Toronto Condo and Real Estate Blog

Housing starts are forecast to decline in both this year and next as high prices crimp demand, Canada Mortgage and Housing Corp. said Friday.

CMHC sees residential housing starts coming in at 215,475 units this year, down from 228,343 starts last year.

The latest CMHC forecast is slightly better than the outlook it offered in May, when it projected 214,650 units would be started in 2008.

Bob Dugan, the chief economist for CMHC said high employment levels, rising incomes and low mortgage rates will keep the real estate market relatively solid this year.

“Increased competition from the existing home market, coupled with the elimination of the pent-up demand that built up during the 1990s, will exert downward pressure on housing starts, which will decline to 194,000 units in 2009 from 215,000 in 2008,” he said.

Starts this year are expected to ease in seven of 10 provinces, with only Saskatchewan, Ontario and Newfound and Labrador forecast to see starts rise.

The situation will change in 2009, however, with Manitoba expected to be the only province to see higher housing starts. Manitoba’s starts are forecast to dip from 2007’s 5,738 units to 5,400 this year, and rise to 5,500 in 2009.

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

Government of Canada Moves to Protect and Strengthen Canadian Housing Market

The Government of Canada recently announced adjustments to the rules for government guaranteed mortgages aimed at protecting and strengthening the Canadian real estate market.

The new measures include:

1) Fixing the maximum amortization period for new government-backed mortgages to 35 years;

2) Requiring a minimum down payment of 5% for new government-backed mortgages;

3) Establishing a consistent minimum credit score requirement

4) Introducing new loan documentation standards.

This announcement marks a responsible and measured approach by the government to ensure Canada’s real estate market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada.

The new limits are planned to take effect October 15, 2008. This would allow existing mortgage pre-approvals with the common 90-day duration to be used or expire. Certain exceptions would also be permitted after October 15. The government will work closely with all stakeholders to ensure timely and effective implementation of these measures.

The new regulations apply only to new mortgages, while existing originations will be unaffected. The lag period prior to the regulatory change will allow existing mortgage pre-approvals to be used or expire. All mortgage insurance companies will be affected by this regulatory change.

As Canada Mortgage and Housing Corporation (CMHC) is a Crown corporation, the government is ultimately responsible for CMHC’s obligations, including mortgage insurance claims. Hence, CMHC will no longer offer 40-year amortization and 100% loan-to-value ratio mortgage insurance products, given the new regulations.

In addition, the government also backs private insurers’ obligations to lenders in the event of default, provided the business is eligible to the guarantee, but claims are subject to a 10% deductible of the original principal amount of the loan agreement.

Private insurers are still free to insure 40-year amortization and 100% loan-to-value mortgage products, but the lack of government backing will lead to sizeable increase in risk. This may mean the elimination of these products after October 15, or a higher insurance cost for the borrower.

The measures announced today will build on the strength of Canada’s real estate market. According to the International Monetary Fund, the increase in house prices in Canada is based on sound economic factors such as low interest rates, rising incomes and a growing population. A recent Statistics Canada report concluded that home ownership is at record levels, with over two-thirds of Canadians owning their own home.

For the news release from the federal Department of Finance, visit www.fin.gc.ca/news08/08-051e.html.

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

Preview opening Thursday September 18 - only registered guests will be allowed to attend. Contact us via email at laurin@jeffreyteam.com or phone 416-388-1960 to book your spot.

Neilas Inc.’s new condominium project in Leslieville is designed to foster a close-knit community, according to the builder.

Dubbed Stage East because of its location just east of the film district, the building will be set on a deep and narrow site on Queen Street East at Leslie Street, within an up-and-coming section of the city.

“It’s just at the east end of what would be considered the ‘hot’ area,” lead architect Richard Witt of Raw Design says of the development, which will open for sales on May 16.

“This is the first [development] which will be going in on that strip, so it’s going to stand out just because it’s a new building,” he adds.

The building will consist of two four-storey towers linked by an interior courtyard and glazed corridors leading to a freestanding elevator. There will be 24 units between the towers.

“The way that we’ve arranged the building around this courtyard — with these glazed links — no one’s going to be a stranger in the building,” Mr. Witt says.

“Everyone is going to see you walking through the corridors and know who everyone is. It’s a real community that we’re trying to make here.”

A green roof will be put on top of the mezzanine, while the courtyard and balconies will have landscaped dividers. Operable windows will be installed, and the south side of the building will have large overhangs.

Bike storage space will be provided, and residents will have access to a vehicle through an auto-sharing operation.

“The Queen Street streetcar is right there and there’s access to bike paths along the lake not very far away,” Mr. Witt adds.

The building will have retail shops fronting on Queen, and residents will be within walking distance of parks with sports facilities.

Suite sizes range from 530 to 863 square feet in one-bedroom, one-bedroom-plus-den or two-bedroom plans.

Interiors will include walls of windows; high-end, contemporary finishes; and private terraces averaging 250 square feet.

“In all our projects, we try to provide as much outdoor space as possible,” Mr. Witt explains.

“There’s something really nice about being in the city, but also being outside in your own space.”

The largest model will have 863 square feet of living space on two levels, with two bedrooms and a den, a balcony and a 350-square-foot wraparound terrace on the roof.

“All the top [floor] units… have absolutely fantastic sunrooms up at the top that have wraparound terraces,” Mr. Witt says. “They’re sensational units.”

Parking and lockers will be available for an extra cost, and maintenance fees have not been set yet.

Occupancy is slated for fall, 2009.

Preview opening Thursday September 18 - only registered guests will be allowed to attend. Contact us via email at laurin@jeffreyteam.com or phone 416-388-1960 to book your spot.

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Also, Monarch is offering 2% off suites at both Nautilus and Quay West. Discount applies to the condo, parking and locker! It is a limited time offer (they aren’t even telling us how long it will run) so if either of these projects interests you, contact us today via email at laurin@jeffreyteam.com or phone 416-388-1960.

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