Strong Start to 2015
February 4, 2015 -- Toronto Real Estate Board President Paul
Etherington announced a strong start to 2015, with robust year-over-year sales
and average price growth in January. Greater Toronto Area REALTORS® reported
4,355 home sales through the TorontoMLS system during the first month of the
year. This result represented a 6.1 per cent increase over January 2014. During
the same period, new listings were up by 9.5 per cent.
"The January results represented good news on multiple fronts. First,
strong sales growth suggests home buyers continue to see housing as a quality
long-term investment, despite the recent period of economic uncertainty.
Second, the fact that new listings grew at a faster pace than sales suggests
that it has become easier for some people to find a home that meets their
needs," said Mr. Etherington.
The average selling price for January 2015 home sales was up by 4.9 per cent
year-over -year to $552,575. The MLS® Home Price Index (HPI) Composite
benchmark was up by 7.5 percent compared to January 2014.
"Home price growth is forecast to continue in 2015. Lower borrowing costs
will largely mitigate price growth this year, which means affordability will
remain in check. The strongest rates of price growth will be experienced for
low-rise home types, including singles, semis and town houses. However, robust
end-user demand for condo apartments will result in above-inflation price
growth in the high-rise segment as well," said Jason Mercer, TREB's
Director of Market Analysis.
Source: www.torontorealestateboard.com
Two-bedroom units make a come back as developers eye live-in buyers
rather than investors.
The
black billboard in front of the old Dip ’n Sip Donut shop at Kingston Rd. and
Main St. is a sign of the times — in more ways than one. It’s there to
advertise that, yes, another condo is going up, and another eclectic piece of
Toronto history is coming down. But it’s also a sign that change is coming to
the condo industry.
Sometime next year, a bulldozer will be brought in and the aged diner, which
had seen better days 20 years ago, will be razed. In its place will go the next
generation of condos. They will be less shoe boxes in the sky aimed at
investors, and more permanent homes aimed at so-called “end users” — young
families, folks looking for the conveniences of turn-key living, baby boomers
looking to downsize in the same neighbourhoods where they raised their kids.
Streetcar Developments, better known for the kind of ubiquitous, boxy,
glass-walled suites that now dominate Toronto’s skyline, is moving to the next
stage. Its newest project, The Southwood, will have just 45 units, most of them
“family-sized suites” in a six-storey building with all the comforts of home
(minus the upkeep), including outdoor space.
All the units will have balconies or terraces and more home-like amenities, such
as gas stoves. Bigger units will have kitchen islands made for great
gatherings. And there’s even a debate about whether to make a daycare centre
part of the second phase, planned down the road and across the street, just
steps from the Kingston Rd. TTC tracks. Streetcar is far from alone.
Developers across the GTA are now doing a major rethink, and a retooling, with
a host of projects that will feature fewer tiny units and more spaces where
people can really live. But they will come at a price — in Streetcar’s case,
$600,000 and up.
“The biggest change in the condo market now is the bigger appetite for bigger
homes for end users,” says Jim Ritchie, senior vice president of sales and
marketing for Tridel, Canada’s largest condominium developer.
“As expensive as condominiums may be seen to be, when you look at alternatives
— like houses — they are still less expensive.” Tridel, like Streetcar, has new
projects in the sales or development stages for 2015 that are turning
conventional condo thinking on its ear. Tridel was surprised when sales
launched in the summer of 2013 for its 362-unitAqualina Bayside project on Queen’s Quay. The company
found that the units in highest demand were some of the biggest and most
pricey.
Those units are typically the last to sell, which is why developers have
flooded the condo market with so many one-bedrooms and even micro-condos up to
500 square feet. They have been hugely popular with investors looking to buy a
unit and rent it out. In fact, of the 100 units in Aqualina that sold for over
$500,000, 31 of them were over $1 million and about 1,500 square feet. As a
result, Tridel stepped up the number of bigger units in the second phase of
Bayside, called Aquavista. Bigger units will account for almost one-quarter of
the 227 total suites. Sales just launched in November, but already end users
have snapped up 25 of the $1 million-plus bigger units, says Ritchie.
“We also have a lot in the $800,000 and $900,000 price range, and we have some
one-bedroom units. But our focus is really on two bedrooms and larger,” says
Ritchie. “We’re seeing more of this demand from end users, and not all of it in
the downtown.”
In many ways, this is an overdue correction in a condo market that had gotten
out of whack. Over the last five years in particular, unit sizes have been shrinking.
Part of that has been a legitimate effort by developers to keep prices below
$450,000 in the face of escalating land and development costs: Above that,
buyers lose most HST rebates. But small condos also fed intense investor
demand, which remains surprisingly strong but has eased from its 2011 peak.
In 2009, for instance, condo projects launched in the GTA had units averaging
929 square feet. By this year, new GTA projects launching sales had lost the
equivalent of a bedroom and hit a low averaging 812 square feet, according to
RealNet research. The loss of living space has been even more pronounced in the
popular downtown core. But already, unit sizes are starting to creep back up,
says RealNet president George Carras.
The down side, however, is that average prices will also climb as units get
bigger – and that’s worrisome given that the average cost of a new condo has
already reached $455,000 as of this fall, not including monthly maintenance
fees, according to RealNet.
Part of that is because new-build houses and condos are subject to the HST,
where resale home aren’t. The $600,000 price tag for one of Streetcar’s The
Southwood condos, for instance, includes $54,000 just in HST.
“That acts as a really negative influence for developers looking to build
bigger units,” says Streetcar Development founder Les Mallins.
Since 2004, the mix of condos coming on the market has changed dramatically,
RealNet research shows: Back then, some 47 per cent of the units in new project
launches were two bedrooms. One-bedrooms accounted for about 41 per cent of all
new unit launches.
But as land and other costs escalated, the mix shifted dramatically. At the
peak in 2011, one bedrooms made up about 61 per cent of all new launches and
two bedrooms just 31 per cent. As of the end of this year, with developers
looking to build bigger, the mix is returning to 2004 levels, with one bedrooms
making up 48 per cent of new launches and two-bedrooms catching up at 41 per
cent.
By: Susan
Pigg
Source: www.thestar.com/business/2014/12/28/the_return_of_the_larger_condo.html
A
forecast from CIBC World Markets predicts that the bank of Canada will make a
further 0.25 per cent cut to interest rates in March despite the current
weakness of the Canadian dollar. Chief economist Avery Shenfield says that
growth will be lower than 2 per cent this year and sees the loonie falling to
77 cents US and not recovering too much above 80 cents US. Avery notes that
there is a need to shift economic growth from housing and debt to exports in
spite of the weak oil prices and also that the US is likely to increase its
interest rates in the summer, putting additional pressure on the Canadian
dollar. There is also a possibility that the BoC will take even more action
later in the year: “While that second cut is priced in, markets may then guess
about a third" Avery says but with CIBC expecting a recovering oil price
by the end of the year it is also forecasting a “reversal of the Bank of
Canada’s rate cuts in 2016.”
by Jamie Henry
Source: http://www.mortgagebrokernews.ca/news/cibc-expects-another-rate-cut-in-march-despite-weak-loonie-187647.aspx
It was always going to happen but while last week the big lenders were
reluctant to pass on the Bank of Canada’s interest rate cut to borrowers, this
week there’s talk of a price war.
Royal Bank of
Canada has become the first of the big banks to cut mortgage rates, dropping
its 5-year fixed rate deal to 2.84 per cent and also cutting its other fixed
products. Flexible rates are unchanged though along with other lending from the
bank. Of course these rates are their published deals and brokers frequently
secure better ones but a ‘battle of the rates’ creating headlines can only help
the perception that now is a great time to buy. How low those rates go is
anybody’s guess but there are already predictions of sub-2 per cent mortgages.
by Jamie
Henry
Source:
http://www.mortgagebrokernews.ca/news/rbc-cuts-mortgage-rate-price-war-coming-187518.aspx
Our Fraser fir, Christmas Tree is taken down and I
miss a pleasant scent in our family room. Hope you all had great holidays with
your loved ones! All the best in 2015!!
Near Record Sales in 2014
January 7, 2015 -- Toronto Real Estate Board President Paul
Etherington announced that Greater Toronto REALTORS® reported 92,867
residential sales through the TorontoMLS system in 2014, including 4,446 in
December. The calendar year 2014 sales result represented a 6.7 per cent
increase over the 2013 sales figure of 87,049 and was just short of the record
set in 2007.
"TREB's 2014 sales figures are a testament to the importance
Greater Toronto Area households continue to place on home ownership. GTA
households realize that home purchases have been a quality long-term
investment. While home prices certainly increased substantially in 2014, the
purchase of an average priced home remained affordable, in terms of the average
household's ability to comfortably cover their monthly mortgage payments,"
said Mr. Etherington.
"Even with a constrained supply of homes for sale in many parts of
the Greater Toronto Area, buyers continued to get deals done last month.
Households remain upbeat about home ownership because monthly mortgage payments
remain affordable relative to accepted lending standards. This is coupled with
the fact that housing has proven to be a quality long-term investment,"
stated Mr. Etherington.
The average selling price continued to grow on a year-over-year basis in
calendar year 2014, with an 8.4 per cent increase over calendar year 2013 to
$566,726. This included a seven per cent increase in the December 2014 average
selling price to $556,602. Throughout 2014, annual increases in the average
selling price and the MLS® HPI Composite Benchmark were consistently reported
on a monthly basis for most market segments, from detached homes through to
condominium apartments.
"The strong price growth we experienced in 2014 can be explained
with two words: listings shortage. The constrained supply of listings was
especially evident for low-rise home types like singles, semis and town houses.
The number of households looking to purchase these home types increased, while
the number of homes from which they could choose decreased. This situation
resulted in more competition between buyers and more aggressive offers,"
said Jason Mercer, TREB's Director of Market Analysis.
Source:
www.torontorealestateboard.com
