Toronto Condo and Real Estate Blog

New-condo sales up 90 per cent

From The Condo Guide

The summer of 2007 is turning out to be as hot and steamy as the weather for the high-rise Toronto condo market in the Greater Toronto Area, Bob Finnigan, President of the Building Industry and Land Development Association (BILD), said recently.

Total new-home sales in the GTA in July surged 47% compared with July of 2006, while sales of high-rise condominium suites nearly double compared with last July, rising a whopping 90% year over year. Not to be totally outdone, low-rise (single-detached, semi-detached and townhomes) unit sales jumped 33% July 2006/July 2007.

“We’re running out of superlatives to describe the new-housing market this year,” said Finnigan, who revealed that total new-home sales through the first seven months of 2007 are running 15% ahead of the same period last year (versus forecasts of declining sales in 2007).

“The good news, is that over the last 12 months, prices have only risen by 5.6% for low-rise, homes and 4.2% for high-rise homes, and therein lays the explanation for the continued strength of the market. Healthy competition among builders is keeping affordability in check, with the benefits accruing to the home-buying public,” added Finnigan.

According to RealNet Canada Inc., BILD’s official independent source of new-home market information, this has been the hottest summer ever, by far, for new-home sales – June/July sales of 9,900 units this year compares with roughly 8,000 sales recorded in 2002 and 2003. Combined sales of nearly 6,000 high-rise units this summer compares with 3,671 last summer, which was second best-ever.

With more than 1,500 members, BILD, formed through the merger of the Greater Toronto Home Builders’ Association and Urban Development Institute/Ontario, is the voice of the residential land development, home building and professional renovation industry in the Greater Toronto Area. BILD is proudly affiliated with the Ontario and Canadian Home Builders’ Associations.

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

Unwavering Demand Supports Rising Canadian House Prices in Third Quarter

TORONTO, September 27, 2007 - Canada’s real estate market remained on solid ground during the third quarter as high consumer confidence, strong employment rates and stable interest rates led to robust buyer demand prompting average real estate prices to rise in all major markets, year-over-year, according to a House Price Survey report released today.

Of the housing types surveyed, the highest average price appreciation occurred in standard condominiums, which rose to $241,818 (+15.7%), followed by standard two-storey properties, which rose to $407,613 (+13.4%), and detached bungalows, which increased to $340,941 (+14.3%), year-over-year.

“Much like the Canadian dollar, the Canadian real estate market is charting its own course, quite independent from the United States and its currency and housing climate. The strength of the Canadian dollar, and the fact that the country is adjusting well to its value, will continue to keep interest rates at their existing low-to-moderate levels, boding well for buyers looking to enter the real estate market. From coast-to-coast, the country’s rich commodity markets have had tremendous impact on local economies, and there is no indication that this will change anytime soon.”

A wave of interest in Canada’s natural resources including oil, gold, uranium and wheat swept across the country, and introduced some new cities in central and eastern Canada to the trend of significant real estate price appreciations in the third quarter.

Trumping Alberta’s two largest cities, Saskatoon’s housing market experienced the highest price appreciations in all housing types examined. Vancouver, Calgary, Edmonton, Regina and Toronto also experienced double-digit average price gains.

Added Soper: “Despite the rising real estate prices across the country, recent Statscan reports cite that the home ownership rate stands at its highest on record. With the combination of the cost of borrowing money remaining relatively low, the availability of longer mortgage amortization periods, and the fact that Canada’s population continues to grow, it is no surprise that more and more people are entering the real estate market.”

Of note is the increasing trend of home ownership in Montreal, a city where renting historically trumps owning. While Quebec reports the lowest rate of home ownership in the country, the number of people buying real estate is growing; a trend likely driven by first time buyers who, in contrast to entry buyers a decade ago, see more value in owning their own house.

While the energy rich west has reported unwavering high consumer confidence and high employment rates for the past several years, central and eastern Canada are now rising alongside their western counterparts as their local commodity industries receive increased attention.

The oil sector remained a bright spot for Alberta and continued to fuel buyer demand; however, the rate of price appreciation and the intensity of the real estate market scaled back from where it was 14 months ago.

Both Saskatoon and Regina experienced a surge in demand, as levels of in-migration were high during the third quarter. Many native Saskatchewan residents returned to the province from the west, seeking more affordable housing and better work life balance.

In Central Canada, Toronto’s real estate market continued to set records throughout the summer, and is poised for continued activity and rising average house prices as the city continues to attract both buyers relocating to the city centre from the suburbs, and newcomers to the country.

In Atlantic Canada, the past few months have seen both Saint John and St. John’s become the ‘Calgarys’ of the east, as several energy-related projects in New Brunswick and Newfoundland gain attention. While Halifax is not directly related to the oil industry, the city is experiencing a spill-over effect as many executives are moving to the area to be in close proximity to the oil projects.

Toronto’s real estate market continued to blaze trails in the third quarter with record-breaking activity levels and average house price increases, driven primarily by a surge in buyers in the city. As one of the world’s leading cities, Toronto’s real estate market is made up of a host of buyers. The traditional homebuyer, typically a married couple, family or single person, has morphed over the last few years. Today’s buyer pool has now grown to include friends or even colleagues buying a property together as an affordable means to building equity, while satisfying their living needs. Despite the tight market in the city’s core, Toronto’s and the surrounding area’s real estate market is moving toward more balanced conditions.

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

Globe and Mail

Perhaps the only thing more certain than sunrise lately has been that Canadian real estate prices keep going up, up, up. The average price of a resale home jumped more than 11% last month compared with August of 2006. Prices of new homes were up almost 8% in July. With the prospect of hefty increases in value, it’s little wonder that many Canadians are flocking to financial institutions, borrowing money, bidding up home prices and perhaps buying beyond their means. It could be a recipe for trouble.

So it is reassuring that Bank of Canada Governor David Dodge is paying close attention to this trend. “One worries about the structure of the mortgage market, that we may be actually aiding, facilitating a rise in the price of real estate that is really not warranted,” he told journalists in Vancouver this week. While he expects real estate prices to escalate in areas of fast economic growth, he said, he is deeply concerned about real estate prices outside those areas, some of which are rising twice as fast as the inflation rate. “We’ll worry about that, and we’ll continue to worry about that.”

Buyers have been crowding into the real estate market in near-record numbers. New home prices were up 15.7% on an annual basis in Winnipeg last July, and 6.8% in Halifax. Although the number of monthly sales of resale homes declined slightly last month, the Canadian Real Estate Association expects the resale market will remain strong for the rest of the year. Financial institutions are dangling good mortgage rates with long-term repayment plans. Even the once-staid Canada Mortgage and Housing Corporation drew Mr. Dodge’s criticism last year with its astonishing offer to insure interest-only mortgages.

The Governor’s concern about real estate prices is part of a deeper worry. Central banks did not understand the magnitude of the easy money available through sophisticated securities and, as a result, kept interest rates too low. Since the recent meltdown in the U.S. subprime mortgage market, credit has been tightening. But what will happen if homeowners face higher interest rates when they renew their mortgages? What if the number of new buyers shrinks in response to higher rates, especially in markets of lower economic growth? So many people have their futures pinned to the increasing value of their house over time. Mr. Dodge is right to pay close attention to what could be a perilously overpriced real estate marketplace.

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