Ajax Pickering Real Estate Blog

Saskatoon, Regina prices up 50%

CBC News

Canada’s real estate scene is showing no sign of the weakness sweeping through the U.S. market, as sales and prices continue to rise.

The average resale price in 24 major markets jumped $5,000 from September to October, to $333,544, according to figures from the Canadian Real Estate Association.

That’s a rise of 10.6% from last October — the sixth month in a row of double-digit year-over-year price gains.

The country’s priciest real estate continued to be found in Vancouver, where the average resale price jumped $8,000 from September to reach $590,577 in October — up 7.8% from a year earlier.

Alberta’s cities used to post the biggest percentage price gains. But recently, it’s been Saskatchewan that’s been doing the booming.

Saskatoon’s average resale home sold for $255,614 in October — up a whopping 53.3% from October 2006. Regina’s increase was just behind — up 50.3% to $190,657.

Average resale prices hit record highs in the two Saskatchewan cities, as well as in Montreal and Toronto.

Toronto’s average price jumped $14,000 in a month to $394,583. A similar price rise took place in the Hamilton-Burlington, Ont. region.

Prices in every market except Windsor were up over last year. Windsor’s real estate market remains weak, with prices down four per cent year-over-year.

On a seasonally adjusted basis, sales rose 1.3% from September’s level, with more than half the markets reporting an increase in activity.

“Negotiations still favour the seller in nearly all major markets,” the Canadian Real Estate Association’s chief economist Gregory Klump said in a release. “This suggests resale housing demand remains on a strong footing, and that price increases will continue to exceed overall consumer price inflation.”

The Canadian Real Estate Association forecasts that average prices in 2008 will set new records in every province, despite a slowdown in sales activity.

The Canadian Real Estate Association’s figures are based on sales through the Multiple Listing Service system.

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

I find a lot of people are still unclear of the particulars surrounding Registered Retirement Savings Plan (RRSP) withdrawals for the purpose of buying a home. For those of you that are unaware - what Revenue Canada calls this program is the Home Buyers’ Plan. Not only is this popular with first time home buyers, but in my opinion it is significantly underused. RRSPs represent one of the only forms of forced savings - so why not use this method to come up with your new home downpayment?

Generally speaking, the Home Buyers’ Plan (HBP) is a program where you can withdraw up to $20,000 from your RRSP to buy or build a (qualifying) home (don’t get too caught up on the qualifying idea - nearly every typical type of residence is included). Each individual that you are buying the home with also has this same ability to withdraw. This means that three people buying together can withdraw up to $60,000 (3 x $20,000) collectively. Withdrawals that meet all of the Revenue Canada HBP conditions are not included in your income and therefore not taxed in the year they are withdrawn. The money you withdraw has to have been in your RRSPs for a minimum of 90 days before it can be withdrawn without tax liability. Through the program you have the ability to withdraw the amount all at once or through a series of withdrawals not to exceed $20,000.

After you have withdrawn this amount you then have up to 15 years to repay it to your RRSPs. Keep in mind that you will not get a tax deduction for the HBP amounts that you repay to your RRSPs. Typically you are required each year to repay an amount that is equal to the total amount you withdrew divided by 15 every year after the home purchase. If you do not repay this amount then that figure is then added to your income for that year. There is no tax liability personally incurred when you make this minimum payment back to your RRSP (at least not from the HBP).

After you move into your home and start making payments back to your RRSPs you have to designate the portion that you would like to go towards your HBP repayment. Since your earnings will likely (hopefully) increase as the years go by it is important to try and pay back the amount you borrowed as quickly as possible. Not only does doing this give you the potential to get a higher tax deduction for your RRSP contributions in your higher earning years, but it also allows for your RRSP dollars to have more years of tax sheltered growth while in your RRSP.

Keep in mind that while this article highlights a number of important elements of the program - it is only an overview. It is no substitute for comprehensive tax and financial advice. Please take the time to consult a financial professional so that you can learn the fine details of the program before you move ahead. A more in depth review of the program can be found by visiting Revenue Canada’s website at: www.rc.gc.ca or by calling 1-800-267-1267.

As the housing and mortgage market starts to get a little more chaotic make sure you take the time to make your housing and financing decisions wisely. Until next time - best of luck with your home and mortgage search.

Calum Ross is Vice President and practicing Mortgage Consultant with The Mortgage Centre. He has appeared on Canada AM, Investment Television, Report on Business Television, City TV. He is the holder of both a B.Comm and an MBA in Finance. He can be reached at (416) 410-9905.

New Homes & Condos Magazine is an excellent source of housing information for those looking for information on new homes in Ontario, Canada. We offer the most up-to-date information on new communities across the Greater Toronto Area.

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

Lori McLeod - Globe and Mail

After three straight months of declines sales of existing homes unexpectedly reversed course in October, gaining 1.3% over the previous month.

However the gain is most likely an aberration rather than a sustainable trend, and sales are expected to decline gradually for the rest of the year and in 2008, said Gregory Klump, chief economist at the Canadian Real Estate Association.

“The rebound was particularly surprising because it was spread right across the country in a number of major markets,” Mr. Klump said. “However we are still expecting that sales will gradually erode, primarily due to a decrease in affordability.”

Sales of resale homes rose to 28,966 units in October, a 7.6% gain over the same month last year, according to statistics from the Canadian Real Estate Association.

Activity rose in Toronto, Edmonton, Hamilton-Burlington, Montreal, Quebec City and Winnipeg. Stronger sales in these markets offset sales declines in Calgary, Vancouver, Saskatoon and Sudbury, cities which have experienced huge home price increases in the past year.

The average price of a resale home in Canada rose 10.6% in October compared with last year to $333,544, the sixth consecutive month in which the increase has exceed 10%. In Toronto, Regina, Saskatoon and Montreal average prices reached their highest levels on record.

Sales activity in most major centres has been very strong at the high end of the market, probably because there’s a dwindling supply of lower priced homes left in many cities, Mr. Klump said.

Residential listings on the Multiple Listing Service dropped slightly in October from September, but still reached their fifth highest monthly level on record.

“Negotiations still favour the seller in nearly all major markets,” Mr. Klump said.

Sales levels are expected to edge down as higher home prices and mortgage rates continue to squeeze buyers out of the market. The posted rate on a five-year mortgage at the big banks is currently sitting at 7.44%, 150 basis points higher than where it was in April.

While sales activity is expected to slow next year, it should still be a very strong year, Mr. Klump said.

“This will be a gradual slowdown but it doesn’t portend disaster. 2008 is still expected to be one of the best years on record, second only to 2007,” he said.

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