GTA New Home Sales Had Strong Q1

FRIDAY, 22 APRIL 2011 08:29 

March saw a multitude of new home sales in the GTA, ultimately tipping Q1 into strong territory, according to new figures released by the Building Industry & Land Development Association (BILD) through a report by RealNet.

Altogether, there were 3,434 new homes and condos sold in March 2011. During Q1 there was a total of 9,374 units sold which signals a drop of 8.5 %, year-over-year.

“Last year, we experienced the new home sales equivalent of March madness as 4,569 new homes were snapped up by homebuyers in a single month. The 3,434 new homes sales in March of this year, albeit down 25 per cent year/year, represents a healthy but much more stable level of activity," said BILD President and CEO Stephen Dupuis.

"While the demand side remains strong, the interplay of factors like the HST and the new mortgage financing rules are certainly keeping the froth factor at bay as the new housing market moves into a state of sustainable equilibrium," he added.

Looking at Q1 completely, RealNet Canada President George Carras pointed out that high-rise sales were steady with those seen in Q1/2010, partly attributed to the $75,000 price differential compared with low-rise.  The current high-rise price index sits at $446,965 while the low-rise product is a staggering $522,034 for low-rise product.

"You can't sell what you don't have," Carras explained, noting that as at March 31, 2011, there was only 5.5 months of supply of low-rise new homes. "Active new home inventories are well below the long-term average levels."

Looking at various regions through the GTA, the York area saw the biggest drop, down by 40.7%, followed by Toronto proper at 25.8%. On the other side, the biggest increase was in Halton, where sales increased by 43.1%- which, incidentally is the only region to register an increase.

Bank of Canada Holds Rates

TUESDAY, 12 APRIL 2011 08:28

Canadians are in for more of the same, at least for now.

Citing such reasons as; the economy is not at full capacity and there is room still for growth, inflation is still manageable, signs of recovery in global economies are becoming more firmly entrenched, and while still unstable, have been balanced by stronger than expected domestic growth, and the strength of the Canadian dollar, the Bank of Canada again chose to hold rates, again.

According to a press release issued this morning by the Bank of Canada, “The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent. “

The Bank of Canada forecasts that the economy will grow by” 2.9 per cent in 2011 and 2.6 per cent in 2012. Growth in 2013 is expected to equal that of potential output, at 2.1 per cent.”

Similarly, they believe that the economy will reach capacity by mid- 2012.

Domestic activity has been stronger than the Bank expected recently; globally, many of the troubled economies are starting to reach more stable ground, and are looking more promising- although they expect that a slow recovery in the U.S. may have an adverse effect on the rest of the world economies.

And too, the continuing strength of the loonie will have impact on imports and exports: “The persistent strength of the Canadian dollar could create even greater headwinds for the Canadian economy, putting additional downward pressure on inflation through weaker-than-expected net exports and larger declines in import prices.”

“Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of material excess supply in Canada. Any further reduction in monetary policy stimulus would need to be carefully considered.”

Mark Carney did indicate that tightening measures, and rate increases will be coming at some point, but did not indicate when. Many analysts predict that it will be summer time before we see rates begin to climb.

TREB Releases Promising March Figures for the GTA

According to the March figures just released for the GTA, March 2011 was the second strongest March on record, with 9,262 sales recorded; a number that is only 11% lower than the records broken last March.

“The strong home sales reported in March and throughout the first quarter of 2011 have been based on a solid affordability picture and improving economic conditions in the GTA and country-wide,” said Toronto Real Estate Board (TREB) President Bill Johnston.

Looking at average selling prices, March 2011 saw prices go up 5% year over year to $456,147. Condos and semi-detached homes saw the greatest increase in price, both rising by 7%.

A general tightening of the market itself contributed to the appreciations in value. “Market conditions were tighter in March compared to last year. With more competition between buyers, we have seen a strong but sustainable rate of price growth,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Steven Fudge ,Sales Rep, Bosley R.E. Ltd., Brokerage has his own theories on why there is such a push, typically in the early spring.

“The spring market, in particular the months of March and April, is an ideal time for home owners to list their properties for sale. It is in these critical months where the momentum of demand will cycle to its highest, while the supply of good housing stock will be at its lowest."

"Buyers active since the autumn,who, for whatever reasons, did not secure a purchase become fully keen house hunters at the beginning of the New Year. Already suffering from buyer’s fatigue from several months of searching, these buyers become highly motivated. The problem for them is not their lack of motivation, but the limited supply of property.”

Speaking exclusively with Propertywire.ca, Fudge has seen much of what TREB has reported for the region in his own experience this March. “March was my busiest month in the history of my 21 years career in real estate sales thus far.”

As the spring, and the busy season continues, the question remains- will this uptick in sales, and steady price appreciation continue?

Fudge believes so-and bases it on good old fashioned, supply and demand- regardless of what else is going on.  “I'm optimistic for Toronto's downtown freehold housing market. In fact, I'm confident enough to predict the ongoing lack of supply will outstrip the burgeoning demand for all of 2011, regardless of the economic climate.”