Data suggest speculation in Toronto’s condo market surged last quarter

Posted in http://news.buzzbuzzhome.com

By Josh Sherman Aug 28, 2017

Photo: Loozrboy/Flickr

How do you go about gauging how much speculative investment activity there is in Toronto’s condo market?

If you’re industry observer Urbanation, over a certain period of time you track the number of condos that are purchased on the resale market and then subsequently rented out.

When the Toronto-based firm did exactly that for this year’s second quarter, it found that the number of existing condo units sold and then rented on the Toronto Real Estate Board (TREB)’s multiple-listing-service system surged by 57 per cent compared to the same period in 2016.

In all, 622 units were first purchased — and then rented out — on the MLS system in that three-month timeframe, admittedly a “relatively small” sample size, according to Urbanation.

But those transactions represented an 8.5 per cent share of activity in the segment, up from the 5.2 per cent share observed over the same period last year, according to Urbanation’s exercise.

While Ontario introduced a foreign-homebuyer tax for the Greater Golden Horseshoe, which Toronto is a part of, in the first month of this year’s second quarter, the Urbanation data suggests it didn’t have a significant impact on the condo market.

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Six figure income needed to buy almost any GTA home: report

Published in thestar.com Aug 17 2017 by Real Estate Reporter TESS KALINOWSKI

As the cost of Toronto-area housing rises, so do the financing challenges for young adults. Report says $200,000 a year is the average income needed for a detached house in Toronto.

It takes a six-figure income to afford virtually any Toronto area home — even a condo — and that expense is presenting a considerable financial challenge to an important cohort of millennial consumers.

Separate studies from two real estate companies on Thursday paint pictures of the high income requirements of affording a home, and of the housing aspirations of Canada’s “peak millennials” — adults 25 to 30.

It takes a household income of more than $200,000 a year to carry the $1.15 million cost of the average detached house in the Toronto region, according to a report from TheRedPin brokerage.

Even the average condo apartment, costing about $511,000, requires an annual income of $92,925 to afford a $1,933 monthly mortgage, plus taxes, utilities and condo fees, according to the report.

Meantime, 59 per cent of those aged 25 to 30 in Ontario would like to own a detached house in the next five years, but only 30 per cent think they will be able to afford one, according a new Royal LePage report based on findings by Leger research.

According to TheRedPin, buyers need more than $150,000 a year to cover the cost of a home in half of 22 Toronto area municipalities.

The average Toronto home price, $864,228, is affordable to buyers with an annual income of $147,750 — though that average may be skewed lower by the large number of condos on the market.

In Oshawa, an annual income of $108,773 is enough to afford the average home price of $552,268.

TheRedPin study averaged home prices over the first seven months of the year, and assumed a 20 per cent down payment and a 2.99 per cent mortgage, amortized over 25 years. The income requirements took into account the areas’ average utility costs and property taxes and estimated condo fees based on a 900-square-foot condo townhouse and a 750-square-foot apartment.

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Toronto's housing market is seeing a massive decline in prices — or is it?

The latest set of housing numbers show Toronto existing home prices rising, but look closely and it's not that pretty a picture

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Published in the Financial Post on Aug 14th, 2017 by Garry Marr

Toronto’s existing homes market is seeing a massive decline in prices — or is it? The latest numbers from the Teranet-National Bank Composite House Index look like they tell a different story.

The index, released Monday, shows Toronto prices actually rose 2.1 per cent from June to July and national prices were up two per cent from a month earlier. The Toronto results, at first glance, appear out of sync with Toronto Real Estate Board results which show prices have declined almost 21.5 per cent from a peak hit in mid-April before the province put in measures like a foreign buyer tax to cool the market in and around the city.

But Marc Pinsonneault, an economist with National Bank, said his index needs to be examined more closely and, as his firm went out of its way to explain in a note, that the index reflects a three-month rolling average, or what it calls a ‘smooth index’. The 2.1 per increase was an average of May, June and July and therefore not fully reflective of the falling Toronto market.

Monday, it also released a so-called unsmoothed index, which offers a better snapshot of July, comparing it to June. The result was 0.3 per cent decline for all dwellings in the Toronto region.

“When (the index) was built, people wanted to soften the monthly fluctuations,” said Pinsonneault, adding the main index number might not reflect a quickly declining market like Toronto is now seeing. The Teranet-National Bank index also focuses on final sales while TREB initial numbers focus on agreements to purchase – the 30-60 days it might take to close a sale creates a lagging effect.

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THE NEXT MOVE: Toronto home buyers and sellers try to stay afloat in a rocky market

CAROLYN IRELAND

Special to The Globe and Mail

Published Thursday, Aug. 17, 2017 8:00AM EDT Last updated Thursday, Aug. 17, 2017 8:00AM EDT

My latest interview in the Globe and Mail.

In the midtown Toronto areas of Leaside and Davisville, the real estate market has been bouncing between optimism and despair like a yo-yo.

Patrick Rocca, a real estate agent with Bosley Real Estate Ltd., has concentrated much of his business on the tree-lined streets radiating out from Bayview and Eglinton Avenues. The mainly traditional detached houses of Leaside appeal to well-heeled families who want room for the kids to run around. Swimming pools and home ice rinks are not uncommon in the spacious backyards. The slightly smaller lots and houses of Davisville are a little more affordable, in most cases, and especially popular with younger couples pushing strollers.

But even in those stalwart family neighbourhoods, real estate deals can be hard to put together these days, says Mr. Rocca, who has been shocked by the market’s swings.

“You knew something was going to happen. It was mind-boggling. It was scary,” he says of the market’s unfettered rise in the spring and the Ontario government’s moves to tame it. “I knew something was going to happen – I just didn’t know how quickly it was going to stop.”

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TREB Talks GTA Housing Supply and How Taxes Impact Market - CP24

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SHOP, WINE & DINE on Mount Pleasant today 5 to 9 PM!

The SHOP, WINE & DINE event on Mount Pleasant is going on today 5 to 9 PM...the weather is suppose to get better later today so don't wimp out! #SHOPMPV #SHOPLocal

Metrolinx - Eglinton Crosstown Hydro Relocation at Mount Pleasant & Eglinton

Latest update from The Eglinton Crosstown re: Hydro Utility Relocation at Mt Pleasant & Eglinton. Short outages (20 mins approx) while hydro work is going on and then longer outages when they switch over to new hydro infra-structure...see map below for the streets affected for approx 8 wks!!!!!!!