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
Friday, June 24, 2011
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
Monday, June 13, 2011
City can’t afford land transfer tax cut, budget chief says
Toronto’s budget chief says the city cannot afford to cut the land transfer tax in the upcoming budget.
Abolishing the despised tax, which tacks on thousands of dollars to the purchase of a home, was a central promise of Rob Ford’s winning mayoral campaign last year. He pledged to wipe it out by 2012 at the latest. But, faced with a $774-million funding gap, budget chief Mike Del Grande said he does not think the administration should scrap this year a tax that brought in $274-million in 2010
“This is not the year to be looking at the land transfer tax,” he told reporters following the monthly meeting of the budget committee. “You really don’t know what the books will look like until you get in. Although a promise may be made in good faith, it’s a challenge to keep it.”
Adrienne Batra, the Mayor’s press secretary, reiterated that Mayor Ford remains committed to eliminating the land transfer tax during his term, but noted that “the fact that there is a $774-million structural deficit obviously raises some significant challenges.”
One councillor claims that the city’s money woes are not as bad as the Ford administration suggests. “I think we’re in a financial position where with a modest tax increase, and a TTC fare increase, we could make it,” said Councillor Gord Perks (Parkdale-High Park), who accused Mayor Ford of “crying wolf” and scaring residents into cutting services they count on. Mr. Del Grande (Scarborough-Agincourt) lamented that some councillors “don’t get it”.
“We are spending more than we are bringing in. That’s why we are looking at everything under the sun, including the ABCs. It’s not business as usual. We are looking at monetizing assets, labour contracts, user fees. I am doing my best to ensure that the pain is spread evenly,” said Mr. Del Grande.
Source: National Post (Natalie Alcoba With files from Peter Kuitenbrouwer)
Abolishing the despised tax, which tacks on thousands of dollars to the purchase of a home, was a central promise of Rob Ford’s winning mayoral campaign last year. He pledged to wipe it out by 2012 at the latest. But, faced with a $774-million funding gap, budget chief Mike Del Grande said he does not think the administration should scrap this year a tax that brought in $274-million in 2010
“This is not the year to be looking at the land transfer tax,” he told reporters following the monthly meeting of the budget committee. “You really don’t know what the books will look like until you get in. Although a promise may be made in good faith, it’s a challenge to keep it.”
Adrienne Batra, the Mayor’s press secretary, reiterated that Mayor Ford remains committed to eliminating the land transfer tax during his term, but noted that “the fact that there is a $774-million structural deficit obviously raises some significant challenges.”
One councillor claims that the city’s money woes are not as bad as the Ford administration suggests. “I think we’re in a financial position where with a modest tax increase, and a TTC fare increase, we could make it,” said Councillor Gord Perks (Parkdale-High Park), who accused Mayor Ford of “crying wolf” and scaring residents into cutting services they count on. Mr. Del Grande (Scarborough-Agincourt) lamented that some councillors “don’t get it”.
“We are spending more than we are bringing in. That’s why we are looking at everything under the sun, including the ABCs. It’s not business as usual. We are looking at monetizing assets, labour contracts, user fees. I am doing my best to ensure that the pain is spread evenly,” said Mr. Del Grande.
Source: National Post (Natalie Alcoba With files from Peter Kuitenbrouwer)
Wednesday, May 18, 2011
Real estate sales dip but prices continue rise
Canadian home prices continued their upward march in April, driven by strong investor demand in Vancouver, while cracks in the Toronto condominium market may be starting to appear.
The Canadian Real Estate Association said Tuesday the average price of a home sold in April across the country was $372,544, up eight per cent from a year ago. It was the third straight month that the average price rose eight per cent on a year-over-year basis but the Ottawa-based group cautioned that the figure was skewed due to "surging multimillion-dollar property sales in selected areas of Greater Vancouver."
The group also shrugged off slow April sales figures that saw activity dip 4.4 per cent from March on a seasonally adjusted basis and 14.7 per cent on an actual basis from a year earlier.
The slow sales are said to have been driven by new mortgage rules that came into affect April 19 and made it tougher to borrow, leading people to rush into purchases in March.
The same sort of impact was felt in April 2010 as people moved their pur-chases forward to avoid the mortgage rule changes at the time, fear of higher interest rates and the looming implementation of the HST in two provinces.
"This makes it difficult to compare," said Gregory Klump, chief economist of CREA. "Changes to mortgage regulations that took effect in April 2011 likely sidelined a number of firsttime homebuyers. By contrast, higher end homes sales in Vancouver and Toronto had their best April ever."
Greater Victoria sales slid by a seasonally adjusted 6.7 per cent in April from March, beating out the national average of 4.4 per cent. A total of 457 homes changed hands in the capital region last month, down from 490 in March.
On a non-seasonally adjusted basis, Greater Victoria homes sales dropped by 23.7 per cent to 540 last month from 708 in March.
The average seasonally adjusted sale price of a home in the capital region rose 1.2 per cent monthover-month, to $498,536, from $492,807. But if the numbers are not seasonally adjusted, the average price decreased slightly, by two per cent, to $508,005 in April from $518,536 in March.
Worries about the sustainability of the housing market could be stoked by a report from Urbanation Inc., which monitors the Toronto condominium market. The group says more than 50 per cent of condominiums sold in the past year were purchased by buyers who do not intend to occupy their units and plan to rent in many instances.
Condominium rents in Toronto in the first quarter of 2011 were $2.11 per square foot compared to $2.09 a year earlier, a 0.8 per cent increase. Condominiums being registered now and ready to be occupied are priced for sale in the $450-per-square-foot range while newer units are going for $550 per square foot.
"What happens when these newer units hit the market?" said Ben Myers of Urbanation. "At $550 per square foot, a 750-squarefeet [condo] is $413,000. You put 25 per cent down and you have a mortgage of $310,000. Take a five-year variable mortgage at three per cent with 25-year amortization and you get $1,475 a month mortgage. Your condo fee is $345, property tax is $345 and you are up to $2,200 in carrying costs.
That's a huge [operating] loss," given the average rental rate would bring in just under $1,600 a month, he said.
Source: The Victoria Times Colonist
The Canadian Real Estate Association said Tuesday the average price of a home sold in April across the country was $372,544, up eight per cent from a year ago. It was the third straight month that the average price rose eight per cent on a year-over-year basis but the Ottawa-based group cautioned that the figure was skewed due to "surging multimillion-dollar property sales in selected areas of Greater Vancouver."
The group also shrugged off slow April sales figures that saw activity dip 4.4 per cent from March on a seasonally adjusted basis and 14.7 per cent on an actual basis from a year earlier.
The slow sales are said to have been driven by new mortgage rules that came into affect April 19 and made it tougher to borrow, leading people to rush into purchases in March.
The same sort of impact was felt in April 2010 as people moved their pur-chases forward to avoid the mortgage rule changes at the time, fear of higher interest rates and the looming implementation of the HST in two provinces.
"This makes it difficult to compare," said Gregory Klump, chief economist of CREA. "Changes to mortgage regulations that took effect in April 2011 likely sidelined a number of firsttime homebuyers. By contrast, higher end homes sales in Vancouver and Toronto had their best April ever."
Greater Victoria sales slid by a seasonally adjusted 6.7 per cent in April from March, beating out the national average of 4.4 per cent. A total of 457 homes changed hands in the capital region last month, down from 490 in March.
On a non-seasonally adjusted basis, Greater Victoria homes sales dropped by 23.7 per cent to 540 last month from 708 in March.
The average seasonally adjusted sale price of a home in the capital region rose 1.2 per cent monthover-month, to $498,536, from $492,807. But if the numbers are not seasonally adjusted, the average price decreased slightly, by two per cent, to $508,005 in April from $518,536 in March.
Worries about the sustainability of the housing market could be stoked by a report from Urbanation Inc., which monitors the Toronto condominium market. The group says more than 50 per cent of condominiums sold in the past year were purchased by buyers who do not intend to occupy their units and plan to rent in many instances.
Condominium rents in Toronto in the first quarter of 2011 were $2.11 per square foot compared to $2.09 a year earlier, a 0.8 per cent increase. Condominiums being registered now and ready to be occupied are priced for sale in the $450-per-square-foot range while newer units are going for $550 per square foot.
"What happens when these newer units hit the market?" said Ben Myers of Urbanation. "At $550 per square foot, a 750-squarefeet [condo] is $413,000. You put 25 per cent down and you have a mortgage of $310,000. Take a five-year variable mortgage at three per cent with 25-year amortization and you get $1,475 a month mortgage. Your condo fee is $345, property tax is $345 and you are up to $2,200 in carrying costs.
That's a huge [operating] loss," given the average rental rate would bring in just under $1,600 a month, he said.
Source: The Victoria Times Colonist
Sunday, May 15, 2011
New house prices flat in March
The New Housing Price Index was unchanged in March following a 0.4 per cent advance in February.
Statistics Canada reports monthly increases in some cities were offset by decreases in others, resulting in no change to the national index.
Prices rose the most in Saint John, Fredericton and Moncton, N.B. (up 0.4 per cent) between February and March.
They were followed by Toronto and Oshawa, Winnipeg and Regina (all three registering increases of 0.3 per cent).
The most significant monthly price decreases were recorded in Quebec City (down 0.7 per cent), Windsor (down 0.6 per cent) and Edmonton (down 0.2 per cent).
Year over year, the index was up 1.9 per cent in March after a 2.1 per cent increase in February.
Source: OTTAWA— The Canadian Press
Statistics Canada reports monthly increases in some cities were offset by decreases in others, resulting in no change to the national index.
Prices rose the most in Saint John, Fredericton and Moncton, N.B. (up 0.4 per cent) between February and March.
They were followed by Toronto and Oshawa, Winnipeg and Regina (all three registering increases of 0.3 per cent).
The most significant monthly price decreases were recorded in Quebec City (down 0.7 per cent), Windsor (down 0.6 per cent) and Edmonton (down 0.2 per cent).
Year over year, the index was up 1.9 per cent in March after a 2.1 per cent increase in February.
Source: OTTAWA— The Canadian Press
Tuesday, April 12, 2011
Vacancy rate down as office real estate recovers from recession
Toronto’s office space market is brushing off the remaining signs of recession as vacancy rates start to lower in the downtown core, a new report says.
According to Colliers International’s semi-annual report released Tuesday, the GTA’s average vacancy rate inched down over the past six months to 6.4 percent. Meanwhile, the availability rate in the downtown core also decreased from 10.3 percent at its peak in 2009 to a pre-recession level of 9.1 percent.
“These are signs of solid recovery and the resiliency of the Toronto office market,” said John Arnoldi, managing director with Colliers International in Toronto.
He pointed out that three new office buildings – the Telus tower, RBC tower, and the Bay And Adelaide centre – that have cropped up in the city are full.
“The city waited nearly 14 years for a new tower and these came up during the recession and were still occupied,” Mr. Arnoldi said. “Toronto’s skyline has been changing dramatically and there are definitely more on the horizon.”
The downtown and mid-town areas are recording lower vacancy rates at 5.7 per cent and 4.8 per cent respectively.
“There was a concern that with the global meltdown, many downtown financial services would move back their offices into the suburbs,” Mr. Arnoldi said. “But if anything, we’re seeing them re-entrenching in the downtown core.”
The trend of recovery can also been seen in Montreal, according to Colliers International.
“Market fundamentals and industry players all indicate that the Greater Montreal Area office market is on a path to recovery,” said Andrew Maravita, managing director with Colliers International in Montreal notes. “If the macro-economic conditions continue to improve, after a few years of drought in terms of new inventory, the vision of cranes in Montreal’s skyline is a realistic expectation.”
It’s not just a Toronto and Montreal success story, said Cushman & Wakefield, another real estate broker consultancy group.
“What’s really neat is this is Canada-wide story,” said Stuart Barron, national director of research at Cushman & Wakefield. “There are rumours on the streets of the new developments in at least four major cities – and in Toronto, you could expect to hear announcements of at least three more developments.”
Colliers also reported the GTA industrial real estate market also experienced a rebound, with more than 16 million square feet of industrial space sold over the past six months and nearly matching the total transaction volume of 2009.
However, while Mr. Barron agreed that downtown Toronto is showing a strong recovery, it’s not a trend that is necessarily reflecting in the GTA suburbs.
“The GTA is really a tale of two cities,” he said. “Suburban markets continue to feel the brunt of the recession. Downtown, on the other hand, has seen unprecedented demand.”
He attributes the suburban market’s slower recovery to a greater connection to U.S. businesses.
“Suburban markets saw shockingly weak demands over the last two years,” Mr. Barron said. “The GTA west [area] had average demand strength of zero and that in the history of the GTA west, they’ve never seen.”
Source: TAMARA BALUJA Globe and Mail Update
According to Colliers International’s semi-annual report released Tuesday, the GTA’s average vacancy rate inched down over the past six months to 6.4 percent. Meanwhile, the availability rate in the downtown core also decreased from 10.3 percent at its peak in 2009 to a pre-recession level of 9.1 percent.
“These are signs of solid recovery and the resiliency of the Toronto office market,” said John Arnoldi, managing director with Colliers International in Toronto.
He pointed out that three new office buildings – the Telus tower, RBC tower, and the Bay And Adelaide centre – that have cropped up in the city are full.
“The city waited nearly 14 years for a new tower and these came up during the recession and were still occupied,” Mr. Arnoldi said. “Toronto’s skyline has been changing dramatically and there are definitely more on the horizon.”
The downtown and mid-town areas are recording lower vacancy rates at 5.7 per cent and 4.8 per cent respectively.
“There was a concern that with the global meltdown, many downtown financial services would move back their offices into the suburbs,” Mr. Arnoldi said. “But if anything, we’re seeing them re-entrenching in the downtown core.”
The trend of recovery can also been seen in Montreal, according to Colliers International.
“Market fundamentals and industry players all indicate that the Greater Montreal Area office market is on a path to recovery,” said Andrew Maravita, managing director with Colliers International in Montreal notes. “If the macro-economic conditions continue to improve, after a few years of drought in terms of new inventory, the vision of cranes in Montreal’s skyline is a realistic expectation.”
It’s not just a Toronto and Montreal success story, said Cushman & Wakefield, another real estate broker consultancy group.
“What’s really neat is this is Canada-wide story,” said Stuart Barron, national director of research at Cushman & Wakefield. “There are rumours on the streets of the new developments in at least four major cities – and in Toronto, you could expect to hear announcements of at least three more developments.”
Colliers also reported the GTA industrial real estate market also experienced a rebound, with more than 16 million square feet of industrial space sold over the past six months and nearly matching the total transaction volume of 2009.
However, while Mr. Barron agreed that downtown Toronto is showing a strong recovery, it’s not a trend that is necessarily reflecting in the GTA suburbs.
“The GTA is really a tale of two cities,” he said. “Suburban markets continue to feel the brunt of the recession. Downtown, on the other hand, has seen unprecedented demand.”
He attributes the suburban market’s slower recovery to a greater connection to U.S. businesses.
“Suburban markets saw shockingly weak demands over the last two years,” Mr. Barron said. “The GTA west [area] had average demand strength of zero and that in the history of the GTA west, they’ve never seen.”
Source: TAMARA BALUJA Globe and Mail Update
Sunday, March 20, 2011
Hidden fees hike cost of new homes in GTA by as much as 30 per cent
New home buyers in the GTA are being saddled with hidden fees that threaten to price buyers out of the market, with as much as 30 per cent of the purchase price going directly to government coffers.
But the construction industry is pushing back, saying the municipalities’ appetite for development charges could derail the new-housing market by driving the average price beyond the means of most buyers just as interest rates are about to move higher.
The charges have more than doubled in the past five years in many communities around the Greater Toronto Area, according to a pair of reports from the industry that will be released on Thursday.
Development fees are levied to raise the money for the municipality to provide infrastructure – such as roads and sewers – to support the housing. However, the cities have also funneled some of the cash toward projects such as libraries and community centres, which developers say have little to do with the actual construction of a house.
Homebuilders – who have become increasingly vocal in their critique of government policy as the new-housing market shows signs of cooling – said governments have been able to pile costs on consumers over the past several years because interest rates have been low and homes have been relatively affordable.
But with interest rates set to move higher in the next year and more buyers conscious of costs, they said, the full effect of a decade of rising fees could sideline an industry that has been crucial to the region’s economic health.
“Municipalities have increasingly looked to development charges for additional revenue because these costs are indirect and hidden,” states a report by the Residential and Civil Construction Alliance of Ontario.
The report estimates that home buyers in Oakville pay an average $50,548 in development charges, with most cities surrounding the City of Toronto charging between $30,000 and $50,000 for each new home built. Toronto’s average take is $12,281 per house, with development charges set to rise this year after a two-year freeze.
“We’re in a different position in the City of Toronto because we aren’t building large subdivisions and most of the infrastructure for new homes is already built,” said special projects director Joe Farag.
In Vancouver, development charges average $23,418. In Calgary, they are $7,475.
These figures don’t include the additional costs added by the federal goods and services tax, or additional charges brought on by the new harmonized sales tax in Ontario and B.C. With those factored in, a report from the Residential Construction Council of Ontario estimates that 30 per cent of a new GTA home’s cost is now determined by government charges. Canada Mortgage and Housing Corp. estimates the Canadian average is 13.4 per cent.
Oakville Mayor Rob Burton said the city charges developers the maximum amount allowed under provincial legislation because development fees haven’t covered the cost of growth in more than a decade. “Mike Harris gutted them in 1997,” he said.
“So local property taxpayers subsidize billionaire developers whose subdivisions make higher profits by not paying for the hospitals, transit and other infrastructure they require,” he said. “Oakville’s council is proud to have development charges that capture the maximum permissible amount of the costs of growth.”
The builders agree that the shifting of some provincial responsibilities to the municipalities led to rapidly escalating fees in the GTA, but say they should not have to bear the brunt. The president of the Canadian Homebuilders Association said builders can’t simply absorb the costs, because their margins have never been thinner.
“Profit is not a dirty word,” said Vince Laberge. “Politicians need to raise property taxes instead of having a social agenda funded by the new home buyer.”
The reports recommend the province pay a greater share of the cost of municipal infrastructure such as fire stations and libraries, and provide more transit funding, and that municipalities implement user fees in place of development charges wherever possible. If not, they warn, development could be reduced in coming years.
Source: STEVE LADURANTAYE — REAL ESTATE REPORTER
From Thursday's Globe and Mail
Published Thursday, Mar. 10, 2011
But the construction industry is pushing back, saying the municipalities’ appetite for development charges could derail the new-housing market by driving the average price beyond the means of most buyers just as interest rates are about to move higher.
The charges have more than doubled in the past five years in many communities around the Greater Toronto Area, according to a pair of reports from the industry that will be released on Thursday.
Development fees are levied to raise the money for the municipality to provide infrastructure – such as roads and sewers – to support the housing. However, the cities have also funneled some of the cash toward projects such as libraries and community centres, which developers say have little to do with the actual construction of a house.
Homebuilders – who have become increasingly vocal in their critique of government policy as the new-housing market shows signs of cooling – said governments have been able to pile costs on consumers over the past several years because interest rates have been low and homes have been relatively affordable.
But with interest rates set to move higher in the next year and more buyers conscious of costs, they said, the full effect of a decade of rising fees could sideline an industry that has been crucial to the region’s economic health.
“Municipalities have increasingly looked to development charges for additional revenue because these costs are indirect and hidden,” states a report by the Residential and Civil Construction Alliance of Ontario.
The report estimates that home buyers in Oakville pay an average $50,548 in development charges, with most cities surrounding the City of Toronto charging between $30,000 and $50,000 for each new home built. Toronto’s average take is $12,281 per house, with development charges set to rise this year after a two-year freeze.
“We’re in a different position in the City of Toronto because we aren’t building large subdivisions and most of the infrastructure for new homes is already built,” said special projects director Joe Farag.
In Vancouver, development charges average $23,418. In Calgary, they are $7,475.
These figures don’t include the additional costs added by the federal goods and services tax, or additional charges brought on by the new harmonized sales tax in Ontario and B.C. With those factored in, a report from the Residential Construction Council of Ontario estimates that 30 per cent of a new GTA home’s cost is now determined by government charges. Canada Mortgage and Housing Corp. estimates the Canadian average is 13.4 per cent.
Oakville Mayor Rob Burton said the city charges developers the maximum amount allowed under provincial legislation because development fees haven’t covered the cost of growth in more than a decade. “Mike Harris gutted them in 1997,” he said.
“So local property taxpayers subsidize billionaire developers whose subdivisions make higher profits by not paying for the hospitals, transit and other infrastructure they require,” he said. “Oakville’s council is proud to have development charges that capture the maximum permissible amount of the costs of growth.”
The builders agree that the shifting of some provincial responsibilities to the municipalities led to rapidly escalating fees in the GTA, but say they should not have to bear the brunt. The president of the Canadian Homebuilders Association said builders can’t simply absorb the costs, because their margins have never been thinner.
“Profit is not a dirty word,” said Vince Laberge. “Politicians need to raise property taxes instead of having a social agenda funded by the new home buyer.”
The reports recommend the province pay a greater share of the cost of municipal infrastructure such as fire stations and libraries, and provide more transit funding, and that municipalities implement user fees in place of development charges wherever possible. If not, they warn, development could be reduced in coming years.
Source: STEVE LADURANTAYE — REAL ESTATE REPORTER
From Thursday's Globe and Mail
Published Thursday, Mar. 10, 2011
Thursday, March 03, 2011
Housing sales this year to come in 15 per cent lower than 2007 peak: Scotiabank
Canadian real estate sales this year are expected to come in about 15 per cent below their peak in 2007 but will hover close to the 10-year average, according to a home sales report from Scotiabank.
The bank's Global Real Estate Trend report released Tuesday said the housing market should remain relatively balanced between both buyers and sellers throughout the year.
Momentum will be strongest in the first half of the year as anticipated higher interest rates and tighter mortgage lending rules contribute to softening later in the year, said Scotiabank senior economist Adrienne Warren.
"Market conditions are expected to remain fairly balanced, favouring sellers to some degree in the spring, and buyers by the fall. This, in turn, suggests relatively steady prices, but with more downside risk later in the year," said Warren.
The broad economic factors supporting housing demand — historically low interest rates and steady employment growth —remain in place for further gains. However, sales will edge down this year and into 2012 as demand modifies following the record-breaking housing boom of the past decade.
"Ownership rates are now reaching both a cyclical and structural peak, given inevitably higher borrowing costs, more moderate medium-term growth prospects and more restrictive mortgage product offerings," she said.
One of the major changes beginning this month is a shortening of the maximum amortization period from 35 years to 30 years — adding about $100 per month to the average mortgage payment.
That could have the effect of pricing some first-time buyers out of the market, or at least forcing then to opt for a less expensive home, Warren said.
"Coming on the heels of earlier mortgage-tightening measures implemented in October 2008 and April 2010, this latest round of regulatory changes will have at least some dampening impact on credit demand, home sales and prices," she wrote in the report.
This year's market is expected to follow a similar pattern to the housing activity seen last year.
A powerful driver of economic recovery, the real estate market kicked off last year on a tear as buyers rushed into the market in advance of higher interest rates, new mortgage rules and a new harmonized tax regime in two provinces.
But sales moderated in the second half of the year as a string of modest interest rate hikes, along with the new rules and sales tax took their toll on demand.
The Bank of Canada announced Tuesday it will stick with its ultra-low interest rate policy of one per cent for now, but most economists suggest it will have to raise rates soon in order to ward off inflation.
Any increase would raise variable mortgage rates and any other loans tied to banks' prime rates.
Warren warns that rising mortgage rates, combined with low household incomes and high home prices will strain affordability and further reduce sales.
The report suggests that the number of unsold new homes is higher than average after builders raced to catch up to demand amid the post-recession boom.
"Combined with more muted sales expectations and potentially some slowing in household formation rates, this points to a lower level of sustainable starts over the next few years," it said.
Canada Mortgage and Housing Corp. predicted last month that between 157,000 and 192,000 new housing units will be built this year, with the number remaining virtually the same in 2012.
In its first-quarter housing market outlook, released Thursday, it said economic growth and lower unemployment will prop up the need for new homes.
Housing sale data from February won't be released until mid-March, but the Canadian Real Estate Association projected activity in the resale market likely picked last month in advance of the new mortgage rules coming into effect March 18.
About 42,379 homes were sold on CREA's Multiple Listing Services in January across the country, up 4.5 per cent from the 40,558 sold in December.
Source: By Sunny Freeman, The Canadian Press
The bank's Global Real Estate Trend report released Tuesday said the housing market should remain relatively balanced between both buyers and sellers throughout the year.
Momentum will be strongest in the first half of the year as anticipated higher interest rates and tighter mortgage lending rules contribute to softening later in the year, said Scotiabank senior economist Adrienne Warren.
"Market conditions are expected to remain fairly balanced, favouring sellers to some degree in the spring, and buyers by the fall. This, in turn, suggests relatively steady prices, but with more downside risk later in the year," said Warren.
The broad economic factors supporting housing demand — historically low interest rates and steady employment growth —remain in place for further gains. However, sales will edge down this year and into 2012 as demand modifies following the record-breaking housing boom of the past decade.
"Ownership rates are now reaching both a cyclical and structural peak, given inevitably higher borrowing costs, more moderate medium-term growth prospects and more restrictive mortgage product offerings," she said.
One of the major changes beginning this month is a shortening of the maximum amortization period from 35 years to 30 years — adding about $100 per month to the average mortgage payment.
That could have the effect of pricing some first-time buyers out of the market, or at least forcing then to opt for a less expensive home, Warren said.
"Coming on the heels of earlier mortgage-tightening measures implemented in October 2008 and April 2010, this latest round of regulatory changes will have at least some dampening impact on credit demand, home sales and prices," she wrote in the report.
This year's market is expected to follow a similar pattern to the housing activity seen last year.
A powerful driver of economic recovery, the real estate market kicked off last year on a tear as buyers rushed into the market in advance of higher interest rates, new mortgage rules and a new harmonized tax regime in two provinces.
But sales moderated in the second half of the year as a string of modest interest rate hikes, along with the new rules and sales tax took their toll on demand.
The Bank of Canada announced Tuesday it will stick with its ultra-low interest rate policy of one per cent for now, but most economists suggest it will have to raise rates soon in order to ward off inflation.
Any increase would raise variable mortgage rates and any other loans tied to banks' prime rates.
Warren warns that rising mortgage rates, combined with low household incomes and high home prices will strain affordability and further reduce sales.
The report suggests that the number of unsold new homes is higher than average after builders raced to catch up to demand amid the post-recession boom.
"Combined with more muted sales expectations and potentially some slowing in household formation rates, this points to a lower level of sustainable starts over the next few years," it said.
Canada Mortgage and Housing Corp. predicted last month that between 157,000 and 192,000 new housing units will be built this year, with the number remaining virtually the same in 2012.
In its first-quarter housing market outlook, released Thursday, it said economic growth and lower unemployment will prop up the need for new homes.
Housing sale data from February won't be released until mid-March, but the Canadian Real Estate Association projected activity in the resale market likely picked last month in advance of the new mortgage rules coming into effect March 18.
About 42,379 homes were sold on CREA's Multiple Listing Services in January across the country, up 4.5 per cent from the 40,558 sold in December.
Source: By Sunny Freeman, The Canadian Press
Wednesday, February 16, 2011
Commercial real estate deals up 48%
Toronto led other Canadian cities in the value of commercial real estate deals last year, growing by 93 per cent to $7.4 billion. (CBC)
The value of commercial property transactions across Canada soared by 48 per cent last year to $18.9 billion, real estate firm CB Richard Ellis said Monday.
CBRE said the hike was driven by a strengthening economy and surging investor confidence.
CBRE's 2010 National Investment Report found that the volume of commercial deals grew in every market expect for London, Ont.
Transactions in Toronto shot up the most, growing by 93 per cent, with $7.4 billion in trades, up from $3.8 billion in 2009.
Last year's total soared past the $12.7 billion seen in 2009 and approached pre-recession, 2005 levels when $19.8 billion of commercial property changed hands.
By year-end, the number of commercial transactions reached 4,589, up by more than 18 per cent from the 3,872 transactions in 2009.
The report predicts that this year transaction volumes will be strong, but the values of individual deals will likely be smaller.
Source: CBC.ca with files from Canadian Press
The value of commercial property transactions across Canada soared by 48 per cent last year to $18.9 billion, real estate firm CB Richard Ellis said Monday.
CBRE said the hike was driven by a strengthening economy and surging investor confidence.
CBRE's 2010 National Investment Report found that the volume of commercial deals grew in every market expect for London, Ont.
Transactions in Toronto shot up the most, growing by 93 per cent, with $7.4 billion in trades, up from $3.8 billion in 2009.
Last year's total soared past the $12.7 billion seen in 2009 and approached pre-recession, 2005 levels when $19.8 billion of commercial property changed hands.
By year-end, the number of commercial transactions reached 4,589, up by more than 18 per cent from the 3,872 transactions in 2009.
The report predicts that this year transaction volumes will be strong, but the values of individual deals will likely be smaller.
Source: CBC.ca with files from Canadian Press
Monday, January 10, 2011
Canadian real estate market to resemble 2010: report
TORONTO — The Canadian real estate market will follow a similar pattern this year as that seen in 2010 as buyers pull sales forward into the early months in anticipation of higher interest rates, according to a report from one of Canada's largest real estate firms.
The aftershocks of the recession, including a lingering low interest rate environment, will continue to influence the Canadian real estate market in 2011 -- a year that will be stronger than expected, said the report released Thursday by Royal LePage.
Royal LePage predicts that average home prices will rise three per cent to $348,600 in 2011, driven largely by a rush to buy in the first half of the year in advance of anticipated interest and mortgage rate hikes in the second half.
"Canadians realize that interest rates are unsustainably low and that homes will become effectively more expensive when mortgage rates return to normal levels," said Phil Soper, president of Royal LePage.
"2011 is expected to unfold much like 2010, when close to 60 per cent of sales volume occurred in the first half of the year in anticipation of interest rate increases that never materialized."
However, the number of transactions will be slightly lower than last year and activity will be modestly closer to the norm because the pull forward phenomenon last year was exacerbated by a tightening of mortgage qualification rules and the introduction of the HST in Ontario and British Columbia in the middle of the year.
Soper said the extension of low mortgage rates will be an unexpected boon to the market this year.
"Like many Canadians, we anticipated an end to the ultra-low interest rate era before year-end 2010," he said.
"Paradoxically, global economic weakness, particularly in the United States, allowed policy-makers and financial institutions to keep borrowing costs low, resulting in a stronger Canadian housing market and a better than forecast fourth quarter."
Average house prices rose between 3.9 per cent and 4.6 per cent in the fourth quarter of 2010, while price appreciation is expected to continue a moderate and steady climb throughout the current year.
The report contrasts with some recent predictions by economists that prices should remain flat or decline over the next year.
The Canadian Real Estate Association has predicted prices will fall by 1.3 per cent to a national average of $326,000, this year, tied to weakness in British Columbia and Ontario -- the hottest real estate markets of 2010. It has also forecasted a nine per cent decline in sales.
CREA has yet to release year-end data for 2010, but preliminary reports from two of the biggest markets, Toronto and Vancouver, released this week indicate 2010 declined as expected.
Sales were down by one per cent compared with 2009 in Toronto, while the average home selling price was $431,463, up nine per cent from 2009.
In Vancouver, sales declined 14.2 per cent from 2009, and were 10.3 per cent below the 10-year average for sales in the region. The average selling price in B.C.'s largest city was up 2.7 per cent at $577,808.
Canada's real estate market has been on a rebound over much of the past year after sales dried up in late 2008 and hit a multi-year low in January 2009.
The housing market's sudden plunge was sparked by a credit crunch that developed in the U.S. housing and lending industries, and gradually spread across the globe, causing a worldwide recession in the late summer and early fall of 2009.
The commercial real estate market experienced a similar plunge as investors lost confidence in the sector.
However, the commercial market, which includes office and retail spaces, had a stronger than expected year in 2010 and that momentum is projected to strengthen throughout 2011, according to a report released Thursday by CB Richard Ellis Ltd.
Some market observers had predicted a glut of vacancies in Canada's major business centres, but that didn't happen, said John O`Bryan, vice-chairman of CB Richard Ellis Canada.
We`ve had good news over the past twelve months with respect to interest rates, housing trends and employment gains, with many companies announcing plans for expansion, he wrote in the report.
"2011 may well be another good, stable year but should be viewed with cautious optimism in light of the concentration in employment growth on part-time jobs rather than the full-time positions that indicate confidence in long-term, sustainable growth."
Source: The Canadian Press (Jan 06, 2011)
The aftershocks of the recession, including a lingering low interest rate environment, will continue to influence the Canadian real estate market in 2011 -- a year that will be stronger than expected, said the report released Thursday by Royal LePage.
Royal LePage predicts that average home prices will rise three per cent to $348,600 in 2011, driven largely by a rush to buy in the first half of the year in advance of anticipated interest and mortgage rate hikes in the second half.
"Canadians realize that interest rates are unsustainably low and that homes will become effectively more expensive when mortgage rates return to normal levels," said Phil Soper, president of Royal LePage.
"2011 is expected to unfold much like 2010, when close to 60 per cent of sales volume occurred in the first half of the year in anticipation of interest rate increases that never materialized."
However, the number of transactions will be slightly lower than last year and activity will be modestly closer to the norm because the pull forward phenomenon last year was exacerbated by a tightening of mortgage qualification rules and the introduction of the HST in Ontario and British Columbia in the middle of the year.
Soper said the extension of low mortgage rates will be an unexpected boon to the market this year.
"Like many Canadians, we anticipated an end to the ultra-low interest rate era before year-end 2010," he said.
"Paradoxically, global economic weakness, particularly in the United States, allowed policy-makers and financial institutions to keep borrowing costs low, resulting in a stronger Canadian housing market and a better than forecast fourth quarter."
Average house prices rose between 3.9 per cent and 4.6 per cent in the fourth quarter of 2010, while price appreciation is expected to continue a moderate and steady climb throughout the current year.
The report contrasts with some recent predictions by economists that prices should remain flat or decline over the next year.
The Canadian Real Estate Association has predicted prices will fall by 1.3 per cent to a national average of $326,000, this year, tied to weakness in British Columbia and Ontario -- the hottest real estate markets of 2010. It has also forecasted a nine per cent decline in sales.
CREA has yet to release year-end data for 2010, but preliminary reports from two of the biggest markets, Toronto and Vancouver, released this week indicate 2010 declined as expected.
Sales were down by one per cent compared with 2009 in Toronto, while the average home selling price was $431,463, up nine per cent from 2009.
In Vancouver, sales declined 14.2 per cent from 2009, and were 10.3 per cent below the 10-year average for sales in the region. The average selling price in B.C.'s largest city was up 2.7 per cent at $577,808.
Canada's real estate market has been on a rebound over much of the past year after sales dried up in late 2008 and hit a multi-year low in January 2009.
The housing market's sudden plunge was sparked by a credit crunch that developed in the U.S. housing and lending industries, and gradually spread across the globe, causing a worldwide recession in the late summer and early fall of 2009.
The commercial real estate market experienced a similar plunge as investors lost confidence in the sector.
However, the commercial market, which includes office and retail spaces, had a stronger than expected year in 2010 and that momentum is projected to strengthen throughout 2011, according to a report released Thursday by CB Richard Ellis Ltd.
Some market observers had predicted a glut of vacancies in Canada's major business centres, but that didn't happen, said John O`Bryan, vice-chairman of CB Richard Ellis Canada.
We`ve had good news over the past twelve months with respect to interest rates, housing trends and employment gains, with many companies announcing plans for expansion, he wrote in the report.
"2011 may well be another good, stable year but should be viewed with cautious optimism in light of the concentration in employment growth on part-time jobs rather than the full-time positions that indicate confidence in long-term, sustainable growth."
Source: The Canadian Press (Jan 06, 2011)
Thursday, December 16, 2010
Home sales rise in November for fourth straight month
TORONTO — Canadian home sales grew in November for the fourth straight month but continued a trend of unfavourable comparisons to the same month last year, when sales reached record levels.
Seasonally adjusted home resales were up 4.8 per cent compared to October, according to the Canadian Real Estate Association's monthly report.
Home resales on CREA's Multiple Listing Service have also rebounded by 19.5 per cent from July, when the market hit a trough following the introduction of new mortgage rules, higher interest rates and a new tax in two provinces.
However, actual home sales were down 9.3 per cent compared to record activity last November, consumer confidence improved from the recession and buyers rushed into the market to secure a new home while mortgage rates were near record lows.
"A comparison of November sales activity to sales for the same month in previous years suggests that activity is currently running at more normal levels," CREA said in its release, adding that the persistence of large year-over-year declines has been masking the steady improvement in sales since July.
Robert Kavcic, an economist at BMO Capital Markets said falling long-term mortgage rates and improved consumer confidence have helped stabilize the market after a downturn in the spring and early summer.
"After a dramatic ride that saw a recession, a piping hot rebound and a subsequent mini correction, the Canadian housing market seems to have landed softly on stable ground. The market now appears well balanced, with neither buyers nor sellers holding a meaningful edge."
The national average price for homes sold in November 2010 was $344,268, up two per cent from November 2009.
Prices also increased from October, when the average home cost $343,747, up less than a percentage point compared to one year ago. Still November prices were down from May when prices peaked at $346,881.
Gregory Klump, CREA's chief economist projects that the housing market will remain in balanced territory in the coming months.
"With sales activity having returned to better health and a firm floor under prices, sellers who previously shied away from putting their home on the market are expected to list their home in response to improved housing demand in recent months," he said.
"Following the chilling lows at the onset of the recent recession and the dizzying heights during the subsequent recovery, the national housing market appears to be returning to some semblance of normalcy."
Seasonally adjusted activity was up from October levels in two-thirds of all local markets, including eight of the ten most active markets.
The number of new listings on the MLS edged down 0.7 per cent and are now down nearly 15 per cent from the peak reached this April.
The decline in new listings is consistent with cooling activity in the housing market since the middle of the year, and has created balanced market conditions in about 60 per cent of Canadian markets.
About two-thirds of the remaining markets remain in sellers' territory.
It would take an average of 5.8 months to sell all of the current houses on the MLS in November -- down from 6.1 months in October.
Source: The Canadian Press
Seasonally adjusted home resales were up 4.8 per cent compared to October, according to the Canadian Real Estate Association's monthly report.
Home resales on CREA's Multiple Listing Service have also rebounded by 19.5 per cent from July, when the market hit a trough following the introduction of new mortgage rules, higher interest rates and a new tax in two provinces.
However, actual home sales were down 9.3 per cent compared to record activity last November, consumer confidence improved from the recession and buyers rushed into the market to secure a new home while mortgage rates were near record lows.
"A comparison of November sales activity to sales for the same month in previous years suggests that activity is currently running at more normal levels," CREA said in its release, adding that the persistence of large year-over-year declines has been masking the steady improvement in sales since July.
Robert Kavcic, an economist at BMO Capital Markets said falling long-term mortgage rates and improved consumer confidence have helped stabilize the market after a downturn in the spring and early summer.
"After a dramatic ride that saw a recession, a piping hot rebound and a subsequent mini correction, the Canadian housing market seems to have landed softly on stable ground. The market now appears well balanced, with neither buyers nor sellers holding a meaningful edge."
The national average price for homes sold in November 2010 was $344,268, up two per cent from November 2009.
Prices also increased from October, when the average home cost $343,747, up less than a percentage point compared to one year ago. Still November prices were down from May when prices peaked at $346,881.
Gregory Klump, CREA's chief economist projects that the housing market will remain in balanced territory in the coming months.
"With sales activity having returned to better health and a firm floor under prices, sellers who previously shied away from putting their home on the market are expected to list their home in response to improved housing demand in recent months," he said.
"Following the chilling lows at the onset of the recent recession and the dizzying heights during the subsequent recovery, the national housing market appears to be returning to some semblance of normalcy."
Seasonally adjusted activity was up from October levels in two-thirds of all local markets, including eight of the ten most active markets.
The number of new listings on the MLS edged down 0.7 per cent and are now down nearly 15 per cent from the peak reached this April.
The decline in new listings is consistent with cooling activity in the housing market since the middle of the year, and has created balanced market conditions in about 60 per cent of Canadian markets.
About two-thirds of the remaining markets remain in sellers' territory.
It would take an average of 5.8 months to sell all of the current houses on the MLS in November -- down from 6.1 months in October.
Source: The Canadian Press
Thursday, November 25, 2010
Ontario REALTORS support grow ops registry bill
November 25, 2010 -Ontario REALTORS® support private members Bill 139, Clandestine Drug Operation Prevention Act, 2010, introduced by MPP Lisa MacLeod to establish a marijuana grow operations and clandestine drug laboratory registry.
“Grow-ops are major problem for homebuyers in the province and we have been urging the Ontario government to establish a registry to protect consumers for almost ten years,” said Dorothy Mason, President. “We urge the government to pass this bill in order to protect homebuyers.”
REALTORS® are obligated by law to disclose to potential homebuyers if a home has been used as a marijuana grow-operation or a drug lab. Ontario REALTORS are hindered by the lack of a central registry which is crucial to protecting homebuyers from the potential health and safety hazards of properties formerly used to manufacturer clandestine drugs.
Bill 139 defines a clandestine drug operation to be an illegal operation where any substance listed in the schedules I through IV in the Controlled Drugs and Substances Act of Canada can be obtained by any method or process.
Clandestine drug operations cause significant damage to homes. For example, physical damage done to the house by excessive moisture leading to mould, chemical contamination, structural alterations and electrical rewiring leading to fire hazards.
Often these homes received cosmetic renovations to disguise the fact they were marijuana grow-operations and consumer unknowingly purchases these homes. This can lead to loss of insurance for the property and exorbitantly high remediation costs.
The Ontario Real Estate Association represents 49,000 brokers and salespeople who are members of the provinces 42 real estate boards. OREA serves its members through a wide variety of publications, educational programs and special services. The association provides all real estate licensing courses in Ontario.
OREA was founded in 1922 to organize real estate activities and develop common goals across the province. These goals included promoting higher industry standards, protecting the general public from unscrupulous brokers and salespeople, and preserving private property rights.
Source: Toronto Real Estate Board
“Grow-ops are major problem for homebuyers in the province and we have been urging the Ontario government to establish a registry to protect consumers for almost ten years,” said Dorothy Mason, President. “We urge the government to pass this bill in order to protect homebuyers.”
REALTORS® are obligated by law to disclose to potential homebuyers if a home has been used as a marijuana grow-operation or a drug lab. Ontario REALTORS are hindered by the lack of a central registry which is crucial to protecting homebuyers from the potential health and safety hazards of properties formerly used to manufacturer clandestine drugs.
Bill 139 defines a clandestine drug operation to be an illegal operation where any substance listed in the schedules I through IV in the Controlled Drugs and Substances Act of Canada can be obtained by any method or process.
Clandestine drug operations cause significant damage to homes. For example, physical damage done to the house by excessive moisture leading to mould, chemical contamination, structural alterations and electrical rewiring leading to fire hazards.
Often these homes received cosmetic renovations to disguise the fact they were marijuana grow-operations and consumer unknowingly purchases these homes. This can lead to loss of insurance for the property and exorbitantly high remediation costs.
The Ontario Real Estate Association represents 49,000 brokers and salespeople who are members of the provinces 42 real estate boards. OREA serves its members through a wide variety of publications, educational programs and special services. The association provides all real estate licensing courses in Ontario.
OREA was founded in 1922 to organize real estate activities and develop common goals across the province. These goals included promoting higher industry standards, protecting the general public from unscrupulous brokers and salespeople, and preserving private property rights.
Source: Toronto Real Estate Board
Friday, November 12, 2010
New home prices up across Canada
When Shawn Richardson breaks ground on his development in Thornhill on Wednesday, it will represent a milestone in the area.
At more than a million square feet for phase one, World On Yonge is being billed as the largest mixed use project in the Greater Toronto Area.
The first phase at Yonge St. and Steeles Ave. will have two residential towers, a 20-storey commercial office building and a three storey shopping centre. Another two residential towers are planned for the 10 acre site which will bring the project to 1.5 million square feet.
“The response has been tremendous. We have many situations where people might buy a retail unit, but they also buy a condominium so they can live where they work,” said Richardson, of Liberty Development Corporation.
Since sales started last September, the group has sold more than 85 per cent of the condos, representing 710 units.
But as the market slows, Richardson expects that the remaining units will typically be the hardest to sell.
Toronto new housing prices remained flat in September over August, the first time that prices have not increased this year, according to figures released by Statistics Canada Tuesday.
However, prices are up by 3 per cent year over year in the Toronto area market.
“ We’re not saying that the market is as strong as it once was, but no projects have tanked, and everyone is doing reasonably well. People are still buying,” said Richardson.
Nationally, new housing prices in Canada continue to increase, even as the economy shows signs of slowing.
Prices were up 0.2 per cent in September, following a 0.1 per cent increase in August according to figures released by Statistics Canada Tuesday.
While prices were up 2.7 per cent year over year in September, they were down from the 3.3 per cent year over year figure seen in June, as the trendline moves downward.
Some analysts believe that prices could end up in the negative figures by next year.
“Prices are divorced from sales, because it takes time for the market to settle. It takes a while before people are forced to reconsider their asking prices,” said Garth Turner, a former revenue minister who held a real estate forum dubbed “HouseAggedon” in Toronto on Tuesday.
Turner says he is convinced that the market remains in a bubble.
“You’ve got a severely inflated market where even with some of the best mortgage rates in history you are still seeing a persistent sales decline. People just don’t have the money to spend,” said Turner.
While prices seem to be holding the line in Ontario, builders blamed the newly implemented HST for slowing sales.
“The pace of residential construction activity has eased across Ontario as a result of slowing of sales earlier this year around the implementation of the HST,” said Ontario Home Builders’ Association president Bob Finnigan. “With that shift of demand to the earlier part of the year, construction has declined accordingly.”
Some urban areas did see month over month price declines, which Turner says is a sign of things to come.
Prices declined by 0.1 per cent in Hamilton, and 0.4 per cent in both Victoria and Vancouver.
“In Vancouver and Hamilton, a number of builders reported lower negotiated selling prices in September, while in Victoria, some builders offered discounts to spur sales,” said Statistics Canada.
The largest year over year increase is in Regina at 6.7 per cent, followed by Winnipeg at 5.2 per cent and St. John’s at 4.9 per cent.
The biggest year over year losers are Charlottetown at minus 2.2 per cent, Greater Sudbury and Thunder Bay at 1.2 per cent, Victoria at 0.6 per cent, and Windsor at 0.5 per cent.
Source: Tony Wong (Toronto Star)
At more than a million square feet for phase one, World On Yonge is being billed as the largest mixed use project in the Greater Toronto Area.
The first phase at Yonge St. and Steeles Ave. will have two residential towers, a 20-storey commercial office building and a three storey shopping centre. Another two residential towers are planned for the 10 acre site which will bring the project to 1.5 million square feet.
“The response has been tremendous. We have many situations where people might buy a retail unit, but they also buy a condominium so they can live where they work,” said Richardson, of Liberty Development Corporation.
Since sales started last September, the group has sold more than 85 per cent of the condos, representing 710 units.
But as the market slows, Richardson expects that the remaining units will typically be the hardest to sell.
Toronto new housing prices remained flat in September over August, the first time that prices have not increased this year, according to figures released by Statistics Canada Tuesday.
However, prices are up by 3 per cent year over year in the Toronto area market.
“ We’re not saying that the market is as strong as it once was, but no projects have tanked, and everyone is doing reasonably well. People are still buying,” said Richardson.
Nationally, new housing prices in Canada continue to increase, even as the economy shows signs of slowing.
Prices were up 0.2 per cent in September, following a 0.1 per cent increase in August according to figures released by Statistics Canada Tuesday.
While prices were up 2.7 per cent year over year in September, they were down from the 3.3 per cent year over year figure seen in June, as the trendline moves downward.
Some analysts believe that prices could end up in the negative figures by next year.
“Prices are divorced from sales, because it takes time for the market to settle. It takes a while before people are forced to reconsider their asking prices,” said Garth Turner, a former revenue minister who held a real estate forum dubbed “HouseAggedon” in Toronto on Tuesday.
Turner says he is convinced that the market remains in a bubble.
“You’ve got a severely inflated market where even with some of the best mortgage rates in history you are still seeing a persistent sales decline. People just don’t have the money to spend,” said Turner.
While prices seem to be holding the line in Ontario, builders blamed the newly implemented HST for slowing sales.
“The pace of residential construction activity has eased across Ontario as a result of slowing of sales earlier this year around the implementation of the HST,” said Ontario Home Builders’ Association president Bob Finnigan. “With that shift of demand to the earlier part of the year, construction has declined accordingly.”
Some urban areas did see month over month price declines, which Turner says is a sign of things to come.
Prices declined by 0.1 per cent in Hamilton, and 0.4 per cent in both Victoria and Vancouver.
“In Vancouver and Hamilton, a number of builders reported lower negotiated selling prices in September, while in Victoria, some builders offered discounts to spur sales,” said Statistics Canada.
The largest year over year increase is in Regina at 6.7 per cent, followed by Winnipeg at 5.2 per cent and St. John’s at 4.9 per cent.
The biggest year over year losers are Charlottetown at minus 2.2 per cent, Greater Sudbury and Thunder Bay at 1.2 per cent, Victoria at 0.6 per cent, and Windsor at 0.5 per cent.
Source: Tony Wong (Toronto Star)
Monday, October 25, 2010
CREA to allow flat-rate listings
Homeowners will soon have a new and potentially less expensive way to sell their properties, according to the details of a recent agreement between the Canadian Real Estate Association and the Competition Tribunal.
Under the agreement, agents will be able to list a seller’s property on the CREA’s Multiple Listing System for a mutually-agreed upon flat fee, as long as it’s not zero.
The agreement, ratified by CREA on Sunday, also means interested buyers can contact the seller directly using information posted alongside the listing. A link to additional property information can also be added.
Until now, homeowners have been forced to pay agents for the full suite of realtor services if they wanted their property to be listed on the MLS – through which 90% of properties in the country are bought and sold.
Competition commissioner Melanie Aitken first took issue with this in February by filing a complaint with the Competition Tribunal alleging the CREA rules limit consumer choice and prevent innovation in the market.
Phil Soper, president and chief executive of Royal LePage, said the changes will bring more choice, especially to the approximately 15% of consumers shopping for a discount service, usually in the low end of the market.
But Alberta-based broker Rod Thompson and founder of SellerInvite.com says Aitken took the entirely wrong approach to boost competition in the industry by giving people yet another for-sale-by-owner option.
“Nobody can save money if they don’t sell their home,” he said.
Instead, commission fees to the buying agent should be scrapped altogether, he said.
Traditionally, sellers pay two commission fees, one to the listing agent and one to agent who brings a buyer.
That’s created prejudice within the system towards discount agents who charge flat rates.
There are realtors who won’t show certain properties because there are no fees being offered, Thompson said.
“It’s a big complaint within the industry,” he said. “And it’s ultimately the consumer who is paying for it.”
Sunday’s changes could also give sellers a false sense of confidence, Thompson said.
“Sellers aren’t going to automatically go on MLS and sell their home. Right now there’s thousands of homes that haven’t sold on MLS, there’s thousands that have expired.”
Realtors are legally responsible for the transaction throughout the entire process, they know the market and draw up documents including important clauses. Lawyers won’t negotiate on your behalf, Thomspon said.
“At the end of the day, people like the MLS system, they like working with a realtor. It’s the cost of the access that’s an issue,” he said.
CREA has always been of the view its rules do not in any way prevent or restrict a broad range of business models, it said. In CREA’s view, the consent agreement reflects this reality and would avoid unnecessary and expensive litigation proceedings.
“This 10-year agreement brings a close to a long process of negotiation with the Competition Bureau and will allow CREA and realtors to do what they do best – help people with the biggest financial decision of their lives, buying and selling a home in these challenging economic times,” CREA president Georges Pahud said in a release.
Source: By Stefania Moretti, QMI Agency (Toronto Sun)
Under the agreement, agents will be able to list a seller’s property on the CREA’s Multiple Listing System for a mutually-agreed upon flat fee, as long as it’s not zero.
The agreement, ratified by CREA on Sunday, also means interested buyers can contact the seller directly using information posted alongside the listing. A link to additional property information can also be added.
Until now, homeowners have been forced to pay agents for the full suite of realtor services if they wanted their property to be listed on the MLS – through which 90% of properties in the country are bought and sold.
Competition commissioner Melanie Aitken first took issue with this in February by filing a complaint with the Competition Tribunal alleging the CREA rules limit consumer choice and prevent innovation in the market.
Phil Soper, president and chief executive of Royal LePage, said the changes will bring more choice, especially to the approximately 15% of consumers shopping for a discount service, usually in the low end of the market.
But Alberta-based broker Rod Thompson and founder of SellerInvite.com says Aitken took the entirely wrong approach to boost competition in the industry by giving people yet another for-sale-by-owner option.
“Nobody can save money if they don’t sell their home,” he said.
Instead, commission fees to the buying agent should be scrapped altogether, he said.
Traditionally, sellers pay two commission fees, one to the listing agent and one to agent who brings a buyer.
That’s created prejudice within the system towards discount agents who charge flat rates.
There are realtors who won’t show certain properties because there are no fees being offered, Thompson said.
“It’s a big complaint within the industry,” he said. “And it’s ultimately the consumer who is paying for it.”
Sunday’s changes could also give sellers a false sense of confidence, Thompson said.
“Sellers aren’t going to automatically go on MLS and sell their home. Right now there’s thousands of homes that haven’t sold on MLS, there’s thousands that have expired.”
Realtors are legally responsible for the transaction throughout the entire process, they know the market and draw up documents including important clauses. Lawyers won’t negotiate on your behalf, Thomspon said.
“At the end of the day, people like the MLS system, they like working with a realtor. It’s the cost of the access that’s an issue,” he said.
CREA has always been of the view its rules do not in any way prevent or restrict a broad range of business models, it said. In CREA’s view, the consent agreement reflects this reality and would avoid unnecessary and expensive litigation proceedings.
“This 10-year agreement brings a close to a long process of negotiation with the Competition Bureau and will allow CREA and realtors to do what they do best – help people with the biggest financial decision of their lives, buying and selling a home in these challenging economic times,” CREA president Georges Pahud said in a release.
Source: By Stefania Moretti, QMI Agency (Toronto Sun)
Tuesday, October 05, 2010
GTA resale home prices up in September
The number of existing homes sold in September in Greater Toronto dipped 23 per cent in September, compared with September a year ago, says the Toronto Real Estate Board.
Board members recorded 6,310 sales in September, down from 8,196 a year ago.
But prices rose despite the softer sales, with the median price of a home rising to $360,325 from $347,000 a year ago. The median price marks the point where half the homes sold for more, half for less.
The average price also climbed, to $427,329 from $406,877 a year ago.
Softer sales volume isn’t surprising after the record sales chalked up by the market in the second half of 2009 and early 2010, said Bill Johnston, president of the real estate board.
Meanwhile in a national survey, Re/Max says the outlook for Canada's home resale market looks healthy going into the final three months of 2010, after a summer "pause."
The national real-estate sales organization says it anticipates fewer sales than in the surprisingly strong fourth quarter of 2009 but prices are expected to hold up.
Re/Max says there hasn't been a big influx of listings, while demand has normalized after a very hot period in late 2009 and early this year.
It also says there was a good sign from the number of higher-end properties sold this summer in both smaller and larger centres.
Source: John Spears Business Reporter (Toronto Star)
Board members recorded 6,310 sales in September, down from 8,196 a year ago.
But prices rose despite the softer sales, with the median price of a home rising to $360,325 from $347,000 a year ago. The median price marks the point where half the homes sold for more, half for less.
The average price also climbed, to $427,329 from $406,877 a year ago.
Softer sales volume isn’t surprising after the record sales chalked up by the market in the second half of 2009 and early 2010, said Bill Johnston, president of the real estate board.
Meanwhile in a national survey, Re/Max says the outlook for Canada's home resale market looks healthy going into the final three months of 2010, after a summer "pause."
The national real-estate sales organization says it anticipates fewer sales than in the surprisingly strong fourth quarter of 2009 but prices are expected to hold up.
Re/Max says there hasn't been a big influx of listings, while demand has normalized after a very hot period in late 2009 and early this year.
It also says there was a good sign from the number of higher-end properties sold this summer in both smaller and larger centres.
Source: John Spears Business Reporter (Toronto Star)
Friday, September 17, 2010
Toronto home sales cooling off
The weather is cooling, and so are sales in Toronto’s existing home market.
Sales were down by 22 per cent in the first half of September, according to figures released Thursday by the Toronto Real Estate Board.
“Home sales are nursing a bit of a hangover from the real estate party in the first half of the year, ” said Doug Porter, deputy chief economist for BMO Capital Markets.
“Looking ahead, sales are expected to remain on the soggy side with consumer confidence dimming, but should find support in still low rates and steady job growth.”
The board reported that 2,623 sales were recorded in the first two weeks of the month compared with the 3,361 sales in 2009.
Nationally, the Canadian Real Estate Association reported on Wednesday that sales were actually up for the first time in months by 4.1 per cent in August.
The forward-looking data for September suggests that the trend line nationally will be on a downward slope as Toronto is responsible for a large share of the overall Canadian market.
“Sales remain below the record pace we experienced in the second half of 2009,” said TREB president Bill Johnston. “The prospect of higher interest rates and new mortgage lending guidelines resulted in higher than normal sales in the first few months of the year.”
Year to date, sales are still 6 per cent higher than they were in 2009.
Average prices are also 5 per cent higher than the same time last year to $412,367, compared with $393,818.
Breaking down the suburbs verses the Toronto area: Prices in the 416 area remained higher at $453,643. Prices in the 905 suburbs averaged $398,529.
While Toronto prices showed appreciation, average prices nationally remained flat year-over-year.
“The flat year-over-year rate is the weakest since April 2009,” David Rosenberg, chief economist at Gluskin + Sheff & Associates, said in an economic note Thursday.
Rosenberg said national average prices could go into negative territory by the end of the month:
“In our view, we could see year-over-year comparisons turn negative as early as September.”
Source: By Tony Wong, Toronto Star
Sales were down by 22 per cent in the first half of September, according to figures released Thursday by the Toronto Real Estate Board.
“Home sales are nursing a bit of a hangover from the real estate party in the first half of the year, ” said Doug Porter, deputy chief economist for BMO Capital Markets.
“Looking ahead, sales are expected to remain on the soggy side with consumer confidence dimming, but should find support in still low rates and steady job growth.”
The board reported that 2,623 sales were recorded in the first two weeks of the month compared with the 3,361 sales in 2009.
Nationally, the Canadian Real Estate Association reported on Wednesday that sales were actually up for the first time in months by 4.1 per cent in August.
The forward-looking data for September suggests that the trend line nationally will be on a downward slope as Toronto is responsible for a large share of the overall Canadian market.
“Sales remain below the record pace we experienced in the second half of 2009,” said TREB president Bill Johnston. “The prospect of higher interest rates and new mortgage lending guidelines resulted in higher than normal sales in the first few months of the year.”
Year to date, sales are still 6 per cent higher than they were in 2009.
Average prices are also 5 per cent higher than the same time last year to $412,367, compared with $393,818.
Breaking down the suburbs verses the Toronto area: Prices in the 416 area remained higher at $453,643. Prices in the 905 suburbs averaged $398,529.
While Toronto prices showed appreciation, average prices nationally remained flat year-over-year.
“The flat year-over-year rate is the weakest since April 2009,” David Rosenberg, chief economist at Gluskin + Sheff & Associates, said in an economic note Thursday.
Rosenberg said national average prices could go into negative territory by the end of the month:
“In our view, we could see year-over-year comparisons turn negative as early as September.”
Source: By Tony Wong, Toronto Star
Friday, September 03, 2010
Toronto home resales drop in August
The Toronto Real Estate Board reported that home resales took another hit in August, dropping by 23 percent from the same month last year.
A rush to buy in the spring has made this summer's drop noticeable, but does not reflect negative numbers in general.
"Sales were probably a little bit higher than expected in the first half of 2010, and now we're seeing a bit of a balancing out in the second half," the board's Jason Mercer told 680News.
"As people were looking down the barrel of interest rate hikes from June onwards this year, and also we saw new regulations around mortgage qualifications, we saw some people pulling forward their buying intentions," he added.
"I really do think that the interest rate environment and also new regulations on borrowing [were key factors] that influenced people's decision to purchase sooner rather than later in 2010."
Meanwhile, the value of homes throughout the city has gone up by six percent from August last year, with the average urban house now selling at $411,000.
Furthermore, home sales have steadily climbed year to year.
The Real Estate Board does not expect to see a record level of sales towards the final months of this year, but the market may be strong enough for house prices to continue rising.
Source: Shauna Hunt & 680News staff
A rush to buy in the spring has made this summer's drop noticeable, but does not reflect negative numbers in general.
"Sales were probably a little bit higher than expected in the first half of 2010, and now we're seeing a bit of a balancing out in the second half," the board's Jason Mercer told 680News.
"As people were looking down the barrel of interest rate hikes from June onwards this year, and also we saw new regulations around mortgage qualifications, we saw some people pulling forward their buying intentions," he added.
"I really do think that the interest rate environment and also new regulations on borrowing [were key factors] that influenced people's decision to purchase sooner rather than later in 2010."
Meanwhile, the value of homes throughout the city has gone up by six percent from August last year, with the average urban house now selling at $411,000.
Furthermore, home sales have steadily climbed year to year.
The Real Estate Board does not expect to see a record level of sales towards the final months of this year, but the market may be strong enough for house prices to continue rising.
Source: Shauna Hunt & 680News staff
Thursday, August 05, 2010
More signs the Toronto housing market is cooling off
Home sales in the Toronto market are cooling rapidly off in the second half of the year, with a 34 per cent drop in July compared to a year earlier.
This is the third consecutive month of falling sales, according to figures released by the Toronto Real Estate Board today.
In June, sales had dipped by 23 per cent. But this has been the steepest drop yet, with sales dipping to 6,564 in July compared with 9,967 a year earlier.
“The level of July sales remained below the expected long term trend. The market has become more balanced,” said TREB president Bill Johnston.
Total sales through the first seven months are still up by 12 per cent, thanks to record sales during the first half of the year.
The average price for July transactions was $420,482, representing a six per cent increase over last year.
Meanwhile, building permit figures for Toronto released by Statistics Canada today also show that developers are less bullish about the housing market moving forward.
Building permits in the Toronto area fell by 15.3 per cent in June over May thanks to a drop in residential building intentions in both the single detached and high rise segments. Non-residential buildings such as commercial and industrial projects showed an increase, but not enough to offset the drop in residential permits.
Source: By Tony Wong (Toronto Star)
This is the third consecutive month of falling sales, according to figures released by the Toronto Real Estate Board today.
In June, sales had dipped by 23 per cent. But this has been the steepest drop yet, with sales dipping to 6,564 in July compared with 9,967 a year earlier.
“The level of July sales remained below the expected long term trend. The market has become more balanced,” said TREB president Bill Johnston.
Total sales through the first seven months are still up by 12 per cent, thanks to record sales during the first half of the year.
The average price for July transactions was $420,482, representing a six per cent increase over last year.
Meanwhile, building permit figures for Toronto released by Statistics Canada today also show that developers are less bullish about the housing market moving forward.
Building permits in the Toronto area fell by 15.3 per cent in June over May thanks to a drop in residential building intentions in both the single detached and high rise segments. Non-residential buildings such as commercial and industrial projects showed an increase, but not enough to offset the drop in residential permits.
Source: By Tony Wong (Toronto Star)
Friday, July 30, 2010
Market More Balanced in June
Greater Toronto REALTORS® reported 8,442 sales through the Multiple Listing Service® (MLS®) in June. This represented a 23 per cent decrease compared to the record 10,955 sales reported in June 2009. Sales for the second quarter of 2010 amounted to 28,810 – up one per cent annually. Year-to-date sales through June were up 23 per cent to 50,455 compared to the first six months of 2009.
"We experienced a record number of existing home sales during the first half of 2010, but these sales were weighted more towards the beginning of the year," said Toronto Real Estate Board President Bill Johnston. "The pace of home sales has moderated from record levels over the past two months with the prospect of higher mortgage rates."
The average price for June transactions was $435,034 – up eight per cent compared to the average of $403,972 recorded for June 2009.
"With more homes to choose from in the second quarter, many home buyers have been making less-aggressive offers. This has resulted in less upward pressure on the average selling price," said Jason Mercer, TREB's Senior Manager of Market Analysis. "The annual rate of average price growth in the second half of 2010 will be in the single digits."
Median Price
In June, the median price was $367,750, from the $345,000 recorded during June of 2009.
Source: Toronto Real Estate Board
"We experienced a record number of existing home sales during the first half of 2010, but these sales were weighted more towards the beginning of the year," said Toronto Real Estate Board President Bill Johnston. "The pace of home sales has moderated from record levels over the past two months with the prospect of higher mortgage rates."
The average price for June transactions was $435,034 – up eight per cent compared to the average of $403,972 recorded for June 2009.
"With more homes to choose from in the second quarter, many home buyers have been making less-aggressive offers. This has resulted in less upward pressure on the average selling price," said Jason Mercer, TREB's Senior Manager of Market Analysis. "The annual rate of average price growth in the second half of 2010 will be in the single digits."
Median Price
In June, the median price was $367,750, from the $345,000 recorded during June of 2009.
Source: Toronto Real Estate Board
Tuesday, July 06, 2010
Toronto existing home sales fall by 23 per cent in June
The Toronto real estate market shows more signs of cooling off, with the second monthly drop in sales this year.
The Toronto Real Estate Board reported today that 8,442 homes sold in June, representing a 23 per cent decrease over June of 2009. In May, sales fell by one per cent compared with the prior year.“The pace of home sales has moderated from record levels over the past two months with the prospect of higher mortgage rates,” said board president Bill Johnston. The average price for June transactions was $435,034 up eight per cent from June of 2009. However, that is below the double digit increases that have been recorded earlier this year.
“With more homes to choose from in the second quarter, many home buyers have been making less aggressive offers,” said Jason Mercer, TREB’s senior manager of market analysis. “This has resulted in less upward pressure on the selling price.” Active listings were also up by 28 per cent in June, suggesting that there is much more product on the market for buyers.
There is also more new supply in the pipeline, with Toronto residential building permits up by 22 per cent in April over May according to figures released today by Statistics Canada. Non residential building permits, representing industrial, commercial and institutional building were down by 28 per cent.
Source: by Tony Wong, Business Reporter (Toronto Star)
The Toronto Real Estate Board reported today that 8,442 homes sold in June, representing a 23 per cent decrease over June of 2009. In May, sales fell by one per cent compared with the prior year.“The pace of home sales has moderated from record levels over the past two months with the prospect of higher mortgage rates,” said board president Bill Johnston. The average price for June transactions was $435,034 up eight per cent from June of 2009. However, that is below the double digit increases that have been recorded earlier this year.
“With more homes to choose from in the second quarter, many home buyers have been making less aggressive offers,” said Jason Mercer, TREB’s senior manager of market analysis. “This has resulted in less upward pressure on the selling price.” Active listings were also up by 28 per cent in June, suggesting that there is much more product on the market for buyers.
There is also more new supply in the pipeline, with Toronto residential building permits up by 22 per cent in April over May according to figures released today by Statistics Canada. Non residential building permits, representing industrial, commercial and institutional building were down by 28 per cent.
Source: by Tony Wong, Business Reporter (Toronto Star)
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