Toronto’s housing market roared back to life in the first half of 2010, with single-detached homes and condominium apartments and townhouses posting unprecedented double-digit gains in average price in most districts, according to a report released today by RE/MAX Ontario-Atlantic Canada. This is in stark contrast to the July 2009 RE/MAX report that found that values in approximately 80 per cent of neighbourhoods surveyed in Toronto had depreciated over the same period in 2008.
RE/MAX examined 63 Toronto Real Estate Board (TREB) districts in the single-detached category between January and June of 2010 and found that 85.7 per cent experienced double-digit gains. Mississauga’s Lorne Park (W13) led in terms of percentage increase in average price with a 30.2 per cent upswing in the first six months of the year, bringing year-to-date values in the area to $880,373 (vs. $676289 in 2009 and $830,041 in 2008). Markham (N01) ranked second with a 27.7 per cent jump to $779,168 (vs. $610,322 in 2009 and $683,050 in 2008) while Armour Heights, Bathurst Manor (C06) came in a close third at 27.5 per cent (rising to $732,535 from $574,599 in 2009 and $589,808 one year earlier). Mississauga’s Creditview, Erindale area (W16) secured fourth spot with an average price of $561,973—up 26.5 per cent over 2009’s $444,221 and 2008’s $476,877. Rounding out the top five was York Mills, Hogg’s Hollow, Bridle Path (C12) with a 26.2 per cent increase over last year and an average price of $1,868,591 (vs. $1,480,296 in 2009 and $1,580,851 in 2008).
“While first-time buyers dominated housing markets during the first half of 2009, move-up buyers ruled during January to June of 2010,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “Rising interest rates and the introduction of the Harmonized Sales Tax (HST) in the province helped drive activity, with more than 50,000 sales reported year-to-date—a figure on par with record 2007 levels.”
As in years past—the exception being 2009—the second half of the year will be more tempered, with price appreciation moderating somewhat in most neighbourhoods. The one exception to the rule will be the hot pocket areas that continue to experience limited inventory.
With affordability a growing issue for many in the Toronto market, the city’s vast supply of existing condominium apartments and townhomes offer a financially attractive alternative. Like single-detached homes, however, condominium prices were on the upswing in the first six months of the year in the 59 TREB districts examined—with 61 per cent reporting double-digit increases.
The Danforth, East York (E03) was the top performing condominium market in terms of price appreciation—with values up 28.2 per cent to $222,421. While the increase is significant compared to the same period in 2009, it’s a more moderate 15 per cent ahead of the $195,019 reported in 2008. Yorkville (C02) secured second spot, with a 22.6 per cent increase in values, bringing average price to $653,745—a serious uptick over the 2009 level of $553,302 but only a nominal 5.6 increase over 2008’s $619,151. Markham (N01) took third place with an increase of 22.1 per cent to $332,590 over the 2009 figure ($272,316). Bayview Village (C15)—Toronto’s newest condominium corridor—saw a 19.6 per cent increase, with values rising to $331,063. North York (C14) continued to experience upward momentum during the first half of the year, with average price on the Yonge St. line up 19.5 per cent to $363,685, compared to the $304,342 reported during the same period in 2009.
Overall, single-detached homes in TREB’s North district (north of Steeles Ave.) saw the greatest percentage increase, with year-to-date average price rising 17.5 per cent to $617,723 (compared to $525,635 one year ago). Not surprisingly, condominium apartments and townhomes in the central core experienced the most significant upswing, with average price in TREB’s Central district rising 16.8 per cent to $385,996, up from $330,517 one year ago.
“Both housing types experienced serious percentage increases year-over-year – yet its important to keep those price hikes in perspective,” says Polzler. “Last year, 80 per cent of those districts experienced a decline in value. The bounce-back—fuelled by unprecedented market conditions including a severe shortage in listing inventory—simply returned average prices to their normal course.”
Source: RE/MAX Ontario-Atlantic Canada
OTTAWA – June 16th, 2010 – Statistics released by The Canadian Real Estate Association (CREA) show that home sales activity and new listings in Canada declined in May.
Seasonally adjusted home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards declined nationally by 9.5 per cent in May from near-record level activity the previous month. While activity declined in more than 70 per cent of local markets, the lower national figure resulted largely from fewer sales in Toronto, Vancouver and Ottawa.
Actual (not seasonally adjusted) national sales activity was down 4.3 per cent in May from the same month last year. In a departure from the normal seasonal pattern, national activity levels in May were also down from April levels. This suggests that the combination of changes to mortgage regulations and rising mortgage rates pulled forward a number of sales into April that would have otherwise taken place at a later date.
“May was the first full month in which sales activity was affected by these changes,” said CREA President Georges Pahud. “An accompanying decline in new listings and housing starts means these changes are also affecting the supply side, which will keep the market balanced and Canadian home prices stable.”
The seasonally adjusted number of homes that were new listings on Canadian MLS® Systems in May 2010 declined by four per cent from the previous month. This marks the first monthly decline in new listings in eight months. New listings had been climbing sharply, rising from a four-year low last September to the second highest level ever last month.
The number of homes listed for sale on Boards’ MLS® Systems at the end of May was up 5.4 per cent from levels at the same time last year, when the supply of homes for sale on the market had started declining.
The national average price of homes sold via Canadian MLS® Systems rose 8.5 per cent in May from a year ago. This is a smaller increase compared to those recorded over the past nine months.
“Supply and demand has become more balanced in a number of major markets,” said CREA Chief Economist Gregory Klump. “Homebuyers now have more choice and are likely be in less of a rush to purchase than they were recently, so the amount of time it takes to sell a home is expected to rise in the coming months.”
With last year’s string of downwardly skewed average price values having now mostly passed, year-over-year national average price comparisons are coming back into line with changes in the national weighted average price.
The weighted average price compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It climbed 8.4 per cent on a year-over-year basis in May 2010. Similarly, the residential average price in Canada’s major markets was up 9.8 per cent year-over-year in May, while the weighted major market average price rose 10.7 per cent.
The actual (not seasonally adjusted) number of months of inventory stood at 5.3 months in May 2010. This is up from 4.8 months at the same time last year. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.
On a seasonally adjusted basis, months of inventory stood at 6.1 months in May, the highest level since last April.
“The number of months of inventory may rise further in response to easing sales activity and a further rise in the number of active listings,” said Klump. “However, the number of newly listed homes will ultimately retreat in response to a more competitive sales and pricing environment in a number of local markets. The outlooks for the Canadian economy, employment, and mortgage market trends remain upbeat, so supply and demand will remain balanced on a national basis. Canada will avoid a U.S.-style home price correction.”
PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.
CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.
MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.
The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 96,000 REALTORS® working through more than 100 real estate Boards and Associations.
Further information can be found at
http://www.crea.ca/public/news_stats/pdfs/Media_May10rpt_e.pdf
For the first time since 2007, the Bank of Canada raised its target for the overnight rate by one quarter of one percentage point to 0.5 per cent on June 1, 2010. The Bank rate was raised to 0.75 per cent and the deposit rate was unchanged at 0.25 per cent, thereby re-establishing the normal operating band of 50 basis points.
The Bank had been keeping its benchmark interest rate at the lowest possible level for more than a year to stimulate the fragile economic recovery.
The Bank noted that while that global economic recovery is well under way, it is unfolding unevenly on a global basis. It characterized the ongoing imbalances as “strong momentum in emerging market economies,” and “some consolidation of the recovery in… industrialized economies,” counterbalanced by the “possibility of renewed weakness in Europe.”
The Bank keyed in on current volatility in the European markets as the largest downside risk to global economic growth saying, “Recent tensions in Europe are likely to result in higher borrowing costs and more rapid tightening of fiscal policy in some countries.”
The Bank noted that spillover into Canada from events in Europe has resulted in a modest decline in commodity prices and some tightening in financial conditions.
The Bank downplayed slightly stronger than expected inflation and economic growth saying, “CPI inflation has been in line with the Bank’s April projections,” and “activity in Canada is unfolding largely as expected.” It also played up the idea that consumer spending would soon subside: “Going forward, household spending is expected to decelerate to a pace more consistent with income growth.”
As of June 1st, the advertised five-year conventional mortgage rate stood at 5.99 per cent. This is down 0.66 per cent from one year earlier, but stands 0.14 per cent above where it stood when the Bank made its previous interest rate announcement on April 20, 2010. It is also one half of a percentage point above where it stood at the beginning of the year.
“The Bank left its options open as to whether it will raise rates again when it makes its next interest rate announcement on July 20th,” said CREA Chief Economist Gregory Klump. “I expect it will raise rates by another quarter of a percentage point at that time, but will take a pause at some point later this year, especially since interest rates in the U.S. are likely on hold until next year.”
“Even though they are on the rise, mortgage rates will still be at low levels that are housing market friendly, with home financing remaining within reach for many homebuyers,” he added.
The Bank will make its next scheduled announcement on July 20th.
http://creastats.crea.ca/natl/interest_rate_trends.htm
(CREA 06/01/2010)
Sales of existing homes will hit six digits for the first time by the end of this year, creating a new record. But 2011 will look “quite different” as the market ratchets down, says a report by the Canada Mortgage and Housing Corporation released Wednesday. “The era of rock bottom mortgage rates is coming to an end and the red hot Greater Toronto Area housing market will begin to lose its steam,” said Shaun Hildebrand, senior market analyst for the CMHC.
The CMHC is forecasting that sales will pass the 100,000 mark for the first time to 101,000 by the end of 2010, while average prices will also increase to a record $444,000. The peak of the market was in 2007 when sales hit 95,000.
However, the federal housing agency is also warning that prices “could come down” sometime in late 2010 or 2011. But they are saying any declines will be minimal or short lived.
The CMHC expects the upward streak of price appreciation to continue into 2011 resulting in 16 consecutive years of increases. They are forecasting that prices will increase slightly by 1.7 per cent at the end of 2011.
The CMHC report is at odds with some other analysts including economist David Rosenberg who has said national prices are overvalued by as much as 30 per cent. The TD Bank recently revised their forecast to say that prices nationally will come down by 2.7 per cent instead of increasing next year. Their previous forecast was for a 1.6 per cent increase.
“There is a question of whether the bidding wars in Toronto have caused prices to overshoot,” said Hildebrand. “There is also the question of whether buyers will respond more negatively than expected to higher interest rates, but we think prices will likely hold.”
The CMHC says prices will likely flat line after 2011 as affordability becomes an issue.
“Five year mortgage rates will be a full percentage point higher by the end of the year. Combining higher rates with the new reality of average prices well above $400,000 will make the transition to homeownership more expensive,” said Hildebrand. “The erosion of affordability will cause delay for many first time buyers.”
For now, the market is showing few signs of a slow down, although more supply is evident.
In a separate report released by the Toronto Real Estate Board on Wednesday, existing home sales in the Toronto area market were up by 7 per cent in the first two weeks of May compared with the same time last year.
The board reported that 4,887 sales occurred through the Multiple Listing Service.
The average price for May mid month transactions was $448,641, up by 12 per cent compared with $399,811 last year.
One encouraging sign for buyers is that new listings are up by 48 per cent.
“The total number of homes currently listed in the GTA is now within a more normal range. As buyers benefit from more choice in the second half of 2010, average selling prices will grow at a slower pace,” said Jason Mercer, the board’s senior manager of market analysis.
The most fragile sector of the Toronto market continues to be high rise development, where the CMHC expects 17,000 condos will be completed in the Greater Toronto Area this year, with another 16,000 completed next year.
The CMHC expects 10,000 of these condominiums, purchased by investors will be placed back on the market over the next two years.
“The added supply will lead to softer price growth for high rise units relative to low rise homes,” said Hildebrand. “With fewer buyers competing for more homes, bidding wars will become less common and prices will face little upward pressure.”
Some mitigating factors in the Toronto economy include stronger income and job growth and higher net migration which will help to keep the market stable, said the CMHC.
Employment is expected to rise by 1.5 per cent in 2010 and wages by 2.5 per cent.
“These are pretty big numbers for the first year out of recession,” said Hildebrand.
Source: Tony Wong, Toronto Star
Canadian home resales slowed in April from the previous month while new listings climbed, suggesting the country's real estate market could soon start to cool after a year of surging prices. Even so, sales of existing homes still showed a big jump from the same month last year, according data on Monday from the Canadian Real Estate Association, with prices rising at a double-digit pace year over year.
Residential housing has become an important driver of the Canadian economy, even during the recession, spurred partly by low interest rates. It also gave rise to a fiery debate on whether the housing sector was forming a bubble, a charge that policymakers swiftly downplay.
All told, 42,078 homes changed hands in April, up 20.1 percent from the same month last year. But sales slipped 2.6 percent from March, the third decline in four months, and have fallen 6.8 percent from the peak reached in December.
The cooler pace of activity is in line with a long-held view by many economists, who see the market slowing after the spring as more homes are put up for sale and interest rates begin to rise.
Some homeowners may also move sooner in order to avoid extra costs associated with new, harmonized sales tax (HST) regimes, set to begin July 1 in Ontario and British Columbia, and this could add to a front-loaded year of sales and pricing activity.
"Prices may see one last uptick in the next few months, but are expected to simmer down notably in the second half," said Doug Porter, deputy chief economist at BMO Capital Markets.
"Indeed, outright price declines are certainly a very real possibility in Ontario and B.C. amid much more moderate activity after the HST kicks in."
CREA said a slowing market in British Columbia was responsible for more than half the decline for the year. Ontario and Quebec, two of the country's larger markets, remained close to record levels in April.
The number of new listings rose to 99,901, surpassing the previous April record, set in 2008, by 0.6 percent. The average national price rose 12.2 percent to C$344,968 ($331,700). The rising supply of homes for sale could dampen prices in the months ahead. Sales may also cool as higher mortgage rates and rising prices chip away at demand, and overall housing investment falls into line with the broader economic recovery.
"The pace of moderation is expected to be measured and orderly," said Millan Mulraine, a senior strategist at TD Securities.
Source: Canadian Real Estate Association
(OTTAWA – May 17, 2010) Home sales activity in Canada came up short of the record for the month of April and new listings continued to climb, according to statistics released by The Canadian Real Estate Association (CREA).
Residential sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards numbered 52,042 units in April 2010. This is less than one per cent short of the record for national sales activity during the month of April, which was set in 2007. Compared to April 2009, national activity was up 20 per cent.
Seasonally adjusted national home sales activity slipped 2.6 per cent from the previous month, and now stands 6.8 per cent below the peak reached in December 2009. More than half of the decline in activity over the first four months of 2010 resulted from fewer sales in British Columbia, while activity in Ontario and Quebec remains at or near record levels.
“The easing trend in national sales activity masks a rising trend in a number of major markets,” said CREA President Georges Pahud. “Real estate is local, so buyers and sellers should engage the services of a REALTOR® for knowledge about housing market trends in their market.”
Some 99,901 homes were newly listed for sale on Canadian MLS® Systems in April 2010, surpassing the previous record for the month of April set in 2008 by six-tenths of one per cent. A total of 236,397 residential properties were listed for sale on Boards’ MLS® Systems at the end of April 2010, down 1.9 per cent from levels one year earlier.
As for the national average price of homes sold via Canadian MLS® Systems, that figure rose 12.2 per cent over this time last year. This is a smaller increase compared to those recorded over the past eight months. Bucking the national trend, price gains continue to increase in a number of major markets in Alberta, Ontario and Quebec.
With last year’s string of downwardly skewed average price values having now mostly passed, and with activity in British Columbia’s lower mainland having settled down, year-over-year national average price comparisons are coming back into line with changes in the national weighted average price.
The weighted average price compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It climbed 11.3 per cent on a year-over-year basis in April 2010. Similarly, the residential average price in Canada’s major markets climbed 12.9 per cent year-over-year in April, while the weighted major market average price rose 12.1 per cent.
The actual (not seasonally adjusted) number of months of inventory stood at 4.5 months in April 2010. This is down from levels one year ago (5.6 months) and April 2008 (4.7 months), but up compared to April levels from 2004 through 2007. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.
On a seasonally adjusted basis, months of inventory stood at 5.3 months in April, the highest level since last May.
“Next month will mark the passage of one year since the national average price rebounded from the recessionary trough to return to the pre-recession peak, so the rise in the national average price is expected to be more subdued next month, ” said CREA Chief Economist Gregory Klump. “The national average price could potentially be skewed higher over the next couple of months if buyers of higher priced homes in Ontario and British Columbia move their purchase decision forward to beat the introduction of the HST in July.”
PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month. The Canadian Real Estate Association has previously released these separately.
CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.
MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.
The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 96,000 REALTORS® working through more than 100 real estate Boards and Associations.
Further information can be found at http://www.crea.ca/public/news_stats/pdfs/media_apr10rpt.pdf
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 the same 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.”
This looks like April will mark the turning point for Toronto's Real Estate Market. For the first time in years we saw new listings increase at a faster rate than sales. Toronto's real estate market has suffered from a shortage of new listings ever since the market rebounded a year ago.
