Toronto Condo and Real Estate Blog

Genworth Financial Canada report shows good opportunities for first-time homebuyers in Ontario’s 2007 housing market

From The Condo Guide

The pace of increasing real estate prices in Ontario will ease in 2007, but the provincial market will remain strong and provide good opportunities for first-time homebuyers, according to a report issued recently by Genworth Financial Canada, The Homeownership Company, a subsidiary of Genworth Financial, Inc.

The Summer 2007 Metropolitan Housing Outlook reveals that slightly lower demand in 2007 will reduce the rate of price increases across Ontario in 2007.

New homes are forecast to increase in price by three per cent across Ontario this year. Price increases have been moderating in Ontario since 2004, when new homes rose 5.1 per cent.

The Genworth study, conducted in partnership with the Conference Board of Canada, is based on data from a number of sources, including the Bank of Canada, the Canadian Real Estate Association and Statistics Canada.

“With the rapid pace of price increases over the last three years, affordability has been stretched in some communities, but now we’re seeing what looks like more manageable growth over the next half-decade in what is still a great real estate market,” says Peter Vukanovich, President of Genworth Financial Canada. “Greater affordability translates into greater opportunities for first-time homebuyers to get into the real estate market and begin building equity in their own homes.”

Toronto at a glance

In Toronto, new-home prices are expected to rise 2.7 per cent in 2007 to an average $518,401. Toronto new homes rose 5.9 per cent in 2004, 4.5 per cent in 2005 and 3.8 per cent last year. Looking ahead, Toronto new-home prices are forecast to climb 3.3 per cent on average from 2008 to 2011.

Canada at a glance

With pent-up demand easing, price increases for new and resale homes are moderating. National home price averages are forecast to reach $378,161 (new) and $293,475 (resale) in 2007.

Genworth Financial Canada’s homebuyer data shows there is strong demand for longer-term amortizations and low down payment solutions that make entering the housing market more affordable for first-time homebuyers, as opposed to waiting to build a larger down payment.

“Genworth is committed to introducing innovative products and working with our lender partners to help Canadians buy homes sooner. Extended amortization periods and lower down payment options give buyers flexibility to keep monthly costs affordable when they enter the market,” says Vukanovich. “They can then opt to make biweekly payments, increase monthly payments in the future, or make planned lump-sum payments.”

“The Canadian housing market continues to demonstrate its fundamental soundness. In fact, Canada’s real estate market is a model of fitness and is forecast to remain strong,” says Jim Murphy, President and CEO of the Canadian Association of Accredited Mortgage Professionals (CAAMP).

Genworth Financial Canada, The Homeownership Company, works with lenders, mortgage brokers, real estate agents and builders to make homeownership more affordable and accessible throughout Canada. The company combines global experience in mortgage insurance with technological and service leadership to deliver innovation to the mortgage marketplace.

The Condo Guide Magazine is an excellent source of housing information for those looking for information on new condos in Ontario, Canada. We offer the most up-to-date information on new condominiums across the greater Toronto area.

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Contact the Jeffrey Team for more information - 416-388-1960

Bob Finnigan, The Condo Guide

The I have just received the latest economic impact statistics for the homebuilding and professional renovation industry in the GTA and the super-size numbers never cease to amaze me. If you are one of more than 150,000 people working in the residential construction industry in the GTA, you already know what I’m talking about, but even if you’re not one of them, you are definitely affected by the success of the industry, for better or worse.

Before I get to the big numbers, let’s start with some percentages. The 40,611 housing starts in the GTA in 2006 represented 17.9% of total housing starts in Canada. That’s the lowest percentage in 10 years (we peaked at 28.1% of all housing starts in 2000), but all that means is that the rest of the country, particularly western Canada, is doing very well.

Super-size jobs How about the fact that one of every 17 jobs (six per cent) in the GTA is directly related to construction? Our local share of the jobs pool has been growing steadily since 2002. As with jobs, our contribution to national GDP sits at 6.3% on an Ontario-wide basis and would be no less if local statistics could be easily pulled out. That stat too, has been growing steadily since 2002.

Now for the really big numbers! Starting with new-home construction, the 40,611 homes we started last year were worth $7.3 billion and created just under 70,000 jobs. Our renovation activity, valued at $7.16 billion, generated another 68,664 jobs. Adding in the economic impacts of other expenditures related to residential construction and our total economic impact exceeds $16 billion and nearly 154,000 jobs – not bad, I say.

Super-size paycheques Another way to picture this story is to look at wages paid. For new homes, builders paid over $3.2 billion to workers last year. Renovators were just under $3.2 billion. Add in the “other” and the total wages paid hits a whopping $7.15 billion. As an aside, the average weekly wage for construction in Ontario is 103% of the average for all industries.

Now for the part that hurts a bit – taxes paid. Adding up all the income, sales and payroll taxes remitted by builders and renovators to the various levels of government, our industry contributed $3.75 billion in taxes last year alone – that’s not including corporate taxes paid or the development charges, permit fees and other charges paid to municipalities, nor the land transfer tax paid to the provincial government.

Super-taxed Looked at over the four years of data immediately available to me, the local homebuilding and renovation industry here in the GTA has generated nearly $60 billion in economic activity, created more than 600,000 jobs (technically speaking it’s person-years of employment) and paid out more than $27 billion in wages. I don’t have a four year tax total, but $13 to 14 billion would be a conservative estimate – OUCH!

Now, take our local numbers and multiply those by two for Ontario and more than five times for Canada, and your calculators would probably start giving you error messages, the numbers are that big. So, when I say that these numbers matter to you for better or worse, I am talking about the fact that as the health of the building industry goes up or down – so does the economy. Can you imagine if all the people we employed were unemployed? If our governments didn’t have the billions in tax revenues generated by our industry, who would pay or what would happen to education, health care and other social services?

Our governments pay a lot of lip service to the industry because they are well aware of these statistics and the implications of a reversal of fortune, but that’s pretty well where the respect ends. When it comes to taxation and regulation, our industry tends to get targeted – a real shame considering the added costs get passed onto homebuyers, through higher prices for the same home or less home for the same money.

I honestly fear that the economic impact of the residential construction industry gets taken for granted in good times and am seeing way too many examples of tax grabs and increased regulation on our industry. Our primary mandate as the Building Industry and Land Development Association is to defend the homebuyer’s interests in this environment and we gladly do so because what’s good for you is good for us. It happens to be good for everybody else too. I just hope our governments hear the message!

The Building Industry and Land Development Association (BILD), formally known as the Greater Toronto Home Builders’ Association and Urban Development Institute (GTHBA-UDI), is the voice of the residential land development, home building and professional renovation industry in the Greater Toronto Area. For more information, visit www.bildgta.ca.

The Condo Guide Magazine is an excellent source of housing information for those looking for information on new condos in Ontario, Canada. We offer the most up-to-date information on new condominiums across the greater Toronto area.

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Contact the Jeffrey Team for more information - 416-388-1960

Linda Mitchell, Vice-President of Marketing for Monarch Corporation
From The Condo Guide

Is there such a thing as a “perfect” condominium? Some condo owners may be supremely happy in their suites, yet believe there are design elements in the building’s exterior or interior that could have been done differently. Few people realize the complexities involved in condominium design – and the fact that design decisions are often made out of necessity because of city by-laws and practical requirements, rather than by choice on the part of the builder/developer.

Just look around Toronto, at its hundreds of condominiums – no two of which are alike. Each building was designed to make the most of its location and the floor plate the site allows for. Design happens only after the planning stages are complete, and the developer understands completely the by-laws and regulations that must be adhered to in determining the kind of condominium that can be placed on that piece of land.

Then the fun – and the challenge – begins! The shape of the building’s exterior creates what we call a floor plate, which then has to be carved into pieces. Although initial drawings are two-dimensional, in fact, the process is more like designing 3-D building blocks. Individual suite designs have to wait until several other necessities are planned, such as elevator closets, air shafts, stairwells, hallways and garbage disposal tri-sorters. Each of these elements is critical in the design of a building that is attractive, efficient and “works” well for the intended target market.

This stage of the design process involves enlisting the expertise of mechanical, electrical and structural engineers. We have to make sure that the heating and cooling systems and plumbing stacks line up vertically, and to ensure that structurally, the walls will withstand the weight they will bear over time. This may mean including stand-alone columns in the suite floor plans, or maybe building structural elements into the exterior wall, which uses up window space. This is a serious consideration because everyone wants as much window space as possible, particularly in a lakeside condo.

Next, the architects get involved in designing the actual condos. Again, this involves a complex set of parameters, including which suites have which orientations. Usually, the larger suites are the ones with the prime views, but we have to consider that the purchasers who choose more compact suites should also have the opportunity to enjoy fabulous views – especially if the condominium is situated at the waterfront. The condo team spends a lot of time determining the best balance of studios, one-bedroom and two-bedroom suites, how many will have dens, how many will be included on each floor, which way they will face, etc.

Then, we get into aesthetics, which has to do with the intended buyers. For many first-timers and young professionals, a tight, affordable layout is preferred, but for empty-nesters moving down from large estate residences, full-size principal rooms for entertaining are a must. Practically speaking, we have to incorporate bulkheads for heating and air conditioning vents in as subtle a way as possible, and we need to consider whether there are enough fan coil units in each suite. In the case of a penthouse with floor-to-ceiling windows and a western exposure, we may need more than one for the air conditioning.

The condominium design process can take from six to eight months before sales can be launched. Builders/developers do everything possible to stick with their initial vision, but city by-laws and the laws of physics often have to take precedence over preference.

Is there such a thing as a perfect condominium? Maybe not – but in Toronto you have the best chance in North America of finding one that’s perfect for you.

Linda Mitchell is Vice-President of Marketing, High-Rise for Monarch Corporation. In 2005, Linda was presented with the coveted OHBA SAMMY (Sales and Marketing Member of the Year) award. In 2003, she received the Riley Brethour Award acknowledging outstanding and consistent professional achievement in residential sales and marketing.

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Contact the Jeffrey Team for more information - 416-388-1960