Good morning to all,
Once again I am guilty of falling (way) behind on my weekly communications. It has been a trying few months between home construction, business and family obligations.
We are finally able to see the light at the end of the tunnel in terms of moving back into our home. See construction blog below.
In the GTA Real Estate Market
GTA REALTORS® RELEASE MONTHLY RESALE HOUSING MARKET FIGURES (See full Report)
TORONTO, November 3, 2016 – Toronto Real Estate Board President Larry Cerqua announced that Greater Toronto Area REALTORS® reported a record 9,768 sales through TREB’s MLS® System in October 2016 – up by 11.5 per cent compared to October 2015. For the TREB market area as a whole, the largest annual rate of sales growth was in the condominium apartment market segment. Detached home sales were up by 10 per cent year-over-year, driven predominantly by transactions in the regions surrounding Toronto.
“The record pace of GTA home sales continued in October, with strong growth observed throughout the month. As we move through November and December, we will be watching the sales and listings trends closely, in light of the recent policy changes announced by the Federal Minister of Finance. TREB will once again be conducting consumer survey work, in order to report on home buying intentions for 2017,” said Mr. Cerqua.
The MLS® Home Price Index Composite Benchmark was up by 19.7 per cent on a yearover-year basis in October 2016. Similarly, the average selling price for all home types combined was $762,975 – up 21.1 per cent over the same time period. Double-digit increases were experienced for all major home types for the TREB Market Area as a whole.
“New listings were up slightly in October compared to last year, but not nearly enough to offset the strong sales growth. This meant that seller’s market conditions continued to prevail as buyers of all home types experienced intense competition in the marketplace. Until we experience sustained relief in the supply of listings, the potential for strong annual rates of price growth will persist, especially in the low-rise market segments,” said Jason Mercer, TREB’s Director of Market Analysis.
New Mortgage Rules – The Stress Test
Effective two weeks ago, borrowers with les than 20% down payment are now qualified by major lenders using the NON discounted interest rate for ALL mortgage types. This basically translates to about 20% less that a buyer can borrow. The buyer will still be able to actually benefit from a discounted rate (E.g. 2.4%) but would have to qualify on affordability of 4.64%. See the PDF for full details
Over all this is a good step to further stabilize the real estate market as qualified buyers should be able to withstand an interest increase of over 1% per annum.
CMHC raises its overall risk rating for national housing market to strong
Home News by The Canadian Press 26 Oct 2016 Alexandra Posadzki
There is growing evidence of risk in the country’s real estate markets as home prices have climbed faster than income and population growth, a report by Canada’s federal housing agency says.
Canada Mortgage and Housing Corp. increased its risk rating for the national housing market on Wednesday to strong, from a moderate rating that it gave in July.
“We now see strong evidence of problematic conditions overall nationally,” CMHC’s chief economist Bob Dugan said in a news release.
“This is fuelled by overvaluation _ meaning house prices remain higher than the level of personal disposable income, population growth and other fundamentals would support. This overvaluation coupled with evidence of overbuilding in some centres means that growth in house prices will slow and housing starts are expected to moderate in 2017 and 2018.”
The agency also said it now sees moderate evidence of price acceleration. That occurs when home prices go up at a faster pace and is a possible sign of speculation.
Back in July, evidence of price acceleration was weak, the agency said.
CMHC is also predicting that home sales and the pace of new housing starts will decline next year before stabilizing in 2018.
CMHC CEO Evan Siddall said earlier this month that the housing agency would raise its risk rating to strong for the first time ever.
CMHC said there is strong evidence of problematic conditions in Vancouver, Calgary, Saskatoon, Regina, Toronto and Hamilton.
Edmonton, Winnipeg, Montreal and Quebec City show moderate evidence of such conditions, the agency said.
The housing market assessment is intended to be an early warning system to alert Canadians about problematic conditions developing in the country’s real estate markets. It covers 15 regional markets and the national housing market as a whole.
Construction Blog #16 – Pictures will be coming soon!
Phew Home Stretch!
All the finished carpentry is complete and the painters are in. They will need at least 2 more weeks to finish up the painting. A soon as the painting is done we will have the hardwood floors installed.
Meanwhile, the kitchen and other cabinetry is being manufactured. HVAC systems are up and running and the back up generator was installed last Thursday.
We are making a push to be able to sleep in our new home for Christmas eve but it will be tight. The reality is that a mid-January move in date is more likely. We are getting excited as we come close to completion.
The support we have received from so many over this last year and half has made this all possible.
Have a wonderful week, Anthony.