CMHC changed forecasts for housing starts in Canada for 2013, 2014

Canada Mortgage and Housing Corp. has tweaked its 2013 and 2014 forecasts for housing starts.

CMHC now expects slightly more housing starts this year and slightly fewer in 2014 than in the previous outlook issued in August.

That will result in a period of relative stability, although both years will be slower than 2012, when there were 214,827 housing units started.

The new forecast is for between 179,300 and 190,600 units this year, with a mid-point of 185,000 units.

That's up from the previous 2013 forecast of 182,800 starts - an increase of 2,200 that is almost offset by a lower forecast for 2014.

CMHC's new 2014 range is 163,700 and 205,700 units, or 184,700 at the mid-point, down 1,900 from 186,600 units in the August forecast.

Price growth next year is expected to be in line with inflation, with the average price of houses sold over the Multiple Listing Service in 2014 coming in at $385,200, compared to $378,000 this year, the Crown corporation says in its latest housing market outlook.

CMHC expects that the number of homes sold over the MLS this year will come in around 456,700, which is about the same as 2012, when 454,005 homes changed hands. It forecasts a rise in sales to 468,200 units next year, with sales rising in the first half of 2014 then moderating during the latter part of the year.

Sales have defied expectations this year. At the start of the summer nearly all economists were predicting a decline in sales for 2013, but the market has since rebounded.

Likewise, housing starts, while generally slowing, have been higher than anticipated. CMHC said Thursday it is anticipating starts to be stable next year, around 184,700 units, compared to 185,000 this year and 214,827 in 2012.

While factors such as employment growth and migration are continuing to support the housing market, "in the new home market, builders are nevertheless expected to limit the number of housing starts while inventories of unabsorbed units, completed and under construction, are drawn down," Mathieu Laberge, deputy chief economist of CMHC, said in a press release. "In the resale market, home buyers have been motivated to advance their purchases and lock-in pre-qualified mortgages given the recent moderate increase in mortgage rates. It is expected that existing home sales will increase modestly in 2014 with improving economic conditions."

It has been difficult to make accurate predictions about the Canadian housing market in recent years. The government has been taking steps to cool it off, and economists have been surprised by its resiliency.

In June CMHC was forecasting a 1.6 percent increase in average prices this year and roughly 443,400 sales.

Its current forecast for starts is also slightly higher than in June, when it expected about 182,900 units to get under way this year. bnn.ca

CANADIAN HOME PRICES IN JULY 2013

The Globe and Mail report says, that home prices in Canada increased in July, reaching a record high, but the slower monthly growth in prices hints at the possibility of the housing market, presently at a strong point, may once again be cooling. This was revealed  through analytics on the Teranet-National Bank Composite House Price Index. The metric is a measurement of price changes for repeat sales of single-family residences, and for July, prices increased 0.7 percent from the month of June. This represented the fifth monthly increase in a row and a higher increase than in June from May, but was modest in comparison to the gains made in previous months. Year-over-year, the index is up by just 1.9 percent from July 2012 numbers. The statistics above are congruent with previously released analytics that suggest Canada’s housing market has indeed recovered after the launch of more stringent mortgage policies in July of last year.  A few economists are still forecasting a burst of the housing bubble akin to that in the U.S., but a rally in sales in the spring months point to what can be called a “soft landing” in analyst parlance. Canada Mortgage and Housing Corp. said in July that, because of the weakness during the first half of this year, it forecasts about 448,900 sales of existing homes during 2013, down from 453,372 last year. But it expects sales to rise to about 467,600 units next year, with prices growing at roughly the same rate as inflation. Royal Bank of Canada economist Robert Hogue said the next major test the market now faces will be in late 2014, when interest rates will likely rise at the same time as a large number of newly built condos come on stream. While the market appears to be on a modest upward trajectory for the moment, there are some factors that could weigh on it this year. Mortgage rates are likely to trend up. The job market could continue to be worse than expected. And CMHC says that “lower population growth among the 25-to-34-year age group … will moderate growth in the pool of first-time home buyers.” “Higher mortgage rates of late have led to some erosion in affordability,” Toronto-Dominion Bank economist Sonya Gulati wrote in a research note. “This should keep a lid on sales growth in the second half of the year, but positive annual sales gains are slated for 2014.”There also remains the possibility that if the market shows too much of a resurgence, the government will act to rein it in again. “Sales dropped sharply in August last year, so we may see some year-over-year increases in sales and average prices next month that would reflect weakness in the rear view mirror,” said Gregory Klump, chief economist of the Canadian Real Estate Association. “Canadian home sales have staged a bit of a recovery in recent months after having declined in the wake of tightened mortgage rules and lending guidelines last year, but the numbers for July suggest that national activity is levelling off at what might best be described as average levels.” Home sales in the first seven months of this year are 4.6 per cent below the first seven months of 2012. The average selling price of existing homes in July was $382,373, up 8.4 per cent from a year earlier. CREA said much of that is because of the resurgence in Vancouver and Toronto, which tend to be pricier markets. The MLS Home Price Index, which attempts to adjust for any change in the type or location of homes that are selling, was up 2.7 per cent. That’s a slightly faster pace than the 2.3-per-cent annual increase in June. “A tightening [though not yet tight] market balance has put a floor under average prices, with 23 of 26 cities posting gains in the past year,” Bank of Montreal economist Robert Kavcic wrote in a research note. Calgary, Winnipeg and Edmonton were among other markets that saw significant year-over-year sales increases last month, while Ottawa, Halifax and Montreal posted declines.

Toronto real estate in January 2012

     Canadian housing starts unexpectedly retreated in the first month of 2012 as a result of considerable decline in urban single units and slowdown in multiples. The seasonally adjusted annual rate of starts decline 1 percent to 197,900 units in January from 199,900 units a month earlier, Canada Mortgage and Housing Corp. reported today. From a year earlier, Canadian dwelling starts increased 18.3 percent in January 2012 compared to a gain of 20.6 percent in December 2011.

       The pace of housing starts slowed slightly in January but remained robust during an unseasonably warm winter, according to data from Canada Mortgage and Housing Corp. Strong homebuilding activity will likely to be a boon to the Canadian economy in the short term, but could also signal overbuilding that could wreak havoc in the longer term, economists warned Wednesday.

     The seasonally adjusted annual start rate — which smooths monthly variations — was 197,900 units in January, down from 199,900 units in December, the CMHC reported. "While housing continues to surprise on the upside, we caution that this pace of homebuilding is unsustainable," said TD economist Diana Petramala.

     January's one per cent decline was mainly because of sharp decreases in Quebec and Atlantic Canada — regions that posted big gains in the month before. Builders have been able to continue construction during the winter season, which has been noticeably warmer and largely snow-free in many parts of the country.

      Low borrowing rates — tied to persistent economic uncertainty — appear unlikely to rise any time soon, which has propped up demand for homes. At the same time, home prices have risen sharply as buyers rush in to take advantage of those low mortgage rates and compete for homes, making ownership less affordable for some. Senior government officials have issued repeated warnings about the implications of taking on too much debt when mortgage rates inevitably rise.

      Still, the January report was good news for Canada's economy because the housing sector makes up a sizable portion of GDP and an influx of building has contributed to a run up in construction jobs in the latest jobs report.

      Based on the high level of building permits approved in December, construction could trend even higher in the months ahead, said David Madani of Capital Economics. "The large amount of work under construction is broadly consistent with the elevated level of construction employment as a share of total employment. This is a stark reminder of just how important strong housing investment is for the broader economy."

      The report is a good indication that housing activity will continue to support GDP growth in the first quarter of 2012, said TD economist Diana Petramala. However, overall weakness in the job market since July —the unemployment rate now sits at 7.6 per cent —could put a damper on demand later this year and the market appears to be "slightly overbuilt and overpriced," she warned.

      In line with a recent trend, January's strength was concentrated in the multi-unit, or condo sector, which has been identified as most at risk of a downturn because of a potential glut of supply that could outpace demand. Multi-unit starts increased 0.4 per cent, while single family home starts fell 7.8 per cent — their lowest level since May.

      Housing construction is outpacing the levels demanded by demographic fundamentals such as the level of new household formation — especially in the condo market. "The result has been a large over hang of newly built and unoccupied multiple units, putting significant downside risk to home building once interest rates begin to rise," Petramala said.

      Madani also said he remains concerned about overbuilding and the "rising likelihood of a housing slump down the road." Given that developers usually begin construction with only about 60 to 70 per cent of units sold, the recent strength in multi-unit starts suggests there could be a glut of newly completed, unoccupied condo units, he said. "This is just one sign of a housing investment boom that has gone too far."

      While January's figures reflect that construction is settling into a healthy pace, there were some specific regional and sectoral trends that underlie the data, BMO economist Robert Kavcic said. Most prominent of those trends is the booming Ontario market, where condo building has been strongest in the past few months, the level of multi-unit building is just slightly below the all-time high set in late 2008, he said.

      The CMHC data showed the seasonally adjusted annual rate of urban starts decreased by 2.8 per cent to 176,600 units in January, with single starts down by 7.8 per cent and multiple starts up 0.4 per cent.

Urban starts decreased by 35.4 per cent in Atlantic Canada and by 34.4 per cent in Quebec on a seasonally adjusted annual rate. Those sharp declines followed particularly robust gains in those regions in December. From GlobalEdmonton.com

CANADIAN BANKS INCREASED FIXED RATE MORTGAGES

The major Canadian banks - CIBC, RBC Royal Bank and TD Canada Trust have increased fixed rate mortgages by 0.25 percentage points to 5.44 per cent. 

The banks increased it's one-year fixed rate mortgage 0.15 percentage to 3.5 per cent.

The mortgage rates are affected by bond yields. which have also risen as a result of concers over inflation. 

There are no changed to other rates.

The new rates already came into effect. 

If you need mortgage or refinancing, try to get pre-approval right now, before additional rates increases.

The best way to do it is to call Centum mortgage agent Alex Malkhassiants at (416) 723-9383.

Centum has the best and lowest Canada mortgage rates on a wide range of products.

Term	Our Rate	Bank Rate
3 Yr Fixed	3.80%	4.35%
5 Yr Fixed	4.04%	5.44%
Variable	2.10%	3.00%

Updated : February 10, 2011

Reports say that households in Ontario are vulnerable to interest rates hikes. That's why you should think about pre-approval before start searching for Ontario real estate or the house in Ontario.

Alexandre Malkhassiants, Sales Representative & Mortgage Specialist,
Right At Home Realty Inc.,  Real Estate Brokerage
Office: (416) 391-3232
Cell: (416) 723-9383
E-mail: amalkhass@rogers.com
Web site: Toronto real estate
Web site: Ontario real estate
Blog: Lowest Canada mortgage rates

Toronto real estate. Canadians are more cautious with debt

Consumers are more “prudent” with credit after racking up a record amount of household debt earlier this year. Gerry McCaughey, chief executive officer of the Canadian Imperial Bank of Commerce, said he is confident that Canadians remain capable of keeping up with their payments – despite much hand-wringing in recent months about skyrocketing household debt.

The slowdown in mortgage lending is positive even though it means weaker loan growth for banks. “I think the consumer probably is taking a pause and acting in a prudent fashion, and that’s what’s driving this slowdown in the housing market,” McCaughey said.

Toronto real estate. CANADA'S CONSTRUCTION STARTS

Total construction starts in Canada through July of this year were up 73 per cent in square footage and up 70 per cent in dollar volume versus the first seven months of last year, according to CanaData figures.

The residential component was up 87 per cent in square footage and up 84 per cent in dollars.

Non-residential building was up 48 per cent in square feet and up 21 per cent in dollars, while engineering was up 16 per cent in dollars.

The residential strength corresponded with starts as reported by Canada Mortgage and Housing Corp.

The single-family-home market is expected to weaken considerably in the second half of this year, due to harmonized sales tax introductions in Ontario and B.C., as well as interest rate increases and poorer resale markets.

“What is driving the multiple-unit market remains a mystery,” says CanaData chief economist Alex Carrick in his latest report.

“New major condo projects continue to be initiated, but the inventory of unsold units is more than double what it should be, according to historical averages. A serious correction seems all but inevitable.”

In non-residential building work, commercial starts are about even with last year.

Industrial construction starts have all but disappeared (down 61 per cent in square feet and down 95 per cent in dollars). dcnonl.com

Toronto real estate. CANADA HOME PRICES INCREASED

Canadian home resale prices rose for a 13th straight month in May, the longest streak since September 2006, the Teranet-National Bank Composite House Price Index showed.

The monthly gain of 1.3 percent was led by a 2.3 percent increase in Ottawa, followed by 1.8 percent in Montreal, according to a report today by National Bank Financial. Overall prices rose 13.6 percent from May 2009. The index has tracked home-price changes in six Canadian cities -- Calgary, Halifax, Montreal, Ottawa, Toronto and Vancouver -- since February 2000.

Housing investment should slow through this year and into 2011 after spending was pulled forward by low mortgage rates and temporary tax credits, the Bank of Canada said July 22. The central bank raised its key lending rate for a second month to 0.75 percent on July 20 and said further action would be “weighed carefully” against an economic recovery.

Alexandre Malhassiants is an active mortgage professional with Centum Mortgage Inc.  and sales representative. Have a question? Please e-mail amalkhass@rogers.com or call 416- 723-9383.

FORECLOSURE IN CANADA: YES OR NO?

Canadians will be spared a U.S.-style wave of foreclosures when the housing market corrects and interest rates rise, according to a report from DBRS Ltd. examining Canada’s $1-trillion mortgage market.

DBRS expects housing prices to fall and acknowledges that the soaring trajectory of consumer debt is worrying. But the debt-rating firm’s study nonetheless paints a picture of a home lending business that is on much more stable footing than the one in the U.S. before its bust.

For that reason, any housing correction in Canada is likely to have a muted effect on the financial sector, nothing like the systemic problem that the U.S. downturn created by crippling banks and mortgage insurers.

“You’re not likely to have factors supporting further [home] price increases; you could have factors leading to price corrections, but they shouldn’t be anywhere near the scale we’ve seen in the U.S.,” said study author Jerry Marriott, who specializes in rating mortgage-backed bonds for DBRS.

“There are just some fundamental characteristics of the Canadian market that make lending in Canada less risky than in the U.S. – a combination of the fact that the banks have continued to use prudent underwriting and maintained better capital ratios.”

The report echoes the conclusions of major banks such as Canadian Imperial Bank of Commerce and Toronto-Dominion Bank. They also call for moderate cooling in house prices after their long runup, as more homes come on the market and higher rates and prices force some buyers out of the market.

CIBC World Markets economist Benjamin Tal said this week that prices might fall by as much as 10 per cent in the next two years, but that a “violent” correction like the United States experienced remains unlikely. TD Bank recently put out a report predicting prices could fall by 2.7 per cent in 2011.

If a correction happens, Mr. Marriott said that it’s unlikely Canadian banks will have to foreclose on many mortgages, saving Canada from one of the factors that exacerbated the U.S. plunge, when banks seized homes and tried to sell them at vastly reduced prices.

Laws in Canada are more lender-friendly, forcing people to keep paying mortgages, and banks were more careful about who they lent to.

Canadians are also less likely to end up under water – owing more than their home is worth – because they generally have more equity in their homes. For the decade and a half leading up to the U.S. housing bust, U.S. borrowers had “consistently” less equity than Canadians, by 8 per cent on average, DBRS found.

What’s more, DBRS argues that while Canadians are racking up debt at a fast pace, they are nowhere near as indebted as some analysts assert, and much less in hock than Americans, so should better be able to handle the stress of higher rates or a housing correction.

While the widely watched measure of debt-to-personal-disposable income shows that Canadians are more indebted than Americans, DBRS argues that the gauge should be adjusted to reflect differences in the two countries, such as the fact that Americans pay lower taxes but have to pay health-care bills out of pocket.

When that’s taken into consideration, at “the end of 2009, Canadian households remained financially less leveraged by 10 per cent to 45 per cent compared with U.S. households,” the report said.

“The Canadian market has been doing just fine, but it is not without risk, and [showing that] is what we’re trying to do in this study,” Mr. Marriott said. CTV.ca

Most Canadians are `comfortable' with mortgage debt

Eighty-one per cent of homeowners surveyed by the Canada Mortgage and Housing Corp. say they are comfortable with their current level of mortgage debt.

The online survey of more than 2,500 homeowners also found that 68 per cent ``feel there is a strong chance they will pay off their mortgage sooner than required'' and 27 per cent said they have ``already taken steps to pay down their mortgage through lump-sum payments or through increased regular payments, '' according to the federal agency.

Meanwhile, CMHC said its annual survey found that 89 per cent of first-time homebuyers used the Internet to get information about mortgages and 84 per cent researched mortgage terms and conditions online.

Toronto real estate. TORONTO REAL ESTATE MARKET UPDATE

Record breaking warm temperatures in March helped bring out buyers during the first two weeks of the month.

The Toronto Real Estate Board reported 4,353 existing home sales, up 70 per cent from the same time last year, when the market was in recession.

But sales were also strong enough to break the mid-month peak set in March of 2006 by 16 per cent, according to the board.

“The spring-like weather in the first half of March brought the first green sprouts of the recurring spring market,” said board president Tom Lebour.

The average price for March mid-month transactions was $440,153, up 20 per cent over last year.

Some good news for buyers was that new listings improved by 34 per cent over last year.

“Look for double digit price increases to cease later in 2010, as new listings rebound from the low levels experienced in 2009,” said Jason Mercer, TREB’s senior manager of market analysis. “Increased listings will give buyers more choice, resulting in less upward pressure on home prices.”

If you want to know more about Toronto real estate, call sales representative and mortgage agent Alexandre (Alex) Malkhassiants, Right at Home Realty,  with all your questions: (416) 723-9383 (cell).

Toronto real estate. Countdown begins to interest rate hikes

The Bank of Canada took its first steps in March toward returning the country to more normal interest rate levels by signalling a more hawkish tone on inflation and acknowledging the economy is performing better than expected on "vigorous" consumer demand.

The messages were conveyed in the Bank of Canada's latest interest-rate statement, which kept its record-low benchmark rate of 0.25% as is and pledged to keep it there until July. But most bank watchers took note of subtle changes in the statement, compared with previous rate announcements, and there was enough there for them to begin the countdown to rate hikes.

"I suspect [governor] Mark Carney and company are starting to feel the urge to tighten -- not a strong urge now, but an urge nevertheless," said Michael Gregory, senior economist at BMO Capital Markets.

Among the key changes was a declaration from the bank that the risks to its inflation outlook are "roughly balanced," and no longer "tilted slightly to the downside" -- language that suggests deflation is no longer a concern and that price increases are creeping up to a level that may prompt a response. (The central bank sets its interest rates to ensure inflation remains at 2%.)

The wording change may appear trivial, "but it is nonetheless significant as it reflects an economic backdrop that continues to improve at a much faster pace than what the bank had envisaged," said Paul-André Pinsonnault, senior fixed-income economist at National Bank Financial.

The rate statement emerged a day after economic data indicated the Canadian economy grew at a robust 5% annualized pace in the final three months of 2009, blowing past market expectations for a 4% gain and the central bank's original 3.3% forecast. Economists say the fourth-quarter performance has set the stage for another robust gain, of perhaps 4% or more, for the first three months of 2010.

Meanwhile, recent data indicate that both the headline and core inflation rates have moved much closer to the 2% level than the central bank had expected. Under the bank's forecast, the 2% level would not be reached until the third-quarter of next year.

In the statement, the central bank acknowledged economic activity has been "slightly higher" than its own projections, with the 5% gain in the fourth quarter powered by "vigorous domestic demand" and a recovery in exports.

Using the adjective "vigorous" caught the eye of some analysts, such as Mr. Gregory. "That implies a strong unleashing of demand pent-up during the recession, with the credit creation process critical to this unleashing.

"In other words," he added, "low interest rates are doing their job in stimulating demand -- perhaps, increasingly, too well."

Mr. Pinsonnault noted the bank also dropped any reference to "considerable" excess supply, an indication, he said, that the slack in the economy is being absorbed at a faster pace than the central bank anticipated.

The consensus remains that the central bank will wait until July to begin raising rates, but the bank used Tuesday's statement to begin building its case. There are two more scheduled rate decisions between now and then, with one April 20 and then June 1.

"What we saw [Tuesday] was one of many steps aiming at moving away from dovish statements to relatively more hawkish ones. This gradual movement comes naturally well before an actual tightening in monetary policy," said Sébastien Lavoie, economist with Laurentian Bank Securities.

His firm believes rate increases will begin in the third quarter, but he said the odds have increased that the first hike will be in July as opposed to September.

How much, and how rapidly, the central bank raises rates beginning in July is up for debate, with economists estimating increases of 100 to 150 basis points in the second half of 2010. Financial Post

If you want to know more about Toronto real estate, call sales representative and mortgage agent Alexandre (Alex) Malkhassiants, Right at Home Realty,  with all your questions: (416) 723-9383 (cell).

Toronto real estate. February record sales activity jumps 74 per cent in Toronto

The Greater Toronto Realtors reported a 74 per cent increase in sales for the first two weeks of February compared to last year, when the recession hit hardest.

There were 3,555 sales through MLS during the first half of this month, compared to 2,0044 during the same period in 2009. This month's activity was even 7.7 per cent higher than the previous record in 2006.

"Home ownership demand remains strong in the GTA, as households remain confident that economic recovery is at hand and that ownership housing will continue to be a quality long-term investment," says Tom Lebour, president of the Toronto Real Estate Board.

Accordingly, the increased activity has led to higher prices as well. The average price for February mid-month transactions was $429,997, up 18 per cent from 2009. That's also drawn more sellers out hoping to cash in. New listings with the Toronto Real Estate Board's boundaries were up 15 per cent to 6,212.

The board's senior market analyst Jason Mercer says double-digit price increases wil continue through the first quarter of the year.

"However, as new listings continue to increase,  creating a better supplied market, we will see the annual rate of price growth moderate into the single digits," says Mercer.

Harmonized Sales Tax ( HTS) : Good News and Bad News

I would like to share the following information with you regarding the New Ontario Harmonized Sales tax which is effective July 1, 2010 (it’s a combination of PST and GST in one - 13% in total)

            It is not going away, so we will have to learn how to deal with the issue and build it into our day-to-day affairs and budget.

• The bad news is that is will increase the cost of certain items ( i.e. gas , utilities and much more below )


• The good news it that it will create credits where there were none before. I.e. In the past, if someone who is running the business had to pay GST on an item , that permitted the individual to claim that GST paid on their return as credit. When it came to PST there was a different protocol; PST could not be claimed as a credit. Under the new HST that will change. Identical to the way GST allows  to claim an input tax credit on items purchased for the purpose of carrying on business, this will now apply to the entire HST.


• In the past there were certain items that were subject to PST or GST alone, now everything will be charged both.


• Where there were rebates before, there will be rebates now.


• As far as real estate concerned the tax will apply to various aspects of the transaction. This will include charges for real estate commission, home inspections, legal services, high ratio mortgage insurance premiums, fire insurance premiums, moving costs, appraisal fees, surveys etc.


• Under the new regime, buying a house where the appliances are included will result in additional tax.

      Gifts from the Government:

• The budget of March 2009 contemplates providing a once only credit to businesses of up to $1000.00 where the business has less than $2,000,000.00 in annual revenues from HST taxable sales.


• Single parents and couples with incomes of less than $160,000.00 will be entitled to a payment of $1,000.00  and finally single individuals earning less than $80,000.00 will be entitled to receive a one time payment of $300


• The budget also provides for annual payments to low-income individuals and families of up to $260.00 with incomes of less than $25,000.00

Alexandre Malkhassiants, Sales Representative & Mortgage Specialist,
Right At Home Realty Inc.,  Real Estate Brokerage
Office: (416) 391-3232
Cell: (416) 723-9383
E-mail: amalkhass@rogers.com
Web site: www.torontogreathomes.com
Toronto real estate market blog: http://torontorealestate.wordpress.com/

Toronto real estate. TORONTO REAL ESTATE MARKET CONTINUE TO SURPRISE

Perhaps it was those uncharacteristically high temperatures that had homebuyers out in droves in the first two weeks of November. Certainly, they had gotten over the doom and gloom of the first two weeks of last November.

According to the Toronto Real Estate Board, realtors reported 3,666 sales, a staggering 84% up on the same period last year. Prices year-over-year rose a more modest, but still impressive, 10% to hit an average of $415,066.

"Increased interest in ownership housing has been widespread throughout the GTA and across all housing types," notes TREB president Tom Lebour in a release. "However, it is important to point out that we are now making comparisons to the fall of 2008 when we experienced a marked decline in sales and average price."

The numbers for year-to-date sales also rose a healthy 11% compared with the same period in 2008, to reach 78,233. The average price for this period was $393,180 a 3% rise over the same period last year.

"Sales and average price in the GTA this winter will be well above levels reported throughout the fourth quarter of 2008 and the first quarter of 2009," notes Jason Mercer, TREB's senior manager of market analysis in a release.

Across Canada, sales had increased in the month of October. According to numbers from the Canadian Real Estate Association, home sales activity through the Multiple Listing Service was the highest ever for an October. The Canadian real estate boards reported 42,288 residential sales, a 41.5% hike over the same month last year. The year-to-date total rose to 401,124, a 1.6% increase on the same period last year.

The average sale price in October was $341,079, a 20.7% rise on last year.

"Low interest rates and upbeat consumer confidence continue to release the pent-up demand that built late last year and earlier this year," notes CREA president Dale Ripplinger in a release. "The release of that pent-up demand has boosted national sales activity to new heights and is drawing down inventories."

The marked rise in resale housing demand has continued to reduce inventories of unsold homes. In October, MLS had 194,994 homes listed for sale, down 20.8% on the same month last year.

New homes in the GTA's 905 region have also skyrocketed, with home builders showing a 173% increase in low-rise sales for the month, compared with October 2008.

Activity may have been on the rise in Canada, but south of the border where tentative signs of recovery had been evident, October housing starts and building permit numbers came as a rather nasty shock.

Builders' sentiment also remained rather gloomy. The National Association of Home Builders/Wells Fargo Housing Market Index showing builder confidence in the market for newly built, single-family homes remained unchanged at the low level of 17 in November.

Residential housing starts for last month, released by the U.S. Department of Housing, plunged an unexpected 10.6% from September, coming in at a seasonally adjusted annual rate of 529,000. That's 30.7% down on the October 2008 rate. The rate for single-family housing starts in October was 476,000, a 6.8% decrease from September. Multiple family units also fell 15.2% month-over- month in October to reach 89,000 units. These numbers bring construction to the lowest level since April.

Building permits in October, required long before construction begins, were also down. Overall permits fell 4% from September to a seasonally adjusted annual rate of 552,000. This is 24.3% down from October last year. The single- family permits component inched down 0.2% month-over-month to reach a rate of 451,000 in October. However, permits for multiple units were up 6% month-over- month to 123,000.

Analysts found some positives.

"There will still be people buying homes, either for the first time or moving up, thanks to the extended and expanded government tax credit," notes Jennifer Lee, economist, manager at BMO Capital Markets. "But in the meantime, it will take a while before residential construction begins to contribute meaningfully to growth."

If you want to know more about Toronto real estate, call sales representative and mortgage agent Alexandre (Alex) Malkhassiants, Right at Home realty,  with all your questions: (416) 723-9383 (cell).

Toronto real estate. Healthy Toronto housing market seen in 2010

Toronto's housing market will stay healthy next year as new home groundbreakings in Canada's most populous city jump even as existing home sales cool, said the Canada Mortgage and Housing Corp.

The federal government agency expects a 26-percent rise in housing starts next year to 36,140 units.

But existing home sales are expected to dip to 78,000 in 2010 from 82,000 this year. Still, CMHC expects average prices to rise by 5 percent, which is in line with the annual average for this decade.

The agency said that while overall demand for home ownership is expected to moderate next year, households with stable employment will take advantage of improved affordability.

Housing has been a rare bright spot as the Canadian economy struggles to emerge from recession. Toronto has seen an upswing in housing activity in recent months, helped by low mortgage rates.

The Bank of Canada cut interest rates to a record low this year and conditionally pledged to keep them there until at least the end of the first half of 2010.

Toronto real estate: Variable mortgage rates can save you money

Fixed mortgage rates may help you feel secure in your budgeting, but the Bank of Montreal says the more volatile variable rate mortgages will save you money in the long run.

A new report from the bank shows that, over the past 30 years, variable-rate mortgages have been more cost-effective about 82 per cent of the time.

That may come as a surprise to some after studies have shown many Canadians prefer a fixed-rate mortgage.

A fixed rate locks the borrower into a set interest rate for a certain period of time.

That gives many borrowers peace of mind knowing how much money to set aside each month for their mortgage payment.

Variable rates change along with interest-rate moves.

BMO said the Bank of Canada's overnight lending rate is at its lowest possible point now, which could mean there are fewer benefits to a variable rate in the foreseeable future.

BMO highlighted two historical periods when fixed rates were considered beneficial -- in the late 1970s and late 1980s -- and both were just before interest rates started rising again.

The bank added that the current interest environment is similar to both of these periods.

"Short-term rates are at extreme lows, and pressure is likely to build for higher rates in the year ahead," said deputy chief economist Doug Porter in the report.

"The question of whether to lock in to a longer-term fixed mortgage rate or stay in a variable rate has become an increasingly complex and important issue."

Canada has been in a long-term declining rate environment since the early 1980s, the bank suggested.

As a result, the spread between five-year fixed mortgages and variable mortgages has been pushed wider in recent years and is now near an all-time high.

If you want to know more about mortgages call Alex Malkhassiants, mortgage agent with Centim Inc, at (416) 723-9383 (cell).

Banks reaching out to help new Canadians buy a home

In the past, many immigrants to Canada came by sea – often landing at Pier 21 in Halifax. Nowadays, as a new Canadian, you are more than likely to touch down at Pearson International Airport after a journey of several hours rather than days or weeks.

    Either way, once on the ground, making a financial start has always been a tough route. Thankfully, today’s evolution of technology makes it easier to prove your creditworthiness in Canada, and to qualify for a mortgage in order to buy your first home here.

    "One of the key things … is credit. You have to find some sort of credit history," says Jim Rawson, regional manager of Invis mortgage brokerage firm in Toronto. "With the Internet, with easy access to information, we can now check credit from just about anywhere, so we can get credit histories much easier than we could in the past."

    As with any financial agreement, your credit status will determine how much you can borrow.

    "There are different kinds of qualifications, depending on how long you’ve been here and depending on whether you have a job or not, whether you’re landed immigrants or here on work permits," Mr. Rawson says. "But there are several lenders that have new-immigrant policies."

    Every country has its own customs and laws when it comes to home purchasing, and Canada is no different. Colleagues and friends can be a good source of recommendations for trusted accredited real estate agents, lawyers and mortgage brokers to guide you through the process.

     Canada Mortgage and Housing Corp. has also produced The Newcomer’s Guide to Canadian Housing, which includes a section on what to consider when buying a home in Canada – right from scoping out a location, to the documents required, to budgeting for the many expenses involved, and the process of making an offer.

    As well as the usual costs attached to home purchasing, as a new immigrant, you will need to add on the additional time and expense of obtaining proof of your immigration and financial status and maybe even fees for wiring money from your country of origin to cover the purchase deposit.

     Buying a home will likely be your largest financial commitment when you come to Canada, but it may not necessarily be the most complex purchase.

    "Getting a mortgage for a house was easier than getting a car loan," says Graeme Morton, who emigrated from Scotland to Guelph. "I had to get my colleague to counter-sign to get the car loan – which was less than $10,000.

    "And as for cellphones, they asked for so much proof as to who we were it was unreal. Obviously, houses are the less portable of the three!"

    If you do not have a credit history, then financial institutions with specific programs for immigrants, such as HSBC and Scotiabank, may help.

    "We have a program, where, even before they establish their Canadian credit history, new immigrants who are willing to put down a 30% downpayment will most likely be approved for 70% of their home purchase," says David Kuo, vice- president, retail branch network for HSBC, Ontario East.

     Mr. Rawson at Invis says that in the past, immigrants could have been required to have a larger deposit to secure a mortgage.

    "If you’re not landed [a permanent resident] you might be looking for a larger deposit," Mr. Rawson says. "But the insurers CMHC and Genworth have pretty decent new-immigrant policies that [allow for] high-ratio financing." kelowna.com

    If you want to know more about Toronto real estate, call sales representative and mortgage agent Alexandre (Alex) Malkhassiants with all your questions: (416) 723-9383 (cell).

Canada housing sales hit record in July

July housing sales across the country were the best on record for the month and the largest year-over year increase in two years, said the Canadian Real Estate Association.

The Ottawa-based group, which represents about 100 boards across the country, said there were 50,270 units sold via the multiple listing service last month. That's an 18.2 per cent jump from a year ago. It also marked the first time sales had topped 50,000 in July.

 "The difference in the resale housing market now, compared to the beginning of the year, is night and day and nowhere is this more evident than in the west," said Dale Ripplinger, president of CREA. "Homebuyers recognize that interest rates and prices have bottomed out, and are taking advantage of excellent affordability before prices and interest rates move higher."

A five-year fixed-rate mortgage, the most popular product among consumers, is still available for under four per cent at some financial institutions. Variable rate mortgages, tied to prime, remain in the three per cent range and are not expected to rise until June. The Bank of Canada has pledged not to change its lending rate until then — but it is not an ironclad guarantee.

The low rates seem to have worked and have the housing market even hotter than it was in 2007, a record year. July sales in 2009 were 3.9 per cent above the previous July high set in 2007.

It has been a stunning reversal for a real estate market that had almost ground to a halt over the winter. MLS sales on a seasonally adjusted basis have risen for six straight months and are up 61.2 per cent off the decade-low set in January. Sales are only off 1.4 per cent from the May, 2007 peak.

The strength in the market is being felt right across the country. Vancouver sales last were up 90 per cent from a year ago to lead the pack. Toronto sales climbed 28 per cent from a year ago and Edmonton sales rose 28 per cent during the same period.

With demand strong in the country's highest-priced markets, it is skewing average price but in the opposite way from what was happening when the market was slumping. The average price of a home sold on MLS last month rose 7.6 per cent from a year ago to $326,832.

Part of the pressure on prices is coming from a dearth of supply. New listings in July were down 13 per cent from a year ago to 73,444. It marked the seventh monthly year-over-year decline in new listings.

The overall supply of homes for sale on the MLS was down to 219,982 at the end of July, a 12.5 per cent decrease from 2008. Based on present activity, there is only 4.4 months of housing inventory in the mark. That's a sharp contrast to the 12.8 months of inventory available in January.

"Home sales through the MLS systems in July provide clear evidence that sentiment about making major purchases continues to improve," said Gregory Klump, chief economist with CREA. "Activity may level out over the rest of the year as home prices and mortgage lending interest rates creep higher. The number of new listings coming onto the market is down from last year and the rebound in sales activity is paring inventories, so the number months of inventory is on the wane. These trends are supporting average prices."

vancouversun.com

Celebrities and real estate. New home for Slumdog child star

The makers of the hit movie Slumdog Millionaire have bought a new house for one of the two child stars discovered in Mumbai’s slums.





The purchase of a 23m, one-bedroom apartment for the family of Azharuddin Mohammed Ismail, 10, was finalised on Monday, said Nirja Mattoo, who helps oversee a trust set up by the filmmakers to help Azharuddin and his 9- year-old co-star Rubina Ali.

’ “They can move in,” Mattoo said, adding that the trust planned to deliver the keys on Thursday.

Both children lost their homes last month when authorities demolished parts of their slum.

Mattoo said the trust was actively looking for a new home for Rubina.



Ownership of the first apartment, which cost about 2.5-million rupees (50000), will be transferred from the trust to Azharuddin when he turns 18, provided he completes school, Mattoo said.



“He has to complete an education. We are very clear about that,” she said. However, she declined to say what would happen to the property if he did not finish school.

The apartment is located in Santa Cruz West, a suburb of Mumbai just north of the slum where the two children now live.

The government has promised to give both of them new apartments, but the families have resisted, saying the government flats are too far away from their neighbours and school.

Toronto Real Estate Market Sets Records in early May 2009

There are more signs of stabilization in the local real estate market.

Interest rates are at a record low for a five-year, fixed-term mortgage, still the most popular product among homeowners. Some banks are offering rates as low as 3.75%, if the buyer locks in for a full five years. But variable rates, tied to prime, have also continued to drop as the Bank of Canada has lowered rates.

The average house price of a single family home in Toronto has reached record levels. Last year, in the first two weeks of May, right after the April peak, and long before the news of the stock market crash and the world financial crisis, single family homes were worth on average $437,205. Now, that number has climbed to $439,459, which is the highest recorded.

So, if you were waiting for prices to drop in half like they did in some locations in the United States, you’ve probably waited too long.

Prices are rising, not dropping. Vendors with exceptional properties didn’t list them this year. They were going to wait and watch the market. So, this is the time to see the better properties become available. These are the properties that buyers stretch for. These are the ones that vendors insist on the best price. If they get listed over the next six weeks, you’ll see a significant upward push in the price structure.

Why? The answer is simple! First mortgages are at their lowest rates in 50 years.

Here are some comparative figures for Toronto, the 905, and the entire GTA. While the 905 didn’t fare quite as well as Toronto, the performance is still quite outstanding. The first two weeks of May 2009 appear, compared with the first two weeks of May 2008 in brackets:

City of TORONTO (”416″)

Sales 1,864 (1,734)

Average Price $439,459 ($437,205)

Rest of GTA (”905″)

Sales 2,697 (2,688)

Average Price $372,408 ($377,344)

GTA

Sales 4,561 (4,422)

Average Price $399,811 ($400,817)

Oddly enough, and this situation occurs rarely; it is both a good time to buy and a good time to sell.

In the condo market as well, one of the G.T.A's top sellers, Brad Lamb tells The Sun there's never been a better time to buy with developers offering many incentives.

Lamb says the condo market survived the worst of the bank crisis last fall, and prices are expected to hold steady for the next year at least.