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TORONTO AND AREA REAL ESTATE MARKET NEWS BLOG

Toronto and area market news blog for the popular Toronto website http://www.torontogreathomes.com

  • REAL ESTATE MARKET IN MARCH

    Toronto Real Estate Board President Mark McLean announced record TREB MLS® home sales for the first quarter of 2016 following a strong result for March transactions. There were 10,326 sales in March and 22,575 sales in the first quarter. The year-over-year growth rate for sales was 15.8 per cent for Q1 2016 and 16.2 per cent for March 2016. For the TREB market area as a whole, double-digit year-over-year rates of sales growth were experienced for all major home types during the first quarter.

    The positive annual growth in sales was not mirrored on the listings front. The number of new listings entered into TREB's MLS® System during March and the first quarter were down compared to the same periods in 2015.

    "At the beginning of 2016, TREB's outlook for the year pointed to a strong possibility of a second consecutive record year for home sales. This outlook was based, in part, on upbeat consumer survey results pointing to robust home buying intentions. It is clear that these upbeat intentions have translated into record first quarter results," said Mr. McLean.

    The MLS® Home Price Index Composite Benchmark for March 2016 was up by 11.6 per cent compared to March 2015. The average selling price for all home types combined was up 12.1 per cent year-over-year in March and 13.6 per cent in the first quarter.

    "Demand was clearly not an issue in the first three months of 2016, regardless of the housing market segment being considered. The supply of listings, however, continued to aggravate many would-be home buyers. We could have experienced even stronger sales growth were it not for the constrained supply of listings, especially in the low-rise market segments. The resulting strong competition between buyers has underpinned the double-digit rates of price growth experienced so far this year," said Jason Mercer, TREB's Director of Market Analysis.

  • TORONTO MORTGAGE RATES AND NEW DOWN PAYMENTS RULES

    Changes to the 5% down payment rules (only applies to purchase prices over $500,000)

    5% on the first $500,000 of the purchase price.  
    Example; purchase price $400,000, down payment $20,000

    10% of the purchase price over $500,000
    Example; purchase price $600,000, down payment $25,000 (first $500,000 x 5%) plus $10,000 (next $100,000 x 10%) for a total of $35,000. 

    Best Variable Rate 


    2.10%   
    Prime minus 0.60% with a 5% down payment
    2.15%   Prime minus 0.55% with a 20% down payment 
     
    Best Fixed Rates (down payment 5% or more)

    2.59%
       5yr term   Fixed Rate with a 5% down payment
    2.64%   5yr term   Fixed Rate with a 20% down payment   

    2.24%   3yr term   Fixed Rate
  • CONDO MARKET STATISTICS

     Toronto Real Estate Board President Mark McLean announced that Greater Toronto Area REALTORS® reported 5,595 condominium apartment sales through TREB's MLS® System during the fourth quarter of 2015. This result was up by 12.6 per cent compared to the same period in 2014.

    Over the same period of time, the number of new condominium apartment listings entered into TREB's MLS® System was also up, but by a substantially lower annual rate compared to sales, at 3.3 per cent. The result was tighter market conditions compared to a year earlier.

    "The condominium apartment segment is integral to the overall housing market in the Greater Toronto Area. Over the past decade, the trend has been to increasingly build up due to provincial land use policies. As new projects have completed, a number of investor-held units have been listed for sale on TREB's MLS® System. These units have been absorbed quite rapidly, with enough demand relative to supply to prompt continued price growth," said Mr. McLean.

    The average selling price for condominium apartments in the fourth quarter was up by 4.1 per cent year over year to $382,070. Throughout the fourth quarter, the MLS® Home Price Index (HPI) Apartment Benchmark Price was up by between four and six per cent on an annual basis.

    "First-time buyers account for approximately half of all buyers in the GTA and even more so in the City of Toronto. Condominium apartments represent an important entry point into home ownership for a lot of households. This is a key reason why we experienced continued growth in sales for this home type over the past year," said Jason Mercer, TREB's Director of Market Analysis.

    Condominium Apartment Market Summary
    Fourth Quarter 2015
    ----------------------------------------------------------------------------
                                           2015                    2014
                                     Sales  Average Price      Sales       Price
                                ------------------------- ----------------------
    Total TREB                       5,595       $382,070      4,971    $367,184
    Halton Region                      157       $383,406        138    $395,550
    Peel Region                        807       $280,820        674    $270,094
    City of Toronto                  3,966       $407,991      3,562    $390,896
    York Region                        543       $367,396        488    $346,506
    Durham Region                      114       $277,343         98    $251,709
    Other Areas                          8       $208,000         11    $228,191
    ----------------------------------------------------------------------------
    Source: Toronto Real Estate Board
  • Annual pace of housing starts slows in December

    Housing starts in Canada ended 2015 at a slower pace than expected as the rate of new condominium construction slowed in Toronto.

    Canada Mortgage and Housing Corp. said Monday housing starts in December came in at a seasonally adjusted annual rate of 172,965 homes, down from 212,028 in November.

    Economists had expected an annual pace of 200,000, according to Thomson Reuters.

    December’s slowdown came as the rate of urban starts fell 19.1 per cent in December to 159,007 units.

    Multiple urban starts, which includes condominium construction as well as other multi-unit homes, dropped 27.0 per cent to 101,264, while single-detached urban starts held steady at 57,743.

    “Toronto was the big mover in December, with condo starts plunging to the lowest since September 2014,” Bank of Montreal senior economist Robert Kavcic wrote in a report.

    “This is hardly bad news, and even a relief for policy-makers after starts were running too hot for comfort earlier in the year.

    Overall, the pace of urban starts fell in the Prairies, Ontario, and Atlantic Canada, but increased in British Columbia and Quebec.

    Kavcic noted that Canadian homebuilding was very modestly higher in 2015, but the relatively stable national numbers hid the shifts below the surface.

    “We suspect that 2016 will continue to see weakness in the Prairies mostly offset by solid residential building conditions in markets such as Toronto and Vancouver,” he said.

    The Canadian housing market is being closely watched by economists for signs of slowing. Low interest rates have helped fuel demand in some markets, however the drop in oil prices have hurt others.

    TD Bank economist Diana Petramala said TD expects housing starts nationally to dip back to below 180,000 units through 2016, following an average of 181,598 over 2015.

    “With the drop in starts in December, the level of new home construction moved from a too-hot for comfort pace, to one more in line with underlying economic and demographic fundamentals,” Petramala said.

    The Canadian Real Estate Association has forecast average house prices in Alberta, Saskatchewan and Newfoundland and Labrador to fall this year.

    However, the industry association has predicted the national average house price is expected to gain 1.4 per cent in the year.

    Canada Mortgage and Housing said rural starts were estimated at a seasonally adjusted annual rate of 13,958.

    The six-month moving average of housing starts was 203,502 units in December compared with 208,204 in November.

     canadianbusiness.com/business-news/cmhc-says-annual-pace-of-housing-starts-slows-in-december-to-179965/

  • Toronto real estate in November

    The GTA set a new record for home sales in November, catapulting the region to a new annual sales record — and there’s still a month of frantic house hunting to go before 2015 is even over.

    Some 7,385 houses and highrise condos changed hands in November, up 14 per cent year over year, according to figures released by the Toronto Real Estate Board Thursday.

    The average sale price of a home — stand-alone houses and condos combined — climbed to $632,685 in November, up 9.6 per cent from a year earlier, says TREB. The MLS composite benchmark price, which factors out sales at the extreme ends of the spectrum, climbed by 10.3 per cent.

    That record November brought sales so far this year to 96,401 homes across the GTA — shattering the previous sales record of 93,193 for all of 2007, set before the recession knocked the steam out of Canada’s real estate market.

    Since then, it’s been an unrelenting climb back, with bidding wars and bully bids now almost a given for stand-alone houses — and even some condos — across the sought-after City of Toronto and booming regions within a relatively easy commute of the core, such as York and Durham.

    “Demand for ownership housing has remained strong in the GTA throughout 2015, with sales generally increasing at a greater annual rate compared to new listings,” said Jason Mercer, TREB’s director of market analysis, in a statement. 

  • Condos - the only option for average Toronto first-time homebuyers

    Condos are the only affordable option for average first-time homebuyers in Canada’s largest city, according to data from two real estate authorities released Monday.

    The Re/Max Hallmark Ltd. Homebuyer Survey found those planning to buy their first home in the Greater Toronto Area over the next 18 months expect to spend $455,000 on average, with a mean down payment of 22 percent.

    That puts detached, semi-detached, and townhouse living well out of the average price range in the 416 area code, according to the Toronto Real Estate Board’s (TREB) September resale housing figures.

    The average condo in Toronto costs $418,603 according to TREB, a 5.6 percent year-over-year increase. Townhouses – the nearest alternative to condos in terms of price – saw the fastest price acceleration in the 416 region, surging 10.8 percent year-over-year to $527,257. Average detached home prices jumped 10.7 since last September to $1,053,871, and semi-detached prices increased 7.3 percent to $740,373.

    TREB found the average price across all housing types climbed 9.2 percent from a year earlier to $627,395. Combined home sales in September were up 2.5 percent to 8,200, a figure TREB says could reach 100,000 by year’s end despite the steeper prices. Bidding wars are also expected to remain the status quo for the remainder of the year.

    “While September was the second straight month where annual growth in new listings outstripped annual growth sales, total active listings at the end of the month still remain below last year’s level. This, coupled with the record pace of sales experienced so far this year, suggests that competition between buyers will remain strong as we move into the fourth quarter. Expect strong rates of price growth to continue through the remainder of 2015 and into 2016,” said TREB director of Market Analysis Jason Mercer in a news release.

    All of this is likely to translate to a great deal of disappointment for some buyers. Over 60 percent say they are looking for property in the City of Toronto, and 56 percent say they prefer detached homes, according to the Re/Max Hallmark survey. While detached housing outside of Toronto is considerably more affordable at $732,852, prices are still well beyond the average budget.

    Millennials will bear the brunt of the disappointment. The survey found 18 to 34-year-olds make up 57 percent of those shopping for a home.

    “The emphasis that millennials, in particular, place on homeownership is especially interesting. It appears owning a home is just as coveted by those born between the early 1980s and the early 2000s as in previous generations,” said Ken McLachlan, an owner and broker at RE/MAX Hallmark in a release.

    bnn.ca

  • Canadian housing markets mostly stable, but Toronto an exception

    The cost of owning a home has been holding steady in most parts of Canada, but affordability declined during the second quarter in the two most expensive markets, Vancouver and Toronto, a report by Royal Bank says.

    In its latest analysis of housing trends, RBC also said Monday it expects prices will continue to rise in Toronto and Vancouver in the short term because of tight supplies of detached homes for sale.

    The bank said supply and demand are more balanced in other Canadian markets and affordability has been close to the long-term average since 1985.

     In a separate report, TD Bank (TSX:TD) said it expects a decline in Canadian borrowing rates in the first half of 2015 will likely boost demand into the early fall, but then have a waning effect in the late stages of this year.

    It says the low-rate environment has helped to keep markets "humming" in hot markets and reduce the impact of low commodity prices in other markets, particularly in Alberta and Saskatchewan.

     TD said commodity-dependent regions such as Edmonton, Calgary, Regina and Saskatoon "have weakened considerably so far this year, but to a lesser degree than was originally anticipated."

    "Elsewhere, markets that had embarked on soft landings over the last few years, including Ottawa, Montreal and Quebec City, have seen activity either stabilize or perk up," TD said.

    The RBC quarterly report takes into account income, property prices and the typical costs of home ownership, such as mortgage payments, utilities, taxes and fees when calculating its affordability measure.

    "The central theme for housing affordability in Canada continues to be the wide divide between stretched conditions in Toronto and Vancouver, and fairly neutral conditions in the rest of the country," RBC said in its report.

    "The split, in fact, widened during the second quarter of 2015, with strong price increases for single-detached homes in Toronto and Vancouver squeezing affordability further in these markets, whereas a slow pace of appreciation -- at best --kept the cost of home ownership mostly stable in the majority of other markets."

    RBC said there was evidence that buyers were more confident in Alberta than they had been in the previous two quarters as a result of the dramatic decline in oil prices, but "prices still remained under slight downward pressure for the most part . . . "

    "The picture was a little different in Saskatchewan where a recovery in single-detached home prices negatively affected the affordability of bungalows and two-storey homes."

    In Quebec, RBC said home prices were "quite stagnant" and that contributed to improved housing affordability.

    "Widespread improvements similarly took place in Atlantic Canada, although there remain few indications that housing demand is turning a corner in the region."

    From - http://kitchener.ctvnews.ca/canadian-housing-markets-mostly-stable-but-toronto-an-exception-banks-1.2540950

  • TORONTO REAL ESTATE IN JULY

    Toronto Real Estate Board President Mark McLean announced record home sales for the month of July. Greater Toronto Area REALTORS® reported 9,880 sales through TREB's MLS® System, representing an eight per cent increase compared to July 2014. The number of transactions were up for all major home types, including a double-digit year-over-year increase in condominium apartment sales.

    "As we move towards a new record for home sales this year, it is important to point out that home ownership demand has been driven not only by low borrowing costs, but also by the fact that the GTA economy has been performing quite well, with the unemployment rate lower compared to last year. Home buyers remain confident in the long-term benefits of owning a home," said Mr. McLean.

    The MLS® Home Price Index (HPI) Composite Benchmark, which accounts for benchmark home prices in communities throughout the TREB market area, was up by 9.4 per cent year-over-year in July 2015. Over the same period, the average selling price was up by a slightly greater amount, growing by 10.6 per cent annually to $609,236.

    Detached homes continued to lead the way in terms of price increases, with annual growth in the average selling price outstripping growth in the MLS® HPI detached benchmark. This suggests that there continued to be a greater share of high-end homes sold this year compared to last.

    "With the level of inventory in the GTA trending below two months, many listings continued to generate a lot of interest from buyers. Not surprisingly, this supported further price increases well-above the rate of inflation. Assuming similar interest rate and economic environments over the next five months, strong price growth will remain the norm for the rest of 2015," said Jason Mercer, TREB's Director of Market Analysis. 

  • Toronto Mortgage Rates

    Variable Rate2.20%
    1 Year2.59%
    2 Year2.19%
    3 Year2.34%
    4 Year2.54%
    5 Year2.69%
    7 Year3.39%
    10 Year3.84%
    Prime Rate2.85%
  • May 2015 Housing Starts

    The trend measure of housing starts in Canada was 181,231 units in May compared to 179,524 in April, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts. 

    "The small increase in the trend was primarily driven by higher multiple starts in Ontario, the Atlantic region, and Quebec. Despite month-to-month variation in multiple starts, CMHC expects builders will continue to focus on managing inventory of completed but unsold units - inventory that is still above historical average," said Bob Dugan, CMHC's Chief Economist. "CMHC also forecasts slight moderation in housing starts in 2015 and 2016, reflecting a slowdown in housing market activity in oil-producing provinces that will partly be offset by increased activity in provinces that are seeing the positive impacts of low oil prices."

    CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of Canada's housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next. 

    The standalone monthly SAAR was 201,705 units in May, up from 183,329 units in April. The SAAR of urban starts increased by 10.8 per cent in May to 185,235 units. Multi-unit urban starts increased by 16.9 per cent to 126,367 units in May, while the single-detached urban starts segment essentially held steady at 58,868 units. 

    In May, the seasonally adjusted annual rate of urban starts increased in Atlantic Canada, Ontario and Quebec, while it decreased in British Columbia and the Prairies.

    Rural starts were estimated at a seasonally adjusted annual rate of 16,470 units.
  • Toronto house prices surge 10 per cent in March

    House prices shot up 10 per cent in March over a year ago driven largely by fierce competition, more demand for higher-end homes and a stunning 15.9 per cent jump in the price of detached homes in the City of Toronto.

    There is no relief in sight for beleaguered buyers as Toronto heads into what’s looking to be a brisk spring market: While new listings were up some 5.5 per cent in March compared to a year ago, sales were up a whopping 11 per cent, according to figures released Tuesday by the Toronto Real Estate Board.

    The average sale price of houses and condos combined across the GTA hit $613,933, up 10 year cent from the average of $557,684 in March of 2014, according to TREB sales and price statistics.

     Average sales prices for condos were up 3.3 per cent in the City of Toronto, with the average price just shy of $400,000 at $398,337. Average condo transaction prices were up 6.7 per cent in the 905 regions, year over year, to $310,156, said TREB.

     Townhome sales were up 8.3 per cent in the 416 region, year over year, and 9.1 per cent in the 905 regions and the average sale price hit $546,993 and $438,503 respectively.

    Semi-detached sales dropped in March over a year earlier, which may reflect a lack of supply as they are among the most highly sought-after housing type now that detached home prices have climbed out of sight.

    Sales for those attached homes were down 5.3 per cent in the City of Toronto and 2.5 per cent in the 905 regions. Prices, however, were up 9.8 per cent in the City of Toronto, to an average transaction price in March of $723,167 while prices climbed 9.2 per cent in the 905 regions to an average of $476,566.

      http://www.thestar.com/business/2015/04/07/toronto-house-prices-surge-10-per-cent-in-march-no-relief-in-sight.html

  • RESIDENTIAL PRICES IN TORONTO CONTINUE TO RISE IN FEBRUARY

    Residential sales in Toronto have surged nearly 15 percent since the beginning of the month when compared to the same period of last year, according to a report from the Toronto Real Estate Board (TREB) released on Wednesday. On average prices jumped 10.3 percent to $602,110 year-or-year, while the number of new listings that entered into the TorontoMLS system was also up, but at a more regulated pace of 3.5 percent.

     According to the TREB mid-month release of housing figures, the number of home sales during the first 14 days of February totaled 3,200 homes. Paul Etherington, president of the industry group wrote as part of the report: “As households continue to take advantage of the great diversity of home ownership options in the Greater Toronto Area, home sales have continued to trend upwards.” Etherington noted that even though home prices have risen when compared to last year, borrowing costs have fallen. In his view home buyers are still able to find “affordable options to meet their housing needs”.

    Data from the TREB shows that in the full month of January, sales in the city rose 6.1 percent year-on-year, while prices increased 4.9 percent on average. According to the release, annual price growth continues to be driven by the rigid low-rise market segment, with double-digit growth reported for detached and semi-detached homes. The industry group also pointed out that bidding wars have also been a driving factor behind the price surge. According to Jason Mercer, director of market analysis at TREB, the ongoing strong competition amongst buyers should not come as a surprise, given the “tight market conditions continuing to prevail in most parts of the Greater Toronto Area,” which has in turn lead to high annual rates of price growth.

  • CANADIAN BANKS LOWERED THE PRIME OVERNIGHT LENDING RATE

    The Canadian real estate market is in for a shake-up as the Bank of Canada lowered the prime overnight lending rate. Following the Bank of Canada's recent surprise benchmark rate cut, Canadian banks have gotten into a mortgage rate price war. Some have already dropped their rates, while many other banks are expected to follow. 
     
    Experts fear the rate cuts may further boost Canada's already overhearing property markets. The central bank dropped its benchmark rate to 0.75% last month, as a response to plunging oil prices. The cut surprised many,  as the Bank of Canada had kept its benchmark interest rate at 1% for more than four years - and many believed that the housing markets were overheating. 
     
    The first bank to drop its mortgage rate was Royal Bank of Canada. It has lowered its five-year fixed rate to 2.84%, and its 10-year fixed rate to 3.84%. “The bank continues review the impact of the Bank of Canada’s rate decision... the company’s individual product lines continue to make pricing adjustments in the regular course of business to ensure we provide competitive rates in the marketplace,” Royal Bank of Canada spokesman Wojtek Dabrowski said recently. 
     
    Bank of Montreal is also planning to drop the mortgage rates in the spring. The bank’s chief executive recently said in an industry conference that the bank is planning to “have a fresh offer that is appealing to customers” in the spring. The bank had in 2013 dropped its five-year fixed mortgage rate to 2.99%. Brokers predict that banks will soon have to cut their prime rates also, which govern variable-rate mortgages. 
  • 2014 GTA home sales just short of record

    TORONTO — Home sales in Toronto and the greater area were up 6.7 per cent in 2014, as the Greater Toronto REALTORS reported 92,867 residential sales through the TorontoMLS system.
    2014 GTA home sales just short of record

    The 2014 figures were just short of the record set in 2007, according to the report.

    "TREB's (Toronto Real Estate Board) 2014 sales figures are a testament to the importance Greater Toronto Area (GTA) households continue to place on home ownership," said TREB president Paul Etherington.

    "GTA households realize that home purchases have been a quality long-term investment. While home prices certainly increased substantially in 2014, the purchase of an average priced home remained affordable, in terms of the average household's ability to comfortably cover their monthly mortgage payments,"

    The average price tag also continued to grow on a year-over-year basis in 2014, jumping 8.4 per cent from 2013 to $566,726.

    "The strong price growth we experienced in 2014 can be explained with two words: listings shortage. The constrained supply of listings was especially evident for low-rise home types like singles, semis and town houses," said TREB director of market analysis Jason Mercer, in the release.

    "The number of households looking to purchase these home types increased, while the number of homes from which they could choose decreased. This situation resulted in more competition between buyers and more aggressive offers,"

  • MORTGAGE RATES ON JANUARY 2015

    Current Discount Mortgage RatesJan 2015
    Variable Rate2.40%
    1 Year2.89%
    2 Year2.49%
    3 Year2.69%
    4 Year2.77%
    5 Year2.99%
    7 Year3.79%
    10 Year4.39%
    Prime Rate3.00%

     


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