Government of Canada Takes Action to Maintain a Healthy, Competitive and Stable Housing Market

Today, December 11, 2015, Finance  Minister Bill Morneau announced changes to the rules for government-backed  mortgage insurance to contain risks in the housing market, reduce taxpayer  exposure and support long-term stability. Effective February 15, 2016, the  minimum down payment for new insured mortgages will increase from 5 per cent to  10 per cent for the portion of the house price above $500,000. The 5 per cent  minimum down payment for properties up to $500,000 remains unchanged.

For example:Let’s say someone is buying a home for $700,000.  The minimum down payment would be:5% of the first $500,000 = $25,000 Plus, 10% of the remaining $200,000 = $20,000 Total minimum down payment would be $45,000

Here is the link to the Government's Official News Release:  http://news.gc.ca/web/article-en.do?nid=1024399&tp=1&_ga=1.114461767.1561939570.1449867552

RECORD SALES FOR THE MONTH OF NOVEMBER The average selling price for all transactions also up by almost 10% to $632,685.

Toronto Real Estate Board President Mark McLean announced today, December 3rd, that Greater Toronto Area REALTORS® reported 7,385 home sales through TREB’s MLS® System in November 2015 – up by 14 per cent compared to November 2014.  This result also represented the best result on record for the month of November.  Sales through the first eleven months of 2015 amounted to 96,401.

“Not only did we see a record sales result for November, but with one month left to go in 2015, we have already set a new calendar year record for home sales in the TREB market area, eclipsing the previous record set in 2007.  Sales were up on a year-over-year basis for all major home types, both in the City of Toronto and surrounding regions.  This suggests that the demand for ownership housing is widespread, from first-time buyers to long-time homeowners across the GTA,” said Mr. McLean.
The average selling price for all transactions was also up by an annual rate of 9.6 per cent to $632,685.
“Demand for ownership housing has remained strong in the GTA throughout 2015, with sales generally increasing at a greater annual rate compared to new listings.  This means that competition between buyers has strengthened in many neighbourhoods in the City of Toronto and surrounding regions.  The end result has been upward pressure on home prices well above the rate of inflation in most cases,” said Jason Mercer, TREB’s Director of Market Analysis.

Summary of TorontoMLS Sales and Average Price  November 1 - 30, 2015
	2015			2014
	Sales	Average Price	New Listings	Sales	Average Price	New Listings
City of Toronto ("416")	2,863	654,221	4,123	2,641	616,241	3,790
Rest of GTA ("905")	4,522	619,050	5,486	3,835	550,825	4,926
GTA	7,385	632,685	9,609	6,476	577,502	8,716

TorontoMLS Sales & Average Price  By Home Type November 1 - 30, 2015
	Sales			Average Price
	416	905	Total	416	905	Total
Detached	901	2,550	3,451	1,018,621	762,326	829,241
Yr./Yr. % Change	0.7%	18.5%	13.3%	8.8%	13.5%	10.7%
Semi-Detached	297	467	764	750,608	504,928	600,435
Yr./Yr. % Change	14.2%	21.0%	18.3%	12.4%	12.5%	11.8%
Townhouse	298	851	1,149	549,649	460,274	483,454
Yr./Yr. % Change	11.2%	15.8%	14.6%	9.1%	12.0%	10.9%
Condo Apartment	1,351	573	1,924	415,316	315,223	385,506
Yr./Yr. % Change	13.3%	22.7%	16.0%	5.4%	1.5%	4.1%

5 Questions to Ask Before hiring a Real Estate Professional

1. What is your experience?

2. What is your approach to the buying or selling process?

3. What services will be included?

4. What are the commissions or fees that I will need to pay?

5. Do you have references? 

For more detailed information on any of these questions, please visit RECO's (Real Estate Council of Ontario) Website: http://www.reco.on.ca/buyer-seller-news/5-questions-to-ask-before-hiring-a-real-estate-professional/

October Sales Were the Best on Record

Toronto Real Estate Board President Mark McLean announced, November 5, 2015, that Greater Toronto Area REALTORS® reported 8,804 home sales through TREB’s MLS® System in October 2015.  This is the best result on record for the month of October.

“It is clear that many GTA households remain upbeat about home ownership because owning a home represents a high quality, long-term investment.  We will see a big, new record this year for home sales reported through TREB’s MLS® System,” said Mr. McLean.

“Despite the record October result, I must point out that the Government of Ontario could hamper home sales in the near future. The Wynne government is seriously considering allowing municipalities throughout Ontario to institute a second land transfer tax on top of the existing provincial tax.  Recent polling has shown that the great majority of Ontarians oppose this tax and would consider delaying a move if they were forced to bear the additional upfront cost,” added Mr. McLean.

The MLS® Home Price Index (HPI) Composite Benchmark was up by 10.3 per cent year over year in October. Over the same period, the average selling price for all home types combined was up by 7.3 per cent to $630,876. Price growth continued to be driven by the low-rise market segments.

“Record sales coupled with a constrained supply of listings in many GTA neighbourhoods has underpinned very strong price growth throughout 2015. Even if we do see a greater supply of low-rise listings in the marketplace over the next year, market conditions will remain tight enough to see continued price growth well-above the rate of inflation,” said Jason Mercer, TREB’s Director of Market Analysis.

Summary of TorontoMLS Sales and Average Price  - October 1 -31, 2015
	2015			2014
	Sales	Average Price	New Listings	Sales	Average Price	New Listings
City of Toronto ("416")	3,431	671,350	5,593	3,404	633,483	5,665
Rest of GTA ("905")	5,373	605,030	7,746	5,108	557,598	7,724
GTA	8,804	630,876	13,339	8,512	587,945	13,389

TorontoMLS Sales & Average Price  By Home Type – October 1 -31, 2015
	Sales			Average Price
	416	905	Total	416	905	Total
Detached	1,077	3,023	4,100	1,071,394	734,745	823,177
Yr./Yr. % Change	-9.7%	2.4%	-1.1%	12.5%	9.1%	9.2%
Semi-Detached	381	542	923	747,149	512,234	609,203
Yr./Yr. % Change	1.9%	4.2%	3.2%	10.0%	13.8%	11.6%
Townhouse	347	1,030	1,377	579,358	456,585	487,524
Yr./Yr. % Change	-3.6%	9.1%	5.6%	11.2%	10.1%	9.8%
Condo Apartment	1,587	632	2,219	406,792	318,317	381,593
Yr./Yr. % Change	9.7%	9.7%	9.7%	4.2%	3.0%	3.9%

Interest Rates Down, Again

... and so, yesterday, July 15, 2015, the Central Bank of Canada cuts Interest Rates for the second time this year. Right after, the Canadian dollar loses value, which is a natural and expected consequence.
Exports seem to be the main factor behind such decision. Canada's merchandise trade deficit widened in May to $3.34 Billion from $2.99 Billion in April. Exports fell for the fifth month, second largest deficit on record after $3.57 Billion shortfall in March, according to Statistics Canada.
Canada's been struggling with its exports for sometime now because its products, goods and services are sold by other Countries at lower prices, or don't have much demand because other Countries are either already making the same or are economically struggling too.
Canada already lost market share in the US to countries such as China, Mexico and South Korea due to a high Dollar.
Oil prices dropped recently forcing the industry, specially in Alberta, to cut jobs and cancel investments.
So, by cutting interest rates (Canadian dollar falls against other currencies), the Central Bank is trying to make Canadian exports more attractive, competitive and increase sales, keep manufacturing jobs alive and reduce the gap between Exports and Imports.
It might benefit Tourism as well, since it becomes cheaper for tourists to come visit and shop in Canada.
On other hand, with the interest rates even lower, many already speculate that Real Estate market will be even hotter. But I'm almost certain, the lenders will increase the percentage of down payment.

Trade Deficit Might Be the Reason for Low Interest Rates

Positive net exports (when exports are higher than imports) contribute to economic growth, something that is intuitively easy to understand. More exports mean more output from factories and industrial facilities, as well as a greater number of people employed to keep these factories running. The receipt of export proceeds also represents an inflow of funds into the country, which stimulates consumer spending and contributes to economic growth.

On other hand, a high level of imports might also indicate robust domestic demand and a growing economy. It’s even better if these imports are mainly of productive assets like machinery and equipment, since they will improve productivity over the long run.

Canada, however, is currently facing a Trade deficit meaning the Exports are less than the Imports.

According to StatsCan, Canada's exports declined 0.6% in May while imports edged up 0.2%. Export volumes decreased 2.5% and prices increased 1.9%. Meanwhile, import volumes were up 0.3% and prices edged down 0.1%.

As a result, Canada's merchandise trade deficit with the world widened from $3.0 billion in April to $3.3 billion in May. This means, whatever we produce or manufacture for export can be bought from other countries at a cheaper price.

So, hiking interest rates too soon would result in a stronger loonie (dollar), dampened Canadian Exports even more and put jobs at risk.

June Sales Represent a New Record, Avg. Selling Price up by 12.3% and Supply cannot satisfy Demand

Toronto Real Estate Board President Mark McLean announced July 7, 2015 that Greater Toronto Area REALTORS® reported 11,992 sales through TREB’s MLS® System in June 2015.  This result represented a new record for the month of June and an 18.4 per cent increase over the June 2014 result of 10,132.

“As I begin my term as TREB President, I think it is important to point out that our region continues to grow in response to our diverse economic, ethnic and cultural bases.  The GTA consistently receives international accolades as one of the best places in the world to live and do business.  As the number of households grow, many of them will take advantage of the diversity of affordable home ownership opportunities that exist in Toronto and the surrounding areas,” said Mr. McLean.

Selling prices were up markedly on a year-over-year basis in June, for all major home types. The average selling price was up by 12.3 per cent over the same period to $639,184.

High-end homes have accounted for a greater share of overall transactions this year compared to last year.  

“It is encouraging to see that new listings have edged upward so far this year, as homeowners have reacted to strong home price growth and have looked to take advantage of increased equity in their homes.  However, the annual rate of sales growth continues to far outstrip listings growth, which means that there remains a lot of willing buyers in the marketplace who haven’t found a home that meets their needs.  As long as this situation persists, expect home prices to trend strongly upward,” said Jason Mercer, TREB’s Director of Market Analysis.

The Average Price of a Detached Home in Toronto (416 Area) went up 14.2% to $1,051,912.00.

Summary of TorontoMLS Sales and Average Price
	June 1 - 30
	2015			2014
	Sales	Average Price	New Listings	Sales	Average Price	New Listings
City of Toronto ("416")	4,406	$682,264	7,169	3,780	$618,526	6,499
Rest of GTA ("905")	7,586	$614,162	10,577	6,352	$539,806	10,134
GTA	11,992	$639,184	17,746	10,132	$569,174	16,633

TorontoMLS Sales & Average Price  By Home Type
	June 1 - 30, 2015
	Sales			Average Price
	416	905	Total	416	905	Total
Detached	$1,488	$4,457	$5,945	$1,051,912	$738,016	$816,583
Yr./Yr. % Change	13.7%	20.0%	18.3%	14.2%	15.0%	14.3%
Semi-Detached	$456	$754	$1,210	$761,819	$496,740	$596,638
Yr./Yr. % Change	1.8%	10.6%	7.1%	13.2%	10.7%	11.0%
Townhouse	$509	$1,396	$1,905	$539,259	$459,004	$480,447
Yr./Yr. % Change	21.2%	18.4%	19.1%	10.8%	14.0%	13.1%
Condo Apartment	$1,906	$794	$2,700	$418,599	$324,388	$390,894
Yr./Yr. % Change	21.3%	25.2%	22.4%	7.0%	4.6%	6.3%