Category Archives: Before You Sell

Ontario Residents Feeling Favourable About Real Estate Markets

Twice each year, the Ontario Real Estate Association polls Ontario residents’ thoughts on home ownership and their local economies in the Ontario Homeownership Index.

This latest poll found that Ontario residents have experienced the largest positive increase in positive sentiment of the local real estate market and economy since 2013, when the Index began.

In the Greater Toronto Area:

59% of residents in the GTA said their real estate market is stronger than last year.

70% of residents in the GTA think their local economy is good.

63% of residents say their local residential real estate market is favourable.

59% of residents in the GTA said the real estate market in their city will be stronger in the next year.

“With significantly-improved perceptions across all markets and timeframes, it is clear to see why the index has posted its biggest gain to date,” said the vice president of Ipsos Public Affairs, Sean Simpson. “As home prices and sales figures throughout the province continue to astound, it is encouraging to see the Ontarians are feeling optimistic about economies and real estate markets, both provincially and locally. The last time Ipsos polled on Ontario real estate, perceptions of the province’s economy were more negative. Midway through 2016, the economic mood has improved considerably, and while there is undoubtedly still room for improvement, opinion has rebounded, likely carrying perceptions of the real estate market along with it.”

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Home Sales Drop Across Canada Again In June 2016

Home sales across Canada dropped by 0.9 per cent from the month of May to June, however actual (not seasonally adjusted) sales were up by 5.2 per cent year-over-year in June.

“While national sales activity remains strong, there are still significant differences in housing market trends across Canada,” said Cliff Iverson, the president of the Canadian Real Estate Association. “While home sales activity and price growth are running strong in BC and Ontario, they remain subdued in other markets where homebuyers are cautious and uncertain about the outlook for their local economy. All real estate is local, and Realtors remain your best source for information about sales and listings where you live or might like to in the future.”

The average price for a home in Canada increased by 11.2 per cent nationally year-over-year in June, however if Greater Vancouver and Greater Toronto are excluded that number drops to 8.4 per cent.

Gregory Klump, the chief economist for the Canadian Real Estate Association, said that, “June sales extend trends observed the previous month. As was the case in May, the monthly decline in national sales activity was led by the Lower Mainland of British Columbia and markets in or around the GTA. In keeping with the law of supply and demand, exceptionally low inventory combined with high demand continues to translate into strong price growth in these housing markets, where year-over-year price gains have been running in double-digit territory since late last year.”

GTA Low-Rise Home Prices More Than Doubled Over 10 Years

In June 2006, the average price of a new low-rise home in the Great Toronto Area was $393,398, and now 10 years later the average price has hit $887,543 according to BILD, the Building Industry and Land Development Association.

The term “low-rise homes” applies to townhomes, semi-detached and detached homes. Within the last year, the price of these homes increased from $785,800 to today’s high, a jump of over $100,000

Michelle Noble, the vice president of communications for BILD, said that, “The price of low-rise homes has grown exponentially as supply has dropped.”

In 2006, new homes in builders’ inventory totaled almost 30,000, more than half of which were low-rise homes. This year, there were 18,427 homes available, only 2,000 of which were low-rise homes. This is a near record low.

She continued, “Supply of new low-rise homes has decline dramatically in the last 10 years due to government policy and lack of available serviced land. Demand for ground-related homes is far outpacing supply, with some projects selling out just hours after launching.”

Toronto Home Sales And Prices Increase In June

According to the Toronto Real Estate Board, the number of home sales during the month of June was 7.5 per cent higher than the number seen in June of last year, while listings decreased by 3.8 per cent.

“As I start my term as TREB President, we are certainly in an interesting environment for ownership housing,” said incoming Toronto Real Estate Board president Larry Cerqua. “There is no doubt that demand is at a record level, but would-be home buyers continue to face an uphill battle against a constrained supply of listings, which has perpetuated strong price growth. Buyers and sellers alike continue to benefit from the value a Realtor brings to a transaction.”

He continued, “As the federal, provincial and local levels of government discuss housing policy in the coming months, issues affecting the lack of supply in the GTA should be of paramount importance. TREB will be undertaking, and making public, results of additional research in the second half of 2016, with the goal of proactively adding to the housing policy discussion.”

The average selling price for a home in Toronto during June 2016 was $746,546, which is an increase of 16.8 per cent over last year.

Jason Mercer, the Toronto Real Estate Board’s Director of Market Analysis, said that, “When TREB surveyed consumer intentions for 2016, we found that the majority of GTA households who were likely to purchase a home continued to be pointed towards some form of ground-oriented housing. This is why we continue to see strong competition between buyers in many neighbourhoods where supply remains constrained.”

Ontario Housing Activity Expected To Stay Elevated

The Canada Mortgage and Housing Corporation’s Ontario Housing Market Outlook says that housing activity in Ontario is expected to remain elevated before easing up next year.

Housing starts in Ontario are now expected to be higher by almost 2,000 units in 2016, with another 213,000 to 231,500 units total in 2017.

Prices in Ontario are also expected to continue to grow, however at a slower rate overall despite strong short-term growth.

The average selling price for a home in Ontario will be between $505,500 and $516,100 this year, and between $517,100 and $535,400 next year.

“Despite an improving Ontario economy, housing activity is expected to ease over the forecast period as the cost of owning a home continues to increase,” said the Regional Economist (Ontario) for the Canada Mortgage and Housing Corporation, Ted Tsaikopoulos. “However, homes in southwestern and southern Ontario markets bordering the GTA tend to be more affordable, thus we expect a growing share of activity in those centres as we do for higher density housing which includes less expensive rental accommodation.

Being Debt-Free A Priority for Canadians

A recent survey by Manulife Bank Canada has found that some homeowners are struggling to pay their bulls, but that being debt-free is a major priority among homeowners in Canada.

According to the survey:

  • 60% of homeowners are not sure if they’ll have enough saved for retirement
  • 37% couldn’t pay their bills at least once within the last year
  • Over 30% don’t expect to be mortgage-free by retirement
  • More than a quarter of homeowners thing home equity will make up the majority of their retirement wealth
  • 74% of people over 50 want to remain in their current home during retirement

“Our research has consistently found that becoming debt-free is among the top financial priorities for Canadian homeowners,” said the President and Chief Executive Officer of Manulife Bank of Canada, Rick Lunny. “They must also find a balance between debt repayment and saving for retirement so they don’t end up house-rich and asset poor. The best option is to work with an advisor to get a plan in place well before retirement to balance debt repayment, retirement savings and day-to-day spending.”

Those who choose to remain savings poor but house rich during their retirement may have to borrow against their home equity, downsize their home, accept a lower standard of living or retire later.

What Are Millennials Looking For When Home Buying?

A Consumer Alerts report from earlier this year found that the main priority for Millennials who are looking to buy homes that are ready to move into, or homes that don’t need much work.

In Canada, there are over 8 million Millennials. This provides a good amount of insight for homeowners who are looking to sell in the near future, and may want to boost their home’s resale value by up to 35 per cent if they make the right kind of renovations.

The same report found that out of all the possible features in a home, a modern, top-of-the-line kitchen is the most desired for Millennials, and updating your appliances isn’t something out of reach for most home sellers. It can even boost the sale price of your home.

Open floor plans are also high on the list for Millennials, as is hardwood flooring and energy efficiency.