Sat Swaminathan

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From the Desk of Faisal - Real Estate News for the period of Mar 20th - Mar 26th

Welcome to Properties Ontario’s weekly real estate update. Our team goes through numerous articles and summarize them for you! Please do not hesitate to contact us if there are any topics you would like to discuss further. If you have any questions about buying, selling, or leasing residential or commercial space, we’re the team for you. For current listings in the marketplace, check out our website www.propertiesontario.com 

 

Federal Budget First-Time Homebuyer Incentive

  • CMHC would provide 5% on a resale and 10% on a new home purchase
  • The program is set to launch in the fall with hopes of increasing supply of housing
  • First-time homebuyers that qualify must have household income of less than $120,000 and the mortgage amount would have to be less than 4 times the household income
  • Some argue this is basically to reallocate homes from distressed owners to first time homebuyers that could take a potential hit
  • Also, there is a chance that first-time buyers may wait until the fall when this kicks in which could result in a slower spring and summer market
  • New home supply absorption is not as quick as developers would like it which is why CMHC is planning to offer twice as much investment for new homes versus resale
  • Long story short, the government is attempting to ramp up demand but not doing much on the supply issue

 

Money Laundering Issue in the GTA

  • Transparency International Canada (TI Canada) studied over 50,000 corporate purchases in the GTA region from 2008 to 2018
  • Keep in mind, Canada doesn’t keep track of beneficial ownership but just keeps track of the directors and a mailing address
  • Looking at 51,498 GTA homes purchased by corporations, $9.8 billion were all cash purchases which accounts for 35% of the total dollar volume spent
  • To compare, only 11% of household purchases were done in all cash transactions
  • In addition, $10.4 billion in mortgages were done through private lenders which represents 49% of corporate mortgage volume
  • To compare, only 3% of household mortgages originated from private lenders
  • So if Canada is not keeping track of beneficial owners and there are no checks on private lenders, there is risk that some of this money could be part of money laundering

 

ADP Canada National Employment Report February 2019

  • ADP Canada National Employment Report showed a monthly increase of 36,200 jobs compared to January 2019
  • Sizeable gains were in manufacturing, construction, trade/transportation and utilities, professional/technical, administrative, education services, leisure and hospitality and finance and real estate

 

Statistics Canada CPI Release

  • Statistics Canada Consumer Price Index was 1.5% year over year in February
  • For comparison, January CPI was at 1.4% year over year
  • On a seasonally adjusted monthly basis, CPI rose 0.3% from January to February

 

Canadian Sales to New Listings Ratio (SNLR)

  • SNLR across Canada was 46.2% in February 2019, down 14.91% from January which still indicates a balanced market but is cooling down
  • Compared to last year (February 2018), the SNLR fell by 2.4%
  • Largest SNLR climbs were Ottawa, Quebec City and Montreal
  • Largest SNLR drops were Fraser Valley, Vancouver and Hamilton
  • For our regional market of Toronto, the SNLR was 46.8%, down 1.3% from last year

 

Altus Group New Home February 2019 Report

  • Benchmark price for newly built detached homes is $1,122,682, down 1.82% from the month before but an 8% decline when compared to the same month last year
  • Benchmark price for new condos are $792,709, down 0.51% monthly but are 8.6% higher when compared to February 2018
  • The number of sales in the GTA were 1,411 in February, down 33.14% from last year
  • If you break down the sales, 639 were single family homes which were up 146% from last year but keep in mind February 2018 sales were 55.9% below February 2017
  • Condo apartment sales were 772, down 58.4% from February 2018 and down 72% from February 2017
  • There are 11,269 new built homes in inventory, representing a 21.36% annual increase
  • Sales to active listings ratio is at 8.55%, down 47.96% from the same time last year
  • The build up of inventory and lack of absorption may result in price decreases

 

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