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Construction worker’s strike affects high rise in GTA

Blogs / Amy / 8 October 2022 / Greater Toronto Area, high rise buildings, Housing, residential construction workers, residential projects

Construction worker’s strike affects high rise in GTA by Amy 15000 residential construction workers go on strike over wages and workers’ rights. This strike by the workers was the biggest in 20 years and this might have had a huge impact on the construction of ground and high-rise buildings in the Toronto Area. On Sunday, May 1st workers in GTA were covered by the labourers ‘ international union of North America local 183 went on strike and announced that workers were forced to go on strike. Multiple construction industry sector members refused the settlement which was proposed to them. Among members from different industry sectors included workers in high rise forming, house framing, installation of tiles forming, rail installation, self-leveling flooring, and hardwood installation were in this matter. This may result in affecting the process of Ground related and high rise residential projects in GTA. Due to the rising costs of living in Ontario, they have demanded fair compensation and a good amount of wages for its components. The workers of the residential sector in GTA deserve the fair compensation that they are demanding and their contribution and hard work reflect in the construction industry. The residential sector is one of the most demanded industries in the Great Toronto Area and other parts of Ontario and will continue to be in most in and for upcoming years. Thus in a press release LiUNA local 183 business Manager, Jack Oliveira said that their members work hard and are critical to building housing across the GTA. He further said that they are ready to come back for work but they just want to get their den and fulfilled and they want the contractors Association to provide their members with fair wages and compensation and accept a fair proposal that appreciates their members and for what they do. (RESCON )Richard Lyall, president of the Residential construction council of Ontario, a representation of residential builders, said that this strike is the most crucial that the sector has faced in around two years. According to him, in the residential construction sector, there are around 30z agreements and all collective bargaining expired on 30th April in The GTA. Many collective agreements have been settled or have achieved an uncertain agreement or some are still waiting for a fair agreement between the parties. LiUNA Local 183 has notified RESCON that its members have not accepted the proposals of settlements and go on a strike in the GTA and the other parts of Ontario. Richard Lyall, president of RESCON, is hoping to resolve this problem with the striking units in the next few weeks. Because according to him, the longer they strike, the more housing projects will be kept pending and the work will stop. Because of the workers who are skilled and are on strike, the other works are held up and cannot be processed further before completing the earlier one. The process of constructing a building is defined to be performed by different workers and so when they are on strike the others have to wait until these things have been resolved. RESCON mentioned that another union local representative of operative engineers has also denied and rejected a new collective agreement. It could affect excavation and other construction activities in the resident’s sector. But the province is urging them to resolve the settlement between both parties. The Ontario minister of labour stated in the press that they are encouraging the employers and the unions to make every effort on resolving their agreement at the bargaining table and they are pretty confident that by working together, both the parties can reach a settlement and resolve this issue. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

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A new record in Q1 as the Pre Construction condo sales increase

Blogs / Amy / 8 October 2022 / average rate, average sales, condo market, condo sales, Greater Toronto Area, interest rate, pre-sales units, Q1, resale market

A new record in Q1 as the Pre Construction condo sales increase Condo sales have increased in the Greater Toronto Area and set a new record for Q1. It has increased by 55 percent and surpassed the 10-year average sales by 60 percent. The 10-year average sales were 5,164, which has raised to a new record. In the second quarter, new condo sales in the greater Toronto area rose to 9001 units which were 5.5times higher than the previous Q2 sales. Demand for new condo units has been rising over the last two quarters and the total number of transactions has become greater than the number of pre-sales units. Inventory that hasn’t been sold has faced a downfall of 34 percent over the last six months. Additionally, the unsold unit’s average price has increased by 16 percent approx to $31,382sq.ft and that too rose year over year. Still, the cost of construction and materials was increasing faster than the sales price and therefore it led to a decrease in the new activity. The demand for pre-construction condos was interesting to the next level but materials became more costly which is the reason for the reduction in the activity of construction. It has been reduced to 86,777 units in Q1 from 88,774 in Q4. The condo resale market is facing a change from the earlier quarter. The average price of a condo per sq. Ft in Q1 has increased by 12 percent. It was less than a quarter earlier. This is the rapid increase quarterly, which also results in the behaviour of buyers. The buyer is entering the market before the expected increase in interest rate. This results in an elevation of resale condo prices. It rose by 19 percent year over year in Q1 to $986 sq. Ft. It would make up to $811,000 for 824 sq. Ft. Which is 25 percent higher than its actual rate. The new condo market has started setting up a new record during Q1. The total sales for great Toronto area condo resale have increased by 74 percent year after year. So in the new condo resale market, prices grew faster and there they only increased by 13 percent: In 905 prices rose faster and reached 28 percent while in the outer area the prices increased by 22 percent. The buyer only focused on the outer region of 416 and 905 in search of value in condo sales where the price has an average rate of $7,66,000 in the 416 regions and $7,61,000 in the 905 area. With the demand for condo sales, there is an increase in resale activity. Including the new projects registered or completed in the past two years, there were 1058 sales in Q1 which was representing 17% of total resale. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

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10 million homes required in Ontario in next 10 years

Blogs / Amy / 8 October 2022 / city of toronto, Greater Ontario, Greater Toronto Area, market supply, Ontario Home Builders Association, property costs, real estate market

10 million homes required in Ontario in next 10 years Given Ontario’s solid populace development, one strategy think tank appraises that the territory will require almost 1,000,000 new abodes throughout the following decade. As indicated by the Ontario Ministry of Finance, the Smart Prosperity Institute and the Ontario Home Builders Association showed up at the close to million home figure in the wake of inspecting the number of homes and what sorts of homes would be expected to address the issues of the area’s normal 2.27 million extra inhabitants over the course of the following decade. As per the examination, 195,000 of the 910,000 units for new families, to a great extent for couples needing to have youngsters, will be in elevated structure condos, with the other 715,000 living in any remaining sorts of lodging. As indicated by the examination, 910,000 homes will be required for new families, 65,000 units will address current market supply holes, and 25,000 units will act as a cushion for any unanticipated extra populace extension during this time span. “Building 1,000,000 new houses in the following decade is difficult for Ontario,” said Mike Moffatt, ranking executive of strategy and advancement at the Smart Prosperity Institute. “In any case, the award is huge: keeping a sufficient inventory of top-caliber, reasonable lodging while likewise producing monetary turn of events and empowering environment activity.” If this doesn’t occur, Ontario will not be able to draw in and keep the ability it expects to contend in the worldwide economy.” Supply limitations in the Greater Toronto Area (GTA) pushed up property costs pointedly, bringing about an 18.3% year-over-year expansion in normal selling costs in September land information. As indicated by information given Tuesday by the Toronto Regional Real Estate Board (TRRB), the typical expense of a property is currently $1,136,280. The board encouraged all degrees of government to address the lodging supply emergency, which they accept is at a “basic point.” While there have never been additional lodging units under development in Canada throughout the course of recent months, as per an examination delivered toward the end of last month by RBC Economics, these advances were recognizably ailing in urban communities like Toronto. Lodging begins in the city expanded by just 1.4 percent (or 500 units) from 2015 to 2019. When contrasted with the rate set somewhere in the range of 2015 and 2019, this misses the mark concerning the public dwelling building development of 26%. As per the review, rising lodging costs are making various youthful families drive until they qualify. 60,000 people left the City of Toronto and Peel Region for different areas between July 2019 and July 2020. “Ontario’s real estate market is a piece like a brutal round of a game of seat juggling,” said Mike Collins-Williams, CEO of the West End Home Builders’ Association. All these factors have made it difficult for the residents to cope with the changes smoothly but steps have been taken by adequate authorities to make sure the transition goes smoothly and people do not feel discomfort. “An ever-increasing number of individuals, especially youthful families searching for space to develop, are leaving more costly urban areas and dissipating across the territory looking for lodging.” “In people group across Ontario, we really want seriously lodging supply and choices. Provided that metropolitan chambers endorse the proper scope of lodging choices in their region can the 1,000,000 new homes required throughout the following ten years to answer and help youthful families be assembled.” Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

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Home Costs in Canada Reach a New Record: Current Scenario and Predictions.

Blogs / Amy / 8 October 2022 / Canadian Real Estate Association, cost, Greater Toronto Area, homeprice, homesales, housing supply, newrecord, pricing, realestate, realestateprice, sales

Home Costs in Canada Reach a New Record: Current Scenario and Predictions. The year 2022 has witnessed several instances of the rise in prices of housing units in Canada. Considering that the year 2022 has just begun, the first three months saw the prices reach a new benchmark, especially in the Toronto area. The price of the average Canadian housing unit hit a new benchmark, reaching the $800,000 mark. It seems that for the first time in February 2022 the pricing of the homes hit a new record. However, few experts and critics in the previous year predicted that the housing market in Canada had already reached its highest mark. According to some, the housing market was supposed to cool down. Did this really happen? Read more to learn more about the situation. It has been a tough and harsh period from 2020 to 2022 in Canada and its housing industry. From small to large housing units in urban regions to even minor rural neighborhoods, the sales, and prices of houses have been increasing to unparalleled heights. There are numerous factors that led to this housing crisis in Canada, they include low-interest rates, increasing demand, reducing supply, and more. With the onset of the coronavirus pandemic, numerous people estimated the collapse of the housing crisis, but that was not so. The housing industry grew even more intensely which affected the suburbs, small towns, and the cottage industry. In the year 2020, a small home in the area of Toronto reached the housing market value of about $1 million and sold for around $800,000. The house was a tiny unit comprising one bathroom and two bedrooms. The house was located on Euclid Street in Little Italy. The tiny housing unit went up for sale in the month of July. It received loads of attention due to its high cost. The reason for its high asking price is probably because of its location and features. The house also has a detached garage. It is located near stores, restaurants, parks, shops, bars, schools, transit stations, and more. The house is a tiny bungalow that was advertised as a ‘one of a kind’, ‘unique sized’, ‘numerous avenues’, and ‘rare housing unit’ situated in the heart of Toronto city. According to the data given by the Canadian Real Estate Association, homebuyers across all of Canada can start to expect prices to rise to $816,720- up 20% from the same period the previous year. That is an estimated 3.5% boost from January onwards. This data is in spite of the fact that recently the housing market is, at last, enjoying some much-needed housing supply. It seems that house buyers are beginning to purchase. A total of around 77,350 new listings have reached the housing market in just one month. This turnout has led to an enormous increase of about 23%, which is a turnover from the 10% decrease witnessed in the month of January. It seems that the coronavirus pandemic has also led to the high prices in the Canadian housing industry. According to the data given by the Canadian Real Estate Association, numerous housing units were sold in July 2022 that any other month that year. The sales in July went up to approximately 62,300 which reached the highest sales in the year on record. Due to the heavy demand amongst homebuyers, the prices reached a whole new level. The sales activity in the month of July 2020, moved up 30.5% as compared to the sales in 2019 in the same month. Coming to the year 2022, the increase in homebuyers and their purchases helped relax the harsh and tough situation in the housing market in the past few months. The Greater Toronto Area, Calgary, and the Fraser Valley region had the highest demand for newly constructed listings for sale. The demand for newly constructed housing units amongst buyers was still prevalent as dozens of buyers came up to purchase the recently-available listings. The number of houses and units that were traded in only the last month was around 58,200. It went up 4% from January but was still behind an 8% decrease as compared to previous years’ February’s historical benchmark activity. The Canadian Real Estate Association reported that sales of housing units were up 60% in all markets. There was a large growth in the regions of Calgary and Edmonton, especially in the Greater Toronto Area. By observing the interior of the Canadian housing market or Canadian real estate market, we can examine the individual performances of different markets: Edmonton- Sales of residential units: -14% and the benchmark cost: +2.6% to $1,152,600 Vancouver- Sales of residential units: +17% and the average cost of residential units: -0.4% to $389,773. Halifax- Sales of residential units: -12% and the average cost: +2.57% to $363,300 Toronto- Sales of residential units: -12% and the average cost: 0% to $1,090,992 Montreal- Sales of residential units: -14% and the costs for single family house: +3% to $496,000 Due to the boost in purchases and supply of housing units, the Canadian Real Estate Association had to alter its prediction for the years 2022 and 2023. The association expects a number of houses to be sold this year, which would be almost the second highest in terms of purchases. 2023 is expected to be the third-highest year on record. The price is expected to increase annually, before rising even more in the year 2023. Other factors that might alter the sudden change in the housing market include changes in fuel prices, Russian Ukraine issues, housing policies, inflation, and more. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise,

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BMO concerned about the collapes in Canadian real estate

Blogs / Amy / 8 October 2022 / Alberta, bank of canada, BMO, BMO Capital Markets, borrowing rates, Canada, Canadian real estate, homeprice, Housing, housing bubbles, housing prices, interest rates, mortgage transactions, mortgages, Real Estate

BMO concerned about the collapes in Canadian real estate Everyone is interested in determining how low real estate prices can go in Canada now that the real estate bubble there has finally started to deflate. Over the course of the weekend, BMO Capital Markets provided clients with an analysis of the topic, including models and historical context. Increasing interest rates will undoubtedly bring about a correction because they will eliminate excessive leverage. Simply to account for the higher borrowing rates, prices will need to fall by a large amount. Concerning how long it will take for the market to recover, the only prior housing bubble in Canada that was nearly this magnitude took 15 years for the market to recover from. Historically, Canadian real estate prices have always adjusted to fundamentals Since the 1980s BMO Research discovered that the cost of housing in Canada has climbed by approximately 3% annually. This is roughly a reflection of inflation, growth in real wages, and lowering interest rates. Remember that low-interest rates handled the majority of the heavy work, so don’t be surprised if it seems like a sharp slope for salaries. Housing often trades at a price that is in line with its liquidity, with the exception of when it’s in the midst of a bubble. People will only pay for something that makes sense to them, to put it in more eloquent terms. This has a direct bearing on the use of leverage in mortgage transactions. The conventional wisdom holds that a reduction in interest rates will make housing more affordable. On the surface, it makes perfect sense: paying less interest means more money can go toward paying down the debt. In point of fact, a decrease in interest rates results in an increase in the amount of leverage available to a buyer. The ability of purchasers to more readily tolerate price increases results in prices rising even more quickly. This is a point that has been emphasised in recent times by the Bank of Canada (BoC), but it appears that many people have ignored it. This will require a more in-depth discussion at another time, but it is essential to comprehend pricing adjustments. The rate of inflation is currently at an all-time high, while mortgage rates have recently fallen to an all-time low. Both of these factors contribute to a faster increase in leverage, which ultimately drives up housing prices. However, according to BMO, a third of today’s housing prices are the result of price fluctuations that have occurred during the past two years alone. That is far higher than low rates, and it is approximately ten times the historic average rate of growth. “We’ve long maintained that demographic and supply-side fundamentals have driven price gains, even in the early stages of COVID-19 alongside some economic adjustments. But, as we warned early last year, more recent price behavior has been driven by excess demand, market psychology and froth,” explained Robert Kavcic, a senior economist at BMO. Increasing interest rates will reduce some of that excess, which is already dampening the enthusiasm of speculators. “So, when we speak of a housing correction, it’s not a question of if, but where, how much, and for how long?” he said. Canadian Real Estate Is 38 Percent Overpriced And Requires A Substantial Decline Just To Accommodate Interest Rates How much will the market for Canadian real estate eventually correct? Home prices are approximately 38 percent overvalued, according to BMO’s estimations; the bank does not have a crystal ball. That does not necessarily mean that a correction of 38 percent is on the horizon. However, the level of overvaluation is so high that prices need to reduce in order to maintain the same level of affordability. Raised interest rates are nearly invariably the method that is used to eliminate excess price gains in housing bubbles. “After leaving policy too loose for too long, psychology and affordability have already been tested by just 75 bps of Bank of Canada tightening, and we expect another 125 bps by year-end,” warns BMO. In addition to putting a stop to speculative thinking, a rise in interest rates alters the perspective of buyers and investors. According to BMO, housing prices for purchasers go from being priced with mortgages at 1.5 percent to being priced with mortgages between 3.75 percent and 5.4 percent. In the event that housing prices remain flat and incomes continue to rise, prices will need to fall by between 10 and 20 percent for affordability to remain at its current level. That level may not have been able to be maintained over the long term, which would have meant that prices would have to go further lower. Investors face an additional challenge in the form of a reduction in attractiveness when there are higher financing expenses. According to projections provided by BMO, cap rates, often known as the rent collected from being a landlord, would need to increase to between 4 and 5 percent. That is a situation that investors encounter more frequently than not. At the moment, a significant number of investor landlords are not even receiving sufficient income to meet their expenses. They wind up increasing their rents out of their own pocket in exchange for the rise in the value of their home. Up until this point, it has been successful since prices have gone up, but if interest rates were to go down, this wouldn’t be the case. A twenty percent drop in price is necessary in order to bring cap rates back to reasonable levels if there are no gains. At the national level, a market breakdown, of course, varies greatly from place to place. Comparatively speaking, markets such as Alberta have values that aren’t as stretched as those in Ontario. Real Estate Corrections In Canada Took Up To 15 Years To Recover The length of time that a decline in housing prices lasted was extremely variable due to the absence of any predetermined guidelines regarding the matter. In order to

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Positive and negative impact of taxes on preconstruction home resale

Blogs / Amy / 8 October 2022 / budget, condo markets, Condos, construction loans, contract sellers, Homebuyers, new homes, non-permanent resident holder, pre-construction, pre-construction condos, Real Estate, Resale homes, tax incentives, tax law

Positive and negative impact of taxes on preconstruction home resale In the event that a construction project is scrapped, it is certain to garner coverage in the media. Even though constructors and developers do everything in their power to avoid dissatisfying their clients, it is a fact that projects do occasionally have to be cancelled, and the reasons behind these cancellations are typically very compelling. When looking for a new place to call home, one does not necessarily have to settle for buying an existing home or condominium on the secondary market. Investing in a home while it is still in the pre-construction phase is another choice. Homebuyers can take advantage of this option to move into a brand-new home that is “move-in ready” and features personalized interior design accents. Having a home warranty is also a beneficial addition, so keep that in mind. Buying a home that is still under construction, on the other hand, involves a different process than buying an existing home on the market. The purchase of a pre-construction unit is distinct from the purchase of a unit that has already been built, and prospective buyers of pre-construction units are obligated to educate themselves on the various disclosures and safeguards available to them before making a purchase. When you have found a pre-construction home project, it is absolutely necessary for you to investigate the builder who will be responsible for the project. Before committing to buying a home from them, it is essential to do background research on their track record and determine how quickly they finish projects. Visiting one of their finished projects and talking to the people who live there is a simple way to gather this information. It’s possible that the payment schedule will make it impossible for some people in Canada to pay. Deposits of twenty percent are customarily required when purchasing a pre-construction property (there is no regulation around this, and the deposit is set at the discretion of the builder). Our industry constructs hundreds of housing projects in the Greater Toronto Area (GTA) each year, resulting in the delivery of approximately 40,000 new housing units. The only exception to this rule is cancellations. According to Altus Group, which tracks the data on new home sales, approximately 13.5 projects have been scrapped each year on average since 2010. This amounts to a total of 148 projects that have been scrapped since 2010. By the end of November in 2021, 12 projects had been scrapped, which is about the same number as during a typical month but significantly fewer than the 21 projects that were scrapped during the worst year, 2014. Consumers need to be aware that there is a possibility of their purchase being cancelled when they buy pre-construction units, despite the fact that these units come at favourable prices. Prospective homeowners who do not feel comfortable with the risk should purchase a unit that has already been built or one on the resale market; however, the price will not be as advantageous as it would be otherwise. Many different things can lead to the termination of a project. Sometimes, not enough of a project’s units are sold for the developer to be able to move forward with the project. In other instances, the builder or developer is unable to obtain financing for the project, or the costs of the project that were projected to be incurred escalate to a level that makes it impossible for the project to be economically viable. In addition, the approval process for some projects can be drawn out, and other projects are never sanctioned. The enhanced disclosure section of the Tarion Addendum, which is the standard form attached to the purchase and sales agreement for pre-construction sales, outlines all of these unfavourable and improbable contingencies in detail. The document that constitutes the agreement also specifies payment schedules, dates of occupancy, and grounds for termination. Buyers of pre-construction units should carefully read their purchase agreement and have it reviewed by a legal professional to ensure that they have a complete understanding of all of the terms and conditions, as well as any possible dangers. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

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Research before you invest in pre-construction homes

Blogs / Amy / 8 October 2022 / builder, buyers, Condos, construction project, developer, home sales, homeowners, homeprice, housing projects, pre-construction, pre-construction home, pre-construction sales, resale market

Research before you invest in pre-construction homes In the event that a construction project is scrapped, it is certain to garner coverage in the media. Even though constructors and developers do everything in their power to avoid dissatisfying their clients, it is a fact that projects do occasionally have to be cancelled, and the reasons behind these cancellations are typically very compelling. When looking for a new place to call home, one does not necessarily have to settle for buying an existing home or condominium on the secondary market. Investing in a home while it is still in the pre-construction phase is another choice. Homebuyers can take advantage of this option to move into a brand-new home that is “move-in ready” and features personalized interior design accents. Having a home warranty is also a beneficial addition, so keep that in mind. Buying a home that is still under construction, on the other hand, involves a different process than buying an existing home on the market. The purchase of a pre-construction unit is distinct from the purchase of a unit that has already been built, and prospective buyers of pre-construction units are obligated to educate themselves on the various disclosures and safeguards available to them before making a purchase. When you have found a pre-construction home project, it is absolutely necessary for you to investigate the builder who will be responsible for the project. Before committing to buying a home from them, it is essential to do background research on their track record and determine how quickly they finish projects. Visiting one of their finished projects and talking to the people who live there is a simple way to gather this information. It’s possible that the payment schedule will make it impossible for some people in Canada to pay. Deposits of twenty percent are customarily required when purchasing a pre-construction property (there is no regulation around this, and the deposit is set at the discretion of the builder). Our industry constructs hundreds of housing projects in the Greater Toronto Area (GTA) each year, resulting in the delivery of approximately 40,000 new housing units. The only exception to this rule is cancellations. According to Altus Group, which tracks the data on new home sales, approximately 13.5 projects have been scrapped each year on average since 2010. This amounts to a total of 148 projects that have been scrapped since 2010. By the end of November in 2021, 12 projects had been scrapped, which is about the same number as during a typical month but significantly fewer than the 21 projects that were scrapped during the worst year, 2014. Consumers need to be aware that there is a possibility of their purchase being cancelled when they buy pre-construction units, despite the fact that these units come at favourable prices. Prospective homeowners who do not feel comfortable with the risk should purchase a unit that has already been built or one on the resale market; however, the price will not be as advantageous as it would be otherwise. Many different things can lead to the termination of a project. Sometimes, not enough of a project’s units are sold for the developer to be able to move forward with the project. In other instances, the builder or developer is unable to obtain financing for the project, or the costs of the project that were projected to be incurred escalate to a level that makes it impossible for the project to be economically viable. In addition, the approval process for some projects can be drawn out, and other projects are never sanctioned. The enhanced disclosure section of the Tarion Addendum, which is the standard form attached to the purchase and sales agreement for pre-construction sales, outlines all of these unfavourable and improbable contingencies in detail. The document that constitutes the agreement also specifies payment schedules, dates of occupancy, and grounds for termination. Buyers of pre-construction units should carefully read their purchase agreement and have it reviewed by a legal professional to ensure that they have a complete understanding of all of the terms and conditions, as well as any possible dangers. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

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A Drop in price of new-construction homes by $60,000 in January

Blogs / Amy / 8 October 2022 / average condo unit, average sales, Building Industry and Land Development Association, condominium, Condos, homeprices, homesales, new construction homes, new homes, pre-construction, single-family home, supply, townhouse

A Drop in price of new-construction homes by $60,000 in January In comparison to December, the price of new construction homes in the Toronto region was slightly lower in January. This was due to the fact that the number of condos sold reached an all-time high, while the availability of single-family homes continued to decrease. According to the data provided by the Home Builders Association, the median price of a single-family home in January rose to $1.77 million, which represents a year-over-year increase of 30 percent from the previous month’s figure but a decrease of nearly $60,000 from the previous December figure. According to a report that was released on Thursday by the Building Industry and Land Development Association (BILD), the number of townhomes, semi-detached, and detached houses that were sold in December represented a 67 percent annual decrease from January 2021, and it was 33 percent lower than the 10-year average. In the meantime, the launch of nine new condominium projects led to sales of a record number of 2,274 highrise, midrise, and stacked townhouse units in the month of January. This figure is more than double the 10-year average and 232 percent higher than sales in the same month the previous year. According to the findings of the study, the average cost of a recently constructed condo has risen to $1.15 million, representing a year-over-year increase of approximately 13 percent from the previous figure. The benchmark price that was established in December is approximately $33,000 lower than this price. At the end of the previous month, there were only 550 single-family homes that were either in the pre-construction, construction, or recently built stages that were available on the market. It was a significant decrease from the 15,000 homes per month that was typical during the decade spanning from the 2000s to the 2009s. This represented a drop of approximately 10% from the levels that existed before the pandemic. According to BILD senior vice-president Justin Sherwood,“What we’re seeing is smaller and smaller releases on single-family (units) just based on the availability of serviced land in the GTA.” Although there will be some new supply in the spring, those smaller project releases are likely to continue as “land supply is tight just about everywhere,” he said. All you have to do is take a look at the number of single-family homes that are currently on the market. It’s 550. Ten years ago, there were 5,000 of them. Sherwood stated that there were over 20,000 in any given month when he worked there twenty years ago. In general, the supply is only a third of what it should be in aggregate, and it does not even exist for single-family homes. Since December, the inventory of condos available for purchase has seen a slight increase thanks to new project launches in the past month. According to Ed Jegg, who is in charge of the analytics team at Altus Group, which is the company that compiles the industry statistics, this still only leaves 2.9 months of supply based on the average sales over the past 12 months. According to him, a well-balanced market would have a supply that is sufficient for nine to twelve months. Instead, the inventory has dropped to a level that is roughly half of what it was in the years 2011-2016. The average condo unit was 926 square feet in size, and the average price per square foot for a condo was $1,243. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

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An increase in fixed rates by lenders, brings them closer to 4.5%

Blogs / Amy / 8 October 2022 / 5-year fixed rates, borrowers, borrowing costs, Canadian household, fixed interest rates, fixed mortgages, Government of Canada, Greater Toronto Area, home sales, Homebuyers, house prices, household debt, households, interest rates, mortgage, mortgage rates

An increase in fixed rates by lenders, brings them closer to 4.5% The previous week saw a rise in bond yields, which led to an increase in the variable and fixed mortgage rates offered by lenders across the country. Rates on 5-year fixed mortgages have been increased by 20 to 25 basis points at major financial institutions such as RBC, TD, and BMO, which all currently offer uninsured rates of 4.39 percent. This change comes after a nearly 10-bps increase in the yield on the Government of Canada’s 5-year bond, which is the benchmark for 5-year fixed rates. On Friday, the yield on a 5-year bond reached a new 11-year high when it closed at 2.88 percent. Bond yields have increased by more than 165 basis points since the beginning of the year. According to the data tracked by Rob McLister, rate analyst and editor of Mortgage Logic, the average uninsured 5-year fixed-rate among national lenders is now 4.37 percent. This represents an increase from the rate of 3.92 percent a month ago. The rate on an insured, fixed-rate mortgage for five years with a down payment of less than twenty percent has increased to 4.14 percent, from 3.78 percent one month ago. This represents an increase from the previous rate. That means that fixed interest rates have increased by approximately 40 basis points in the space of just one month. To put this into perspective, an increase in the rate of 50 basis points results in a roughly $25 higher monthly payment for every $100,000 of debt when amortised over a period of 25 years. New borrowers and those renewing a mortgage are facing significantly higher rates compared to just a few months ago and potentially double for those renewing a mortgage. While this does not affect the majority of borrowers with fixed rates, it does impact new borrowers and those renewing a mortgage. Following the Bank of Canada’s next rate decision meeting on June 1, at which it is anticipated that it will raise interest rates by another 50 basis points (bps), variable interest rates are likely to surge once more in the wake of this development. This may cause the prime rate, which is the rate used to price variable-rate mortgages and lines of credit, to rise to 3.70 percent. Impact of rising rates on mortgage borrowers “As interest rates march higher—we expect the overnight rate to hit 2% by October, a projection that increasingly looks conservative—borrowing costs for Canadians will also rise, leaving the average Canadian household to spend almost $2,000 more in debt payments in 2023,” say economists from RBC Economics. “This will erode spending power, especially for the lowest-earning fifth of households which spend 22% of their after-tax income on debt servicing (including mortgage principal and interest payments),” they add. On the other hand, RBC reports that the pandemic contributed to an increase in the amount of savings made by households in Canada. According to what the RBC economists wrote, the pandemic may have increased debt, but it also left Canadian households with an estimated savings balance of $300 billion. That is an enormous safety net, sufficient to cover approximately one and a half years’ worth of payments on the total Canadian household debt. Impact of rising rates on home prices The most recent housing data showed a significant decrease in home sales during the month of April; however, house prices have remained stable across the majority of the country, with the exception of Ontario. In the Greater Toronto Area, home prices have decreased by approximately 6 percent on average, but they have decreased by as much as 22 percent depending on the type of property and the particular region. Since benchmark prices are frequently a lagging indicator, it is likely that there will be additional price decreases in the months to come. In a recent post on move smartly, real estate analyst John Pasalis, president of Realosophy Realty, wrote that”…tomorrow’s homebuyers are going to have a much harder time paying today’s prices if they were paying 5% on their mortgage compared to the low 2% range just a few months ago, and the high 1% range a year ago.” Pasalis pointed out that some people have argued that this isn’t a concern because many borrowers have been qualifying at a stress test rate of at least 5.25 percent, but he suggests that this is an oversimplification of the situation. The mortgage stress test is currently used to qualify borrowers at a rate that is either the buyer’s actual mortgage rate plus 2 percentage points or the benchmark rate, which is currently 5.25 percentage points.According to what Pasalis has written, as these are dynamic measures that will change as rates do, the stress test will also increase, which will result in a reduction in the amount of debt a buyer can take on. He goes on to say that the contract rate influences how much mortgage debt the borrower is willing to take on. “A buyer who qualifies for a $1M mortgage may be willing to take on that much debt when interest rates are 1.75%, but less so when rates are 4% because under the higher rate their actual mortgage payment would be roughly $1,100 per month higher,” he wrote. As a result, if interest rates continue to trend higher, Pasalis says he “would not be surprised if we see some downward pressure on home prices over the next 9 to 18 months due to homebuyers being unwilling or unable to pay today’s prices at tomorrow’s higher interest rates.” Although, he adds that any price decline would “likely be a temporary one due to long-term fundamental factors that have been contributing to rising home prices in the Toronto area.” Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly

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A hint on change in Canada’s ‘stress test’ rules before year’s end

Blogs / Amy / 8 October 2022 / banking regulator, Canada, Canadian banking, Canadian housing, Canadian housing market, Canadian lending industry, home prices, Homebuyers, housing market, housing season, interest rates, Mortgage brokers, mortgage insurance, mortgage practices, mortgage rates, Toronto Regional Real Estate Board

A hint on change in Canada’s ‘stress test’ rules before year’s end Mortgage brokers argue that given the slowdown in the housing market, the Canadian banking regulator should relax its “stress test” qualifying rate for mortgages and make it easier to qualify for a mortgage. This week, the Office of the Superintendent of Financial Institutions issued a statement in which it alluded to the possibility that it might make “adjustments” to its qualifying rate before the end of the year. A review of the qualifying rate is performed by the regulator and then communicated to the general public every December, in advance of the hectic spring housing season that follows the following year. This week, however, the office, which is an independent federal agency that is responsible for supervising hundreds of financial institutions and over a thousand pension plans in Canada, suggested that an announcement may be forthcoming before the end of this year. According to a statement released by the regulatory body on Thursday,“Throughout the rest of the year, OSFI continually monitors the Canadian housing market and mortgage practices, and may make adjustments at any point if necessary for the health of the Canadian lending industry.” Some people working in the real estate industry see this as a sign that the office ought to take action and, in all likelihood, will do so given the rise in interest rates that has occurred this year and the resulting decrease in home sales. The most recent statistics released by the Toronto Regional Real Estate Board indicate that the housing market in the region reached its highest point in the month of February when houses and condos sold for an average of $1.33 million. The average price in the region dropped to $1.25 million as a result of a number of factors, including the Bank of Canada’s decision to raise interest rates in April and the expectation that they will do so again soon. Despite this, prices are still 15% higher than they were at this time last year. “The market is softening, prices are coming down. They (OSFI) did the stress test to cool the market. They don’t need any cooling of the market anymore. It’s already there now,” said mortgage broker Kim Gibbons. In order to avoid having to pay for mortgage insurance, homebuyers are required by the rules to demonstrate that they are able to afford mortgage payments at an interest rate of 5.25 percent or their mortgage contract rate plus two percent, whichever is higher. Homebuyers who have made a minimum down payment of 20 percent are exempt from this requirement. They were implemented in 2016 and 2017 with the goal of reducing overall market activity and preventing buyers from feeling overly pressured by rising interest rates. According to comments made by mortgage brokers in Thursday’s edition of the Star, the current average interest rate for mortgages with fixed terms of five years ranges from 4.19 to 4.25 percent. A borrower would need to demonstrate that they are capable of paying an interest rate that is as high as 6.25 percent in order to qualify for a loan with the requirement of a two percent plus contract. Gibbons believes that this is unreasonable and that it “doesn’t make sense” given the current state of affairs. “As things stand now they have got to do something,” Gibbons added. “Clients are going to alternative sources of lenders, credit unions where you don’t have to do two percent above the contract rate to qualify. People can qualify with credit unions much easier,” she said. “The stress test takes away about 20 percent of your purchasing power. Not always, but that’s kind of the rule.”Mortgage broker True North Mortgage, headquartered in Toronto, and its chief executive officer Dan Eisner are both of the opinions that the Office of the Superintendent of Financial Institutions will step in before the end of the year. According to Eisner if the “If the current housing market continues on a downward trend in home prices, that will give a lot of headroom to OSFI to reduce the stress test rate and requirements for the contract rate plus two percent before the end of the year.” ”I wouldn’t be surprised if they just eliminate the contract rate plus a two percent portion of the stress test; it’s a bit too aggressive. It doesn’t make sense when the fixed rates are in the four percent levels,” Eisner said. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

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Central banks blamed for majority of global real estate price increase

Blogs / Amy / 8 October 2022 / Bank of International Settlements, Canada, Central banks, Cheap loans, global real estate, global real estate prices, Global synchronization, Housing demand, housing price, inflation, interest rates, Investors, policy, Real Estate Risks

Central banks blamed for majority of global real estate price increase What factors are contributing to the rise in global property prices? Well, it’s all about the money. This is a condensed version of the findings from the study conducted by the Bank of International Settlements (BIS). The Bank for International Settlements (BIS), which is known as the central bank for central banks, recently issued a warning the risks to global home prices are being formed. According to the findings of their researchers, the majority of the progress made since 2020 can be attributed to monetary policy. A synchronization risk was created as a result of countries adopting policies that were similar to one another. These risks have the potential to become a significant threat to the economy if higher interest rates and less leverage are not implemented. Gains in Global Real Estate Price are Unusual It appears that the majority of people are under the impression that real estate prices go up when interest rates go down. When the first signs of a recession appeared, it was obvious that this was an excellent time to purchase a house. Before the most recent economic downturn, this was never the situation at all. In the past forty years, when the economy has entered a recession, home prices have followed suit and fallen. The researchers discovered that this decrease, which follows an economic shock, typically lasts for four quarters. Home prices shot up during the pandemic and completely disregarded the slump that was occurring at the same time. The researchers wrote that there was not even a temporary drop, and the tone of their writing almost sounds shocked. In addition, a phenomenon known as credit contraction took place during this most recent economic downturn. Or, more specifically, an insufficient amount of credit contraction. In times of economic hardship, individuals typically cut back on the amount of debt they are carrying. However, rather than taking a step back, central banks poured massive amounts of liquidity into the market. They flooded the market with cheap credit, which led to an increase in the number of liabilities being carried. It’s possible that this was the only recession in history from which households emerged even more financially stretched than before. It would be understating the extent of how unusual this path was for home prices during a recession. Global Home Prices Surged As Easy Money and Investors Flooded The Market According to the study, global real estate prices increased for several reasons. After the caused recession, economies recovered far faster than projected. There were few opportunities to spend your spare money, therefore household savings surged. The financial aid was helpful, but its overuse may have produced a moral hazard. Supply chain constraints are real, and they might contribute to inflation. Even so, none of these factors had much of an impact on housing values when compared to… anyone? Bueller? Bueller? That’s correct, it’s easy money. The idea essentially consisted of flooding the financial sector with cheap and easy debt. Some people made educated guesses at first and didn’t make any modifications until two years afterward. To call it imprecise would be an understatement. Housing demand soared in most Western economies as a result of the cheap money. “Above all, exceptionally easy financing conditions have boosted demand for housing further amid the strong liquid asset positions of households and support from other factors,” the researchers wrote. “Households looking to be owner-occupiers can borrow at historically low nominal and real interest rates. In addition, gross rental yields are well above bond market returns in AEs, turning dwellings into attractive assets, including in the buy-to-let segment,” explains the researchers Cheap loans didn’t merely stimulate owner-occupied home sales, as per the narration. Investors recognized an arbitrage opportunity to take a loan at low rates and transform it into rental yield. It’s an element of yield hunting, a practice that skyrocketed in growth during the Global Financial Crisis (GFC) (GFC). Due to low market bond rates, investors were obliged to convert Millennial rent payments into regular payments. Following the 2020 Rate Cut Extravaganza, the investor tendency accelerated. Investors now account for more than a quarter of house sales in countries like Canada. A quick search on TikTok reveals a plethora of popular accounts detailing how to make real estate investments. How could they leave this chance? “The inflation-hedging features of housing may also have had a role,” the BIS says. In the late 1970s and early 1980s, this was a popular housing strategy. Some people were fortunate in escaping rising inflation and interest rates. Normalization of inflation quickly turned the bubble into a disaster. Let us now turn our attention to dangers. Synchronization of global real estate prices is usually bad news. Global synchronization of property prices was detected by BIS analysts, which is never a good omen. We’ve discussed synchronization previously, but the point is that it occurs when assets begin to behave similarly. It’s characterized by a non-productive economy with plenty of cash but inadequate parking spaces. Everything inflates when there is so much money that can’t be navigated properly. In this situation, it makes no difference if the home is in a suburb or a city, Vancouver or Poughkeepsie, because values are growing. When it comes to financing, synchronization nearly always equals increased risk. When assets share the same driver, they tend to behave similarly. It’s the polar opposite of diversification, which spreads risk and reduces damage. Synchronization converts an asset group into a cascade of dominoes, each one waiting for the next to fall. “… the international synchronization of house prices has strengthened. More than 60% of house price movements can now be explained by a common global factor. One reason for this much higher synchronization is that the pandemic has been truly global, thus inducing similar policy reactions and flattening yield curves worldwide,” wrote the researchers. In other words, property values in these areas were driven by monetary policy. It wasn’t local characteristics that created

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Highest Inflation in Canada since MC Hammer’s 2 Legit 2 Quit release

Blogs / Amy / 8 October 2022 / BMO, Canada, Canadian housing, Canadian real estate, Canadian Real Estate Association, Consumer Price Index, Greater Toronto Area, home prices, Real Estate, real estate market, toronto

Highest Inflation in Canada since MC Hammer’s 2 Legit 2 Quit release Households in Canada are currently facing the highest level of inflation seen in a whole generation. The Consumer Price Index (CPI) data for the month of April was just released by Statistics Canada (Stats Can). The agency places the recent acceleration, which sent growth to the highest level since the early 1990s, on the shoulders of the need for food and shelter. Although there are those who are predicting that growth has reached its peak, leading analysts on Wall Street do not see this happening in the upcoming report. The inflation rate in Canada has reached 6.8 percent, marking its highest level since 1991. The annual rate of inflation in Canada went up once more, although the rate of increase was lower than in recent months. The Consumer Price Index (CPI) grew at an annual rate of 6.8 percent in April, up just 0.1 points from the previous month. It had the highest read count ever recorded, dating back to September 1991. To put it another way, if you are under the age of 30, you have never witnessed how your cost of living has increased. Inflation in Canada was Driven by the Cost of Food and Shelter During the Past Month According to Stat Can, the majority of the most recent increase can be attributed to increases in the cost of food and housing. Food prices rose by 9.7 percent in April, marking the period since September 1981 during which they have increased at the fastest rate. According to the agency, this marked the fifth consecutive month in which the food component scored more than 5 points. As a result of disruptions in the supply chain, including restrictions on exports, it is not likely to drop anytime soon. The majority of Canadians are aware that the cost of housing is going up, but the increase in CPI is not due to the reason you might think it is. The agency reported that the annual rate of inflation for housing costs reached its highest level since 1983 in the month of April, reaching 7.4 percent. The majority of the increases can be attributed to higher fuel costs, such as those for heating and cooling. The costs of home replacement for homeowners are also climbing at a lofty rate of 13.0 percent, which is a proxy for new homes. “The prior boom in home prices is now aggressively working its way into CPI, with new home prices and “other owned accommodation expenses” (mostly real estate fees) the two single biggest drivers last month,” said Douglas Porter, Chief Economist at BMO. The Next Inflation Report Is Expected to Show Rapid Acceleration In April, the annual growth rate only increased by 0.1 points, which is a tenth of the increase in CPI that was seen in March. Although this may point to a moderation in future expansion, the consensus on Bay Street this morning is not to that effect. BMO Capital Markets issued a warning to its clients that the relatively slow month was just a temporary blip. According to Porter’s explanation, “… this is the relative calm before another downpour in next month’s report, as gasoline prices are tracking a double-digit increase for May alone.” Additionally, the National Bank of Canada (NBF) issued a warning that the tight labour market poses a threat to inflation. According to Matthieu Arseneau, the deputy chief economist at the National Bank of Canada (NBF), “In an environment where the labor market is extremely tight with the unemployment rate at a record low, workers are well-positioned to ask for compensation, which should translate into relatively high inflation in services,” In addition, “For these reasons, the Central Bank must continue its fast-paced process of normalizing interest rates, which are still far too accommodating for the economic situation.” When allowed to continue, high inflation evolves into a problem that is both more extensive and more challenging to address. Once wages start adjusting to the levels of inflation, the potential for “transitory” employment will no longer exist. The general trend is for higher wages to result in higher consumer prices, which can contribute to higher levels of inflation. Getting out of a downward spiral of inflation is extremely challenging, and the top brass at RBC has warned about the issue. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

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