Housing evolution driving average price appreciation

 in Canada’s major centres, says RE/MAX

 

Record investment dollars poured into Canadian housing stock over past decade

 

 

Billions spent in new construction, renovation, and infill over the past decade have contributed to a serious upswing in the calibre of Canada’s housing stock, propping up residential average price in the country’s major centres, according to a report released today by RE/MAX.   

 

Since 2000, the value of a Canadian home has doubled, rising from $163,951 to $339,030 in 2010.  Nowhere has the upswing been better captured than in both the value of residential building permits issued nationally between 2000 and 2010—at $340 billion—and the estimated $450 billion spent in renovation.  The impact of these two forces alone has fuelled the Canadian residential real estate market – as well as the construction industry—for more than 10 years.

 

As a result, investment in Canada’s housing stock is at an all-time high in the 16 Canadian residential real estate markets examined in the RE/MAX Housing Evolution Report.   Higher quality housing translated into extraordinary price appreciation across the country—with 62 per cent (10 markets) experiencing increases in excess of 100 per cent since 2000.  

 

“While a number of external variables were also behind the exceptional gains, revitalization—amid an aging housing stock—and newer construction are largely underestimated factors supporting Canadian housing values.   The trend is expected to continue for years to come as investment in residential real estate through renovation, infill, and redevelopment ramps up across the country.   City planners, builders, developers, and homeowners have only just begun.

 

The report found that the unprecedented sum funneled into housing has effectively changed the landscape of Canada’s major centres.  New home construction has advanced suburban sprawl, giving rise to new sought-after pockets in virtually every centre across the board.

 

Infill continues to redefine neighbourhoods, particularly in areas where the value of existing structures have not kept pace with escalating land values.  The trend was evident in all centres, but had the greatest impact in large metropolitan cities such as Toronto and Vancouver.  Bungalows on large lots are prime targets, making way for custom builds that transform working-class subdivisions of yesteryear into up-and-coming upper-end pockets.  Infill is also maximizing land potential, often replacing one, two or several tired structures with a block of townhomes or mixed-use residential, even high-rise apartments.

 

Renovation has also had a tremendous impact on housing throughout the decade, so much so that it’s emerged as, arguably, Canada’s next national past time.  Residential renovation spending has been gaining momentum year-over-year since the early part of the decade and now exceeds $60 billion annually.

 

 

The trend has not been limited to single-family homes—although that activity has been nothing short of remarkable.  Canada’s cities have also mounted ambitious renewal of their own, particularly in the heart of most major centres—the urban core.  Strategic smart growth plans are altering cityscapes, challenging our concepts and perceptions—including our purchasing patterns—and creating partnerships that are working to escalate our markets to world-class status.   Non-residential construction, including infrastructure spending has had a positive secondary impact, in turn boosting spending on the residential side.  

 

The past decade has also marked the rise of the condominium—moreover, its undeniable acceptance as an attractive option as opposed to a secondary compromise.  Toronto, for example, has become the largest condominium market in North America.  Yet, it isn’t just gaining traction in large centres like Toronto, Ottawa and Vancouver, but also in smaller cities such as Kelowna, London and Halifax—to name a few.  Running the gamut from entry-level units to upscale, luxury suites,  condominiums have gained widespread appeal with aging boomers, looking for lifestyle and low maintenance; young professionals, attracted to trendy locales; and first-time buyers, looking to get their foot in the door to homeownership.

 

Condominiums have changed the urban landscape, driving residential neighbourhoods up, instead of out, and bringing to market a bevy of new options from mixed-use residential, live-work studios, lofts, townhomes, and condo bungalows. Townhomes, in particular, have experienced a serious rise in popularity, bridging the gap for empty-nesters and retirees not yet ready for apartment-style living.  

 

With construction of rental product few and far between in many Canadian centres, it’s no surprise that investors have also been particularly active in the condominium market, especially in college/university towns or where vacancy rates remain tight.  

 

Redevelopment holds the greatest potential for cities on the cusp of exciting rejuvenation.  While former brownfields can present challenges, many have opened up and revitalized entire areas.  The Barrel Yards Development in Kitchener-Waterloo, for example, is expected to change stagnant industrial land into a bustling residential, commercial and retail hub.  Past successful transformations include Garrison Woods in Calgary, the Hamilton Beaches in Hamilton and Bishop’s Landing in Halifax, with countless projects planned nationwide in the years to come.  Conversions also continue to breathe new life into existing structures with good bones, while supporting the move to higher-density and the introduction of affordable options. 

 

Greater sustainability overall, keeping the urban lifestyle attainable, livable and attractive at all price points, depends on redevelopment. 

 

Lastly, population growth has been a key factor making housing evolution possible.  Since 2000, Canada’s population has experienced double-digit growth of 11 per cent.  By 2031, over 42 million people are expected to call Canada home.

 

There’s no question that population growth will continue to support investment, propping revitalization and new construction in the years ahead, and by extension raising the bar and prices in real estate markets even further.

 

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.

Stage is set for one of the best recreational property

markets in years, says RE/MAX

Greater affordability, increased selection, and pent-up demand also key factors in 2011 season

Canada’s recreational property market is gaining serious traction as savvy purchasers take advantage of ideal conditions, setting the stage for what is expected to be the best market in recent years, according to a report released today by RE/MAX.

 

The 2011 RE/MAX Recreational Property Report, examining sales and trends in 46 markets across the country, found that substantial equity gains and recovering stock portfolios in major centres have contributed to an upswing in demand from coast to coast.  Demand rose in 78 per cent of markets, while sales were up or on par in 41 per cent of recreational centres.   Inclement weather, including a late thaw and an abundance of precipitation, resulted in a slow start in many areas, but should be offset by stronger peak season activity.  While starting prices have remained relatively stable across the board, there are deals to be had in virtually every region – especially at the top end. Luxury sales, as a result, have climbed in almost half of the markets examined.  Inventory levels are healthy throughout the country,  although there has been some tightening reported at entry-level price points in about one-third of markets.  Some of the best selection of product in recent years is now available.  

 

Buyers who held off during the recession are back in recreational property markets from coast-to-coast.  Their patience has been rewarded with more affordable recreational values and greater inventory levels.   It’s the perfect storm, as ideal market conditions dovetail with wealth recovery.

  

The report also found that Americans are cashing out—especially in Ontario and Atlantic Canada.  For many, the timing has never been better.  The vast majority purchased in Canadian markets when the dollar fell to 65 cents.  These sellers are now taking advantage of price appreciation and the currency exchange.

 

In British Columbia, the recreational property report identified prices at or near bottom.  Astute purchasers—many of whom were scooping up product south of the border—are starting to cherry pick in markets where oceanfront prices are down from peak, pre-recession levels.  Softer values have driven up sales in Western Canada, with transactions up or on par in 58 per cent of markets, well ahead of the national average.  

 

Opportunities that haven’t been seen in years are now presenting themselves, especially on the West Coast.  Prices are down as much as 20 per cent from peak levels reported in 2006-2007, bringing ownership within reach to many potential purchasers.  The strengthening oil sector has also brought Albertans back into mix, driving demand for both local and coastal B.C. properties.  2011 could be the turning point.

 

In markets in Ontario, Quebec, and Atlantic Canada, the supply of recreational property has tightened considerably at the lower end, with potential price increases in store by year-end if momentum continues at the current pace.   

 

 

At present, 50 per cent of markets offer recreational product at $350,000 or less, including most Ontario markets, Atlantic Canada, the Laurentians and three markets in the West—Lake Winnipeg, Canmore and Harrison Lake.   Yet, even greater value exists for those willing to compromise on lot, location or type of access, such as riverfront, view properties, condominiums, fractional ownership or boat access options.

 

With overall economic performance improving daily and consumer confidence rising, the resurgence of Canadian recreational property markets is a natural progression.  An upswing in discretionary spending is once again drawing purchasers to what is, without question, an innate Canadian pastime.

 

The report noted that the composition of the country’s recreational destinations continues to evolve.  Fewer traditional cottages are available for sale than in years past.  As the desire for the year-round lifestyle continues to drive renovation and new construction activity, these waterfront properties are disappearing from the landscape.   Meanwhile, today’s average recreational getaways are truly earning the distinction as the “home away from home,” with many of the bells, whistles and comforts of their residential counterparts.  The movement is challenging local municipalities to manage the delicate balance between regional growth and natural preservation—in some instances, changing recreational migration patterns in the process.

 

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.

 

 

 

 

 

 

 

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.

Demand for luxury homes intensifies amid rising Canadian and global wealth

Record or near-record activity reported in most major centres from coast-to-coast

Improved financial standing among high net worth individuals is the major factor driving strong sales activity at the top end of Canadian housing markets, according to a report released by RE/MAX.

 

RE/MAX Ontario-Atlantic Canada and RE/MAX of Western Canada examined 12 major centres from coast-to-coast and found that luxury sales have surged in close to two-thirds of housing markets between January 1 and April 30 of this year, compared to the same period in 2010.  Leading in terms of percentage increases over the four-month period were Greater Vancouver (118 per cent)—where foreign investment has also played a major role—Ottawa (59 per cent), Calgary (51 per cent), Halifax-Dartmouth (27 per cent), Winnipeg (24 per cent), Hamilton-Burlington (13 per cent) and Greater Toronto (nine per cent).  Six of the seven major cities—with the exception of Calgary—are poised to set new records in top-end activity by year-end.  Several are just short of peak levels reported in 2010, such as Victoria, Regina, and London-St. Thomas.    

 

Three key factors—serious equity gains, stock market recovery, and improved economic performance—have been behind the push for luxury housing product across the country. The combination also continues to bolster the bottom line of high net worth individuals both nationally and globally.  The impact of that wealth is being seen in the demand for all things luxury—from homes to cars, collectibles and fine wines.  

 

While foreign investment has augmented sales activity in several Canadian markets, its influence was only significant in Greater Vancouver.  The vast majority of regions reported that locals were the primary drivers of demand for luxury product. A number of factors position Canada as an attractive option, foremost that its real estate remains a bargain by international standards, given its ranking for quality of life, political and economic stability and the strength of its property laws.  To those from abroad, it’s the perfect mix.

 

 

The strength of the upper-end segment continues to defy expectations.  That demand remains largely domestic speaks to the solid underpinnings of the market, while underscoring the appeal of Canadian real estate on an international stage.  Western Canada, in particular, will continue to see the upside benefit of investment from abroad.

 

The climbing wealth factor has played a role. The financial status and number of millionaires is rising once again—a fact supported by several recent studies released by notable institutions such as CapGemini/Merril Lynch, Citi Private Bank, Deloitte Centre for Financial Services, and Investor Economics—to name a few.  While estimates vary, the studies concluded that the high net worth population in Canada and/or abroad—and its corresponding fortunes—is trending upward and will experience considerable expansion moving forward.   Despite the impact of the 2008/2009 global financial crisis, most millionaire portfolios/assets have improved or exceed pre-downturn levels.  Of particular interest, residential real estate holdings have increased among high net worth individuals, as they express a clear preference for tangible assets.  This trend is expected to continue, and serve to boost high-end residential real estate in months ahead, as the move to diversify assets continues in 2011.  

 

As Canada’s millionaire club swells in size, inventory will play an increasing role in future, as the existing upper end housing stock struggles to keep pace with growing demand in central core areas, particularly in Canada’s gateway centres.  Infill, renovation and new construction are helping to some extent—while driving up prices in tandem.  The building activity is also serving to create new prime areas in areas that were once considered high-end peripherals, as well as in suburban communities. 

 

Limited inventory levels in Canada’s largest markets have hampered sales activity to some extent in 2011, given that demand exceeds available supply.  Multiple offers are occurring in both Greater Vancouver and Greater Toronto, as buyers compete for quality product in prime neighbourhoods.

 

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.

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.