November Resale Housing Figures

TORONTO, December 5, 2012 -- Greater Toronto Area REALTORS® reported 5,793 sales in November 2012 – down by 16 per cent compared to November 2011.

“Transactions have been down on a year-over-year basis since June, after being up substantially in the last half of 2011 and the first half of 2012. Some buyers pulled forward their decision to purchase, which has impacted sales levels in the second half of 2012,” said Toronto Real Estate Board (TREB) President Ann Hannah.

“Stricter mortgage lending guidelines, including a reduced maximum amortization period and a purchase price ceiling of one-million dollars for government insured mortgages, have prompted some buyers to move to the sidelines. This situation has been exacerbated in the City of Toronto because the additional upfront Land Transfer Tax takes money away from buyers that otherwise could be used for a larger down payment,” continued Ms. Hannah.

The average selling price was up by 1.6 per cent annually to $485,328. The MLS® Home Price Index (MLS® HPI) Composite Benchmark was up by 4.6 per cent compared to last year.

“The moderate annual rate of price growth compared to previous months was largely due to a different mix in detached home sales this year compared to last, particularly in the City of Toronto. The share of detached homes that sold for over one-million dollars was down substantially, which influenced the overall average price,” said Jason Mercer, TREB’s Senior Manager of Market Analysis

Sales Keep Falling But Prices Keep Going Up

Greater Toronto Area REALTORS® reported 6,896 transactions through the TorontoMLS system in October 2012 – a decrease of 7.1 per cent compared to October 2011, Toronto Real Estate Board made public today.There were two more business days in October 2012 versus October 2011.

“Sales have decreased in the second half of this year compared to 2011, especially since the onset of stricter mortgage lending guidelines at the beginning of July.The prospect of higher monthly mortgage payments due to the reduced maximum amortization period has prompted some households to delay their home purchase,” said Toronto Real Estate Board (TREB) President Ann Hannah.

The average selling price for October transactions was $503,479 – up 6.2 per cent compared to October 2011.The MLS® Home Price Index composite benchmark price, which allows for an apples-to-apples comparison in terms of home attributes, was up by 5.1 per cent.

“We continue to see price increases well above the rate of inflation.Active listings have remained low from a historic perspective, so substantial competition between buyers still exists, especially for low-rise homes,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

“It should be noted, however, that the annual rate of price increase has been edging lower over the past few months as the market has gradually become better supplied,” continued Mercer.

For more info, please check out TREB's Website: http://www.torontorealestateboard.com/market_news/release_market_updates/news2012/nr_market_watch_1012.htm

September Sales Show Values Went Up 8.5% Despite Low Number of Transactions

Today, October 3, 2012, the Toronto Real Estate Board (TREB) made public that Greater Toronto Area (GTA) REALTORS® reported 5,879 transactions through the TorontoMLS system in September 2012. The average selling price for these transactions was $503,662, representing an increase of more than 8.5 per cent compared to last year.
The number of transactions was down by 21 per cent in comparison to September 2011. However, it is important to note that there were two fewer working days in September 2012 compared to September 2011. The majority of transactions are entered on working days. On a per working day basis, sales were down by 12.5 per cent year-over-year.
“While sales have been lower due to stricter mortgage lending guidelines, we continue to see substantial competition between buyers. The months of inventory trend remains low from a historic perspective, which explains the strong price increases we are experiencing,” said Toronto Real Estate Board President Ann Hannah.
September average selling prices were up compared to last year for all major home types. Price growth was strongest in the City of Toronto, including condominium apartments with eight per cent year-over-year growth. All benchmark home types included in the MLS® Home Price Index (MLS® HPI) experienced year-over-year price increases, with substantially stronger increases for low-rise home types.
“Barring a major change to the consensus economic outlook, home price growth is expected to continue through 2013. Based on inventory levels, price growth will be strongest for low-rise home types, including single-detached and semi-detached houses and town homes,” said TREB’s Senior Manager of Market Analysis, Jason Mercer.

August Resale Market Figures

Greater Toronto Area (GTA) REALTORS® reported, according to TREB, 6,418 sales through the TorontoMLS system in August 2012, representing a year-over-decline of almost 12.5% compared to 7,330 sales reported in August 2011. The number of new listings reported in August was down by 5.5% compared to the same period in 2011.

“Residential transactions were down in August compared to last year. Stricter mortgage lending guidelines, which came into effect in July, arguably played a role. In the City of Toronto, the additional impact of relatively higher home prices coupled with the upfront cost associated with the City’s Land Transfer Tax led to a stronger annual decline in sales compared to the rest of the GTA,” said Toronto Real Estate Board (TREB) President Ann Hannah.
The average selling price for August 2012 transactions was $479,095 – up by almost 6.5% compared to August 2011. The annual rate of price growth was driven by the low-rise home segment in the City of Toronto, including single-detached homes with an average annual price increase of 15%. The MLS® Home Price Index (MLS® HPI)* composite index, which allows for an apples-to-apples comparison of benchmark home prices from one year to the next, was up by 6.3 per cent year-over-year.
“While sales were down year-over-year in the GTA, so too were new listings. As a result, market conditions remained quite tight with substantial competition between buyers in the low-rise market segment,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “The trends for sales and new listings are moving somewhat in synch, suggesting that the relationship between sales and listings will continue to promote price growth moving forward.”

Your Taxe Dollars are used to Pay Banks when Borrowers Default

Banks in Canada have, lately, been very strict about qualifying and approving potential home buyers for Mortgage.
On 29 of August, "The Globe and Mail" published an article saying that "Canada Mortgage and Housing Corp. saw profits at its mortgage insurance business fall sharply in the second quarter largely due to a jump in losses from claims.
The rise in claims losses suggests that an increasing number of borrowers whose mortgages were insured by CMHC have been unable to make their payments and have lost their homes. Mortgage insurance pays the bank back when a borrower defaults.
Amid growing concern about taxpayers’ exposure to mortgage defaults, Ottawa has been taking steps to curb CMHC’s growth and has placed the housing agency under the watch of the country’s banking and insurance regulator.
The amount of insurance that CMHC has in force crept up to $576-billion at the end of June, closing in on the $600-billion limit that Ottawa is now enforcing on the Crown corporation. To keep the amount in check, CMHC has dramatically cut the amount of portfolio insurance that it is offering to banks.
And it said that its future sales of mortgage insurance will continue to be offset as each year Canadians pay off about $60-billion of mortgages that it has already insured.
CMHC said that it has been spending more money on so-called “work-outs,” in which the mortgage insurer and banks work with struggling borrowers to find a solution – such as deferred payments – to keep them in their home".
To read more go to:
Jump in Claims pinches CMHC's Insurance Business

First Time Buyers and Retirees Will Continue to Prop Up Demand for Condos

According to an article published today in the "Financial Post", A new condo report suggests first-time buyers, retirees and population growth will continue to fuel demand and price growth for the compact living spaces over the next few years.
The study by Genworth Canada found that average condo resale prices are expected to rise next year in seven of the eight metropolitan centres studied.
Prices in Toronto are projected to jump 2.5% to $312,352.
For those seeking to own a home affordably in urban centres, condos remain a good option.
The highest increase however, is expected to be in Edmonton where prices could rise 3.2%.
Vancouver is the only city where condo prices are expected to drop, by 2% to $348,152.
The report stands in contrast to warnings from economists and officials that the condo market in some hot markets is reaching bubble territory that could soon burst.
The central bank noted certain segments of the housing market that have a persistent oversupply — such as condos in Toronto — face a higher risk of a price correction.
Genworth — which earns revenue from selling mortgage insurance — notes that rising prices for single-detached homes are driving first-time buyers to condos, but retirees also continue to prop up demand.
It suggests that the population is expected to grow in all eight cities studied over the next few years, while employment growth and low interest rates should also support the market.

Home Sales Down in June. Land Transfer Tax is a Heavy Burden in Toronto Area

According to Toronto Real Estate Board (Treb) at the begining of July Greater Toronto REALTORS® reported 9,422 home sales through the TorontoMLS system in June 2012. The number of transactions was down by 5.4% in comparison to June 2011. The year-over-year decline was largest in the City of Toronto, where sales were down by 13% compared to June 2011. Sales in the rest of the Toronto Real Estate Board (TREB) market area were comparable to a year ago.
“Buyers continue to face the substantial upfront cost associated with the City of Toronto’s unfair Land Transfer Tax,” said TREB President Ann Hannah. “Recent polling by TREB suggests that many households are considering home purchases outside of the City of Toronto to avoid paying the Land Transfer Tax. This goes a long way in explaining the disproportionate decline in sales in the City versus surrounding regions.”
The average selling price in June was $508,622 – up by 7.3% compared to June 2011. The mortgage payment associated with the average priced home in June, assuming five per cent down and a five-year fixed rate mortgage amortized over 25 years, would account for approximately 35% of the average household’s income in the GTA after adding property tax and utility payments.
“According to new mortgage lending guidelines set out by Finance Minister Jim Flaherty, the GTA housing market remains affordable. The share of the average household’s income going toward major home ownership payments for the average priced home remains below the 39 per cent ceiling recently announced by Mr. Flaherty,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Federal Government Announced New Mortgage Rules

During the second half of the Month of June the Minister of Finance, Jim Flaherty, announced four measures for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent:

1. Reduce the maximum amortization period to 25 years from 30 years.
2. Lower the maximum amount Canadians can borrow when refinancing to 80 per cent from 85 per cent of the value of their homes.
3. Fix the maximum gross debt service ratio at 39 per cent and the maximum total debt service ratio at 44 per cent.
4. Limit the availability of government-backed insured mortgages to homes with a purchase price of less than $1 million.

These new rules will take effect on July 9, 2012.

Employment Rate Unchanged

Following two months of large gains, employment was unchanged in May, and the unemployment rate remained at 7.3%.
Compared with 12 months earlier, employment increased 1.2% or 203,000. Virtually all of this growth was in full-time work, up 192,000 (+1.4%).
www.statcan.gc.ca

Interest Rates Stay Low

According to "The Financial Post" (financialpost.com), Once again the Bank of Canada maintained interest rates at 1% last Tuesday, June 5, staying the course despite confirming global financial turbulence is creeping ever closer to our shores, while housing and household debt remain domestic risks.
The Bank of Canada has now held rates at a stimulus-level 1% since September 2010.

Federal Government putting Pressure to Cool down the Market

Cautious about getting too much in Debt
Today I was listening to a Real Estate Radio Show on 640AM and a buyer who found a Cottage property somewhere in Ontario said that he was having trouble finding mortgage although he had a 25% downpayment.
This doesn't come as a surprise to me. I've noticed that the Federal Government is currently putting lots of pressure on Financial Institutions (Lenders) so they thoroughly scrutinize everyone before approving any application for Mortgage.
Any potential home or condo buyer must be a real buyer: which means, there must be a very good credit history, solid savings for downpayment (25% or more of the purchase price), real job(s) paying real salary(ies) that should be clearly enough to pay for the Land Transfer Tax, Mortgage, Utility Bills (Hydro, water,...), Maintenance Fee in case of Condos, Property Taxes, etc.
According to some Mortgage Brokers from different Lenders I had the opportunity to meet and talk to recently, mortgage applications that would be easily approved a year or two ago, are now denied.
And even after approving the mortgage, the Lender, before the closing date, sends an Appraiser to make sure the Buyer(s) didn't over pay for the property.
Knowing that most of us don't have any savings in case things go South, the Government obviously doesn't want us to get into much (unsustainable) Debt because, God Forbid, the interest rates go up or we loose our job(s) we can't make the payments any more. The direct consequence, is what we see is happening with the American Real Estate Market: people leave the properties and if the lenders can recuperate their investment by Selling the property(ies), the government has to pay for their loses.
So these Government measures are purposely cooling and slowing down certain areas in Great Toronto Area and certain segments of the market such as the Condo Market.
I believe interest rates will not go up any time soon. At least not before 2013 since the economy is not growing as fast as we'd like it to. We just learned this week that General Motors Canada (GM) in Oshawa, Ontario Assembly Plant will next year (2013) let go  2000 jobs to the USA (Detroit and Tenesse).

Luxury Homes Sales Across Canada

According to Toronto "Metro" Daily Newspaper the Re/max real-estate sales organization says demand for high-priced housing was strong in most Canadian markets in the first months of this year, with records set in 10 of 16 markets it tracks.
Vancouver was one of the six markets where the luxury market has cooled off after an especially hot period last year, but demand in Toronto remained high.
The organization says the price of luxury housing depends on the market, from a low of $500,000 in mid-sized cities such as St. John's and Halifax to a high of $2 million in the Vancouver area.
In the case of Regina, which had the biggest increase in luxury sales this year, there was 56% more sales of at least $500,000. In Canada's most expensive market, Vancouver, there was a 31% decline from last year's peak with 393 luxury homes sold in the first quarter.
By contrast, Toronto's market has been hotter than last year, with 412 homes sold for at least $1.5 million each - a 49% increase from early 2011.

Canada's Job Growth Soars Above Forecasts

For the second consecutive month, Canada’s economy has put a surprisingly large number of people to work, and again most of those were in full-time positions.
Statistics Canada said Friday that while 58,200 more people found jobs last month, the unemployment rate edged up to 7.3% from 7.2% in March as others entered the labour market in search of work.
The vast majority of the new jobs in April were in the private sector.
Friday’s numbers add to the momentum from March, when a massive 82,300 jobs were created.
“This is the strongest back-to-month monthly job gain since 1981,” Scotia Capital in a note to investors.
Full-time employment was up by 43,900 positions in April, while part-time hiring totaled 14,300. In March, there were 70,000 new full-time positions and 12,400 part-time jobs.
Compared to a year earlier, employment is up 1.2%, or 214,000 positions. All of the growth the past 12 month was in full-time positions.
The huge gains in March and April came after fourth months of little change in employment rolls.
“The employment gain in April was primarily in the goods sector, with increases in construction, manufacturing, natural resources and agriculture,” Statistics Canada said.

According to Canadian newspaper "Financial Post", Friday’s (April 11, 2012) stronger than-expected job numbers could help push Canada’s GDP to 3% in the second quarter, a development that could spur the Bank of Canada to begin hiking rates this summer, one economist said Friday.
CIBC chief economist Avery Shenfeld said that such strong numbers could have the Bank of Canada rethinking on when to hike. Mr. Shenfeld had originally expected the Bank to leave interest rates unchanged this year, but he admits that the strong data has him weighing the possbility now.
http://business.financialpost.com/2012/05/11/canadas-job-growth-soars-above-forecasts/

Home Sales in April 18% Higher than in 2011

Great Toronto REALTORS® reported 10,350 transactions through the TorontoMLS System in April 2012: 3,925 Sales in Toronto (416 Area) and 6,425 Sales in Rest of GTA (905 Areas).

This level of sales was 18% higher than the 8,778 firm deals reported in April 2011.The strongest sales growth was reported in the single-detached market segment, with transactions of this home type up by 22% compared to a year ago.

“Interest in single-detached homes has been very high, both in the City of Toronto and surrounding regions.Growth in single-detached listings has not kept up with demand, which means competition between buyers in this market segment increased.With this in mind, it was no surprise that the strongest annual price increase was also experienced in the single-detached segment,” said Toronto Real Estate Board President, Richard Silver.

The average price for April 2012 transactions was $517,556 – up 8.5 per cent compared to April 2011.While price growth was strongest for single-detached homes, the better-supplied condominium apartment segment experienced a more moderate annual rate of price growth, at 4%.
“Monthly mortgage payments remain affordable for home buyers in the Greater Toronto Area.While interest rates are generally expected to increase over the next two years, the extent and timing of rate hikes has been thrown into question by slower than expected economic growth in the first quarter of this year.On net, borrowing costs are expected to remain a positive factor influencing home sales through 2012,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

http://www.torontorealestateboard.com/market_news/release_market_updates/news2012/nr_market_watch_0412.htm

Competition Bureau Threatens to Dismantle Privacy Safeguards of Home Sales 75% of Ontarians Opposed

On March 14, 2012, the Toronto Real Estate Board (TREB) released the results of an Angus Reid Vision Critical poll. The vast majority of Ontarians clearly expressed their opposition to abandoning the privacy safeguards of the current MLS® System.

When asked about the consequences of the Competition Bureau’s actions, Ontarians expressed concern:

• 75% of Ontarians believe that personal information such as name and final sale price should be kept confidential by REALTOR® professionals. Commissioner Aitken wants to release this information.
• 70% of homeowners do not want their personal contact information released to the public. Commissioner Aitken wants to release this information.
• 67% of Ontarians oppose any measure to make personal contact information such as name and address available to others who are not subject to a professional code of conduct. Commissioner Aitken wants to release this information.

“The results of this poll are overwhelming,” said TREB President Richard Silver.” TREB strongly believes that REALTORS® have an obligation to protect consumers’ personal information. That’s why TREB and REALTOR® Members are fighting for the privacy rights of consumers.”

The Competition Bureau is taking action that would force TREB to abandon the safeguards in the MLS® System and make personal information publicly available on the Internet, threatening the privacy and safety of GTA consumers.

If the Competition Commissioner gets her way, consumers’ private information, which is currently protected on our secure MLS® System, would become freely available on the Internet, including:

• Seller’s name and address
• Property floor plans
• Sensitive Property access information
• Negotiated sale price
• Mortgage details

“Ontarians clearly oppose what Commissioner Aitken is trying to do. They’ve said they want their personal and private information kept confidential,” said Von Palmer, Chief Government and Public Affairs Officer and Chief Privacy Officer for TREB.

If Commissioner Aitken gets her way, Ontarians won’t. Privacy matters. TREB is standing up for GTA consumers. Visit www.ProtectYourPrivacy.ca for more information.

Canada Housing Prices Won't Crash: Poll

It was published in the Financial Post that Canada’s government will make it tougher for many homebuyers to get mortgages this year as it grapples with an overheated property market, according to analysts in a Reuters poll, who also ruled out the prospect that prices could suddenly crash.Ten of 14 economists and strategists surveyed last week in Reuters’ first poll on the Canadian housing sector answered “yes” when asked if they thought Ottawa would tighten mortgage rules within the next 12 months.
They expect home prices to climb just 0.1% in the year to December 2012, and the same in 2013. That is down from a 0.9% year-on-year increase in December 2011.
If Finance Minister Jim Flaherty tightens requirements for government-backed insured mortgages it would be his fourth intervention in the real estate market since 2008.
Flaherty could raise the minimum down payment to buy a home from the current 5% or reduce the maximum amortization period from 30 years.
Any move would likely come before the prime spring real estate season, analysts said. “Sometime between now and the next budget,” said Benoit Durocher, senior economist at Desjardins in Montreal, on the timing of such a move.
The budget is expected in late March.
The poll respondents see the housing market as moderately overvalued, particularly in Toronto and Vancouver.
“There is some genuine concern that the housing market and households have been overstretched,” said Mazen Issa, economist at TD Securities.
“But in the absence of several triggers for a housing market decline, which are not likely to be forthcoming until at least the middle of next year, the underlying theme is of gradual moderation,” he said.
Possible triggers would be a rise in mortgage rates or a sharp rise in unemployment.
Household debt levels are approaching those in the United States before the 2008-09 housing meltdown there. Canada’s debt-to-income ratio hit a record 153% last year and is expected to rise.
The Bank of Canada, which has fanned the flames by holding its benchmark lending rate at 1% for an unprecedented 17 months, has made it clear that rates are likely to stay unchanged for at least this year.
Read more on this:
http://business.financialpost.com/2012/02/21/canada-housing-prices-wont-crash-poll/#more-144215

January Shows Toronto Real Estate Market Continues Strong

Greater Toronto REALTORS® reported 4,567 sales through the TorontoMLS® system in January 2012. This number was 8.8 per cent higher than the 4,199 sales reported in January 2011. Sales growth was strongest for low-rise home types in the regions surrounding the City of Toronto.

“A favourable affordability picture bolstered by very low posted fixed mortgage rates has kept home buyers confident in their ability to achieve the Canadian goal of home ownership,” said Toronto Real Estate Board President Richard Silver. “The buyer pool remains diverse in the GTA with strong interest in home types across the pricing spectrum,” continued Silver.

The average selling price for January 2012 transactions was $463,534 – up by almost 9 per cent compared to January 2011.
“Low inventory levels have kept competition between buyers strong, resulting in robust annual rates of price growth over the last year. Strong price growth is expected to attract more listings. A better supplied market should result in a slower rate of price growth, especially in the second half of 2012,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis. http://www.torontorealestateboard.com/market_news/release_market_updates/news2012/nr_market_watch_0112.htm

Foreign acquisition of Canadian debt securities strengthens

According to Statistics Canada, Foreign investment in all types of Canadian securities strengthened in November with non-residents adding $15.0 billion to their holdings, the largest such inflow of funds since May. Canadian investors purchased $2.8 billion of foreign securities, evenly split between stocks and bonds. For the 11 months ending in November, foreign investment in Canadian securities was $88.2 billion compared with $14.7 billion of Canadian investment in foreign securities.
For information, click the link below:
http://www.statcan.gc.ca/daily-quotidien/120117/dq120117a-eng.htm

Hot Market is Cooling!!?

The Canadian government is watching the housing market closely and is ready to intervene if needed, but is not about to do so now, Finance Minister Jim Flaherty said today, Tuesday, noting he saw indications of softening in the market.He was speaking to reporters after the Bank of Canada said that very favourable credit conditions were expected to buttress housing activity, and that Canada’s ratio of household debt to income was expected to rise further.
Asked if he had expressed concern with the banks about record-low mortgage rates, he said: “I have frequent discussions with the bank leaders including some of them yesterday in Toronto.”
Data this week showed existing homes sales rose only slightly in Canada last month, while the average sale price declined, offering further evidence the once hot market is cooling.
Canada’s housing sector, which did not experience the subprime mortgage boom and bust seen in the United States, played a key role in lifting the economy out of recession as ultra-low interest rates drove sales and prices higher.
But policymakers have voiced fears the market’s post-recession boom, combined with a long run of low lending rates, could create an asset bubble. The Canadian government tightened mortgage rules several times to cool the market.
Cautioning consumers, Mr. Flaherty reiterated on Tuesday that Canadians must not assume interest rates will remain low for a long time.

Financial Post, Tuesday, January17, 2012.