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National home sales plunge 14.5% amid Toronto strain

Canadian home sales plunged the most in a decade last month, driven by fewer transactions in a Toronto market squeezed by tougher mortgage lending rules and higher interest rates.

Sales fell 14.5% nationwide from December and were down 26.6% in Toronto, the Canadian Real Estate Association said Thursday from Ottawa. The national decline was the biggest since 2008 and Toronto’s was the biggest since 1989, according to historical CREA data.

The housing market is cooling off from heady price gains of 30 percent in Toronto after policy makers stepped in with measures including a foreign buyer tax. The January decline comes after a record December, when buyers rushed into the market before a new federal mortgage lending stress test came into force. The Bank of Canada raised its trend-setting interest rate last month for the third time since July.

“The piling on of yet more mortgage rule changes that took effect starting New Year’s Day has created home buyer uncertainty and confusion,” CREA President Andrew Peck said in a statement. Some of January’s decline reflected buyers accelerating their purchase plans in December, the group said.

The weakness didn’t show up in prices, with the nationwide benchmark index up 0.3% on the month. Prices were little changed in Toronto. The unadjusted average sales price across Canada of $481,562 was up 2.3% from a year earlier.

Sales fell in about three-quarters of housing markets across the country. The number of new homes listed for sale dropped by 21.6% from December to January to the lowest since 2009, CREA said.

The realtor group has predicted sales will weaken by about 5% this year.

On top of the new mortgage stress test, the Bank of Canada may raise interest rates twice more this year, futures trading suggests. Those moves are the first time some younger buyers have experienced any major rise in debt servicing costs, and Governor Stephen Poloz has said household finances remain a key vulnerability.

Copyright Bloomberg News

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Toronto Real Estate market poised for a robust in 2018

The strength exhibited by the GTA real estate market in 2017 is poised to continue seamlessly into this year, according to the latest report from commercial real estate services provider Altus Group Limited.

In the firm’s 2018 GTA Flash Report, Altus outline the key trends that industry players in Toronto should look out for in the coming months.

Chief among these is the growing prominence of shared work spaces in office properties.

“The trend of renting workstations within a larger office space will grow in the GTA as low vacancy rates lead to higher rents. Look for this segment to grow not just in the downtown market, but throughout the GTA, as employers look to accommodate staff pushed further out in search of more affordable housing options,” Altus stated.

Demand for industrial space will remain strong, since online and traditional retailers will continue seeking warehouse space “to support their e-commerce business strategies.”

“Retailers will continue to shrink their brick and mortar footprint and traditional retail space will continue to evolve as retail centres focus on consumer experiences, especially food themes, to draw in traffic.”

On the residential side, land sales are projected to enjoy a strong 2018, with the caveat of greater uncertainty due to higher prices and recent policy changes.

“High-demand areas are likely to remain expensive, which could push some developers to seek more affordable options outside traditional core areas.”

New condominium apartment sales volume will likely remain elevated this year, Altus added.

“However, surpassing 2017 levels will be a challenge. While investor interest continues to be strong, some end user buyers who have been looking to the new condominium apartment sector for more affordable homes are now starting to be priced out of this segment as well,” the report explained.

“Some modest increase in new single-family sales is possible, however sales in this segment will continue to be challenged by lack of available product, in particular options that are affordable to a broader range of buyers.”

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Get Your Home Ready For Buyers During Winter Months

Keep the Exterior Neat

When preparing for the exterior of your home in winter months remember that the snow outside can be an obstacle for people coming in to see your home. Make sure that your front driveway and walkway are shoveled and scraped to prevent ice from forming. If a potential buyer sees a walkway covered in snow and ice, they may not want to see your home.


Make Sure There Are No Traces of ‘Pet Mess’

In the winter it can be hard to keep your pet from dragging the outside in with them. Make sure that they are not tracking wet, slushy footprints all over your homes’ flooring. Make sure any towels that are used to wipe pets off are put away as smells can be off-putting or offensive.

Temperature of Your Home Comfortable

When a buyer comes into your home during the winter they will be dressed for the colder temperatures outside, not the temperature inside your home. When setting the temperature, make sure that it is not too hot to be wearing warm clothing. A potential buyer may not decide to remove their coat.  Also remember that it can take a while to heat a house, so set the thermostat to come on a few hours before showings.


Brighten Up Your Home Buyers Visit

In winter months there is a lot less natural daylight due to the sun setting earlier. There is a higher chance that buyers will be coming in to view your home when it is dark outside.

Make sure that lights are turned on inside and outside of your home. It is also a good idea to make sure that light bulbs and fixtures are dusted before showing your home.

Create a Cosy Feeling Indoors and Outdoors

With the holidays around the corner you can make your home more appealing to a buyer by creating a cosy atmosphere. Try hanging a wreath on your door or setting out some candles or small tasteful decorations.

Protect Your Floors From the Elements

When viewing your home a buyer could be bringing in slush and mud on their shoes or boots. Make sure top protect your flooring. Use a mat at the front entrance both inside and outside that won’t let water through. Place a sign at the front entrance asking to please remove shoes. Offering a rubber shoe mat can create a sense of organization with a lot of practicality.

Show Homebuyers What Their Potential Home Will Look Like in the Summer

To remind buyers that your home isn’t always buried in a few feet of snow, place pictures around your home of the outdoors in the summer. If you have a pool or a garden this tip will make sure they know how amazing it will look in the summer.

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CREA cuts 2017, 2018 forecast due to incoming tighter mortgage rules

The Canadian Real Estate Association says it has cut its home sales forecast for next year due to the impact of tighter mortgage regulations taking effect in the new year, which will erode affordability.

The association representing real estate agents across the country also downgraded projections for 2017.

It now expects national sales activity this year to decline by four per cent to 513,900 units this year due to weak activity in Ontario, after the province in April announced measures to cool the market.

However, it says the national average price of a home is still expected to rise to $510,400, up 4.2 per cent compared to 2016.

CREA is now forecasting a 5.3 per cent drop in national sales to 486,600 units next year. That new estimate shaves about 8,500 sales from its previous 2018 forecast.

The national home price is expected to slip by 1.4 per cent in 2018 to $503,100.

Still, the November figures show the number of homes sold through its MLS system rose by 3.9 per cent compared with October, led by a 16 per cent sales spike in the Greater Toronto Area.

The Canadian Press

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Toronto housing market decline in November

The Toronto housing segment is seeing a continuous drop in prices amid a widening pool of homes for sale, though there are signs the correction is beginning to lure in some new buyers.
The Toronto Real Estate Board’s benchmark home price index fell for the sixth consecutive month, down another 0.4% from October. The index has fallen 8.8% since May, the largest six-month decline in the history of data back to 2000.
Also, for the first time since 2009, the average price of a home sold in Toronto ($761,757) failed to surpass levels from a year earlier.

Toronto’s housing market, dubbed one of the riskiest housing bubble cities by UBS Group AG, has slumped over the past few months amid government rules and harsher mortgage guidelines aimed at curbing demand.
These developments have coincided with a sharp increase in supply, with new listings up 37% from a year earlier. However, the data is indicating that lower prices have begun to boost demand and fuel sales.
“We have seen an uptick in demand for ownership housing in the GTA this fall, over and above the regular seasonal trend,” TREB President Tim Syrianos said, adding new tighter mortgage qualification rules set to come into force next month may also be expediting sales. “It is also possible that the upcoming changes to mortgage lending guidelines, which come into effect in January, have prompted some households to speed up their home buying decision.”
The correction in Toronto’s housing market has been primarily in Toronto’s detached market, where average prices surpassed $1.2 million earlier this year. The price index for single family detached homes is down 12% since May. The condominium price index is little changed from record levels earlier this year.