Home ownership more difficult for young people now than it used to be: OREA

TORONTO, ON, December 19, 2017 – They might not agree on everything, but when it comes to home ownership being a challenge for younger buyers, Ontarians of all ages concur. In a survey conducted by Nanos Research for the Ontario Real Estate Association (OREA), 9-in-10 Ontarians aged 30 to 39 (91%) and 88% of those 60 plus, agree or somewhat agree that owning one’s own home is more difficult for young people now than it used to be. Yet the dream of home ownership persists, with more than 9-in-10 Ontarians across all age groups agreeing or somewhat agreeing that home ownership is important to them.

“We may never settle the ‘who has it harder’ argument between baby boomers and millennials, but on this particular issue, there’s no contest: owning a home is tougher these days than it was for the previous generation,” said Tim Hudak, OREA CEO. “It takes much longer for millennials to save up for a down payment, and when they finally do, their housing options are limited. Either because the housing that’s available is out of their price range, there’s not enough of the housing they can afford, or public policy keeps changing and pushing their buying plans further away.”

It now takes 15 years of full-time work for a typical young Ontarian (age 25-34) to save a 20 per cent down payment on an average-priced home, according to research from Generation Squeeze. In 1976-80, it only took five years of full-time work to save the 20 per cent down payment on an average-priced home in Ontario.

“There’s no denying the challenges faced by millennial home buyers today; the Ontario government tried to alleviate the pressure earlier this year when it doubled the first-time home buyer tax rebate,” said Hudak. “So, we know policy makers are aware. Now they just need to enforce policies that effectively bring more housing supply to the marketplace.”

Not surprisingly, a large majority of home owners and aspiring home owners say that single detached homes are the best fit for their needs right now (73%). Semi detached homes were named the second best fit (35%), with townhouses and low rise condominiums coming in third for being the second best fit (15% each).

Ontario Realtors continue to advocate for government policies to increase the supply of housing, lower taxes and fees, and stop the pile on of regulation and demand side policy interventions.

Source:  Ontario Real Estate Association

Methodology

Nanos conducted an RDD dual frame (land- and cell-lines) random telephone survey of 2,000 homeowners and aspiring homeowners in Ontario, 18 years of age or older, between November 3^rd and 19^th, 2017. Participants were randomly recruited by telephone using live agents and administered a survey. The sample is geographically stratified to be representative of Ontario.

Aspiring homeowners are defined here as Ontarians who currently rent their home but are likely to buy in the next three years. Individuals were randomly called using random digit dialling with a maximum of five call backs. The margin of error for a random survey of 2,000 Ontarians is ±2.2 percentage points, 19 times out of 20. This study was commissioned by the Ontario Real Estate Association and the research was conducted by Nanos Research. 

About the Ontario Real Estate Association

The Ontario Real Estate Association represents 70,000 brokers and salespeople who are members of the 39 real estate boards throughout the province. OREA serves its REALTOR® members through a wide variety of professional publications, educational programs, advocacy, and other services.

Market Snapshot: December 3-9, 2017

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*
Total Sales: 159
Average Price: $504,559
Median Price: $470,000
Avg Days On Market: 37
 
Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown 

** Not intended to solicit clients currently under contract.

"I get my deposit back, right?"

Making an offer on a house with some conditions, maybe mortgage or home inspection, one of the common buyer questions is to confirm that they will get the deposit back if the conditions don't work out. 

Most standard conditions* include the wording that if conditions are not fulfilled by a certain time frame then "this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction."

So in short, the answer is "yes you will get the deposit back."  However, there are some qualifications to the answer a buyer should be aware of.

First, you have to be acting in good faith.  Having a condition on a home inspection does allow a way out.  And with the usual wording* indicating that the inspection result must be okay in the buyer's sold and absolute discretion, there is a LOT of wiggle room on why the buyer might back out after the inspection.  [Courts have agreed that buyers can cancel on what sellers would feel are trivial reasons] because it is in the buyer's sole and absolute discretion..  BUT..  the buyers have to be seen as acting in good faith.  One can not cancel the contract if one has not even attempted to do a home inspection.  The courts can take a dim view of someone using a condition to back out of a deal outside of the parameters of the condition.

Second, buyers should be aware of the trust nature of the deposit.  When money is put into a brokerage's trust account, it is being held 'in trust'.  Essentially the money belongs to no one and can not be released by the brokerage without the express written consent of both parties (or court order and a couple other exceptional situations) or according to the contract such as when a sale closes (when it is applied toward purchase price).  So when you back out of a purchase after a condition has failed, the seller still has to sign off on returning the deposit.  You have a right to it according to the contract, but the brokerage can't release it without that written consent from both sides. If they decide to be unreasonable, then it comes to suing them.  But their agent and lawyer should be advising them of this, so it's unlikely they will remain too obstinate about it. 

I have never personally had an issue with a deposit being returned to a buyer client, but we know strange things happen out there.  For all practical purposes in most times and places, the answer should be yes, you will get the deposit back. 

* the Ontario Real Estate Association (OREA) has a library of standard clauses and conditions which real estate professionals use in drafting contracts. One must be careful to check the wording of every offer, especially is registered professionals are not involved, because it is easy to alter wording and drastically alter meaning and end results.

Market Snapshot: October 15-21, 2017

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*

Total Sales: 205
Average Price: $439,616
Median Price: $413,000
Avg Days On Market: 31
Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown 

** Not intended to solicit clients currently under contract.

MORE LISTINGS, FEWER SALES

The REALTORS® Association of Hamilton-Burlington (RAHB) reported 2,296 new listings were processed through the RAHB Multiple Listing Service® (MLS®) System in September, which is 17.2 per cent higher than the same month last year and 16.7 per cent higher than the 10-year average.

[CLICK HERE] to read the full report (PDF).

Market Snapshot: August 13-19

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*

Total Sales: 174
Average Price: $437,154
Median Price: $420,000
Avg Days On Market: 32

Sales volume recovered from the dip the previous week, but sale prices held more or less steady.  Time on market is also almost unchanged.

Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **


*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown 

** Not intended to solicit clients currently under contract.

Market Snapshot: August 6-12

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*

Total Sales: 122
Average Price: $439,333
Median Price: $435,000
Avg Days On Market: 31

Even though sales dropped steeply this week and average time on market continues its climb toward past norms (35-40 days), average price recovered significantly from a surprising dip.

Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **


*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown 

** Not intended to solicit clients currently under contract.

What's this about free trees in Hamilton?

Did you know the City of Hamilton has a 'free trees' program?  

That's right: in a nutshell, the city's Street Tree Planting program offers free trees to homeowners in Hamilton.  

The trees are planted in the City-owned road allowance of your property, so obviously there are some requirements and guidelines. 

See the City of Hamilton website for [information on the program] and the application process.

Market Snapshot: July 30-August 5

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*

Total Sales:171
Average Price:$383,790
Median Price: $402,000
Avg Days On Market:27

Average time on market has increased but still shorter than the norm for a balanced market (35-40 days). Sales volume has shrunk from the spring peak, but is still decent for the summer season.  Average sale price this week is much lower than the spring near $500,000.

Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **


*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown 

** Not intended to solicit clients currently under contract.

A BIT OF RELIEF FROM THE HEAT FOR HOME BUYERS

The REALTORS® Association of Hamilton-Burlington (RAHB) reported 2,013 new listings were processed through the RAHB Multiple Listing Service® (MLS®) System in July, which is 17.8 per cent higher than the same month last year, 9.2 per cent higher than the 10-year average and the most new listings in the month of July.

All property sales were 20.4 per cent lower than the same month last year, and 12.9 per cent lower than the 10-year average.

[CLICK HERE] for the full report with stats (PDF)

Market Snapshot: July 9-15

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*

Total Sales: 199
Average Price: $463,796
Median Price: $442,500
Avg Days On Market: 22

All stats recovered a bit.  Average time on market backed down to 22 days again, and sales volume jumped back up.  Average sale price this week is still lower than it was in the heat of the spring market, but also recovered significantly.

Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **


*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown 

** Not intended to solicit clients currently under contract.

Market Snapshot: July 2-8

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*

Total Sales: 151
Average Price: $410,002
Median Price: $415,000
Avg Days On Market: 25

Average time on market continued to creep up from 22 to 25 days, but is still below past norms for a balanced market (more like 35-40 days).  Average sale price this week continues to be quite a bit lower than the last few months. Sales volume also dropped, most likely due to two "holiday weekend" days after Canada Day.

Average price varies by district. Call to discuss sales data for your specific area. 

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown

Bank of Canada raises interest rates - what now?

Did the Bank of Canada interest rate that affects variable rate mortgages just go up? 

[Yes, it did.]

And yes it might [affect your loans and debts], including a variable rate mortgage if you went that route. I sincerely hope it isn't enough to put you under water. If that is the case, I'm sorry to hear it and it won't matter what else I say because your situation is your situation.

But as far as the rate increase itself goes, let's not be dramatic: it's still much lower than historical norms.  And far from the worst it has ever been

This becomes pretty readily apparent when you look at the history of the interest rate, as available in [easily readable format on tradingeconomics.com].  Click on the 'Max' timeframe and check out where it was before 1995.

Sure, there are lots of risk factors in the market right now. There always are. This interest rate increase shouldn't spark a massive economic shut-down, but consumer sentiment can be a fickle thing.  [As I suggested yesterday], skewed perceptions in the market can themselves create the adverse conditions that buyers fear.

Until they make a massive interest rate hike, 'keep calm and carry on' as the saying goes.  Feel free to keep an eye on the news, but be careful not to buy into excessive media hype.  Every little increase is a "hike" or "jump" - there are not small upward changes. Such drama sells news, but it's not always a good basis for financial decisions.

If you're concerned about your variable rate mortgage going up more in the future, talk to your [mortgage professional] about the merits of locking in the rate, and maybe even refinancing to pay off other higher interest debts. You'll typically get a higher fixed rate, but it will be at least one more stable number you can plan on.

What's going on with the market?

There's a lot of uncertainty about what's happening with the market and where things are going to go.  So the question on everyone's mind is, "Just what's going on with the market?"

Unfortunately no one really knows, and that in itself is what's going on in the market.

Because buyers and sellers are just people, the market is always going to be at least partially driven by emotions. So when buyers become concerned about a slowdown, they hold off. And holding off creates the very slowdown they were concerned about.  Add in the sellers who accelerate their plans to sell and list quickly to try to beat the slowdown, and suddenly you have an influx of supply at the same time demand goes down.

If you took emotions out of it, there is no real justification for the slump in the GHTA markets.  The foreign buyer tax that the provincial government implemented only affects about 5% of the market, and only in the areas it applies (it is not province-wide, so foreign buyers can still buy in a large portion of the province without paying the extra tax). Obviously it's not a 100% direct correlation, but statistically that means that if all foreign buyers disappeared, you'd have to have 20 offers on your house before you lost 1.  Oh, so you only have 19 buyers now instead of 20?  Oh, the horror.

The real cause of the slowdown is not a mass exodus of buyers but the market's emotional response.  A moot point, because it still happened, but it is good to understand why it happened.

Add to this the federal government talking about [interest rate increases] and [new rules for mortgage qualification] that will seriously cut buying power even with a large downpayment, and the news that [real estate accounted for 29% of Ontario's economy] in 2016.  (that's construction and purchase prices so doesn't even count the large amount of spin-off business where home buyers go out and buy new furniture, renovate, etc)

No wonder buyers are scratching their heads and wondering what's going on. It sometimes feels like the government is trying to block holes in the dam with sticks of dynamite.

In the short term, my advice for buyers is pretty much what it always is: stay cool and look at actual sale prices.  Minor decreases in price should eventually recover, so think long term if you're shopping for a home or longer term rental investment.  Be very cautious if you're still looking at flipping for quick profits.

On the selling side, be prepared to wait a bit for your sale, and talk frankly with your real estate professional about pricing and where things are in your neighbourhood right now.  Unfortunately, what someone on your street got two months ago may not be what you'll get today - especially if they got it because of competing offers.  Either be ready for this, or be ready to stay put for a while.  This varies depending on where you are in the city, though, because some areas are still selling well.  Again, discuss the specifics of your situation with your REALTOR®.

Market Snapshot: June 25-July 1

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*

Total Sales: 197
Average Price: $434,687
Median Price: $410,000
Avg Days On Market: 22

Average time on market crept up a touch from 19 days to 22, and average price of this week's sales are quite a bit lower than recent times.  However, the sale volume actually went up a bit this week despite including the beginning of the Canada Day weekend.

Average price varies by district. Call to discuss sales data for your specific area. 

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown

Mixed Bag in June 2017 Market

The REALTORS® Association of Hamilton-Burlington (RAHB) reported 2,756 new listings were processed through the RAHB Multiple Listing Service® (MLS®) System in June which is 23.8 per cent higher than the same month last year and 28 per cent higher than the 10-year average.

Sales were 21 per cent lower than the same month last year, and were 5.6 per cent lower than the 10-year average.

[CLICK HERE for the full report]

Market Snapshot: June 18-24

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*

Total Sales: 188
Average Price: $476,496
Median Price: $435,307
Avg Days On Market: 19

Average price varies by district. Call to discuss sales data for your specific area. 

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown

Market Snapshot: June 4-10

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*

Total Sales: 231
Average Price: $453,466
Median Price: $437,000 
Avg Days On Market: 16

Average price varies by district. Call to discuss sales data for your specific area. 

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown

Listing inventory growth continuing so far through June

Everyone's wondering what's happening with the local real estate market these days, especially after a [record number of new listings in May]. 

Looking at listings commencing June 1-10 in the Hamilton* districts of the local MLS® system, there have been 587 new listings entered.. That's a 29% increase over the same ten day period last year.  Not as dramatic as the spike in May, but still considerable.  Meanwhile, sales in the same time frame are down about 18%, from 388 in 2016 to 316 in 2017.  Increased supply and reduced demand means more listings on the market - at least in the short term.

This is pretty preliminary of course, and there's no guarantee that this will hold up long enough to be called a trend.  But it is interesting to see that the listing inventory growth is at least extending past the end of May.  As always, I will be watching for the official stats at the end of the month to see if things are still heading in this direction.

For now, I'd say buyers can be cautiously optimistic that the market is starting to head toward some balance.  But even if it does, it's likely to remain a sellers' market in the near future as we recover from a long term listing shortage.

* Ancaster, Dundas, Flamborough, Glanbrook, Hamilton, Stoney Creek, Waterdown

Market Snapshot: May 28-June 3

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*

Total Sales: 247
Average Price: $513,938
Median Price: $485,000
Avg Days On Market: 12

Average price varies by district. Call to discuss sales data for your specific area. 

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown

Record Listing Numbers in May 2017

The REALTORS® Association of Hamilton-Burlington (RAHB) reported a record 3,208 new listings were processed through the RAHB Multiple Listing Service® (MLS®) System in May, which is 41.1 per cent higher than the same month last year and 34.8 per cent higher than the 10-year average.

Sales were less than one per cent lower than the same month last year, and still 15.3 per cent higher than the 10-year average.

“Listings continue to be the story,” said RAHB CEO George O’Neill. “The difference is that two months ago we reported on the sustained low inventory of listings and this month we are talking about a record for new listings. The increase in listings suggests that homeowners have been watching the market, seen home values increase significantly over the last year or two, and decided to take advantage of those increases.”

[CLICK HERE] to read the full release (PDF)

The other side of today's market: supply shift?

In my recent [column in the Mountain News], I referred to some preliminary information from May about sales volume.  Up to May 24, 2017 was higher in sales than in 2016, suggesting that the local market was weathering the recent provincial housing policies shifts without losing any steam.

Demand is, of course, only one side of the market, as I have been saying for a while. Local listing inventory has been shrinking for years now, and it was adding to the market frenzy with fewer and fewer properties available for an increasing number of interested buyers.  At the end of April, we saw a small surge of listings so that we had more new supply than demand for the first time in a while.

Now, [CBC has just reported] that new listings in May 2017 outpace any month in 2016.  It has been surmised that some sellers are accelerating their plans and listing sooner, out of concern for deflation in the market. But with the still-increasing demand suggested by sales volume, I don't think there is any reason for local sellers to fear any significant market loss.  And as a professional dealing with the diminishing supply of properties, I'll be happy to have a little relief for buyer clients, if that is in the cards.

As CBC says in their article, the official numbers won't be out for a few days, and I'll be watching for them to see just what is happening with our listing inventory.  Will it still outpace demand or is it just more wood on the already hot fire?

RECORD MARCH SALES; LOW INVENTORY CONTINUES

The REALTORS® Association of Hamilton-Burlington (RAHB) reported 1803 sales were processed through the RAHB Multiple Listing Service® (MLS®) System in March. The month’s all-property sales set a new high for the month of March, surpassing the record set just last year by 22.2 per cent.


[CLICK HERE] for the full report in PDF.

Guest blog: Debt-To-Income Ratio; Real Or Imagined Threat?

If one were to stop a citizen on the street and ask them if they believe today's low interest rates have allowed Canadians to borrow more money than they should have, most will say yes.

If one were to stop a citizen on the street and ask them if they believe today's low interest rates have allowed housing prices to rise too high too fast, most will say yes.

If on the heels of these two questions you then asked one more: Should government step in and tighten regulations?

Most will say yes.

And these citizens would be inaccurate.

We have a journalistic climate less interested in one set of numbers and more interested in another, and the relentless reporting of specific numbers while ignoring others is a problem.

Nearly every news story on the topic of debt is framed in a negative light, and this is a problem.

We have endless reporting of the rising debt-to-income ratio, almost always with alarmist overtones. There is never any acceptance that debt is in fact not a bad thing in the majority of households. At least not when it relates to buying a home.

Returning to our citizen in the street, let’s ask a few more questions.

Would it sound reasonable to take on a $2,000 mortgage payment if your annual household income were $100,000?

Do you think it’s fair to say that the same household income could support a $2,600 monthly payment?

Likely we are going to get a ‘yes’ to both of these questions. Those numbers are quite reasonable in relation to one another.

Here’s where it gets a touch more interesting…

That $2,000 per month payment represents a monthly payment at today’s rates on a $500,000 mortgage balance.

The $2,600 per month payment represents a monthly payment at double of today’s rates when that mortgage balance come up for renewal.

(using 20 per cent down on a 30-year amortization with five-year fixed-rate products – for illustrative purposes)

Our readers quick with numbers may see where this is going.

   That aforementioned household debt-to -income number currently reported at 167 per cent and painted as an alarmingly high – a sky about to fall number – let’s look at it in the context of the above mortgage example.

That household with a $500,000 mortgage balance and a $100,000 household income, their debt to income ratio is in fact 500 per cent.

Are they freaking out?

Not at all, I mean they are a little bit – but only when they think about you and your debt to income number, not their own. Because they are concerned that today’s low rates have allowed you to borrow more than you should have – and as you know, you have not.

Canada enjoys 69 per cent home ownership, and when I say enjoys, I mean truly enjoys the benefits thereof. Home ownership provides stability to families, and thus stability to communities and by extension stability to our country. Home ownership is the thread with which the fabric of Canadian society has been woven. We are not a nomadic bunch at all, we like to stick close to our hometowns in many cases, or once we adopt a new hometown we tend to stay planted there for decades. The ability to purchase a home is a key part of that.

Half of Canada has no mortgage at all, the other half have bigger mortgages than their parents can even fathom, but then they also have larger paycheques than their parents would have fathomed.

The payments are more than manageable for the majority, even if rates were to double at renewal from today’s record lows.

So the suggestion that a household with a 167 per cent debt-to-income ratio is on the brink of disaster is hyperbole. If the bulk of that debt is mortgage debt, then our $100,000 per year household would have a $750 per month payment on the $167,000 mortgage.

More likely that $100,000 income household has a larger mortgage than $167,000, but not much larger than the above example, as current qualification standards limit such a household to $445,240 if they have less than 20 per cent down.

This is still a 445 per cent debt-to-income ratio.

But again, how concerned are we about a household with $8,333.00 gross monthly income making their $2,000 per month payment?

As the kids say 'Keep calm and carry on'.

Marianne Hobson
Mortgage Agent Lic#M08004925
Dominion Lending Centres Homestead Financial FSCO# 11711
 
Cell: 905-973-9266
Email:  mhobson@dominionlending.ca

Just how sure is a sure thing in real estate sales?

You've sold your house and it's a firm sale - no conditions.  So it's a sure thing, right?

Yes.

Well, as close as it gets anyways.  Because, really, how sure is a sure thing when people are involved?

You have a legally binding contract for the sale of the house, so in a sense it is a sure thing.  But we also know that contracts do get broken sometimes for a variety of reasons.

Even though the buyer may have made a firm offer, their bank or mortgage company may still want to do an appraisal.  If the bank's appraiser decides the property is worth less than the buyer was (legitimately) willing to pay, this could leave them in a position where they have to make up the difference.  Not all buyers are in a good enough financial position to cover this gap when the [appraisal goes "bad"].  They may find a way to make it work or they may walk away, breaching the contract - irresponsible as that is.  Fortunately, people generally follow through on their agreements.  Even if the appraisal is weaker than expected, well-informed and represented buyers don't make firm offers without being prepared and understanding what they are getting into.

But the lawyers could also turn up unexpected issues with the title search.  This could be a 50 year old mortgage that never got discharged properly, a minor encroachment, or even a more recent mortgage fraud on your title that you didn't even know about.  What is involved in correcting the issue can vary a fair bit from one situation to another, and some problems may get taken on and covered by title insurance.  It is often only a matter of time to get these problems fixed, but it can make deals go sideways quickly.

And even if there are no surprises directly related to the deal, life sometimes gets in the way of things.  The buyer's financial situation could change drastically if their spouse passes away unexpectedly through accident or illness, they could lose their job, or their current house could go up in flames and kill their sale and the expected cash proceeds they were counting on.

So we tend to move forward taking a firm sale as a sure thing... we just have to remember that when people are involved, a "sure thing" still means 99.99% at the most and never really a 100% guarantee. As with anything in life, we just deal with problems if they arise.

Report Urges Mixed Housing Choice, Complete Communities to Address Housing Prices

New report from Greenbelt Foundation puts Toronto region housing crunch in global context

A new report, [Global Cities: Housing Prices in Major Urban Centres], from the Friends of the Greenbelt Foundation finds that housing price increases in the Greater Golden Horseshoe are comparable to similar booming markets in major urban centres around the world. With 56% of the world’s population now living in cities, the report suggests that as globalization continues to bring more residents to cities, planning solutions to increase housing choice are needed.

“People are moving to where the jobs are, and municipalities need to plan for more density along transit corridors and in residential neighbourhoods,” said Burkhard Mausberg, CEO Friend of the Greenbelt Foundation. “The report shows this is happening around the world – and the regions that lead the way in planning to accommodate growth efficiently are going to see the greatest economic rewards while protecting our environment.”

The report encourages the Province and municipalities to ensure Growth Plan policies are used to encourage the development of more housing choice, including detached and semi-detached homes, townhouses, and mid-rise buildings with units large enough for families. These policies protect farmland and local food while delivering more affordable housing options to residents.

From 2005-2015, housing prices in Canada’s major cities have increased anywhere from 136% in Ottawa-Gatineau to 192% in Winnipeg. In Toronto, prices increased 165% over a decade. This echoes booms seen in international growth centers like Beijing, which in one year experienced a 31% increase in prices in 2016, and Amsterdam, which saw prices rise 14% that year. The same data set assessed Toronto’s increase at 16% in 2016.

“The solution is not to reverse policies like the Growth Plan that encourage city-building and discourage sprawl,” said Burkhard Mausberg. “We need to embrace a more sustainable future, not go back to low-density, car-dependent sprawl which is bad for our health, bad for our commutes, and bad for our environment.”

The Greater Golden Horseshoe (GGH) is already home to 25% of Canada’s population. By 2041, the GGH is expected to grow by 50% to reach 13.5 million. The report recommends that this growth be accommodated with a forward-looking approach that prioritizes integrated transit and smart growth, protecting farmland and building healthy communities.

Source: Friends of the Greenbelt Foundation
 
About the Greenbelt:
Ontario’s Greenbelt is the solution for fresh air, clean water, and a thriving economy with healthy local food and active outdoor recreation. At 2 million acres, it’s the world’s largest permanently protected greenbelt, keeping our farmlands, forests, and wetlands safe and secure. The Friends of the Greenbelt Foundation works to help keep farmers successful, strengthen local economies, protect natural features, and promote sustainable growth. Learn more at greenbelt.ca.

Hamilton's hot real estate market continues in February

The REALTORS® Association of Hamilton-Burlington (RAHB) reported 1,311 sales were processed through the RAHB Multiple Listing Service® (MLS®) System in February. Total property sales were 16.4 per cent higher than the same month last year and, for the second month in a row, set a new high for that month.

[CLICK HERE] to read the full report (external PDF, 150kb)

January 2017 Housing Starts in Hamilton CMA

TORONTO, ONTARIO--(Marketwired - Feb. 8, 2017) - Housing starts in Hamilton Census Metropolitan Area (CMA) were trending down at 3,617 units in January compared to 3,833 units in December, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

"The trend in Hamilton CMA total housing starts was down entirely due to fewer multi-unit housing starts in January 2017 compared to the previous month. The trend in single-detached housing starts was up but not enough to completely offset the decline in multi-unit housing starts," said Abdul Kargbo, CMHC's Senior Market Analyst for Hamilton and Brantford CMAs. "The trend in multi-unit housing starts reached a record level in 2016, reflecting strong first-time buyer demand. The record housing starts in 2016 will likely result in fewer multi-unit housing starts in 2017 as the number of units currently under construction is at an elevated level."

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of the housing market. In some situations, analysing only SAAR data can be misleading in some markets, as they are largely driven by the multiples segment of the markets which can be quite variable from one month to the next. The multiples segment includes apartments, rows and semi-detached homes.

The standalone monthly SAAR was 2,978 units in January, down from 9,543 units in December. The January decrease in the SAAR measure was due to fewer single-detached, townhouse and apartment starts compared to December.

Hamilton market slowing for 2017? Not so far, and probably not..

I was discussing the market with some of my colleagues, as we're all waiting to see what impacts we'll see in 2017 from recent changes to mortgage qualification and CMHC premiums.  And there was a feeling that January has seemed a bit slower.  But was it actually slower or are we just enjoying a breather from more hectic seasons?

Well, now that January is done I had a look at sales reported through the local MLS® system.  With 543 sales in the City of Hamilton through January 2017, it is certainly slower than the spring market when numbers were in the 1000 range, or even the fall with sales around 800..  However, when you consider that sales volume for the same month in 2016 was 476, it becomes obvious that the slowdown is just the usual seasonal effect and the market is still pretty robust. That's an increase in local sales of 14% for the same month.

There's no guarantee that this will carry forward into the spring market - I'm still on the look out for a reliable crystal ball if you know where to find one - but the market has clearly weathered [the more significant change to mortgage qualification last fall].

[The change to the CMHC premiums is relatively minor], with the premium amortized with the mortgage.  There is an extra ding on buyers on closing because the sales tax on the premium has to be paid up front and can't be amortized.  However, there is a good offset to that from the increased [first-time buyer rebate on the provincial Land Transfer Tax] - what used to be a maximum rebate of $2000 is now $4000 as of January 1, 2017.  On a $400,000 purchase, the increase in sales tax on the CMHC premium is only $128.  Buyers are still quite a bit ahead on closing.

CMHC also recently made a comment that Hamilton's market has been driven largely by Toronto's hot market spilling out into surrounding areas, and suggested that a 10% decrease in prices in Toronto would affect Hamilton with a 14% loss in value.  Generally, they say the price relationship between Toronto and Hamilton is [a 1.4% change in Hamilton for every 1% change in Toronto].

I gather that the idea is that if Toronto becomes more affordable, people will go back to buying there, thus relieving some of the pressure on outlying areas.

While I agree with the principle, the flaw I see is that this is not likely to be an instantaneous effect.  If Toronto's prices have dropped 5% but people expect it to drop 10%, they're going to be hesitant to invest in that marketplace.  They'll continue to look outside the big city.  They won't want to invest in Toronto until they feel it has bottomed out and starting to rebound.

So there is likely to be a delayed effect on Hamilton's market, and with fluctuations keeping buyers on their toes, it may never be adequate to completely eliminate interest in Hamilton as a safer place to buy. All of this is, of course, ignoring the fact that [the Toronto Real Estate Board is predicting double digit increases].

Either way, I think Toronto will continue to be an upward influence on our local market despite any small price corrections there.

There are lots of other factors and regulatory changes, so the whole thing is a real moving target as they say.  Only time will tell, but I'm not worried about any market implosions at this point.

December 2016 Housing Starts in Hamilton CMA

TORONTO, ONTARIO--(Marketwired - Jan. 10, 2017) - Housing starts in Hamilton Census Metropolitan Area (CMA) were trending up at 3,836 units in December compared to 2,833 units in November, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

"The trend in Hamilton CMA total housing starts was up primarily due to strong apartment starts in December 2016 compared to the previous month. The trend in single-detached housing starts was up although the increase was not as pronounced as in multi-unit housing starts," said Abdul Kargbo, CMHC's Senior Market Analyst for Hamilton and Brantford CMAs. "The trend in multi-unit housing starts reached a record level in December 2016, reflecting strong first-time buyer demand. The record in December puts a crowning touch to the highest annual total housing starts since 2010."

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of the housing market. In some situations, analysing only SAAR data can be misleading in some markets, as they are largely driven by the multiples segment of the markets which can be quite variable from one month to the next. The multiples segment includes apartments, rows and semi-detached homes.

The standalone monthly SAAR was 9,560 units in December, up from 2,113 units in November. Similar to the trend measure, the December increase in the SAAR measure was mostly due to an exceptionally high number of apartment starts compared to the previous month.

As Canada's authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

SALES SET RECORD FOR DECEMBER

The REALTORS® Association of Hamilton-Burlington (RAHB) reported 904 sales were processed through the RAHB Multiple Listing Service® (MLS®) System in December. Sales were 13.1 per cent higher than the same month last year and set a new high for the month of December. This was the sixth month in 2016 to see a new monthly sales record.

[Click here to read the full report (PDF)]

Desire for detached homes growing in Ontario, new research from OREA shows

TORONTO, ON--(Marketwired - December 28, 2016) - Half of Ontarians in the market to buy a home in the next two years say they are looking for a detached house, up 13 points from a year ago, shows new research from the Ontario Real Estate Association (OREA). In Toronto, where supply of detached homes is at an all-time low, the demand is up 21 points from a year ago, with 50% of buyers saying they are likely to buy this housing type, according to the Ontario Home Ownership Index, OREA's semi-annual consumer study conducted by Ipsos Reid.

"With limited supply of this housing type, it's becoming increasingly difficult to meet the demand," said Tim Hudak, OREA CEO. "Young families looking for more space, a backyard to play with their kids in, simply don't have enough options to choose from. Increasing the supply of single-family detached houses, as well as semis and townhouses, will give buyers more choice at affordable levels."

The Building Industry and Land Development Association (BILD) recently reported that housing supply has plummeted over the past decade. The lack of housing supply is a key driving factor for increasing prices of new single-family detached houses and high-rise condos in the GTA.

"Demand for detached houses is up while supply is critically low -- no wonder prices are rising so quickly," said Hudak. "We need more homes on the market; government should give careful consideration to policies that will increase supply. Home ownership is not a fad -- it is the Canadian dream."

According to OREA's Ontario Home Ownership Index, eight out of ten Ontarians consistently say that home ownership is important to them (79%), real estate is a good investment (82%) and it makes more sense to own rather than rent (81%). 'Long-term investment value' is Ontarians' top reason for buying a home (34%).

Housing Types - Ontario compared to Toronto
Types of homes Ontario and Toronto buyers say they are likely to purchase in the next two years
Ontarians say:		Torontonians say:
50% - likely to buy a detached house in the next two years, up 13 points from a year ago		50% - likely to buy a detached house, up 21% from a year ago
19% - likely to buy a condo in the next two years, down 7 points from a year ago		22% - likely to buy a condo, down 17% from a year ago
19% - likely to buy a semi-detached home, up 4 points from a year ago		23% - likely to buy a semi-detached home, up 3 points
14% - likely to buy a townhome, down 2 points from a year ago		22% - likely to buy a townhome, up 2 points

Methodology
These are some of the findings of an Ipsos poll conducted between October 27 and 31, 2016, on behalf of the Ontario Real Estate Association (OREA). For this survey, a sample of 1,003 Ontarians from Ipsos' online panel was interviewed online. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within +/ - 3.5 percentage points, 19 times out of 20, had all Ontario adults been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

About The Ontario Home Ownership Index
The Ontario Home Ownership Index is designed to reflect Ontarians' overall views of the residential real estate market in Ontario, and incorporates measures such as Ontarians' perceptions of whether the market in their neighbourhood, city, and Ontario, respectively, have improved or worsened in the last year and looking ahead into the future, whether home ownership is important to them and whether it is a good investment in the long-term. The first wave of the index, conducted in the fall 2013, was set to a baseline of 100 points.

About the Ontario Real Estate Association
The Ontario Real Estate Association represents 67,800 brokers and salespeople who are members of the 40 real estate boards throughout the province. OREA serves its REALTOR® members through a wide variety of professional publications, educational programs, advocacy, and other services. www.OREA.com