The Canadian housing market is making a transition to a much slower pace growth compared to the surge seen in the past decade, according to a Royal Bank (TSX: RY) housing market outlook.
The report released Thursday said home resales are expected to grow by 0.9 per cent this year and remain unchanged in 2012, while home prices will increase by 4.4 per cent this year and 0.4 per cent in 2012.
“Such results would mark a significant slowing relative to the performance during the 2002-2008 period,” senior economist Robert Hogue wrote in the report.
Since 2008, the transition in the housing market has been extremely volatile reflecting the impact of events both at home and abroad, it said.
Those changes include a global recession, as well as domestic policy changes — such as a sharp drop in interest rates, three rounds of mortgage rule changes and the introduction of the HST in Ontario and British Columbia.
“Our view is that less turbulent economic and policy environments will support a smoother process going forward,” Hogue said.
“The main policy shift will be one toward progressively higher interest rates, which will cool demand but not deep-freeze it.”
At the provincial level, RBC forecasts that the Alberta market will post the strongest growth in home sales this year and next, while it expects a modest decline in Quebec.
Meanwhile, “perplexing developments” in the Vancouver area, where average home prices have surged despite slower resales, are expected to be partly reversed, making B.C. the only province to see a price decline in the bank’s 2012 forecast.
Home sales have rebounded from lows reported last summer to 465,000 units in the first quarter, although they have softened to 443,000 units in the second quarter.
“This slowing is in line with our view that the latest changes in mortgage lending rules announced in January of this year and implemented in March and April brought forward some demand that would have otherwise occurred later on,” Hogue said.
“In turn, the second-quarter slowing represented somewhat of a ‘payback,’ which will then be followed by a return to mildly stronger activity.”
Source: VINCE TALOTTA/TORONTO STAR
Monday, July 25, 2011
Friday, July 08, 2011
Competition Bureau updates charges against Toronto Real Estate Board
Increase text size The Toronto Real Estate Board’s attempt to appease the country’s Competition Bureau has fallen flat, with the Bureau filing updated charges that lambaste the board’s plan that would allow agents to set up private websites for their clients.
The board’s proposed policy falls short in two key areas, the Competition Bureau said, and does nothing to address its anti-competitive concerns. Real estate agents would not be able to post historical sales data on the sites, or information about commission fees offered by selling agents to agents representing buyers.
Historical sales data is a key way for buyers to gauge a home’s value, because they can see how often the property has changed hands and for how much. If consumers get all of the data on a password protected website, they could expect to pay less in commission fees.
“If the proposed rules are enacted, they will continue to prevent member brokers from operating a [website],” the revised statement of claim states. “TREB will continue to thwart the development of new, innovative, and efficient models of providing real estate brokerage services using the Internet. The proposed rules will discriminate against brokers seeking to innovate, and will constitute a further anti-competitive act by TREB.”
The Toronto board already allows real estate agents to provide a great deal of information to buyers – such as the number of days a house has been on the market and previous selling prices – in person, by telephone or e-mail, but they are not allowed to create websites where customers can look up the information on their own.
The board was quick to react after the Competition Bureau filed charges, passing a policy that would allow agents to set up the sites as long as certain guidelines were followed – the sites must be password protected, available only to clients, TREB would be able to monitor activity, sellers could opt out of having their home appear on the site and the seller's name and contact information couldn’t appear in the listings.
But without sales data or commission information, the Competition Bureau said the board hasn’t gone far enough. That’s because the Bureau wants brokers to be able to use all of the sales data generated by the board to create products that ultimately lower fees for consumers.
Any restriction on the flow of information is unacceptable, Competition Commissioner Melanie Aitken said. Real estate fees are artificially high in Toronto, she said, because brokers aren’t allowing their clients to do some of the legwork themselves.
Some brokerages in the United States offer their clients as much as 50 per cent off their commission fees if they use a website to do their own research, she said.
The real estate board’s executives have been working on a policy for its 30,000 members since last August, and met with the Bureau several times prior to the charges. Former president Bill Johnston has spoken out strongly against Ms. Aitken’s office, accusing her of using her pulpit to advance her career at the expense of the country’s real estate industry.
Friday, the board said it stood by its new policy. If the two sides can’t find a way to break the impasse, the case will go to the Competition Tribunal, which is allowed to issue fines and could issue binding resolutions to force the board to make changes if it felt the charges were warranted.
TREB president Richard Silver said the board’s main concern is that the Bureau wants it also to publish sale prices for homes that have been technically sold, but haven’t officially closed yet. That could compromise the seller’s ability to get the same price if the deal falls through, he said.
“The Commissioner is pressuring TREB to make changes to its own property listing system that TREB believes would violate consumer privacy laws, reduce the quality of the system, and diminish protection for consumers who list their homes in the Greater Toronto real estate market,” he said.
“TREB appreciates that the Commissioner has a job to do, but TREB is the wrong target. The Commissioner obviously has recognized that her initial application back in May was faulty. Instead of working with TREB to find a practical solution for consumers, the Commissioner has today decided to pursue an additional legal process that will further delay improvements and further disadvantage consumers.
Source: Steve Ladurantaye, Globe and Mail
The board’s proposed policy falls short in two key areas, the Competition Bureau said, and does nothing to address its anti-competitive concerns. Real estate agents would not be able to post historical sales data on the sites, or information about commission fees offered by selling agents to agents representing buyers.
Historical sales data is a key way for buyers to gauge a home’s value, because they can see how often the property has changed hands and for how much. If consumers get all of the data on a password protected website, they could expect to pay less in commission fees.
“If the proposed rules are enacted, they will continue to prevent member brokers from operating a [website],” the revised statement of claim states. “TREB will continue to thwart the development of new, innovative, and efficient models of providing real estate brokerage services using the Internet. The proposed rules will discriminate against brokers seeking to innovate, and will constitute a further anti-competitive act by TREB.”
The Toronto board already allows real estate agents to provide a great deal of information to buyers – such as the number of days a house has been on the market and previous selling prices – in person, by telephone or e-mail, but they are not allowed to create websites where customers can look up the information on their own.
The board was quick to react after the Competition Bureau filed charges, passing a policy that would allow agents to set up the sites as long as certain guidelines were followed – the sites must be password protected, available only to clients, TREB would be able to monitor activity, sellers could opt out of having their home appear on the site and the seller's name and contact information couldn’t appear in the listings.
But without sales data or commission information, the Competition Bureau said the board hasn’t gone far enough. That’s because the Bureau wants brokers to be able to use all of the sales data generated by the board to create products that ultimately lower fees for consumers.
Any restriction on the flow of information is unacceptable, Competition Commissioner Melanie Aitken said. Real estate fees are artificially high in Toronto, she said, because brokers aren’t allowing their clients to do some of the legwork themselves.
Some brokerages in the United States offer their clients as much as 50 per cent off their commission fees if they use a website to do their own research, she said.
The real estate board’s executives have been working on a policy for its 30,000 members since last August, and met with the Bureau several times prior to the charges. Former president Bill Johnston has spoken out strongly against Ms. Aitken’s office, accusing her of using her pulpit to advance her career at the expense of the country’s real estate industry.
Friday, the board said it stood by its new policy. If the two sides can’t find a way to break the impasse, the case will go to the Competition Tribunal, which is allowed to issue fines and could issue binding resolutions to force the board to make changes if it felt the charges were warranted.
TREB president Richard Silver said the board’s main concern is that the Bureau wants it also to publish sale prices for homes that have been technically sold, but haven’t officially closed yet. That could compromise the seller’s ability to get the same price if the deal falls through, he said.
“The Commissioner is pressuring TREB to make changes to its own property listing system that TREB believes would violate consumer privacy laws, reduce the quality of the system, and diminish protection for consumers who list their homes in the Greater Toronto real estate market,” he said.
“TREB appreciates that the Commissioner has a job to do, but TREB is the wrong target. The Commissioner obviously has recognized that her initial application back in May was faulty. Instead of working with TREB to find a practical solution for consumers, the Commissioner has today decided to pursue an additional legal process that will further delay improvements and further disadvantage consumers.
Source: Steve Ladurantaye, Globe and Mail
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