Tag Archives: new housing development
By Stefania Moretti – QMI Agency
Price tags on new houses posted a surprising, but small, increase in August as builders reported slightly higher costs, Statistics Canada data released Wednesday shows.
The New Housing Price Index notched up 0.1% in August, following a 0.1% drop in July. Economists had been waiting for yet another dip in August.
Prices increased most in Hamilton, Ont., Windsor, Ont., and Winnipeg. They remained flat in 10 of the 21 metropolitan areas studied.
In Saint John, Fredericton, Moncton, Ottawa–Gatineau, Calgary as well as Greater Sudbury and Thunder Bay, the cost of owning a new home actually dropped 0.1%.
Year-over-year the NHPI is up 2.9%. In the 12 months to August, Regina has seen prices jump 6.1%, Winnipeg 5.3% and St. John’s 4.9%.
David Rosenberg, formerly of Merrill Lynch and now chief economist at Gluskin Sheff and Associates, told a group of real estate professionals Wednesday he believes prices are headed south, especially in the major markets of Toronto and Vancouver after a busy start to 2010.
“We borrowed two years worth of housing activity, so the demand is just not going to be there,” he said, adding he sees average home prices falling as much as 10% in the Greater Toronto Area in the coming months.
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Tony Wong – Yourhome.ca
Dennis Au-Yeung has heard the doomsday predictions of the housing market. In particular, that too many condominiums are being built in the city of Toronto.
Prepared for a less torrid market, the Chief Financial Officer of Concord Pacific Group Inc., the largest condo builders in Canada, did not expect line ups for his latest project, Tango at Concord Park Place in North York last month.
But within a day the 250 units he had put up for sale had sold out.
“I really didn’t get this kind of response, we had actually expected the market to soften a little,” said Au-Yeung.
Au-Yeung thinks the strong response is because some buyers have been priced out of the downtown market and there hasn’t been as much supply in areas outside the core. The average selling price was $440 per square foot compared with over $500 downtown.
“I think affordability is certainly an issue,” he said.
According to a Statistics Canada report Thursday, new home prices are up across Canada and particularly in Toronto where condominium sales have been strong.
Prices of new homes in Canada rose by 0.3% in May over April, according to the report.
This is the third month in a row of identical price increases, as new home builders continue to report strong market conditions.
Prices increased the most in Regina, followed by Toronto and Oshawa according to Statscan.
“Builders reported that they increased their prices as a result of higher material and labour costs as well as increased land development,” said Statscan.
The Toronto market, which accounts for a third of all new housing development reported a 0.7% increase, well above the national average.
Year over year, Toronto new home prices are up by 3.2%. Vancouver housing prices remain the market leader, with a 5.8% gain year over year.
“It is a little strange that the resale market seems to be softening, but we’re still going strong,” said Au-Yeung. “But we also haven’t had the big price increases.”
New home price increases have been restrained in comparison to the existing home market. Buyers trying to take advantage of low interest rates and not willing to wait for new product have bid up the prices on resale homes.
The average price for June transactions for existing homes was $435,034, or up 8% from June of 2009 according to figures released by the Toronto Real Estate Board this week. However, sales fell for the second straight month in a row.
The new condo market on the other hand, has been targeted by investors who are willing to wait several years for new product before renting or divesting of the asset. That could also be problematic as some analysts have said there are too many units under completion for the market to absorb.
“A cooling off of housing prices is likely to occur in June in response to the May jump in mortgage rates, a cooling off of global commodity prices, and the impact of the harmonized sales tax,” said Arlene Kish, senior economist of HISIHS Global Insight.
As a result, new home prices are also expected to ramp down in the third quarter.
“Canadian housing activity is moving into reverse,” said David Rosenberg, chief economist at Gluskin + Sheff and Associates in Toronto. “It looks like the impact of modestly higher interest rates and Canada Mortgage and Housing Corporation’s incremental moves to tighten up its underwriting guidelines have taken the steam out of the real estate market.”
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Tony Wong – Yourhome.ca
The clock is ticking as Greater Toronto Area developers rush to bring new housing developments to market.
Introduction of the Harmonized Sales Tax, in July, and the prospect of higher interest rates in the second half have developers marketing new developments to take advantage of favourable conditions.
Sales of new houses and condos in the Greater Toronto Area were up more than 237% in February from the year-ago month, according to RealNet Canada Inc. figures released Monday.
February’s 3,148 new homes sold represented the highest levels since 2006 and this month is expected to be even better.
“March results are expected to complete a very solid first quarter for new home sales in the GTA,” the Building, Industry & Land Development Association said. “The new home market continues to benefit from the tight conditions in the resale market, 50-year-low interest rates and healthy levels of consumer confidence in real estate.”
Comparison is a little misleading: 2009 was a recessionary year when February represented the bottom of the market. But, looking at 2008 and 2007, this February’s sales were up 24% and 19% respectively. Developers are putting projects on the market in the first half, with analysts expecting a slower market in the second.
“The employment situation is showing steady improvement but job creation this year won’t positively affect housing demand,” industry analyst Will Dunning reported Monday. “The temporary factors that have overstimulated the housing market … low interest rates and fears of increases are starting to lose force. I still expect a progressive slowdown of housing activity this year.”
Toronto proper, which took the hardest hit last year, selling only 247 new properties, also recorded the biggest jump, up almost fivefold to 1,386, largely on highrise sales.
This month, new, stylish Thompson Residences in Toronto’s King St. W. district and the hotly anticipated One Bloor condos are expected to start sales, which analysts say should finish a robust first quarter.
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