Five months after buying one of Toronto’s new luxury hotel condominiums, Oliver Baumeister is girding for a glut of suites like his to hit the market as the biggest names in the hotel business open hundreds of units in Canada’s largest city.
Baumeister, himself a real estate agent, is in no rush to sell. When Toronto’s untested market for five-star condo living absorbs the surplus — say by 2016 — he intends to offload his sky-high unit for a tidy 20% profit, and look for his next Canadian real estate investment.
“A bunch of it will sit for a while and it will take time to sell,” said Baumeister, who has been buying Toronto condominiums with his brother for the past four years.
“But we bought it with the belief that the Toronto hotel condo market definitely has a future. When we sell, hopefully … we’ll see about a 20% profit.”
The model of ultra-fine condos attached to luxury hotels isn’t new — cities like Hong Kong and New York are full of them.
But Toronto, a relatively small city with no five-star hotel condominiums a year ago, is coming to the game late but with a vengeance.
By the end of this summer Toronto will have four such projects, as Four Seasons, Ritz Carlton, Trump and Shangri-La open massive towers in a city where a red-hot market for all types of housing has brought rising concern about a real estate bubble.
The granite-and-glass towers, including two of Canada’s tallest residential buildings, are opening in quick succession, adding hundreds of hotel rooms and more than a thousand condominiums just as Canadian housing hype hits a fever pitch.
Signs of success are mixed. None of the four projects, whose condos cost from just under $1-million to $28-million, has sold out, and the push by developers to sell their remaining units before a resale market kicks in has the feel of a ticking time bomb.
Source: Financial Post (Andrea Hopkins, Reuters)
Monday, May 14, 2012
Thursday, April 19, 2012
Canadian real estate market a tale of two cities
It’s a title Vancouver is more than happy to relinquish.
Canada’s hottest real estate market is finally cooling off, new sales figures show, much to the relief of those who have grown weary of talk of a West Coast property bubble.
At more than $761,000, the average cost of a Vancouver home is still higher than anywhere, but was 3.1 per cent lower in March than in the same month last year. Sales activity is slower, too, down 22.3 per cent through the first three months of 2012.
But the data from the Canadian Real Estate Association indicate that Toronto’s sizzling market is still gaining momentum, with average prices in the country’s largest city soaring more than 10 per cent last month, to about $504,000.
The diverging fortunes of the country’s two most important real-estate markets adds to the complexity of the policy decisions facing Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney. Both have issued repeated warnings about the high level of personal debt that Canadians are taking on to buy increasingly expensive houses.
But Mr. Flaherty has said he is reluctant to tighten the rules on mortgages again, believing that the market will correct itself, while Mr. Carney is unlikely to raise interest rates any time soon for fear of driving up the currency and hurting other parts of the Canadian economy.
Toronto and Vancouver together account for about one-quarter of all real estate activity in Canada.
The opposing directions of the two cities have resulted in a country-wide average price that’s edging lower, easing economists’ concerns of a U.S.-style crash. And should the trend continue, it may also ease the worries of officials in Ottawa.
“When it comes to housing, Toronto is not Canada, nor is Vancouver,” Douglas Porter, an economist in Toronto at BMO Nesbitt Burns, said in a report.
“For most cities, the market looks well balanced, and is broadly moderating on its own accord.”
Nationally, the average price of a home fell 0.5 per cent to $369,677 in March from last year while sales rose 1.6 per cent.
“The slight decline in the national average price points to a tug of war between Toronto and Vancouver,” Gregory Klump, chief economist for the Canadian Real Estate Association, said in a statement. “The decline in average price reflects the change in Vancouver’s sales mix, not housing price deflation.”
Despite the price drop, few in Vancouver are calling this a correction. The spring of 2011 saw a spike in sales of expensive luxury homes in Vancouver that is now skewing the data for 2012, some argue.
Real estate agent Steve Di Fruscia, who specializes in selling high-end homes, said the Vancouver market, particularly in pricey areas such West Vancouver, are in the midst of a “typical cooling-off period,” after the frenzied activity of a year ago
“We’re still on a very optimistic, greedy part of the year where people are trying to cash in on extra high prices, believing that we will have the same spring as we did last year and prices will continue to skyrocket another 10 to 15 per cent,” he said.
Mr. Di Fruscia markets his clients’ properties in both Canada and mainland China. Some have blamed Vancouver’s high prices on an influx of so-called “foreign” and “speculative” money from foreign investors. However, Mr. Di Fruscia said 95 per cent of his sales of Vancouver homes are to Chinese buyers who are immigrating to Canada as citizens or permanent residents.
There are no statistics on what, if any, impact foreign investors are having on the real estate market in Vancouver, Toronto nor the rest of Canada. Cameron Muir, chief economist of the B.C. Real Estate Association, suggested that in Vancouver, the number of foreign buyers are “much lower” than many people think, accounting for between 1 per cent and 3 per cent of the market.
In Toronto, a low supply of properties is leading to bidding wars that drove up the average price of Toronto homes to $504,117 in March. Toronto’s average home prices have set a new record high in every year since 2000 and 2012 should be no different.
“We’d love to have more inventory to sell because there’s no shortage of buyers looking for good inventory,” said Kevin Somers, the broker area manager for Royal LePage Real Estate Services Ltd. in central Toronto.
“As long as the basic economic indicators and interest-rate outlook remain positive, people will always need a place to live and would rather own than rent in most cases.”
Source: The Globe and Mail (ANDY HOFFMAN AND NICOLAS JOHNSON)
Canada’s hottest real estate market is finally cooling off, new sales figures show, much to the relief of those who have grown weary of talk of a West Coast property bubble.
At more than $761,000, the average cost of a Vancouver home is still higher than anywhere, but was 3.1 per cent lower in March than in the same month last year. Sales activity is slower, too, down 22.3 per cent through the first three months of 2012.
But the data from the Canadian Real Estate Association indicate that Toronto’s sizzling market is still gaining momentum, with average prices in the country’s largest city soaring more than 10 per cent last month, to about $504,000.
The diverging fortunes of the country’s two most important real-estate markets adds to the complexity of the policy decisions facing Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney. Both have issued repeated warnings about the high level of personal debt that Canadians are taking on to buy increasingly expensive houses.
But Mr. Flaherty has said he is reluctant to tighten the rules on mortgages again, believing that the market will correct itself, while Mr. Carney is unlikely to raise interest rates any time soon for fear of driving up the currency and hurting other parts of the Canadian economy.
Toronto and Vancouver together account for about one-quarter of all real estate activity in Canada.
The opposing directions of the two cities have resulted in a country-wide average price that’s edging lower, easing economists’ concerns of a U.S.-style crash. And should the trend continue, it may also ease the worries of officials in Ottawa.
“When it comes to housing, Toronto is not Canada, nor is Vancouver,” Douglas Porter, an economist in Toronto at BMO Nesbitt Burns, said in a report.
“For most cities, the market looks well balanced, and is broadly moderating on its own accord.”
Nationally, the average price of a home fell 0.5 per cent to $369,677 in March from last year while sales rose 1.6 per cent.
“The slight decline in the national average price points to a tug of war between Toronto and Vancouver,” Gregory Klump, chief economist for the Canadian Real Estate Association, said in a statement. “The decline in average price reflects the change in Vancouver’s sales mix, not housing price deflation.”
Despite the price drop, few in Vancouver are calling this a correction. The spring of 2011 saw a spike in sales of expensive luxury homes in Vancouver that is now skewing the data for 2012, some argue.
Real estate agent Steve Di Fruscia, who specializes in selling high-end homes, said the Vancouver market, particularly in pricey areas such West Vancouver, are in the midst of a “typical cooling-off period,” after the frenzied activity of a year ago
“We’re still on a very optimistic, greedy part of the year where people are trying to cash in on extra high prices, believing that we will have the same spring as we did last year and prices will continue to skyrocket another 10 to 15 per cent,” he said.
Mr. Di Fruscia markets his clients’ properties in both Canada and mainland China. Some have blamed Vancouver’s high prices on an influx of so-called “foreign” and “speculative” money from foreign investors. However, Mr. Di Fruscia said 95 per cent of his sales of Vancouver homes are to Chinese buyers who are immigrating to Canada as citizens or permanent residents.
There are no statistics on what, if any, impact foreign investors are having on the real estate market in Vancouver, Toronto nor the rest of Canada. Cameron Muir, chief economist of the B.C. Real Estate Association, suggested that in Vancouver, the number of foreign buyers are “much lower” than many people think, accounting for between 1 per cent and 3 per cent of the market.
In Toronto, a low supply of properties is leading to bidding wars that drove up the average price of Toronto homes to $504,117 in March. Toronto’s average home prices have set a new record high in every year since 2000 and 2012 should be no different.
“We’d love to have more inventory to sell because there’s no shortage of buyers looking for good inventory,” said Kevin Somers, the broker area manager for Royal LePage Real Estate Services Ltd. in central Toronto.
“As long as the basic economic indicators and interest-rate outlook remain positive, people will always need a place to live and would rather own than rent in most cases.”
Source: The Globe and Mail (ANDY HOFFMAN AND NICOLAS JOHNSON)
Tuesday, March 27, 2012
Bidding wars spark complaints from homebuyers, says Real Estate Council of Ontario
The Real Estate Council of Ontario is feeling the heat from Toronto’s hot housing market with a surge in calls from potential homebuyers upset they’ve lost out — or won — high-stakes bidding wars.
About 30 per cent of the 15,000 inquiries the council has had in the last year are from house hunters overwhelmed by the multiple bids process, says Bruce Matthews, deputy registrar in charge of complaints for RECO, the regulatory body for Ontario’s 58,000 realtors.
What’s most worrisome is how many homebuyers have waived home inspections in a desperate bid to win the house of their dreams, only to end up with a nightmare of costly repairs and upgrades later, says Matthews.
The concerns and confusion around multiple offers, which have spiked across the GTA in the last six months in particular, are part of the reason the council is launching a new education campaign this week.
The ads on public transit and YouTube are meant to encourage house hunters to do their homework before making the biggest purchase of their lives — and look beyond whether the home is in the best neighbourhood or school district.
“We’ve had numerous circumstances brought to our attention where a buyer, even against the advice of their realtor, has waived home inspections or conditions around financing when they found out there were other offers on the property,” says Matthews.
“Unfortunately in bidding wars, reason and rational thought are often replaced by emotion and haste. We can’t legislate human behaviour, but we’re trying to put more of the emphasis on information and knowledge in advance (of going to open houses and putting in offers) to prevent these kind of situations.”
The council has seen some homebuyers walk away from hefty deposits, or end up in costly court cases, because they waived financing conditions to get a leg up in multiple bids. Some couldn’t close because they were rejected for financing or the bank felt they had paid too much, says Matthews.
Others found out too late that the house had knob and tube wiring or structural damage that would have been discovered in a home inspection.
Some of the calls have come from house hunters angry that they lost out to a lower bid.
“With the current supply and demand issue, a lot of power is with the seller,” says Matthews.
Sometimes a seller will choose a lower bid because the buyers can close at a specific time, have kids or don’t plan to raze the house: “We don’t regulate the buyers or sellers themselves,” says Matthews.
The council has a website and a host of information brochures meant to educate buyers, and sellers, about the ins and outs of bidding wars, the legal obligations when you sign a contract with a realtor, issues around mortgage fraud. It also has a complaints line and email address: 1-800-245-6910or complaints@reco.on.ca
The council also stresses safety and recommends that sellers put personal photos, valuables and medicines out of sight during open houses. The photos, for instance, can tip would-be thieves off to the fact you live alone or travel a lot.
Realtors are required to alert all potential bidders that multiple offers have been registered against a property. The council has had what Matthews calls “sour grapes” calls from house hunters who believe those numbers are being exaggerated to drive up emotions and house prices.
RECO has the power to investigate so-called “phantom bids” which are prohibited under the code of ethics in the Real Estate and Business Brokers Act which regulates realtors.
Even some realtors are becoming concerned at how high emotions are running in the Toronto market right now, fuelled by low interest rates that have no where to go but up. Last week ReMax reported that some 50 per cent of homes in the “coveted” $600,000 to $900,000 range in prime Toronto neighbourhoods have been selling over asking.
But bidding wars are also emerging in Winnipeg and a number of other resource-rich areas of Canada, it noted.
“We want people to really think about what they’re doing,” says Tom Wright, president and CEO of RECO. “Buying a house is the largest transaction most of us are ever likely to make and it stays with you for years.”
Source: Susan Pigg Business Reporter (Toronto Star)
About 30 per cent of the 15,000 inquiries the council has had in the last year are from house hunters overwhelmed by the multiple bids process, says Bruce Matthews, deputy registrar in charge of complaints for RECO, the regulatory body for Ontario’s 58,000 realtors.
What’s most worrisome is how many homebuyers have waived home inspections in a desperate bid to win the house of their dreams, only to end up with a nightmare of costly repairs and upgrades later, says Matthews.
The concerns and confusion around multiple offers, which have spiked across the GTA in the last six months in particular, are part of the reason the council is launching a new education campaign this week.
The ads on public transit and YouTube are meant to encourage house hunters to do their homework before making the biggest purchase of their lives — and look beyond whether the home is in the best neighbourhood or school district.
“We’ve had numerous circumstances brought to our attention where a buyer, even against the advice of their realtor, has waived home inspections or conditions around financing when they found out there were other offers on the property,” says Matthews.
“Unfortunately in bidding wars, reason and rational thought are often replaced by emotion and haste. We can’t legislate human behaviour, but we’re trying to put more of the emphasis on information and knowledge in advance (of going to open houses and putting in offers) to prevent these kind of situations.”
The council has seen some homebuyers walk away from hefty deposits, or end up in costly court cases, because they waived financing conditions to get a leg up in multiple bids. Some couldn’t close because they were rejected for financing or the bank felt they had paid too much, says Matthews.
Others found out too late that the house had knob and tube wiring or structural damage that would have been discovered in a home inspection.
Some of the calls have come from house hunters angry that they lost out to a lower bid.
“With the current supply and demand issue, a lot of power is with the seller,” says Matthews.
Sometimes a seller will choose a lower bid because the buyers can close at a specific time, have kids or don’t plan to raze the house: “We don’t regulate the buyers or sellers themselves,” says Matthews.
The council has a website and a host of information brochures meant to educate buyers, and sellers, about the ins and outs of bidding wars, the legal obligations when you sign a contract with a realtor, issues around mortgage fraud. It also has a complaints line and email address: 1-800-245-6910or complaints@reco.on.ca
The council also stresses safety and recommends that sellers put personal photos, valuables and medicines out of sight during open houses. The photos, for instance, can tip would-be thieves off to the fact you live alone or travel a lot.
Realtors are required to alert all potential bidders that multiple offers have been registered against a property. The council has had what Matthews calls “sour grapes” calls from house hunters who believe those numbers are being exaggerated to drive up emotions and house prices.
RECO has the power to investigate so-called “phantom bids” which are prohibited under the code of ethics in the Real Estate and Business Brokers Act which regulates realtors.
Even some realtors are becoming concerned at how high emotions are running in the Toronto market right now, fuelled by low interest rates that have no where to go but up. Last week ReMax reported that some 50 per cent of homes in the “coveted” $600,000 to $900,000 range in prime Toronto neighbourhoods have been selling over asking.
But bidding wars are also emerging in Winnipeg and a number of other resource-rich areas of Canada, it noted.
“We want people to really think about what they’re doing,” says Tom Wright, president and CEO of RECO. “Buying a house is the largest transaction most of us are ever likely to make and it stays with you for years.”
Source: Susan Pigg Business Reporter (Toronto Star)
Wednesday, March 21, 2012
GTA condo sales down 59 per cent in February
Condo sales declined 59 per cent across the GTA in February as builders sold remaining inventory from last year and geared up to launch new projects for spring.
That saw the sale of new single-family homes outpace highrise sales for the second month in a row, according to figures from RealNet Canada Inc. released Tuesday by the Building Industry and Land Development Assoc.
The sales figures also show that the GTA new housing market “is easing back into stability” after last year’s record pace of sales, said RealNet.
“Following a slow period in late-2011, the lowrise sector has once again stabilized and we are seeing steady activity, particularly in the 905 markets,” said BILD Acting President Joe Vaccaro in a statement Tuesday.
“On the highrise side, while it may appear that sales are down from last year, it actually reflects the typical February lag as existing units are purchased while new condominium projects prepare to launch in the City of Toronto later this year.”
But pricing is another matter.
While condo prices increased just two per cent in February over the same month a year ago, new home buyers were faced with a 10 per cent increase in prices, largely because of the delays in building approvals by municipalities and government-imposed development charges, Vaccaro noted.
Just 913 condos were sold across the GTA in February, down from 2,226 a year earlier. That compares to 1,666 new low rise properties sold last month, up 16.2 per cent from the 1,434 homes sold in February, 2011.
Source: Toronto Star (by Susan Pigg )
That saw the sale of new single-family homes outpace highrise sales for the second month in a row, according to figures from RealNet Canada Inc. released Tuesday by the Building Industry and Land Development Assoc.
The sales figures also show that the GTA new housing market “is easing back into stability” after last year’s record pace of sales, said RealNet.
“Following a slow period in late-2011, the lowrise sector has once again stabilized and we are seeing steady activity, particularly in the 905 markets,” said BILD Acting President Joe Vaccaro in a statement Tuesday.
“On the highrise side, while it may appear that sales are down from last year, it actually reflects the typical February lag as existing units are purchased while new condominium projects prepare to launch in the City of Toronto later this year.”
But pricing is another matter.
While condo prices increased just two per cent in February over the same month a year ago, new home buyers were faced with a 10 per cent increase in prices, largely because of the delays in building approvals by municipalities and government-imposed development charges, Vaccaro noted.
Just 913 condos were sold across the GTA in February, down from 2,226 a year earlier. That compares to 1,666 new low rise properties sold last month, up 16.2 per cent from the 1,434 homes sold in February, 2011.
Source: Toronto Star (by Susan Pigg )
Thursday, March 08, 2012
Bank of Montreal brings back 2.99 per cent., five-year mortgage
The Bank of Montreal has fired another shot across the bow of its housing market rivals by renewing its record-low 2.99 per cent rate on five-year mortgages.
The bank also said Wednesday it will offer a rate of 3.99 per cent on 10-year mortgages.
Both products come with a 25-year amortization period.
The offer takes effect Thursday for the five-year mortgage and Sunday for the 10-year. Both will be available until March 28, said Frank Techar, head of Canadian personal and commercial banking at the Bank of Montreal.
The special offers – a boon to heavily indebted home buyers – come amid worries that Canada’s real estate market is cooling, and that prices in big cities such as Toronto and Vancouver may be headed for a decline.
The deals also highlight increasing competitiveness among Canada’s big banks.
The 25-year amortization periods, which would leave some borrowers unable to qualify, are “good for Canadians and good for the stability of the Canadian housing market,” Techar said.
“We want to minimize interest rate risk for our customers and help them understand the benefits of paying their mortgage faster.”
The maximum amortization period on a mortgage is typically 30 years.
The products carry some restrictions. Customers can pre-pay and make lump sum payments as long as the total doesn’t exceed 10 per cent of the principal amount owed. Most mortgages let you make monthly and lump sum payments of as much as 20 per cent.
As well, you cannot refinance or switch your mortgage to another lender for the length of the term.
“We’re trying to reinforce the fact we want customers to have the benefit of the low rate but we also are catering to customers that want to live in their house and repay their mortgage as fast as possible,” Techar said.
Bank of Montreal was the first to offer the 2.99 per cent rate in January as a time-limited offer.
The reaction was fantastic, Techar said. “We saw an increase in volume almost immediately and it continued for the whole two-week period.”
It was later matched by Toronto-Dominion Bank and Royal Bank of Canada, though both banks ended the promotion early, citing changing conditions in the bond market, making it more expensive for banks to fund these loans.
Source: By Madhavi Acharya-Tom Yew (moneyville.ca)
The bank also said Wednesday it will offer a rate of 3.99 per cent on 10-year mortgages.
Both products come with a 25-year amortization period.
The offer takes effect Thursday for the five-year mortgage and Sunday for the 10-year. Both will be available until March 28, said Frank Techar, head of Canadian personal and commercial banking at the Bank of Montreal.
The special offers – a boon to heavily indebted home buyers – come amid worries that Canada’s real estate market is cooling, and that prices in big cities such as Toronto and Vancouver may be headed for a decline.
The deals also highlight increasing competitiveness among Canada’s big banks.
The 25-year amortization periods, which would leave some borrowers unable to qualify, are “good for Canadians and good for the stability of the Canadian housing market,” Techar said.
“We want to minimize interest rate risk for our customers and help them understand the benefits of paying their mortgage faster.”
The maximum amortization period on a mortgage is typically 30 years.
The products carry some restrictions. Customers can pre-pay and make lump sum payments as long as the total doesn’t exceed 10 per cent of the principal amount owed. Most mortgages let you make monthly and lump sum payments of as much as 20 per cent.
As well, you cannot refinance or switch your mortgage to another lender for the length of the term.
“We’re trying to reinforce the fact we want customers to have the benefit of the low rate but we also are catering to customers that want to live in their house and repay their mortgage as fast as possible,” Techar said.
Bank of Montreal was the first to offer the 2.99 per cent rate in January as a time-limited offer.
The reaction was fantastic, Techar said. “We saw an increase in volume almost immediately and it continued for the whole two-week period.”
It was later matched by Toronto-Dominion Bank and Royal Bank of Canada, though both banks ended the promotion early, citing changing conditions in the bond market, making it more expensive for banks to fund these loans.
Source: By Madhavi Acharya-Tom Yew (moneyville.ca)
Wednesday, February 01, 2012
Mortgage lending tightens for self-employed, immigrants
It’s going to be tougher for the self employed, new immigrants and higher-risk borrowers to get a mortgage as concerns continue to mount over the state of Canada’s housing market.
CIBC’s wholesale mortgage arm, FirstLine, quietly announced Tuesday that it will no longer accept new applications from “stated income” homebuyers who can’t prove they have the annual net income to qualify for home loans.
FirstLine also set a $1 million cap on what it will lend for a home purchase.
The major change in policy, which is bound to pique the interest of other major lenders, came on the same day it was revealed that the Canada Mortgage and Housing Corp. could be forced to cut back on the mortgages it insures.
The moves are seen as among the clearest indications yet that Canada’s hot housing market and record levels of household debt are a concern far beyond just the Ottawa offices of Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney.
That’s despite a Bank of Montreal report this week that says Canada’s housing market is more balloon than bubble and more likely to deflate than pop.
“The signs are there that everyone is worried, with the exception of BMO. It’s not like there is just one person saying there is a problem with the housing market,” said Jason Friesen, a mortgage consultant with the Callum Ross Team.
“It’s impossible to know, given all the doom and gloom in the rest of the world, what will happen over the next three months or the next six months, but lending institutions are looking for ways to protect themselves.”
The CIBC was unable to comment last night on the changes, other than to say FirstLine’s decision “reflects the normal course of business.”
But that, coupled with CMHC’s predicament, is sure to raise concerns.
CMHC has traditionally backstopped loans, especially to first-time homebuyers who can’t raise the traditional 20 per cent downpayment for a home.
But the housing corporation has recently received “an unexpected level of requests for large amounts of CMHC portfolio insurance” that has pushed it close to the $600-billion cap on insurance set by the federal government.
Those requests have come from financial institutions looking for, in essence, taxpayer backing on pools of previously uninsured low-ratio mortgages.
While a CMHC spokesperson insisted this “does not affect the availability of CMHC’s mortgage insurance for qualified home buyers and will not impact the cost of buying a home,” the federal housing company may inevitably be forced to take a harder look at who it insures down the road, housing experts say.
That’s led to speculation that CMHC, too, could back away from self-employed home buyers who often need insurance to get a mortgage.
CMHC declined to comment on those suggestions Tuesday, other than to say “CMHC continues to manage its mortgage loan insurance business in accordance with the $600 billion insurance in force limit.”
FirstLine’s announcement is “a pretty substantial change in thinking” from the second-biggest mortgage lender in the country, said Friesen.
The question is whether other institutional lenders will follow suit.
CMHC’s situation is equally worrisome in that the federal limit could see a tightening of lending conditions that leads to a cooling of a market many housing experts consider “overheated.”
As of Sept. 30, CMHC had insured $541 billion in loans, up from $501 billion a year earlier. Just three years ago, CMHC was insuring $450 billion in loans and asked Ottawa for approval for the $600 billion cap.
The increase in insurance-backed loans is not only evidence that increased prices are pushing houses further out of reach of many homebuyers, but that people are still so keen to get into the market, they’re willing to pay for mortgage default insurance, said TD Bank economist Sonya Gulati.
Maintaining the cap could have a dampening effect on demand for housing, but would be “an indirect way of making it tougher to get a mortgage,” she said.
Ottawa has raised concerns about record levels of household debt, fuelled by high-spending baby boomers and historically low interest rates.
But restricting CMHC “is a bit trickier,” said Gulati, than having Ottawa tighten up mortgage rules yet again by insisting on higher downpayments and shorter amortization periods.
Source: By Susan Pigg (Toronto Star)
CIBC’s wholesale mortgage arm, FirstLine, quietly announced Tuesday that it will no longer accept new applications from “stated income” homebuyers who can’t prove they have the annual net income to qualify for home loans.
FirstLine also set a $1 million cap on what it will lend for a home purchase.
The major change in policy, which is bound to pique the interest of other major lenders, came on the same day it was revealed that the Canada Mortgage and Housing Corp. could be forced to cut back on the mortgages it insures.
The moves are seen as among the clearest indications yet that Canada’s hot housing market and record levels of household debt are a concern far beyond just the Ottawa offices of Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney.
That’s despite a Bank of Montreal report this week that says Canada’s housing market is more balloon than bubble and more likely to deflate than pop.
“The signs are there that everyone is worried, with the exception of BMO. It’s not like there is just one person saying there is a problem with the housing market,” said Jason Friesen, a mortgage consultant with the Callum Ross Team.
“It’s impossible to know, given all the doom and gloom in the rest of the world, what will happen over the next three months or the next six months, but lending institutions are looking for ways to protect themselves.”
The CIBC was unable to comment last night on the changes, other than to say FirstLine’s decision “reflects the normal course of business.”
But that, coupled with CMHC’s predicament, is sure to raise concerns.
CMHC has traditionally backstopped loans, especially to first-time homebuyers who can’t raise the traditional 20 per cent downpayment for a home.
But the housing corporation has recently received “an unexpected level of requests for large amounts of CMHC portfolio insurance” that has pushed it close to the $600-billion cap on insurance set by the federal government.
Those requests have come from financial institutions looking for, in essence, taxpayer backing on pools of previously uninsured low-ratio mortgages.
While a CMHC spokesperson insisted this “does not affect the availability of CMHC’s mortgage insurance for qualified home buyers and will not impact the cost of buying a home,” the federal housing company may inevitably be forced to take a harder look at who it insures down the road, housing experts say.
That’s led to speculation that CMHC, too, could back away from self-employed home buyers who often need insurance to get a mortgage.
CMHC declined to comment on those suggestions Tuesday, other than to say “CMHC continues to manage its mortgage loan insurance business in accordance with the $600 billion insurance in force limit.”
FirstLine’s announcement is “a pretty substantial change in thinking” from the second-biggest mortgage lender in the country, said Friesen.
The question is whether other institutional lenders will follow suit.
CMHC’s situation is equally worrisome in that the federal limit could see a tightening of lending conditions that leads to a cooling of a market many housing experts consider “overheated.”
As of Sept. 30, CMHC had insured $541 billion in loans, up from $501 billion a year earlier. Just three years ago, CMHC was insuring $450 billion in loans and asked Ottawa for approval for the $600 billion cap.
The increase in insurance-backed loans is not only evidence that increased prices are pushing houses further out of reach of many homebuyers, but that people are still so keen to get into the market, they’re willing to pay for mortgage default insurance, said TD Bank economist Sonya Gulati.
Maintaining the cap could have a dampening effect on demand for housing, but would be “an indirect way of making it tougher to get a mortgage,” she said.
Ottawa has raised concerns about record levels of household debt, fuelled by high-spending baby boomers and historically low interest rates.
But restricting CMHC “is a bit trickier,” said Gulati, than having Ottawa tighten up mortgage rules yet again by insisting on higher downpayments and shorter amortization periods.
Source: By Susan Pigg (Toronto Star)
Monday, January 16, 2012
Home prices to rise again in 2012, but more slowly than last year: LePage
Canadian home prices will continue to go up in 2012, although at a slower pace than they did last year, according to one of the country’s largest real-estate sales organizations.
Royal LePage, which franchises brokerages across the country, predicted Thursday that the national average price for resale homes will increase this year by 2.8 per cent by the end of 2012.
It said the national average price for a standard two-storey home was $375,427 in the fourth quarter of 2011, up 4.2 per cent from 2010.
“Widespread calls for a major real estate correction in 2012 simply can’t be justified. The industry has significant momentum entering the year, and buoyed by the stimulative effect of very low interest rates, we expect the market to continue to expand — albeit at a slower pace,” said Phil Soper, the president and CEO of Royal LePage Real Estate Services.
National averages don’t tell the whole story, however, since there are wide variations depending on the type of home and location.
In Vancouver, a standard two-storey home had an average price of $1.1 million in the fourth quarter of 2012, up 10.9 per cent from a year ago. By contrast, two-storey homes in Atlantic Canada had an average price of $200,000 or less in several cities where increases were fairly flat compared with a year ago.
In Toronto, which is usually the country’s second-most expensive real-estate market after Vancouver, Royal LePage found strong price gains for most housing types in the fourth quarter — due to a lack of available properties and steady demand.
The Royal LePage forecast came as the Statistics Canada reported the price of new homes rose again in November, led by gains in Toronto and Montreal.
The government agency’s new housing price index rose 0.3 per cent in November, after a 0.2 per cent increase in October. On an annual basis, the index was 2.5 per cent higher in November compared with November 2010.
The largest year-over-year price increases in reported by Statistics Canada were in Toronto and Oshawa, Ont., where they were up 6.2 per cent.
In 2012, Royal LePage expects that real estate values in Toronto will increase 2.6 per cent compared to 2011 — slightly slower than the national growth rate.
In the fourth quarter, the average price for detached bungalows rose 7.2 per cent from a year earlier to $532,137; prices for standard two-storey homes rose 4.2 per cent to $629,188 and standard condos rose 3.4 per cent to $347,659.
Some economists have said housing prices in certain Canadian markets, including the Toronto area, may be too high to be sustainable and are due for a correction. However, LePage said housing prices have been high in Toronto because demand has outstripped supply.
“Inventory has been a challenge for Toronto’s potential buyers throughout 2011 and this restricted supply has put upward pressure on prices,” said Gino Romanese, senior vice-president for Royal LePage Real Estate Services Ltd.
“Standard condominiums in the resale market saw a more modest increase due to a healthier supply that was created by newer units coming online. However, demand for older units has increased as they are generally larger in size and preferable to (people downsizing from houses) who are used to more space.”
In Victoria and Saint John, N.B., house prices were flat or slightly down in the fourth quarter, compared with the same period of 2010.
In Saint John, detached bungalows fell 2.2 per cent year-over-year to $179,946, while standard two-storey properties slipped 0.3 per cent to $298,076. Condos were the exception, with average prices climbing 16.1 per cent year-over-year to $159,370, although LePage said those increases weren’t typical.
In Victoria, standard two-storey homes were unchanged, with prices remaining at $480,000 while detached bungalows slipped 0.8 per cent to $486,000 and condos dropping 1.1 per cent to $282,000.
Source: The Canadian Press
Royal LePage, which franchises brokerages across the country, predicted Thursday that the national average price for resale homes will increase this year by 2.8 per cent by the end of 2012.
It said the national average price for a standard two-storey home was $375,427 in the fourth quarter of 2011, up 4.2 per cent from 2010.
“Widespread calls for a major real estate correction in 2012 simply can’t be justified. The industry has significant momentum entering the year, and buoyed by the stimulative effect of very low interest rates, we expect the market to continue to expand — albeit at a slower pace,” said Phil Soper, the president and CEO of Royal LePage Real Estate Services.
National averages don’t tell the whole story, however, since there are wide variations depending on the type of home and location.
In Vancouver, a standard two-storey home had an average price of $1.1 million in the fourth quarter of 2012, up 10.9 per cent from a year ago. By contrast, two-storey homes in Atlantic Canada had an average price of $200,000 or less in several cities where increases were fairly flat compared with a year ago.
In Toronto, which is usually the country’s second-most expensive real-estate market after Vancouver, Royal LePage found strong price gains for most housing types in the fourth quarter — due to a lack of available properties and steady demand.
The Royal LePage forecast came as the Statistics Canada reported the price of new homes rose again in November, led by gains in Toronto and Montreal.
The government agency’s new housing price index rose 0.3 per cent in November, after a 0.2 per cent increase in October. On an annual basis, the index was 2.5 per cent higher in November compared with November 2010.
The largest year-over-year price increases in reported by Statistics Canada were in Toronto and Oshawa, Ont., where they were up 6.2 per cent.
In 2012, Royal LePage expects that real estate values in Toronto will increase 2.6 per cent compared to 2011 — slightly slower than the national growth rate.
In the fourth quarter, the average price for detached bungalows rose 7.2 per cent from a year earlier to $532,137; prices for standard two-storey homes rose 4.2 per cent to $629,188 and standard condos rose 3.4 per cent to $347,659.
Some economists have said housing prices in certain Canadian markets, including the Toronto area, may be too high to be sustainable and are due for a correction. However, LePage said housing prices have been high in Toronto because demand has outstripped supply.
“Inventory has been a challenge for Toronto’s potential buyers throughout 2011 and this restricted supply has put upward pressure on prices,” said Gino Romanese, senior vice-president for Royal LePage Real Estate Services Ltd.
“Standard condominiums in the resale market saw a more modest increase due to a healthier supply that was created by newer units coming online. However, demand for older units has increased as they are generally larger in size and preferable to (people downsizing from houses) who are used to more space.”
In Victoria and Saint John, N.B., house prices were flat or slightly down in the fourth quarter, compared with the same period of 2010.
In Saint John, detached bungalows fell 2.2 per cent year-over-year to $179,946, while standard two-storey properties slipped 0.3 per cent to $298,076. Condos were the exception, with average prices climbing 16.1 per cent year-over-year to $159,370, although LePage said those increases weren’t typical.
In Victoria, standard two-storey homes were unchanged, with prices remaining at $480,000 while detached bungalows slipped 0.8 per cent to $486,000 and condos dropping 1.1 per cent to $282,000.
Source: The Canadian Press
Thursday, December 29, 2011
Toronto housing market headed for cool down, BMO predicts
Vancouver’s hot housing market is headed for a cool down in 2012. So is Toronto’s.
But prepare for oil prices — and Alberta’s distinction as the strongest employment market in Canada in 2011 — to propel Calgary and Edmonton to the top two spots next year, according to a bold prediction by BMO Economics.
“Assuming oil prices hold around $90 or better, look for those two cities to lead the way for the hottest housing markets in 2012,” says BMO Deputy Chief Economist Doug Porter.
But GDP growth of just 2 per cent next year, slowing job growth and record-high household debt makes it highly unlikely that we’ll see a repeat of this year’s “surprisingly perky performance” of Canada’s housing market overall, warns Porter in a report.
Leading the way was Vancouver where house sales were up 16 per cent in November 2011 over a year earlier as the seasonally adjusted price of a house hit $756,512.
“That won’t be repeated next year — there are already clear signs that sales are dipping, and price increases are starting to ebb,” says the report.
“Toronto has seized the mantle of hottest major market in recent months, and appears to be at some risk of overheating.”
In second-place Toronto, home sales were up 9.7 per cent in November over a year earlier as the average house price surpassed $480,000 for the first time.
Calgary and Edmonton clearly have some catching up to do, given that their housing markets have remained flat over the last year, even as Alberta topped the rest of the country in job growth.
House prices there are a relative bargain with the average house selling for just $402,185 in Calgary and $326,741 in Edmonton in November, according to figures from the Canadian Real Estate Board.
Source: by Susan Pigg (Toronto Star)
But prepare for oil prices — and Alberta’s distinction as the strongest employment market in Canada in 2011 — to propel Calgary and Edmonton to the top two spots next year, according to a bold prediction by BMO Economics.
“Assuming oil prices hold around $90 or better, look for those two cities to lead the way for the hottest housing markets in 2012,” says BMO Deputy Chief Economist Doug Porter.
But GDP growth of just 2 per cent next year, slowing job growth and record-high household debt makes it highly unlikely that we’ll see a repeat of this year’s “surprisingly perky performance” of Canada’s housing market overall, warns Porter in a report.
Leading the way was Vancouver where house sales were up 16 per cent in November 2011 over a year earlier as the seasonally adjusted price of a house hit $756,512.
“That won’t be repeated next year — there are already clear signs that sales are dipping, and price increases are starting to ebb,” says the report.
“Toronto has seized the mantle of hottest major market in recent months, and appears to be at some risk of overheating.”
In second-place Toronto, home sales were up 9.7 per cent in November over a year earlier as the average house price surpassed $480,000 for the first time.
Calgary and Edmonton clearly have some catching up to do, given that their housing markets have remained flat over the last year, even as Alberta topped the rest of the country in job growth.
House prices there are a relative bargain with the average house selling for just $402,185 in Calgary and $326,741 in Edmonton in November, according to figures from the Canadian Real Estate Board.
Source: by Susan Pigg (Toronto Star)
Tuesday, November 29, 2011
Toronto Mayor Rob Ford to seek 2.5-per-cent property-tax hike
Toronto residents will be asked to pay 2.5-per-cent more in property taxes at a time of cuts to city spending as Mayor Rob Ford continues his austerity crusade with the proposed budget for next year.
The mayor is attempting to reverse a steady increase in spending – an especially tall task in municipal government, where Mr. Ford requires buy-in from a majority of council. Toronto residents get their first glance at how Mr. Ford plans to do that when the wraps come off the 2012 budget starting Monday.
Proposed cuts would shave close to $50-million off the city’s total spending, sources familiar with the budget say. At the same time, the city is counting on taxes to cover a greater share of its planned $9.35-billion budget, which also includes revenue from transfer payments, user fees and other sources. A growing assessment base and the proposed tax hike are expected to add close to $100-million to the city’s coffers, sources say.
Mr. Ford has been clear about his desire to shrink the size of Toronto’s government and reduce costs across the board. For too long, he argues, the city has lived beyond its means, relying on one-time revenue and bailouts from the province to balance its books.
But curbing spending is proving to be a greater task than the mayor envisioned when he promised voters he could cut costs and preserve services by finding the “gravy” at city hall – proof his critics say that there is no gravy after all.
The proposed cut to next year’s budget represents about half a per cent of total expenditures. Balancing the city’s books will depend on one-time windfalls, such as the sale of real estate and the city’s interest in Enwave, Toronto’s downtown district heating and cooling system, The Globe and Mail has learned.
Gaining council’s approval for this budget is a key test for the mayor. The prospect of cuts to libraries and transit service has prompted strong push-back from the public. A review of core services this summer came up with $27.7-million in cost savings to which councillors could agree and the mayor’s closest allies outvoted him earlier this month on a money-saving measure to stop the collection of extra recycling placed beside blue bins.
Labour costs also will be a factor. Staff cuts are a certainty, with pink slips already being delivered in some departments. In addition, management are being trained to drive Zambonis and deliver front-line services in anticipation of a possible lengthy labour disruption next year.
In selling his budget, Mr. Ford is expected to emphasize the need to hold the line on spending, stressing that a dollar directed to save one service must be balanced by a dollar cut elsewhere.
“This is where the city needs to go,” said a source close to the administration. “This is all about resetting the foundation.”
A city-wide directive asked for 10-per-cent savings in all areas. But some, such as police services, failed to reach that number, meaning others will face even more reductions. “Not all departments are essential,” said the source, characterizing the 10-per-cent request as a “management tool,” used to push staff to find savings.
Using the cost-cutting efforts of other governments as a guide, economist Eric Lascelles predicts lowering Toronto’s spending will be tough. Inflation and a growing population naturally drive up expenditures by about 3-per-cent annually, he said, even without new programs, so holding the line or reducing the money going out generally means fewer services.
“It’s difficult to avoid,” said Mr. Lascelles, chief economist for RBC Global Asset Management, pointing to the federal budgets of Paul Martin as an example. “You have to be out there actively cutting and that’s the challenge. It’s very unpopular and politicians don’t like to be unpopular. That’s what makes it so difficult,” he said.
Critics of Mr. Ford, among them former budget chair Shelley Carroll, argue there is no need to cut spending in a city with a growing population and tax base like Toronto. “We are not that broke,” Councillor Carroll said. “You should be efficient, but rein in spending? There is nothing to rein in here.”
Source: Elizabeth Church (Globe and Mail)
The mayor is attempting to reverse a steady increase in spending – an especially tall task in municipal government, where Mr. Ford requires buy-in from a majority of council. Toronto residents get their first glance at how Mr. Ford plans to do that when the wraps come off the 2012 budget starting Monday.
Proposed cuts would shave close to $50-million off the city’s total spending, sources familiar with the budget say. At the same time, the city is counting on taxes to cover a greater share of its planned $9.35-billion budget, which also includes revenue from transfer payments, user fees and other sources. A growing assessment base and the proposed tax hike are expected to add close to $100-million to the city’s coffers, sources say.
Mr. Ford has been clear about his desire to shrink the size of Toronto’s government and reduce costs across the board. For too long, he argues, the city has lived beyond its means, relying on one-time revenue and bailouts from the province to balance its books.
But curbing spending is proving to be a greater task than the mayor envisioned when he promised voters he could cut costs and preserve services by finding the “gravy” at city hall – proof his critics say that there is no gravy after all.
The proposed cut to next year’s budget represents about half a per cent of total expenditures. Balancing the city’s books will depend on one-time windfalls, such as the sale of real estate and the city’s interest in Enwave, Toronto’s downtown district heating and cooling system, The Globe and Mail has learned.
Gaining council’s approval for this budget is a key test for the mayor. The prospect of cuts to libraries and transit service has prompted strong push-back from the public. A review of core services this summer came up with $27.7-million in cost savings to which councillors could agree and the mayor’s closest allies outvoted him earlier this month on a money-saving measure to stop the collection of extra recycling placed beside blue bins.
Labour costs also will be a factor. Staff cuts are a certainty, with pink slips already being delivered in some departments. In addition, management are being trained to drive Zambonis and deliver front-line services in anticipation of a possible lengthy labour disruption next year.
In selling his budget, Mr. Ford is expected to emphasize the need to hold the line on spending, stressing that a dollar directed to save one service must be balanced by a dollar cut elsewhere.
“This is where the city needs to go,” said a source close to the administration. “This is all about resetting the foundation.”
A city-wide directive asked for 10-per-cent savings in all areas. But some, such as police services, failed to reach that number, meaning others will face even more reductions. “Not all departments are essential,” said the source, characterizing the 10-per-cent request as a “management tool,” used to push staff to find savings.
Using the cost-cutting efforts of other governments as a guide, economist Eric Lascelles predicts lowering Toronto’s spending will be tough. Inflation and a growing population naturally drive up expenditures by about 3-per-cent annually, he said, even without new programs, so holding the line or reducing the money going out generally means fewer services.
“It’s difficult to avoid,” said Mr. Lascelles, chief economist for RBC Global Asset Management, pointing to the federal budgets of Paul Martin as an example. “You have to be out there actively cutting and that’s the challenge. It’s very unpopular and politicians don’t like to be unpopular. That’s what makes it so difficult,” he said.
Critics of Mr. Ford, among them former budget chair Shelley Carroll, argue there is no need to cut spending in a city with a growing population and tax base like Toronto. “We are not that broke,” Councillor Carroll said. “You should be efficient, but rein in spending? There is nothing to rein in here.”
Source: Elizabeth Church (Globe and Mail)
Wednesday, November 16, 2011
Real estate boards push back
The Canadian Real Estate Association might have struck a deal that gives property owners the chance to pay brokers only for the services they want when selling their homes.
But in an odd twist, a year after settling with the Federal Competition Bureau, the real estate association is now facing an internal revolt by several member boards that say they are fed up of paying for services they don’t need.
Indeed, the Greater Montreal Real Estate board – the second largest board in Canada with 10,000 members – says it would consider leaving CREA at the end of 2012 if the association doesn’t cut expenses, and embrace the very same “fee-for-service” model now available to Canadian homeowners.
“What we want here in Quebec – and we assume it’s the same thing at other real estate boards in Canada – is for the CREA to provide us with à la carte services,” Montreal board president Patrick Juanéda told The Gazette in an interview Thursday. “We have too much duplication of services. Why recreate what already exists?
“This is a reality that’s existed for 10 years, and it’s just grown and grown. It’s becoming too expensive; our members are fed up.”
According to the Montreal board, CREA’s national membership dues are to rise 41 per cent between 2010 and 2013, from $220 to $310. CREA dues are used to defray the costs of services like government relations, publicity, meetings and technological tools like the realtor.ca website.
The CREA dues are part of the more than $2,000 in fees paid this year by a Montreal-area broker to his or her industry associations. These fees come at a time when members are seeing their commissions watered down by competition from For Sale By Owner sites and discount agencies where brokers are willing to be paid less for offering limited real estate services.
But a spokesperson for CREA said any fee increases were approved by 80 per cent of association delegates at a 2010 meeting. The fee increase, Pierre Leduc said in an email, was needed so CREA “could keep up to date with the tech tools consumers and Realtors use,” such as new apps developed by the association.
Yet Juanéda says CREA services like its ad campaigns aren’t useful in Quebec, where the entire real estate profession – down to the use of terminology like “broker” as opposed to “agent” – is regulated by provincial law. Indeed, last month CREA actually reimbursed the Montreal board for the dues its members pay for advertising, Juanéda said.
What’s more, CREA’s site, realtor.ca, duplicates the
centris.ca website used by most brokers in Quebec.
The Montreal board says CREA fees have grown by 121 per cent over the last 10 years.
“What company today would spend that much more without trying to trim its own fat?” Juanéda asked.
Although Juanéda says his concerns over duplication of services are shared by real estate professionals across the country, Quebec real estate boards appear to be the most vociferous. One small real estate board – in Granby – has already opted to leave.
A spokesperson for the Toronto Real Estate Board, Canada’s largest board, could not be reached for comment. Neither could ones for the Real Estate Board of Greater Vancouver or the Calgary Real Estate Board.
But in a recent interview, outgoing Calgary board president Ron Esch told Real Estate Magazine that duplication of services is a concern for his members.
“One of the concerns I have for real estate boards (and it includes the provincial associations and CREA) is that we don’t duplicate services at the different levels,” Esch told the magazine. “We need to make sure that we don’t keep piling it on and then the member has to pay for the same service at two or three different levels.”
CREA spokesperson Leduc said the complaints against CREA largely stem from Quebec boards where brokers have been hit by a hefty fee hike from the real estate industry’s watchdog, the Organisme d’autoréglementation du courtage immobilier du Québec, or OACIQ.
“We understand that Quebec boards and their members are under unique pressures due to market conditions and the fact that the regulator in Quebec has nearly doubled its licensing fees,” Leduc wrote.
Leduc, however, acknowledged that the concerns aren’t limited exclusively to Quebec boards.
“As you can imagine, with over 100,000 members and 103 member boards and associations, CREA is always talking with them about various issues, how to meet evolving needs, etc.,” he wrote. “But I’m not aware of any specific ongoing concerns related to the dues increase – as I said almost 80 per cent of the delegates approved it.”
Leduc was not able to say Thursday whether the association would change its model of collecting dues from member boards, but noted that CREA would continue to talk to disgruntled boards.
“We have had, and continue to have, discussions with some Quebec boards, including Montreal, and are working toward a mutually agreeable solution that works for the benefit of all CREA members.”
Source:The Montreal Gazette
But in an odd twist, a year after settling with the Federal Competition Bureau, the real estate association is now facing an internal revolt by several member boards that say they are fed up of paying for services they don’t need.
Indeed, the Greater Montreal Real Estate board – the second largest board in Canada with 10,000 members – says it would consider leaving CREA at the end of 2012 if the association doesn’t cut expenses, and embrace the very same “fee-for-service” model now available to Canadian homeowners.
“What we want here in Quebec – and we assume it’s the same thing at other real estate boards in Canada – is for the CREA to provide us with à la carte services,” Montreal board president Patrick Juanéda told The Gazette in an interview Thursday. “We have too much duplication of services. Why recreate what already exists?
“This is a reality that’s existed for 10 years, and it’s just grown and grown. It’s becoming too expensive; our members are fed up.”
According to the Montreal board, CREA’s national membership dues are to rise 41 per cent between 2010 and 2013, from $220 to $310. CREA dues are used to defray the costs of services like government relations, publicity, meetings and technological tools like the realtor.ca website.
The CREA dues are part of the more than $2,000 in fees paid this year by a Montreal-area broker to his or her industry associations. These fees come at a time when members are seeing their commissions watered down by competition from For Sale By Owner sites and discount agencies where brokers are willing to be paid less for offering limited real estate services.
But a spokesperson for CREA said any fee increases were approved by 80 per cent of association delegates at a 2010 meeting. The fee increase, Pierre Leduc said in an email, was needed so CREA “could keep up to date with the tech tools consumers and Realtors use,” such as new apps developed by the association.
Yet Juanéda says CREA services like its ad campaigns aren’t useful in Quebec, where the entire real estate profession – down to the use of terminology like “broker” as opposed to “agent” – is regulated by provincial law. Indeed, last month CREA actually reimbursed the Montreal board for the dues its members pay for advertising, Juanéda said.
What’s more, CREA’s site, realtor.ca, duplicates the
centris.ca website used by most brokers in Quebec.
The Montreal board says CREA fees have grown by 121 per cent over the last 10 years.
“What company today would spend that much more without trying to trim its own fat?” Juanéda asked.
Although Juanéda says his concerns over duplication of services are shared by real estate professionals across the country, Quebec real estate boards appear to be the most vociferous. One small real estate board – in Granby – has already opted to leave.
A spokesperson for the Toronto Real Estate Board, Canada’s largest board, could not be reached for comment. Neither could ones for the Real Estate Board of Greater Vancouver or the Calgary Real Estate Board.
But in a recent interview, outgoing Calgary board president Ron Esch told Real Estate Magazine that duplication of services is a concern for his members.
“One of the concerns I have for real estate boards (and it includes the provincial associations and CREA) is that we don’t duplicate services at the different levels,” Esch told the magazine. “We need to make sure that we don’t keep piling it on and then the member has to pay for the same service at two or three different levels.”
CREA spokesperson Leduc said the complaints against CREA largely stem from Quebec boards where brokers have been hit by a hefty fee hike from the real estate industry’s watchdog, the Organisme d’autoréglementation du courtage immobilier du Québec, or OACIQ.
“We understand that Quebec boards and their members are under unique pressures due to market conditions and the fact that the regulator in Quebec has nearly doubled its licensing fees,” Leduc wrote.
Leduc, however, acknowledged that the concerns aren’t limited exclusively to Quebec boards.
“As you can imagine, with over 100,000 members and 103 member boards and associations, CREA is always talking with them about various issues, how to meet evolving needs, etc.,” he wrote. “But I’m not aware of any specific ongoing concerns related to the dues increase – as I said almost 80 per cent of the delegates approved it.”
Leduc was not able to say Thursday whether the association would change its model of collecting dues from member boards, but noted that CREA would continue to talk to disgruntled boards.
“We have had, and continue to have, discussions with some Quebec boards, including Montreal, and are working toward a mutually agreeable solution that works for the benefit of all CREA members.”
Source:The Montreal Gazette
Tuesday, October 25, 2011
GTA REALTORS® Release Mid-Month Resale Market Figures
Greater Toronto REALTORS® reported 3,477 transactions through the TorontoMLS® system during the first 14 days of October 2011. This total represented a 20 per cent increase over 2,890 sales reported during the first two weeks of October 2010. Year-over-year growth in new listings for the same period was slightly stronger than that recorded for sales – up 21 per cent to 6,249.
"The first two weeks of October seem to be pointing towards more balanced market conditions as we move toward 2012. Growth in new listings outstripped growth in sales, meaning more choice for buyers," said Toronto Real Estate Board President Richard Silver. "A growing number of home owners are reacting to the above average price growth reported this year and have decided to list their home for sale. They are confident they will receive timely offers in line with their asking prices."
The average selling price during the first two weeks of October was $475,743 – up 7.5 per cent compared to the same period in 2010.
"The average resale home price is expected to grow at a slower pace in the months ahead because the market is becoming better supplied. There will be less competition between home buyers as we move through the fall and winter." said Jason Mercer, the Toronto Real Estate Board's Senior Manager of Market Analysis. "With a more balanced market in 2012, the average rate of annual price growth is expected to be in the mid single digits."
"The first two weeks of October seem to be pointing towards more balanced market conditions as we move toward 2012. Growth in new listings outstripped growth in sales, meaning more choice for buyers," said Toronto Real Estate Board President Richard Silver. "A growing number of home owners are reacting to the above average price growth reported this year and have decided to list their home for sale. They are confident they will receive timely offers in line with their asking prices."
The average selling price during the first two weeks of October was $475,743 – up 7.5 per cent compared to the same period in 2010.
"The average resale home price is expected to grow at a slower pace in the months ahead because the market is becoming better supplied. There will be less competition between home buyers as we move through the fall and winter." said Jason Mercer, the Toronto Real Estate Board's Senior Manager of Market Analysis. "With a more balanced market in 2012, the average rate of annual price growth is expected to be in the mid single digits."
Summary of TorontoMLS® Sales and Average Price October 1 – 14 | |||||||||||
2011 | 2010 | ||||||||||
Sales | Average Price | Sales | Average Price | ||||||||
City of Toronto ("416") | 1,408 | $524,553 | 1,237 | $499,740 | |||||||
Rest of GTA ("905") | 2,069 | $442,527 | 1,653 | $400,088 | |||||||
GTA | 3,477 | $475,743 | 2,890 | $442,742 | |||||||
TorontoMLS® Sales & Average Price By Home Type | |||||||||||
Sales | Average Price | ||||||||||
416 | 905 | Total | 416 | 905 | Total | ||||||
Detached | 450 | 1,143 | 1,593 | 754,240 | 530,339 | 593,588 | |||||
Yr./Yr. % Change | 2% | 24% | 17% | 3% | 10% | 6% | |||||
Semi-Detached | 183 | 245 | 428 | 545,995 | 364,649 | 442,188 | |||||
Yr./Yr. % Change | 33% | 41% | 37% | 11% | 7% | 9% | |||||
Townhouse | 151 | 372 | 523 | 461,112 | 343,510 | 377,464 | |||||
Yr./Yr. % Change | 23% | 18% | 20% | 16% | 12% | 13% | |||||
Condo Apartment | 609 | 251 | 860 | 369,528 | 272,190 | 341,119 | |||||
Yr./Yr. % Change | 16% | 22% | 18% | 10% | 10% | 10% | |||||
Source: Toronto Real Estate Board
Friday, September 16, 2011
In Toronto, the fall housing market hits a speed bump
Toronto’s hot housing market may be showing the first signs of cooling as a surge of new listings arrived right after Labour Day to a lukewarm response from potential buyers.
Real estate agents say it’s too soon to tell whether buyers are losing confidence or are just slow to return from vacation as the fall market gears up.
Theodore Babiak of Royal LePage Real Estate Services Ltd. says some sellers have received multiple offers in recent weeks, but the frenzied bidding that characterized the spring market has slowed down.
“I think sellers will need to temper their expectations,” says Mr. Babiak, who detected a slight decrease in buyers’ enthusiasm in the second half of August.
Bank of Nova Scotia economist Adrienne Warren says strong price gains during the summer may be encouraging more owners to bring their properties to market.
Ms. Warren says sellers definitely had the upper hand in Toronto’s real estate market last month as listings remained tight.
Early data shows that sales jumped 24 per cent last month compared with the lethargic pace set in August of 2010. She estimates that the average price rose 10 per cent in August compared with the same month last year.
But a shift may be underway, Ms. Warren says, as the strong price gains tallied through the summer may be encouraging more owners to bring their properties to the market.
“I think sellers say ‘it’s a pretty good time to list.’ ”
Consumers, meanwhile, are feeling less buoyant according to recent surveys.
Last week’s employment report from Statistics Canada, which showed the economy shed jobs in August, may dampen confidence further, she adds.
Ms. Warren says Toronto’s real estate market has been noticeably hotter than those in other Canadian cities. Demand in Vancouver has been dampened by the lack of affordability, she adds, and that same phenomenon may discourage house hunters here.
“Affordability is certainly an issue here in Toronto,” she says.
Ms. Warren is still forecasting increasing prices on an annual basis in Toronto, but she believes those gains will slow to two or three per cent by the final months of 2011 compared with the same months in 2010.
She cautions, however, that if the jobs market deteriorates sharply, house prices may fall.
Mr. Babiak says the high end of the market has been soft in Toronto in recent months as investment bankers and other Bay Street workers worry about the outlook for financial markets and world economies.
Houses priced at less than $1-million have been snapped up quickly thus far, he says, but buyers may become more nervous.
“I would have no problem telling sellers to list sooner rather than later,” he says.
For now Mr. Babiak will continue to advise sellers with a good property to set an offer date with the hope of attracting multiple bids, he says, but sellers of houses and condos that are poorly-located or have other flaws will likely do better to take offers at any time.
“New listings will have to be priced sharply to get action,” he says.
Agent Duncan Fremlin of ReMax Hallmark Realty Ltd. says he has been called out to evaluate several potential listings but it’s too soon to tell if house hunters will retreat to the sidelines.
“The wild card in all of this is the buyers.”
He hasn’t seen signs of a cool down.
“I haven’t sensed yet that the consumer has lost confidence.”
Source: Carolyn Ireland (Globe and Mail)
Real estate agents say it’s too soon to tell whether buyers are losing confidence or are just slow to return from vacation as the fall market gears up.
Theodore Babiak of Royal LePage Real Estate Services Ltd. says some sellers have received multiple offers in recent weeks, but the frenzied bidding that characterized the spring market has slowed down.
“I think sellers will need to temper their expectations,” says Mr. Babiak, who detected a slight decrease in buyers’ enthusiasm in the second half of August.
Bank of Nova Scotia economist Adrienne Warren says strong price gains during the summer may be encouraging more owners to bring their properties to market.
Ms. Warren says sellers definitely had the upper hand in Toronto’s real estate market last month as listings remained tight.
Early data shows that sales jumped 24 per cent last month compared with the lethargic pace set in August of 2010. She estimates that the average price rose 10 per cent in August compared with the same month last year.
But a shift may be underway, Ms. Warren says, as the strong price gains tallied through the summer may be encouraging more owners to bring their properties to the market.
“I think sellers say ‘it’s a pretty good time to list.’ ”
Consumers, meanwhile, are feeling less buoyant according to recent surveys.
Last week’s employment report from Statistics Canada, which showed the economy shed jobs in August, may dampen confidence further, she adds.
Ms. Warren says Toronto’s real estate market has been noticeably hotter than those in other Canadian cities. Demand in Vancouver has been dampened by the lack of affordability, she adds, and that same phenomenon may discourage house hunters here.
“Affordability is certainly an issue here in Toronto,” she says.
Ms. Warren is still forecasting increasing prices on an annual basis in Toronto, but she believes those gains will slow to two or three per cent by the final months of 2011 compared with the same months in 2010.
She cautions, however, that if the jobs market deteriorates sharply, house prices may fall.
Mr. Babiak says the high end of the market has been soft in Toronto in recent months as investment bankers and other Bay Street workers worry about the outlook for financial markets and world economies.
Houses priced at less than $1-million have been snapped up quickly thus far, he says, but buyers may become more nervous.
“I would have no problem telling sellers to list sooner rather than later,” he says.
For now Mr. Babiak will continue to advise sellers with a good property to set an offer date with the hope of attracting multiple bids, he says, but sellers of houses and condos that are poorly-located or have other flaws will likely do better to take offers at any time.
“New listings will have to be priced sharply to get action,” he says.
Agent Duncan Fremlin of ReMax Hallmark Realty Ltd. says he has been called out to evaluate several potential listings but it’s too soon to tell if house hunters will retreat to the sidelines.
“The wild card in all of this is the buyers.”
He hasn’t seen signs of a cool down.
“I haven’t sensed yet that the consumer has lost confidence.”
Source: Carolyn Ireland (Globe and Mail)
Thursday, September 15, 2011
CREA report could show August market turmoil affected monthly home sales
Investors are bracing for word on whether August's stock market volatility put a damper on Canadian housing sales for the month.
The Canadian Real Estate Association is set to release figures for existing home sales later this morning.
Economists are expecting a 14 per cent spike in sales volumes from a year ago and say prices will rise by 7.5 per cent.
Strong housing sales in the second quarter had previously prompted CREA to revise its 2011 home sales projections upwards.
Initially, the real estate brokers group had predicted they would decline one per cent from 2010 levels.
But August was a month of wild swings on most major markets, including the Toronto Stock Exchange, and the effect on the real estate market is not yet known.
U.S. government debt negotiations and fears of an economic meltdown in cash-strapped European countries saw the TSX drop below 12,000 points and fall off more than 10 per cent from highs set in early March.
Analysts say the Canadian housing market has continued to grow despite a slowing national economy — mainly because of low mortgage rates and strong job growth, especially in western Canada.
Source: The Canadian Press
The Canadian Real Estate Association is set to release figures for existing home sales later this morning.
Economists are expecting a 14 per cent spike in sales volumes from a year ago and say prices will rise by 7.5 per cent.
Strong housing sales in the second quarter had previously prompted CREA to revise its 2011 home sales projections upwards.
Initially, the real estate brokers group had predicted they would decline one per cent from 2010 levels.
But August was a month of wild swings on most major markets, including the Toronto Stock Exchange, and the effect on the real estate market is not yet known.
U.S. government debt negotiations and fears of an economic meltdown in cash-strapped European countries saw the TSX drop below 12,000 points and fall off more than 10 per cent from highs set in early March.
Analysts say the Canadian housing market has continued to grow despite a slowing national economy — mainly because of low mortgage rates and strong job growth, especially in western Canada.
Source: The Canadian Press
Sunday, August 21, 2011
Toronto Real Estate Board plans to move ahead with password-protected sites
The Toronto Real Estate Board says it's sticking to its plan to develop password protected websites, despite the federal Competition Bureau's opposition.
In its first response to an amended lawsuit filed by the federal agency, the Toronto Real Estate Board said Friday that its proposed new password protected websites that allow consumers to search Multiple Listing Service data while protecting the privacy of its customers.
"As planned, TREB has followed through on its commitment to provide realtor members with greater flexibility to serve their clients by developing a Virtual Office Website (VOW) policy," it said.
It added that consumers will be able to use those protected websites with the oversight of a realtor.
TREB accused the competition commissioner of pressuring the real-estate board to release private data about individual consumers, including contact and financial information, on the Internet.
Last month, the Competition Bureau updated its lawsuit, saying that password protected websites are still discriminatory and anti-competitive.
The amended case says the VOWs would still prevent agents from making key historical data available online.
The filing comes after TREB announced a new policy proposal last month in response to the Competition Bureau's first legal action taken against it in May.
The bureau had alleged consumers were being denied choice because while local agents were allowed to provide detailed information to customers in person or through fax or email, they were banned from doling out such information through websites.
But the bureau is not satisfied with the new policy, saying the proposed rules will continue to require customers to contact a realtor, entrenching the physical location model and discriminating against brokers who want to use the Internet.
The bureau alleges that TREB's restrictions are in violation of the Competition Act.
Source: The Canadian Press
In its first response to an amended lawsuit filed by the federal agency, the Toronto Real Estate Board said Friday that its proposed new password protected websites that allow consumers to search Multiple Listing Service data while protecting the privacy of its customers.
"As planned, TREB has followed through on its commitment to provide realtor members with greater flexibility to serve their clients by developing a Virtual Office Website (VOW) policy," it said.
It added that consumers will be able to use those protected websites with the oversight of a realtor.
TREB accused the competition commissioner of pressuring the real-estate board to release private data about individual consumers, including contact and financial information, on the Internet.
Last month, the Competition Bureau updated its lawsuit, saying that password protected websites are still discriminatory and anti-competitive.
The amended case says the VOWs would still prevent agents from making key historical data available online.
The filing comes after TREB announced a new policy proposal last month in response to the Competition Bureau's first legal action taken against it in May.
The bureau had alleged consumers were being denied choice because while local agents were allowed to provide detailed information to customers in person or through fax or email, they were banned from doling out such information through websites.
But the bureau is not satisfied with the new policy, saying the proposed rules will continue to require customers to contact a realtor, entrenching the physical location model and discriminating against brokers who want to use the Internet.
The bureau alleges that TREB's restrictions are in violation of the Competition Act.
Source: The Canadian Press
Wednesday, August 10, 2011
Toronto housing prices hit mid-summer slump
Toronto real estate prices have slid back to levels last seen in March, after reaching a higher average in July than the same time the previous year.
According to figures released Thursday by the Toronto Real Estate Board, the average GTA selling price in July was $459,122 -- "up by almost 10 per cent compared to the July 2010 average of $418,675," it said.
But the average GTA price peaked in May at $485,520.
The March average price was $456,147, while the January price was $427,037.
Jason Mercer, the board's senior manager of market analysis, told CTV News that they consider the year-over-year price to be a more "apples to apples" comparison.
Housing prices almost always dip each summer, he said.
"Over the last four years … every year, you've seen the price decline from the spring into the summer. Just as sales edge lower in the summer, so does price," Mercer said.
In the board's news release, it highlighted strong sales volumes last month, saying they were up 23 per cent over July 2010.
However, total sales in the first seven months of 2011 are down by 1.3 per cent compared to the same period in 2010.
"But what we're seeing is an acceleration in sales," Mercer said.
He said if the pace keeps up, the board still expects about 90,000 sales transactions in 2011, which would make it the second-best year on record.
The board released its statistics on a day when the TSX suffered its worst one-day drop since the start of the recession in 2008.
It declined by 435 points, or about 3.4 per cent, closing at 12,380.13, over fears of a slowing U.S. and global economic recovery. That follows several sessions of losses.
Mercer said economic confidence appeared diminished in the summer of 2010 over changes to federal mortgage lending guidelines, along with fears about interest-rate hikes and the impact of the HST. The new provincial tax, which is harmonized with the federal GST, came into effect on July 1, 2010, and applies to most real estate purchases.
"This year, we've seen consumer confidence remain quite strong," he said, pointing to Ontario's job numbers through to June along with positive news on income growth.
Moving into the second half of the year, it will be interesting to see if the turbulence in the equities markets hurts that confidence, Mercer said.
In the GTA market, homes remain relatively affordable, with basic expenses (mortgage, utilities, taxes) totalling about 31 to 32 per cent of household income, he said.
"That is certainly acceptable from a mortgage lending perspective, and it remains low from a historic perspective," Mercer said.
Source: Darren Calabrese / THE CANADIAN PRESS
According to figures released Thursday by the Toronto Real Estate Board, the average GTA selling price in July was $459,122 -- "up by almost 10 per cent compared to the July 2010 average of $418,675," it said.
But the average GTA price peaked in May at $485,520.
The March average price was $456,147, while the January price was $427,037.
Jason Mercer, the board's senior manager of market analysis, told CTV News that they consider the year-over-year price to be a more "apples to apples" comparison.
Housing prices almost always dip each summer, he said.
"Over the last four years … every year, you've seen the price decline from the spring into the summer. Just as sales edge lower in the summer, so does price," Mercer said.
In the board's news release, it highlighted strong sales volumes last month, saying they were up 23 per cent over July 2010.
However, total sales in the first seven months of 2011 are down by 1.3 per cent compared to the same period in 2010.
"But what we're seeing is an acceleration in sales," Mercer said.
He said if the pace keeps up, the board still expects about 90,000 sales transactions in 2011, which would make it the second-best year on record.
The board released its statistics on a day when the TSX suffered its worst one-day drop since the start of the recession in 2008.
It declined by 435 points, or about 3.4 per cent, closing at 12,380.13, over fears of a slowing U.S. and global economic recovery. That follows several sessions of losses.
Mercer said economic confidence appeared diminished in the summer of 2010 over changes to federal mortgage lending guidelines, along with fears about interest-rate hikes and the impact of the HST. The new provincial tax, which is harmonized with the federal GST, came into effect on July 1, 2010, and applies to most real estate purchases.
"This year, we've seen consumer confidence remain quite strong," he said, pointing to Ontario's job numbers through to June along with positive news on income growth.
Moving into the second half of the year, it will be interesting to see if the turbulence in the equities markets hurts that confidence, Mercer said.
In the GTA market, homes remain relatively affordable, with basic expenses (mortgage, utilities, taxes) totalling about 31 to 32 per cent of household income, he said.
"That is certainly acceptable from a mortgage lending perspective, and it remains low from a historic perspective," Mercer said.
Source: Darren Calabrese / THE CANADIAN PRESS
Monday, July 25, 2011
Home prices expected to stay flat in 2012: RBC
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
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
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
Friday, June 24, 2011
Toronto Real Estate Board policy takes aim at competition concerns
The Toronto Real Estate Board has developed a new website policy for agents in a bid to satisfy Canada's Competition Commissioner, giving agents the power to create personalized listings sites so clients can browse for houses from their living rooms.
While some of Canada’s 101 real estate boards already allow agents to set up password-protected sites for their clients, the largest board in the country does not. Agents can't rush to open sites today, though - there is a 60-day consultation period planned.
What happens next could set a national precedent for the way in which home buyers research the biggest purchase of their lives, because other boards are expected to adopt the same policy once it’s instituted.
Competition Commissioner Melanie Aitken launched a lawsuit against TREB in May, saying it prevents brokers from sharing information online with their customers . It’s the latest move in the protracted fight between the bureau and real estate agents, who have come under increasing scrutiny as commission-based payments have grown along with the price of Canadian homes.
While the Toronto board allows real estate agents to provide information – such as the number of days a house has been on the market and previous selling prices – by hand, telephone or e-mail, they are not allowed to create websites where customers can look up the information on their own.
The new policy would allow the sites to exist as long as they meet certain requirements - the site's must be password protected, only clients can use them, TREB can monitor activity, sellers can opt out of having their home appear on the sites, and the name and contact information for the sellers must never appear on the listings.
The policy is based on one adopted by the National Association of Realtors in the United States to satisfy the Department of Justice several years ago.
TREB said it has been working on the policy since last August, however, the Competition Bureau has maintained the real estate association hasn't been willing to go far enough to satisfy its concerns. Both sides met several times prior to the charges being filed.
“Consistent with the bureau's practice, we shared our concerns with TREB as well as what would be necessary to address them,” a spokesperson said. “Ultimately, it was necessary for us to seek a legally binding order from the Tribunal to ensure greater competition and increased innovation.”
Incoming TREB president Richard Silver said the policy “confirms TREB's strong belief in open competition and in its members competitive spirit, quite independent of the Competition Commissioner's claims and approach.”
The Bureau said it would rather settle the complaint prior to an appearance at the Competition Tribunal, which can issue fines and binding rulings.
Source: Globe and Mail by STEVE LADURANTAYE
While some of Canada’s 101 real estate boards already allow agents to set up password-protected sites for their clients, the largest board in the country does not. Agents can't rush to open sites today, though - there is a 60-day consultation period planned.
What happens next could set a national precedent for the way in which home buyers research the biggest purchase of their lives, because other boards are expected to adopt the same policy once it’s instituted.
Competition Commissioner Melanie Aitken launched a lawsuit against TREB in May, saying it prevents brokers from sharing information online with their customers . It’s the latest move in the protracted fight between the bureau and real estate agents, who have come under increasing scrutiny as commission-based payments have grown along with the price of Canadian homes.
While the Toronto board allows real estate agents to provide information – such as the number of days a house has been on the market and previous selling prices – by hand, telephone or e-mail, they are not allowed to create websites where customers can look up the information on their own.
The new policy would allow the sites to exist as long as they meet certain requirements - the site's must be password protected, only clients can use them, TREB can monitor activity, sellers can opt out of having their home appear on the sites, and the name and contact information for the sellers must never appear on the listings.
The policy is based on one adopted by the National Association of Realtors in the United States to satisfy the Department of Justice several years ago.
TREB said it has been working on the policy since last August, however, the Competition Bureau has maintained the real estate association hasn't been willing to go far enough to satisfy its concerns. Both sides met several times prior to the charges being filed.
“Consistent with the bureau's practice, we shared our concerns with TREB as well as what would be necessary to address them,” a spokesperson said. “Ultimately, it was necessary for us to seek a legally binding order from the Tribunal to ensure greater competition and increased innovation.”
Incoming TREB president Richard Silver said the policy “confirms TREB's strong belief in open competition and in its members competitive spirit, quite independent of the Competition Commissioner's claims and approach.”
The Bureau said it would rather settle the complaint prior to an appearance at the Competition Tribunal, which can issue fines and binding rulings.
Source: Globe and Mail by STEVE LADURANTAYE
Friday, June 17, 2011
May home prices rise 8.6%
A hot real estate market in Vancouver helped drive home sales in Canada higher in May and push the average price was up 8.6 per cent, according to the Canadian Real Estate Association.
The average price in Vancouver, far and away Canada's most expensive market, was up 25.7 per cent to $831,555, while the number of home sales in that area was up 7.2 per cent from a year ago.
BMO deputy chief economist Doug Porter noted the Canadian housing market appears to have enjoyed a healthy spring selling season, while Vancouver marched to its own drummer.
"Quite simply, no other city in the country is seeing anything remotely close to what's unfolding in Vancouver," Porter wrote.
"In fact, many large cities have posted price declines over the past year, notably Calgary, Edmonton and Halifax."
Porter said Vancouver's average price was driven by sales of high-end homes but even so, the price of a typical home was up 6.2 per cent from a year ago at $627,000 and still the highest in the country, according to the Vancouver Real Estate Board.
The number of homes sold in Canada last month was up 2.3 per cent from a year ago, when home sales dropped off after months of heated activity. The national average price in May gained 8.6 per cent to $376,817, driven by strong gains in Vancouver and Toronto.
Excluding Vancouver, the average national price was up 5.6 per cent, while excluding Vancouver and Toronto, the national average was up 3.7 per cent.
Sales down over one month
"The Canadian housing market has seen some big ups and downs in recent years, making national sales activity so far this year look like something of a Goldilocks story by comparison — not too hot, not too cold," said Gary Morse, president of the Canadian Real Estate Association.
While sales compared with a year ago were higher, they were down slightly from the previous month. The number of homes sold in May was down 0.6 per cent from April, while the average price was down 0.1 per cent.
Housing prices have been supported by interest rates which have remained near historic lows and expectations that the Bank of Canada would raise to its key rate — which affects variable rate mortgages — later this year.
Canada's big banks have cut their residential mortgage rates in recent weeks as the weak U.S. economic recovery has put downward pressure on general borrowing costs.
The lower mortgage rates reflect the lower cost of borrowing in the bond market, where banks finance their home loan lending.
TD Bank economist Diana Petramala said Canada's home real estate market will likely remain well supported through most of 2011 by low interest rates.
"As interest rates begin to climb through 2012, a further deterioration in housing affordability will weigh on demand, and home prices are expected to fall," she wrote in a note to clients.
"That being said, continued improvements in the Canadian labour market, and only gradual increases in interest rates will help the resale housing market avoid a 'hard landing."'
Source: The Canadian Press, June 15, 2001
The average price in Vancouver, far and away Canada's most expensive market, was up 25.7 per cent to $831,555, while the number of home sales in that area was up 7.2 per cent from a year ago.
BMO deputy chief economist Doug Porter noted the Canadian housing market appears to have enjoyed a healthy spring selling season, while Vancouver marched to its own drummer.
"Quite simply, no other city in the country is seeing anything remotely close to what's unfolding in Vancouver," Porter wrote.
"In fact, many large cities have posted price declines over the past year, notably Calgary, Edmonton and Halifax."
Porter said Vancouver's average price was driven by sales of high-end homes but even so, the price of a typical home was up 6.2 per cent from a year ago at $627,000 and still the highest in the country, according to the Vancouver Real Estate Board.
The number of homes sold in Canada last month was up 2.3 per cent from a year ago, when home sales dropped off after months of heated activity. The national average price in May gained 8.6 per cent to $376,817, driven by strong gains in Vancouver and Toronto.
Excluding Vancouver, the average national price was up 5.6 per cent, while excluding Vancouver and Toronto, the national average was up 3.7 per cent.
Sales down over one month
"The Canadian housing market has seen some big ups and downs in recent years, making national sales activity so far this year look like something of a Goldilocks story by comparison — not too hot, not too cold," said Gary Morse, president of the Canadian Real Estate Association.
While sales compared with a year ago were higher, they were down slightly from the previous month. The number of homes sold in May was down 0.6 per cent from April, while the average price was down 0.1 per cent.
Housing prices have been supported by interest rates which have remained near historic lows and expectations that the Bank of Canada would raise to its key rate — which affects variable rate mortgages — later this year.
Canada's big banks have cut their residential mortgage rates in recent weeks as the weak U.S. economic recovery has put downward pressure on general borrowing costs.
The lower mortgage rates reflect the lower cost of borrowing in the bond market, where banks finance their home loan lending.
TD Bank economist Diana Petramala said Canada's home real estate market will likely remain well supported through most of 2011 by low interest rates.
"As interest rates begin to climb through 2012, a further deterioration in housing affordability will weigh on demand, and home prices are expected to fall," she wrote in a note to clients.
"That being said, continued improvements in the Canadian labour market, and only gradual increases in interest rates will help the resale housing market avoid a 'hard landing."'
Source: The Canadian Press, June 15, 2001
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