Inside the Toronto Real Estate Market

While inventory is still low, we are starting to see things heating up for the spring market. But as listings increase, so do the number of buyers. So if you are thinking of buying in the coming months, get your proverbial ducks in line so you are ready to move on the home you want.

The market is still making a good recovery in terms of average prices but numbers are being pushed up by the imbalance in the supply and demand.

Again, now is a GREAT time to sell.

Check out great housing charts from the Toronto Real Estate Board showing historic market performance against current activity.

You can also see the full TREB Market Watch below.

We're looking forward to a solid spring market!

GTA REALTORS® Report February Resale Housing Market Figures

March 3, 2010 -- Greater Toronto REALTORS® reported 7,291 sales through the Multiple Listing Service® (MLS®) in February, representing a 77 per cent increase over February 2009. The average price for these transactions was up 19 per cent year-over-year to $431,509. Sales and average price increases represent both increased demand for ownership housing and the base year effect, which involves a comparison of economic recovery this year to a period of economic decline last year.

“Increases in existing home sales and average price were noted across the GTA in low-rise and high-rise home types. Similar rates of growth were experienced in the City of Toronto and surrounding 905 regions,” said TREB President Tom Lebour. “This suggests that first time, move-up and down sizing buyers are all active in the existing home marketplace.”

New listings also increased in February, climbing 24 per cent compared to the same month last year.

“Annual growth in new listings is expected to continue. New listings growth will start to outstrip sales growth as we move through 2010,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “As the market becomes better supplied, we will see more sustainable single-digit rates of price growth.”

Click here for the full February Toronto Real Estate Market Watch.

New Mortgage Regulates and Current Rates

Check out Peter Majthenyi's coverage on the new mortgage regulations that you need to know!

New CMHC (Canada Mortgage & Housing Corp) Guidelines and You…

By now most have heard that our Finance Minister is concerned about Canadians keeping their debts under control so American mistakes are not repeated here. The Canadian housing market has been quite resilient regardless of the crippling global recession of the last two years. Now Canada takes great pride in our Banking system and prudent lending practices … we are the “Gold Medalists” of the Economic Olympics so to speak.

CMHC has agreed to work with “Big Brother” and make some minor changes to mortgage lending rules, which I feel are quite insignificant for the typical borrower. These new rules are practices that most mortgage professionals have implemented quite some time ago.

• Now buyers need to have their employment income to mortgage payment ratios to be based on the five year fixed mortgage rate even though they may choose a variable rate mortgage at a much lower rate. Previously we were required to use a three year fixed mortgage rate to determine one's qualifying ratios. Again, this difference is very minor for anyone who deserves a mortgage.
• When refinancing to better reposition debts we can no longer increase the mortgage up to 95% of a property's value. Going forward we can consolidate our obligations by increasing our mortgage to only 90% of the property's value. In the past, rarely would I see someone in a desperate position where we needed to leverage their home up to 95% when consolidating their debts.
• Finally, investors now need to put 20% down payment on a rental property where until now they could buy with as little as 5% down. When buying a rental property with less then 20% down the insurance premiums were so high that it was counterproductive to consider buying an investment property this way … not once have I seen an investor want to pay the high CMHC premium to buy with 5 or 10% down.

Even though the above changes will have little effect in cooling off our hot real estate market, we are seeing other changes at CMHC that are causing some borrowing barriers. As of late, CMHC has been more cautious when appraising property values, and in multiple offer situations CMHC is questioning purchase prices that are well in excess of the list price. We have also noted that they are scrutinizing credit ratings more carefully, as well as job tenure. Our best advice is to be well prepared with your mortgage planner in advance of making offers where the mortgage will be more then 80% of the purchase price.

2010 will prove to be a strong year for real estate primarily fuelled by low mortgage rates that are not expected to rise significantly anytime soon … so for all intents and purposes it is “Business as Usual”.

Mortgage Rates

Check out the current rates by clicking here!

HST and Real Estate

Once again the government is doing a fantastic job of putting up more barriers to growing the economy by implementing HST, as if increased land transfer costs were not enough!

Many people have had questions on how this will impact home purchases. The biggest misconception is that this tax applies to resale homes as well as new builds. This is definitely not the case.

To clarify, no HST will be charged on residential rents, condo fees or the purchase of resale homes.

The HST will be applied on the purchase of new homes.

However, home buyers will be able to claim a rebate of some of the provincial portion of the tax for new homes priced up to $500,000. The rebate for new primary residences under $400,000 will be six percent of the purchase price (or 75 percent of the provincial portion of the tax), with the rebate amount reduced for homes priced between $400,000 and $500,000.

Buyers of new residential rental properties will receive a similar rebate.

The HST will however, apply on real estate commissions.

To see how else the HST will affect your day-to-day expenditures, check out the handy chart below:
















Chart courtesy of Richard Silver, Torontoism

Send your feedback to your local MPP or, for your convenience, we have included Dalton and Dwight's email address for you to share how you feel about HST!

Dalton McGuinty - Premier: dmcguinty.mpp.co@liberal.ola.org

Dwight Duncan – Ministry of Finance: dduncan.mpp@liberal.ola.org