Ajax Pickering Real Estate Blog

By Sharon Singleton, QMI Agency

Canada’s real estate market showed no sign of losing steam in February, with housing starts rising faster than expected and a new survey showing 10% of Canadians expect to buy a home in the next two years.

Seasonally adjusted housing starts were 196,700 in the month, up from 185,400 in January, according to figures from the Canadian Mortgage Housing Corp. That was above analysts’ forecasts for a 190,000 gain.

RBC’s 17th annual home ownership study found that the number of Canadians saying they are very likely to buy a new home rose from 7% two years ago to 10%. The number of people who view their house as a good investment rose to a 12-year high of 91%.

Canada’s real estate market has been one of the main drivers of economic growth, with housing construction helping to power a 5% expansion in gross domestic product in the fourth quarter.

Some economists have forecast that the property market will begin to cool from the second half, when the Bank of Canada is expected to begin raising interest rates and demand and supply of available housing becomes more balanced.

“The gain in February housing starts was concentrated in the multiple starts segment, particularly in Toronto,” said Bob Dugan, chief economist at CMHC’s Market Analysis Centre.

Urban multiple starts, or condos, increased by 19.1% to 89,900 units while single urban starts increased by 0.5% to 89,200 units.

Urban starts rose 28.6% in Ontario, 14.3% in Atlantic Canada, 10.8% in the Prairie region and 8% in British Columbia. In Quebec, urban starts dropped 14.1%.

Rural starts were estimated at a seasonally adjusted annual rate of 17,600 units in February.

According to the RBC poll, younger Canadians between the ages of 18 to 24 are likely to lead the market. About 15% said they were likely to buy, almost double the number in 2009.

About 60% also believe housing prices will continue to rise this year, up from just 25% this time a year ago. They also expect mortgage rates to rise, with two-thirds expecting to have to pay more, the bank said.

That belief is being reflected in the choice of mortgage, with 16% opting for a variable rate loan compared with 20% last year.

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

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A home may be one of the biggest investments you ever make. Saving up a down payment is just the first step.

Investor Education Fund

1. You may find it hard to get your money out. Some investments can lock in your money for a while, but you can usually pay a penalty and get your money out if you really need it (for example, a five-year Guaranteed Interest Certificate (GIC)). If you buy a home, you may find it will tie up most of your savings. Turning your house into cash means selling it or renting it out, and that can take a lot of time and effort. That’s why a home is not considered a very liquid investment.

2. You will pay very different kinds of costs. Most investments have costs like service charges, fees, or commissions. The costs to maintain a home investment are different, and many are hard to plan for. There are taxes and utility costs, for starters. Then there’s maintenance. On top of that, if you have a mortgage, you will pay interest – and interest rates can go up, making your home investment more costly to own.

3. Many factors affect what you will make. Some investments, such as GICs or bonds, give you a fixed rate of return, so there’s no guesswork. You can estimate the return on other investments, such as stocks or mutual funds, based on past results and other factors, but there is no guarantee what you will make. To predict how much money you’ll make when you sell a home, you have to look at factors such as:

* The average increase in housing prices over time, which runs between 2% and 4% a year in most locations
* The location of your home
* Your home’s size, age, and condition

4. You get the unique advantage of living in your investment. Most investments bring you a return in the future. A home can do that too, but with a home, you also get to enjoy your investment by living in it.

5. You are not just investing, you are also borrowing. A few lucky people have enough money to pay cash for their homes, but most people make a down payment and borrow the rest by taking out a mortgage. When you buy investments like stocks and bonds, you don’t usually borrow the money you invest – or at least, not as much.

6. You use different sources of information to research your home investment. Your real estate agent is your best source of information when buying a home. Find one you feel comfortable with, who seems to understand your needs and your budget. Make sure they are familiar with the area you are interested in. Of course, don’t overlook other sources of information. For example, people in the neighbourhood are often willing to share information that can help you make your final decision. Newspapers, books and the Internet also provide useful information. You can also talk to your banker or financial adviser.

Remember: Location matters when you’re buying a home

The return on investment for homes in some places is higher than it is in others. Whether you live in a small town or a big city, you get the same interest on a GIC. If you buy a house in a small town, you probably will not pay as much for it as you will for a similar house in the centre of a large Canadian city, close to public transit, shopping, schools, and entertainment.

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

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TREB President’s Column as it appears each Friday in the Toronto Sun’s Resale Homes and Condos section

One characteristic that defines most Canadians is hope. Canada is a society founded on the promise of a better life achieved through hard work and integrity. This dream and these principles attract people from all over the world to Canada, who in turn, contribute so much to what makes our country great.

If you were to ask Canadians to identify the key to a better life most would point to home ownership. Indeed, nearly 70% of Canadian households owned their dwelling at the time of the 2006 Census, representing the highest rate of homeownership since 1971. The reason for our love of housing is simple: real estate is not only an excellent long-term investment; it’s the only one in which you can live as it grows.

Regardless of whether you are a first-timer, a move-up buyer or a right-sizing empty nester, it’s wise to use the professional services of a Realtor to help with the transition. Like other Canadians, integrity is paramount to Realtors and for this reason your Realtor will ask you to sign a Buyer Representation Agreement, confirming their commitment to represent your best interests by working exclusively on your behalf.

Once you have signed a Buyer Representation Agreement, be sure to ask your Realtor about the Buyer Registry Service, a password-protected database that contains information on the current housing preferences of Greater Toronto Realtors’ clients. To provide for your privacy, your personal information is only accessible to your Realtor, whose name is displayed for making contact.

You can achieve a much more efficient search by registering your criteria in the BRS, as it allows your Realtor to receive advance notice when properties that match your preferences are listed for sale. Homes that match your criteria are typically emailed to you on a nightly basis but communication can occur even faster between Realtors using the BRS.

Your Realtor can also get a sense as to the demand for your preferred housing type by comparing your criteria to similar preferences registered in the BRS. Gauging this type of information can help you make a successful offer.

Your registration in the BRS also helps verify the clearly defined business relationship between you and your Realtor, which can help you avoid potential conflicts when signing a Buyer Representation Agreement.

All that’s needed to take advantage of this very useful tool is a signed Buyer Representation Agreement and completed BRS Data Form.

We are fortunate to live in one of the most accomplished cities in the world not just with respect to finance, the arts and cultural diversity, but also based on our approach to real estate transactions. The BRS is just one example of Greater Toronto Realtors’ commitment serving your needs with the highest professional standards.

To learn more about the BRS, talk to a Greater Toronto Realtor and visit the Toronto Real Estate Board’s consumer website www.TorontoRealEstateBoard.com.

Tom Lebour is President of the Toronto Real Estate Board, a professional association that represents 28,000 Realtors in the Greater Toronto Area.

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

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