Sunday, December 1, 2019

Tarion adds new protection for condo buyers

Condo buyers in Ontario will get greater protection following the announcement of new requirements by the province’s home warranty provider.

Tarion says the new measures will help educate and inform prospective homebuyers and will include the addition of new search tools on Tarion’s Ontario Builder Directory and a new detailed information sheet highlighting the potential risks of purchasing certain types of pre-construction condominiums.

“The purchase of a new home is often the most important one that many Ontarians will make,” said Tarion’s President and CEO Howard Bogach. “At Tarion, we’re doing our part to ensure that these purchases are guided by a thorough understanding of the risks, builder history, and status of a given project. The initiatives that we’re announcing today will contribute to a better informed purchasing process.”

The new mandatory disclosures will be effective from January 1, 2020, and will ensure that potential buyers are aware of several key risk factors including:
  • pre-construction condominiums come with the risk that they may never be completed;
  • early termination conditions that would allow a developer to cancel a project; 
  • information about the status of the development (e.g., formal zoning approval, relevant approval authority and date of commencement of construction);
  • information about any restrictions on the developer’s land title that may prevent the project from going forward; 
  • a purchaser has an initial 10 days under the Condominium Act, 1998 to cancel a sales agreement; and
  • the expected date when a purchaser can take occupancy.
The new information sheet will be required for all agreements of purchase and sale for units where the purchase agreement for the project or phase of the project is signed after January 1, 2020.

However, leasehold, common element and vacant land condominiums are excluded from the requirement.

Thursday, November 21, 2019

Tarion adds new protection for condo buyers

Condo buyers in Ontario will get greater protection following the announcement of new requirements by the province’s home warranty provider.
Tarion says the new measures will help educate and inform prospective homebuyers and will include the addition of new search tools on Tarion’s Ontario Builder Directory and a new detailed information sheet highlighting the potential risks of purchasing certain types of pre-construction condominiums.
“The purchase of a new home is often the most important one that many Ontarians will make,” said Tarion’s President and CEO Howard Bogach. “At Tarion, we’re doing our part to ensure that these purchases are guided by a thorough understanding of the risks, builder history, and status of a given project. The initiatives that we’re announcing today will contribute to a better informed purchasing process.”
The new mandatory disclosures will be effective from January 1, 2020, and will ensure that potential buyers are aware of several key risk factors including:
  • pre-construction condominiums come with the risk that they may never be completed;
  • early termination conditions that would allow a developer to cancel a project; 
  • information about the status of the development (e.g., formal zoning approval, relevant approval authority and date of commencement of construction);
  • information about any restrictions on the developer’s land title that may prevent the project from going forward; 
  • a purchaser has an initial 10 days under the Condominium Act, 1998 to cancel a sales agreement; and
  • the expected date when a purchaser can take occupancy.
The new information sheet will be required for all agreements of purchase and sale for units where the purchase agreement for the project or phase of the project is signed after January 1, 2020.
However, leasehold, common element and vacant land condominiums are excluded from the requirement.

Sunday, November 17, 2019

No signs of overheating in the GTA's new home market

The beginning of fall typically marks the start of a busy season for the new home market in the Greater Toronto Area, and 2019 was no different. 

According to the Building Industry and Land Development Association’s monthly new home market report, there were 3,061 new home sales across the GTA in September 2019, which is 73% higher than the same month a year ago. Altus Group, BILD’s trusted source for new home market intelligence, says this is 6% above the 10-year average. 

New condo sales increased 39% with 2,107 sales in September, which is 12% above the 10-year average, while new single-family home sales went up a whopping 283% year-over-year with 954 sales. While there were many single-family home sales, the total for the month was still 5% below the 10-year average, which actually isn’t that low considering August 2019 single-family sales were 39% below the 10-year average.  

“September provided additional evidence that the new home market in the GTA is recovering nicely from last year’s slump,” says Patricia Arsenault, Altus Group’s Executive Vice President, Data Solutions. “The degree of improvement in both new home sales and new project openings this year has been contained, however, and there are no signs of overheating in the market.”

August is usually slow because builders are planning openings for September and October. There were many new launches in September, bringing the new home inventory in the GTA up to 18,745 units. It’s good to see inventory increasing along with sales because the GTA is in need of more supply as more and more families choose to move to the region. 

“While new home sales and inventory have been increasing, the GTA continues to experience a significant housing supply crunch,” says David Wilkes, BILD President & CEO. “We must continue to focus on the supply side of the housing equation to address this generational challenge for the long term.”

The average price of a new single-family home in the GTA in September 2019 was $1,081,175, which is 3.4% lower than a year ago. Though the average price fell slightly, most families in the GTA still can’t afford a new home priced higher than $1 million. 

As the average price of a new single-family home continues to drop slowly, the average price of a new condo in the GTA has jumped once again, this time by 6.5%, hitting $841,159. If the price gap between single-family homes and condos continues to decrease, we may see some buyers deciding to save slightly longer in order to buy a single-family home instead of a condo.

Tuesday, August 13, 2019

GTA condo apartment sales up 3.2% in the second quarter

The market for condo apartments remained strong in the Greater Toronto Area in the second quarter.

Greater Toronto Realtors reported 7,038 sales of condo apartments through the Toronto Real Estate Board’s MLS in the three months, up 3.2% compared to a year earlier.

New listings for the sector were down 3.5% year-over-year to 11,110; and the average price gained 5.1% to $589,887, although in the City of Toronto (70% of transactions) the gain was  5.9% to $639,316.

“As has generally been the case in the region since the implementation of the Ontario Government’s Fair Housing Plan in 2017, the condo market segment has remained tight in comparison to other major housing types. However, from a price point perspective, condo apartments continue to offer prospective buyers a relatively affordable housing option when looking across the GTA,” said TREB president Michael Collins.

Rental market also tight

In the rental market, average rents for one-bedroom and two-bedroom apartments increased above the rate of inflation on a year-over-year basis in Q2 2019 as the market remained tight.

“However, we have seen an acceleration in the number of units listed for rent, which has provided renters with more choice in the market place and has coincided with a slower pace of average rent growth over the past year,” said Jason Mercer, TREB’s Chief Market Analyst.

Wednesday, August 7, 2019

TREB Releases July Market Figures

Toronto Real Estate Board President Michael Collins announced that Greater Toronto Area REALTORS® reported 8,595 sales through TREB’s MLS® System in July 2019. This result was up by 24.3 per cent compared to July 2018. On a month-over-month basis, sales were up by 5.1 per cent, after preliminary seasonal adjustment.

New listings entered into TREB’s MLS® System in July 2019 were up compared to July 2018, but by a much lesser annual rate than sales, at 3.7 per cent. With annual growth in sales far outstripping annual growth in new listings, market conditions clearly tightened compared to last year.  Active listings at the end of July were down by 9.1 per cent year-over-year, further reflecting tightening market conditions.

“While the OSFI mortgage stress test has clearly had an impact on the number of home sales over the last year-and-a-half, for most GTA residents the goal of home ownership has not diminished.  In fact, we’re seeing growing pent-up demand for ownership housing, especially as the number of GTA households continues to increase by 40,000 to 50,000 each year due to strong population growth.  As more and more households come to terms with the stress test and move back into the market in the coming months and years, they could suffer from a chronically under-supplied marketplace and an acceleration of home price growth to unsustainable levels. Fortunately, policy makers have acknowledged the housing supply issue and are working toward solutions,” said TREB CEO John DiMichele.

“On the housing supply issue, it has certainly been encouraging to see both the City of Toronto and the Ontario Government working on solutions to bring more supply on-line.  Based on Mayor John Tory’s motion, Toronto City Council gave City staff a strong mandate to report back on how to develop a greater diversity of housing options in traditional single-family neighbourhoods, including timelines.  Similarly, we’ve seen the Provincial Government launch consultations to spur on, and speed up, the development of different forms of housing in conjunction with their ‘More Homes, More Choice’Plan. TREB looks forward to working with the City and the Province to turn their initiatives into reality,” said TREB President Michael Collins.

As market conditions continued to tighten in July, the average selling price increased by 3.2 per cent on a year-over-year basis to $806,755.  The MLS® Home Price Index Composite benchmark was up by 4.4 per cent.  Higher density home types continued to drive price growth, whereas detached home prices remained down in many communities throughout the GTA.

“Broadly speaking, increased competition between buyers for available properties has resulted in relatively strong price growth above the rate of inflation for semi-detached houses, townhouses and condominium apartments.  However, the single-detached market segment, which has arguably been impacted most by the OSFI stress test, has experienced a slower pace of price growth, with average detached prices remaining lower than last year’s levels in some parts of the GTA,” said Jason Mercer, TREB’s Chief Market Analyst.