Find Your Dream HomeTopics:
Strong start
for 2007,
RE/MAX • INVESTMENT REPORT •
2006/2007,
ONTARIO 2007 INVESTOR REPORT,
TORONTO
MARKET WATCH FALL
2006, TORONTO
CONDO MARKET UPDATE
2006, IS THERE
REAL ESTATE BUBBLE
IN CANADA?
In Canada —
where real estate is
enjoying a record
long bull market -
there is no bubble
to burst. And
forecasts keep
predicting a rosy
housing future, even
though affordability
is being eroded by
higher prices, which
are averaging
$367,226 in Toronto.
Canada’s multi-year
boom in multi-unit
construction shows
no sign of letting
up.
What is
slowing, though, is
construction of
single-detached
homes, which are
becoming too
expensive for
first-time buyers.
Overall,
that means what’s
ahead is hardly a
housing collapse.
Rising home and land
costs are making
more affordable
housing options,
such as condominiums
and town homes
increasingly
attractive,
particularly for
first-time buyers.
Who’s
buying? According to
statistics Canadians
are snapping up
condos in the
20-to-29-age
bracket, and those
55 and older. Bottom
line is: Both empty
nesters and young
professionals like
the idea of living
closer to downtown
cores, which cuts
down on commuting
time. Investors are
also turning to
condos as ways to
diversify their
portfolios.
TORONTO REAL
ESTATE NEWS RELEASE IN YOUR EMAIL,
JUST ASK FOR
IT!
TORONTO, February 6, 2007 -- The
January resale housing market was the best
January ever, registering 13 per cent more
transactions than a year ago, Toronto Real
Estate Board President Dorothy Mason announced
today. The 5,173 sales in the month were six per
cent above the previous record set in January
2002.
“Sales have been very solid to start the
year,” Mrs. Mason said. “It's a very good sign
for the market to see a healthy level of
activity carrying over from last year's strong
finish.”
Scarborough's Birchmount Park / Cliffside area
(E06) saw 55 per cent more overall sales
compared to last January, with detached homes
accounting for nearly all transactions.
In the Islington / Kingsway area of Etobicoke, a
jump in condominium transactions helped to push
overall sales 42 per cent higher than January
2006.
An increase in sales of condominiums and
semi-detached homes helped lift Forest Hill to
an overall increase of 56 per cent over January
of last year.
North of the city, in Markham West /
Langstaff (N01), 50 per cent more homes changed
hands in January than during the same month a
year ago.
Ted Tsiakopoulos, CMHC's Ontario regional
economist, noted that Toronto's housing market
has been a very stable sector of the economy.
“The market remains resilient despite
slower job growth, high energy prices, and a
loss of migrants to western Canada,” Mr.
Tsiakopoulos said. “Historically low interest
rates, strong income growth and healthy consumer
confidence are important factors keeping January
home sales buoyant across the GTA.”
TREB's President added that while the
results are preliminary, they should instill
confidence in consumers.
“The housing market is healthy and
continues to be well supported by strong
economic fundamentals,” Mrs. Mason said. “These
are ideal conditions, and consumers can feel
confident making a switch to another home or
realizing their dream of home ownership for the
first time.”
Toronto REALTORS® are passionate about
their work. They adhere to a strict code of
ethics and share a state-of-the-art Multiple
Listing Service designed exclusively for
REALTORS®. Serving more than 24,000 Members in
the Greater Toronto Area, the Toronto Real
Estate Board is Canada's largest real estate
board.
RE/MAX • INVESTMENT REPORT •
2006/2007 •
College, as well as
properties close to the city
centre. Parents purchasing
townhomes and condominiums
for children attending the
college are common
investors, as are
professionals in their
mid-thirties to late
forties. Properties that
command the most attention
are those in the $300,000
–$450,000 range. Investors
in the area tend to hold
their properties for long
periods of time; ten years
or more. In fact, many of
the properties purchased in
the late 1980s are still
held by the original
purchasers. Given the
supply and demand dynamics
in the Barrie property
investment market, the
prevailing wisdom is ‘if you
can find a property that
breaks even or better, seize
the opportunity’ and hold
onto it for long-term gains.
ONTARIO 2007 INVESTOR REPORT
STATISTICS
FOR REAL ESTATE
INVESTORS
Here's some
good news for
investors.
OTTAWA
Historically low interest
rates and a vibrant housing
market grabbed investor
attention early in the new
millennium in Ottawa.
Disillusioned and bitter
about losses suffered in the
stock market, investors
turned to the security of
bricks and mortar. Demand
for multi-unit residential
began to climb, driven in
large part by smaller
investors, aged 35 to 55
years, with secure jobs and
retirement in mind. Today,
demand for duplexes,
triplexes, and condominium
units exist across the
board.
Location and
price are the primary
factors driving the
purchase. A modest duplex or
triplex, built in the 1930s
and 1940s, typically starts
at $250,000 while a
condominium apartment or
townhouse can be priced as
low as $140,000. Limited
inventory levels have
created heated demand for
duplexes and triplexes.
Those located in good areas
that are priced attractively
may even experience multiple
offers. With vacancy rates
at higher than normal
levels, most investors tend
to favour duplexes and
triplexes because they are
traditionally easier to
rent. Low maintenance
condominiums also appeal to
investors, while
single-detached homes are
not as popular. Most
investors are prepared to
hold onto their properties
for the long-term – ten
years and more in some
instances. The desire to
maximize profits and reduce
costs has the vast majority
of small investors in Ottawa
opting to manage their own
properties. The recent lull
in the market has created
some unique opportunities
for investors in the area.
After several years of tight
supply levels and fierce
competition, pressure in the
marketplace has actually
eased, making the timing
ideal for investors.
TORONTO
As the lynchpin of Ontario’s
strong economic engine,
Toronto has experienced
solid growth in recent
years. The city’s
residential real estate
market has posted
record-breaking activity
year-after-year, attracting
the attention of domestic
and offshore investors
alike. Many have been active
in the market for investment
properties over the past
four to five years.
However, with
average price in the GTA
hovering at $335,000, and
Toronto now the third most
expensive city in the
country, smaller investors
are looking at duplexes,
tri-plexes and homes with
basement apartments in less
expensive peripheral areas.
The objective is to find
good quality property in a
rentable location, with
adequate parking, that is
mechanically sound and
adheres to code. Today’s
younger investors tend to
use the equity in their
existing home to purchase
properties, often with only
five per cent down. If the
intention is to purchase and
generate cash flow from
tenancy, rather than
renovate and sell, a
long-term hold is the norm.
Small investors with one or
two properties will more
likely self manage, while
investors with more than two
properties will hire
property managers.
BARRIE
With Barrie’s economy
running on all cylinders,
investors are eager
participants in the city’s
real estate market.
Investment activity has
accelerated in the last two
to three years in tandem
with Toronto’s building boom
and overall growth.
Availability of good product
is a problem considering the
strong competition that
exists between local and
Toronto investors. An added
constraint to supply is the
fact that City Council takes
a stringent approach to
legalizing inlaw apartments.
Consequently, when an
income property such as a
tri or six-plex is listed
for sale, it sells quickly.
A favored
location is the area
surrounding Georgian Bay
TORONTO
MARKET WATCH FALL
2006
TORONTO CONDO
MARKET UPDATE
Toronto has
the largest
condominium market
in North America.
Last year, there
were more than
16,000 condominium
suites sold here —
Chicago saw only
6,800 sales, New
York City had 6,450
and Miami, 7,500.
There are now 245
new condo projects
in Toronto with
suites ranging in
price from $112,000
to $12 million.
Strength of
the Toronto market
is backed by many
factors including
affordability, our
healthy Canadian
economy, low
interest rates and
high demand.
With an
annual population
growth of 108,000
(representing 44,000
households) in the
GTA, the need for
new homes and
condominiums will
persist. Intense
competition means
that prices cannot
be raised
artificially, so the
people buying condos
are mostly end
users, not
investors. In the
1980s, there weren’t
nearly the number of
condo projects
available, interest
was a lot higher,
and investors were
inflating prices.
Toronto ’s
exceptional condo
market is not a
bubble that will
burst at the first
sign of change. The
first quarter of
2006 resulted in
nearly 3,800 condo
units sold here,
which is 34 per cent
more than the same
period last year.
This strong
start occurred
despite the eight
per cent increase in
prices over last
year.
So what are
you waiting for? You
have more condo
selection than ever
before, in great
locations with
affordable prices, a
higher level of
finishes including
standards that would
have been considered
upgrades a couple
years ago, and
excellent value. Now
is a great time to
buy.
IS THERE
REAL ESTATE BUBBLE
IN CANADA?
In Canada —
where real estate is
enjoying a record
long bull market -
there is no bubble
to burst. And
forecasts keep
predicting a rosy
housing future, even
though affordability
is being eroded by
higher prices, which
are averaging
$367,226 in Toronto.
Canada’s multi-year
boom in multi-unit
construction shows
no sign of letting
up.
What is
slowing, though, is
construction of
single-detached
homes, which are
becoming too
expensive for
first-time buyers.
Overall,
that means what’s
ahead is hardly a
housing collapse.
Rising home and land
costs are making
more affordable
housing options,
such as condominiums
and town homes
increasingly
attractive,
particularly for
first-time buyers.
Who’s
buying? According to
statistics Canadians
are snapping up
condos in the
20-to-29-age
bracket, and those
55 and older. Bottom
line is: Both empty
nesters and young
professionals like
the idea of living
closer to downtown
cores, which cuts
down on commuting
time. Investors are
also turning to
condos as ways to
diversify their
portfolios.
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