GTA RealEstate Blog

August 16, 2010 Tony Wong Business Reporter YourHome.ca

Canada’s real estate market is due for a “moderate correction” with homes that are anywhere from 10 to 15 per cent overvalued, says the TD Bank.

“The excessive pricing of Canadian housing in relation to fundamentals is now clearly correcting,” TD Bank economist Grant Bishop said in an economic note Monday. “We expect a moderate correction in prices over the coming year.”

The bank is forecasting a “downward correction of 10 per cent in monthly average prices, followed by several years of stagnation of price growth,” according to Bishop.

TD says affordability was steadily eroded during the house price surge of late 2009 and early 2010, with carrying costs rising relative to average household incomes. “The current level of household debt flags the need for households to slow their borrowing,” said the bank.

TD is the latest major financial institution to rain on the real estate parade. Other Canadian economists have said the market is overvalued by as much as 25 per cent. The Canadian Real Estate Association (CREA) also revised its figures downward this month.

Canadian existing home sales continue to decline rapidly, thanks to a drop in activity in Ontario and British Columbia, according to a monthly report by CREA on Monday.

Seasonally adjusted national home sales were down 6.8 per cent in July compared with June. On a year-over-year basis, national sales activity was down by 30 per cent compared with July 2009. It was the third month in a row that sales have declined.

“The market went up faster than most people have expected and it’s going down more quickly than we had anticipated,” said BMO Capital Markets senior economist Sal Guatieri.

The average price of homes sold through CREA’s Multiple Listing Service in July was $330,351, only one per cent higher than the same month a year earlier.

Year to date transactions are still up by 5.6 per cent in the first seven months of the year.

“It looks like anyone who wanted to buy a house in Canada got their shopping done early,” said Doug Porter, deputy chief economist for BMO Capital Markets.

“The combination of tighter mortgage insurance rules, a modest back up in borrowing costs, and the HST have delivered a hammer blow to sales.”

Meanwhile, CREA is warning that there are likely more dismal sales numbers in the months to come.

“The gap is expected to shrink as the year progresses since activity rose sharply over the second half of last year, reaching levels that are unlikely to be matched in the final five months of 2010,” the association said in its report.

What may keep prices from falling more dramatically is that new supply seems to be trending down. Seasonally adjusted figures for new listings show that they declined by 7.2 per cent in July compared with the prior month. This is the third consecutive month over month decrease.

“We went from a period last year during the recession where we saw very few listings, then a lot more listings earlier this year when the market improved,” said Guatieri.

“Now you’re seeing fewer listings as vendors see the market softening as they take their homes off the market because they’re worried they may not get the price they’d like to see.”

To discuss your real estate needs please contact Joseph Biafore, Broker at Re/Max Diamond Realty Inc., Brokerage at 1-866-901-2971 or click josephbiafore.com.

on Yahoo!

10 things to check before you buy a new home

 

By Emily Hsieh, Shine staff

The process of buying a new home—especially if it’s your first time—is incredibly intimidating. And while there are certain things you may know you’re going to want to change upon moving in (like paint colors or retiling), if you’ve never gone through this before you may not know what else to watch out for before you sign the dotted line (just because a home is gorgeous on the outside, it’s not impervious to having a bunch of costly-to-fix issues that go way beyond the surface—remember The Money Pit?). Here, via apartmenttherapy.com, a handy checklist of all kinds of things a potential buyer should be mindful of:

1. Check the drains to make sure they’re not backed-up. To test, do a load of laundry, fill up the tub and sinks, and try to drain them all at the same time.

2. Open all the windows all the way to make sure they’re able to open and shut completely—fixing them is not only a pain, but a financial drain.

3. Turn on all the faucets and make sure they’re in working order.

4. Light a fire in the fireplace. While cleaning them is pretty easy (just call a professional chimney sweeper), you should also make sure they draft correctly.

5. Taste the water. Even if the city you live in has great water, if you’ve got old pipes, they may send out debris into yours.

6. Flush the toilets. Make sure that the toilets are able to flush toilet paper.

7. Open the electrical panel. Watch out for loose wires or ones that simply don’t connect to anything, which could be a sign of live wires inside!

8. Turn on the heat/air. Not only do you want to ensure they turn out, but check to see if they heat/cool to their designated temperatures.

9. Pull the carpets back. Peel away a corner of the carpet to verify what’s underneath (often there’s hardwood under there) and to make sure it’s not mildewing.

10.Basement moisture. Check for signs of dampness, not just on the walls, but near things like dehumidifiers, which suck water out of the air.

To discuss your real estate needs please contact Joseph Biafore, Broker at Re/Max Diamond Realty Inc., Brokerage at 1-866-901-2971 or click josephbiafore.com.

 

Dated decor, extreme customization behind bad MLS listings

May 18, 2010 Paul Gallant Special to Yourhome.ca

 

It took one homeowner about 45 years to collect 30,000 bobblehead dolls—and a big chunk of his home to store them. The real estate agent selling the place had to think quickly to come up with a strategy so the colourful collection wouldn’t scare away potential buyers.

“I decided to mention that he was the original owner, so people would be prepared,” says Brian Mayer, an agent for Royal LePage in Toronto. “I also made sure the remarks said that all that custom shelving would be removed.”

 

When it comes to creating real estate listings that will attract potential buyers to their home, sellers aren’t always the best judges of what works for the multiple listing service (MLS) at Realtor.ca. Not everybody can afford to stage their home to make it appealing to buyers, but some owners can be their own worst enemy.

 

Dated or eccentric decor, massive clutter and extreme customization populate the most cringe-worthy listings. The U.S.-based website Hookedonhouses.net features photos of homes overrun with stuffed animals, china and questionable murals. Mayer’s even come across a bright-orange swastika poster, which he, of course, suggested be removed. Though most homeowners will follow their agent’s lead to sell their property, some are surprised when they’re told that photographs or descriptions of their passions do not make for an effective listing.

 

“It’s hard to tell them to take things down or get rid of things without them taking it personal,” says Mayer. “You don’t judge them but you really have to encourage them to clean things up.” Too many family photos, too many plants, too much art—it all gets in the way of helping buyers imagine themselves living there.

Homeowners who spent a lot of money on cabinets and other custom features often see only how much money they spent on the upgrade—not the fact that the customization might be decades out of date.

 

“I remember one client who wanted me to mention the custom wall treatment,” says Steven Green, also an agent at Royal LePage in Toronto. “I suppose it would have been great if you had walked in there without your glasses on. It was hellacious—multicoloured and gold. They wanted me to take pictures of it for the digital virtual tour. I did, but I can’t say it looked good.”

 

Sometimes homeowners work hard to help sell the property—it’s just that their judgment about what potential buyers are looking for can be shaky. Stuart Sankey, a representative with Re/Max Hallmark Realty Ltd. in Toronto, remembers one client who decided to repaint the place for the listing photos. Sankey brought over an interior designer to check it out and they soon discovered that rather than opting for neutrals—the safest bet—the owner had picked out colours he had found on sale.

 

“The designer opened the door and, well, she’s still in therapy,” says Sankey, who suggests talking to the designer first, painting later.

 

Mayer remembers one seller who wanted to include photos of their family at dinner—the table fully set, the wine served—to show how many people the dining room could fit and how much fun they could have there. Then there was the home that promised parking for eight vehicles—and the photo showing eight vehicles crammed onto the pad to demonstrate it was true.

 

Some selling features are, to the average buyer, not features at all. To say that contaminated land was cleaned up years ago is only reminding people that the land was contaminated in the first place. A “lush” backyard garden often turns out to be overgrown. Green discourages phrases like “steps from a bus stop,” which not only emphasizes convenience but the possibility of noisy mass transit going by at all hours. “You can rephrase it so people know it’s there without thinking of the nuisance.” Green has also had to talk people out of mentioning steam rooms and saunas at properties where the facilities have not been working for years—potential buyers would end up feeling disappointed.

 

Of course, then there are the sellers who don’t try at all. Sankey remembers one client who filled his condo with boxes and never unpacked before putting the place back on the market, a strategy that made it all but impossible to get into the unit’s second bedroom. “He would hang his laundry to dry all over the place and pick them up as he wore them. There were crunchy white Jockeys everywhere. It was the first time I never took a picture for the listings.” Green remembers a multi-million-dollar property where the owner refused to cut the grass.

 

Finally, there are the overlooked details. Photos of the backyard in full bloom are a great idea, especially for a wintertime listing. Less so if they include cats, dogs and other occupants that aren’t included in the sale. Green remembers one seller who had a lovely backyard deck and submitted what would have been great photos.

 

“Except the barbecue was open. Your eyes went straight to it,” he says, “And it was filthy.”

To discuss your real estate needs please contact Joseph Biafore, Broker at Re/Max Diamond Realty Inc., Brokerage at 1-866-901-2971 or click josephbiafore.com.

Canadian Affiliates Top Sales Survey

Canadian RE/MAX Associates: Your hard work once again pays off. 

RE/MAX placed 130 brokerages on the first-ever REAL Trends Canadian Top 200 survey of the country's leading firms. That 65 percent showing easily topped the next closest competitor, Royal LePage, which had just 28 brokerages – 14 percent – on the list.

What's more, RE/MAX Associates in offices represented on the list closed an average of 17.9 transaction sides in 2009 – the report's highest per-agent production. The overall average was 14.5 transactions, with almost every franchise competitor falling under that mark.

The numbers give the network a clear advantage over competing brands in Canada, establishing RE/MAX Associates as the most productive agents in the industry. 

"The numbers are no surprise to us," says Debra Bain, Co-Broker/Owner of RE/MAX Hallmark Realty, a seven-office brokerage in Toronto. The firm placed among the top five out of 200 brands for both sales volume and transaction sides. "We have incredible agents, many who have built their careers with us. 

"This solidifies that RE/MAX in Canada has the most listings, buyers, market share, along with the best agents in the industry. And that comes from recruiting the top talent out there."

A mix of recruiting, training and old-fashioned hard work helps RE/MAX brokerages consistently outshine its competitors, says Peter Degroot, Broker/Owner of six RE/MAX Twin City offices in the Kitchener, Ontario, area. RE/MAX Twin City placed No. 4 among 200 for closed transaction sides.

"We have created a stable, credible business over the past 30 years, and our agents' experience and hard work has helped us get through tough times," Degroot says. "We can use these numbers to show prospects our strength, and as the saying goes, 'If you can't beat them, join them.'"

The REAL Trends Canadian 200 research report identifies Canada’s largest residential real estate firms as ranked by closed transaction sides and closed sales volume. The 2010 report looks at full-year 2009. Participation in the survey is voluntary. REAL Trends requires independent verification of all data.

© 2010 RE/MAX, LLC. RE/MAX Affiliates may share this article, provided they do not charge for it and this notice is included. All other rights reserved.

 

Dramatic rebound characterizes Canada’s luxury home segment in 2010

69 per cent of markets set records for best-ever first quarter sales

Luxury home sales soared in the first quarter of 2010 as affluent purchasers moved to take advantage of favourable market conditions across the country, according to a report released by RE/MAX.

The RE/MAX Upper End 2010 Report, highlighting sales and trends in 13 major Canadian centres and five sub-markets, found that improved economic performance, increased personal wealth, immigration and foreign investment all contributed to a serious upswing in sales. Virtually all areas experienced double and triple-digit increases between January and March of this year over 2009 figures for the same period. Nine out of the 13 markets examined (69 per cent) shattered existing records – setting new all-time highs for first quarter activity in the upper end.

Real estate continues to resonate with purchasers at every price point. With the top end of the market shifting into high gear, every segment of the residential real estate sector is now operating in tandem. Despite the upward momentum, there are still deals to be had – especially at the higher price points—a fact that is motivating buyers to act.

While comparisons are being made to one of the worst first quarters on record – it’s important to note that the bounce back in many areas – including Greater Vancouver, Victoria, Winnipeg, London-St. Thomas, Greater Toronto, Ottawa, Montreal (Island), Halifax-Dartmouth, and St. John’s -- exceeds record levels reported in years past. Leading in terms of percentage increase in sales is Kelowna (700 per cent), Montreal (Island) (300 per cent), Victoria (275 per cent), Greater Toronto (263 per cent), Greater Vancouver (184 per cent), Hamilton-Burlington (169 per cent), Edmonton (164 per cent), London-St. Thomas (125 per cent), and Ottawa (121 per cent).

Recovery in the upper end has been nothing short of remarkable. This segment of the market was hardest hit when the recession took hold—yet its comeback has been fast and furious. There is no doubt that mindset has changed and confidence has returned. One only has to look at the percentage increases to see the current upward trajectory.

Economic performance has been a major driver, boosting consumer confidence levels across the board. The tangibility of bricks and mortar has also played a role in record activity – a development that began in 2008 as affluent purchasers reduced their exposure to equities and shifted their earnings into real estate holdings. Recovering stock markets – and portfolios – in the months ahead will further contribute to housing market activity.

Luxury sales as a percentage of the market have been steadily increasing in recent years – with the exception of 2009. With the return to economic growth, it’s expected that the number of high net worth individuals will begin to rebound, following two years of consecutive decline. This will continue to help prop up Canada’s luxury market going forward.

Immigration and foreign investment have also had an impact on the luxury segment – and in some markets, seriously bolstered sales. Middle Eastern buyers, Mainland China investors, and Europeans—to a lesser extent—are represented in virtually every market across the country. Canada’s sound banking system, political stability, and strong dollar are attracting foreign investment – and that is spilling over into high end residential real estate.

Most active in 2010 were business executives, entrepreneurs, and professionals. Location was first and foremost among upper-end buyers, followed by a preference for newer homes or those that are turn-key (completely renovated). With the exception of Toronto, buyers could be relatively particular and take their time in making decisions as balanced conditions characterized markets across the board. Given adequate supply, prices are likely to hold steady or experience modest increases in the majority of markets in 2010.

Canada’s most expensive luxury markets are shared equally among East and West, with Greater Vancouver topping the entry-level price point for high-end homes at $2 million, followed by $1.5 million in Greater Toronto and Montreal (Island). Upper-end value markets were most abundant in Atlantic Canada and smaller centres in Ontario, where luxury home prices started at $400,000 in St. John’s, $450,000 in Halifax-Dartmouth, $500,000 in London St. Thomas, and $750,000 in Ottawa and Hamilton-Burlington. Winnipeg and Edmonton represented good value in the West at $500,000 and $850,000 respectively.

Greater Vancouver holds the title for the most expensive home sold through MLS in the first quarter. The property—an 11,600 sq. ft. home on ¾ of an acre on the city’s Westside, changed hands for $10.06 million. Other noteworthy sales include: $7.25 million in the Greater Toronto suburb of Mississauga, $6.25 million in Toronto’s central core, $5.75 million in Calgary, $5.5 million in Montreal (Island), and $5.3 million in White Rock/South Surrey. The priciest MLS listings could be found in West Vancouver ($29.9 million), Greater Toronto ($23 million in Bridle Path), Vancouver Westside’s Shaughnessy area ($22 million) and Victoria ($19 million).

To discuss your real estate needs please contact Joseph Biafore, Broker at Re/Max Diamond Realty Inc., Brokerage at 1-866-901-2971 or click josephbiafore.com.

Real estate fraud rare but experts warn homeowners to be on the lookout

by Malcolm Morrison, THE CANADIAN PRESS

Thursday, April 8, 2010

TORONTO - Real estate fraud is a rare thing but experts in the field say that doesn't mean people should assume it will never happen to them - considering the misery it can inflict on the unwary homeowner, it's worth knowing that it's out there and it's nasty.

"I compare the fraud issue to the lottery," said Ray Leclair of title insurance provider TitlePlus.

"There are millions of transactions in Ontario alone in real property every year. A very minute number of those are fraudulent. So for the public to win or lose in the fraud lottery, the odds are very low."

But it's not an experience you would ever want to go through, he said, even though governments have put in place some measures to make it easier for people to regain ownership title that have been fraudulently pilfered.

"At the end of the day, even if you get your title back, there's the question of (legal fees)."

There are two types of real estate fraud to be concerned about - mortgage fraud and title fraud.

Mortgage fraud is something that is more troublesome for lenders. It involves a fraudster leaving the title or ownership of a property in the current owner's name but mortgaging it without their knowledge, sometimes by fraudulently discharging the existing mortgage. It can also happen when a would-be homeowner falsifies information to get a mortgage.

"That's just a fact of lending," said Laura Parsons, manager of specialized sales for Bank of Montreal in Calgary.

"There are people out there who normally wouldn't get a loan granted to them but because they are fraudulent and give incomplete information or they don't let the lender know all the information, they end up getting approved."

What the average homeowner has to look out for is title fraud. It happens when a fraudster changes the ownership or title of a property into another name in order to sell or refinance the property.

According to the Ontario Ministry of Consumer Services, "it often involves fraudsters using stolen identity or forged documents to transfer a registered owner's title to himself or herself securing a mortgage on the property and then disappearing with the mortgage proceeds."

Parsons calls it a form of identity theft.

"So they know all the details of the person, they go to the land title registry, they pull a title and they find out that there is no encumbrance on the property," she said.

"Now they have basically a ticket to sell the property, so they go in and they can change home ownership."

If the fraudster has enough information, they can change ownership of the property at a land titles office, put a property in their own name. Then they either sell it or go to the bank and get a homeowner line of credit or a mortgage put on that property for their own purposes.

You would think that you would know immediately if you had been scammed, but fraudsters aren't entirely stupid and there are ways to delay finding out.

"They have gone in and taken the title or put a mortgage on and then they will pay it for two or three months," said Leclair.

In the meantime, you're getting all your bills and everything looks fine.

"In the meantime, your mortgage is gone and there's a new mortgage on there - it's going to be paid for two or three months and then two or three months later, they default, there's two or three months waiting time before the bank actually does something so six months, nine months down the road, you now get an angry bank calling you, saying they're going to sell, or you get someone showing up at the door saying you're out the door."

Leclair also pointed to a fraud victim in Vancouver who started wondering why he wasn't getting his property tax bill.

He called city hall and was told "well, you sold the property."

"It's very ordinary things. You don't get a water bill, you don't get those kind of things that could be a hint that something has changed along the way."

Leclair notes that while the government has systems in place to help you if you are defrauded, it's up to the homeowner to monitor. Both he and Parsons emphasized the importance of protecting your private information as a way to avoid becoming a target of real estate fraud.

Parsons said, in particular, you want to keep your social insurance number confidential. And that means not carrying around your SIN card in your wallet where it could be lost or stolen.

"And now with these recycling bins, people are throwing more and more of their mail and personal information in the blue bin - people should get a shredder - $149 buys you some security," she said.

And consider title insurance. Not only does it protect you now and in the future, it provides coverage for fraud that may have occurred prior to your purchase of your home.

Leclair said the insurance costs about $200 to $300, depending on the value of the property, and it is good for as long as you own the home.

And one of the worst things you can do?

"I've read articles where people say the best protection against fraud is to get the biggest mortgage you can on your property - it's a fallacy," said Leclair.

"People figure, well if there's no equity in the property, how can they steal it? Well they can go in and fraudulently discharge the mortgage. I laugh every time I see this. Discharging a mortgage is probably simpler than anything else. It's the bank's signature, it's very easy to imitate. Who knows what a bank's signature looks like?"

To discuss your real estate needs please contact Joseph Biafore, Broker at Re/Max Diamond Realty Inc., Brokerage at 1-866-901-2971 or click josephbiafore.com.

Higher interest rates ahead, bank warns April 20, 2010

THE TORONTO STAR

Bank of Canada Governor Mark Carney, sees a high dollar as hurting economic recovery. BLAIR GABLE/REUTERS

OTTAWA-The Bank of Canada has issued its first unequivocal warning that higher interest rates are on their way, likely in about five weeks.

The central bank’s policy statement Tuesday surprised no-one by keeping the trend-setting interest rate at the record low 0.25 per cent for another announcement date, but it was clear about where it was heading next.

The bank’s governing council declared with the economy growing faster this year than thought, as well as inflation, there was no need to stay with its “conditional commitment” that it wouldn’t touch rates until the end of the second quarter, or after June 30.

“This unconventional policy provided considerable additional stimulus during a period of very weak economic conditions,” the council wrote.

“With recent improvements in the economic outlook, the need for such extraordinary policy is now passing, and it is appropriate to begin to lessen the degree of monetary stimulus.”

Hence, the council went on, it was withdrawing the conditional commitment.

That means the bank no longer believes it has a pledge to keep the policy rate at the so-called lower bound until July and sets the stage for a quarter-point or even half-point hike on June 1, the next announcement date.

Markets had already been planning for the central bank to move off emergency rates and in the past few weeks had begun hiking fixed, longer-term mortgage rates. Once the bank does act, short-term rates and variable mortgages are also likely to be increased.

To drive home the point that the bank believes the financial crisis is over, it said it was also ending its emergency liquidity instrument — the purchase and resale agreements — that ensured money markets in Canada continued to function during the recession.

Several economists had been urging governor Mark Carney to move early on interest rates, but the vast majority felt the bank would lose credibility if it did so without a clear indication that inflation was getting out of control.

A small minority, however, argued that the economy was still too weak to warrant any increase in interest rates this year, and that doing could stall the recovery. Economists also feared that an early signal from the bank, ahead of the U.S. Federal Reserve, would light a fire under the loonie and make life even more difficult for Canada’s battered manufacturing and export sector.

The bank gave at most a mixed signal that it believes inflation is getting out of hand, however, it said it was more lively than it had expected.

Nor is the economy in danger of overheating, judging by the bank’s new forecasts for 2010, 2011 and 2012.

The bank said the economy will advance 3.7 per cent this year, 3.1 per cent next year and 1.9 per cent in 2012. In January, its last forecast, it had growth at 2.9 this year, 3.5 next and gave no estimate for 2012.

In essence, the bank has moved up growth in the near term but left it relatively unchanged in the aggregate.

“This profile reflects stronger near-term global growth, very strong housing activity in Canada, and the bank’s assessment that policy stimulus resulted in more expenditures being brought forward,” it said.

“At the same time, the persistent strength of the Canadian dollar, Canada’s poor relative productivity performance and the low absolute level of U.S. demand will continue to act as significant drags on economic activity,” it added.

As for inflation, the council said core prices have been firmer than projected, but that they were expected to ease slightly in the second quarter of this year and remain near the bank’s two per cent target over the next two years.

Total headline inflation, which includes volatile items such as gasoline prices, was expected to be higher than two per cent this year, but returning to target in the second half of 2011.

The sum of the parts, the bank said, is that the economy will return to full capacity one-quarter sooner than it had previously thought in the second quarter of 2011.

To discuss your real estate needs please contact Joseph Biafore, Broker at Re/Max Diamond Realty Inc., Brokerage at 1-866-901-2971 or click josephbiafore.com.

Mortgage rates on rise again

April 13, 2010 Emily Mathieu Business Reporter, YourHome.ca

Canada’s record low interest rates are in their final days and repeated hikes in mortgage costs mean some first-time buyers could be shut out of the housing market, according to a mortgage expert.

 

“It is going to price some (buyers) out of the market. They are not going to be able to qualify” on their own, said Anthony De Almeida, chief executive officer of CanEquity Mortgage, a call centre-based nationally licensed mortgage broker.

 

On Tuesday, Royal Bank of Canada announced it was raising its residential mortgage rates for the second time in less than a month, by a quarter of a percentage point. Scotiabank followed suit a few hours later.

 

The moves by Canada’s first- and third-biggest banks will almost certainly lead to another round of higher rates by other lenders.

 

Effective Wednesday, a closed fixed-rate five-year mortgage at RBC will carry an annual interest rate of 6.10 per cent, with closed seven-year and closed 10-year fixed-rate mortgages carrying annual rates of 6.90 per cent and 7.05 per cent, respectively.

 

Two-, three- and four-year closed fixed-rate mortgages will carry annual rates of 4 per cent, 4.6 per cent and 5.59 per cent.

 

About two weeks ago Royal Bank announced an increase on closed residential mortgages with terms of three, four and five years, boosting its five-year mortgage by 60 basis points. Other lenders followed suit with almost identical increases.

 

Alan White, professor of finance and investment strategy with Joseph L. Rotman School of Management of the University of Toronto, said Tuesday’s move are another indicator that a rate hike from the Bank of Canada is imminent.“When they make the jump is the open question, but it is a sign that interest rates are going up and if you have a variable rate mortgage it is something to be aware of,” White said. “Clearly you are going to see people trying to flip into fixed rate mortgages” and away from the traditionally cheaper floating rate.

 

The central bank has pledged to keep its overnight rate at a historic low of 0.25 per cent until the beginning of the third quarter.

 

White said anything that dampens Canada’s hot housing market is not necessarily a negative thing, but it will make getting into the market more difficult for first-time buyers.

 

Prices will decline, but not right away, said White. “The market will slow down and in order to sell you will have to cut your price.”

 

De Almeida said despite the hike it remains an affordable time to buy a house. Even with higher prices, borrowing costs are far better than they were five years ago, he said.

 

He said he expects the persistent mortgage hikes will change the landscape of how people qualify for a first mortgage, adding that co-signed mortgages may be the new reality for first-time buyers.

 

Whenever mortgage rates increase or interest rate hikes are predicted the brokerage side of his company’s business peaks, he said. “It causes people to jump into action,” said De Almeida.

 

CanEquity Mortgage has access to 85 lenders and can typically offer rates lower than the major lenders with no cost to the home buyer, he said. Prices are still low compared to 2000, he added.

 

“It is a hike, but people have short memories when it comes to rates.”

To discuss your real estate needs please contact Joseph Biafore, Broker at Re/Max Diamond Realty Inc., Brokerage at 1-866-901-2971 or click josephbiafore.com.

Low inventory levels set stage for heated Spring market

in most major Canadian centres, says RE/MAX

Active listings down in 81 per cent of markets in January

 

 

Lack of inventory will be the greatest challenge facing housing markets across the country this Spring, according to a report released by RE/MAX.

 

The RE/MAX Market Trends Report 2010, which examined real estate trends and developments in 16 markets across the country, found that unusually strong activity during one of the traditionally quietest months of the year has led to a sharp decline in active listings in 81 per cent of markets surveyed.  The threat of higher interest rates, tighter lending criteria, and in British Columbia and Ontario, the introduction of the new Harmonized Sales Tax (HST) have clearly served to kick-start real estate activity from coast-to-coast, prompting an unprecedented influx of purchasers. As a result, 87.5 per cent of markets posted an increase in sales in January. Average price appreciated in 81 per cent of markets surveyed.

 

There have never been so many motivating factors in play at once.  We’re in for a heated Spring market that will, in all probability, spill over into the summer months, as the window of opportunity draws to a close. The supply of homes listed for sale has been drastically reduced, housing values are once again on the upswing, and banks and governments are moving in unison toward stricter lending policies.

 

Markets experiencing the tightest inventory levels include Toronto (- 41 per cent); Kitchener-Waterloo 

(-33 per cent); Ottawa (- 30 per cent); Victoria (- 30 per cent); Greater Vancouver (- 27 per cent); Halifax-Dartmouth (- 19 per cent); London-St. Thomas (- 18 per cent); Regina (- 16 per cent); and Winnipeg (- 13 per cent).  Conditions were still balanced, but starting to tighten in Calgary, Edmonton and Saskatoon, particularly in the single-family detached category.

 

The highest year-over-year sales gains were reported in Greater Vancouver (152 per cent), Kelowna (121 per cent), Greater Toronto (87 per cent), Victoria (69 per cent), Hamilton-Burlington (58 per cent), London-St. Thomas (55 per cent) and Calgary (47 per cent). Western Canadian cities dominated the list of centres with the highest increases in price appreciation.  These included Victoria at 25.5 per cent, Kelowna at 22 per cent, Greater Vancouver at 19.5 per cent, and Winnipeg at 17 per cent.  St. John’s (23 per cent) and Toronto (19 per cent) were also among the frontrunners for price growth. 

 

Affordability is the catalyst for the vast majority of purchasers in today’s housing market.  While homeownership is still within reach in many major centres, levels are slipping.  There is a growing sense, on both sides of the fence, that the time to act is now.

 

While buyers are taking advantage of favourable conditions, sellers too are reaping the rewards.  Competing bids are a factor in the marketplace once again, with well-priced listings—especially at the entry-level price point—experiencing multiple offers.  Properties priced at fair-market value will likely sell quickly for top dollar.  The overall pressure on sales and price is significant across the board – and it’s not likely to subside unless more inventory comes on-stream.  

 

 

The level of frustration is growing, as pent-up demand builds.  For every successful offer, there are those that will walk away empty-handed.   They’re thrust back into the buyer pool and the process starts all over again.  Some buyers are upping the ante, while others are considering alternate housing options.  Still, purchasers remain cautious in their bids, with most careful not to max out debt service ratios.

 

Recent revisions to lending criteria will add fuel to the fire in the short term.  Buyers considering a variable rate mortgage will step up their plans for homeownership in the next month or so just to get in under the wire.  In the longer term, buyers will adjust, but move forward.  Compromise has long been a reality—particularly in the larger centres.  This simply means they may go smaller or further in their pursuits.   

 

It’s been a 180 degree turnaround from this time last year.  It’s clear that real estate from coast to coast has roared back to life and markets are once again firing on all cylinders.  The vast majority of markets are now recovered and fully-evolved, with all segments working in tandem.   At the luxury price point, activity was brisk in seventy-three per cent of centres surveyed, with momentum ramping up in the remainder.  Opportunity exists in some areas, but the question is for how much longer?

To discuss your real estate needs please contact Joseph Biafore, Broker at Re/Max Diamond Realty Inc., Brokerage at 1-866-901-2971 or click josephbiafore.com.

Heated housing activity throughout 2009 lends little air to bubble theory in the GTA, says RE/MAX

 

Single‐ detached housing values remain slightly off 2008 levels in 27 per cent of TREB districts

Mississauga, ON (January 28, 2010) – Despite limited inventory levels in the Greater Toronto Area (GTA) in the latter half of the year, double‐digit price appreciation failed to materialize in the single‐detached housing category in 2009, says RE/MAX Ontario‐Atlantic Canada.

In fact, an in‐depth analysis by RE/MAX of 63 districts within the Toronto Real Estate Board found that detached housing values in 27 per cent of districts remained slightly off 2008 levels, while 57 per cent reported price appreciation of less than five per cent in 2009. Sixteen per cent of districts recorded an increase in average price in excess of five per cent. No double‐digit gains were noted.

 

“There is simply no evidence of a housing bubble,” says Michael Polzler, Executive Vice President, RE/MAX Ontario‐Atlantic Canada. “While sales were up considerably over one year ago—and supply was tight in many of the city’s hot pocket areas—the expected surge in average price did not occur. Buyers remained cautious in their pursuit of homeownership—with most unwilling to overpay for the privilege. “

 

While one quarter of all TREB districts saw prices in the detached housing category soften in 2009, just over half declined by less than two per cent. Those that saw prices fall by more than two per cent were primarily upper‐end neighbourhoods—the vast majority located in the central core—which were slower to rebound once the market regained momentum. By year‐ end, however, sales in all of these areas posted double‐digit growth—a fact that clearly indicates a greater number of transactions at the lower end of the price spectrum. Inventory may have also played a role as sellers held off listing their luxury properties until market conditions improved.

 

Leading the GTA in terms of price appreciation was South Pickering (E12) where the average has risen 9.4 per cent to $358,493; Malvern, Hillside, Rouge (E11) takes second place with a 7.3 per cent upswing to $368,095; North Pickering (E13) was ranked third with values climbing 7.2 per cent to $396,973; fourth spot goes to Port Credit (W12) in Mississauga where values have climbed seven per cent to $614,144; and rounding out the top five ‐‐ the lone downtown Toronto district ‐‐was Riverdale, Leslieville (E01) where prices escalated 6.7 per cent to $522,017. Ballantrae, Cedar Valley (N13) ranked sixth with a reported 6.4 per cent increase to $662,268. In seventh place is Richmond Hill – North End (N05) with a 6.3 per cent increase in average price to $574,642. The Applewood, Rathwood neigbhourhoods (W14) in Mississauga ranked eighth in terms of price appreciation, rising 6.1 per cent to $505,994, while Markham (N10) claimed ninth spot with a 5.3 per cent escalation in detached housing values, bringing the average to $510,268. Bathurst Manor, Armour Heights (C06) in the city’s north end secured tenth place with a 5.1 per cent upswing in average price to $597,025.

 

The East clearly dominated the top five and affordability factored in heavily, with single‐ detached homes in both Pickering districts and Malvern, Hillside, Rouge, priced under $400,000. Young families – most buying their first home ‐‐ were attracted to communities like Riverdale and up‐and‐coming Leslieville, while move‐up buyers looked to Port Credit, which has steadily increased in popularity in recent years.

 

“First‐time buyers were a driving force throughout much of the year, but their role was most noticeable in early 2009,” says Polzler. “Almost one in every two homes sold was priced under $400,000 in the first quarter of the year. An entirely different picture emerged in the final quarter when just one‐third of homes moved under the $400,000 price point.”

 

As the move‐up segment swelled, so too did demand for more upscale properties across the board. Yet, despite the upswing, average price registered only a small percentage increase. In the central core, for example, where the average price ranges from $572,529 in Don Mills to as high as $1,717,190 in Rosedale, overall values rose one per cent to $919,838, compared to 2008. Unit sales in C‐district jumped 31 per cent to close to 4,000 units.

 

The number of homes sold in the city’s north end saw the greatest percentage increase at 32 per cent to 8,843 units. Average price in North district, which ranges from $398,864 in Newmarket to $700,499 in King City, rose two per cent overall to $555,616. Housing sales climbed in the west, where values range from $298,136 in Brampton to $790,060 in the Kingsway, by close to 19 per cent to 12,453 units. West district’s average price rose a nominal 1.5 per cent to $467,227. The increase in sales was more moderate in the East End (including Scarborough and Pickering, Ajax), where values range from $325,393 in Bendale, Woburn to $691,128 in the Beach. The number of detached homes sold increased 15 per cent year over year to 6,690. Average price in East Toronto rose 2.6 per cent overall to $400,813.

 

“After a dismal start, the stats confirm that 2009 returned to the healthy, upward trajectory that we have followed for much of the last decade,” says Polzler. “We see detached homes continuing on that course in 2010, with moderate gains expected. The detached housing category continues to be a solid gauge of the market’s overall performance, accounting for approximately half of the activity in GTA.”

 

RE/MAX is Canada’s leading real estate organization with over 17,000 sales associates situated throughout its more than 677 independently‐owned and operated offices across the country. The RE/MAX franchise network, now in its 36th year, is a global real estate system operating in more than 70 countries. Over 6,700 independently‐owned offices engage nearly 100,000 member sales associates who lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral, and asset management. For more information, visit: www.Smart-RealEstate.ca

To discuss your real estate needs please contact Joseph Biafore, Broker at Re/Max Diamond Realty Inc., Brokerage at 1-866-901-2971 or click josephbiafore.com.