Banking head speaks out on Toronto real estate marketHomeBusiness News
by Bloomberg04 Apr 2017
By Doug Alexander
Governments may have to impose more measures to cool Toronto’s housing market if prices remain “overheated” after the spring buying season, said Bank of Nova Scotia’s Canadian banking head James O’Sullivan.
Toronto is the housing market of most concern in the country, with unsustainable and unhealthy price increases, O’Sullivan told reporters Tuesday after Scotiabank’s annual meeting in Toronto. He’d like to see how home sales in Canada’s most-populous metropolitan area play out between April and June before pushing for further measures.
“If at the end of that spring market Toronto still has higher volumes, strong double-digit price increases, then we think it’ll clearly be time for further action -- and we will be supportive of that action,” O’Sullivan said. “If it remains overheated, it’s time for action.”
Measures such as a speculation tax or foreign-buyers levy, such as the one British Columbia imposed last year to cool Vancouver’s housing market, should both be “on the table,” O’Sullivan said, adding that mortgage market changes by federal and provincial governments in the last couple of years have removed risks in the housing market.
Still, Toronto remains an issue: the city has seen prices up 24 percent from a year ago, sparking calls by economists at Bank of Montreal and elsewhere that the city is in a housing “ bubble.”
“Double-digit price increases are not sustainable and they’re not healthy, and this market has been going straight up for a very long time,” O’Sullivan said. “So it’s going to come to an end at some point, and it’s a question of how it ends.”
O’Sullivan said he wants a smooth correction and a soft landing, which would argue for action sooner rather than later.
“It’s in the best interest of everyone that we have a soft landing rather than a hard landing,” he said.
CONGRATULATIONS!!! to my 1st time Buyer on the closing of his beautiful high-rise condo...looking forward to seeing it decorated to your style!! Exciting time in your life, really happy for you :)
CONGRATULATIONS!!!! to my Buyer Clients on the closing of their new home today! HAPPY moving and looking forward to the party!!
I thought I would provide a daily account of my small (8x6.6FT space) master bathroom reno experience to help others with their plan and/or learn tips to avoid.
Received 3 Quotes from 'recommended' Mississauga Contractors.
Questions to Ask the Contractors
1. What is your availability timeline to start the project?
2. What will your schedule of work look like? (i.e. Will there be avoidable delays during the project?)
3. What is your guarantee of work?
4. What is your liability insurance for the on-site workers?
5. Do you have a team with a proven/certified skill-set? Or do you hire new tradesmen on a per-job basis? (I should have asked this question!!!)
6. Will you guide/supervise/inspect the job daily?
7. Will you provide daily check=ins/updates? (i.e. Daily end-of-day update discussions with Contractor).
8. Will you stick to the budget of the quote? (i.e. are there extra costs that you anticipate?)
Quote #1 - Peel Tile: $23,000-25,000 + HST
Provided a 6-page quote, which was great because it had everything described in detail. A moderately easy to follow & review document. Fairness of price?...well, I think that number speaks for itself!
Quote #2 - Eric, an Independent Contractor $8000-10,000 + HST
Eric was heading out on vacation the next day of visiting my home and I received a two line email from the airport, providing an estimate cost, without any work descriptions. Also not available to start project for 6 months. Fairness of Price?...seem to be a fair ballpark but a little concerning without a full write-up of inclusions and exclusions of work to be provided. Potentially, full of surprises on the extra cost side-of-things.
Quote #3 - Goran, Manager at Swift Renos Inc. $8000-10,000 + HST
Goran provided a 2-page quote indicating full descriptions and included individual cost per task. Fairness of Price?...seemed to be fair. I felt the most confident with this quote presentation, so we chose to hire Swift Reno Inc.
Project delayed one day...
Completed demolition and removal of all debris. Job well done.
Delayed - Electrical work extra expense of $900.00.
Electrical work completed. LED pot lights.
Drywalling....and more drywalling.
DAYS NINE & TEN
Finished the floor priming for tiling!
Dry-walling in progress.
Day 25...DONE! and I LOVE it!
Canada's Housing Market Posts Strong Growth in Fourth Quarter Led By Gains in Country's Largest Markets TORONTO, Jan. 13, 2016 /CNW/ - Canada's residential real estate market showed strong growth in the fourth quarter of 2015, led by hot Vancouver and Toronto markets according to the Royal LePage House Price Survey1 and Market Survey Forecast2 released today. Looking forward to 2016, Royal LePage expects continued price increases in most markets, but not at the pace that has been the recent norm. Instead, the national real estate market is expected to slow later this year, principally due to the effects of a dampened economy in Western Canada and eroding affordability in Toronto and Vancouver.
According to the Royal LePage National House Price Composite, compiled from proprietary property value data in 53 of the nation's largest real estate markets, the price3 of a home inCanada increased 6.5 per cent year-over-year to $500,688 in the fourth quarter. The price of a two-storey home rose 7.7 per cent year-over-year to $610,134, and the price of a bungalow increased 5.4 per cent to $420,082. During the same period, the price of a condominium increased 3.1 per cent to $341,448. Looking ahead to 2016, Royal LePage forecasts that the aggregate price of a home in Canada will increase 4.1 per cent for the full year when compared to 2015.
"The frenetic pace of our country's largest housing markets should moderate throughout the year ahead," said Phil Soper, president and chief executive officer, Royal LePage. "While most of the country will continue to see house value appreciation in 2016, we expect that the pace of price increases in Greater Vancouver and the Greater Toronto Area – where real estate appreciation has significantly outpaced job and wage growth – will settle to a more sustainable, single-digit price increase trajectory.
"Through the recent period of depressed oil prices, property prices in Canada's energy-centric regions, particularly Alberta and Newfoundland and Labrador, were more resilient than most onlookers had expected," continued Soper. "Consumers, reluctant to sell their homes at what they perceived to be a discount to their true value, simply withdrew from the market, resulting in steady house prices and a drop in unit sales volume. In the coming year we expect to see the delayed impacts of the slowing economy and rising unemployment on the regions' housing stock, with moderate declines in home values. In cities like Calgary, it is critical that homeowners seek the guidance of a real estate professional to price homes accurately to local market conditions, or the property will not sell."
In Quebec, home prices were relatively flat during 2015. A lower Canadian dollar and U.S. economic growth should fuel service and manufacturing sector dynamism in 2016, improving employment levels and consumer confidence, and providing a lift to home prices.
"Montreal's slow-growing real estate market is expected to be much more vigorous in 2016," said Soper. "A recent economic opportunity study4 pointed to Montreal as Canada's third 'city to watch' in 2016, just behind Vancouver and Toronto in growth potential."
In 2016, Royal LePage expects the price of residential real estate in Canada to be more heavily influenced by macroeconomic factors than by housing-specific variables such as tighter regulation in the mortgage industry. The Bank of Canada is expected to keep its overnight rate steady through the all-important spring market, extending the prolonged period of exceptionally low borrowing rates. While the new Federal Minister of Finance kicked off his appointment with a hike to 10 per cent in the minimum down payment required for the portion of mortgage insurance over $500,000, Royal LePage expects this change to have a marginal effect on the overall market.
"The new federal government moved quickly with a policy change in the minimum down payment required to secure mortgage insurance," said Soper. "The clever public policy argument here is that the government-backed program, provided primarily as assistance to the first-time homebuyer, should be more expensive for people insuring very large mortgages. The change will produce an added benefit akin to a slight tap on the brake for our two most costly cities. On a nationwide basis, we expect the number of transactions that this will impact to be minimal – significantly less than the initial industry reaction would lead consumers to believe."
The global economic picture continues to be uneven. For the most part, forecasters such as the International Monetary Fund expect worldwide growth in 2016 to be close to the modest levels attained in 2015. Asia remains a wildcard as evidenced by the recent gyrations in China's stock markets. If China's economy, the world's second largest, continues to sputter, Canada's second largest export market could reduce the quantity of goods and services that they are willing to purchase, creating drag on our economy.
Offsetting the dampening effects of a troubled global economy and oil price declines, the economic rebound and hiring surge in America presents a meaningful opportunity for Canadian export growth. For Canada, export volumes to the U.S. are twenty-times larger than export volumes to China. Combined with the relatively weak Canadian dollar which makes the country's goods and services more attractive to foreign buyers, Royal LePage expects to see expanding export activity in Ontario, British Columbia, Quebec and Manitoba.
In the manufacturing sector, a recent report from Export Development Canada5 noted that exporters will ride the wave of surging demand in the U.S., as evidenced by vehicle sales climbing above pre-recession levels.
"Canada will benefit more than any other country in the world from the 'made in America' recovery underway south of the border. It took seven long years, but the incredible U.S. jobs creation machine is finally running at full tilt, and those newly confident people want what we have to offer. Growing exports mean more jobs at home, and by extension, stronger Canadian consumer confidence. Combined with continued low interest rates, the country's housing market is in a solid position to weather the impact of low commodity prices and a choppy domestic economy," concluded Soper.