The downturn in Toronto’s housing market appears to be drawing to a close, and if the performance of Canadian bank stocks is any indication, investors seem to agree.
Despite persistent fears that the domestic housing market was in a dangerous bubble bound to burst in a disruptive fashion, data from the Toronto Real Estate Board suggests otherwise. While resales in August remained on the downtrend relative to a year ago (falling 34.8 per cent), the annual decline was the smallest in three months. “Those worried about a collapse in Toronto’s housing market can breathe a little easier now,” said Robert Hogue, senior economist at Royal Bank of Canada. Now Open To The Public. Today, Saturday September 9th At 10:00 AM In Hawthorne South Village. Experience modern condo living in gorgeous Milton, right under the incredible Niagara Escarpment. Our brand-new, stylish condo village perfectly complements the well-established Hawthorne South village community. These thoughtfully designed homes are surrounded by incredible biking and walking trails, as well as every urban convenience. In fact, schools for all ages, shopping, restaurants, the Milton District Hospital, and a world-class sports field are all only minutes away! New Release Of Steel and Concrete Construction Condo Suites, Available Today. Come To The Hawthorne South Village Sales Centre At Derry Road & Trudeau Drive In Milton. Below Are Items That You MUST Bring In Order To Purchase. Six (6) Blank Cheques For All Deposits Valid Photo Identification (Driver's License, Passport, Permanent Resident Card) Health Card Won't Be Accepted Social Insurance Number The head economist of RBC’s asset management division is shedding light on Toronto’s unoccupied condo units as the city mulls a vacant-home tax like Vancouver’s amid support from activists.
“Given anecdotes about speculators, foreign buyers and the fraction of condos perpetually dark even as day turns to dusk, one worries about this segment of the market in the event of a serious correction,” Eric Lascelles, chief economist at RBC Global Asset Management, writes in his latest weekly #MacroMemo. “Fortunately, the actual statistics bely this fear,” he adds. SEE ALSO: “Condomanium”: here’s why Toronto’s condo market is still booming Lascelles doesn’t dismiss risks. Rather, he suggests they are “significantly overstated,” first stating that 1 per cent of condos made available for rent in Toronto are vacant. Then he addresses a different slice of the towering market: “Wait a moment. What about the ‘shadow inventory’ — all the condos held off the market but nevertheless empty?” he asks. According to 2015 numbers from Canada Mortgage and Housing Corporation (CMHC), roughly half of all condos in this category are rented out, while 42 per cent are still used in some way by an owner or their family, he notes. Some 4.1 per cent remain vacant. “This is considerably higher than 1.0%, but literally an order of magnitude smaller than feared,” he adds. “The fact that condo prices have held up better than detached homes during the city’s recent swoon hints at this [market’s] resilience.” The fact that low-rise housing types have become so expensive in the city has helped cushion condo prices from some of the chill from Ontario’s Fair Housing Plan, which has most dramatically impacted the detached-home market. Being the only remaining affordable kind of housing for many buyers in Toronto, there is a certain level of built-in demand for condos, one expert tells BuzzBuzzNews. However, housing advocates are pushing for a tax on property owners who leave their dwellings vacant as a way to provide relief to renters by easing the Greater Toronto Area’s tight rental vacancy rate. In 2016, the rate sunk to 1.3 per cent, with the average rent hitting $1,233, up 3.1 per cent from the previous year, according to CMHC. With Toronto seeking input on whether it should tax owners of vacant homes, Generation Squeeze, a lobby group hailing from Vancouver, is now gathering signatures from those in favour. “A vacant home tax has the potential to quickly transition thousands of existing homes into the rental supply, and at no cost to the public purse,” the group’s website reads Ontario’s Fair Housing Plan may not be the only thing having a psychological impact on the Toronto real estate market.
While the foreign-buyer tax has arguably encouraged buyers and sellers to take a “wait-and-see” approach, interest rates are also factoring into the housing head games, BMO Senior Economist Robert Kavcic suggests. “The first impact of the follow-up BoC rate hike might be psychological,” Kavcic writes in a note titled “Housing: What the BoC Help Giveth, the BoC Help Taketh Away.” SEE ALSO: The Bank of Canada hikes the overnight rate for the second time in 2017 “It’s no coincidence that, after a multi-year period of well-behaved price growth, the Toronto market began to explode after the Bank of Canada cut rates twice in the first half of 2015,” he continues. In January 2015, the month of the Bank of Canada’s 25-basis-point key interest rate cut, the average price of a Greater Toronto Area home was $552,575. Today, it is $732,292. Lower rates marginally improved affordability, it’s true. But the central bank’s tandem cuts signalled something to the market as well, and the ensuing demand that was generated pushed prices through the roof. “It also sent a clear message that, after barely containing their enthusiasm for years as rates were expected to (eventually) normalize, buyers/investors/speculators had a free pass to run amok,” Kavcic notes. Those days are over, Kavcic suggests, and gone with them (in all likelihood) is a period jaw-dropping price growth. Housing Market News AlertsSign up for news alerts on the Toronto housing market Email Confirmation SentIf the Bank of Canada’s July right hike — its first in the better part of a decade — wasn’t a clear enough sign, then the follow-up hike this week may have sealed the deal. “A follow-up hike sends an even stronger message that past price growth shouldn’t be expected to continue,” Kavcic says. The whiz of cars on Kennedy Rd. cuts through the sound of crickets singing and wind rustling through soy fields at Empringham Farms.
The busy north-south corridor can be “dangerous” for farmers moving equipment between fields, said Kim Empringham, who farms 800 acres with her husband. They’re based on 10 acres in Stouffville, but they farm cash crops — corn, wheat, and soy — in fields from Markham to Newmarket. It can take an hour by tractor to travel between them. Some of their equipment is so wide, it crosses the yellow centre line on narrow commuter roads that weren’t built for farmers. At times, they have to stop what they’re doing and wait for rush hour to end, because “it’s just not safe,” she said. It’s a familiar challenge for farmers in the GTA, but things could change: Ontario is developing an agricultural system in the Greater Golden Horseshoe to enhance the area’s agri-food industry. The sector contributed $37.5 billion to Ontario’s GDP in 2016. The agricultural system will protect a continuous base of prime farmlands from development, support the services and communities critical to the farm and food industry and ensure farmers’ needs are considered in future infrastructure planning. “It’s about making sure that the sector, as a whole, can survive,” said Empringham, who also serves as the secretary-treasurer for the York Region Federation of Agriculture. For Janet Horner, the executive director of the Golden Horseshoe Food and Farming Alliance, a simple rhetorical question almost says it all: “Don’t you want to eat?” “Protecting our land, so we are able to be somewhat self-sufficient and food secure is important. If we could eat houses, that’s fine, but we can’t,” she said. Protecting those prime lands for food productions becomes even more important as the population of the Greater Toronto Area is expected to grow by 42 per cent by 2041 and productive farmland is under threat from urban sprawl. Most of Canada’s prime agricultural lands have already been lost, said Keith Currie, the president of the Ontario Federation of Agriculture. Just look out from the top of the CN Tower. “It’s all the best farmland that’s been developed. Essentially it’s entombed forever under asphalt and cement,” he said. While some agricultural lands are protected under current policies, even the Greenbelt Plan, which protected some farmland, including most of the land Empringham farms, left prime agricultural lands outside its bounds. The urban development spreading outward from Toronto’s core has left farmland fragmented, at its worst creating farm islands in a suburban sea. “When you’re surrounded by subdivisions, you can’t farm,” Empringham said. The further your farm is from the other services and businesses that support you, the less competitive you are, she explained. An agricultural system that ensures protection for a continuous tract of farmland creates an incentive for other agri-food businesses — vets, mills, equipment sellers and others — to expand or move into dense agricultural areas, boosting the economic outlook for farms. For farmers, protected land can also give them confidence to plan long-term, without fear they’ll be squeezed out by development. “We know we can stay here, so we can make improvements to the buildings, to the infrastructure that we’ve got here on our home base,” Empringham said. Even if they sell, they know they’ll be selling to farmers, making investments in the farm worthwhile. That’s not something she sees happening on the farms to the south, which fall outside the greenbelt in an area Empringham said is likely to become subdivisions at some point. Developers in the region have a very different outlook. They are concerned the ministry isn’t considering pre-existing infrastructure and development approvals as it moves through the process of establishing an agricultural system. “Remember 90 per cent of the housing that’s built is built by the private sector, so . . . if you want to provide that supply, the industry needs to have some certainty, not just in the future, but also some certainty with the approvals they currently have,” said Joe Vaccaro, CEO of the Ontario Home Builders’ Association. A spokesperson for the Ministry of Agriculture, Food and Rural Affairs said the government is committed to managing growth, while protecting Ontario’s farmland and supporting economic viability. The development of the agricultural system, which stems from the co-ordinated review of four land use plans and was recommended by the review panel chaired by David Crombie, is still in its early stages. The provincial government has developed a draft map of the agricultural system, showing proposed protection boundaries as well as existing infrastructure and services. The draft system map and implementation procedures are out for public consultation until Oct. 4. This concerns Empringham, who notes the summer and fall are a busy time for farmers. For those that can spare two-and-half hours, there’s an online webinar, provided by the ministry, on Sept. 6, on the mapping and implementation procedures, for members of the agricultural community. Once the public consultation is closed, the government will move forward with plans to update the map by the end of this year. Municipalities will have a couple years to refine it as part of their official plan reviews, which are required by July 2022. Down the road, Horner, who is also a Mulmur Township councillor, expects there could be challenges between municipalities and the province over which lands should be protected for agriculture and which should be open to development Home prices continued their multi-month slide in the Toronto area in August, driven by falling demand for detached houses even as condominium prices climbed.
The average home in the Greater Toronto Area sold for $732,292 in August, a 20.5-per-cent drop from the market's peak in April, when prices for all types of homes averaged $920,791, according to the Toronto Real Estate Board. Compared to a year ago, the average price for a home in the GTA is up just 3 per cent, which means a four-month drop in prices since April has eroded almost all of the gains the Toronto market recorded late last year and earlier this year. The total number of homes sold fell 34.8 per cent to 6,357 in August compared to a year earlier. The detached house sector has been hit hardest, with the average price of a detached home in the City of Toronto now down 1.2 per cent compared to a year ago at $1,191,052, while detached house prices in the 905 region surrounding Toronto have fallen 0.1 per cent over the past year to an average of $906,592 in August. From the market's peak in April this year, the average price for detached homes in the GTA has fallen 19.6 per cent to $968,494 in August from $1,205,262 in April, bringing the average detached home price back below $1,000,000 in the region. Semi-detached home prices are still up 12.1 per cent compared to a year ago, however, while townhouse prices are 8.9 per cent higher and condominium prices are up 21.4 per cent since August, 2016. Detached homes have become one of the weakest sectors in Toronto's real estate market in recent months as many buyers opt for more affordable options. Many who own detached houses have also opted not to list expensive homes for sale in a weakening market. The Toronto Real Estate Board said a key reason for weakness in the average sales price in August was a change in the composition of homes sold in the month, with far fewer higher-priced homes sold compared to a year ago. TREB's benchmark house price index, which corrects for the changing composition of homes sold in the period, showed a 14.3-per-cent increase in prices in August. The number of detached homes sold in August fell 41.6 per cent compared to the same month last year, while other types of housing had less severe sales declines. Condominium sales, for example, were down 28 per cent in August, but condo prices climbed compared to July and remain strong on a year-over-year basis. TREB said 11,523 homes of all types were listed for sale in August, the lowest level for August since 2010 and a decline of 6.7 per cent compared to a year ago. Although new listings surged from April to June, the latest numbers suggest many potential sellers are moving to the sidelines while waiting to see if home prices recover this fall. TREB president Tim Syrianos said economic conditions remain strong in Toronto, and his association believes the market could improve this fall as buyers start shopping again. "Positive economic news coupled with the slower pace of price growth we are now experiencing could prompt an improvement in the demand for ownership housing, over and above the regular season bump as we move through the fall," he said in a statement. Jason Mercer, TREB director of market analysis, said the market is currently balanced between buyers and sellers, which means price growth should "normalize" slightly above the rate of inflation. "However, if some buyers move from the sidelines back into the marketplace, as TREB consumer research suggests may happen, an acceleration in price growth could result if listings remain at current levels," Mr. Mercer said. If you’re selling your house in York Region, this is going to come as really bad news.
If you’re looking to buy, you can breathe a sigh of relief, although prices continue to be steep. After a frenzied selling period in the Greater Toronto Area from last fall to April, York Region is suffering among the worst drop in prices of resale detached homes in the GTA, according to new numbers from the Toronto Real Estate Board. On a list of eight GTA communities where prices have plunged by at least 20 per cent since April, York Region takes five spots, more than any other area. Whitchurch-Stouffville tops the list. Prices have plummeted 26 per cent to an average of $1.025 million. Newmarket is next. Prices have fallen 24 per cent to $901,005. In third place, Aurora and Markham tie Toronto West, where prices in all three communities have dropped 23 per cent. The average resale detached house in Aurora now sells for $1.144 million, while in Markham it goes for $1.319 million. In sixth place is Richmond Hill, where prices have fallen 22 per cent to an average of $1.467 million. Rounding out the list are Oshawa, where prices have dropped 22 per cent to $523,943 and Clarington, where prices have plunged 21 per cent to $550,677. Georgina is the only York Region community on the list of prices that have fallen between 15 and 20 per cent since April. Prices have dropped 15 per cent to $604,838. Of the six communities where prices have dipped 10 to 15 per cent, Vaughan tops the list. Prices have dropped 14 per cent to $1.349 million. East Gwillimbury is sixth. Prices have fallen 10 per cent to $966,047. The only GTA communities that saw house prices increase since April were Halton Hills and Scugog. Frank Polsinello, of Remax Polsinello, is surprised how quickly prices have fallen in the region. He doesn’t blame the dramatic drop on the province’s foreign buyers’ tax introduced in the spring. Instead, he believes buyers walked away from the frantic market, leaving a glut of inventory on the market. Great article from Brett Muir on security devices for your home!
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