Good morning to everyone;
Hope that all are enjoying this fall like weather. It has certainly helped me on a personal level with our construction. This will be the last communication for the year.
I will have a year in review in the January communication. Have a wonderful and safe holiday season.
GTA REALTORS® RELEASE MONTHLY RESALE HOUSING FIGURES – BEST RESULT ON RECORD FOR THE MONTH OF NOVEMBER
TORONTO, ONTARIO — December 3, 2015 – See full Report.
Toronto Real Estate Board President Mark McLean announced that Greater Toronto Area REALTORS® reported 7,385 home sales through TREB’s MLS® System in November 2015 – up by 14 per cent compared to November 2014. This result also represented the best result on record for the month of November.
Sales through the first eleven months of 2015 amounted to 96,401. “Not only did we see a record sales result for November, but with one month left to go in 2015, we have already set a new calendar year record for home sales in the TREB market area, eclipsing the previous record set in 2007.
Sales were up on a year-over-year basis for all major home types, both in the City of Toronto and surrounding regions. This suggests that the demand for ownership housing is widespread, from first-time buyers to long-time homeowners across the GTA,” said Mr. McLean. The MLS® Home Price Index (HPI) Composite Benchmark was up by 10.3 per cent year over year in November.
The average selling price for all transactions was also up by a similar annual rate of 9.6 per cent to $632,685. Annual rates of average price growth for
November and the first eleven months of 2015 were similar, with the strongest rates of increase being reported for low-rise home types, including detached and semi-detached
houses and townhouses. “Demand for ownership housing has remained strong in the GTA throughout 2015, with sales generally increasing at a greater annual rate compared to new listings. This means
that competition between buyers has strengthened in many neighbourhoods in the City of Toronto and surrounding regions. The end result has been upward pressure on home prices well above the rate of inflation in most cases,” said Jason Mercer, TREB’s Director of Market Analysis.
This past week The Bank of Canada has left interest rates alone.
How the Bank of Canada and the U.S. Fed are parting ways
The U.S. is about to raise interest rates for the first time in eight years. Canada’s on a different track altogether
Dec 4, 2015 Kevin Carmichael
The Bank of Canada and the U.S. Federal Reserve are about to part ways, a rare separation that will ensure downward pressure on Canada’s currency. Some will cheer that prospect, as Canadian goods and services will have a price advantage in the U.S. market. The tradeoff is that domestic companies will find it more costly to import state-of-the-art equipment to retool, and to invest in growing markets abroad. Exports could thrive, but productivity may suffer.
All of this crystallized amid a cascade of economic data, monetary policy announcement and speeches over the past few days. Fed chair Janet Yellen on December 2 stated as clearly as central bank lexicon will allow that she will recommend raising America’s benchmark interest rate when she convenes the policy-setting Federal Open Market Committee later this month. It would be the first increase in nine years. The day the Fed raises its target lending rate from zero, “is a day that I expect we all are looking forward to,” Yellen told economists in Washington. Key in her remarks was an emphasis on the importance of staying ahead of inflation. The Fed wants to raise borrowing costs, but very slowly, which means it must get started so it can leave a decent interval before the next increase. “Were the FOMC to delay the start of policy normalization for too long, we would likely end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of our goals,” of price stability and full employment, Yellen said.
The Bank of Canada is in an entirely different position. It will be staying in the low-for-longer club—likely into 2017, based on current economic forecasts. Before Yellen addressed the Economic Club of Washington, her counterparts in Ottawa released their latest policy statement, in which Canada’s central bank said it was keeping its benchmark interest rate at 0.5%, a quarter-point shy of the lowest level ever. The Canadians described an economy that “continues to undergo a complex and lengthy adjustment” to the collapse of commodity prices.
The good news was the central bank thinks the worst is over. Statistics Canada reported December 1 that gross domestic product expanded at an annual rate of 2.3% in the third quarter after contracting at rates of 0.3% and 0.7%, respectively, in the previous two quarters. Non-energy exports led the rebound, a show of strength that Bank of Canada Governor Stephen Poloz has been waiting on since he started his job more than two years ago. The bad news was that Canada’s other economic engines are sputtering. The value of total household consumption through the first nine months of 2015 is little changed compared with the same period in 2014, according to StatsCan data. And business investment is contracting as commodity companies retreat. The flight of capital might stop, but there is little reason to expect much of it to come back. “We do not see an imminent turning point in commodity prices and thus forecast further negative repercussions on the Canadian economy next year,” Sebastien Lavoie, assistant chief economist at Laurentian Bank Securities in Montreal, said in an analysis of the Bank of Canada’s latest policy statement.
Poloz eschews explicit guidance on where interest rates are headed, but he and his deputies on the Governing Council write their statements in a way that makes deduction possible. In this week’s communication, policy makers highlighted an unusually complicated global landscape. Before the financial crisis, most every economy was doing well, albeit on a bubble of debt and inflated asset prices. After the Great Recession, emerging markets were relatively quick to recover, led by China. Now, the global economy is a patchwork of regions that are doing okay, not so well, and terribly. Each situation will demand different policies, heralding a divergence in interest rates that junior traders on Bay Street never will have seen.
The European Central Bank on December 3 dropped one of its main policy rates to negative 0.3% from negative 0.2% and said it would extend its bond-buying program, under which it creates euros to purchase debt, to at least March 2017. All things being equal, the euro will weaken against the U.S. dollar and perhaps other currencies. (The euro actually rose after the ECB announcement, and stock markets fell, as investors expressed their disappointment with fresh stimulus measures they had bet would be more aggressive.) That is what ECB President Mario Draghi hopes, as he flagged trade as the European economy’s main headwind.
Services matter—but making stuff is the core of any strong economy
Canada is in a slightly better position than the European Union because it is so closely tied to the U.S., which is growing. Still, the Bank of Canada isn’t taking any chances—it favours a weaker currency. “Policy divergence is expected to remain a prominent theme,” Canadian policy makers said in their December 2 statement, new language that read as a reminder to currency traders that the Bank of Canada sets policy independent of the Fed. And Canada is one of those regions that isn’t doing so well. The Canadian policy statement also reiterated that the central bank expects economic growth has slowed in the fourth quarter, and that the economy won’t regain altitude until sometime in 2016. Yellen is on her own.
The Canadian economy lost nearly 36,000 jobs in November as the armies of part-time workers hired for the October federal election were let go.
Job losses were bigger than economists had been expecting
Investopedia Posted: Dec 04, 2015 8:39 AM ET| Last Updated: Dec 04, 2015 12:57 PM ET
Statistics Canada says the number of public administration jobs fell by 32,500 last month, almost matching October’s increase in the same category.
■Canadian economy returns to quarterly growth amid signs of weakness
■Solid U.S. job gains make Fed likely to hike interest rates
“The November decline in public administration was seen across all provinces,” Statistics Canada said. “The decrease was concentrated among survey interviewers and statistical clerks, an occupational group that corresponds with the type of work done during the election.”
The job losses, which were almost four times larger than the 10,000 that economists had been expecting, forced the national unemployment rate up slightly to 7.1 per cent, from seven per cent in October.
While the economy lost a total of 72,000 part-time jobs last month, it also added 36,000 full-time workers. That had Scotiabank economist Derek Holt saying the November report was not as bad as it might seem.
“It does suggest the underlying details are not as bad as the headline reading imply and that the composition of job growth is still mostly favourable,” he wrote in a morning commentary. Alberta lost nearly 15,000 jobs last month and its jobless rate jumped 4/10ths of a percentage point to 7.0 per cent, as the oil-related slump continued to take a toll. That was the biggest decline in employment among the provinces and leaves Alberta’s unemployment rate at a five-year high. Manitoba, New Brunswick and Prince Edward Island also lost jobs, while employment in other provinces was relatively unchanged. Canadian Unemployment in November Contrast with U.S.
Several economists noted the stark contrast with the United States, where the economy added a solid 211,000 jobs last month. “In a world where the U.S. economy is churning out 200,000 job gains per month without breaking a sweat, and oil prices are barely holding above $40 US, the Canadian dollar will struggle for some time yet,” said BMO chief economist Douglas Porter. “The overall picture [in Canada] is one of an economy struggling to post consistent gains and likely headed for sub-par GDP growth in Q4,” he said.
David Madani, of Capital Economics, saw further weakness in Friday’s other economic data releases, pointing to reports that Canada’s exports fell 1.8 per cent in October and the country’s trade deficit with the rest of the world widened by $500 million to $2.8 billion.
“Accordingly, we still think that more policy stimulus will be needed eventually, both from monetary and fiscal policymakers,” Madani said.
One piece of encouraging news from the labour report related to what appears to be a long-awaited comeback in manufacturing employment. Statistics Canada said the country added 17,400 manufacturing jobs in November — the first significant increase since May.
KEEP IN MIND – Many of the jobs lost were related to those involved with the federal election. Once the election was over those individuals become unemployed. They now need to seek work and it has been too soon for the market to absorb them all. Also, many of the jobs shed were part time and in fact many full time jobs have been created – better full time jobs is what is desired most.
Minimum home purchase down payment could rise under Liberal plan
by Steve Randall | 03 Dec 2015
The Liberal government could be about to impose tougher restrictions on homebuyers by raising the minimum downpayment for a government-insured mortgage. Mortgage expert Robert McLister says that there could be a sliding scale of down payment requirements depending on the price of the home. The Huffington Post reports that it could mean a 10 per cent minimum for those buying a home of $700,000 or more; which would particularly hit those in Toronto and Vancouver where average prices are already above that level. Those buying a home above $501,000 would have to find 7 per cent as a minimum. The Finance Department told HuffPost Canada that it does not comment on unconfirmed policy options but that it regularly reviews policies in consideration of the housing market and wider economy.
Personally I do not have any clients that would be affected. Most people that are purchasing homes over 700k homes tend to have at least a 10% down payment plus closing costs. The change in these rules can slow down some of the bidding frenzies but I think it would actually strengthen the market, very much like the retraction of the 40 year amortization period several years ago.
Foreign investor stats revealed Home News by REP03 Dec 2015
(Bloomberg) — Foreign owners made up a bigger share of the condominium markets in Toronto and Vancouver over the last year, according to the nation’s housing agency.
Foreign owners of condos comprised 3.5 percent of the market in Vancouver and 3.3 percent in Toronto, according to a report from Canada Mortgage & Housing Corp. which surveyed property managers. That’s up from 2.3 percent in Vancouver last year and 2.4 percent in Toronto, Canada’s largest city. When narrowing to the downtown core, foreign buyers made up 5.4 percent of Vancouver condo buyers this year versus 3.4 last year and 5.8 percent of Toronto condo buyers versus 4.3 percent.
Politicians have been under pressure from many quarters including Vancouver Mayor Gregor Robertson, HSBC Holdings Plc and local residents to start monitoring offshore money that may be pushing up home prices, particularly in Vancouver. The average price for a detached home rose 9 percent to C$1.02 million ($760,000) in Toronto in November from a year ago while Vancouver home prices soared 18 percent to C$752,500.
So far, the agency’s data is limited to condominiums and based only on a survey of property managers. Offshore buyers can keep their location and identity secret, Evan Siddall, chief executive officer of CMHC said in a speech last month.
The Ottawa-based agency released the data as part of its Housing Market Insight series, and will publish about 40 more reports on different cities and housing topics throughout 2016.
Construction Blog # 13 – It’s not all Doom and Gloom
After my last construction Blog I had several people reply back to me with messages of support. I then realised that my blogs make it seem that the sky is always falling.
What I’ve learned is that our building experience is for the most part, par for the course. It indeed has been very stressful but I am excited and we have made tremendous progress with our home.
The weather has held up and thus allowing us to brick the exterior – The weather has worried me immensely but God willing another 10-14 days of above season temps will come see the exterior finished. Happy to share the most recent pics for those of you curious to see (just email me).
Working with the masons this last month has been a challenge for sure. I have flagged much sloppy work that needed to be fixed and just an overall lack of concern by the workers.
The market place for trades people is tighter than the housing market. Many people don’t even return calls. I reached out to 5 separate mason companies and only 2 return my calls. The company I chose has been mediocre.
A generation ago people cared about their work. Today workers don’t want to be told what to do or they will flat out leave your site. They act is if they are doing the home owner a favour for just having showed up. There is a shortage of skilled labour and many inferior people can easily bounce from job to job.
Overall I love the way our home is turning out. I know once complete, it will be great despite some concessions here and there.
Work Progress Report
- Bricks and stone around the home should be complete in 10 days
- The shingles for the roof will be complete in 1 week (It has been wrapped in Deck Armour and Ice Shield for the last 5 weeks as we waited for the special order of the shingles to arrive from the US)
- The HVAC has been completed inside the home and by the end of the month I hope to start excavation for the hydro service.
- Plumbing will start within roughly 2 weeks
- Electrical to follow plumbing.
- My goal is to be at the drywall phase by early March. Fingers crossed.
Wishing you and all your loved ones the best of the season! Much love, health and happiness to you all.
God bless, Anthony