Archive for October 29, 2007

Laurin Jeffrey | October 30, 2007
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Housing boom seen in smaller Ontario towns

Anne Howland, CanWest News Service

Smaller Ontario towns, particularly in the Toronto area, are experiencing their own mini housing booms, even as their bigger counterparts grab most of the attention for record-breaking sales and price increases.

According to a report released Thursday, boomers flush with proceeds from selling their big-city homes and price-conscious buyers looking to get into the hot real estate market are busy looking for properties in smaller towns such as Timmins, Pembroke, Belleville and Collingwood.

And that’s despite concerns over a higher Canadian dollar and its impact on the province’s manufacturing sector, the report added.

The report, which looked at residential real estate activity in more than 30 major Ontario centres, found that sales were climbing in 85% of markets surveyed, while all but one market saw average price escalate. Parry Sound, Clarington/Bowmanville/Newcastle, Trenton, Belleville, North Bay and Pembroke led the province in terms of percentage increase in unit sales, all with double-digit gains, the report noted.

“While an overall healthy economy has supported home-buying activity, consumer confidence in the future of real estate has taken markets to the next level,” said Michael Polzler. “Given current momentum, we expect demand for housing to continue throughout the traditionally slower summer months and shatter existing records for sales and/or price in many markets by year-end.”

Average price has seen solid appreciation in the first five months of the year, with all but Windsor reporting an increase in values, the report showed. The greatest gain occurred in Timmins, where the demand for residential properties prompted a 29% upswing in year-to-date average price, compared to one year ago. Double-digit increases in average price were also noted in Sudbury, Haliburton, Collingwood and North Bay, Pembroke/Petawawa, and Sarnia.

“Affordability is a huge factor in the real estate marketplace, with smaller, more reasonable-priced centres experiencing exponential growth this year,” said Polzler. “This is especially true in communities within close proximity to the Greater Toronto Area – as far as Bowmanville to the east, Barrie to the north, and Stratford to the west. Many purchasers are willing to sacrifice location for value, as long as it allows them to realize homeownership.”

Empty-nesters and retirees are also setting down stakes for their golden years, returning to their original hometowns flush with equity gains realized in larger, metropolitan areas, the report said. In many instances, these purchasers are sparking demand for upper-end product, as evidenced by the 73% of markets reporting an uptick in luxury home sales in the first five months of the year, it added.

Statistics Canada recently substantiated the trend. Between 2001 and 2006, six census metropolitan areas located in the Greater Golden Horseshoe reported population growth rates higher than the national average, including Barrie, Oshawa, Toronto, Kitchener, Guelph and Brantford, the agency said.

“While the GTA’s bidding wars tend to dominate headlines, multiple offers are also occurring in more than half of the markets surveyed in the report,” said Polzler. “Limited inventory levels, particularly in hot pocket neighbourhoods, are seriously contributing to the increase in this phenomenon.”

Earlier this month, the Canadian Real Estate Association reported that the national resale real estate market shattered all previous records in May, with major market activity on track to set a new annual record in 2007.

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Contact the Jeffrey Team for more information – 416-388-1960

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Category: General Real Estate | Tags: , ,
Laurin Jeffrey | October 30, 2007
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Changing the landscape

Cottages, condos will be hot real estate buys of the future: report

Anne Howland, CanWest News Service

An aging Canadian population and increasing immigration will bring significant changes to the country’s real estate market, a report released Monday suggests.

Short-term cyclical factors will slow Canada’s hot real estate market over the next several years, according to the latest Real Estate Trends from Scotia Economics, while long-term fundamentals, including slower population growth, will dampen demand.

According to the report, the average annual rate of population growth will slow to just 0.8% over the coming decade, reflecting an aging society and historically low fertility rates.

“This less favourable demographic trend does not in itself pose a major risk to the housing outlook,” said Adrienne Warren, senior economist with Scotia Economics. “Real household income growth and the level of interest rates have a statistically more significant influence on real estate sales and price appreciation.”

Yet the moderation in housing demand comes as affordability is at a cycle low, supply conditions are better balanced and pent-up demand has largely been met, potentially reinforcing the industry’s more subdued prospects, the report suggested.

A slowdown would follow a booming real estate market that has shown little signs of abating for several years. The Canadian Real Estate Association recently reported that the average resale price for agent-listed homes in Canada surpassed $300,000 in April for the first time ever, with record highs in seven provinces. The seasonally adjusted sales rate in April was also a record, up 0.6% from the previous record set in January, CREA said. Year-to-date sales were also at a new high, 6.7% more than last year, it added.

“Demographic shifts will also influence the type of housing in demand,” added Warren. “In particular, the changing age structure of the Canadian population and the growing significance of immigration will likely favour certain forms of housing and certain geographical areas.”

The Canadian population aged 25 to 44 years – those with the highest probability of buying a home in any given year – is projected to increase by just two per cent between 2006 and 2016, the report noted. All of the growth will come from the youngest in this cohort (aged 25 to 34), reflecting the maturing of the baby echo generation, it added.

“These buyers, many of them singles or young professional couples, should support continuing moderate demand for entry-level homes and condos, particularly in urban centres close to employment opportunities,” said Warren.

The population aged 35 to 44 years (the smaller baby bust generation) is expected to decline in absolute numbers over the same period, the report said. This group encompass both first-time buyers and households in their early “trade-up” years, it added. They are more likely to have young families and favour larger suburban homes, a real estate segment that could underperform, the report noted.

The number of Canadians aged 45 to 64 years is projected to rise by 15%, while Canadians 65 and over will jump by 65 per cent, the report said. Even with the higher level of housing market activity of younger Canadians, the number of sales involving late-stage “move up” buyers and “downsizers” could dominate those of more traditional homebuyers, it added.

“While the lifestyles and housing needs of these more mature homeowners vary widely, an aging population should favour new construction over resales, lower maintenance options such as condominiums, second homes and vacation properties, and urban areas with greater amenities,” said Warren.

“Immigration will also play an increasingly important role in shaping housing demand,” Warren added. “Immigration has been the dominant source of household formation since the early 1990s, a trend that will accelerate over the coming decade as the rate of natural population growth continues to slow.”

Net international migration is expected to account for over two-thirds of Canada’s population growth between 2006 and 2016, something not seen since Wilfrid Laurier was prime minister, the report noted, adding immigration could be Canada’s only source of population growth by about 2030.

Relatively weaker earnings growth compared to native-born Canadians is a possible factor behind the difficulty faced by some recent immigrant households in making the transition from renter to homeowner, the report said. Immigrant families are also more likely than native-born Canadians to locate in major cities where homeownership rates in general are lower and home prices higher, the report said.

“More than one-third of foreign-born residents in Canada’s largest urban centres have been in Canada for 10 years or less. This suggests a significant pool of potential homebuyers ready to enter the Canadian real estate market,” said Warren.

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Contact the Jeffrey Team for more information – 416-388-1960

Category: Buying Real Estate, Condos, General Real Estate, Miscellaneous |
Laurin Jeffrey | October 29, 2007
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Can’t afford it now?

Cottage affordability becoming an issue for leisure-loving Canucks

Anne Howland, CanWest News Service

OTTAWA — They may work second jobs or downsize their city houses to afford cottage life, but one-quarter of Canadian recreational property owners say high gas prices will keep them from enjoying their decks and docks as much as they used to.

And 12% may even sell their piece of paradise if gas prices continue to rise, according to a survey released Tuesday.

Despite rising cottage and gas prices, the number of Canadians committed to owning a getaway has increased since last summer, with 12% of Canadians planning to or considering buying a recreational property in the next three years, according to the 2007 Recreational Property Report.

“Our research reveals that the demand for recreational property continues to far exceed supply across Canada, causing cottage prices to rise at a much quicker rate than the overall housing market. A standard waterfront, land access property increased by 13 per cent over the past year, with properties ranging from under $100,000 to over $1 million,” said Phil Soper.

“Families are managing the affordability challenge with creativity and personal flexibility. Prospective purchasers on a budget can still find a cottage or cabin, but they may have to accept a longer weekend commute, seek alternate ownership options or subsidize ownership through rental income.”

More affordable properties can be found in Eastern Canada, as balanced markets and new developments characterize the majority of Atlantic Canada, while stronger demand and cottage prices that commonly inch up toward $500,000 typify Ontario’s market, the report said. In Alberta and British Columbia, cottage seekers will find some of the country’s most expensive cottage real estate and very tight inventory levels, it added.

Of those planning or considering purchasing a cottage, 49% are willing to move into a smaller city house and 32% would take on a second job, the poll said. Other sacrifices include making the cottage the primary residence, driving as far as necessary and using the cottage to generate rental income during the year, results showed.

Enjoying the outdoors, escaping the hustle of city life and spending quality time with friends and family were the top reasons for heading to cottage country, the poll showed. It also found that 69% of parents who own cottages said part of the reason they go to the cottage is to “unplug” their kids and have them spend time outdoors.

Adults also look to cut off their own high-tech lifelines, with 33% of respondents claiming they take a complete break from their BlackBerries, while seven per cent continue to check in.

The report comprises a nationwide poll of Canadian cottage owner and buyer attitudes and actions and a 51 market analysis of recreational property prices, trends and activity.

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Contact the Jeffrey Team for more information – 416-388-1960

Category: Buying Real Estate, General Real Estate, Miscellaneous | Tags: , , , ,
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