Have they finally Caused the Bubble?

The Toronto Real Estate Board released its February sales number to the glee of many in financial circles.  Sales Collapsed by 20%  SHOUT the headlines!

http://www.torontorealestateboard.com/market_news/market_watch/2013/mw1302.pdf

In the front page chart

Condo apartments
Month over month % change - 20%

This is in direct conflict with the chart immediately below that shows new listings at 11,052  down 12% from 2012.

YET Days on Market [DOM] increased to 28.... 28 days on market is a one month supply of homes for sale A Seller's Market FIRMLY continues [in the Toronto resale market] with multiple offers on detached and semi detached properties all around the GTA.   

Now, have a look at the chart above.  Detached home sales in the 416 numbered 749.  The 905 area code sold 2,025 homes in that same period.  A WHOPPING 3 times the number.  So, as the singles start families or find their BFF and want more space, they migrate from the glamour of the city core and find their own white picket fence. Is the Toronto Land Transfer Tax singularly to blame?  The average home price in Mississauga or Milton, Burlington is more appealing but now you need to go substantially further to save. Ajax and Oshawa are very appealing.

The most confusing is the BOM announcing 2.99% fixed for 5 year financing when typically the interest rates increase in spring to coincide with the RRSP and Tax Deadlines combined with mortgage demand for spring borrowings.  Simply Put, There are annual interest rate fluctuations to match Home Buyer demand.

This creates conflicting media messages that make Buyers Hesitate. Additional mortgage qualification tweeking has removed some buyers from the POTENTIAL PURCHASER pool, yet has effectively changed nothing. CMHC may not insure purchases in excess of a 25 year Amortization [AM] or Purchases in excess of ONE MILLION.  OK, but Genworth and MICC will gladly accept your insurance premium, funding with a first line financial institution and provide 30 year AM's.

I am more concerned about the announcement of continuing layoffs in a variety of business sectors combined with aged attrition in the workforce [retirees].  Part Time and Contract positions do not have the income and ability to qualify for mortgages.

If We are having a this conversation, this is good.

What do you want to do?



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Land Transfer Tax makes RED HOT impact on Toronto Real Estate

The sales are up? The sales are down? Prices are falling? Who says? Are there more listings?

Lets look at the details;

There were 2,081 sales of detached homes in the Toronto GTA that encompasses the Toronto real Estate Board.   In case you missed the details, 3 times as many home buyers selected a home in the 905 rather than the 416.  This same ratio continues in all categories except condos. If there was ever a more glaring example of inequity it is the ADDITIONAL Land Transfer Tax. Previous conversations; CD HOWE reports on Land Transfer Tax Impact 

Lets examine the AVERAGE DOLLARS

I am not a statistician but average means AVERAGE. The average house sale in Toronto was up 2.7% for a sale price of $ 765,000 on 502 units.  [ Before everyone gets on a TITHER on t How can people afford a house program just check out this link...   http://www.canequity.com/ontario/toronto-mortgages.htm  Average is actually $270K ]   Sales in the 905 were TRIPLE for the same period and their prices increased 6.8%

So when people say: Is the market up or down?

We can say condo prices in Toronto are down almost 5% over last year but prices have adjusted only by One Percent. Detached homes are up 4.8%  SO really there was no change at all. The number of listings has been slow to feed the demand of Toronto Home Shoppers and we will continue to see Bidding Wars.  

Ready to get started?  Teaching your child to ride their bicycle inside the underground parking garage or in the hallway is not the same as being on the street in front of your own home.

Give me a call. I'll help you pick the street.