Market News
What’s taxable under the HST and what’s not?
The PDF document put out by the Province of Ontario outlines common products and services and how they will be affect by the new HST. I found it to be a very useful reference.
Record First Quarter Sales – March 2010
Record First Quarter Sales
Full Report Market Watch March 2010
April 6, 2010 — Greater Toronto REALTORS® reported 10,430 sales through the Multiple Listing Service® (MLS®) in March, pushing total first quarter 2010 sales to 22,418 – the best result on record under the current Toronto Real Estate Board (TREB) boundaries. The average price for March transactions was $434,696. The average price for the first quarter was $427,948.
“The strong rebound in the existing home market was one of the initial drivers of economic recovery,” said TREB President Tom Lebour. “While we don’t expect to see the same rates growth moving forward, GTA households will remain confident in ownership housing as a quality long-term investment, especially as economic recovery expands across all industries.”
The annual rate of growth for new listings continued to accelerate in March. The number of new listings grew by 42 per cent compared to March of 2008.
“The average home price in the GTA will continue to grow this year, but the pace will slow as we move through the spring,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “As growth in new listings starts to outstrip growth in sales, buyers will experience more choice, resulting in more sustainable single digit rates of average price growth.”
Median Price
In March, the median price was $370,000, from the $317,500 recorded during March of 2009.
Higher interest rates on way, Carney warns.
March 25, 2010
Les Whittington
Bank of Canada Governor Mark Carney prepares to testify before the Commons finance committee on Parliament Hill in Ottawa. (Oct. 27, 2009)
CHRIS WATTIE/REUTERS
OTTAWA–Bank of Canada Governor Mark Carney has put Canadians on notice that today’s rock-bottom borrowing costs are likely headed upwards by midsummer – if not sooner.
He acknowledged Wednesday that inflation and economic growth are rebounding faster than the bank predicted and left the door open for a rise in the central bank’s trend-setting overnight rate more quickly than Canadians have expected.
Nearly a year ago, Carney decided to combat the recession by taking the unusual step of promising to keep the bank’s overnight rate at a record low 0.25 per cent until the end of this June.
But, in a reminder that he has the option to hike rates sooner, he drove home the point on Wednesday that he has always said the bank would re-examine its stance if inflation – its main concern – threatened to get out of control.
The commitment to rock-bottom interest rates “is expressly conditional on the outlook for inflation,” he reiterated in a speech to the Ottawa Economics Association.
“The bank has an unwavering commitment to price stability,” Carney said.
“That means keeping inflation low, stable and predictable,” he added.
Rising Bank of Canada rates cause commercial banks to follow suit, driving up borrowing costs for consumers, homebuyers and business. This slows economic expansion and cools inflation, but it is not without risks. Raising rates too quickly could slow Canada’s rebound from the recession.
Economic growth and price increases have both exceeded expectations in recent months. The core inflation rate, which excludes volatile items such as gasoline, rose to 2.1 per cent in February, Statistics Canada said last week.
This is considerably more than had been predicted by Carney, who forecast that core inflation would average 1.6 per cent in the January-through-March period and not hit 2 per cent until the second half of this year. The bank’s long-term goal is to head off runaway inflation, which it tries to do by manipulating interest-rate policy to keep price increases in the 2 per cent range.
With inflation rising, analysts have speculated that the bank might not wait until mid-year to raise interest rates.
But Carney was careful not to tip his hand, saying Canadians will have to wait until the bank’s next interest-rate setting on April 20 for a decision. As for a reading of inflation dangers, the bank will publish its analysis in its quarterly report on April 22.
In the meantime, he warned Canadians that sooner or later interest rates will be rising now that the economy is recovering from the recession.
“We’re not trying to give personal financial advice,” he said at a news conference. But “certainly in any sort of major purchase or financing that individuals are considering, (they should) recognize that interest rates are at extraordinarily low levels” and will be going up, Carney said. Canadians should “think about your ability to service your debts if rates move to a more normal level.”
While acknowledging inflation is “slightly firmer” than the bank forecast and economic expansion in the early months of this year is stronger than expected, Carney was guarded in his assessment of the outlook.
He pointed out that Canadians are dealing with “an economy that is just emerging from a very deep recession.”
And he noted that the sharp rise in inflation in February may reflect a one-time phenomenon – the rise in accommodation costs during the Vancouver Winter Olympics.
Still, the fact Carney is not hinting at any changes to his year-old promise to hold the bank’s overnight rate at 0.25 per cent until the end of June is an indication borrowing costs will likely be going up at mid-year, said CIBC World Markets economist Avery Shenfeld.
“By saying nothing about what happens after June, it starts to become a hint that rates will move up in July.”
But it will be a tricky call for Carney because pushing up rates could strangle the economic rebound and drive up the value of the loonie on exchange markets, hurting the ability of exporters to sell goods in the key United States market.
“We’re still in the relatively early stages of a recovery, and I think the bank probably should err on the side of trying to stimulate the economy,” said United Steelworkers economist Erin Weir.
“The other big risk of raising interest rates too soon is that it could drive the Canadian dollar even higher, which of course would hurt export industries and could staunch the recovery.”
Changes in the MLS system? – Q & A for Real Esate Consumers
The recent public debate over proposed amendments and the upcoming Competition Tribunal review have created some level of uncertainty and confusion in the marketplace. To that effect, we have prepared this communication, which includes key messages and answers to questions We hope it proves helpful to you in addressing some of the concerns or misunderstandings with respect to the proposed amendments and upcoming Competition Tribunal review.
1. REALTORS® are committed to delivering the utmost value to their clients.
• Working with a REALTOR® provides Canadian buyers and sellers with access to real estate insight, marketing expertise, expert counsel and industry search tools such as the MLS system.
• REALTORS® are bound by obligation to uphold CREA’s Code of Ethics and Standards of Business Practice and have completed the necessary entry requirements to join and maintain their membership under CREA.
• REALTORS® have experience and expertise in this field and can be a source of great advice — help clarify and interpret information gathered online and through various other sources, help navigate through complexities of real estate transactions and ensure consumers make the right decisions.
2. The MLS system is a proprietary, member-to-member platform that is monitored and managed by the Canadian Real Estate Association and regional real estate Boards.
- Access to the MLS platform is earned by REALTORS® – REALTORS® must meet educational requirements and abide by the highest ethical standards of conduct in the industry.
• The MLS platform offers consumer protection through a set of listing and usage criteria and rules, unlike a variety of publicly operated platforms, which are not bound by the same rules (Kijiji, Craigslist, etc).
• The MLS consumer portal, www.realtor.ca, is only one facet of this member-to-member system, which provides REALTORS® with a variety of business tools that they use to deliver client services.
3. The MLS consumer portal, www.realtor.ca is the most visited real estate site in Canada. Together with www.royallepage.ca, these are the trusted sources of online real estate information for Canadian consumers.
• The MLS’ robust platform allows users to access the most listings Canada – tens of thousands – in a user-friendly online environment
• The MLS database is multi-purpose offering a wide variety of services to REALTORS® and contains both member-only and publicly accessible information.
4. Consumer protection and trust are the hallmarks of our business
• The real estate market in Canada is highly competitive, and includes a wide variety of companies with diverse and innovative business models and price structures that are available to all consumers.
• As in the past, there are other channels through which buyers and sellers can participate in the market, including online and do-it-yourself options.
Frequently Asked Questions addressing client queries
Are recently passed MLS® amendments good for consumers? What’s in it for me?
No change. The recently passed MLS® amendments clarify the existing rules to address concerns of the Competition Bureau. Prior to these amendments, customers had access to thousands of REALTORS® who could post on MLS® and offered a variety of fee structures. Ultimately, the agreement between a REALTOR®and his/her client has not changed.
Can I post my own home on the MLS® system?
No. The MLS®system is a proprietary, member-to-member platform that is monitored and managed by the Canadian Real Estate Association.
- Access to the MLS® platform is earned by REALTORS® – REALTORS® must meet educational requirements and abide by the highest ethical standards of conduct in the industry.
• The MLS® platform offers consumer protection through a set of listing and usage criteria and rules, unlike a variety of publicly operated platforms which are not bound by the same rules (Kijiji, Craigslist, etc).
• The MLS consumer portal, www.realtor.ca, is only one facet of this member-to-member system, which provides REALTORS® with a variety of business tools that they use to deliver client services.
Can I just pay a REALTOR® to post my listing on the MLS® System?
As in the past, you can find a REALTOR® who will agree to do that. However, we believe that the assistance of a knowledgeable and experienced REALTOR® can help you make more informed and better purchasing or selling decisions on what is often the largest financial transaction consumers will make in their lifetime.
• REALTORS® have much experience and expertise in this field and can be a source of great advice. They help clarify and interpret information gathered online and through various other sources
• Help consumers negotiate and obtain the best price for their homes
• Help consumers navigate through this complex process
• Provides reassurance to consumers that they are dealing with ethical and experienced professionals (REALTORS® meet strict CREA and local boards requirements)
• Offer consumers recourse in the event of unlawful behaviour (insurance, licensing, etc)
If the rules are going to change, should I wait to sell my house?
No. Buying or selling a home is very much a personal decision based on a consumer’s needs and timeline. There are a number of factors that determine the best timing and your REALTOR® is there to help you and advise you through this process.
Furthermore, it is not possible to predict the outcome of the Tribunal review. We will not even know the outcome until the end of the year at the earliest. At that time, it could also be appealed, extending the process further. There are many other market factors that clients would be best advised to discuss with their REALTORS® before making any purchasing or selling decision. These factors include seasonality, anticipation of future interest rates, market conditions, etc.
• REALTORS® understand their clients’ needs and use their expertise to help determine the right time to buy or sell a home.
Are fees charged by REALTORS® going to be affected by current or potential changes to MLS® Rules?
No. As always, fees are negotiated between the REALTOR®and the client. Changes to the MLS® Rules do not relate to fees.
Market Statistics – Weekly Sales Report – March 12, 2010
Market Statistics
Weekly Sales Report – March 12, 2010
|
Region |
Area Sales |
Average Price |
|
East |
466 |
$353,622 |
|
West |
887 |
$403,438 |
|
Central |
394 |
$593,352 |
|
North |
450 |
$473,443 |
|
Total |
2,197 |
$441,269 |
NOTE: Please note these are preliminary figures. Minor adjustments may be required at month’s end.
Market Watch – Frebruary 2010 – February Sales and Average Price Increase Annually
March 3, 2010 — 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.”
Median Price
In February, the median price was $366,300, from the $312,900 recorded during February of 2009.
