From PROFIT magazine, March 2010
Real Estate Housing's comeback
How to cash in on the rebound in new construction.
Residential construction drives so much economic activity that the dizzying drop in housing starts in early 2009 hammered more than just hammer makers. Yet, since then, home building has become a powerful expansionary force as record-low mortgage rates have fueled demand. Canada Mortgage and Housing Corp. estimates that housing starts topped 186,000 in January, up from last April's trough of 118,000. Western Canada led the country, with starts more than doubling.
Total starts remain below the average of 221,000 from 2002 through 2008, says Alex Carrick, Markham, Ont.-based chief economist at Reed Construction Data Canada. Still, says Carrick, "This is an extraordinary comeback, rather than the gradual recovery that was expected." He disagrees with the common view that housing starts will slow once interest rates begin to rise. He figures that potential home buyers, believing that more rate hikes are on the way, will jump in and buy while they can still afford it.
Housing economist Peter Norman of Toronto-based Altus Group calls this "a good, solid housing recovery" but not a boom. He says the rebound is increasing home builders' demand for legal and accounting services, employee health insurance and software for processes such as design and site management. One promising area, says Norman, is to help builders become more productive: "They're looking, for instance, for better ways to design houses and manage inventory, and products to help them reduce waste".
Friday, February 26, 2010
Wednesday, February 24, 2010
Major real-estate markets have tight supply: Re/Max
A lack of available purchase properties will be the greatest challenge to the real estate market when it begins to heat up this spring, according to a new report.
The new report from Re/Max says January -- traditionally one of the quietest months of the year for home sales -- was "unusually strong."
That means the number of active listings in many markets is sharply down from normal, setting up a potentially frustrating spring buying season as buyers fight over fewer properties.
The Re/Max Market Trends Report 2010 surveyed 16 markets in Canada. It found that the coming Harmonized Sales Tax in B.C. and Ontario, fears of rising interest rates and tighter lending rules, have triggered activity earlier than normal and drawn more purchasers into the market.
"We're in for a heated spring market that will, in all probability, spill over into the summer months, as the window of opportunity draws to a close," said Michael Polzer, executive vice president of Re/Max's Ontario-Atlantic Canada division, in a release.
"The supply of homes listed for sale has been drastically reduced, housing values are once again on the upswing, and banks and governments are moving in unison toward stricter lending policies."
The Toronto and Kitchener-Waterloo markets are among those feeling the most dramatic effects of the different factors affecting inventory. In Canada's largest city available-for-purchase housing was down 41 per cent, and in Kitchener-Waterloo it was down 33 per cent.
Here are some other coast-to-coast numbers from the report:
Ottawa: -30 per cent
Victoria: -30 per cent
Greater Vancouver: -27 per cent
Halifax-Dartmouth: -19 per cent
London-St.Thomas: -18 per cent
Regina: -16 per cent
Winnipeg: -13 per cent
In Calgary, Edmonton and Saskatoon the situation is less dramatic, the report says.
The declines resulted in significant increases in year-over-year sales in most markets. Greater Vancouver, for example, showed a staggering 152 per cent increase in sales.
Here are some additional year-over-year sales gains:
Kelowna: 121 per cent
Greater Toronto: 87 per cent
Victoria: 69 per cent
Hamilton-Burlington: 58 per cent
London-St. Thomas: 55 per cent
Calgary: 47 per cent
Housing price increases showed some significant gains as well, particularly in the West, where Victoria prices were up 25.5 per cent and, Kelowna 22 per cent and Greater Vancouver 19.5 per cent.
Elsewhere, Greater Toronto's prices were up 19 per cent, Winnipeg 17 per cent and 23 per cent in St. John's.
The report suggests that a growing lack of affordability combined with factors such as rising interest rates, the HST in some provinces, and anticipation of the spring buying frenzy, potential buyers are anxious to make their purchases as soon as possible.
"The level of frustration is growing, as pent-up demand builds," Polzler said. "For every successful offer, there are those that will walk away empty-handed. They're thrust back into the buyer pool and the process starts all over again
A lack of available purchase properties will be the greatest challenge to the real estate market when it begins to heat up this spring, according to a new report.
The new report from Re/Max says January -- traditionally one of the quietest months of the year for home sales -- was "unusually strong."
That means the number of active listings in many markets is sharply down from normal, setting up a potentially frustrating spring buying season as buyers fight over fewer properties.
The Re/Max Market Trends Report 2010 surveyed 16 markets in Canada. It found that the coming Harmonized Sales Tax in B.C. and Ontario, fears of rising interest rates and tighter lending rules, have triggered activity earlier than normal and drawn more purchasers into the market.
"We're in for a heated spring market that will, in all probability, spill over into the summer months, as the window of opportunity draws to a close," said Michael Polzer, executive vice president of Re/Max's Ontario-Atlantic Canada division, in a release.
"The supply of homes listed for sale has been drastically reduced, housing values are once again on the upswing, and banks and governments are moving in unison toward stricter lending policies."
The Toronto and Kitchener-Waterloo markets are among those feeling the most dramatic effects of the different factors affecting inventory. In Canada's largest city available-for-purchase housing was down 41 per cent, and in Kitchener-Waterloo it was down 33 per cent.
Here are some other coast-to-coast numbers from the report:
Ottawa: -30 per cent
Victoria: -30 per cent
Greater Vancouver: -27 per cent
Halifax-Dartmouth: -19 per cent
London-St.Thomas: -18 per cent
Regina: -16 per cent
Winnipeg: -13 per cent
In Calgary, Edmonton and Saskatoon the situation is less dramatic, the report says.
The declines resulted in significant increases in year-over-year sales in most markets. Greater Vancouver, for example, showed a staggering 152 per cent increase in sales.
Here are some additional year-over-year sales gains:
Kelowna: 121 per cent
Greater Toronto: 87 per cent
Victoria: 69 per cent
Hamilton-Burlington: 58 per cent
London-St. Thomas: 55 per cent
Calgary: 47 per cent
Housing price increases showed some significant gains as well, particularly in the West, where Victoria prices were up 25.5 per cent and, Kelowna 22 per cent and Greater Vancouver 19.5 per cent.
Elsewhere, Greater Toronto's prices were up 19 per cent, Winnipeg 17 per cent and 23 per cent in St. John's.
The report suggests that a growing lack of affordability combined with factors such as rising interest rates, the HST in some provinces, and anticipation of the spring buying frenzy, potential buyers are anxious to make their purchases as soon as possible.
"The level of frustration is growing, as pent-up demand builds," Polzler said. "For every successful offer, there are those that will walk away empty-handed. They're thrust back into the buyer pool and the process starts all over again
Sunday, February 21, 2010
New Rules for Canadian Mortgages
You’ve probably read about the new regulations regarding Canadian mortgages for buyers/ investors and home owners wanting to re-finance. In case you haven’t been following, here is the scoop.
Three changes will come in effect on April 19:
Qualification: All borrowers will need to meet standards for five-year fixed-rate mortgages regardless of whether they’re seeking a loan with a lower rate and shorter term.
Refinancing: The government is lowering the maximum amount Canadians can withdraw when refinancing a home to 90% of its value, from the current 95%.
Speculation: It will be required a 20% down payment for government-backed mortgage insurance on “speculative” investment properties. As opposed to 5% down-payment for investments not occupied by the owner.
I’ve posted a list of articles written by the media. You can also check out The Canadian Mortgage Trends for an interesting and detailed post.
Reckless speculators get a cold shower – The Globe and Mail
Ottawa’s decision to hike minimum down payment required to obtain insurance on investment homes likely to have immediate effect.
Don’t worry, home loan rules can still be bent - The Montreal Gazette
The good news or bad news, depending on your perspective, is you can still buy a home in Canada with almost no money…
Home buying rush expected in spring - The Globe and Mail
That may be the calm before the storm. Analysts expect a hot spring real estate market given Finance Minister Jim Flaherty’s move to tighten mortgage standards yesterday.
The trouble with bubbles: They’re elusive – The Globe and Mail
Some say government spending has overinflated global assets; but even the best minds have missed calling most collapses
You’ve probably read about the new regulations regarding Canadian mortgages for buyers/ investors and home owners wanting to re-finance. In case you haven’t been following, here is the scoop.
Three changes will come in effect on April 19:
Qualification: All borrowers will need to meet standards for five-year fixed-rate mortgages regardless of whether they’re seeking a loan with a lower rate and shorter term.
Refinancing: The government is lowering the maximum amount Canadians can withdraw when refinancing a home to 90% of its value, from the current 95%.
Speculation: It will be required a 20% down payment for government-backed mortgage insurance on “speculative” investment properties. As opposed to 5% down-payment for investments not occupied by the owner.
I’ve posted a list of articles written by the media. You can also check out The Canadian Mortgage Trends for an interesting and detailed post.
Reckless speculators get a cold shower – The Globe and Mail
Ottawa’s decision to hike minimum down payment required to obtain insurance on investment homes likely to have immediate effect.
Don’t worry, home loan rules can still be bent - The Montreal Gazette
The good news or bad news, depending on your perspective, is you can still buy a home in Canada with almost no money…
Home buying rush expected in spring - The Globe and Mail
That may be the calm before the storm. Analysts expect a hot spring real estate market given Finance Minister Jim Flaherty’s move to tighten mortgage standards yesterday.
The trouble with bubbles: They’re elusive – The Globe and Mail
Some say government spending has overinflated global assets; but even the best minds have missed calling most collapses
Subscribe to:
Posts (Atom)
