Tag Archives: home resales
Toronto’s best-buy real estate areas
With Toronto neighbourhoods becoming pricier and less affordable, fringe areas are experiencing an upswing in sales as buyers move away from blue-chip neighbourhoods into areas that offer more of a financial upside, says a study.According to an “up-and-coming” neighbourhoods study released yesterday, there are still areas downtown that offer good value, but don’t expect to find them on the Bridle Path.
The top up-and-coming neighbourhood, according to the report, is in the Bathurst Manor and Armour Heights district of Toronto, north of Highway 401 in the city’s central core. In second place, neighbourhoods outside High Park, such as Roncesvalles, Brockton Village and the Junction, scored high for value.
Affordability remains key in the Toronto market, and especially for the first time buyer. As a result people are looking to fringe neighbourhoods.
Bathurst Manor, a neighbourhood with roots in the 1950s characterized by semi-detached and ranch style homes, had a 33% increase in sales in the first eight months of the year compared to last year, as younger buyers discovered the area’s affordability.
Armour Heights lies between Bathurst St. and the Don River valley from Earl Bales Park south to Wilson Ave. Highway 401 cuts across its south end.
Lot sizes are good for a central location, and prices start as low as $160,000 for condominiums and average $350,000 for a freehold single-family home.
The area is undergoing a real revitalization, with a lot more infill and new construction happening.
The 401, which cuts along the neighbourhood, seems to act as both a physical and economic boundary: Similar houses south of the 401 could be as much as $200,000 more.
The key to maximizing value in a strong housing market is to find those undiscovered neighbourhoods, particularly those neighbourhoods that are on the fringe of more prestigious “blue chip” areas that have good potential for price appreciation.
The Junction area near High Park is one example, he says. While homes in Bloor West Village and High Park — an area that has achieved something of an elite status — start at a minimum of $400,000, similar homes can be found in the adjoining Junction area — which is still undergoing a revitalization, for about $275,000.
The same situation applies in the Scarborough area that borders on the coveted Beach neighbourhood. Prices in Scarborough start at $300,000, while a similar Beach home would start about $500,000.
Some buyers are moving out of the city altogether in a quest for more bang for their buck.
The Markham-Stouffville area is the top pick for suburban locations. Home resales have risen 33% there in the past year.
Resales in neighbouring Richmond Hill have also seen an 18% increase. Further east, Pickering and Ajax have also seen double-digit gains.
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Real estate buyers to focus on low interest, ignore market turmoil
Mary Gazze, The Canadian Press
Canada’s real estate market is now expected to grow this year rather than decline, as buyers take advantage of continued low interest rates that are intended to offset recent economic turmoil, economists said Tuesday.
The comments came after the Canadian Real Estate Association revised its 2011 national forecast for home resales, citing stronger than expected sales and higher prices in the second quarter.
An earlier CREA forecast that called for a 1% dip in sales this year from 2011. But the association said Tuesday sales should grow this year — albeit less than 1% above 2010.
CIBC deputy chief economist Benjamin Tal said recent stock market uncertainty due to the European debt crisis and the United States credit downgrade is actually helping boost sales in Canada’s real-estate market.
Bad economic news abroad tends to keep Canadian interest rates low, he said.
Since the European and American debt issues came to a head in recent weeks, economists have been predicting the Bank of Canada will leave its key rate untouched at 1% until at least next year.
That’s a change of opinion since last winter, when economists widely expected Canada’s central bank would begin hiking its rates sometime in 2011 as the economy strengthened — putting upward pressure on the price of borrowing.
With the global economy now looking weaker than expected, and the U.S. Federal Reserve promising last week that it will keep its key short-term rate at an all-time low for another two years, the Bank of Canada is now expected to put off raising its short-term lending rates.
“The uncertainty globally is really benefiting mortgage holders because it’s really postponing the increase in interest rates in Canada,” Tal said, explaining that when the stock market turns volatile, real estate becomes an attractive investment because of its security.
“Many people can use this opportunity to look into extremely low mortgage rates, so again the misery of other people elsewhere is helping Canadian home buyers.”
Sonya Gulati, an economist at TD Economics said the bank is anticipating that sales will be a bit more subdued in the next two months, but buyers, especially first timers and immigrants won’t likely be deterred in the longer term as interest rates stay low.
“People may be waiting to see whether or not they want to purchase homes, see if things turn for the better. It really has been a roller coaster for the last little while so we anticipate a little bit more subdued activity in August and September,” she said.
“(The stock market) will be a factor in their decision making process, but at the end of the day one of the key things for people is the interest rate and mortgage rates are still very low and they may actually want to enter the market for that reason despite the uncertainty out there.”
Meanwhile, CREA’s chief economist Gregory Klump said it is too early to judge whether buyers are moving towards or shying away from real estate due to volatile stock markets. But he said historically, real estate does well during times of uncertainty.
“During periods of financial market upheaval the Canadian real estate market has remained far more stable,” he said, adding that even though some investors put off buying high end homes during the financial crisis of 2008 and 2009, those buyers returned to real estate soon after recovery began.
“The last time we had financial market instability, the housing market wasn’t immune, but it was certainly less volatile and certainly Canadians recognize that and feel comfortable investing in their home.”
Overall, CREA said Tuesday that 450,800 housing units are expected to be sold across Canada under its Multiple Listing Service in 2011, and the average selling price will be slightly higher. In May, it had estimated 441,100 units would be sold through the MLS.
Both Gulati and Tal said they expect the market to cool off in 2012 once interest rates rise again. Gulati said home prices could fall as much as 10%, while Tal said they could fall between 5% and 10%. Gulati described this as a “correction” while Tal said it was an “adjustment,” but “nothing to write home about.”
Comment: And they both only said it “could” happen, not that it would.
Meanwhile, the association said it was revising its sales expectations for 2012 downward to 447,000 units, roughly on par with the 10-year average.
On a regional basis, British Columbia’s 2011 sales forecast has been revised slightly higher as home sales in the province appear to have bottomed out soon than predicted, while stronger than expected activity in Ontario is expected to offset slightly softer than anticipated demand in Quebec, Manitoba and Newfoundland and Labrador.
CREA said it now expects the national average home price will rise 7.2% in 2011, to $363,500. The previous estimate in May was $352,500.
The upward revision reflects increases in the second quarter in Vancouver and acceleration in other parts of the country, particularly Toronto. Vancouver has experienced a surge in multimillion-dollar home sales this year.
CREA said the two markets have a high number of sales and average price, so they play a big part in influencing the national average.
Additional new listings should also result in a more balanced resale housing market in most provinces, with the national average price forecast to stabilize in 2012.
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Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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Housing prices to flatten in most markets
Dianne Nice – Globe and Mail
After three years of volatility, the Canadian housing market is settling into a more moderate pace of activity.
An RBC report on the Canadian home resale market says home prices will increase by 4.4% this year before they flatten to 0.4% growth for 2012. Home resales are expected to increase by 0.9% this year and remain unchanged next year.
“Our view is that less turbulent economic and policy environments will support a smoother process going forward,” the RBC report says. “The main policy shift will be one toward progressively higher interest rates, which will cool demand but not deep-freeze it.”
Since 2008, the housing market has experienced a lot of volatility due to the global financial crisis and domestic policy changes, including stricter mortgage lending rules and the introduction of the HST in Ontario and British Columbia.
Canadian property values have roughly doubled in the past decade and rebounded quickly to new record-high levels following the 2008 market downturn. In the United States, by contrast, housing prices have still not recovered.
The Alberta resale housing market is expected to post the strongest gains this year with 7% growth, a partial recovery from the 13.6% decline it suffered in 2010. The other Prairie provinces will average 4.5% growth this year, the report says. Alberta and Saskatchewan will see modest increases in real estate prices (0.5% and 2.1%, respectively) for 2012.
For all other provincial markets, price gains next year are forecasted to be at their weakest during a time of economic expansion since the mid- to late-1990s.
“In the case of British Columbia, we expect that extremely poor affordability will cause a partial reversal of the recent substantial gains and forecast an absolute decline of 1.6% (on an annual basis) in 2012,” the report says.
“The perplexing developments in the B.C. market in the past several months — whereby home prices have surged in segments of the Vancouver-area market despite slower resales — are expected to be partly reversed in the coming year, making British Columbia the only province experiencing a price decline (on an annual basis) in our forecast for 2012,” the report says.
Resale activity in Ontario and the Atlantic provinces is expected to be flat this year and weaker next year.
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Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
———————————————————————————————————————
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