Sat Swaminathan

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ROYAL LEPAGE SIGNATURE REALTY, Brokerage*

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(647) 261-6150
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905-568-2121
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From the Desk of Faisal - Real Estate News for the period of May 8th - May 14th

Welcome to Properties Ontario’s weekly real estate update. Our team goes through numerous articles and summarize them for you! If you have any questions about buying, selling, or leasing residential or commercial space, we’re the team for you.

 

Effective Borrowing Rate BoC 

  • The effective borrowing rate is a weighted index of consumer and mortgage loan rates 
  • As of April 26th, the rate was 3.88%, which is 6.9% higher than the same time last year 

 

Canadian Housing Starts April 2019 

  • New home starts reached 18,096, a 13% increase compared to April 2018 
  • Year to date, 53,668 new homes started construction so far, down 8% compared to the same period in 2018 
  • In Toronto, April starts were 3,154, up 46% compared to last April 
  • Year to date in Toronto were 10,545 starts, down 26% compared to same period last year
  • Housing construction starts are doing well year over year but are still behind year to date 
  • With weaker presale absorption in the large markets, starts may trend lower 

 

 Toronto and Vancouver Office Vacancy Surge

  • According to research firm CoStar Group, office vacancy rates will double by 2023 
  • This is due to the construction pipeline of office units, 25 new towers expected to be built in Toronto and another 15 towers in Vancouver 
  • The annual rent growth of 6% (Q2 2019) is expected to face a downward turn and cut down to 1.5% by 2023 according to this report 

 

GTA Investment Sales Decelerating 

  • Total of 502 investment property sales over $1 million occurred in Q1 2019 
  • The dollar volume amounted to $4.1 billion which is 29% lower than Q1 2018 and marks the 5th consecutive quarter of investment sales declines
  • According to Altus Group, they state it’s due to lack of supply versus lack of demand 
  • The lack of supply has pushed down cap rates to 4.15% from 4.25% during the 1st quarter
  • Of all investment sales, GTA lands led the charge with $1.3 billion worth of sales 

 

Teranet Home Price Index 

  • The index was up 1.24% in April and is now 1.77% below the peak in September 2018 
  • The index for Toronto was up 3.29% annually but is still 4.07% below the peak achieved back in July 2018 
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