From the Desk of Faisal - Real Estate News for the Week of Dec 10th - Dec 16th
Welcome to Properties Ontario’s weekly update. Our team goes through numerous articles and summarize them for you! Please do not hesitate to contact me 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
Hamilton and Burlington Real Estate Statistics
The Realtors Association of Hamilton-Burlington (RAHB), the third largest real estate association in Ontario, reported 862 residential sales. This represents a 17.1% annual decline or a 17.4% decline for the year to date. The number of sales of single-family homes fell 17.5% annually while prices increased 5.2%. Townhome sales were also down but sale prices rose 5.6%. Apartment style property sales rose 3.1% but the average price actually fell 1.6%.
Housing Starts and Building Permits
Figures from CMHC show a seasonally adjusted annual rate in November of 210,038 starts. This increased from 204,460 in the previous month and ended a four-month decline. While single detached starts trended lower, this was offset by gains in multi-unit starts, especially in condo apartments in Toronto. In terms of residential permits, the value rose 4.2% to $5.2 billion. A total of 20,017 units received permits. Single family residential permits had its first increase in five months, up 4.6% to $2.3 billion. In unit terms that was an increase of 5,052 (2.2% monthly increase). The multi-family sector rose 3.8% to $2.9 billion or 14,965 units (4.7% monthly increase). Value of non-residential building permits fell 7% in October to $2.9 billion due to lower construction intentions for industrial and institutional buildings. Overall building permits for the month of October was $8.1 billion, down 0.2% from September 2018.
GTA Detached November 2018 Statistics
GTA November 2018 Detached Statistics (November 2017 comparison in brackets)
- Benchmark Price: $910,100 (-0.28%)
- Median Price: $845,000 (+3.17%)
- Average Price: $1,008,768 (+1.3%)
- Number of Sales: 2,665 (-14.2%)
- New Listings: 5,367 (-27.66%)
- Sales to New Listings Ratio: 49.66 (balanced market)
- Active Listings: 10,001 (-5.65%)
- Months of Inventory: 3.75 if no new listings came on the market
Toronto November 2018 Detached Statistics (November 2017 comparison in brackets)
- Benchmark Price: $1,111,000 (+2.1%)
- Median Price: $1,000,000 (+5.31%)
- Average Price: $1,301,382 (+1.8%)
- Number of Sales: 701 (-12.5%)
- New Listings: 1,256 (-25.76%)
- Sales to New Listings Ratio: 55.81 (balanced market)
- Active Listings: 2,000 (-6.67%)
- Months of Inventory: 2.85 if no new listings came on the market
Teranet-National Bank Home Price Index November
Teranet-National Bank Home Price Index which is like the Case-Shiller Index in the US, saw a decline from October to November. This was the 2nd monthly decline in a row. The C11 which measures 11 of the largest cities in Canada fell 0.28% monthly but increased 3.05% annually. A monthly decline in November has only occurred 4 times in the last 20 years. The index for Toronto declined 0.10% from October to November but increased 3.25% from November 2017 to November 2018. These prices are now 4.12% below the peak price achieved in July 2017.
OSFI Domestic Stability Buffer Increase
The Office of the Superintendent of Financial Institutions (OSFI) review the financial situation of the country and set a domestic stability buffer. This buffer is mandatory for charted banks designated as too important to fail, meaning it is an essential for the Canadian financial system. The level of buffer was 1.5% in April 2018, but OSFI will raise it to 1.75% in April 2019. OSFI says that risks from high levels of household debt relative to income, uncertainty in some housing markets, and increasing levels of corporate debt should require banks to become more cautious.
Household Debt to Disposable Income Ratio
CMHC, using Equifax Data, produced a report analyzing household debt to disposable income for the second quarter of 2018. On average, across Canada, the ratio is 171% which means for every dollar of disposable income, there is $1.71 of debt. The highest ratios are in Vancouver (242%), Toronto (208%), and Victoria (189%). The lowest ratios were in Saint John (106%), Sherbrook (132%), and Sudbury (133%). In comparison, the US has a ratio of 109% for the entire country. This is what economists, bankers, and many others are concerned about as interest rates continue to rise. How Canadians manage their debt level will determine if the economy will face a major or minor slowdown in the coming years.
TREB Commercial Statistics for November 2018
The Toronto Real Estate Board (TREB) reported that 1,782,401 square feet was leased for the month of November. This includes industrial, commercial/retail, and office space. This figure is 23.9% lower than November 2017 as there are concerns in the automotive industry and the oil/gas industry. However, the unemployment rate remains near historic lows in the region. The average industrial lease rate climbed to $7.84, up 15.5% annually. Meanwhile, the average office lease rate climbed from $12.88 in November 2017 to $16.74 in November of 2018. Lastly, the average commercial/retail lease rate increased from $22.64 to $23.64 (4.5% increase).