Baby, we got a bubble!?

[James]

The fundamental aspect of real estate in Toronto is simply that homes in the downtown core and those in midtown and uptown off the Yonge Street corridor are always going to be in demand. So much so, that it's stripping supply. Listings are down, probably due to the buzz and talk about a softening market, making sellers of these homes more hesitant to list. Unfortunately, with the demand still high, those that are looking to buy are all clammering to the few good homes that are available on the market and, in turn, are unintentionally driving prices back up again.

 

[rbt]

Wouldn't it be nice if the real estate numbers were independently monitored and verified by an outside party? Trusting TREB to tell the truth about RE is like taking Mayor Ford's word that he is the greatest mayor this city has ever seen.

Like the land title registry and the banks giving out mortgages?

http://housepriceindex.ca/

It's a different methodology and not directly comparable; but you can compare the resulting trends from both.

 

[klb86]

BMO Bank of Montreal announced today it is changing its residential mortgage rates, effective December 10, 2013.

The new rates are changing to the following:

Fixed Rates: To:
1 year fixed closed 3.24%
2 year fixed closed 3.24%
3 year fixed closed 4.05%
4 year fixed closed 4.84%
5 year fixed closed 5.44%
5 year low rate fixed closed 3.89%

Variable Rates:
3 year open 4.10%
5 year closed 3.10%




The interest rate for a fixed rate mortgage is calculated half-yearly not in advance. The interest rate for a variable rate mortgage is calculated monthly not in advance.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $537 billion as at October 31, 2013, and more than 45,000 employees, BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and solutions.

http://www.cbc.ca/news/business/bmo-raises-5-year-fixed-mortgage-rates-1.2457236

 

[cdr108]

Canada household debt-to-income ratio hits record high


Reuters – Fri, 13 Dec, 2013 10:45 AM EST

By David Ljunggren

OTTAWA (Reuters) - The ratio of Canadian household debt to income edged up to a record high in the third quarter but the pace of growth almost halved, which might calm policymakers fretting about high personal debt levels.

The ratio hit 163.7 percent in the third quarter from 163.1 percent in the second quarter, Statistics Canada said on Friday. The ratio increased by 0.34 percent from the second quarter after advancing by 0.65 percent in the second quarter over the first.

The Bank of Canada - which has regularly warned Canadians not to take on too much debt at a time when interest rates are near record lows - has said it sees signs consumers are starting to retrench.

Bank of Canada Governor Stephen Poloz said on Thursday he expected imbalances, including rising household indebtedness, to stabilize and then gradually unwind in coming years.

Analysts noted that the second and third quarters of the year are typically peak times for buying property.

"While the household debt ratio deteriorated again in the third quarter, the Bank of Canada's 'constructive evolution' of household balance sheets appears to be unfolding," said Benjamin Reitzes of BMO Capital Markets Economics.

"Policymakers will continue to watch this metric, but rising interest rates and better income growth should stabilize, then nudge this ratio lower over the next few years," he said in a note to clients.

Mortgage borrowing led the demand for credit in the third quarter, rising by C$19.7 billion ($18.4 billion) to a total of just over C$1.1 trillion.

The central bank on Tuesday said housing sector imbalances - a term used to describe debt, high house prices and over investment in property - were the single biggest internal threat to the Canadian economy.

The household debt-to-income ratio has now risen for two consecutive quarters after back-to-back declines. Poloz said on Thursday consumers had brought forward their plans to buy houses as mortgage rates started to rise.

Poloz also made clear he is particularly concerned about the risks posed by low inflation. The annual rate in October was just 0.7 percent, well below the central bank's 2 percent target.

Mazen Issa, a Canada macro strategist at TD Securities, noted that mortgage credit growth on a year-ago basis had decelerated.

"When taken in conjunction with Governor Poloz's speech yesterday ... (this) lends credence to the narrative that the low inflation backdrop has become the more dominant concern at the Bank of Canada," he said in a note to clients.

Statscan also said that national net worth rose 2.1 percent to C$7.50 trillion in the third quarter.

(Reporting by David Ljunggren; Editing by John Wallace, Jeffrey Hodgson and Krista Hughes)

 

[Eug]

I hadn't seen this before, so it must have shown up on Teranet's Home Price Index page in the last couple of months. You can now check on price increases over specific time frames by building type, not just all (comparative) sale prices.

http://homepriceindex.ca/hpi_tool_en.html

In the last 5 years (Nov. '08 to Nov. '13), prices have gone up:

35.65%: All residential home types
39.34%: Single Family
40.54%: 1 Storey
38.87%: 2 Storey
31.46%: Townhouse
26.13%: Apartment

I believe "Single Family" means 1 storey + 2 storey, and "Apartment" means condo.

Huge difference between condo price increases and single family detached home price increases.

BTW, for the listed cities, the price increases have been the highest in the GTA. The composite price increase in the GVA is <17%, and in Victoria and Vancouver Island they've been negative.

 

[TheRedPin.com]

Here is a report we have just released which can help you assess the market for yourself. Data categories in the report include active listings, new listings, average days on market, average price, average size per square foot, price per room and price per square foot in Toronto and specific markets in the GTA.

Let me know if you'd like anything to be added to the report. It's a unique one cause you can see an overview of both the resale market and the new home market:

Download the report: http://bit.ly/1bXXG38

 

[avenirv]

@TheRedPin.com

I have one question: the average size of the condos seem too large. these days a 900+ sf condo is HUGE, but in your report is average.
Am I wrong ?
Thank you.

 

[denfromoakvillemilton]

Here is a report we have just released which can help you assess the market for yourself. Data categories in the report include active listings, new listings, average days on market, average price, average size per square foot, price per room and price per square foot in Toronto and specific markets in the GTA.

Let me know if you'd like anything to be added to the report. It's a unique one cause you can see an overview of both the resale market and the new home market:

Download the report: http://bit.ly/1bXXG38

A suggestion to your site.

You should allow people to search by neighbourhood in their favorite cities i.e. Toronto, Mississauga, Brampton, etc.

 

[Johnzz]

This year will shock the media and their followers as the market will prove quite strong (5%-7% avg price increase). Housing markets globally are now perking up, with the help from another huge blast of money printing ($3 trillion globally this year alone) and continued low interest rates. Last year’s mortgage rules change in Canada caused buyers to pause (thus lower sales), but have now left pent-up demand which will be satisfied likely this Spring/Summer. If you’re still waiting for that 20% price crash, you’ll be bitterly disappointed. I guess there’s always the great crash of 2014 to hope for…

Well, I posted the above comments in this thread last January. It's been a year now so let's review what's happened:

http://www.torontorealestateboard.com/market_news/market_watch/2013/mw1312.pdf

The average GTA price increased 8.9%, from $477,756 to $520,398. Condominiums in the 416 increased 7.6% last year.

2014 is shaping up to be just as strong.

I wonder when the media will stop describing this housing market as weak...

 

[James]

I've also said it before as well. The single family home market in the core will continue to be strong. The condo market will see slow but steady increases, nothing as compared to previous years, but certainly not a huge fire sale occurring as some predicted.

The Toronto Star reported on the TREB report today as well: http://www.thestar.com/business/rea...rices_and_sales_keep_climbing_in_toronto.html

 

[KA1]

Well, I posted the above comments in this thread last January. It's been a year now so let's review what's happened:

http://www.torontorealestateboard.com/market_news/market_watch/2013/mw1312.pdf

The average GTA price increased 8.9%, from $477,756 to $520,398. Condominiums in the 416 increased 7.6% last year.

2014 is shaping up to be just as strong.

I wonder when the media will stop describing this housing market as weak...

Wait for a fitting response when one Daveto reads your post

By the way, the latest date of possession for my unit in AURA is June 16, 2014.

 

[Condo George]

my prediction is 2014 will be a great year for condos

 

[interested]

my prediction is 2014 will be a great year for condos

Are you talking new or resale?
Also, if new, do you think this will be across the price range or will the high end continue to suffer?

 

[Condo George]

New and resale have picked up in the last six month and will continue that upward momentum.......


High end will continue to suffer, being dragged by costs to carry and lack of demand for some sites, $700 a ft is the bottom lets see if we crack that.


Interested, you can call me anytime, I can pick you up in Maybach 57 or Flying Spur don't be shy lets go for a coffee

 

[TorontoMike$$]

I agree. The market has changed over the past few months and the signs are pointing to higher sales and slightly lower inventory. Reminds me of the point we were at in early 2007 before the run started. Remax is predicting a record year lead by freehold. I honestly don't think there will be enough supply for freehold to lead the charge, and they have underestimated the condo factor!

Welcome back CG.. great to see the leader in this industry back on ut sharing market insight.