Wednesday, December 29, 2010

Ontarians keep a pulse on the housing market

Two-thirds of Ontarians say they find out how much their neighbours’ homes sell for to keep track of market values, which is a good idea since many Ontarians move often. One in five have owned more than five homes and forty per cent of those surveyed plan to move again within ten years according to the TD Canada Trust Repeat Home Buyers Report, which surveyed Canadians who have either purchased or intend to purchase a home that was not their first home. Less than one-third say their next move will be their last.

Financing their new home

Four in five Ontarians will sell their current home rather than keep it as an investment or rental property, but half of Ontarians say the proceeds from the sale of their current home will be less than the value of their new home, meaning that they will need to take out a mortgage.

Most home buyers will try to save money on their mortgage. Eighty-five per cent will put down as much as they can afford for a down payment. Seven in ten say they will save on interest payments by choosing accelerated payments (weekly or bi-weekly instead of monthly). Two-thirds will save on interest payments by choosing a shorter amortization period for their mortgage. Still, 19% say they will take out the maximum mortgage that they qualified for from their bank.

“It is encouraging that the majority of Canadians are taking steps to save money on their mortgage,” says Farhaneh Haque, Regional Sales Manager, Mobile Mortgage Specialists, TD Canada Trust. “I recommend that home buyers buy the house that fits their budget, not just their lifestyle. After all, if you buy a house that is too big for you to afford, you could be giving up that lifestyle just to pay it off.”

Mortgages for repeat home buyers

Two-thirds of repeat buyers have a mortgage on their current home and 74% intend to use their current lender when they purchase a new home. The top reasons for switching among the remaining 26% are better rates (68%), better terms (43%) and better customer service (40%).

“There are many options available to repeat home buyers and a mortgage expert can help you choose the right one to save money so you can own your new home faster,” says Haque.

The TD Home Buyers Report found that more than half of buyers don’t know that they have options or haven’t thought about their mortgage options. Haque offers these tips for buyers:

• Take your mortgage with you when you move. Many banks will let buyers take their mortgage with them, even if they need to increase their principal amount. This gets blended at the current market rate with the existing principal at its original interest rate.

• Use your mortgage as a selling feature. If the seller’s mortgage interest rate is lower than current market rates, the purchasers may be able to take on the seller’s mortgage when they move.

The poll showed that only one-third of repeat buyers bring their current mortgage with them to their new home and only 5% use it as a selling feature of their prior home, allowing the new owner to assume their mortgage.

Selling their current home

Nine in ten say the next home they buy will be their permanent residence and 84% plan to sell their current property before purchasing another one. Of the remaining 16% who will keep both properties, 40% will use one as a rental property or investment property (23%).

Ontarians are the most likely to say they will improve the resale value of their home by redecorating (61% versus 52% nationally) and 14% will even hire professional home stagers (versus 9% nationally). Fifty-four per cent will renovate to improve resale value and 37% improve the curb appeal with landscaping.

Half of Ontarians say that if the perfect house came up for sale, they would put in an offer before they sold their current house. The other half are more cautious saying they wouldn’t put in an offer unless they had sold their current home.

What kind of homes are Ontarians buying?

Ontarians are split on whether their next home will be larger or smaller (46% versus 54%) and more expensive or less expensive (49% versus 51%), but there is some consensus that in their next house-hunt, they intend to find a fully detached home. Seven-in-ten repeat home buyers are looking for a fullydetached home – even those currently living in condos, townhouses or semidetached homes are most likely to be looking for fully-detached homes for their next purchase.

The factors that play in to Ontarians’ decision to move are varied. The top reason is retirement (30%). Other top reasons include market conditions (16%), investment opportunities (16%), children moving out (16%) and simply being bored or restless of their current home (15%). Another 14% say they had always planned to move but were waiting to save enough money.

Monday, December 13, 2010

Monthly Resale Housing Market Figures

Greater Toronto REALTORS reported 6,510 existing home sales in November – down 13 per cent from 7,446 sales in November 2009. New listings were also down 13 per cent annually to 8,642.

On a month-over-month basis, the seasonally adjusted annual rate of sales increased for the fourth straight month to 88,100. This rate was substantially higher than the July low of 67,900.

"The GTA resale market has tightened since the summer. Healthy market conditions continued to support growth in the average selling price," said Toronto Real Estate Board President Bill Johnston.

“Sales through the first 11 months of the year were down only marginally compared to the same period in 2009. We remain on track for one of the best years on record under the current TREB market area,” continued Johnston.

The average selling price for November transactions was $438,030 - up five per cent compared to November 2009.

"The average selling price in the GTA is affordable. A household earning the average income can comfortably cover the mortgage payments on an average priced home. Expect the average selling price to grow at a moderate pace over the next year," said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Tuesday, November 16, 2010

Home Sweet Home – for now: one-in-five Canadians own more than 5 homes in their life time

TD Canada Trust releases 2010 Repeat Home Buyers Report

There is no place like home, but for many Canadians, buying a home doesn’t mean they plan to stay for long. In fact, one-in-five repeat buyers have owned more than five homes. Twenty-three per cent of those surveyed plan to move again within six years according to the TD Canada Trust Repeat Home Buyers Report, which surveyed Canadians who have either purchased or intend to purchase a home that was not their first home. Less than one-third say their next move will be their last.

Canadians are split on whether their next home will be larger (49%) or smaller (51%), but there is consensus that in their next house-hunt, they intend to find a fully detached home. Seven-in-ten repeat home buyers are looking for a fully-detached home – even those currently living in condos, townhouses or semi-detached homes are looking for fully-detached homes for their next purchase.

Financing their new home

Half of Canadians say the proceeds from the sale of their current home will be less than the value of their new home, meaning that they will need to take out a mortgage (51%).

Most home buyers will try to save money on their mortgage. Eighty-three per cent will put down as much as they can afford for a down payment. A further two-thirds say they will save on interest payments by choosing accelerated payments (weekly or bi-weekly instead of monthly). Sixty-one per cent will save on interest payments by choosing a shorter amortization period for their mortgage. Still, 21% say they will take out the maximum mortgage that they qualified for from their bank (this increases to 28% of those under 40).

“It is encouraging that the majority of Canadians are taking steps to save money on their mortgage,” says Farhaneh Haque, Regional Sales Manager, Mobile Mortgage Specialists, TD Canada Trust. “I recommend that home buyers buy the house that fits their budget, not just their lifestyle. After all, if you buy a house that is too big for you to afford, you could be giving up that lifestyle just to pay it off.”

Mortgages for repeat home buyers

Two-thirds of repeat buyers have a mortgage on their current home; 72% intend to use their current lender when they purchase a new home. The top reasons for switching among the remaining 28% are better rates (60%), better customer service (33%) and better mortgage terms (28%).

“There are many options available to repeat home buyers and a mortgage expert can help you choose the right one to save money so you can own your new home faster,” says Haque.

The TD Home Buyers Report found that nearly 60% of buyers don’t know that they have options or haven’t thought about their options for their current mortgage. Haque offers these tips for buyers:

- Take your mortgage with you when you move. Many banks will let buyers take their mortgage with them, even if they need to increase their principal amount. This gets blended at the current market rate with the existing principal at its original interest rate.

- Use your mortgage as a selling feature. If the seller’s mortgage interest rate is lower than current market rates, the purchasers may be able to take on the seller’s mortgage when they move.

The TD Canada Trust Repeat Home Buyers Report showed that only one-third of repeat buyers bring their current mortgage with them to their new home and just 8% use it as a selling feature of their prior home, allowing the new owner to assume their mortgage.

Why buy another home?

The top factor that influences the decision to move is retirement (29%). Other factors include being bored of their current home (16%), investment opportunities (15%) and market conditions (15%). Fourteen per cent say they had always planned to move but were waiting to save enough money.

The top considerations for Canadians’ next home are the layout of the home (98%), the size of the home (97%) - though they are divided on whether to go smaller or bigger -- and price (96%).

Selling their current home

The majority of home buyers plan to sell their current property before purchasing another one (84%). Of the remaining 16% who will keep both properties, 39% will use one as a rental property or investment property (20%).

Those selling hope to improve the resale value of their home by renovating (54%) or redecorating (52%).

Fifty-five per cent of Canadian home buyers are cautious saying they wouldn’t buy a new home until their current home is sold – but 45% say they would put in an offer if the perfect home came up for sale and hope that their house sells.

Wednesday, November 3, 2010

Monthly Resale Housing Market Figures

Greater Toronto REALTORS® reported 6,681 sales through the Multiple Listing Service® (MLS®) in October 2010.

This represented a 21 per cent decrease compared to the 8,476 sales recorded in October 2009. Through the first ten months of the year, sales amounted to 75,582 – up one per cent compared to the January through October period in 2009.

“The annual change in sales and average selling prices has been quite uniform across the GTA and by property type as the market has balanced out from record levels of sales in the second half of 2009 and first few months of 2010,” said Toronto Real Estate Board (TREB) President Bill Johnston.

“The composition of GTA home sales does differ depending on location. Condominium apartments accounted for 42 per cent of total sales in the City of Toronto and almost 60 per cent of sales in TREB’s central districts,” Johnston continued. “In regions surrounding the City of Toronto, in contrast, low rise home types accounted for almost 90 per cent of transactions.”

The average price for October transactions was $443,729 – up five per cent compared to the average of $423,559 reported in October 2009. The average selling price through the first nine months of the year was $430,802.

“The average selling price in the GTA has continued to grow relative to 2009 because home ownership has remained affordable,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis. “A household earning the average income in the GTA can comfortably afford the mortgage payments associated with the purchase of an average priced home.”

“The outlook for mortgage rates and income growth over the next year is favorable. The average home selling price could increase moderately next year and remain affordable for the average GTA household,” continued Mercer.

Tuesday, October 26, 2010

Time to lock in that mortgage rate?

Andrew Allentuck, Financial Post

Taking on a mortgage is a big commitment. Every buyer who uses a mortgage has the choice of floating or going with a fixed rate that often costs a couple of percentage points higher per year. Today, for example, one can get variable rates at an average rate of 2.34% while five year closed rates average 5.27%, according to Fiscal Agents Financial Services Group in Oakville, Ontario. Negotiated rates can be lower.

If rates never changed very much, there would be no contest – the floating rate deal would win. But rates do rise and fall and therein lies the borrower's dilemma.

Borrowers with kids and an aging car fear that their ability to pay interest rates twice or thrice the current floating rates are limited. "The test is liquidity and risk tolerance," says Derek Moran, a registered financial planner who heads Smarter Financial Planning Ltd. in Kelowna, B.C. "People with ample liquidity can afford to take a chance on rising mortgage rates. It follows that those who lack liquidity feel some pressure to avoid drastic interest rate increases."

The point is not merely academic, for Canada, in spite of recent mortgage rate increases, is still at a relatively low point of rates over the last four decades. "There is more room for rates to go up than down," Moran points out.

The cost of making a decision to float or go fixed varies with the rate differences.

In 2008, Moshe Milevsky, Associate Professor of Finance at the Schulich School of Business at York University, and Brandon Walker, a research associate at the Individual Finance and Insurance Decisions Centre in Toronto, published a study that measured the direct and opportunity costs of going with either choice. "Over the long run, homeowners really do pay extra for fixed rate mortgages," they concluded.

The reason is intuitive. Lenders do not want to take the chance that when they have to refinance a loan that they will be stuck paying more than they are getting.

Mismatching what they lend with the cost of what they borrow can cut their profits and even lead to insolvency. So lenders attach what amounts to an interest rate insurance fee and bundle that into the price of money they lend on fixed terms.

Milevsky and Walker confirmed this explanation. "The study showed that a positive Maturity Value of Savings [the value of investing the difference between floating and fixed mortgages in 91-day T-bills] was positive the majority of the time, so the homeowner saved by using a variable-rate mortgage."

The amount of money that the homeowner can save by taking a chance on floating rates varied in the Milevsky and Walker study, depending on the time periods in question. But the average amount was impressive: $20,630 as of 2008. Put another way, floating allowed borrowers to cut the time it would take to pay off the mortgages by a year or more, in some cases as much as five years on 15-year amortizations.

Rational calculation and personal feeling are, of course, different things. A person with a fixed income and a great deal of debt may be reluctant to put a rate casino between himself and the lender and will therefore go with certainty, even at a high price.

It is also a matter of experience. "First time buyers tend to pay close attention to the cost of the mortgage," says Laura Parsons, Areas Manager of Specialized Sales – which includes mortgages, for the BMO Financial Group in Calgary. For them, the appeal of locking in is relatively high. Their mortgages are new, the amounts they owe are higher than they would be 10 or 15 years in future when the mortgage is substantially reduced, and their incomes, often early in their adult lives, are lower than they will be in future.

"First time home buyers are net debtors and they don't want to endanger their finances," suggests Adrian Mastracci, a portfolio manager and financial planner who heads KCM Wealth Management Inc. in Vancouver.

There are other strategies that the buyer can use to provide some rate insurance without taking on what Milevsky and Walker have demonstrated as the high cost of peace of mind.

"The buyer can take a variable rate mortgage but set payments higher than the minimum required" says Parsons. "That could be at the 5 year closed rate, which would mean a faster paydown and growing asset security while still keeping the low cost of the variable rate mortgage. Faster paydown is itself cost insurance if interest rates do rise."

Banks are nothing if not inventive in helping clients cope with the fixed versus floating dilemma. For example, TD Bank offers to give 5% of the amount borrowed on a five or six year fixed rate residential mortgage to the borrower. The program, aptly dubbed the "5% CashBack Mortgage," implicitly acknowledges that fixed rate loans can be more costly than variable rate ones.

For its part, RBC has a RateCapper Mortgage that builds on the initial low cost of a variable rate mortgage but limits the cost if rates shoot up. On a five year mortgage, the borrower will never pay more than the capped rate and if the variable rate, based on the prime rate, drops below the RateCapper mortgage maximum, the interest rate charged to the borrower also drops. The plan is a compromise and spreads interest rate risk. Many other lenders allow borrowers to mix fixed and variable rates, thus accomplishing a similar goal.

Plan selection, it turns out, is gender-related. According to a BMO survey, men, 44% of the time, are more likely than women to choose a fixed rate mortgage than women, who make that choice only 28% of the time. Women, it turns out, tend to make the better choice, for as BMO's analysis shows, "fixed rates were advantageous during only two periods – through the late 1970s and in the late 1980s, in both cases ahead of a period rising interest rates, as is the case now."

So where are interest rates headed? The yield curve, a line that links interest rates for periods of time from 1 day to 30 years, implies that rates will rise, but not very much.

There is no sense that we are returning to a period of double digit rates. Moreover, there are deflationary forces at work, notes Patricia Croft, chief economist of RBC Global Asset Management in Toronto. "The present crisis in European finance and the potential fizzling out of the present recovery in North American capital markets could presage falling inflation and even disinflation – the subsidence of rising prices and interest rates," she explains..

BMO forecasts that the rising Canadian dollar will put downward pressure on consumer prices, reflecting the fact that much of what Canadians eat and use is imported. Inflation could flare up, BMO's economists say, but there is a balanced risk of declining prices. For now, the Bank of Canada is being very cautious in its interest rate management commitments. For those who are strapped for cash, personal circumstance may dictate the choice of a fixed rate. But for everyone else, the folly of trying to make interest rate predictions over a business cycle and to predict both the short term rates and the long term rates along the yield curve should be apparent. No promises, of course, but the odds of saving money are with borrowers who choose variable rate plans or those that emulate them.

Tuesday, October 19, 2010

Mid-Month Resale Housing Market Figures

Greater Toronto REALTORS® reported 3,012 sales through the Multiple Listing Service® (MLS®) during the first two weeks of October 2010.

This represented a 17 per cent decrease compared to the 3,631 sales recorded during the same period in 2009. Year-to-date sales amounted to 71,988, representing a three per cent increase compared to 2009.

“The GTA resale market is balancing out from the record level of sales experienced in the second half of 2009 and first few months of 2010. This is why sales figures have been lower than 2009 levels in recent months. With this said, it should be noted that the annual rate of decline slowed somewhat through the first two weeks of October,” said Toronto Real Estate Board President Bill Johnston.

The average price for October mid-month transactions was $444,644 – up seven per cent compared to the average of $414,479 recorded during the first 14 days of October 2009.

“We are seeing enough buyers relative to sellers to promote continued price growth year-over-year. People are buying because home ownership remains affordable in the GTA. A household earning the average income can comfortably afford a mortgage on the average priced resale home,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Friday, September 24, 2010

Mid-September Resale Housing Figures

Greater Toronto REALTORS® reported 2,623 sales through the Multiple Listing Service® (MLS®) during the first two weeks of September 2010. This represented a 22 per cent decrease compared to the 3,361 sales recorded during the same period in 2009. Year-to-date sales amounted to 65,455, representing a six per cent increase compared to 2009.

“Sales remain below the record pace we experienced in the second half of 2009. The prospect of higher interest rates and new mortgage lending guidelines resulted in higher than normal sales in the first few months of the year. To balance this out, the pace of sales has slowed in the second half,” said Toronto Real Estate Board President Bill Johnston.

“It is important to note that year-to-date sales remain above the number reported through the same period last year,” added Johnston.

The average price for September mid-month transactions was $412,367 – up five per cent compared to the average of $393,818 recorded during the first 14 days of September 2009.

“Under current lending standards, the average selling price is affordable for a household earning the average income in the GTA. The annual price growth we have been experiencing has been justified by this positive affordability picture,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Friday, August 27, 2010

Sales and New Listings Down, Average Price up in July

August 5, 2010 -- Greater Toronto REALTORS® reported 6,564 sales in July – a 34 per cent dip from the record 9,967 sales reported in July 2009. New listings, at 10,825, dropped to the lowest level for the month of July since 2002.

"The level of July sales remained below the expected long-term trend. The market has become more balanced following record monthly sales through most of the winter and early spring," said Toronto Real Estate Board (TREB) President Bill Johnston.

Total sales through the first seven months of 2010 were up 12 per cent compared to the same period in 2009.

Notwithstanding the fact that price trends vary at the neighbourhood level in GTA, the average price for July transactions was $420,482, representing a six per cent increase over July 2009. Over the first seven months of 2010, the average selling price was up 12 per cent annually to $432,253.

"Market conditions promoting growth in the average selling price have remained in place. While July sales were down compared to last year, the number of new listings in the marketplace also fell. This means there was enough competition between buyers to exert upward pressure on price," said Jason Mercer, TREB's Senior Manager of Market Analysis.

Wednesday, July 7, 2010

Monthly Resale Housing Figures

Greater Toronto REALTORS® reported 8,442 sales through the Multiple Listing Service® (MLS®) in June.

This represented a 23 per cent decrease compared to the record 10,955 sales reported in June 2009. Sales for the second quarter of 2010 amounted to 28,810 – up one per cent annually. Year-to-date sales through June were up 23 per cent to 50,455 compared to the first six months of 2009.

“We experienced a record number of existing home sales during the first half of 2010, but these sales were weighted more towards the beginning of the year,” said newly elected Toronto Real Estate Board President Bill Johnston. “The pace of home sales has moderated from record levels over the past two months with the prospect of higher mortgage rates.”

The average price for June transactions was $435,034 – up eight per cent compared to the average of $403,972 recorded for June 2009.

“With more homes to choose from in the second quarter, many home buyers have been making less-aggressive offers. This has resulted in less upward pressure on the average selling price,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “The annual rate of average price growth in the second half of 2010 will be in the single digits.”

Friday, June 18, 2010

Mid-Month Resale Housing Figures

Greater Toronto REALTORS® reported 4,139 sales through the Multiple Listing Service® (MLS®) during the first two weeks of June 2010.

This represented a 20 per cent decrease compared to the 5,185 sales recorded during the same period in 2009. New listings increased by 21 per cent annually to 7,985.

“The pace of existing home sales in the GTA has slowed to more normal levels following a record-setting start to 2010,” said Toronto Real Estate Board President Tom Lebour.

“Due to higher mortgage carrying costs, sales in the second half of 2010 will not be as high as what was experienced during the last six months of 2009.”

The average price for June mid-month transactions was $437,039 – up seven per cent compared to the average of $407,716 recorded during the first 14 days of June 2009.

“The seller’s market conditions experienced during the first few months of the year have given way to more balanced conditions. Home buyers are experiencing more choice,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “With more choice in the market place, price growth is starting to slow.”

Monday, June 7, 2010

Hybrid Mortgages Catching On

Investors like to avoid putting all their eggs in one basket. But this philosophy has been slow to catch on in the mortgage market. 94% of people still choose either fixed or variable rates. Very few choose a combination of both.

That may be changing. According to RBC, 40% of prospective homebuyers (people who plan to buy in the next two years) intend to take out a hybrid mortgage. That compares to 32% in last year’s survey.

These stats are a little hard to grasp given CAAMP’s recent mortgage survey. It suggests only 6% of Canadians have actually chosen a hybrid mortgage in the last year. However, Ipsos Reid’s Sean Simpson, says: “I would account for the difference by saying that one is an outlook while the other is retrospective.”

Simpson notes that, “Looking forward to the next two years, there is much more uncertainty in the direction of interest rates.” He says that Hybrids are therefore becoming more attractive since they let people capitalize on low rates while retaining an element of security.

Based on what an RBC spokesperson told us, hybrids may be catching on fast. In terms of the number of new buyers choosing hybrids, RBC says: "We have been trending similar to the survey results over the last quarter."

Marcia Moffat, head of Home Equity Financing at RBC, adds: "As consumers begin to learn about the benefits of mortgage diversification, we're seeing more homebuyers gain a better comfort level with adding floating rate mortgage options."

From our own anecdotal observations, that appears to be the case. We’re not seeing anywhere close to 32-40% of borrowers choose hybrids, but there’s been a noticeable increase in hybrid mortgage inquiries compared to last year.

The academic research supports hybrids as well. Dr. Moshe Milevsky, Canada’s most quoted mortgage researcher—says: “Nobody can truly predict how rates will move over a five-year period. It’s just that simple.”

He therefore believes hybrids are a good form of mortgage risk management. “People should strongly consider mortgages that are part fixed and part floating,” he told us last year. Interest rate diversification benefits borrowers just like it benefits investors who buy portfolios of stocks.

Of course, if history is a guide, well-qualified borrowers may save more money by simply choosing an ultra-low variable rate, or a 1-year fixed. But not all borrowers are in the same boat. Homeowners with only moderately strong personal “balance sheets,” can’t afford to dismiss the concept of risk management.

Many moderately-strong borrowers will in fact assume the risk of putting 100% of their mortgage in a variable rate. These folks will probably never realize the value of rate diversification/risk management unless the “worst case” materializes…and then it’s usually too late.

______________________________________________________

A hybrid mortgage is a mortgage with multiple terms.

These terms may be part fixed and part variable, and/or part long-term and part short-term.


For example, a hybrid mortgage might be contain the following:

50% in a 5-year fixed rate
50% in a 5-year variable rate

As another example, a hybrid might contain:

20% in a 3-year fixed rate
30% in a 5-year variable rate
50% in a 1-year fixed rate

Thursday, June 3, 2010

Monthly Resale Housing Figures

Greater Toronto REALTORS® reported 9,470 sales through the Multiple Listing Service® (MLS®) in May, representing a one per cent dip from May 2009. In comparison to previous years, this was the third highest May sales result on record.

"The pace of transactions slowed in May following record‐setting sales in February, March and April,” said Toronto Real Estate Board President Tom Lebour. “Buyers who otherwise would have been purchasing a home in May moved more quickly this year, likely to get ahead of mortgage rate hikes.”

New listings were up 38 per cent annually to 18,940. The average price for May transactions was $446,593 – up 13 per cent compared to the average of $395,609 recorded in May 2009.

"The gap between listings and sales has widened, which means there is more choice for buyers," said Jason Mercer, TREB's Senior Manager of Market Analysis. “The annual rate of price growth will slow in the second half of 2010, from the current double digit pace into the single digits.”

Wednesday, May 5, 2010

Most Trusted Residential Real Estate Brand in Canada

Dedication, skill, and professionalism earned RE/MAX realtors the designation of Most Trusted Residential REALTOR in Canada by Reader’s Digest magazine. Reader’s Digest will unveil its “Most Trusted Brands” list in its May 2010 issue. The magazine commissioned independent third party Harris/Decima to conduct 1,500 online surveys among a random sample of its panel members from October 2 – 15, 2009.

“The results of the survey are proof positive that our sales associates are the best in the business,” says Michael Polzler, Executive Vice President, RE/MAX Ontario‐Atlantic Canada. “We’ve built a solid reputation based on consistent results. RE/MAX associates sell one in every three homes in Canada and carry more professional designations than any other realtor in Canada. We’re specialists in all niches from residential, recreational, and commercial properties to luxury homes. Our focus has always been service excellence, which includes a serious emphasis on professional development and education. The status quo may work for some, but after almost 40 years in the business, we’re not content to rest on our laurels.“

Reader’s Digest looked at 28 different product categories ‐‐ ranging from cereal to residential real estate – and allowed consumers to select the brands that they trusted the most. RE/MAX joins leading brands such as RBC Royal Bank, TD Canada Trust, Air Canada, and Blackberry.

“Our commitment to the communities in which we live and work also runs deep,” says Polzler. “I think that’s something that has always set RE/MAX apart. We’ve been involved in charitable giving long before the terms ‘corporate philanthropy’ and ‘cause marketing’ were common. RE/MAX realtors participate in countless vital programs and causes each year that help the most vulnerable members of our society and strengthen the foundation of neigbhourhoods from coast to coast. Their enthusiasm, spirit and dedication to others never fails to inspire.”

Charitable giving is woven into the fabric of the RE/MAX organization. The company and its sales force has demonstrated a strong desire to give back, exceptionally active in both corporate and local charities. Close to $40 million has been raised in support of Children’s Miracle Network since 1992 – which funds research and development, outreach programs and upgrades to equipment and facilities at children’s hospitals and foundations across the country. The Canadian Breast Cancer Foundation is also a cause close to the hearts of RE/MAX associates—one that RE/MAX continues to support through its popular Sold on a Cure Program and the annual Yard Sale for the Cure.

RE/MAX is Canada’s leading real estate organization with over 17,500 sales associates situated throughout its more than 680 independently‐owned and operated offices across the country. The RE/MAX franchise network, now in its 37th year, is a global real estate system operating in 80 countries. Over 6,450 independently‐owned offices engage over 92,000 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.

Monday, April 26, 2010

Mid-April Resale Market Figures

TORONTO, April 16, 2010 – Greater Toronto REALTORS® reported 4,601 sales through the Multiple Listing Service® (MLS®) during the first two weeks of April.

This represented a 25 per cent increase compared to the 3,681 sales recorded during thesame period in 2009. New listings increased by 48 per cent annually to 9,512.

“The fact that annual growth in new listings outstripped growth in sales suggests that the GTA existing home market is becoming better supplied,” said Toronto Real Estate Board President Tom Lebour.

"Home owners are reacting to strong sales and price growth by listing their homes in greater numbers. They are confident they will receive offers in line with their asking price."

The average price for April mid-month transactions was $430,271 – up 12 per cent compared to the average of $383,361 recorded during the first 14 days of April 2009.

"The average annual rate of price increase has declined and we are shortly going to see a return to sustainable single-digit rates of growth," said Jason Mercer, TREB's Senior Manager of Market Analysis.

"As home buyers experience more choice in the marketplace, there will be less upward pressure on the average selling price in the GTA.”

Tuesday, March 23, 2010

New Listings!!!


76 Sandrift Sq. Toronto


88 Sonley Dr. Whitby


36 Plum Brook Cres. Toronto


99 Blackwell Ave. #801

MARCH MID-MONTH HOUSING STATISTICS

TORONTO, MARCH 17, 2010 - Greater Toronto REALTORS® reported 4,353 sales through the Multiple Listing Service® (MLS®) during the first two weeks of March.

This represented a 70 per cent increase compared to the 2,562 sales recorded during the same period in 2009 when resale transactions had dipped markedly due to the recession. The mid-month sales total was also 16 per cent higher than the previous March midmonth high reached in 2006.

“The spring-like weather in the first half of March brought the first green sprouts of the recurring spring market. Every year, monthly sales climb steadily through May,” said Toronto Real Estate Board President Tom Lebour. "People are buying homes because they are confident in the current economic recovery and mortgage payments on the average priced home remain affordable."

The average price for March mid-month transactions was $440,153 – a 20 per cent increase over 2009. New listings within the Toronto Real Estate Board boundaries were up 34 per cent to 8,540.

"Look for double-digit annual price increases to cease later in 2010, as new listings rebound from the low levels experienced in 2009," said Jason Mercer, TREB's Senior Manager of Market Analysis. "Increased listings will give buyers more choice, resulting in less upward pressure on home prices.”

Thursday, March 4, 2010

FEBRUARY RESALE HOUSING MARKET FIGURES

Greater Toronto REALTORS® reported 7,291 sales through the Multiple Listing Service® (MLS®) in February, representing a 77 per cent increase over February 2009. The average price for these transactions was up 19 per cent year-over-year to $431,509. Sales and average price increases represent both increased demand for ownership housing and the base year effect, which involves a comparison of economic recovery this year to a period of economic decline last year.

“Increases in existing home sales and average price were noted across the GTA in low-rise and high-rise home types. Similar rates of growth were experienced in the City of Toronto and surrounding 905 regions,” said TREB President Tom Lebour. “This suggests that first time, move-up and down sizing buyers are all active in the existing home marketplace.”

New listings also increased in February, climbing 24 per cent compared to the same month last year.

“Annual growth in new listings is expected to continue. New listings growth will start to outstrip sales growth as we move through 2010,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “As the market becomes better supplied, we will see more sustainable single-digit rates of price growth.”

Wednesday, February 24, 2010

Low inventory levels set stage for heated Spring market



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.

The highest year-over-year sales gains were reported in Greater Vancouver (152 per cent), Greater Toronto (87 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.

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?

New Mortgage Rules quick reference

You've likely seen media coverage on measures the government of Canada announced to help keep the housing market stable for the long-term.

There are three different changes. All are aimed at keeping the housing market stable and consumers' debt loads manageable, even if interest rates rise. Discussions are still going on that could fine-tune changes, but here's a brief summary of all three updates:

First, in order to qualify for any kind of mortgage, borrowers will need to have the income to qualify at the five-year posted rate - even if the rate they're being offered is less than the posted rate, whether for a fixed or variable-rate mortgage. For example, we currently have a seven-year mortgage on special at 4.95%, but a borrower would need to meet the income test to qualify for the five-year posted rate of 5.39%.

Second, investors who want to buy a home that they don't plan to live in will have to make a minimum down payment of 20%, up from the 15% currently required.

And third, homeowners who want to refinance will only be able to borrow 90% of the value of their home, down from 95%.

These changes will take effect for transactions started on or after April 19, 2010.

What do these changes mean for home buyers?

The first rule change will be felt the most - affecting approximately 29% of borrowers. According to TD Economics, based on the national average home price of $337,000, a buyer with only 5% down would require roughly $9,200 more in annual income to qualify under the new rules. To buy a $200,000 home, potential buyers with only 5% down would need $5,500 more in annual income.

As a result, some customers may choose to buy a less expensive house or consider a different type of mortgage product. Others may decide to delay buying.

The lower cap on how much a home can be refinanced for will help keep customers debt at a manageable level. And finally, the rule about mortgages for investment properties needing a larger down payment will help limit the effect of speculation on the market.

Friday, February 19, 2010

MID-FEBRUARY RESALE HOUSING MARKET FIGURES

Greater Toronto REALTORS reported 3,555 sales through the Multiple Listing Service during the first two weeks of February.

This represented a 74 per cent increase compared to the 2,044 sales recorded during the same period in 2009 when resale transactions had dipped due to the recession. The February mid-month sales total was also 7.7 per cent above the previous high set in 2006.

"Home ownership demand remains strong in the GTA, as households remain confident that economic recovery is at hand and that ownership housing will continue to be a quality long-term investment," said Toronto Real Estate Board President Tom Lebour.

The average price for February mid-month transactions was $429,997 - an 18 per cent increase over 2009. New Listings within the Toronto Real Estate Board boundaries were up 15 per cent to 6,212.

"Double-digit price increases will persist through the first quarter of the year," said Jason Mercer, TREB's Senior Manager of Market Analysis. "However, as new listings continue to increase creating a better supplied market, we will see the annual rate of price growth moderate into the single digits."

HST Transition Rules

Background

The provincial government has passed legislation to combine the eight percent Provincial Sales Tax with the five percent federal Goods and Services Tax, creating a 13 percent Harmonized Sales Tax (HST).

The HST is NOT YET IN EFFECT. The HST will come into effect beginning on July 1, 2010; however, note transition rules below.

* HST will not apply on the purchase price of re-sale homes.

* HST would apply to services such as moving cost, legal fees, home inspection fees, and REALTOR® commissions.

* HST will apply to the purchase price of newly constructed homes. However, the Province is proposing a rebate so that new homes across all price ranges would receive a 75 per cent rebate of the provincial portion of the single sales tax on the first $400,000. For new homes under $400,000, this would mean, on average, no additional tax amount compared to the current system.


Transitional Rules for New Housing

Generally, sales of new homes under written agreements of purchase and sale entered into on or before June 18, 2009 would not be subject to the provincial portion of the single sales tax, even if both ownership and possession are transferred on or after July 1, 2010.

The tax would also not apply to sales of new homes under written agreements of purchase and sale entered into after June 18, 2009 where ownership or possession is transferred before July 1, 2010.

Additional Transitional Rules

Where services straddle the HST implementation date of July 1, 2010, the tax charged for the service may have to be split between the pre-July 2010 and post-June 2010 periods. However, the HST will generally not apply to a service if all or substantially all (90% or more) of the service is performed before July 2010.

Four key timelines are important (see below). All are based on the earlier of the time the consideration is either due (In general, an amount is due on the date of the invoice or the day required to be paid pursuant to a written agreement), or is paid without having become due. If consideration is due or paid,

* Before October 15, 2009, HST will generally not apply (however, see above
transition rules for new housing).

* From October 15, 2009 to April 30, 2010, certain business that are not entitled to recover all of their GST/HST paid as input tax credit may be required to self-assess the provincial component of the HST with respect to goods or services supplied after June 30, 2010.

* From May 1, 2010 to June 30, 2010, HST will generally apply for services supplied after June 30, 2010.

* After June 30, 2010, HST will generally apply. An exception to this rule would be where ownership of the property is transferred before July 2010 or the invoice relates to services provided before July 2010.

With regard to the lease or license of goods, including non-residential real property, HST will generally apply to lease intervals or payment periods on or after July 1, 2010 and the general rules noted above will apply. However, where a lease interval begins before July 2010 and ends before July 31, 2010, it is not subject to HST.

With regard to the sale of non-residential property, HST is due where both possession and ownership of non-residential property occurs on or after July 1, 2010.

Tuesday, February 16, 2010

MORTGAGE INSURANCE RULES ANNOUNCEMENT

Federal Finance Minister Jim Flaherty announced prudent changes to mortgage insurance rules intended to come into force on April 19, 2010. CAAMP was actively engaged in the discussions around these changes which are as follows:

1. All borrowers must meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term;

2. The maximum amount one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one's home;

3. Non-owner occupied properties will require a minimum down payment of 20%.

There were no changes to down payment requirements or length of amortizations for owner-occupied residences.

Thursday, February 4, 2010

JANUARY RESALE HOUSING MARKET FIGURES

Greater Toronto REALTORS® reported 4,986 transactions through the Multiple Listing Service (MLS®) in January 2010. This result represented a large increase over the 2,670 sales in January 2009 when the home sales were in a recessionary trough. Last month’s sales were slightly higher than the January average in the five years
preceding 2009.

“The GTA housing market has rebounded well from the lows in sales experienced at the beginning of 2009. Sales climbed back to healthy levels across the GTA because the cost of home ownership remained affordable in the Toronto area,” said TREB President Tom Lebour.“Increasingly confident consumers moved to take advantage of affordable home ownership.”

The average home selling price in January 2010 climbed 19 per cent to $409,058, compared to 343,632 in the same month last year.

“Expect strong annual growth rates for existing home sales and average price through the first quarter as we continue to make comparisons to the weak market conditions at the beginning of 2009,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “The rate of sales and price growth will be lower in the second half of 2010.”

Monday, February 1, 2010

86% of Canadians opt for fixed-rate mortgages

Despite concerns about a Canadian housing bubble and high levels of household debt, a survey commissioned by the country’s mortgage brokers suggests Canadians are exhibiting prudence when borrowing from a home.

The survey, released by the Canadian Association of Accredited Mortgage Professionals, indicated the vast majority of home buyers, at 86%, were opting for fixed-rate mortgages over variable products. Moreover, 70% of people surveyed opted for terms of at least five years or more -– a signal that buyers realize interest rates are headed upward and want to capitalize on the record-low borrowing costs for as long a period as possible.

“This new research shows that Canadians are assessing their abilities and vulnerabilities,” said Jim Murphy, CAAMP’s president and chief executive. “They are being prudent and the vast majority of Canadian mortgage borrowers are not taking on undue risks. They have factored rising interest rates in to their mortgage decisions.”

The results emerge after senior officials at the Bank of Canada said that it was “premature” to talk about a housing bubble in the country. Still, the central bank has warned about rising household debt levels and consumers’ ability to finance that debt once interest rates begin their climb back upward.

The survey is based on questions to members who issued more than 40,000 mortgage loans totalling $10-billion, which were funded during 2009 (the data is for home purchases only and excludes renewals or refinances of existing mortgages). CAAMP said the data represent about one-sixth of total mortgage activity for home purchases in Canada.

The findings also indicated that the majority of people who took out their first mortgage last year borrowed less than they could afford to, as their debt service ratios are below allowed maximums.

“The high share of fixed rate mortgages and low debt-service ratios for home buyers are contrary to perceptions that consumers and financial institutions are taking on more risk,” CAAMP said.

In an updated economic forecast CIBC World Markets indicated that the red-hot housing market is set to cool down this year as listings increase and buyers back off once mortgage rates begin to climb.

Thursday, January 28, 2010

Housing activity throughout 2009

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.”

Sunday, January 17, 2010

Property Assessment in Ontario

The Government of Ontario has made a number of changes to the property assessment system that went into effect in the 2009 property tax year. These changes include the introduction of a four-year assessment update cycle and a phase-in of assessment increases.

Currently, the assessed value of properties in Ontario is based on a January 1, 2008 valuation date. MPAC’s last province-wide assessment update took place in 2008 and was based on a January 1, 2008 valuation date.

To provide an additional level of property tax stability and predictability, the market increases in assessed value between 2005 and 2008 will be phased-in over four years. The phase-in program does not apply to decreases in assessed value. Any market decrease in the value of a property is applied immediately and reflected on your most recent Property Assessment Notice. The change in assessed values and the phased-in assessment values for the 2009 to 2012 property tax years are listed on the 2008 Notices. There is a difference between the 2008 Current Value Assessment (CVA) (the destination value) and the current year’s phase-in value. The current year (which can be 2009, 2010, 2011 or 2012 taxation year) phase-in value is the assessed amount that the municipalities or the local tax authorities use to calculate the annual property taxes. An example of this is as follows:

Current year (2010) Phase-in CVA=$250,000
Total Municipal Tax Rate= 1 %
Total Municipal Tax burden = $250,000 x 1 %= $2,500.

The 2008 CVA is not used until 2012 since this is the destination value.
The municipalities/local taxing authorities set property tax rates and the province sets the education tax rate. MPAC’s assessed values are used to determine these taxes.

How MPAC Assesses Properties

MPAC’s mandated role is to accurately value and classify all Ontario properties in compliance with the Assessment Act and related regulations. To establish a property’s assessed value, MPAC analyzes property sales in a community to determine the CVA. This method is used by most assessment jurisdictions in Canada and throughout the world. When assessing a residential property, we look at all of the key features that affect market value. Five major factors usually account for 85% of the value: location; lot dimensions; living area; age of the structure(s), adjusted for any major renovations or additions; and quality of construction. Examples of other features that may affect a property’s value include: number of bathrooms; fireplaces; finished basements; garages and pools. Site features can also increase or decrease the assessed value of your property such as traffic patterns; being situated on a corner lot; and proximity to a golf course, hydro corridor, railway or green space.

Thursday, January 7, 2010

DECEMBER RESALE HOUSING MARKET FIGURES

Greater Toronto REALTORS® reported 87,308 MLS® transactions in 2009 – a 17 per cent increase over 2008. This result included 5,541 sales in December. The 2009 result was in line with the healthy levels of sales experienced between 2004 and 2006, but lower than the record of 93,193 set in 2007.

“After a slow start to the year, existing home sales rebounded during the second half of 2009,” said TREB President Tom Lebour. “As consumer confidence improved, many households moved to take advantage of affordable home ownership opportunities in the GTA. The strong residential real estate sector was a key contributor to overall economic recovery in Canada.”

The average home price in 2009 climbed four per cent to $395,460. The average price for December transactions was $411,931.

“Market conditions became very tight in the latter half of 2009. Sales climbed strongly relative to the number of homes listed for sale, resulting in robust price growth that more than offset average price declines in the winter,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “A greater supply of listings in 2010 will see home prices grow at a sustainable pace.”

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