February 27, 2008
Canadian real estate trends
Canadian real estate markets will remain remarkably buoyant, especially in light of the deepening housing downturn in the United States and the generally softening conditions in most other advanced economies globally, according to experts who presented at Scotiabank’s Canadian Real Estate Outlook and Trends Forum 2008 held yesterday in Toronto.
During the forum, keynote speaker Phil Soper, President and CEO of Brookfield Real Estate Services commented, “Our expectations are that balanced conditions will prevail throughout 2008, which will mark a return to a more ‘normal’ environment than the highly skewed seller’s market that we have experienced over the better part of this decade. A stumbling American economy will impact us, slowing growth here at home, yet the solid foundation that supports the contemporary Canadian economy should prevent the housing market here from retracting.”
Also speaking at the conference was Adrienne Warren, Senior Economist, Scotiabank. “We expect construction, sales and price gains to moderate in 2008 due to decreasing affordability, especially for first-time buyers, and some softening in domestic economic conditions associated with the intensifying U.S. slowdown,” remarked Ms. Warren while presenting the findings of her latest Real Estate Trends Report. “Housing starts will likely ease to around 204,000 units, still firmly above underlying household formation, with the more affordable multiple-family segment holding up better than single-detached construction.”
Ms. Warren added that more balanced resale market conditions, as sales volumes edge down and more listings come on stream, should bring average price increases back into the mid-single digit range. Renovation activity, which lags the trend in home resales by one to three years, will outperform new construction.
Mr. Soper added, “New flexible financial products, affordable interest rates and increasing choice in the condominium market across Canada, will continue to attract first-time buyers to real estate – even in high-priced markets. We can also expect to see a broadening buyer pool, as emerging high growth market segments such as single female buyers are anticipated to take advantage of the favourable market conditions.”
Economic conditions still favour Western Canada
In her report, Ms. Warren states that housing starts totaled 228,343 units in 2007, essentially matching the high level of activity of the prior two years and only two per cent below the 233,431 unit peak of 2004. Strength was evident across the country, but led by more than a 60 per cent surge in new homebuilding in Saskatchewan, underpinned by strong job growth, good affordability and a positive shift in net interprovincial migration. Resale activity was equally brisk, with MLS sales volumes reaching a new record in 2007 and average home prices climbing a further 11 per cent. While Western Canada continues to lead in price appreciation, average prices rose by at least five per cent in all provinces last year. The momentum of construction and sales has carried through to 2008.
Ms. Warren also reports that from a demand standpoint, economic conditions still favour Western Canada, with its booming resource-based industries and extremely tight labour markets. Yet, affordability is becoming a constraining factor in several centres, including Calgary where average home prices have doubled in the past four years.
From a supply perspective, most Canadian markets are still in sellers’ territory, in which prices would be expected to rise faster than inflation. Yet, some of the hottest markets in recent years, including Edmonton, have become much better balanced due to a flood of new listings. Based on a combination of job growth, housing supply and affordability, among this year’s potential outperformers are Saskatoon, Regina and Winnipeg in the West, Sudbury, Hamilton and Quebec City in Central Canada, and St. John’s to the East.
Commercial markets to lead
Commercial market activity in Canada should be brisk in 2008 even as the pace of residential building gradually cools. Notwithstanding a number of major new office tower developments currently underway, centred in Toronto and Calgary, significant new space is not expected until 2009.
“Given a high pre-lease ratio, vacancy rates should remain low and rents on the rise,” Ms. Warren said in her presentation. “The national downtown office vacancy rate hit a 22-year low of just 4.7 per cent in the final quarter of 2007, with both Calgary and Vancouver below the three per cent mark. Demand for new office space is being supported by strong employment growth, environmental and technical upgrades, and institutional investor interest.
A housing boom for the history books
Ms. Warren concluded her presentation with the discussion of real home price appreciation, noting that Canada’s current housing boom is the strongest and longest of the post-war era. Between 1998 and 2007, average inflation-adjusted home prices have soared some 65 per cent, easily besting the 32-56 per cent appreciation of the prior three housing cycles of the 1960s, 1970s and 1980s. At their peak in 2005, U.S. real home prices had increased a cumulative 48 per cent from the 1995 trough.
“Canada’s record price gain owes entirely to the longevity of the expansion,” said Ms. Warren. “The current housing upswing is going on ten years, whereas the prior three cycles ranged from five to six years. It has also outlasted the housing booms experienced in many other advanced economies this decade. Average annual price appreciation over this period has actually been quite typical at just under six per cent per year, and well below the almost 10 per cent average annual price gains recorded in the late-1980s.”
Economy to maintain moderate growth
Aron Gampel, Vice-President and Deputy Chief Economist, Scotiabank, also provided a brief overview of the changing economic and financial conditions that are affecting the Canadian outlook.
According to Mr. Gampel, “the Canadian economy is likely to maintain moderate growth this year and next, with the strength of the development boom in the resource-rich regions of the country providing a much needed offset to the increasing drag on our manufacturing centres from the intensifying U.S. slowdown and persistently strong currency.”
Mr. Gampel added that “while underlying domestic fundamentals are still encouraging and broadly supportive of the real estate market, the increasing downside risks to the U.S. outlook could further restrain housing’s overall performance.”
February 20, 2008
Toronto Real Estate Board:
Reports sales near 3,000 mark at mid-month.
Resale home transactions in the Greater Toronto Area declined in the first two weeks of February, Toronto Real Estate Board President Maureen O’Neill announced today. The first half of the month yielded 2,775 transactions, down 14 per cent from the 3,240 sales recorded in the same timeframe last year. The moderation in sales was more pronounced within the City of Toronto–down 18 per cent to 1,066 from last February’s 1,308—than in the 905 suburbs, which saw transactions off 11 per cent.
“It’s important to recognize that the mid-month report provides an indication of market conditions based on a very brief period,” said Ms. O’Neill. “However, we believe the harsh winter weather we’ve experienced in the early part of the month has had a negative impact on both sales and inventory levels. If you can’t get buyers out to your open house, then you are less inclined to list. And fewer listings means less appealing product for the potential home-buyer. It’s a compound effect.”
Although sales eased, several positive factors were also noted. At $385,735, the average price in the GTA rose seven per cent compared to $358,533 recorded in mid-February 2007. Within the City of Toronto, the average rose 11 per cent to $434,657, although pockets within the East end (Agincourt, for example) rose at the more affordable pace of around five per cent. As well, properties are remaining on the market fewer days.
The average number of days on market is currently 31 versus 35 days at the same time last year. Furthermore, a few neighborhoods both within and outside of the 416 area code saw increased sales over the first half of February, 2007.
In Ajax (E14) sales were up 11 per cent compared to mid-February 2007, based mainly on an increase in detached home sales. In the West region, the W3 (York South) district saw a 41 per cent increase in transactions, driven by strong sales of semi-detached homes. Central Richmond Hill (N04) also experienced a notable increase in sales compared to the same timeframe last year. Transactions were up 21 per cent, primarily due to an increase in attached row sales.
“We are optimistic that we will see a strong spring market because the economic fundamentals remain in place,” said Ms. O’Neill. “Prices are still particularly affordable in Toronto’s East end.”
February 16, 2008
Family Day Events
February 18 is Family Day, the province’s newest stat holiday. Here’s a look at what’s open, what’s closed, plus a roundup of family-friendly activities and discounted admissions this long weekend.
Family Day Events
Gadgets & Gizmos Family Toy Building Workshop
The Ontario Science Centre offers kids a chance to create toys using everyday objects. This workshop is free with admission.
Family Day Shenanigans
In honour of Family Day and the new Chinese Lunar Year, the Bata Shoe Museum is hosting kid-friendly activities with an animal theme. Kids can create paper lanterns in the shape of snakes, paint mini clogs and mimic a kangaroo in a pair of jump shoes.
Family Day Long Weekend at the ROM
The ROM has special programs happening throughout the long weekend including the extreme Weather Zone, Dino Activity Area and an inflatable Star Lab. Kids can also check out Gertie the “Balloonosaurus” – a life sized model of a barosaurus made entirely of balloons.
Family Day Festival
Winter fun at the Beach with face painting, a petting zoo and ice skating. If it’s too cold outside you can check out the indoor activities at the Beach United Church like story time and a visit from Tricky Ricky the magician.
Canadian International Autoshow
More than 1,000 cars and trucks take over both the Metro Toronto Convention Centre and the Rogers Centre. The show includes new models, design previews and a collection of classics. A unique playcare centre is available throughout the show for the little ones; it features a live rabbit petting zoo.
Family Day at the CN Tower
SpongeBob Squarepants and his best friend Patrick are available for photo ops at 11 a.m., noon and 1 p.m. After the photo shoot you can take one of the six high-speed elevators straight to the top, where there’s a glass floor observation deck and Sky Pod, the world’s highest observatory.
Family Day Discounts and Promos
Toronto Zoo
All visitors get 50% off the regular admission price.
Casa Loma
Children get in free when accompanied by a paying adult.
CN Tower
The Tower is offering a buy one get one free deal on all admission packages.
Family Day Shopping
It’s business as usual for most Toronto shops and malls. Here’s a list of what’s open and closed on Family Day.
Eaton Centre – Open 10 a.m. to 9 p.m.
Sherway Gardens – Open 10 a.m. to 6 p.m.
Fairview Mall – Open 10 a.m. to 6 p.m.
Yorkdale Shopping Centre – Open 10 a.m. to 6 p.m.
Scarborough Town Centre – Open 10 a.m. to 6 p.m.
All GTA malls located outside of the City of Toronto are closed for the holiday.
Supermarkets
Only some locations are open on Monday, most with reduced hours. Consult your supermarket’s website before heading out.
What’s Closed on Family Day
LCBO/Beer Stores
Libraries
Schools
Canadian Stock Markets
Banks
Public Transit on Family Day
For Family Day Monday, the TTC is on a holiday service schedule, and GO Transit is running on a Saturday schedule.