Good morning everyone;
I have been back for almost 2 weeks and my super light tan is almost all but gone. The sun and sand quickly became a memory as I shovelled 25cm of snow off the driveway. My snow blower blew up 2 days earlier. Arrrrgh!
In The GTA Market
- Since being back from vacation (2 weeks Sunday) I have been personally involved in 3 bidding wars. 2 for buyer clients, and one for my selling client.
- I have been also monitoring specific properties of interest for buyer clients and noting that selling prices have been setting new records (by quite a bit) for certain home types and neighbourhoods.
- There does not seem to be any slowing down on upward pressure on sale prices as quality inventory is virtually non-existent!
- A home in Central district 1 (C01) listed at 649k. Semi-detached that need to be completely gutted!!!. Sells in a bidding war at $908,888. I had pegged a sale price of roughly 820k.
- A nicely renovated bungalow in Lakeview listed at $759,900. Offers anytime no hold off period. Based on comparable sales it should fetch about 730k. An unintended bidding war ensues and the final sale price was $782,500. I was involved in this one with 3 other competing offers.
- Many other examples but I think you get the point.
Despite it being cold and dreary outside I have clients that are going out to view whatever properties are available.
Average Selling Price Up Sharply
GTA REALTORS® Report Monthly Latest Monthly Resale Market Figures (Full Report)
February 4, 2014 — Home ownership in the Greater Toronto Area remains affordable and there are many people looking to purchase a home. In January, the number of homes listed for sale was down quite strongly compared to last year, which means that it was difficult for some buyers to find a home.
GTA Commercial REALTORS® Report Latest Commercial Market Figures (Full Report)
February 4, 2014 — Toronto Real Estate Board Commercial Network Members reported 427,926 square feet of leased industrial, commercial/retail and office space on a per square foot net basis through the TorontoMLS system in January 2014 (for properties where pricing was disclosed).
COMMERCIAL REALTORS® REPORT LATEST COMMERCIAL MARKET FIGURES
TORONTO, February 5, 2014 – Toronto Real Estate Board Commercial Network Members reported 427,926 square feet of leased industrial, commercial/retail and office space on a per square foot net basis through the TorontoMLS system in January 2014 (for properties where pricing was disclosed). This result was virtually unchanged compared to 428,513 square feet of space leased in January 2013.
The amount of industrial space leased was up by almost 11 per cent on a year-over-year basis to 356,440 and accounted for 83 per cent of total leased space. The average industrial lease rate was similar to last year, with an average $5.21 per square foot net in January 2014 compared to $5.31 per square foot net a year earlier. Average lease rates were down for the commercial/retail and office segments of the market. These declines were largely due to a year-over-year change in the mix of office and commercial properties sold.
“The industrial segment of the market is important in the context of the southern Ontario economy, including the manufacturing sector. If we continue to see an increase in leased industrial space this year, this could indicate that industrial firms are anticipating an increase in demand for their products and therefore are looking to take on more space to help accommodate increased production,” said Commercial Committee Chair Cynthia Lai.
There were 42 combined industrial, commercial/retail and office sales in January 2014, for which pricing was disclosed. This result was in line with 43 transactions in January 2013. The year-over-year change in average selling prices was mixed on a per square foot basis. The average selling price for industrial properties was much higher this past January compared to 2013, because this year’s transactions involved smaller properties compared to last year.. Smaller properties tend to sell for more on a per square foot net basis.
Commercial/retail pricing was basically unchanged compared to January 2013 and office pricing was down by about nine per cent year-over-year.
“The consensus view is that the Canadian economy is expected to grow at a faster pace in 2014 compared to 2013. The increased rate of growth should be driven by an improvement in exports, due to a strengthening US economy and weaker Canadian dollar vis-à-vis the US. This should bode well for the commercial real estate market, and in particular the industrial sector,” added Ms. Lai.
Regulating the Home Inspection Industry
February 4, 2014 — TREB is working with the Ontario Real Estate Association (OREA) on regulation of the home inspection industry by the Ontario Government.
Currently in Ontario, home inspectors are unregulated. In 2012, The Minister of Consumer Services, the Honourable Tracy MacCharles, started to work on developing mandatory minimum standards for home inspectors to enhance consumer protection. To ensure the creation of comprehensive regulations, the Ministry has been working with home inspection associations, consumer advocates, and the real estate industry, including TREB and OREA.
Both TREB and OREA support the provincial government’s current efforts to require minimum standards for home inspectors. Specifically, TREB’s positions on this issue are as follows:
- Increase Transparency of the Profession
- Home inspectors should be regulated. Specifically, they should be regulated by a self-regulated at arm’s length body/agency.
- Ensure a minimum standard of training
- Home inspectors should be required to have a minimum level of training and/or education.
- Home inspectors should be required to update their skills, knowledge and training through continuing education.
- Home inspectors should be required to abide by a code of ethics mandated by the regulatory body.
- Improve consistency in home inspections
- Home inspectors should be required to follow a standardized visual inspection checklist. This checklist should include basic home structures and systems.
- Enhance consumer protection
- Home inspectors should be required to carry valid errors and omissions insurance.
This is a positive move to ultimately protect consumers with the largest purchase that many of them will ever make.
TD says home prices 10 per cent overvalued
TORONTO – Canadian home prices are likely about 10 per cent overvalued given the expectations for rising interest rates, TD Bank said in a report Monday.
However, the bank also noted that the overvaluation in markets like Toronto, Vancouver, Montreal and Ottawa is likely more significant than in others across the country.
“These markets will likely feel the pinch from modestly higher interest rates over the next two years more so than others,” TD economist Diana Petramala wrote in the report.
She noted that Montreal, Quebec City and Ottawa have been flooded with an overhang of inventory of unsold condos.
“Home prices have weakened in the second half of 2013 as a result and we expect that softness to persist in 2014,” Petramala said.
“Toronto is poised to follow their lead, as the number of new condos scheduled to be completed in 2014 and 2015 is elevated relative to history.”
The Canadian housing market and worries about a real estate bubble have been key concerns for policy-makers for several years. Recent indicators have suggested the market may be headed for a soft landing instead of a bubble bursting, but concerns have persisted.
“Our forecast is consistent with this imbalance unwinding gradually over the next few years through a combination of moderate income growth and a modest home price correction,” Petramala wrote.
“While 2014 is likely to see stable prices on average, prices are expected to edge down by two per cent in 2015-16 as the over-building challenge increasingly weighs on the market and as borrowing costs grind higher.”
The Canadian Real Estate Association reported last month that sales through its multiple listings service totalled 457,893 homes for 2013, up eight-tenths of a per cent from 2012.
The national average price for homes sold in December was $389,119, up 10.4 per cent from the end of 2012. Excluding Greater Vancouver and the Toronto region, the year-over-year increase was 4.6 per cent.
The TD report noted that overvaluation can be measured in several different ways with vastly different results.
“The home price-to-rent ratio points to an overvaluation of 60 per cent. However, this measure is skewed by rent controls. It is difficult to know whether prices are too high, or if its rents that are too low,” TD said.
Another indicator, the home price-to-income ratio suggested overvaluation as high as 30 per cent, but TD said that depends on how income is defined and what is included.
“Our preferred index of assessing housing overvaluation is affordability — the per cent of income an average household would have to devote to mortgage payments if they purchased an average priced home and took out a conventional mortgage,” the report said.
“While interest rates are not likely to return to their historical norms, the current low level of interest rates is also not sustainable. Looking forward, we expect a modest increase in interest rates.”
Have a great Valentine’s Day, Anthony
Photo by ButterflySha.