SONJA NIELSEN'S BLOG

Toronto Real Estate Market Report – July/August 2010

sonjanielsen — Thu, 16 Sep 2010 16:24:07 +0000

There were 6600 homes sold on TREB in July, the fourth consecutive month with a decline in the residential home sales. The peak sales for the year so far was in April, the sales in July represent 40% of those sold in April. Actually, lower numbers were expected in July and the same number is forecast for August 2010.

The condo market is more difficult to forecast because of the continuing supply of new developments coming to the markets, significantly increasing the supply of units. However, the population growth and lifestyle changes increase a demand for the downtown living. The downtown condos at $500-600 per sq.ft. are much lower than other major world class cities and also they are under priced to other Canadian markets if income levels and migrations is factored.

Toronto Real Estate Market Report – June/July 2010

sonjanielsen — Tue, 06 Jul 2010 15:38:27 +0000

In terms of sales and prices the Toronto Real Estate market has peaked but that does not mean it is bad news. Looking forward the market will be more balanced. The economy is coming out of the recession, the impact of the HST is not as bad as was predicted and the biggest factor that will impact the market is the increasing supply of the property listings.

TREB Residential sales were down 1% from May of last year and were lower than in April 2010. However, the overall were 2% higher than a year ago, downtown condos were even better – 12% higher than last year, Year-to-date sales for 2010 will be 52,000 condo units as compared to 42,000 last year.

There are many positive factors about this condominium market, especially the downtown condos. There are still a lot of buyer and they have a lot more to choose from. The condos that sold – days-on-market averaged just 18 days and the sold price averaged at 99% of the list price. But the sale-to-list ration dropped to just over 30%.

Pricing of the property is very important, the prediction is the the prices today will be higher that the ones later this year.

Toronto Real Estate Market Report – April 2010

sonjanielsen — Thu, 15 Apr 2010 16:14:00 +0000

The Real Estate market in Toronto is moving towards the balance. Even though there were record sales in March – over 10,000 units, the end is approaching and it will probably come before July 1st introduction of the HST in Ontario. The prediction is the the market will peak in April. The multiple offer sales are already down and if there is a multiple offer sale there is no bidding way over the listing price. The other factor is the number of listings coming on MLS. Presently there are over 19,000 listings on TREB and 1,100 for the downtown condominiums. The sale-to-list (sales to active listings in a month) is now 50% compared to 80% a while ago and it might go down to 25-35% in the nearest future.

The Government is also helping to slow the market down with the recently introduced new CMHC lending policies that will affect buyers with the low down payment and investors (see Blog, dated March 25, 2010).

Impact of HST on the Real Estate market in Ontario

sonjanielsen — Mon, 29 Mar 2010 17:59:38 +0000

On July 1, 2010 the new Harmonized Sales Tax (HST) will become effective in the Province of Ontario. The HST will combine the 5% GST and 8% PST into one tax (13%) and will apply tomost goods and services that previously only charged the GST.

The HST will have a tremendous impact in several areas of the Real Estate market:

- new homes, which are currently exempt from PST, will be subject to the HST. The homes under $400,000 will qualify for the 6% rebate, full HST will now apply to the homes over $400,000.
- the closing cost (real estate commissions, lawyers fees, supplies, courier services etc.) will be subject to the HST.
- the cost of hydro, natural gas will increase by 8% (previously only GST applied to these).
- in condominiums the maintenance fees will be increased to accommodate the more expensive fees for the property management, repairs and other services that will also be subject to the HST.
- for the same reason rents might increase to cover the more expensive operating cost of the rental buildings.

To soften the impact of the HST on the consumer, the province promises the HST rebates when filing for the income taxes but it is to be seen what the rebates will be and who will qualify to receive them.

New rules for CMHC mortgages

sonjanielsen — Thu, 25 Mar 2010 15:11:48 +0000

The new rules for the government-backed insured mortgages, recently introduced by the Finance Minister Jim Flaherty, will take effect on April 19, 2010.

There are 3 basic changes to the existing rules:

1. Borrowers will now have to qualify for a mortgage based on the five-year fixed rate regardless of the type of the mortgage they will choose.
2. When refinancing the property, the owner can now refinance only a maximum of 90% of the value of the property instead of 95%.
3. If the property is purchased as an investment, the buyer will need 20% of the down payment to qualify for the government-backed mortgage insurance.

These changes have been designed to protect the home owners’ debts if the interest rates increase.

Toronto Real Estate Market Report – March 2010

sonjanielsen — Thu, 25 Mar 2010 15:10:39 +0000

The Spring market has arrived in Toronto about one month to early. According to the report by the Toronto Real Estate Board, sales through the Multiple Listing Service (MLS) in February were 7300 units, this represents a 77% increase over February 2009. Sales were indeed a record high, higher than those in 2007 and 2008. The March sales are already tracking at 9,800 units, this will easily surpass the number for the previous years. While the lack of snow might be a factor for the high sales volume, it is apparent the there is a rush to beat the upcoming deadline of July 1st for the Harmonized Sales tax (HST).

The 2010 forecast by Re/Max Condos Plus called for a strong 1st half of the year sales and a slower 2nd half of the sales due to the 3 factors:

- introduction of the HST (this will not impact the prices in the resale market but will increase the cost of services and new properties over $400,000)
- there is an expectation of the bump in Bank of Canada interest rates
- there will be larger sales inventory, more listings are expected to come to the market (particularly in the condo segment)

With the increasing sales, listings inventory is accelerating at an even faster pace. At the end of January, there were 12,000 active listings; at the end of February, 14,514 active listings; in March there are already 17,000 listings and more properties are listed every day. This trend is the same in both, housing and condo market.

There is one more consideration that might have an impact on the market – new mortgage qualification rules coming in April 2010.

Welcome to My Blog

sonjanielsen — Mon, 15 Mar 2010 15:22:51 +0000

“In real estate, I found my calling. In condominium, I found my specialty. For me it’s so enriching to have the longevity in this business to help the grandchildren of my first clients”.

I hope you will enjoy the updates of the forever changing Real Estate market I will be posting on my blog. Please feel free to post your comments or contact me if you need any more information about the specific topics I will be writing about.