National picture of the Canadian real estate market

As the Canadian real estate market continues to rebound from a steep decline a year ago brought on by the recession, home buyers remain nervous about the stability of the economy, according to a survey of 1,225 Royal LePage agents and brokers across Canada. However, few buyers think home prices will decline again.

When asked to comment on the most common fears they are hearing from home buyers over the past three months, 38 percent of Royal LePage agents and brokers cited economic stability and related factors such as job security. 23 percent said home buyers fear they may not be able to sell their existing homes at the price they are hoping for, while 12 percent said buyers are hesitant because they believe prices have not yet hit the bottom of the cycle. Twenty percent of agents and brokers said they are not hearing any concerns from buyers.

The Royal LePage Advisor Survey, conducted online in November 2009, also found that an increasing number of Canadians are purchasing homes as investment properties, and almost 50 percent of brokers and agents say the number of buyers intending to renovate their properties after purchase is increasing.

Changing Leaside

Lots of changes are happening in Leaside, or could happen depending on what happens at the Ontario Municipal Board. Currenly before the OMB is a proposal to replace the heritage- designated Talbot Apartments on Bayview Avenue with an 8-storey condo tower and condo townhouses.

On Thursdsay Dec. 10 at 6:30, a public meeting will be held at Leaside Library concerning another development site at 85 Laird Drive, part of which is occupied by a heritage rail maintenance facility. The site at one time was going to be used for a car sales facility but that plan went down with the demise of General Motors. First Capital is proposing to a 180,000 retail power centre for the site with 928 surface and below grade parking stalls. The city wants to maintain the area as an employment centre but the days of industry in this former industrial park seem numbered. I would love to see a Liberty Village type of development with loft condos, small offices, and some bars utilizing some of the heritage buildings.

Hot Market Continues- More Properties Needed for Buyers

Greater Toronto REALTORS® reported 7,446 sales in November – slightly more than double the November 2008 result when GTA home sales had dipped markedly due to the economic downturn. Year-to-date sales were up 14 per cent compared to the first 11 months of 2008.

“This year in the GTA home sales will be in line with the healthy levels experienced between 2004 and 2006,” said Toronto Real Estate Board President Tom Lebour. Increased resale home transactions in the Toronto area and country-wide played a key role in pushing the Canadian economy out of recession in the third quarter.”

The average price for November transactions was up 14 per cent year-over-year to $418,460. The average price year-to-date was up four per cent to $394,464.

“Very strong annual growth rates for sales and average price should be expected through the first quarter of 2010, because we will be comparing the current recovery to the housing market decline experienced last winter,” according to Jason Mercer, TREB’s Senior Manager of Market Analysis. “As we move into the spring, growth rates will move to more sustainable levels.”

Strong Market Continues in November- More Listings Needed

In the first two weeks of November, Greater Toronto REALTORS® reported 3,666 sales – up 84 per cent compared to the first two weeks of November 2008. The average price for these transactions was up 10 per cent year-over year to $415,066.

Increased interest in ownership housing has been widespread throughout the GTA and across all housing types,” said Toronto Real Estate Board President Tom Lebour. “However, it is important to point out that we are now making comparisons to the fall of 2008 when we experienced a marked decline in sales and average price”

Year-to-date sales, at 78,233 are up 11 per cent compared to 2008. Average price, at $393,180, is up by three per cent.

Eglinton Crosstown LRT Meetings

Another series of open houses is beginning for the Eglinton Crosstown Light Rail Transit (LRT). The LRT line will run from Kennedy subway station all the way to Pearson Airport and will undoubtedly have an effect on property development and values along the route. There is generally a positive impact on property values along the route as more intensive development occurs around the stations, though this often takes place over a number of years. For more information, see www.toronto.ca/transitcity

TREB Reports Strong Growth in October MLS Transactions

In October 2009, Greater Toronto REALTORS® reported 8,476 sales, up 64 per cent from October 2008. The average price for October transactions was $423,559 – up by 20 per cent compared to the same month last year.

"Strong sales growth has occurred across many property classes – from price ranges that would attract first-time buyers to luxury properties selling for over one million dollars," said TREB President Tom Lebour. “The highest rate of sales growth in October was experienced for properties selling for over $750,000. In contrast, luxury home sales declined at an above-average rate last year.”

Year-to-date sales, at 74,721, were up nine per cent compared to the first ten months of 2008. Average price, at $392,264 was up by almost three per cent.

Economic and Condo Update 2010

I attended the Economic and Condo Market Update yesterday sponsored by Genworth Financial (thanks to Jessica Magno for the invitation). In his address, a speaker from the Conference Board of Canada showed that our economy seems to be on the mend. While it is of little consolation to those who are losing their jobs, he pointed out that we experienced eight years of employment growth from 2000- 2008, far greater than the jobs lost in the last year.

An interesting point he made is that it is unlikely that the US will very soon start to address the huge deficit that they are building up, which is actually a good thing for us in Canada. Once they start to address it, there will be a tightening spending by Americans, our biggest export customers. He said that the introduction of the HST in July 2010 will add .7% to the inflation rate, with the overall rate expected to be 2.7% He did not foresee an increase in mortgage rates beyond 1-2%, which he felt would not have a significant effect on the real estate market. I took my son Michael, who recently graduated from Trent with a Bachelor in Business Administration and is looking for a job in finance, with me. It was interesting to see how the younger generation views these things.

One of the other speakers was from Urbanation (www.urbanation.ca) who spoke about the Toronto condo market. He felt that the biggest issue with the coming HST is its impact on condo maintenance fees, which he expects will rise by about 6%. He said that when fees rise to over $600/mo., it has a negative effect on condo sales. Overall he was very positive about the condo market in Toronto, reporting that the unsold inventory is down significantly. He noted that a number of successful projects had revised their suite mix, going to smaller less expensive units.

He noted that there has been a difference in price per square foot between new and re-sale has declined. He also identified the condo areas that have experienced the most price appreciation since 2007:

Downtown core: up 16%

North York City Centre: up 12%

City Place: up 10%

Downtown West: up 9%

Downtown East: up 8%

Harbourfront: up 8%.