardless of the economic climate.”
“The strong home sales reported in March and throughout the first quarter of 2011 have been based on a solid affordability picture and improving economic conditions in the GTA and country-wide,” said Toronto Real Estate Board (TREB) President Bill Johnston.
Looking at average selling prices, March 2011 saw prices go up 5% year over year to $456,147. Condos and semi-detached homes saw the greatest increase in price, both rising by 7%.
A general tightening of the market itself contributed to the appreciations in value. “Market conditions were tighter in March compared to last year. With more competition between buyers, we have seen a strong but sustainable rate of price growth,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
“The spring market, in particular the months of March and April, is an ideal time for home owners to list their properties for sale. It is in these critical months where the momentum of demand will cycle to its highest, while the supply of good housing stock will be at its lowest."
"Buyers active since the autumn,who, for whatever reasons, did not secure a purchase become fully keen house hunters at the beginning of the New Year. Already suffering from buyer’s fatigue from several months of searching, these buyers become highly motivated. The problem for them is not their lack of motivation, but the limited supply of property.”
As the spring, and the busy season continues, the question remains- will this uptick in sales, and steady price appreciation continue?
Based on good old fashioned, supply and demand- regardless of what else is going on. “I'm optimistic for Toronto's downtown freehold housing market. In fact, I'm confident enough to predict the ongoing lack of supply will outstrip the burgeoning demand for all of 2011, regardless of the economic climate.”
Wednesday, April 6, 2011
Expect demand to remain healthy
April 1, 2011 -- Existing home sales in the Greater Toronto Area remained strong in February. There were 6,266 transactions reported through TorontoMLS® representing a 14 per cent decline from the record result reported in February 2010. While not representing a record, February 2011 sales were 50 per cent higher than the number reported in February 2009 during the recession and slightly higher than the average February sales over the previous ten years.
In my opinion, one of the key factors underlying the number of transactions we see in the resale home market is consumer confidence. If people are confident in their ability to purchase and pay for a home over the long term, sales levels will remain strong. Continued improvement in the GTA economy over the past year has arguably kept confidence levels high. We have seen steady growth in the number of people employed, the unemployment rate has receded markedly from the recessionary peak and income growth has accelerated.
RBC recently released the results of their annual Home Ownership Study. The results confirm what we have experienced in the housing market over the past year. The percentage of Canadians who said they would likely purchase a home over the next two years was at 29 per cent – down from 31 per cent in 2010 (the highest level on record), but the second highest reading since 2006. The percentage of Ontarians planning on purchasing a home over the next two years was slightly lower than the national average at 28 per cent. I asked Jason Mercer, the Toronto Real Estate Board's Senior Manager of Market Analysis to comment.
"The RBC survey results follow the trend we have seen recently in the GTA. Last year this time home sales were running well-above what the level of population dictated. In 2011 and 2012, the pace of sales is expected to be more sustainable, meaning in line with the expected level of population and population growth. Expect to see between 80,000 and 85,000 transactions through TorontoMLS® this year, and other 85,000 to 90,000 sales in 2012."
I also asked Mr. Mercer to provide his views on the direction of price over the next couple of years. He is confident that we will continue to see growth through the end of 2012, albeit at a more subdued rate.
"Average existing home selling prices are expected to increase by three to five per cent annually over the next two years. Even with expected mortgage rate hikes in 2011 and 2012, the share of the average GTA household's income dedicated to mortgage principal and interest, property tax and utilities will remain manageable in relation to accepted lending standards," continued Mercer.
"Recently, average price growth has also been supported by relatively tight market conditions. While sales have remained quite strong, the number of new listings has been low from a historic perspective. There has been enough competition between home buyers to promote price growth," added Mercer.
Market conditions through the recession-recovery period between 2008 and the end of 2010 can certainly be characterized as volatile. Over the next two years, by most accounts, it seems like the housing market in the GTA is getting back to normal.
In my opinion, one of the key factors underlying the number of transactions we see in the resale home market is consumer confidence. If people are confident in their ability to purchase and pay for a home over the long term, sales levels will remain strong. Continued improvement in the GTA economy over the past year has arguably kept confidence levels high. We have seen steady growth in the number of people employed, the unemployment rate has receded markedly from the recessionary peak and income growth has accelerated.
RBC recently released the results of their annual Home Ownership Study. The results confirm what we have experienced in the housing market over the past year. The percentage of Canadians who said they would likely purchase a home over the next two years was at 29 per cent – down from 31 per cent in 2010 (the highest level on record), but the second highest reading since 2006. The percentage of Ontarians planning on purchasing a home over the next two years was slightly lower than the national average at 28 per cent. I asked Jason Mercer, the Toronto Real Estate Board's Senior Manager of Market Analysis to comment.
"The RBC survey results follow the trend we have seen recently in the GTA. Last year this time home sales were running well-above what the level of population dictated. In 2011 and 2012, the pace of sales is expected to be more sustainable, meaning in line with the expected level of population and population growth. Expect to see between 80,000 and 85,000 transactions through TorontoMLS® this year, and other 85,000 to 90,000 sales in 2012."
I also asked Mr. Mercer to provide his views on the direction of price over the next couple of years. He is confident that we will continue to see growth through the end of 2012, albeit at a more subdued rate.
"Average existing home selling prices are expected to increase by three to five per cent annually over the next two years. Even with expected mortgage rate hikes in 2011 and 2012, the share of the average GTA household's income dedicated to mortgage principal and interest, property tax and utilities will remain manageable in relation to accepted lending standards," continued Mercer.
"Recently, average price growth has also been supported by relatively tight market conditions. While sales have remained quite strong, the number of new listings has been low from a historic perspective. There has been enough competition between home buyers to promote price growth," added Mercer.
Market conditions through the recession-recovery period between 2008 and the end of 2010 can certainly be characterized as volatile. Over the next two years, by most accounts, it seems like the housing market in the GTA is getting back to normal.
Monday, March 21, 2011
What effect will the mortgage rule changes have on the property market in Canada?
Tougher mortgage rules starting today are getting a failing grade by mortgage industry professionals who say the federal government effectively dropped the ball in a half-hearted attempt to deal with rising consumer debt.
If Ottawa were genuinely interested in tackling high amounts of personal debt, it needs to address other means of high-interest loans such as credit cards, personal loans and lines of credit, they say.
“We need more legislation on access to other types of loans,” says Claire Drage, a mortgage agent with Dominion Lending Centres Home Capital Solutions Inc. in Oakville, Ont.
“Do you really need a Chase card? Capital One? Visa and Mastercard? Sears? Bay card? There’s so much easy access to high interest consumer debt.”
As for how the mortgage changes will affect the housing industry, Drage suspects it will be business as usual for the most part.
“The demand will still be there,” she says. “Consumers might have to cut their choices a bit. It’s like going to an arcade and winning coupons and instead of getting to choose prizes from the bottom three shelves, now you get to choose from the bottom two.”
In January, federal finance minister Jim Flaherty announced he would shorten the maximum amortization on Canadian mortgages to 30 years from 35 years, and lower the refinancing limit from 90 per cent of a home’s value to 85 per cent. The government also announced it would withdraw insurance on home equity lines of credit.
The move came after reports about the rising debt load of Canadians. Statistics showed household debt in Canada surpassed the U.S. for the first time in 12 years. Statistics Canada reported the average Canadian debt-to-income ration hit a record 148.1 per cent.
Kristian Harris, a mortgage broker with Monstermortgage.ca in Toronto believes the government’s mortgage changes will have little impact.
“The government’s purpose of making these changes is to slow down the housing market,” Harris says. “They’re worried about consumer household debt. I think this is a sign the government doesn’t think interest rates will rise substantially over the next 12 to 18 months so they felt the need to implement these new rules. If the government thought rates were going to increase significantly, they wouldn’t need to make these changes.”
Although many focus on the mortgage market when it comes to consumer debt, they should also look at the easy access available to many Canadians for other types of credit, he says, adding that the government should eliminate giving credit cards out to students and distributing Visa card applications at hockey games.
Furthermore, Harris doesn’t think the changes are going to impact the industry or the real estate market all that much. The reduction on a mortgage’s amortization period to 30 years will, however, impact some borrowers as to how much they can qualify for. But at about $100 a month on a $300,000 mortgage, the amount is not overly significant.
“It’s only $35 for every $100,00,” he says. “It’s not a huge difference at the end of the day.”
Adam Hawryluk, a mortgage consultant for INVIS Mortgages in Nananimo, B.C., believes the government’s mortgage changes are a step in the right direction. But he would like to see more sweeping changes that also target education and credit regulations addressing the whole spectrum of debt.
Canadians would be better served if they were somehow educated about debt and money issues, he says. In addition, Hawryluk would like to see the government step in to either lower the interest rates that credit card companies are allowed to charge or make access to credit cards more stringent.
“When people are financially extended beyond their means, it’s a scary situation for the whole country,” says Hawryluk. “The mortgage changes are a step in the right direction because we’ve learned from U.S. housing industry.”
The issue of Canadians carrying debts close to or over the edge has been a challenge for many mortgage professionals. Hawryluk recalls an experience with older clients whose monthly debt payments on credit cards and loans climbed to $3,100. The couple had the added burden of being on a fixed income. Fortunately, they had some equity in their home and Hawryluk managed to consolidate their debts in a new mortgage, giving them much-needed breathing space.
“The woman was crying in my office,” he recalls. “They know they’ll never be mortgage free but on a month-to-month basis, they can survive now. They wished they would have come to me years ago.”
Robert McLister, a mortgage professional who writes about the industry for Canadian Mortgage Trends, gives the new mortgage rules a varied critique. Given Canadians’ record debt levels, McLister believes the government had to pull in the reins on borrowing. He’s just not wild about what they decided to focus on.
“The spirit behind it is wise and well intended,” says McLister. “But I think the actual execution of it is poor because it reduces the probability of excess borrowing overall which is great but, at same time, it handicaps highly qualified borrowers that present virtually no default risk for no good reason at all.”
There are many reasons, says McLister, why a borrower might need an additional five per cent on a refinancing. And they don’t have to do with luxury items. He’s referring to being suddenly faced with an illness or a divorce or perhaps having to send your child off to university. The rules also penalize the self-employed person, who might save the extra funds in a mortgage with a 35-year amortization to keep as a back up for their lack of steady income.
“Removing the flexibility from the market in general for people that are extremely low risk makes no economic sense whatsoever,” he adds.
Calgary’s Marty Laframboise, a mortgage broker with VERICO: Mortgage Planning Central, is critical of the changes. He thinks the government should have mandated that if those with strong credit scores wanted to stay on a 35-year amortization, they could do so with biweekly accelerated payments, which would automatically reduce the mortgage term down to 30 years.
“I don’t like the changes,” he said. “They should have been handled differently. It really does take a lot of people out of the price range they’re shopping in.”
Laframboise points to a client who had found a house he liked for $425,000, affordable thanks to the 35-year amortization period. The client had the additional stress that his wife wouldn’t be able to see the house until the end of this month, which means the couple will only be able to afford $395,000 on the new 30-year limit.
“The client is now faced with a situation of having to decide whether to take a leap of faith and hope that his wife will like the house or wait until she comes back and look for something $30,000.00-$35,000.00 cheaper.”
Drage agrees that the country’s overall financial literacy needs a boost. She thinks money, budgeting and debt should be taught to Canadians once they’re in high school. That, she believes, would help prepare post-secondary school students, who are often introduced to credit cards during their college and university days.
Drage has taken some extreme measures with clients struggling to manage their debt loads. She’s taken scissors with her to a client’s home when working on a refinancing application.
“They wanted to swipe and play instead and swipe and pay,” she says.
She’s even advised clients to tear up all but one main credit card. If the client insists on keeping a second card, Drage has advised that the client keep it frozen in ice in an old plastic container in the freezer.
“There’s a way of thinking that it’s easy to get, so it’s easy to spend,” she says. “It’s just a matter of looking at your situation and being realistic. Have a budget and a plan and spend within your means."
If Ottawa were genuinely interested in tackling high amounts of personal debt, it needs to address other means of high-interest loans such as credit cards, personal loans and lines of credit, they say.
“We need more legislation on access to other types of loans,” says Claire Drage, a mortgage agent with Dominion Lending Centres Home Capital Solutions Inc. in Oakville, Ont.
“Do you really need a Chase card? Capital One? Visa and Mastercard? Sears? Bay card? There’s so much easy access to high interest consumer debt.”
As for how the mortgage changes will affect the housing industry, Drage suspects it will be business as usual for the most part.
“The demand will still be there,” she says. “Consumers might have to cut their choices a bit. It’s like going to an arcade and winning coupons and instead of getting to choose prizes from the bottom three shelves, now you get to choose from the bottom two.”
In January, federal finance minister Jim Flaherty announced he would shorten the maximum amortization on Canadian mortgages to 30 years from 35 years, and lower the refinancing limit from 90 per cent of a home’s value to 85 per cent. The government also announced it would withdraw insurance on home equity lines of credit.
The move came after reports about the rising debt load of Canadians. Statistics showed household debt in Canada surpassed the U.S. for the first time in 12 years. Statistics Canada reported the average Canadian debt-to-income ration hit a record 148.1 per cent.
Kristian Harris, a mortgage broker with Monstermortgage.ca in Toronto believes the government’s mortgage changes will have little impact.
“The government’s purpose of making these changes is to slow down the housing market,” Harris says. “They’re worried about consumer household debt. I think this is a sign the government doesn’t think interest rates will rise substantially over the next 12 to 18 months so they felt the need to implement these new rules. If the government thought rates were going to increase significantly, they wouldn’t need to make these changes.”
Although many focus on the mortgage market when it comes to consumer debt, they should also look at the easy access available to many Canadians for other types of credit, he says, adding that the government should eliminate giving credit cards out to students and distributing Visa card applications at hockey games.
Furthermore, Harris doesn’t think the changes are going to impact the industry or the real estate market all that much. The reduction on a mortgage’s amortization period to 30 years will, however, impact some borrowers as to how much they can qualify for. But at about $100 a month on a $300,000 mortgage, the amount is not overly significant.
“It’s only $35 for every $100,00,” he says. “It’s not a huge difference at the end of the day.”
Adam Hawryluk, a mortgage consultant for INVIS Mortgages in Nananimo, B.C., believes the government’s mortgage changes are a step in the right direction. But he would like to see more sweeping changes that also target education and credit regulations addressing the whole spectrum of debt.
Canadians would be better served if they were somehow educated about debt and money issues, he says. In addition, Hawryluk would like to see the government step in to either lower the interest rates that credit card companies are allowed to charge or make access to credit cards more stringent.
“When people are financially extended beyond their means, it’s a scary situation for the whole country,” says Hawryluk. “The mortgage changes are a step in the right direction because we’ve learned from U.S. housing industry.”
The issue of Canadians carrying debts close to or over the edge has been a challenge for many mortgage professionals. Hawryluk recalls an experience with older clients whose monthly debt payments on credit cards and loans climbed to $3,100. The couple had the added burden of being on a fixed income. Fortunately, they had some equity in their home and Hawryluk managed to consolidate their debts in a new mortgage, giving them much-needed breathing space.
“The woman was crying in my office,” he recalls. “They know they’ll never be mortgage free but on a month-to-month basis, they can survive now. They wished they would have come to me years ago.”
Robert McLister, a mortgage professional who writes about the industry for Canadian Mortgage Trends, gives the new mortgage rules a varied critique. Given Canadians’ record debt levels, McLister believes the government had to pull in the reins on borrowing. He’s just not wild about what they decided to focus on.
“The spirit behind it is wise and well intended,” says McLister. “But I think the actual execution of it is poor because it reduces the probability of excess borrowing overall which is great but, at same time, it handicaps highly qualified borrowers that present virtually no default risk for no good reason at all.”
There are many reasons, says McLister, why a borrower might need an additional five per cent on a refinancing. And they don’t have to do with luxury items. He’s referring to being suddenly faced with an illness or a divorce or perhaps having to send your child off to university. The rules also penalize the self-employed person, who might save the extra funds in a mortgage with a 35-year amortization to keep as a back up for their lack of steady income.
“Removing the flexibility from the market in general for people that are extremely low risk makes no economic sense whatsoever,” he adds.
Calgary’s Marty Laframboise, a mortgage broker with VERICO: Mortgage Planning Central, is critical of the changes. He thinks the government should have mandated that if those with strong credit scores wanted to stay on a 35-year amortization, they could do so with biweekly accelerated payments, which would automatically reduce the mortgage term down to 30 years.
“I don’t like the changes,” he said. “They should have been handled differently. It really does take a lot of people out of the price range they’re shopping in.”
Laframboise points to a client who had found a house he liked for $425,000, affordable thanks to the 35-year amortization period. The client had the additional stress that his wife wouldn’t be able to see the house until the end of this month, which means the couple will only be able to afford $395,000 on the new 30-year limit.
“The client is now faced with a situation of having to decide whether to take a leap of faith and hope that his wife will like the house or wait until she comes back and look for something $30,000.00-$35,000.00 cheaper.”
Drage agrees that the country’s overall financial literacy needs a boost. She thinks money, budgeting and debt should be taught to Canadians once they’re in high school. That, she believes, would help prepare post-secondary school students, who are often introduced to credit cards during their college and university days.
Drage has taken some extreme measures with clients struggling to manage their debt loads. She’s taken scissors with her to a client’s home when working on a refinancing application.
“They wanted to swipe and play instead and swipe and pay,” she says.
She’s even advised clients to tear up all but one main credit card. If the client insists on keeping a second card, Drage has advised that the client keep it frozen in ice in an old plastic container in the freezer.
“There’s a way of thinking that it’s easy to get, so it’s easy to spend,” she says. “It’s just a matter of looking at your situation and being realistic. Have a budget and a plan and spend within your means."
Wednesday, March 16, 2011
Title Insurance - Would I Recommend it?
A common questions posed to real estate agents by their buyers, is whether or not title insurance should be purchased.
I thought that I would give you 15 good reasons to buy title insurance. Actually, there are more than fifteen, but if these fifteen are not enough, then you're just not going to be convinced.
Until 1997, the common practice in Ontario was to secure an opinion on title from a solicitor. If something went wrong, then you simply sued the lawyer. Now, that's easier said than done! Title insurance has now come to the rescue. Certain identified risks are covered under a policy of insurance. The coverage is much broader than the matters set out in an opinion letter from a solicitor.
Here are some of the reasons why "insurance" may be better than an "opinion":
1) it covers matters not included in a title opinion,
2) you don't have to sue your lawyer if something goes wrong,
3) it provides funds to solve the problem,
4) the insurer provides creative solutions to rectify the issues,
5) it pays your legal fees,
6) it provides compensation to you, if your problem cannot be resolved,
7) it covers the claim and legal fees if someone sues you,
8) it's inexpensive, and there is a one-time premium,
9) you may save on the usual disbursements in a transaction because some searches are not completed,
10) you may save the cost of a new survey in most cases,
11) it protects you against survey errors, in both old an new surveys,
12) it protects against errors in information provided by municipalities and utilities,
13) you may negotiate to obtain additional coverage for other issues including environmental hazards, native land claims and risks you have assumed by contract,
14) it protects you against certain construction liens,
15) it protects you against fraud and forgery,
16) it continues to provide coverage for problems arising after the closing date,
17) it protects your mortgagee so that the deal will be closed and the mortgage funds advanced,
OK, these should be enough to get title insurance.
And, I'm sure you (clients) really didn't want to sue your own lawyer!
I thought that I would give you 15 good reasons to buy title insurance. Actually, there are more than fifteen, but if these fifteen are not enough, then you're just not going to be convinced.
Until 1997, the common practice in Ontario was to secure an opinion on title from a solicitor. If something went wrong, then you simply sued the lawyer. Now, that's easier said than done! Title insurance has now come to the rescue. Certain identified risks are covered under a policy of insurance. The coverage is much broader than the matters set out in an opinion letter from a solicitor.
Here are some of the reasons why "insurance" may be better than an "opinion":
1) it covers matters not included in a title opinion,
2) you don't have to sue your lawyer if something goes wrong,
3) it provides funds to solve the problem,
4) the insurer provides creative solutions to rectify the issues,
5) it pays your legal fees,
6) it provides compensation to you, if your problem cannot be resolved,
7) it covers the claim and legal fees if someone sues you,
8) it's inexpensive, and there is a one-time premium,
9) you may save on the usual disbursements in a transaction because some searches are not completed,
10) you may save the cost of a new survey in most cases,
11) it protects you against survey errors, in both old an new surveys,
12) it protects against errors in information provided by municipalities and utilities,
13) you may negotiate to obtain additional coverage for other issues including environmental hazards, native land claims and risks you have assumed by contract,
14) it protects you against certain construction liens,
15) it protects you against fraud and forgery,
16) it continues to provide coverage for problems arising after the closing date,
17) it protects your mortgagee so that the deal will be closed and the mortgage funds advanced,
OK, these should be enough to get title insurance.
And, I'm sure you (clients) really didn't want to sue your own lawyer!
Monday, March 7, 2011
TREB Releases February Resale Figures
While resales numbers are down in Toronto compared to a year ago, they are still promising, according to the latest report released by the Toronto Real Estate Board (TREB).
Check out this article
PropertyWire.Ca Forecast For The Canadian Property Industry In 2011
PropertyWire,Ca's journalist, Heather Wright, has conducted exclusive interviews with Phil Soper, President of Royal LePage, Robert Hogue, Senior Economist with RBC and Jeffrey Schwartz, Executive Director of Consolidated Credit Counseling Services of Canada. Read their predictions for the 2011 Housing Market in Canada here: Balance and stability, two words that recently seemed foreign and unlikely, at least in reference to the Canadian Housing Industry. Now that the economic downturn is fading...
Read More
There were 6,266 transactions in February 2011. From this time last year, these numbers signify a drop of 14%.
While at first glance, these numbers seem to indicate a downward trend, when placed against the numbers from February 2009- in the middle of the recession- they have actually increased by 50%.
"Continued improvement in the GTA economy, including growth in jobs and incomes and a declining unemployment rate, has kept the demand for ownership housing strong," said Toronto Real Estate Board (TREB) President Bill Johnston.
While the numbers of resales are down, average prices have gone up. The average price rested in at $454,423- which is up 5%from February of last year.
"Market conditions remain quite tight in the GTA. There is enough competition between home buyers to promote continued price growth," said Jason Mercer, TREB's Senior Manager of Market Analysis.
Breaking it down by housing type, year-over-year, for sales numbers, detached homes fell by 16%; Semi-detached fell by 19%; Townhouses fell by 7%; Condos fell by 11%.
Looking at average prices year-over-year, prices for detached homes went up by 8%; prices for semi-detached homes rose by 4%; Townhouses went up slightly, by 1%; Condos rose by 6%.
Speaking exclusively to Propertywire.ca, Lorena Romano, Sales Representative with Royal LePage West Realty Group, Brokerage, says that there is definite momentum in the Toronto market. “The real estate market is definitely picking up. The problem is that there are not enough inventories. There are many buyers hoping to purchase before March 18th due to the mortgage changes, and many others who are just hoping to purchase before the summer months.”
"However, the shortage of inventory creates a large number of bidding wars. The buyers are there, the inventory though is not enough! I think with the spring market, March will see more properties for sale and more sales transactions will occur. Also, many will try and purchase before March 18th, so overall I think we will see a definite increase in sales for the month of March.”
Check out this article
PropertyWire.Ca Forecast For The Canadian Property Industry In 2011
PropertyWire,Ca's journalist, Heather Wright, has conducted exclusive interviews with Phil Soper, President of Royal LePage, Robert Hogue, Senior Economist with RBC and Jeffrey Schwartz, Executive Director of Consolidated Credit Counseling Services of Canada. Read their predictions for the 2011 Housing Market in Canada here: Balance and stability, two words that recently seemed foreign and unlikely, at least in reference to the Canadian Housing Industry. Now that the economic downturn is fading...
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There were 6,266 transactions in February 2011. From this time last year, these numbers signify a drop of 14%.
While at first glance, these numbers seem to indicate a downward trend, when placed against the numbers from February 2009- in the middle of the recession- they have actually increased by 50%.
"Continued improvement in the GTA economy, including growth in jobs and incomes and a declining unemployment rate, has kept the demand for ownership housing strong," said Toronto Real Estate Board (TREB) President Bill Johnston.
While the numbers of resales are down, average prices have gone up. The average price rested in at $454,423- which is up 5%from February of last year.
"Market conditions remain quite tight in the GTA. There is enough competition between home buyers to promote continued price growth," said Jason Mercer, TREB's Senior Manager of Market Analysis.
Breaking it down by housing type, year-over-year, for sales numbers, detached homes fell by 16%; Semi-detached fell by 19%; Townhouses fell by 7%; Condos fell by 11%.
Looking at average prices year-over-year, prices for detached homes went up by 8%; prices for semi-detached homes rose by 4%; Townhouses went up slightly, by 1%; Condos rose by 6%.
Speaking exclusively to Propertywire.ca, Lorena Romano, Sales Representative with Royal LePage West Realty Group, Brokerage, says that there is definite momentum in the Toronto market. “The real estate market is definitely picking up. The problem is that there are not enough inventories. There are many buyers hoping to purchase before March 18th due to the mortgage changes, and many others who are just hoping to purchase before the summer months.”
"However, the shortage of inventory creates a large number of bidding wars. The buyers are there, the inventory though is not enough! I think with the spring market, March will see more properties for sale and more sales transactions will occur. Also, many will try and purchase before March 18th, so overall I think we will see a definite increase in sales for the month of March.”
Wednesday, March 2, 2011
House prices to rise modestly: BNS
A modest rise in Canadian home prices is likely this year as the market is tilting mildly in favor of sellers, Bank of Nova Scotia said on Tuesday.
Market watchers should expect a 2% decline in sales of existing homes in 2011, and a 2% uptick in prices, Adrienne Warren, Scotiabank's senior economist, said at a bank-sponsored forum on the Canadian real estate market's outlook and trends.
For 2012, a lack of pent-up demand and further tightening of mortgage rules, announced in mid-January, will probably dampen sales further. As well, Canadian interest rates are expected to rise by next year and increase mortgage carrying costs, and that should also pressure the market, she said.
Looking at the long-term trend in house prices relative to income, Warren estimates the current average home is about 10% overvalued. But she is quick to point out that this is "fairly typical" toward the end of an expansionary phase.
She expects a soft-landing scenario will likely play out, a view that is held by several other forecasters. The Canadian Real Estate Association said last month it sees national sales activity falling just 1.6% this year from 2010, less than originally forecast, while prices may rise 1.3%.
Data shows the average price of a home in Canada was $339,030 in 2010, while 473,772 units changed hands.
Phil Soper, president and chief executive of Brookfield Real Estate Services, said he expects sales in Canada's housing market will be "front-loaded" to the first half of the year as homebuyers get into market ahead of an expected rise in interest rates.
The Bank of Canada left its key interest rate unchanged at 1% on Tuesday and gave no signal it plans to raise rates soon, pushing market players to trim expectations of a first-half rate increase.
Market watchers should expect a 2% decline in sales of existing homes in 2011, and a 2% uptick in prices, Adrienne Warren, Scotiabank's senior economist, said at a bank-sponsored forum on the Canadian real estate market's outlook and trends.
For 2012, a lack of pent-up demand and further tightening of mortgage rules, announced in mid-January, will probably dampen sales further. As well, Canadian interest rates are expected to rise by next year and increase mortgage carrying costs, and that should also pressure the market, she said.
Looking at the long-term trend in house prices relative to income, Warren estimates the current average home is about 10% overvalued. But she is quick to point out that this is "fairly typical" toward the end of an expansionary phase.
She expects a soft-landing scenario will likely play out, a view that is held by several other forecasters. The Canadian Real Estate Association said last month it sees national sales activity falling just 1.6% this year from 2010, less than originally forecast, while prices may rise 1.3%.
Data shows the average price of a home in Canada was $339,030 in 2010, while 473,772 units changed hands.
Phil Soper, president and chief executive of Brookfield Real Estate Services, said he expects sales in Canada's housing market will be "front-loaded" to the first half of the year as homebuyers get into market ahead of an expected rise in interest rates.
The Bank of Canada left its key interest rate unchanged at 1% on Tuesday and gave no signal it plans to raise rates soon, pushing market players to trim expectations of a first-half rate increase.
Friday, February 25, 2011
GTA High-Rise Condo Sales Reach Record Highs
According to newly released statistics from the Building Industry and Land Development Association (BILD), 2011 has started off with a bang in GTA- in regards to the high-rise condo sector.
According to RealNet, their primary information source, 2,335 new homes and condominium suites sold in the GTA during January 2011. This does signal a 13 % decline from this time a year ago; however, high-rise sales skyrocketed, reaching the second highest level since 2000. BILD President and CEO Stephen Dupuis indicated that 2,335 unit sales in January is quite respectable considering that most builders are using that month to sell inventory as they prepare to launch new phases and projects in February and March.
"January is not a heavily weighted month in the grand scheme of things, but sales of over 2,300 units in January bodes well for the Spring market," Dupuis said.
Regionally, low-rises in Toronto itself saw the greatest decline- dropping almost 45% from last January. The biggest increase for low-rises occurred in Halton, where there was actually an increase of 72.4%.
For high-rises, the greatest drop occurred in Halton, where sales fell by 45.7%. The greatest increase was in Peel, where sales went up by 23.3%.
According to RealNet, their primary information source, 2,335 new homes and condominium suites sold in the GTA during January 2011. This does signal a 13 % decline from this time a year ago; however, high-rise sales skyrocketed, reaching the second highest level since 2000. BILD President and CEO Stephen Dupuis indicated that 2,335 unit sales in January is quite respectable considering that most builders are using that month to sell inventory as they prepare to launch new phases and projects in February and March.
"January is not a heavily weighted month in the grand scheme of things, but sales of over 2,300 units in January bodes well for the Spring market," Dupuis said.
Regionally, low-rises in Toronto itself saw the greatest decline- dropping almost 45% from last January. The biggest increase for low-rises occurred in Halton, where there was actually an increase of 72.4%.
For high-rises, the greatest drop occurred in Halton, where sales fell by 45.7%. The greatest increase was in Peel, where sales went up by 23.3%.
Wednesday, February 9, 2011
'Window closing’ on ultra-low mortgage rates
Amid the noise of volatile-but-improving economic indicators, mortgage rate hikes are likely to repeat like a chorus in the coming months.
Canadian banks are raising interest rates on mortgages, marking the beginning of a trend as they correlate with rising bond yields and expected monetary tightening.
That’s making a strong case for borrowers to lock into fixed rates before it’s too late, said Benjamin Tal, deputy chief economist with CIBC World Markets. “The window is closing.”
TD Canada Trust and CIBC both announced Monday hikes to their residential mortgage rates, the first increases since changes to the rules of borrowing were announced by the federal government last month. The other big banks where expected to follow the moves shortly.
Effective Feb. 8, the interest rate on the banks’ benchmark five-year closed fixed rate mortgage will increase 25 basis points to 5.44%. The country’s other major lenders are expected to soon follow suit.
Toronto mortgage broker Paula Roberts said rising borrowing costs will compel more of her clients to abandon ultra-low variable rates in favour of higher, fixed-rate mortgages.
That can be a tough decision for borrowers to accept higher payments, but not one that should strain a mortgagee’s finances, she said. “If you can’t afford [your payments] ... that’s a problem,” Ms. Roberts said. “That’s why the government has changed the rules.”
In two stages over the past year the federal government announced changes to the conditions of mortgage lending — shortening the maximum amortization from 35 years to 30 years and requiring borrowers to qualify for a fixed-rate plan, even if they are opting for a variable rate.
Many who only qualify under the old rules, however, will try to secure mortgages before the shorter maximum amortization periods come into effect next month, Ms. Roberts said.
“There are going to be a lot of people that will enter into their agreements by March 18.”
Much of the momentum in mortgage rates can be attributed to a bond selloff and rising yields across the board. That effect is partly a reflection of building global inflationary pressures as well as a global economy that is proving more robust than expected.
“In my opinion, the bond market will not be the place to be over the next six months, and if that’s the case, you will see mortgage rates continue to rise,” Mr. Tal said.
In addition, anticipation of increases to the Bank of Canada’s benchmark lending rates is building, also contributing to rising yields, which puts pressure on fixed-income mortgages.
If there was any lingering doubt that the Bank will soon raise rates, last week’s jobs report erased them. The report showed Canada added four times more jobs than expected in January.
“[It] creates a fairly powerful story for the Bank of Canada, which is clearly concerned on the domestic front,” said Camilla Sutton, chief currency strategist at the Bank of Nova Scotia. “I think there’s a material change.”
So do investors. The probability that the central bank will boost its key policy rate by May, as measured by overnight index swaps, jumped to almost 75% after the jobs data.
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