September Home Sales

TORONTO Oct 15 (Reuters) - Sales of existing homes in Canada rose in September from August, edging up for a second straight month, the Canadian Real Estate Association said on Friday.

The industry group said a total of 33,913 homes changed hands in September, up 3 percent from August, and the highest level since May. Compared with a year earlier, however, sales were down 20.1 percent.

Seasonally adjusted sales were higher in two-thirds of the markets tracked by the association, led by Winnipeg, Calgary, and Montreal.

Analysts say the Canadian housing market is stabilizing as it cools off after helping to drive the economy out of recession last year and early this year.

Most big Canadian banks lowered their five-year fixed rate mortgages this week by 0.10 percent to 5.29 percent, a move that may continue to attract homebuyers.

"This, together with recent developments in existing home sales activity, signal the likelihood that we are closer to a balanced market position than previously envisaged," said TD Bank economist Shahrzad Mobasher Fard. "Some firming up in existing home sales and prices may consequently be in sight."

Risks include a slowing economy and rising household indebtedness, the economist noted.

The national average price dipped 0.2 percent in August from a year earlier to C$331,089 from C$331,683. It was the second straight month that prices were about even with levels in 2009.

The number of new listings rose 0.7 percent from the previous month, and remain 15 percent below the peak reached in April.

Banks Want New Home Buyers To Enter Home Market

Banks move to cut fixed mortgage rates

Most of Canada's major banks have moved to cut their fixed mortgage rates, a response to their own lowered borrowing rates on the bond market.

Since the weekend, Toronto-Dominion, Canadian Imperial Bank of Commerce, Bank of Montreal and National Bank have all slashed their posted five-year fixed mortgage rate to 5.29 per cent.

That's an across-the-board cut of 0.10 percentage points.

The posted mortgage rates at the Royal Bank of Canada and Bank of Nova Scotia already sat at 5.29 per cent.

The rate cuts are in reaction to declining borrowing costs at the banks themselves. When banks lend mortgages to consumers for mortgages, the funds generally come from money the banks raise via bonds to investors. The banks make money by managing the spread between those two rates.

The yield on benchmark five-year government of Canada bonds has dropped significantly in the last month, from 2.26 per cent on Sept. 16 to 1.87 per cent on Oct. 8.

"Rates went down because investors were demanding less of a return for safe investments, and banks are starting to pass that on," said Toronto mortgage lender Marcus Tzaferis of Morcan Direct Inc.

"Until recently, banks were shoring up their balance sheets and enjoying the difference between these spreads."

Up until six months ago, fixed rates were popular, Tzaferis said, and banks pushed people into them, hoping to lock in the profits to be had in the spread between what they paid to borrow and what they earned to lend.

Banks are also lowering the rate to try and spur new buyers to enter the home market. The number of home buyers dropped four straight months before an uptick in August, data from the Canadian Real Estate Association shows.

The Bank of Canada's overnight lending rate, which it started to hike in June after being frozen at zero for nearly a year, has more influence on short-term lending rates and variable-rate mortgages than it does on fixed-rate products.

The banks do offer special rates on mortgage products for certain customers, with many currently below the posted rates. But such rates can be changed, withdrawn or extended at any time, the banks say.

-"For the medium term, we're going to see low fixed-rates and minimal movement on variable rates," Tzaferis said.

Retail Real Estate Market Boom In Canada

A growing trend lately in the Canadian Retail Real Estate Market is a great recovery powered by big-name foreign brands in search of prime mall and main-street spaces and most important shoppers ready to buy.

The reasons why American and Foreign retailers find Canada so attractive is relative value(bargain priced rents) combined with a stronger and more positive economic outlook.

Canada's two most expensive streets, Ste Catherine in Montreal and Bloor Street in Toronto ranked 32nd and 33rd in the world by cost per square foot.

That equates to prime space in these two cities costing $294.12 (US) per square foot compared to the Champs Élysées or Fifth Avenue in New York that rent out for $1,250 (US) per square foot.

Some of the major American and Foreign companies now setting up shop in Canada include:

• Brooks Brothers
• Bath and Body Works
• Victoria's Secrets
• Anthropologie
• Fashion House Bestseller
• Loews Home Improvement

This foreign-led retail Real Estate renaissance will benefit both suburbs and downtowns across Canada and offer a lot more competition for smaller Canadian retailers-and shoppers ready to buy.

Related:

Toronto Financial District Real Estate Redevelopment

Rental Report Toronto Real Estate

Toronto Condominiums continue to record positive gains with price appreciation up in certain types.

There are a lot of new Condos in the Toronto Real Estate Market and more to come!

Read Further:

GTA REALTORS® Report Rental Market Figures

TORONTO, ONTARIO--(Marketwire - Sept. 16, 2010) - During the May-to-August 2010 reporting period, TREB Members reported 6,712 leased condominium apartments and townhomes, up 18 per cent from 5,673 transactions recorded during the same time-period last year.

Average rents climbed in all apartment categories, with the benchmark two-bedroom apartment rent averaging $1,937 across all TREB districts – up three per cent from the average of $1,873 recorded in 2009.

Some differences emerged, however, when the TREB market area was broken down into four regions (west, central, east and north).

Average annual rent growth in the west, east and north districts were above the rate of inflation for most unit types. In the central districts the story was different.

The average annual rate of rent growth was below the rate of inflation for one-bedroom and two- bedroom unit types.

The number of rental listings in the central districts increased strongly year-over-year. With more properties to choose from, rent growth was more subdued.

The jump in rental listings within the central districts was driven by strong condominium apartment completions over the better part of the last year.(1)

Many newly completed units are held by investors who have chosen to rent their units.
(1) For a breakdown of condominium apartment completions by GTA municipality consult the Canada Mortgage and Housing Corporation's "Housing Market Tables: Selected South-Central Ontario" at http://www.cmhc.ca/.

Central Area

In TREB's Central districts, Members reported rental transactions for 2,468 one-bedroom and 1,534 two-bedroom units, which leased for an average of $1,520 and $2,115 per month, respectively. The average one bedroom rent was up one per cent year-over-year, while the average rent for two bedroom units declined slightly.

North Area

Most leased condo-apartment transactions within the North area (512 in total) involved one and two-bedroom units. One-bedroom apartments (245 transactions) rented for an average of $1,343 per month - up four per cent from last year. Two-bedroom apartments (253 transactions) rented for an average of $1,745 per month, up two per cent from last year's average.
124 townhouses were rented in TREB's Central Districts. Three-bedroom units rented for an average of $2,983 per month – up 14 per cent from last year.

81 townhouse units rented in TREB's North area. The majority (50) were three-bedroom units, which rented for an average of $1,770 per month – down one per cent from last year.



East Area

Members reported 179 one-bedroom transactions and 190 two-bedroom transactions in TREB's East Districts. One-bedroom units rented for an average of $1,259 per month – up three per cent from the May to August period in 2009. Meanwhile two bedroom apartments rented for an average of $1,526 per month – up five per cent from last year.

West Area

There were 1,082 apartments rented in TREB's West districts between May and August. Of these, 422 were one-bedroom units, which rented for an average of $1,341 per month. There were 612 two-bedroom apartments which rented for an average of $1,696 per month. Average one and two-bedroom rents were up three per cent and seven per cent respectively.
47 townhouses were leased in TREB's East districts. Of these, 26 were 3-bedroom units, which rented for an average of $1,422 per month – up two per cent from the same period last year.

The West led the GTA in the number of townhouse rental transactions, with 211 in total. Of these, 148 were rentals of three-bedroom units, with an average monthly rent of $1,661 – up seven per cent from last year.

Related:

Toronto Condo Rentals

Toronto Real Estate September Housing Charts

Above is the Toronto Real Estate Board's September housing chart that shows TREB MLS sales monthly over the last three years for comparison.

Here, we have the Toronto Real Estate Board's MLS average resale home price monthly over the last three years.

Above, we have the Toronto Real Estate Board's MLS monthly average price since Jan-95.

I am the number one fan of the Toronto Real Estate housing charts.

Why?

The Toronto Real Estate Board( TREB ) is transparent in all its Real Estate statistics, bi-weekly, monthly and so on.

Realtors know what they are doing and how the Real Estate Market is going in Toronto and the GTA.

Better still, TREB is not a newspaper or a stock broker (analyst?) giving advice on Real Estate trends.

Resale Homes Exempt from HST

Concerned that homebuyers are uncertain about the Harmonized Sales Tax's (HST) applicability on real estate purchases, Greater Toronto REALTORS® are reaching out to consumers to eliminate misconceptions.

Using social media channels and an ongoing series of newspaper columns, the Toronto Real Estate Board (TREB) is conveying to consumers that the HST does not apply to the purchase price of resale homes.

"Although the HST applies to newly constructed homes and professional services associated with real estate transactions, the purchase price of a resale home is exempt from this tax," said TREB President Bill Johnston.

Since resale housing was never subject to the Provincial Sales Tax (PST) or the federal Goods and Services Tax (GST), it continues to be exempt from the new HST.

Conversely, newly constructed homes were previously subject to the GST, meaning that the HST now applies. The provincial government however, provides a rebate of 75 per cent of the PST on the first $400,000 on new homes, to a maximum of $24,000.

"When considering the purchase of any type of home, it is important to budget for additional costs, like the Land Transfer Tax and property taxes. Fortunately though, the purchase price of a resale home is one area of relief for taxpayers and recognizing that a home is many people's single largest investment, this exemption is an important consideration."

TREB began informing Greater Toronto Area homebuyers of this important distinction prior to the introduction of the new tax and plans to continue driving home the message.

Source:

Toronto Real Estate Board

Toronto Real Estate Housing-September Results

The 6.310 residential housing resales in Toronto and the GTA were down 23 per cent from September 2009.

The average resale home prices increased 6.5 per cent in the City of Toronto (416 area) and the average resale home price in the GTA (905 area) was up 4.2 per cent from September 2009.

The Toronto Downtown Condos Average Price for September ranged from -4.5 per cent to 9.5 per cent in several of the Toronto Real Estate's Central Districts.


Read The Toronto Real Estate Board's September Report below:

GTA Housing Market Conditions Remain Healthy in September

October 5, 2010 -- Greater Toronto REALTORS® reported 6,310 sales through the Multiple Listing Service® (MLS®) in September 2010. This represented a 23 per cent decrease compared to the 8,196 sales recorded during the same period in 2009. Through the first nine months of the year, sales amounted to 69,069 – up four per cent compared to the first three quarters of 2009.

"The level of sales in the second half of 2010 has been lower, representing a balancing out period following record levels of sales in the latter half of 2009 and first few months of 2010. We remain on track for one of the best years in history for existing home transactions in the GTA," said Toronto Real Estate Board President Bill Johnston.

The average price for September transactions was $427,329– up five per cent compared to the average of $406,877 reported in September 2009. The average selling price through the first nine months of the year was $429,657.

"Resale homes in the GTA remain affordable," said Jason Mercer, TREB's Senior Manager of Market Analysis.

"It is important to consider the positive impact of declining mortgage rates over the past two decades. Simply considering home prices relative to incomes does not allow for an accurate analysis of affordability," continued Mercer. "The share of average household income going toward a mortgage payment on the average priced home in the GTA remains within accepted lending guidelines. This is why the average home selling price has continued to grow."

Median Price
In September, the median price was $360,325, from the $347,000 recorded during September of 2009.

RE/MAX Market Trends Report Fall 2010

RE/MAX reports in their latest Real Estate Market reports that 11 of the Canada's 19 largest Real Estate Markets are ahead in sales activity from the same time last year.

Luxury homes across Canada all reported a surge of sales of 20 per cent or more.

Read the full CBC news report below:

Canada's real estate market is showing signs of improvement after slowing noticeably over the summer months — but is a long way from the highs of late 2009, according to Re/Max.

According to Tuesday's market trends report from Re/Max, sales activity so far this year has eclipsed last year's level in 11 of the country's 19 largest real estate markets.

"The outlook for the residential housing market has vastly improved over the past three months. Yet, markets are expected to record softer sales activity in the final quarter of the year, in comparison to the same period in 2009," says the report from Re/Max, the country's largest real estate firm.

On average, prices have been moving lower since peaking earlier in the spring, but over a longer time frame, prices are up across the board, with five areas reporting double-digit gains since the start of the year.

By far the strongest area of activity was sales of luxury homes, Re/Max said.

All markets reported a surge of 20 per cent or more in upper-end home sales. Sixty-eight per cent of markets saw upscale home sales climb in excess of 40 per cent, while 21 per cent boasted triple-digit gains.

"If anything demonstrates the underlying health of the national housing picture, it’s the surge in sales of luxury properties this year," said Michael Polzler, Re/Max's executive vice-president for Ontario and Atlantic Canada.

"We know from experience that this segment of the market is usually the first to show pressure cracks when a market is softening [and] that has certainly not been the case this year, even during the summer slowdown."

Related:

Toronto Downtown Condos Average Price-September

Home Mortgage Rules Could Tighten

The Canadian mortgage rules could tighten again when pre-budget discussions to change housing regulations take place in Ottawa this Monday, according to a source close to the situation.

Changing the mortgage rules again seem to stem from the Bank Of Canada's governor who warned that consumer borrowing could not continue at its present pace.

Canadian debt is rising to 146 per cent of personal disposable income with the majority of that debt coming from mortgage debt or home equity lines of credit.

The recent slide in the Real Estate market has Ottawa rethinking early attempts in tightening mortgage rules.

The latest Real Estate Statistics show average prices falling and sales down as much as 20 per cent from a year ago.

If the government goes ahead and imposed rules with lower amortization periods, or increased the minimum down payment, it could seriously impact the Canadian housing market.

Source: The Financial Post

Related:

Toronto Real Estate Housing Market Charts August 2010

Toronto Real Estate Listings Search