Housing Market Charts – TREB – July 2010
Housing Market Charts Along with the monthly Market Watch release, TREB will now be including a series of charts summarizing key residential statistics for the GTA. A pdf version of all charts, including a description of each chart, is available along with individual JPEG files that Members are free to download and insert into their own publications. Download Housing Market Charts :
HST vs Real Estate Explained…
Here is an update regarding HST and its impact on real estate that I thought may interest you.
The government is following the lead of Quebec, New Brunswick, Nova Scotia and Newfoundland and Labrador by harmonizing the 5 per cent GST and the 8 per cent PST into one blended tax – the HST or harmonized sales tax – that will add 13 per cent to a wide range of items and services that weren’t covered by the provincial levy in the past.
The Harmonized sales tax looms on the housing horizon. This tax is coming into effect on July 1st 2010. The HST will apply to new homes and to all home closing costs, thereby increasing the cost of everything.
The effect of this harmonized HST tax on real estate transactions is as follows:
1. Rents on leases are exempt.
2. Resale homes are exempt.
3. The new tax will apply to ‘new housing’ – there will be a rebate of 75% of the provincial component for new homes priced under $400,000.The rebate would be reduced for new homes priced between $400,000 to $500,000 range, and would not be available for homes priced at more than $500,000. On all new housing over $500,000, the full HST tax of 13% will apply.
4.Sales of used owner-occupied homes are usually exempt. In most cases, the GST/HST does not apply to the sale of an owner occupied home since the owner is not a builder. Only homes sold by builders are taxable.
5. Newly build AND resale home sales, there will be an increase in ‘professional service’ costs – real estate commissions will increase with the current GST tax going from 5% to an HST tax at 13%. Also increased will be the costs of: home inspection, mortgage insurance premiums, legal costs, title insurance, landscaping and house cleaning services, cost of labour for installations or repairs, additions, renovations, driveways, fences and swimming pools!
CANADA’S REAL ESTATE MARKET EXPECTED TO CONTINUE STRONG GAINS INTO THE FIRST HALF OF 2010
Demand and supply finding balance in the second half of the year
TORONTO, January 7, 2010 – Canada’s residential real estate market is forecast to remain unusually strong through the first half of 2010 as economic conditions across the country improve and the stimulus impact of low interest rates continues to stoke demand, according to today’s Royal LePage House Price Survey and Market Survey Forecast. As confidence in the recovery builds in early 2010, increases in average house price levels and overall market activity are expected to continue. The gradual erosion of affordability driven by higher house prices and the expected late-year modest upward movement of interest rates, together with an improvement in listings supply as confidence improves, are expected to bring the market back into balance in the second half of the year, when home price increases are expected to moderate.
“The Canadian real estate market enters 2010 with considerable momentum from a unusually strong finish to the previous year, said Phil Soper, president and chief executive, Royal LePage Real Estate Services. “The stimulus effect of low borrowing costs has contributed to a sharp rise in demand that has driven activity levels to new highs. This demand, coupled with a typical seasonal undersupply of homes for sale, should cause home prices to continue to appreciate significantly during the early months of the year. Improving supply as the year unfolds and easing demand as the cost of home ownership rises should moderate home price increases in the second half of 2010.”
In contrast to the difficult months during the worst of the recession, house prices appreciated during the later part of 2009, with fourth quarter price averages surpassing averages from the fourth quarter 2008. The average price of detached bungalows rose to $315,055 (up 6.0%), the price of standard two-storey homes rose to $353,026 (up 5.2%), and the price of a standard condominium rose to $205, 756 (up 6.4%). The first two quarters of 2009 saw significant year-over-year price declines across the housing types surveyed and the third quarter provided the first signs saw a strong rebound in Canadian home values.
Regions that saw the strongest declines during the recession are now showing marked gains. Those regions include Toronto and the Lower Mainland, B.C. Vancouver in particular experienced a robust quarter, with home prices rising across all housing types surveyed.
“No other sector of the economy has been as highly affected by economic stimulus as housing,” commented Soper. “As consumer confidence has improved, Canadians have shown a lingering reluctance to acquire depreciating assets such as consumer durables, but have embraced the opportunity to invest in real property. Predictably, the regions benefiting most from this renewed interest in home ownership are those with lower average house prices and strong economic confidence, such as Winnipeg and parts of Atlantic Canada.”
Soper added, “Our forecast is built upon an expectation that interest rates will ease upward before the year’s end, which should have a dampening effect on demand, allowing it to come into balance with the supply of resale homes on the market. Further, we expect to see an increasing number of homes listed for sale as the year progresses – as Canadians regain confidence in the economy, they should be more willing to enter into a large financial transaction such as the sale of a home.”
REGIONAL MARKET SUMMARIES
Halifax saw varied gains across all surveyed housing types in comparison to fourth quarter 2008. Notably, more affordable homes posted the highest price increases due to the influx of workers returning from Western Canada.
Montreal saw strong gains this quarter as year-over-year price levels rose across all three housing types surveyed. Recent increases in demand have resulted in lower than normal inventory levels. Inventory levels are expected in increase in 2010. Continued demand is expected to result in moderate price levels.
House price levels in Ottawa are moderately higher this quarter compared to fourth quarter 2008 across all housing types surveyed. Fourth quarter sales activity did not slow as expected, and the demand has resulted in higher incidences of sellers receiving multiple offers, an unusual occurrence in end of year activity for this region. While inventory levels are low and there is competition among home buyers, this may abate as the government eases economic stimulus in 2010.
The Toronto market saw year-over-year price increases across the housing types surveyed in the fourth quarter. Of particular interest is the increase in sales of higher-priced units, which were hit hard by the recession over the previous 12 months. There was a surge of first-time buyers active in the market last year, depleting the inventory of entry-level units. They are expected to be joined by move-up, executive, and luxury buyers in the coming year, resulting in additional price appreciation.
Winnipeg saw some of Canada’s largest home price increases this quarter. More than one third of homes sold in the region went for above their asking price driven largely by first time buyer activity. This strong growth is expected to continue well into 2010.
Inventory levels in Regina are low, as much as thirty per cent lower than expected for this time of year; this situation should be corrected in the spring of 2010. House prices should continue to increase into 2010, driven by labour force growth in the construction industry.
Price levels in Calgary remain constant as the market is correcting from the record growth seen in the middle of the previous decade. Inventory levels are one quarter the levels seen in 2008, and the reduction in choice has delayed purchases. Activity and price levels are expected to increase modestly in 2010.
House price levels in Edmonton are also still correcting from the 2005 to 2007 boom. Low inventory levels have provided some price support, and activity is expected to increase in the spring of 2010.
Vancouver saw significant gains in price levels, with average increases of approximately ten per cent across the housing types surveyed. Inventory levels are beginning to decrease, and there has been an increase in sales involving multiple offers. Sales activity may drop off due to the city’s focus on the Olympics in the first quarter, but the market is expected to be robust for the remainder of the year.
Royal LePage’s quarterly House Price Survey (Q4 2009) shows the annual change of prices for key housing segments in select national markets. Click here to view the chart (.PDF).
The Royal LePage Survey of Canadian House Prices is the largest, most comprehensive study of its kind in Canada, with information on seven types of housing in over 250 neighbourhoods from coast to coast. This release references an abbreviated version of the survey, which highlights house price trends for the three most common types of housing in Canada in 80 communities across the country. A complete database of past and present surveys is available on the Royal LePage Web site at www.royallepage.ca. Current figures will be updated following the complete tabulation of the data for the fourth quarter. A printable version of the fourth quarter 2009 survey will be available online on February 5th, 2010.
Housing values in the Royal LePage Survey are Royal LePage opinions of fair market value in each location, based on local data and market knowledge provided by Royal LePage residential real estate experts. Historical data is available for some areas back to the early 1970s.
PDF Downloads:
TREB Market Watch – January 2009
The Toronto Real Estate Board’s review of the GTA market place – January 2009
Don’t Know much about Mimico?
Don’t know much about this south Etobicoke nabe? You’re not the only one—Mimico has been flying under the radar for a long time. But thanks to a wide range of housing and prices almost half of those found in some downtown ’hoods, first-time buyers are flocking here. Mimico’s location on the lake gives it a bucolic feel. And yet, it’s still on the Queen streetcar line, which runs along Lake Shore (or you can take the GO train a mere 10 minutes to Union Station).
HOUSING STOCK: There’s a wide range of styles and sizes, from lakeside mansions that at one time served as summer getaways for Toronto’s elite to more modest blue-collar bungalows.
BARGAIN ZONES: Look for smaller homes closer to the rail tracks that cut through the middle of the neighbourhood, or anything on the series of streets from Drummond to Albani between Royal York and Dwight, where you can get detached bungalows for about $375,000.
THE VERDICT: This burg was once strictly for blue hairs and blue collars. However, as the city core becomes out of reach for anyone without a trust fund or a serious drywalling fetish, Mimico’s suburb-in-the-city appeal increases. Of course, cheaper house prices come with a few trade-offs. Aside from a couple of noteworthy shops, the retail strip on Lake Shore is largely limited to a poorly planned, unattractive motel row, low-end nail salons and the usual dollar stores (though the high-end shops of Sherway Gardens are just a short trip west on the QEW).
NEIGHBOURHOOD HOT SPOTS:
Birds & Beans The easygoing café stocks fair-trade, organic, shade-grown, bird-friendly java and offers weekly jazz jams, which are also organic. 2413 Lake Shore Blvd. W., 416-913-9221.
Mimico Tennis Club Aspiring Rafael Nadals flock to Mimico Tennis for its red clay court. A rarity in Canada, clay courts are friendly to the knees and to beginners who need an extra second of response time. 29 George St., 416-657-2050.
Tatsu’s Bread Baker Tatsunobu Sato crafts organic artisanal breads, including a chewy walnut loaf. 3180 Lake Shore Blvd. W., 416-253-5557.
The Village Butcher Organic offerings from Ontario farms include eggs, meat, milk and ice cream. 2914 Lake Shore Blvd. W., 416-503-9555.
Article from Toronto Life Real Estate Guide February 2009.
