Welcome to Properties Ontario’s weekly update. Our team goes through numerous articles and create summaries for you! Please do not hesitate to contact me if there are any topics you would like to discuss further or if you have a general question about buying, selling, or leasing residential or commercial space. For current listings in the marketplace, check out our website www.propertiesontario.com
Canadian GDP Forecast
The Conference Board of Canada has laid out its forecast for the economy. In our current year, we are forecasted to grow 2% which is 0.2% higher than the previous forecast. However, if NAFTA talks fail to materialize, the growth would be between 0.5-1.3% over the next two years. There has been news that a NAFTA agreement is imminent in October but until it is official, it will play a speculative role for the Canadian dollar and the forecasted growth. The reason for the 2% GDP growth forecast is due to the Canadian economy performing well in the 2nd quarter of 2018. There was increased consumer spending, business investment, capital stock, and double digit increases in exports. The job market projection is 213,000 new jobs in 2018 compared to 337,000 in 2017. Wages are up 3.1% but are forecasted to weaken in 2019. Based on these figures, the Conference Board of Canada expects an October interest rate increase and three further increases in 2019. On the US side, the Federal Reserve forecast 3.1% GDP growth for 2018, 2.5% for 2019, 2% for 2020, and 1.8% for 2021.
Sales to New Listings Ratio Across Canada
The sales to new listings ratio (SNLR) help us determine whether it is a balanced market (40-60%), seller’s market (60%+) or a buyer’s market (40% and below). This statistic by itself doesn’t paint a full picture as recent month deviations along with inventory must be assessed with it. Nevertheless, the highest SNLR are in London (77.1), Windsor (76.5), and Ottawa (68.4). These all indicate a seller’s market where the seller has more bargaining power than the buyer. The lowest SNLR were in Edmonton (45.8), Calgary (47.9) and Toronto (48.8). These would illustrate a balanced market where buyers and sellers are both able to negotiate effectively to land on a value of a home. The largest increase was in Halifax which jumped 12.7% to 68.4 and the largest decrease was in Niagara which fell 23.05% to 60.1.
American Equity Building
According to analytics firm CoreLogic’s Home Equity Report, US homeowners have seen equity increase 12.3% since the 2nd quarter of 2017. The report is only for US homeowners who have a mortgage but that accounts for nearly 2/3 of all properties. In dollar terms, this represents an increase of $981 billion in equity. This shows that the net worth of individuals is increasing but with rising interest rates it is important to budget effectively and make smart purchases. An incorrect purchase that is more based on emotion and fear of missing out can potentially wipe out a chunk of your equity. In addition, mortgage delinquencies fell by 12% annually for the month of August 2018. However, economists are paying close attention to this figure as Hurricane Florence may impact in the coming months.
New Homes Sales in Ontario
BILD (Building Industry and Development Association) stated there were 974 new home sales in August 2018. This data is based on statistics provided by Altus Group. Of the 974 new home sales, there were 171 single-family homes sold which is a 50% increase year over year but 80% below the 10-year average. Condo apartments accounted for 803 of new homes sales which is an annual decline of 1% and 23% below the 10-year average. The benchmark price of a new condo rose to $784,512 (21.8% higher annually) while the benchmark price of a new single family home is at $1,129,129 (12.4% lower annually). August inventory is at 13,619 units (8,842 condos and 4,777 single family homes).
New Development at Toronto Waterfront
Developers MaRS Discovery District who would be leasing from Menkes Development is planning a 24,000 square foot development at the Toronto waterfront. This development would house 3,000 new workers and 400,000 square feet of commercial office space which is set to open in 2021. This is on top of Microsoft and Google proposed expansion within the GTA.