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GTA, Ontario, Canada
Experienced Realtor (2012, 2013, 2014 And 2015 Recipient Of The Prestigious RE/MAX PLATINUM CLUB AWARD For Sales Greater Than 10 Million Annually) in Durham Region And The GTA, #1 Team 2014 & 2015 Whitby Office. "THE JACKIE GOODLET TEAM" has extensive knowledge which includes selling resale homes, new build homes & condo's since 1989. With over 25 years experience and exceptional negotiating skills we are confident we can save you time and money on all your real estate endeavours. We look forward to hearing from you soon!

Monday, August 21, 2017

Calgary market to undergo “process of recovery” for rest of 2017

The Calgary real estate market is expected to undergo a “process of recovery” for the rest of the year as oil prices improve, according to a recent report by the Calgary Real Estate Board (CREB).

CREB expects annual sales to hit 18,491 units, a 3.3% rise from 2016. “While this is a slightly faster pace than originally anticipated, these levels are still well below long-term trends.”

“We saw many of those consumers who delayed any purchasing decisions willing to re-enter the market as concerns regarding the economy eased,” said CREB president David Brown. “More potential buyers on the market helped move some of the product in inventory and started to create some price stability.”

An early boost in demand this year helped ease pressure on supply levels. The report said inventories will remain “slightly elevated” for the rest of the year, but this is not expected to significantly bring down prices.

CREB warned that difficulties continue to exist in the condo-apartment ownership market as rising sales cannot keep pace with the growth in new listings. It said this specific area of the market will likely continue to face challenges well into next year, as it will take time to absorb additional inventory in the resale, new and rental markets.

“Economic challenges continue to exist, as high unemployment rates, weak migration levels and more stringent lending conditions are weighing on the housing market,” said CREB chief economist Ann-Marie Lurie. “This will continue to cause some adjustments in the housing market for the remainder of this year. However, this is not expected to offset earlier gains supporting general stability in 2017.”

“While the shift is welcome news for many, we continue to expect that process of recovery will be slow and dependent on the property type and location within the market,” she added.

CREW

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!

Chinese pullback won’t hurt property prices – expert

Commercial real estate prices, hovering at record highs in the U.S. following a six-year boom, are sustainable even as Chinese regulators tighten restrictions on overseas investment, according to Brookfield Property Partners LP.

There is enough capital pouring into real estate from multiple regions -- including Europe and the Middle East -- to counter any potential slowdown in Chinese investment, Brookfield Property Chief Executive Officer Brian Kingston said in a Bloomberg Television interview. While Asian buyers are often part of the equation, a global shift from low-yield fixed-income holdings to real estate will drive property values for the foreseeable future, he said.

“There was a lot of headlines around how much capital was coming out of Asia,” said Kingston, a senior managing partner at Brookfield Asset Management Inc., the parent company of Brookfield Property. “The reality is it’s broad-based. It comes from a lot of places.”

Price growth for U.S. commercial buildings such as office towers and apartment buildings has leveled off over the past year, according to research firm Green Street Advisors LLC, and a growing disconnect between buyers and sellers is putting a damper on new deals. In Manhattan, one of the biggest beneficiaries of a foreign-capital influx in recent years, transaction volume plunged 39 percent to $18 billion in the first half from a year earlier, according to the Real Estate Board of New York, a trade organization.

Still, there have been a handful of blockbuster transactions. In March, Chinese conglomerate HNA Group Co. agreed to buy 245 Park Ave. for $2.21 billion, one of the highest prices ever paid for a New York skyscraper, from Brookfield Property and its 49 percent partner in the building, the New York State Teachers’ Retirement System.

“We have been over the last couple of years selling in most major markets and we’ve been buying in those same markets,” Kingston said. “That really defines how we invest in real estate, which is we buy these assets, we reposition them, we increase the income. And then ultimately, we sell them and we redeploy that capital into the next opportunity.”

MPA

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!

Retiring early with real estate

Let your portfolio work for you: One investor gives his tips to become completely financially independent at any age.

Millennials have it tough financially- we’ve been told if we go to a respected University, study hard and get good grades we will land a great paying job. The reality? You graduate with loads of debt with no assistance or prospects of getting a great job and you return for more schooling thinking it will solve the problem. To add salt to the wound, house prices and rent keep increasing beyond reasonable affordability. As a millennial, I’m here to tell you that you can create your own financial freedom and you don’t need to settle and live in your parent’s basement into your 30s. In fact, I’m here to show you how we purchased our first house at 24, live for free by “house-hacking” and create passive cash flow for life.

What is house-hacking? The concept is simple yet powerful: purchase a house, create an income suite (e.g. basement apartment) and rent it out for passive income. The rental income from the apartment can either pay for the majority of your mortgage and living expenses, or you could even get paid to live for free. If you live in the main/ upstairs unit and rent out the basement, you can have the majority of your mortgage covered. If you go one step further and live in the basement/lower unit, you could not only live mortgage free but you could also have profit leftover in your pocket.

The first hurdle millennials and most people have to overcome is coming up with the downpayment. In our case, we lived below our means in order to save for a 5% downpayment. Another strategy is to borrow money from family, friends or private lenders. If required for financing, you could also ask them to act as a guarantor / co-signer.

Once we had the downpayment and financing confirmed, we purchased a detached fixer upper bungalow in the GTA which met all of the requirements for a potential basement apartment (e.g. ceiling height, separate entrance, zoning, parking, etc.). The house walkouts to a large backyard and backs on to ravine which is a major selling point for tenants. We built an open-concept legal 2 bedroom basement apartment with high-end looking finishes. We ensured we made the space look modern, bright and open so that it didn’t feel like a typical, dungy basement apartment. We started off by charging $1,250/mo (non-inclusive) with many applicants. Now we rent the unit for $1,450/mo (non-inclusive) and live mortgage-free.

Since then, we have refinanced the house based on the built-in equity and purchased another property which will be converted into a duplex. We are using this same strategy, except creating a 3-bedroom basement apartment and renting both units individually by room. The property is expected to cash flow more than $1,000/mo after all expenses. Once this duplex is complete, we will be refinancing and finding another property to expand our portfolio.

Rinse and Repeat until you reach your goals of financial freedom.

CREW

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!

Canada’s fifth-largest lender starts its own digital bank

Canadian Imperial Bank of Commerce and grocery chain Loblaw Cos. are ending their 19-year President’s Choice Financial partnership as the country’s fifth-largest lender starts its own digital bank.

Simplii Financial will offer no-fee banking, mortgages, and loans online and by phone, according to Mike Boluch, CIBC’s executive vice president of direct banking, innovation and payments. CIBC expects to take $100 million (US$78.4 million) of fees and charges before tax in the quarter ending October 31 related to the transaction, the Toronto-based bank said Wednesday in a statement.

President’s Choice Financial was one of Canada’s first digital banks, offering services online and at grocery-store kiosks since 1998, and now has about 2 million customers. Clients with President’s Choice Financial products provided by CIBC will be moved to Simplii Financial effective November 1, the bank said. There’ll be no changes to PC Financial Mastercard products since they’re offered by Loblaw’s bank unit.

“It’s something we’ve been contemplating for some time,” Boluch said in a phone interview. “We mutually decided it was time for us to move forward in a different direction.”

Loblaw’s President’s Choice Bank said in a separate statement that it’s committed to a “smooth and seamless transition” with CIBC for the banking products migrating to the new branding, and will focus on payment and loyalty programs through its Mastercard products and PC Plus rewards plan.

Free Groceries

“When we ask our customers what they value most, they tell us they appreciate the ability to make payments simply and put free groceries on the kitchen table,” said Barry Columb, chief executive officer of President’s Choice Financial. “That remains our focus.”

CIBC’s Boluch said Simplii Financial will offer straightforward, no-fee banking with “great interest rates” for customers who prefer making transactions by telephone or online, while also including free access to CIBC automated teller machines.

“There’s certainly a business model out there that clients appreciate and want, and this allows us to serve those who really value no-fee daily banking and great rates,” Boluch said. “That’s why we chose to go this route.”

Simplii Financial will compete with Bank of Nova Scotia’s online lender, Tangerine Bank, which it bought from ING Groep NV in 2012, as well as smaller firms including Canadian Western Bank’s Motive Financial, Desjardins Group’s Zag Bank and Equitable Group’s EQ Bank, which started in January 2016.

“Direct banking is a growing channel for clients, and Simplii we expect will be a strong competitor in this space,” Boluch said.

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!

Institute makes mortgage warning

Think tank crunches mortgage stats, urges policy makers to take a close look at mortgage habits and the impact of interest rates.

Canadians have qualified for much larger mortgages over the past two decades due to record-low interest rates, and that has impacted affordability according to the Fraser Institute.

"Increased borrowing power, brought about by falling interest rates and rising incomes, is potentially the most overlooked and least understood factor influencing home prices across Canada," Niels Veldhuis, president of the Fraser Institute, said.

In its new study, Interest Rates and Mortgage Borrowing Power in Canada, the institute found mortgage interest rates fell from 7% to 2.7% between 2000 and 2016 and increased the maximum mortgage for Canadians by 53%.

“Based on average family incomes in 2000, falling interest rates resulted in increased mortgage borrowing power in the four main regions over the same period: Vancouver from $183,751 to $280,893; Calgary from $221,214 to $352,671; Toronto from $221,214 to $338,161; and Montreal from $171,692 to $262,459,” the institute said in the study.

Incomes increased in lockstep, jumping 53% nationwide – and contributing to even more purchasing power among Canadians.

And the results have the Fraser Institute warning policymakers about the potential implications of increased borrowing power.

"This increase in borrowing power -- in simple terms -- means that an average Canadian family, dedicating the same share of their income to monthly mortgage payments, can afford a mortgage that's more than twice as big now as it would have been in 2000," Veldhuis said. "As would-be homebuyers and governments contend with rising prices across Canada, policy makers should look closely at the impact of interest rates, rising incomes and increased mortgage borrowing power on home prices."

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!

Big Six prepare for earnings season

Canada's big six banks will report third quarter earnings over the next two weeks and profits are expected to rise due to the strength of the Canadian economy.

Analysts will be watching the impact of the housing market and rising interest rates on the lenders’ profits. The slowdown in home sales growth in Toronto will be a particular concern due to its impact on mortgage portfolios.

The first of the banks to report earnings is RBC Wednesday followed by CIBC Thursday with Scotiabank, BMO, National Bank and TD reporting next week.

Although smaller margins and mortgage volume may be a concern most analysts are expecting credit quality to remain high.

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!

Tighter lending restrictions could hit first-timers hardest

The proposals to tighten mortgage insurance underwriting practices could damage affordability especially for first time buyers according to the real estate association in British Columbia.

OSFI began a consultation period for changes to its Guideline B-20 in July with three key proposals: •Requiring a qualifying stress test for all uninsured mortgages;

•Requiring that Loan-to-Value (LTV) measurements remain dynamic and adjust for local market conditions where they are used as a risk control, such as for qualifying borrowers;

•Expressly prohibiting co-lending arrangements that are designed, or appear to be designed to circumvent regulatory requirements.
The period for submissions closed last week.

The British Columbia Real Estate Association says that the housing market is still adapting to recent changes including the tightening of mortgage lending regulations last fall and the recent interest rate rise.

“Requiring all uninsured mortgages to have to qualify for a higher mortgage rate than can be negotiated between borrowers and lenders may put homeownership out of reach in some markets,” the association wrote on its blog.

The association says that more changes could imbalance local markets and is calling on the federal government not to make fundamental changes to the national housing finance system at a time of rising interest rates.

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!

Average Condo Price Up Year-Over-Year in Q2 '17

July 2017 -- Greater Toronto Area REALTORS® reported 8,223 condominium apartment sales reported through TREB's MLS® System between April and the end of June. This result was down by eight per cent compared to 8,942 sales reported in Q2 2016.

Despite the recent dip in overall GTA home sales, the condominium apartment market was quite resilient, especially when compared to low-rise market segments. Market conditions also remained tight, which resulted in the continuation of strong annual rates of price growth.

The average selling price for condominium apartments increased by 28.1 per cent compared to Q2 2016. The average selling price for the TREB market area as a whole was $532,032, with the average price in the City of Toronto higher, at $566,513.

Recent consumer survey results from Ipsos suggest that condominium apartments will continue to gain in popularity with home buyers over the next year.


It shows that you can buy more for less around Yorkdale, where a square foot of space averages $375. That's because the buildings tend to be a little older, he said.

The map provides the average cost of a square foot around subway stops from Jan. 1 to May 10 of this year. The average is based on a radius of about the halfway point from one subway station to the next on the line.

Price per square foot is the best measure of what you're getting for your money, said Langschmidt.

TREB

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!





Market Continued to Adjust in July

August, 2017 -- Greater Toronto Area REALTORS® reported 5,921 residential transactions through TREB's MLS® System in July 2017. This result was down by 40.4 per cent on a year over- year basis, led by the detached market segment.

Clearly, the year-over-year decline we experienced in July had more to do with psychology, with would-be home buyers on the sidelines waiting to see how market conditions evolve.

We generally see an uptick in sales following Labour Day, as a greater cross-section of would-be buyers and sellers start to consider listing and/or purchasing a home.

The Composite Benchmark was down by 4.6 per cent relative to June. Monthly MLS® Home Price Index (HPI) declines were driven more so by single-family home types. The average selling price for all home types combined was up by five per cent year-over-year to $746,218.




TREB

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!

Sunday, August 20, 2017

Toronto housing market downturn to be short lived, federal housing agency says

TORONTO, The recent downturn in Toronto's real estate market, brought on after Ontario introduced measures this spring including a foreign buyers' tax, is expected to be brief, the federal housing agency said Wednesday.

Property prices in the city _ which fell from an average of $919,589 in April to $793,915 last month, according to data from the Toronto Real Estate Board _ should pick up again due to supply constraints and a stronger economy, Canada Mortgage and Housing Corp. said.

"The response we're seeing in the Toronto market seems almost emotional and a knee-jerk reaction to some of the changes, which suggests that these impacts will be short-lived,'' Dana Senagama, CMHC's principal market analyst for Toronto, said during a conference call to discuss the agency's latest housing market assessment.

The provincial government's measures, which were retroactive to April 21, include a 15 per cent tax on foreign buyers in the Greater Golden Horseshoe region, expanded rent controls and legislation allowing Toronto and other cities to tax vacant homes.

"If job creation continues in Toronto ? and the economy continues to fuel the housing demand, we can expect some of the pressures on house prices in Toronto to resume,'' said Bob Dugan, CMHC's chief economist.

Like Toronto, Vancouver also experienced a real estate slowdown following the implementation of a tax on foreign buyers a year ago. But there have been signs this year that the city's housing market is heating up again.

In its latest quarterly house price survey released two weeks ago, Royal LePage said home sales in Vancouver began to recover in the April-to-June period after the tax ``bruised consumer confidence.'' The realtor reported in April that sales in Vancouver's housing market jumped by almost 50 per cent on a month-over-month basis.

CMHC, in its latest housing market assessment released Wednesday, kept its overall risk rating for the national housing market at strong. The quarterly report, which is based on data from the first three months of this year, precedes the Ontario government housing rules.

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!

To sell an $80 million house, its owners raise the price

In early 2008, Albert Elkouby bought a 1.54-acre piece of land on the corner of a main thoroughfare in Beverly Hills for $18 million and set about erecting a 28,000 square-foot “French chateau-inspired” house. Four years later, in 2012, Elkouby, who owns JH Design, an apparel company that makes branded jackets for the NFL, NBA, and Nascar, put the shell of the home on the market for $29.9 million.

Elkouby had originally bought the land for himself, said his daughter Vered Nisim, who through a family trust is a partial owner of the property. But after seeing yet another lot on the same street at a higher elevation, he decided to unload the property quickly, hence the not-quite-completed house going onto the market when it did. “I think he did it on a whim,” she said, but after minimal market interest, Elkouby took it off the market to finish it.

After another three years passed, the house, which has 11 bedrooms, 18 bathrooms, and a garage that holds 15 cars, returned to the market in 2015 for $72 million, or nearly a 141 percent price increase. The one catch? It still wasn’t done.

“Some of the finishes were far from being done,” said Nisim, who is the vice president of marketing at her father’s company. “And the landscaping wasn’t completed.”

The family’s logic for listing the property before it was complete was simple, she said. With a listing that expensive, “we were thinking that the potential buyer would come in with their own vision and taste, and then we would finish it for them.”

But after it languished with no takers, they realized that “at this price point, the buyer needs to see the finished product,” she said. “It’s difficult for the buyer to envision what the house would look like, and that was our biggest barrier.”

So the house disappeared from the market once again, only to reappear earlier this month listed by Sam Real from Nest Seekers International, fully complete and with an even higher price: $80 million.

A “Comparison Shopping” Issue

From a strategic standpoint, at least, the new price has some area brokers scratching their heads. “We don’t see a lot of high-end luxury developers raising their prices,” said Connie Blankenship, the director of luxury sales at Douglas Elliman Real Estate in Los Angeles. “If anything, they do it the other way, starting higher with the price they would love to get, and then if they’re not getting the activity they need, lowering the price.”

One explanation could be that the elevated price is effectively a marketing move. “It seems the higher you price your house, the more attention it gets,” Blankenship said.

Another could simply be that sellers have unreasonable expectations based on other, similarly aspirational homes currently on the market. “What also happens is that other owners look and say, ‘Well, this person is pricing their house high, so mine also must be worth that amount.’ But the problem,” she continued, “is that those houses haven’t actually sold, so they’re not real comparisons.”

Yet another explanation is that the new price and new listing are a way to reinvigorate a property that’s now been on the market for more than half a decade.

“Owners try to manipulate the market just as agents try to manipulate the market to make it fresh,” said Drew Mandile, an L.A. broker for Sotheby’s International Realty. “They’ll change the market data, or put it out as a new listing, and all of that is done, for lack of a better word, to trick the market and to make new buyers believe that no one knows about it or has seen it.”

The question whether the $8 million price hike will help or hurt the house’s chances is irrelevant, he said. “Eight million dollars doesn’t mean anything, because no one knows what a $72 million or $80 million house looks like,” he said. “It’s a comparison shopping issue.”

Is Worth It?

Nisim put forward more straightforward logic for the $8 million price change: The improvements are worth the price. “For two years, we just worked on the details,” she said. “Every wall, floor, molding in there is hand-cut. Just to do the wood floor in the ballroom took a good five to six months, because it’s all hand-carved.”

The house also features an elevator, indoor pool, greenhouse, sauna, and screening room. “We put, I would say, over $5 million in just some of the additional finishes,” she said. “There’s Italian marble, plus the changed landscaping. We’ve definitely upgraded it.”

As lofty as the $80 million price tag might appear, though, a handful of homes have sold for similar prices. In February, a house that had been asking for $135 million sold for $65 million, while one in the Owlwood Estate in Holmsby Hills sold for $90 million, after sitting on the market for several years with an asking price of about $150 million.

This current house, in other words, isn’t a dramatic departure from the current, super-high-end market.

That market, however, is unpredictable. “Many of these asking prices aren’t anywhere near the sales prices,” said Mandile. “Unless the house is at $30 million or $40 million and there are more sales to compare it to, you really can’t tell exactly what it’s really worth.”

MPA

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!

Alberta housing sector resurgent thanks to Edmonton and Calgary

With the petroleum-centric Albertan economy gradually making a comeback, the province’s real estate sector is growing more and more tempting for buyers and investors alike—and nowhere is this more evident than the resurgence in the Edmonton and Calgary housing markets, according to industry observers.

“For both Edmonton and Calgary, there are great buying opportunities right now, but there’s no rush,” Real Estate Investment Network (REIN) CEO Patrick Francey told Next Home. “That’s the good news. You’re finding the properties that cash-flow in a single-family would have preferably come from basement suites. Anything that’s in the $400,000 to $500,000 range is still very strong, but ultimately, there are good opportunities to buy. You’ve got to look for the deals, but they exist. And there are cash-flow opportunities, especially in single-family uptown suites.”

Culling data from the Canada Mortgage and Housing Corp. along with latest provincial information on employment, population, and wage growth, Next Home noted that Edmonton and Calgary properties currently offer the best returns for investors who “buy, hold, and rent”.

Edmonton benefited from being hardier than other provincial markets, according to local real estate professionals

“The Edmonton market has been a real head-scratcher the last little while,” according to Tom Shearer of Royal LePage Noralta Real Estate, Edmonton. “Investors keep asking me, ‘When is the big drop going to happen, so I can buy in?’ The big drop never really hit. Prices climbed in 2015, 2016 and now we’re finally seeing a small drop in prices. That might even be attributed to the changes in financing rules in October 2016.”

Shearer cited the city’s downtown as a spot of particular interest, especially with its several new condo complexes under construction. “I believe that the excitement of having the Ice District and several other projects come to life downtown has created a new energy and is increasingly drawing interest from homebuyers and investors alike.”

Meanwhile, Calgary’s downtown—along with Okotoks and Chinook—boast of competitive home prices, rental growth, and occupancy rates.

“Demand for these regions is continually growing, as many buyers and potential renters have become increasingly interested in these markets,” sayeth John Hripko of Royal LePage Benchmark, Calgary. “If investors choose to suck it up and purchase a property at current rates, they would likely turn a monthly profit in the near future, as oil prices continue to stabilize and the Alberta economy returns to its former glory, causing rental rates and home prices to increase.”

CREW

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!

Poll results: The best way to invest money mid-long-term

Real estate is the favoured investment vehicle, according to a recent study, beating out many other popular options.

Real estate is king, according to a poll by Bankrate.com, with 28% of respondents in its latest Financial Security Index poll saying it’s the best choice to invest money for 10 years or more.

“If you have a long time horizon, you will win in real estate,” Abhi Golhar, a real estate investor who owns and rents out single-family homes, said in the report.


Real estate investing beat out cash (23%) by a slight margin and the stock market (17%), gold (15%) and bonds (4%) by more significant margins.

It should be noted that the results are based on American investors; however, considering how many real estate investors and home owners south of the border were burned in the wake of 2008’s recession, the results are very significant.

They certainly point to long-term positive sentiment about investing in real estate.

Still, real estate investment does have its detractors.

“One study by professors at the London Business School found that housing returned only 1.3 percent per year after inflation from 1900 to 2011, while stocks tended to perform more than four times better,” Bankrate said of the study. “Homes are costly to maintain and can be difficult to sell in both good markets and bad. During a downturn, there can be so few available buyers that your ability to ask for a higher price is diminished.”

It wouldn't be a huge leap to assume a poll in Canada would yield similar results -- especially considering how much home owners and investors in major markets have built up in home equity over the past decade.

CREW

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!

Saturday, August 19, 2017

Larger mortgages a by-product of income growth, low interest rates

A prolonged regime of low-interest rates along with a steady trend of rising incomes have more than doubled the amount that Canadians are able to borrow for their home purchases, according to the latest report by a public policy think-tank.

In its newest study titled “Interest Rates and Mortgage Borrowing Power in Canada”, the Fraser Institute stated that from 2000 and 2016, interest rates decreased from 7.0 to 2.7 per cent, while household income rose by 53 per cent nationwide. These developments have increased the maximum size of mortgage homebuyers can qualify for by 53 per cent.

In turn, these trends might have contributed to the prevailing environment of elevated housing prices in metropolitan markets nationwide.

“Increased borrowing power, brought about by falling interest rates and rising incomes, is potentially the most overlooked and least understood factor influencing home prices across Canada,” Fraser Institute president Niels Veldhuis said.

Mortgage-borrowing power in Calgary increased by a staggering 161 per cent, the greatest nationwide. Meanwhile, Vancouver saw a 118-per-cent growth in this metric. Montreal posted 115 per cent, and Toronto saw a 100-per-cent rise.

“This increase in borrowing power -- in simple terms -- means that an average Canadian family, dedicating the same share of their income to monthly mortgage payments, can afford a mortgage that’s more than twice as big now as it would have been in 2000,” Veldhuis explained.

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!

Home ownership far more attainable for young buyers in Atlantic Canada

In its latest Peak Millennial Survey, Royal LePage noted that while current economic and employment realities along with elevated housing prices in Canada’s largest metropolitan areas are making it nearly impossible for young adults to put down roots and get started with their own families, Atlantic Canada markets are proving to be the exception to this grim rule.

The study looked at the impact that peak millennials—which Royal LePage defined as those aged between 25 and 30—are expected to have in the Canadian real estate sector over the next few years. This market demographic is expected to increase 17 per cent by 2021.

Bucking the national trend of difficulty in achieving home ownership dreams, Atlantic Canada holds the highest percentage (69 per cent) of peak millennials who indicated belief that they will be able to purchase their own houses in the next 5 years.

“With a significant amount of extremely affordable housing, and a much lower cost of living, purchasers within this region are often able to save up enough money and find the perfect home with relative ease,” according to James Marjerrison of Royal LePage Prince Edward Realty in Charlottetown.

Atlantic Canada also posted the highest volume of those aged 25 to 30 who think homes within their market remain affordable (59 per cent). 75 per cent of peak millennials surveyed in the region expressed hope of getting detached homes, with 54 per cent saying that they will be able to afford such purchases.

“Peak millennials often do not need to make compromises when looking for a home in Atlantic Canada,” said Karen Syroid of Royal LePage Gardiner Realty in Fredericton. “For this reason, many millennials today are making housing decisions based on criteria that other generations simply haven’t thought of in the past. They want a home that will help them augment their lifestyle, and refuse to shrink their budget to the point where they have to give up the things they love.”

“Peak millennials make up a significant portion of the market in Atlantic Canada, acting as both first-time homeowners and move-up buyers,” added Glenn Larkin of Royal LePage Professionals 2000 in St. John’s. “With many parts of the region offering significant value, purchasers will tend to go wherever the best deal is so long as the property is move-in ready and able to enhance their lifestyle.”

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Households now need six-figure incomes to afford homes in Toronto—report

According to the latest study a household will need an annual income of more than $200,000 to shoulder the cost of a Toronto detached home, the average price of which is now sitting at $1.15 million.

The analysis—which took the average of home prices between January and June 2017 and assumed 20-per-cent down payment with a 2.99-per-cent mortgage amortized over 25 years—found that prospective buyers would need $150,000 per year to live comfortably in half of 22 Toronto area municipalities.

The average home price in Toronto ($864,228) is affordable to buyers who earn $147,750 annually. Condos, which skew towards the lower end of the cost scale with an average price of $576,000, demand an annual income of $92,925.

However, while various quarters have cited housing scarcity as a central driver in the city’s long-running affordability issues, a Bloomberg analyst duo has argued that latest census data actually belies that notion.

Earlier this week, markets observers Erik Hertzberg and Theophilos Argitis wrote that “the most important question remains the extent to which speculation is driving demand.”

“Ideally, fundamentals such as demographics and employment are at play, and the price gains reflect natural household growth getting ahead of supply. If that’s true, the market should eventually stabilize once new supply kicks in,” Hertzberg and Argitis explained. “A situation where speculators are bidding up prices would be much more problematic.”

“Canada’s 2016 census, which the statistics agency is releasing piecemeal this year, is providing some insight into the debate. The results: supply may not be the big problem many people thought it was.”

The data revealed that between 2011 and 2016, the total number of Toronto households increased by 146,200 (up to 2.14 million). To compare, the number of newly completed homes stood at 175,825 projects.

“In other words, supply of new houses exceeded real household demand by almost 30,000 over those five years,” the duo stated. “That throws cold water on the argument — voiced particularly by the industry — that the city’s affordability crisis won’t be resolved unless the government introduces measures to help increase supply.”

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Institute makes mortgage warning

Think tank crunches mortgage stats, urges policy makers to take a close look at mortgage habits and the impact of interest rates.

Canadians have qualified for much larger mortgages over the past two decades due to record-low interest rates, and that has impacted affordability according to the Fraser Institute.

"Increased borrowing power, brought about by falling interest rates and rising incomes, is potentially the most overlooked and least understood factor influencing home prices across Canada," Niels Veldhuis, president of the Fraser Institute, said.

In its new study, Interest Rates and Mortgage Borrowing Power in Canada, the institute found mortgage interest rates fell from 7% to 2.7% between 2000 and 2016 and increased the maximum mortgage for Canadians by 53%.

“Based on average family incomes in 2000, falling interest rates resulted in increased mortgage borrowing power in the four main regions over the same period: Vancouver from $183,751 to $280,893; Calgary from $221,214 to $352,671; Toronto from $221,214 to $338,161; and Montreal from $171,692 to $262,459,” the institute said in the study.

Incomes increased in lockstep, jumping 53% nationwide – and contributing to even more purchasing power among Canadians.

And the results have the Fraser Institute warning policymakers about the potential implications of increased borrowing power.

"This increase in borrowing power -- in simple terms -- means that an average Canadian family, dedicating the same share of their income to monthly mortgage payments, can afford a mortgage that's more than twice as big now as it would have been in 2000," Veldhuis said. "As would-be homebuyers and governments contend with rising prices across Canada, policy makers should look closely at the impact of interest rates, rising incomes and increased mortgage borrowing power on home prices."

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Friday, August 18, 2017

Home equity in red-hot markets impelling consumer spending—study

Canadian consumer spending in the country’s hottest real estate markets is on an upward spiral once more, a trend propelled by mounting home sale prices despite slower transaction volumes.

“The sharp appreciation in home prices in Ontario and British Columbia fuelled by extremely accommodative monetary policy have undoubtedly encouraged some homeowners to tap into their home equity in order to support a spending binge,” National Bank chief economist Stéfane Marion told BuzzBuzzNews.

Canadians are taking advantage of home equity lines of credit (HELOCs) to feed this hunger for spending. In the previous quarter alone, consumer-credit grew at the fastest rate since 2010.

Approximately 3 million HELOCs are currently active nationwide, according to data from the Financial Consumer Agency of Canada.

The country’s sixth largest bank stated that HELOCs currently comprise around 45 per cent of consumer credit. The average outstanding balance on these loans was $70,000.

“We estimate that HELOCs at Canadian chartered banks have surged by close to $20 billion in the past year, accounting for close to 60 per cent of the growth in total consumer credit,” Marion noted.

However, these developments—while beneficial for GDP growth—do not bode well for the system’s long-term stability.

“So, the resurgence in consumer credit may ring some alarm bells at the Bank of Canada which, as you may recall, continues to see household indebtedness and housing market imbalances as ‘the most important vulnerabilities for the Canadian financial system,’” Marion explained.

The improving sentiment suggested that Canadians are shrugging off the impact of higher borrowing costs after the Bank of Canada raised interest rates last month, focusing instead on an accelerating economy that has driven the jobless rate to the lowest since 2008 and the purchasing power benefits that come with a higher dollar.

“While the normalization of interest rates is likely to have a negative impact on household balance sheets, a stronger Canadian dollar could be perceived as another sign of a healthier economy,” New York-based Bloomberg economist Robert Lawrie said.

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A closer look at CREA’s numbers

Canada’s average home price may have shown the most precipitous decline since the recession, but one industry veteran sees the silver lining

“Despite all the stuff happening in the Greater Golden Horseshoe the numbers aren’t dramatically different than we expected. We’re pretty well on par,” Christopher Alexander, regional director with RE/MAX, told Canadian Real Estate Wealth. “There were significant changes the government introduced on April 20 and any time that happens sometimes drastic outcomes can happen. I’m actually pretty pleased.”

Canada’s average home price dropped 1.5% to $607,100 month-over-month, which is the largest decline since 2008’s recession.

Toronto led the charge with its own 4.7% month-over-month dip.

The reason for the GTA’s cooling, according to many pundits, is the Ontario Fair Housing Plan, introduced in April, which included a foreign buyers tax and other measures meant to address affordability issues.

That, coupled with increased mortgage rates, has many Canadians sitting on the sidelines and waiting to see how it all shakes out.

However, some – including the Canadian Real Estate Association – believe the most precipitous declines may have already been felt in Toronto.

“July marked the smallest monthly decline in Greater Golden Horseshoe home sales since Ontario’s Fair Housing Plan was announced in April,” said Gregory Klump, CREA’s Chief Economist. “This suggests sales may be starting to bottom out amid stabilizing housing market sentiment. Time will tell whether that’s indeed the case once the transitory boost by buyers with pre-approved mortgages fades.”

Newly listed homes dropped 1.8%, led by a decline in the GTA.

“Many other markets in the Greater Golden Horseshoe region have also seen new supply pull back recently after having jumped immediately following the Ontario government’s announcement of its Fair Housing Plan in late April,” CREA said.

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Majority of Canadians do not use the internet to do research on financial products

In its latest study conducted for financial products comparison portal LowestRates.ca, Ipsos found that Canadians are more likely to use websites for evaluating travel products than for researching on mortgages, credit cards, and vehicle insurance.

The results of the study also suggested that this lack of analysis is making Canadian consumers overspend on financial products.

Only 60 per cent of Canadians use the internet to evaluate mortgage options, while only 42 per cent conduct research when renewing their mortgages. Over one-fifth of tech-savvy Canadians (22 per cent) renew without doing any research at all. 45 per cent use websites to study credit cards, while 47 per cent do so for car insurance.

Meanwhile, Canadian millennials compare hotels (72 per cent) and flights (67 per cent) more frequently. Even the demographic that had the lowest rates of internet usage (baby boomers) still had a relatively high adoption rate: 56 per cent compare flights and 59 per cent compare hotels.

“The massive gulf between Canadians who compare travel options and financial products is disappointing. Because the latter is where you save real money,” LowestRates.ca CEO Justin Thouin said. “Sure, you can shave hundreds of dollars off your flight by using comparison sites, but taking the time to compare auto insurance or mortgages saves many of our users thousands of dollars a year — and those savings add up over decades.”

“A few months ago, we found that many Canadians don’t understand how common financial products work,” Thouin added. “And this survey really hammers home that a large part of that is because Canadians can’t be bothered. We need to make comparing financial products as common as comparing flights or hotels.”

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Edmonton and Calgary leading the charge in Alberta housing’s recovery

With the petroleum-centric Albertan economy gradually making a comeback, the province’s real estate sector is growing more and more tempting for buyers and investors alike—and nowhere is this more evident than the resurgence in the Edmonton and Calgary housing markets, according to industry observers.

“For both Edmonton and Calgary, there are great buying opportunities right now, but there’s no rush,” Real Estate Investment Network (REIN) CEO Patrick Francey told Next Home. “That’s the good news. You’re finding the properties that cash-flow in a single-family would have preferably come from basement suites. Anything that’s in the $400,000 to $500,000 range is still very strong, but ultimately, there are good opportunities to buy. You’ve got to look for the deals, but they exist. And there are cash-flow opportunities, especially in single-family uptown suites.”

Culling data from the Canada Mortgage and Housing Corp. along with latest provincial information on employment, population, and wage growth, Next Home noted that Edmonton and Calgary properties currently offer the best returns for investors who “buy, hold, and rent”.

Edmonton benefited from being hardier than other provincial markets, according to local real estate professionals

“The Edmonton market has been a real head-scratcher the last little while,” according to Tom Shearer of Royal LePage Noralta Real Estate, Edmonton. “Investors keep asking me, ‘When is the big drop going to happen, so I can buy in?’ The big drop never really hit. Prices climbed in 2015, 2016 and now we’re finally seeing a small drop in prices. That might even be attributed to the changes in financing rules in October 2016.”

Shearer cited the city’s downtown as a spot of particular interest, especially with its several new condo complexes under construction. “I believe that the excitement of having the Ice District and several other projects come to life downtown has created a new energy and is increasingly drawing interest from homebuyers and investors alike.”

Meanwhile, Calgary’s downtown—along with Okotoks and Chinook—boast of competitive home prices, rental growth, and occupancy rates.

“Demand for these regions is continually growing, as many buyers and potential renters have become increasingly interested in these markets,” sayeth John Hripko of Royal LePage Benchmark, Calgary. “If investors choose to suck it up and purchase a property at current rates, they would likely turn a monthly profit in the near future, as oil prices continue to stabilize and the Alberta economy returns to its former glory, causing rental rates and home prices to increase.”

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Multiple cities west of Ottawa experiencing homes sales slowdown

Amid a stricter mortgage regime, signs of sales decline have been observed in several major metropolitan housing markets nationwide over the past few months, according to the National Bank.

Most notably, sales fell by 40.4 per cent year-over-year in July in Greater Toronto, in the wake of new provincial housing rules that included expanded rent controls and a 15-per-cent foreign buyers’ tax. Meanwhile, Greater Vancouver suffered an 8.2-per-cent sales decline over the same time frame.

“Based on a survey of real estate boards that we conducted earlier this month, home sales declined on a [year-on-year] basis in July in most large Canadian cities west of Ottawa,” National Bank economist Marc Pinsonneault wrote in a client note earlier this week, as quoted by The Huffington Post Canada.

“If that trend persists, home price growth might decelerate in these regions.”

The data came along with the latest edition of the Teranet house price index, which showed a strong 14.2 per cent annual price growth in July (the same pace as the previous month).

However, Pinsonneault cautioned that the information might be a reflection of what happened several months ago, not necessarily the date of release.

“The Teranet-National Bank data comes from a land registry, and so transactions are recorded in the land registry about one or two months after the sale is recorded in the [multiple listing service] system,” he explained last month. “When you have a sudden shift in price trends, it’s plausible that the Teranet-National Bank index will be lagged with the MLS [data].”

According to the index, home prices in Toronto were up 28 per cent in July from a year ago, while Greater Vancouver saw an 8.7-per-cent increase in this time frame.

Pinsonneault cited Ottawa and Montreal as the two housing markets going against this flow and doing much better than their peers. These cities were the “two areas where the Teranet-National Bank Home Price Index was at a record level in July,” with annual housing growth increasing to approximately 4 per cent in Ottawa and 5.5 per cent in Montreal.

“Downward pressure is likely to be more acute in regions where affordability has been eroded by past price escalation, while home prices should be more resilient in regions where homes are more affordable,” Pinsonneault stated.

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Canada has 3 of the 10 most liveable cities in the world

The annual rankings of the world’s most liveable cities has been revealed and three of the top ten are in Canada.

The listings from The Economist Intelligence Unit is based on several key factors: •Stability including crime and the threat of terror attacks;

• Healthcare including the availability and quality of public and private health services;

•Culture & Environment including sporting, food and consumer goods and services, climate and levels of corruption;

•Education, both public and private;

•Infrastructure including roads, energy and provision of housing.

Melbourne, Australia leads the list followed by Vienna, Austria and the next three positions are all in Canada.

Vancouver (3), Toronto (4) and Calgary (5) all score highly in the key metrics for the listings.

The top ten is completed by Adelaide and Perth (Australia), Auckland (New Zealand), Helsinki (Finland) and Hamburg (Germany).

Some of the world’s most famous cities do not make the top ten due to high levels of crime offsetting some of their positives, these include New York, Paris, London and Tokyo.

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Canadian homebuyer power has doubled since the millennium

In the year 2000 the bank lending interest rate in Canada was 7% but by last year it had fallen to 2.7% while incomes increased, more than doubling the amount that homebuyers could borrow.

A study by the Fraser Institute has looked into the effect of this mortgage-borrowing power on Canadian home prices.

“Increased borrowing power, brought about by falling interest rates and rising incomes, is potentially the most overlooked and least understood factor influencing home prices across Canada,” said Niels Veldhuis, president of the Fraser Institute.

With a 53% increase in the maximum mortgage homebuyers can qualify for; and also a nominal 53% increase in income nationwide, the study says that equates to a 126% rise in mortgage-borrowing power.

“This increase in borrowing power—in simple terms—means that an average Canadian family, dedicating the same share of their income to monthly mortgage payments, can afford a mortgage that’s more than twice as big now as it would have been in 2000,” Veldhuis said.

Regionally, mortgage-borrowing power increased 161% in Calgary, 118% in Vancouver, 115% in Montreal and 100% in Toronto.

“As would-be homebuyers and governments contend with rising prices across Canada, policy makers should look closely at the impact of interest rates, rising incomes and increased mortgage borrowing power on home prices,” Veldhuis added.

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Thursday, August 17, 2017

Millennials to heavily impact real estate

Gen-Y is a massive cohort that is overwhelming interested in breaking into the real estate market – but will affordably challenges and impactful mortgage rules allow them to?

“Facing challenges their baby-boomer parents never encountered, peak millennials are confronted with significant obstacles that vary depending on where they live,” Phil Soper, president and CEO, Royal LePage, said. “While finding employment in our largest urban markets, Toronto and Vancouver, is relatively easy compared to other areas of Canada, buyers face limited inventory and high home values in these regions. Where prices are more affordable, job markets can be more uncertain.

“The pent up demand for housing from millennials is enormous, with only a third of this large demographic currently owning a property and an overwhelming majority desiring to be homeowners.”

According to a new report from Royal LePage, the number of Canadians aged 25-30 is projected to increase 17% in 2021 compared to 2016. And that cohort will have massive purchasing power.

“Whether they choose to buy or rent, peak millennials will inevitably shape the housing market due to their sheer volume,” Soper said. “We expect demand from this demographic to put additional pressure on entry-level housing and investment properties being used to supplement the limited inventory of purpose-built rental buildings.”

The desire to own a home is strong among these Canadians, with Royal LePage’s cross-Canada survey finding 87% of Canadians aged 25-30 believe home ownerships is a good investment.

However, slightly fewer –69% -- hope to own a home in the next five years and only 57% of those surveyed believe they will be able to afford one.

Despite the challenges facing millennials who plan to enter the housing market, Soper suggests there are some developmental strategies that could help meet demand.

“While peak millennials are becoming increasingly inventive in their quest for homeownership, careful attention to urban planning could help to alleviate some of their constraints,” said Soper. “By focusing on vertical living, and developing larger, affordable condominiums in urban markets, supply limitations would ease, providing long-term, appealing solutions to young buyers in search of affordable property.”

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Homebuyers willing to sacrifice indoor space for outdoors

Outdoor living is becoming increasingly popular and a new poll shows that homebuyers are willing to have less indoor space if that means more room outside.

Having a larger buffer between their home and their neighbours’ properties is a key factor in the trade-off for 46% of millennials and 53% of other demographics.

The poll by homebuilder Taylor Morrison, which sold its Canadian operations to Mattamy Homes in 2014, also reveals that women are more likely than men to want a feature-rich outdoor space (62% vs. 51%) rather than a larger interior floor space.

Asked how they would spend $10k-$15k to improve their new home, outdoor living enhancements such as outdoor living rooms and tiles that match those used indoor topped the list. That marks a shift away from higher spending on kitchen interiors.

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Resale homes should have energy ratings by 2019

Environmental groups are calling for all Canadian resale home listings to show information about the amount of energy they use by 2019.

A letter has been sent to two government ministers by a group of ten environmental organizations including The Pembina Institute, The Atmospheric Fund, and Canadian Energy Efficiency Alliance.

They have more than 20 policy changes that they want Ottawa to implement to cut energy use in residential and commercial buildings in order to reduce Canada’s carbon emissions.

New homes would be required to generate their own electricity through solar or other renewables by 2030, and the energy-use labelling system along with accelerating retrofits and emissions reductions in existing buildings.

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CIBC to launch new digital banking brand

CIBC has announced a new digital banking brand which will launch in November and retain existing banking and mortgage customers from President’s Choice.

Simplii Financial will include daily banking, mortgages and loans and will replace the services it offers through its 20-year association with Loblaw subsidiary President’s Choice which will focus on its payments and loyalty products.

"This is an exciting step as we continue to build a leading client-focused direct banking offer," said Mike Boluch, Executive Vice-President, Direct Banking, Innovation & Payments, CIBC.

"Simplii will deliver straightforward, no-fee everyday banking and great rates for the growing number of Canadians who prefer to do their banking by telephone, online, or through mobile and other digital channels,” he added.

There will be no change in the terms and conditions of mortgages for those who already have their home loan with President’s Choice.

CIBC expects to incur fees and charges of approximately $100 million pre-tax in the current quarter, which will be reported as an item of note when CIBC releases its fourth quarter results.

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Nearly 2/3 of local markets remain in ‘balanced territory’—DLC’s Cooper

In a recent analysis, Dominion Lending Centres chief economist Dr. Sherry Cooper noted that multiple housing markets nationwide are now reaching a more stable footing in terms of supply and demand, despite “marked slowdown” in key metropolitan areas.

Data from the Canadian Real Estate Association (CREA) covering July 2017 showed that the number of new listings has decreased by 1.8 per cent on a monthly basis, led by the Greater Toronto Area.

“Many other markets in the Greater Golden Horseshoe region also saw new supply pull back after having surged immediately after the Ontario government housing policy changes in April 2017,” Cooper explained.

New listings also declined in Calgary, Edmonton, Montreal, and northern British Columbia. Overall, the national sales-to-new listings ratio sat at a “well-balanced” 53.5 per cent, in contrast to the high-60-per-cent range in Q1 2017.

“The ratio in the range of 40%-to-60% is considered consistent with balanced housing market conditions. Above 60% is considered a sellers’ market and below 40%, a buyers’ market,” Cooper wrote. “Based on a comparison of the sales-to-new listings ratio with its long-term average, more than 60% of all local markets are in balanced market territory.”

“In the Greater Golden Horseshoe region, housing markets that recently favoured sellers for an extended period are now balanced, with some beginning to tilt toward buyers’ market territory,” she added.

Recent measures and industry moves played key roles in these developments, Cooper stated.

“Notably impacting psychology, was the Bank of Canada rate hike in July, the first such hike in seven years. Positive surprises in the Canadian economy this year caused the Bank to preempt inflation pressures sooner than many had expected.”

“The Canadian dollar and mortgage rates rose in response to the Bank’s action. The posted mortgage rate has now increased 20 basis points to 4.84%, which is of particular importance because this is now the assumed borrowing rate at which mortgage applicants must qualify for insured loans. There is a proposal to extend this qualification criterion to uninsured borrowers as well–that is, those that put at least 20% down on their home purchase. Before October 2016, the eligibility rate was the contract rate, which is meaningfully lower than 4.84%.”

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