Michelle Cao

Strong Condo Sales Growth in Q4 2011

Michelle Cao — Fri, 10 Feb 2012 20:20:00 GMT

January 20, 2012 -- Greater Toronto REALTORS® reported 5,025 condominium apartment transactions in the Fourth Quarter of 2011. This result was up 10.5 per cent in comparison to the Fourth Quarter of 2010. Over 70 per cent of total transactions occurred in the City of Toronto, with Peel Region (including Mississauga City Centre) accounting for the second highest share of sales.

The number of new listings for condominium apartments was up by 14 per cent in the fourth quarter of 2011 compared to the same period in 2010.

"The condo segment of the market continued to be a key driver of sales in the fourth quarter. Even with an uptick in new listings following strong condo completions over the last year, market conditions remained tight. Tight conditions were the foundation for a robust year-over-year increase in the average selling price," said Toronto Real Estate Board President Richard Silver.

The average selling price for condominium apartments in the fourth quarter of 2011 was $336,748 – a seven per cent increase over the fourth quarter of 2010.

"In addition to the healthy situation in the ownership condo market, the condo rental market tightened up at the end of 2011, with the number of units listed down and the number of transactions up. This prompted above-inflation increases in average one-bedroom and two-bedroom rents," said Jason Mercer, TREB's Senior Manager of Market Analysis.

Commercial Market Holds Up Well in Q4

Michelle Cao — Fri, 10 Feb 2012 20:13:00 GMT

January 5, 2012 -- Toronto Real Estate Board (TREB) Commercial Division Members leased over 3.6 million square feet of commercial space through the TorontoMLS® system in the fourth quarter of 2011, representing a small 3.5 per cent decline compared to the fourth quarter of 2010. However, the amount of industrial space leased was up by eight per cent compared to 2010. Industrial transactions accounted for 79 per cent of total leased space in the fourth quarter. The average lease rate for industrial transactions completed on a per square foot net basis and for which pricing was disclosed was $4.92 – down 3.4 per cent compared to the fourth quarter of 2010.

“After a dip in economic output in the second quarter of 2011, the Canadian economy rebounded in the third quarter. This rebound was in line with the consensus outlook for steady economic growth through 2012. In keeping with this outlook, it would seem that a number of industrial firms made the decision to take on additional space in the fourth quarter,” said TREB Commercial Division Chair Larry Purchase.

In the fourth quarter, 209 commercial properties were sold through the TorontoMLS® system. This result was 13.6 per cent lower compared to the same period in 2010. Industrial property types accounted for 47 per cent of total sales. The average selling price for industrial transactions completed on a per square foot net basis and for which pricing was disclosed was $70.25 – almost a five per cent increase compared to fourth quarter of 2010. Other commercial property types sold for an average $149.68 – up 50 per cent in comparison to the last three months of 2010. It is important to note that the nature of commercial property transactions can vary substantially from year to year. This means that while market forces play a role in the rate of price growth, large swings in the average selling price are often indicative of changes in the types of properties sold in a given reporting period.

“The economic outlook for Canada remains positive, but it is important to note that the risks to this outlook are substantial. How the story will unfold in Europe and south of the border is far from certain. As a result, business confidence arguably remains fragile. This suggests that while we could be headed for a strong year in the commercial market, we should also be prepared for some volatility in the number of transactions and prices along the way,” Purchase added.

Market Watch - Strong Sales/Price Growth Continue in 2012

Michelle Cao — Fri, 10 Feb 2012 20:10:00 GMT

February 3, 2012 -- Greater Toronto REALTORS® reported 4,567 sales through the TorontoMLS® system in January 2012. This number was 8.8 per cent higher than the 4,199 sales reported in January 2011. Sales growth was strongest for low-rise home types in the regions surrounding the City of Toronto. “A favourable affordability picture bolstered by very low posted fixed mortgage rates has kept home buyers confident in their ability to achieve the Canadian goal of home ownership,” said Toronto Real Estate Board President Richard Silver. “The buyer pool remains diverse in the GTA with strong interest in home types across the pricing spectrum,” continued Silver. The average selling price for January 2012 transactions was $463,534 – up by almost nine per cent compared to January 2011. “Low inventory levels have kept competition between buyers strong, resulting in robust annual rates of price growth over the last year. Strong price growth is expected to attract more listings. A better supplied market should result in a slower rate of price growth, especially in the second half of 2012,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis.

July Sales and Averge Price Up Compared to 2010

Michelle Cao — Wed, 10 Aug 2011 12:55:00 GMT

August 4, 2011 -- Greater Toronto REALTORS reported 7,922 transactions through the TorontoMLS® system in July 2011, representing a 23 per cent increase over July 2010. Total sales through the first seven months of this year amounted to 55,863 – down by 1.3 per cent compared to the same period in 2010. After adjusting for seasonal fluctuations, the July figure continued to point to an annual sales result close to 90,000 – in line with results from the previous six months.

"Strong home sales continued in July, with a substantial rebound over last summer's slow-down brought about by higher mortgage rates, new lending guidelines and misconceptions about the HST. The greatest rebound was seen in the condominium apartment segment in the City of Toronto," said Toronto Real Estate Board President Richard Silver. "If the current pace of sales holds up, we could see the second best year on record under the current TREB market area."

The average selling price in July was $459,122 – up by almost ten per cent compared to the July 2010 average of $418,675.

"Tight market conditions have boosted the annual rate of price growth this year. However, the listings situation is starting to improve. A better supplied market later this year and into 2012 would lead to a more sustainable rate of price growth," said Jason Mercer, TREB's Senior Manager of Market Analysis.

Commercial Realty Watch - July 2011

Michelle Cao — Thu, 07 Jul 2011 22:27:00 GMT

Lease Transactions Down in June

July 6, 2011 -- In June, TREB Commercial Members reported 537,793 square feet of leased space – a 46 per cent decline from the 1,004,651 leased square feet recorded in June 2010.

"There have been a substantial number of commercial lease transactions during the first half of 2011, but there also has been a significant amount of month-to-month volatility in the number and size of transactions," said Toronto Real Estate Board Commercial Division Chair Larry Purchase. "In addition, we have seen some warning signs emerge related to the global economic outlook, which could have caused some businesses to temporarily reassess their real estate needs."

By category, TREB Commercial Members leased 389,590 square feet of industrial space, down 53 per cent from the total of 830,765 square feet recorded in June 2010. In addition, 89,998 square feet of commercial space was leased, up 13 per cent from 79,402 square feet leased in June of 2010. Finally, 58,205 square feet of office space was leased, down 38 per cent from 94,484 square feet leased in June 2010.

Industrial space in all size categories leased for an average of $4.46 per square foot net (sfn), down seven per cent from the average of $4.78/sfn recorded in June 2010. Commercial space traded for an average of $14.29/sfn, up 24 per cent from the average of $11.51/sfn reported in June 2010. Finally, office space traded for an average of $12.17/sfn, down six per cent from the average of $12.97/sfn recorded in June 2010.

Sales Market Highlights
TREB Commercial Members recorded 45 sales of IC&I properties in June, including 20 industrial buildings of all size categories which sold for an average price of $56.00 per square foot. This represented a 10 per cent decline from the average of $62.33 per square foot reported in June 2010. The average price for sold industrial properties from non-MLS sources was $81.78 per square foot. In addition, there were 25 Commercial/Retail sales in June, which sold for an average of $110.64 per square foot – down 33 per cent from an average of $165.85 per square foot recorded in June 2010.

TorontoMLS® Sales and Average Price Up in June

Michelle Cao — Thu, 07 Jul 2011 22:22:00 GMT

July 6, 2011 -- Greater Toronto REALTORS® reported 10,230 home sales through the TorontoMLS® system in June 2011 – up 21 per cent compared to June 2010. This number represented the third best June result on record behind 2007 and 2009. The number of transactions during the first six months of 2011 amounted to 48,189 – down by 4.5 per cent compared to the first half of 2010.

"The strong June result capped off an interesting first half of 2011," said Toronto Real Estate Board President Richard Silver. "The pace of sales was a bit sluggish at the beginning of the year, but rebounded in May and June. Because of the positive affordability picture, home buyers remained confident in their ability to purchase and pay for a home over the long term."

The average price for June transactions was $476,371 – a 9.5 per cent increase over June 2010. Through the first six months of the year, the average selling price was $467,169 – almost an eight per cent increase compared to the same period in 2010.

"While sales have been strong, we would be on track for a record number of transactions in 2011 if not for the decline in listings so far this year," said Jason Mercer, the Toronto Real Estate Board's Senior Manager of Market Analysis. "Tight supply meant more competition between home buyers and an accelerating annual rate of price growth in the second quarter."

"Home owners will likely react to the stronger price growth by listing their homes in greater numbers. A better supplied market would result in more moderate price increases," continued Mercer.

Median Price
In June, the median price was $405,000, from the $367,750 recorded during June of 2010.

Second Best March on Record

Michelle Cao — Thu, 07 Apr 2011 00:08:00 GMT

April 5, 2011 -- Greater Toronto REALTORS® reported 9,262 transactions through the TorontoMLS® system in March 2011, representing the second best March result on record. The number of transactions was 11 per cent lower than the record result reported in March 2010.

"The strong home sales reported in March and throughout the first quarter of 2011 have been based on a solid affordability picture and improving economic conditions in the GTA and country-wide," said Toronto Real Estate Board (TREB) President Bill Johnston.

The average selling price for March 2011 was up five per cent year-over-year to $456,147. The strongest average annual price growth was reported for condominium apartments and semi-detached houses, at approximately seven per cent for both home types.

"Market conditions were tighter in March compared to last year. With more competition between buyers, we have seen a strong but sustainable rate of price growth," said Jason Mercer, TREB's Senior Manager of Market Analysis.

Median Price
In March, the median price was $385,000, from the $370,000 recorded during March of 2010.

First-time buyers in major Canadian markets move to get in ahead of higher interest rates, says RE/MAX

Michelle Cao — Wed, 06 Apr 2011 23:36:00 GMT

Driven by the threat of higher interest rates down the road, first-time buyers are contributing to strong upward momentum in residential housing markets across the country, according to a report released by RE/MAX.

The RE/MAX First-Time Buyers Report, highlighting trends and developments in nineteen major Canadian centres, found that low interest rates and balanced market conditions have provided significant impetus in 2011, particularly at lower price points. Just over 30 per cent of markets are reporting sales in excess of 2010 levels as a result, while almost 70 per cent have experienced an upswing in average price. Leading the country in terms of percentage increases in the number of homes sold are Western Canadian markets, including Saskatoon (up close to 15 per cent), Greater Vancouver (up close to 12 per cent), and Winnipeg (up just over 11 per cent). With an average price hike of close to 20 per cent year-to-date (February), Greater Vancouver continues to show unprecedented strength, followed by Hamilton-Burlington (eight per cent), Quebec City (seven per cent), Winnipeg (close to seven per cent), Greater Toronto (five per cent), and Greater Montreal (five per cent).

Despite homeownership rates approaching 70 per cent, there is clearly room for growth as entry-level buyers make their moves from coast-to-coast, undeterred by higher housing values and changes to lending criteria. Many purchasers intent on realizing homeownership are scaling back on expectations or are willing to sacrifice location, quality and/or size to make their dream a reality – not unlike generations before them.

Inventory levels, while tight in several larger centres, are more balanced overall, giving first-time buyers a good selection of housing product from which to choose. Not surprisingly, condominium apartments and town homes have become the first step for many entry-level purchasers, especially in Greater Vancouver, Victoria, Kelowna, Edmonton, Calgary, London-St. Thomas, Hamilton-Burlington, Greater Toronto, the Island of Montreal, and Halifax-Dartmouth where average prices have risen unabated in recent years.

With the Canadian economy on firmer footing overall, residential real estate is well-positioned moving into the traditionally busy spring market. Consumer confidence is climbing in conjunction with economic performance, and concerns over a secondary recession fade with each passing day. The mood is cautiously optimistic, as first-time buyers enter the market.

Changes to recent financing criteria have not created the anticipated run up in activity in most markets. From a financial standpoint, most rookie home buyers remain quite prudent. Those making the leap are not doing it lightly, buying within their means. While this most recent round of policy tightening will likely have a negligible effect on demand, the message is getting across.

Affordability remains a growing concern in most markets, and—aside from first-time purchasers—no one is more in tune with that than housing planners and developers. In fact, the growing demand for reasonably-priced product is creating a shift in the country’s housing mix. That trend is expected to gain traction in coming years, as builders look to create greater options for those seeking to realize homeownership. In recent years, builders have helped ease the move to homeownership by concentrating on intensification—condominium buildings with smaller suites and small-lot subdivisions offering detached, compact homes at a fraction of the cost of a traditional single-family home. On the flip side, the affordability factor is also breathing new life into tired older neighbourhoods, and that, in turn, is contributing to rising values.

As prices escalate, first-time buyers are indeed spending more—some out of necessity, but others are simply in a position to do so. Unlike in years past—a greater percentage of today’s first-time buyer pool is comprised of dual-income, college or university-educated couples with solid earnings. They’re spending close to average price or slightly more to secure—in most cases—a better location or a home that will grow with them. Yet, the fact remains that those on a tighter budget can get in for considerably less, with reasonable choices in every major market across the country. While some may feel discouraged by eroding affordability levels, the underlying confidence in the concept of homeownership is rising.

While market conditions are one thing that influences first-time buyers, few things trump the fundamental belief in homeownership. Today’s entry-level buyers are steadfast in their mindset. They know they have to live somewhere, but they simply don’t want to pay someone else’s mortgage. Savvy or practical, they remain a driving force. The bottom line is that the demand for entry-level product will remain steady. The role of starter homes in the marketplace is becoming ever more vital.

Re: Market Watch - March 2011

Michelle Cao — Tue, 15 Mar 2011 21:28:00 GMT

March 3, 2011 -- Greater Toronto REALTORS® reported 6,266 transactions through the TorontoMLS® system in February 2011. This result was 14 per cent lower than the record sales reported in February 2010.

While not representing a record, February 2011 sales were 50 per cent higher than the number reported in February 2009 during the recession and slightly higher than the average February sales over the previous ten years.

"Continued improvement in the GTA economy, including growth in jobs and incomes and a declining unemployment rate, has kept the demand for ownership housing strong," said Toronto Real Estate Board (TREB) President Bill Johnston.

The average selling price for February 2011 transactions was $454,423, which was more than five per cent higher than the average selling price reported in February 2010.

"Market conditions remain quite tight in the GTA. There is enough competition between home buyers to promote continued price growth," said Jason Mercer, TREB's Senior Manager of Market Analysis.

Median Price
Median Price In February, the median price was $379,000, from the $366,300 recorded during February of 2010.

‘Wild card’ props up Canadian housing markets

Michelle Cao — Tue, 08 Feb 2011 20:09:00 GMT

Tighter inventory levels helped to make the last decade one of the healthiest periods on record for Canadian real estate, insulating markets in major centres from the peaks and valleys characteristic of past decades, according to a report released by RE/MAX.

The RE/MAX Housing Barometer Report measured monthly sales-to-new listings ratios in 18 major centres across the country from January 2000 to December 2010. The report found strong seller’s/balanced conditions prevailed for much of the time frame, prompting significant gains in housing values. The lone exception was when the market dipped into buyer’s territory during the latter half of 2008 and early 2009. However, fewer listings served to offset diminished demand and provided greater stability. Average price increases from 2000 to 2010 ranged from an annually compounded rate of return of 4.82 per cent in London-St. Thomas to a high of 9.56 per cent in Regina. The national average was 6.82 per cent. By far the tightest market in the nation was Winnipeg, where seller’s ruled the roost for 85 per cent of the decade, followed by Hamilton-Burlington (67 per cent), Regina (63.6 per cent), Kitchener-Waterloo (59.8 per cent) and Edmonton (57.5 per cent).

Housing markets have been remarkably hearty over the past decade and the stage is set for a better than expected 2011. Inventory has proven to be an effective form of market self-regulation, providing both an ideal climate for price escalation and a shelter in periods of softer home-buying activity. As a number of city centres are already reporting stronger than usual activity out of the gate, it’s clear supply will continue to be the wild card in 2011.

First-time buyers comprise the vast majority of purchasers, with move-up buyers in close pursuit. Demand and supply are on relatively even keel at present in most areas, but the traditionally busy spring season is expected to keep the market at a perfect equilibrium in the days and months ahead. However, there may be some exceptions to the rule. The country’s largest markets—Greater Toronto, Greater Montreal, and Greater Vancouver—are expected to head into the second quarter with fewer listings overall. Two centres—Newfoundland & Labrador and Kelowna—are still firmly entrenched in buyer’s markets.

An improved global economic picture, lower unemployment rates and rising consumer confidence levels have buoyed home buying activity since November. While sales figures are expected to be slightly off 2010’s heated pace, housing values are forecast to continue to climb in Canadian real estate markets in 2011—with most a direct result of lower listing levels.

Western Canada experienced some of the highest rates of return for real estate over the 11-year period. While values in Regina posted the greatest percentage increase (9.56 per cent), Edmonton, (9.25 per cent), Saskatoon (9.2 per cent), Winnipeg (9.01 per cent), Kelowna (8.42 per cent), Greater Vancouver (7.8 per cent), Calgary (7.7 per cent) and Victoria (7.59 per cent) all outperformed the national average.

Equally strong gains were posted in Quebec. While solid balanced market conditions prevailed for much of the decade, housing values in Quebec City and Montreal rose 9.2 and 8.48 per cent respectively on an annually compounded basis.

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Increases were more moderate in Ontario and Atlantic Canada—with the exception of Newfoundland & Labrador, where values escalated 8.14 per cent on average. Ottawa led in terms of price appreciation in Ontario at 6.78 per cent, followed by Hamilton-Burlington at six per cent, Kitchener-Waterloo at 5.69 per cent, the Greater Toronto Area at 5.35 per cent, and London-St. Thomas at 4.82 per cent.

There’s no question that price growth has been solid over the past decade, but history tells us that exceptional growth supported by sound fundamentals is healthy. Concern is only raised when the underpinnings are insufficient to justify the trajectory. By all accounts, Canada’s real estate market measures up to conventional wisdom and the faith in homeownership has not been misplaced.

While the statistics are impressive, they alone cannot tell the tale. The gains realized over the past decade speak to the tremendous resiliency of the Canadian residential housing market. Considering catastrophic events, both natural and manmade, that occurred throughout the period—SARS, forest fires, ice storms, 9/11, a recession—the performance of the real estate sector proved that much more significant. It remained a consistent bright spot supporting economic growth and ancillary spending, and subsequently helped lead the nation out of the greatest downturn in recent memory—its hardy nature heightening its appeal as a long-term investment.

Residential Average Price - Compound Annual Growth Rate (CAGR) by Market
2000 - 2010

	Avg. $	Avg. $
Market	2000	2010	CAGR %

Newfoundland & Labrador	$99,525	$235,341	8.14%
Halifax-Dartmouth	$128,003	$253,610	6.41%
Moncton	$89,065	$152,251	5.00%
Montreal	$121,544	$297,621	8.48%
Quebec City	$90,079	$237,240	9.20%
London-St. Thomas	$135,857	$228,114	4.82%
Kitchener-Waterloo	$157,317	$289,041	5.69%
Hamilton-Burlington	$164,168	$311,683	6.00%
Greater Toronto	$243,255	$431,463	5.35%
Ottawa	$159,623	$328,439	6.78%
Winnipeg	$88,553	$228,706	9.01%
Saskatoon	$112,567	$296,293	9.20%
Regina	$94,518	$258,023	9.56%
Calgary	$176,305	$398,764	7.70%
Edmonton	$124,203	$328,803	9.25%
Kelowna	$168,551	$410,302	8.42%
Victoria	$225,731	$504,561	7.59%
Greater Vancouver	$295,978	$675,853	7.80%

CANADA	$164,091	$339,030	6.82%

Source: CREA, TREB, Okanagan Mainline Real Estate Board, RE/MAX