Toronto Real Estate and Neighbourhoods Blog | Move Smartly

New Listings up 34% First Half of March

John Pasalis in Toronto Real Estate News

The Toronto Real Estate Board 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 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.”

John Pasalis is the Broker owner of Realosophy Realty Inc in Toronto. Realosophy Realty focuses on researching Toronto neighbourhoods to help their clients make smarter real estate decisions.

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Is Toronto's Real Estate Market a Bubble Ready to Burst?

John Pasalis in Toronto Real Estate News

It seems as though any time house prices are on the rise in Toronto, regardless of how modest the increase might be, Torontonians are worried that a real estate crash is just around the corner.  But for the first time in nearly twenty years, concerns of a real estate bubble are somewhat justified.

According to the Teranet National Bank House Price Index, Toronto home prices have appreciated by 15% from the market bottom in April 2009 to December 2009.  Toronto hasn’t seen this kind of rapid price appreciation since the real estate bubble in the late 1980’s. 

There is also a significant imbalance between the supply and demand for houses in Toronto which is resulting in a high percentage of multiple offers for houses which in turn is driving up prices.

But when it comes to deciding whether or not Toronto is experiencing a real estate bubble is the formula really as simple as:

Are there any circumstances where a rapid appreciation in house values does not mean we are in a bubble?  Can a rapid appreciation in prices ever be explained or is it always irrational speculation? 

Toronto Real Estate Sales up 74% Mid February

John Pasalis in Toronto Real Estate News

From the Toronto Real Estate Board:

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."

John Pasalis is the Broker owner of Realosophy Realty Inc in Toronto. Realosophy Realty focuses on researching Toronto neighbourhoods to help their clients make smarter real estate decisions.

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Tougher Mortgage Rules for Canadian Buyers

John Pasalis in Toronto Real Estate News

From the Department of Finance:

The Honourable Jim Flaherty, Minister of Finance, today announced a number of measured steps to support the long-term stability of Canada's housing market and continue to encourage home ownership for Canadians.

"Canada's housing market is healthy, stable and supported by our country's solid economic fundamentals," said Minister Flaherty. "However, a key lesson of the global financial crisis is that early policy action can help prevent negative trends from developing."

The Government will therefore adjust the rules for government-backed insured mortgages as follows:

• Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.
• Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.
• Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.

"There's no clear evidence of a housing bubble, but we're taking proactive, prudent and cautious steps today to help prevent one. Our Government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it," said Minister Flaherty. "If some lenders aren't willing to act themselves, we will act. These measures demonstrate the Government is committed to taking action when necessary to support the long-term stability of a sector that is so vital to our economy and the financial well-being of Canadian families."

These adjustments to the mortgage insurance guarantee framework are intended to come into force on April 19, 2010.

Photo Credit: CBC

John Pasalis is the Broker owner of Realosophy Realty Inc in Toronto. Realosophy Realty focuses on researching Toronto neighbourhoods to help their clients make smarter real estate decisions.

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Toronto and Vancouver – Canada’s Hottest Real Estate Markets

John Pasalis in Toronto Real Estate News

Toronto and Vancouver have Canada’s hottest real estate market according to the Teranet-National Bank House Price figures released this week.

Looking at the appreciation in the Index from each city’s market bottom in 2009, Toronto is leading the way with a 13.6% increase in house values.  Vancouver prices increased 11% followed by Ottawa at 8.7%.  Toronto’s market bottomed in April 2009 versus June 2009 for Vancouver.  This two month head start pushed Toronto’s appreciation ahead of Vancouver’s for November 2009, but prices in Vancouver are appreciating at a faster rate than Toronto.

Toronto House Prices up 19% Mid January

John Pasalis in Toronto Real Estate News

The Toronto Real Estate Board reported 1,749 existing home sales on the Multiple Listing Service (MLS®) during the first two weeks of January. This result was almost double the 888 sales reported for the same period in 2009, when sales had dipped to a recessionary low.

“We have had a strong start to 2010,” said Toronto Real Estate Board President Tom Lebour.
“Widespread sales growth in terms of geography and housing type indicates that many
households remain confident in their ability to purchase and pay for a home over the long-term.”

The average price for transactions in the first two weeks of January was $395,307, compared to an average of $332,495 for the same period in 2009.

“Double-digit average annual price growth will continue through the first quarter of 2010 as sales remain high relative to listings and we continue to make comparisons to last year’s winter downturn,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

John Pasalis is the Broker owner of Realosophy Realty Inc in Toronto. Realosophy Realty focuses on researching Toronto neighbourhoods to help their clients make smarter real estate decisions.

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Toronto House Prices Increase for 13th Straight Year

John Pasalis in Toronto Real Estate News

The average price for a Toronto home increased by 4% in 2009 to $395,460, the 13th straight year house values have increased in Toronto.

Browse year over year comparison charts on our new Toronto Real Estate Statistics page.

The following chart shows the average price for a home from 1975-2009.

 

Note the difference in appreciation between the late 1980s to the appreciation we’ve seen over the past thirteen years.  In the late 1980s house prices increased 150% in just 4 years compared to a 100% increase from 1996 to 2009. 

Feds May Change Mortgage Rules to Cool Down Real Estate Market

John Pasalis in Toronto Real Estate News

CTV News reports that finance minister Jim Flaherty is considering raising the minimum down payment required for a mortgage in Canada and possibly reducing the maximum amortization period allowed in an effort to cool down Canada's hot real estate market.

Flaherty warns "If we see further evidence that there is excessive demand in the housing market or that there's an indication that people are taking on obligations that they will not be able to handle in the future when interest rates rise, then we will take some action,"

"The likely action we will take is to increase the size of the down payment from 5 per cent to a higher number, reduce the amortization -- bring it down from 35 years to something less," he said.

Low interest rates have been one of the key drivers behind the quick turnaround in Canada's real estate market.  The federal government is looking for ways to cool the demand in the real estate market without raising interest rates.  Increasing interest rates would have a negative effect on the other sectors of Canada's recovering economy.

John Pasalis is the Broker owner of Realosophy Realty Inc in Toronto. Realosophy Realty focuses on researching Toronto neighbourhoods to help their clients make smarter real estate decisions.

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A Glimmer of Hope for Toronto Home Buyers

John Pasalis in Toronto Real Estate News

The Toronto Real Estate Board’s November Market Watch report showed the first sign that some relief might be on the way for Toronto home buyers.

Every month this year prior to November experienced a decline in the number of new listings coming on the market.   In some months the decline in new listings was as high as 30% over the previous year.  This decline is one of the factors driving the imbalance we are seeing between the demand and supply for homes in the Toronto market.  November marked the first month this year where we did not see a decline in the number of properties coming on the market.  The number of new listings remained flat when compared to the same month last year.

 

But the overall inventory (total number of homes available for sale) for the market continues to be well below historical levels.

More Transparency Needed in The Real Estate Industry’s Multiple Offer Process

John Pasalis in Toronto Real Estate News, Home Buying Tips

The Real Estate Council of Ontario (RECO) recently published a brochure with some consumer focused information about competing in a Multiple Offer for a home in Ontario.  The publication offers some good tips on setting an offer price and understanding the risks involved when excluding conditions on financing and inspection.  The brochure unfortunately falls short by not recommending any new rules or guidelines on how the real estate industry should manage multiple offers and how to improve the transparency to consumers.

When more than one buyer competes for a home in Toronto, they have to put their best offer forward from the start because the seller typically accepts the best offer presented.  The best offer is usually the one with the highest price and fewest conditions.  Most buyers who win multiple offers often exclude a condition on financing and inspection in order to make their offer more attractive (See Realosophy's Home Buyer's Guide to learn more about the risks of removing conditions from your offer).

What makes multiple offers particularly stressful for many buyers is the lack of transparency.  Buyers are only told how many other buyers are competing for the same house.  They know nothing about the contents of the other offers, who the other agents are or even what brokerage they work for.