Tag Archives: New housing market
GTA new home sales a tale of two markets
Canada News Wire
Sales of new high-rise condominium suites held firm in June while sales of new low-rise homes retreated due to record-low inventory levels of that product type, the Building Industry and Land Development Association (BILD) announced today.
According to RealNet Canada Inc., BILD’s official, independent source of new home market intelligence, there were 2,920 new homes and condos sold in June 2010. While high-rise condo sales remained right in line with 2009 (and 2008), low-rise (single-detached, semi-detached town-home) sales were off by 46%, resulting in a 26% decrease in total new home sales June/June. “It’s a tale of two markets,” quipped BILD President and CEO Stephen Dupuis.
With the first half of 2010 in the books, the recovery in new home sales is revealed by a 69% increase in total new home sales driven by a dramatic 142% increase in sales of high-rise condominium suites. Even compared with January-June 2008, total new home sales are up a healthy 22%.
“By this point last year, the new housing market was nearing full recovery from the global financial crisis. We’re now comparing apples with apples and on that basis, the new home market appears to be on relatively solid footing at this time,” Dupuis said.
He pointed out that the low-rise market is up 29% on a year-to-date basis, with the June decline reflecting an over-shot last year when sales spiked by 60%, as well as the record low inventory levels of detached, semi-detached and townhomes. “With relatively few new project openings thus far this year, low-rise sales have been naturally constrained,” Dupuis stated.
June new home sales were split 60% high-rise, 40% low-rise and through the first six months of the year 53% high-rise, 47% low-rise.
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Toronto real estate sales boom in October
ctvtoronto.ca – with a report from CTV Toronto’s Paul Bliss
The development industry says new home sales in the GTA are at their highest level in more than two years.
The Building Industry and Land Development Association (BILD) said Friday that there were 4,150 sales in October, the best results since July 2007.
Sales of homes, primarily in the 905 area, “were up an astounding 173%,” it said Friday.
High-rise condo sales, primarily in Toronto, “rose by an impressive 77%,” BILD said, citing RealNet Canada Inc. as the data source.
“The turnaround in new home sales has been nothing short of remarkable, with homebuyers taking advantage of ultra-low interest rates and intense competition among builders,” Stephen Dupuis, BILD’s president and CEO, said in a statement.
“The low-rise new housing market picked-up in late Spring while the high-rise condo market has sprung back this fall, accounting for 60% of total new home sales in October,” he said.
“With year-to-date sales now running 2.5% ahead of last year and a decidedly up-note in the market, it looks like total new home sales in 2009 will end up far higher than anyone could have anticipated earlier in the year.”
In Toronto, real estate agent Krysten Fleischhacker of Coldwell Banker told CTV Toronto that the condo business has been crazy.
“There’s so much competition. There’s been multiple offers on every unit that’s under $400,000, it seems — even higher,” she said.
One issue is that inventory is low. Fleischhacker said it’s so tough to get into the resale market, many are finding better deals in new condos.
“They do offer incentives, like cash-back on closing or up to $5,000 in upgrades, which could include laminate floors throughout …,” she said.
So long as interest rates and inventory stays low, Fleischhacker said it’s likely to remain a seller’s market.
CTV Toronto’s Paul Bliss said some agents are lining up to buying units in new buildings before turning around and selling them again.
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Is the hot housing market a boom, bust or bubble?
Stephen Dupuis – Yourhome.ca
I can’t believe how often I have heard the B-word of late. No, I’m not talking about “B” as in real estate “boom,” I’m talking about “B” as in real estate “bubble.”
Considering that we are barely six months out of what was looking like a prolonged real estate “bust,” it’s hard to fathom how the “experts” can already be warning that the real estate market is too hot for its own good.
I’ll be the first to admit surprise at just how buoyant the real estate market has been. Then again, should there be any surprise that after six months of paralysis during the height of the global economic crisis, homebuyers would react to a reprieve by rushing back into the real estate market.
Frankly, I’m delighted the real estate market is doing so well because a healthy real estate market drives renovation as well as new home sales as all boats rise with the tide. That said, I have a lot of empathy for the homebuyers who are getting caught up in bidding wars. That’s a situation that will be resolved when listings increase, as they always do.
To the homebuyers that find bidding wars distasteful, I would note that at least with new homes and condos, the price is the price and right now, new home prices are extremely competitive.
Although it took a little longer than the real estate market to recover, the lowrise new housing market picked up in late spring while the highrise market came back to life this fall. On an overall basis, it looks like total new home sales in 2009 will end up just slightly ahead of 2008, with last year ending on a down note and this year ending on an up note.
Is the new housing market booming? Far from it! So where are the “bubble” theorists coming from? For the most part it seems they are concerned with the extent of mortgage insurance in the market as well as the potential impact of higher interest rates down the road.
The concern with the prevalence of mortgage insurance ignores the fact that it has always been a major and important part of our housing finance system. Frankly, so long as banks are prevented from lending to anyone with less than 20% down, mortgage insurance will continue to be a growth industry.
The irony is that we have mortgage insurance to thank for the fact that our banks are lending to homebuyers, enabling the recovery we have been experiencing in our real estate markets.
That said, homebuyers still have to qualify for mortgage insurance and if anything, that’s become more difficult since federal finance Minister Jim Flaherty clamped down on mortgage insurers.
In July 2008, Flaherty imposed a number of restrictions on mortgage insurers including a prohibition on insuring mortgages with amortizations longer than 35 years, a minimum 5% down payment, minimum credit score requirements, maximum debt ratios and new loan documentation standards, all good things as far as I’m concerned.
As for low mortgage rates, it seems the experts are concerned that homebuyers might have difficulty carrying their mortgages should interest rates be higher at renewal time. This ignores the reality that most homebuyers these days are smartly locking in their mortgages for five years during which they will increase the equity in their homes and/or enjoy income growth.
To be on the safe side, homebuyers that pay down as much as they can during those all-important first five years will be in a far better position to ignore the experts as well as the columnists.
Stephen Dupuis is president and CEO of the Building Industry and Land Development Association. The views expressed are those of the president.
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Contact the Jeffrey Team for more information - 416-388-1960
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