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BuzzBuzzHome (BBH) recently pieced together an infographic showcasing the heights new condo projects are reaching all over North America. With Toronto’s tallest project (88 storeys) only 8 storey’s behind New York’s (96 storeys), it’s easy to see that the city is moving up. But how long would it take to walk from the bottom to the top? BBH timed their President making an attempt – check it out.
Our friends at BuzzBuzzHome (BBH) have, once again, produced another fun and informative infographic! The BBH team took a look at new condo developments in 5 of Canada’s top markets and compared what $380,000 could buy you in each city. Take a look at what they found.
This four-bedroom starter home in Edmonton costs $269,000 and features old character, modern upgrades, and a fully fenced backyard.
In Alberta, there are two major cities that people live, work and play in: Calgary and Edmonton. And the good news for most first-time homebuyers is that purchasing a home in both cities is considerably more affordable than some of the other big markets.
According to Edmonton-area mortgage broker Nelson Sousa, starter homes can be found in almost all areas of the city.
“As the city expands, new development areas continue to grow North, South, East and West,” Sousa said.
With the average starter home priced in the $250,000 to $300,000 range, first-time buyers are able to get into the market early, and in a townhouse or single-family dwelling, no less.
In Calgary, on the other hand, the average starter home costs between $300,000 and $350,000. Realtor Jim Sparrow knows less expensive homes (under $300,000) are available in nearby towns – like Airdrie to the North and Okotoks to the South – but suggests the costs involved with living outside of the city should be considered by first-time buyers, before making any final offers. Continue reading
This three-bedroom starter home in Coquitlam costs $578,000, and features a basement bedroom/family room combo with a separate entrance and a large backyard.
Owning a home is something most people dream about. Not only does paying for a mortgage mean you’re not paying rent, it also gives you the freedom to have full control of your property. Unfortunately, for some regions in Canada, it’s much easier to break into the market than others.
Most of British Columbia falls into the “hard to break into” category, with continually climbing price tags on already expensive homes. Vancouver, for instance, is considered the most expensive place to buy in Canada. According to a recent Home Listing Report by Coldwell Bank, the average listing price for a four-bedroom, two-bathroom home is a staggering $1,876,414 in Vancouver. Richmond and Burnaby also topped the list, with average prices hovering around the $1-million mark.
In B.C.’s Lower Mainland, a four-bedroom home is considered somewhat of an aspiration. As such, most first-time buyers are looking for something a little smaller – like a two- or three-bedroom bungalow that is just big enough to start the life of homeownership in. Continue reading
House sales drop 22.7% from 2012 – The Province
There won’t be a housing crash – just a soft landing – and a minor correction in prices: this is what homeowners and potential buyers have been told repeatedly, over the last month or two. While that might sound like good news, no one can ignore the fact that sales are falling fast in the Canadian housing market. The Real Estate Board of Greater Vancouver has reported that sales in January 2012 were down 22.7 per cent from the year before. And while Toronto only saw a decrease of 3.8 per cent in the same month, compared to 2011, sales decreased fast throughout 2012.
While the average price of a home actually went up in Toronto, Vancouver’s has dropped by 5.8 per cent since May of 2012. David Madani, an economist with Capital Economics, predicts home prices will drop by as much as 25 per cent on average in Canada. That number would mean a lot more than a soft landing, especially for homeowners with outstanding mortgages who are looking to sell. One anonymous industry insider says Canadians shouldn’t worry about such a steep decrease in prices, stating that a drop in sales is nothing more than a standoff between buyers and sellers.
Canada’s housing market cooling, but homes $1M and above still hot – Financial Post
While the rest of the Canadian housing market seems to be cooling, the same cannot be said for homes listed above $1-million. Southeby International Realty Canada says 2013 looks like a good year for sellers of top-end homes; the realtor is so confident in this statement, it is expanding to Edmonton and Quebec City. Continue reading
Bank of Canada Governor Mark Carney Heading to the U.K.
After months of media speculation, it finally became official – Mark Carney announced he is leaving his post as the Governor of the Bank of Canada in June 2013 to lead the Bank of England. This is a well-deserved promotion for Carney. Carney’s ability to lead Canada through the financial crisis of 2008 relatively unscathed has undoubtedly impressed the world’s second most important financial hub.
Carney has a lot to be proud of – Canada’s banks are among the world’s most stable, the housing market avoided a U.S.-style crash, and the economy is in relatively good shape. With that being said, there still remains much to be accomplished. Mounting household debt due to a prolonged period of low interest rates continues to concern Carney, as the debt-to-income ratio hit a new record of 164.6 per cent in the third quarter of 2012.
In early December, Carney announced for the 27th consecutive month in a row he was leaving the overnight lending rate at 1.00 per cent. Will Carney finally pull the trigger on rise rates before his departure in June? If household debt continues to balloon and inflation starts to become a problem he might finally raise rates. With 5-year fixed mortgage rates at an all-time low, there’s never been a better time to lock-in if you’re concerned about rising rates.
CREA Downgrades Housing Market Forecast for 2013
The housing market continues its slowdown since June 2012, when Finance Minister Jim Flaherty announced the fourth round of new mortgage rules in four years. First-time homebuyers are having a more difficult time qualifying for a mortgage, now that the maximum mortgage amortization has been trimmed from 30 years to 25 years for high-ratio mortgages. As a result, the Canadian Real Estate Association (CREA) has revised its forecasted home sales this year. Continue reading
Why the housing market won’t crash in 2013 – The Globe and Mail
If you’re worried about a few slowing markets being the first sign of a housing market crash, stop. That’s the message Larry MacDonald left in this week’s post on why he doesn’t think the housing market will crash in Canada this year. His first reason for believing this is because of Canada’s highly supportive monetary policies. For Canadians, this means the country should generate growth in jobs and income, which typically supports the housing market. And if people continue to buy homes, prices shouldn’t fall by much in 2013.
Now, what happens if interest rates rise this year? As long as income and employment are rising as well, this should create an offset demand for housing. MacDonald finished his prediction by saying last year’s tightening of mortgage rules are also not expected to be a serious concern for the housing market.
Home values to drop significantly in some parts of B.C. – Vancouver Sun
For the first time in years, homeowners in a number of areas of British Columbia are expected to see a drop in their annual property assessments. Perhaps not surprisingly, the most significant decreases are expected to be seen in Whistler and the Sunshine Coast, as well as Pemberton and Bowen Island. Continue reading
2012 was a busy year for homebuyers and homeowners alike. The year started with off with a bang! Mortgage pricing wars began in January and new mortgage rules were introduced in July, resulting in the housing market cooling as the year came to an end. Let’s break down the year that was 2012 and see how it affected the average Canadian homeowner.
Mortgage Rate Wars
January 2012 saw the beginning of the much-heated mortgage rate wars. BMO fired the first shot by offering their 5-year fixed rate at 2.99 per cent, the lowest 5-year rate in modern Canadian history. The other big banks quickly followed suit with similar offerings. We also saw a rise in popularity of the 10-year fixed rate at 3.99 per cent. As it stands, there’s never been a better time to buy a house, as there are a plethora of low-rate mortgage products to choose from, allowing homeowners to pay down their mortgage faster than ever before.
Fixed vs. Variable
The Bank of Canada left its overnight lending rate at 1 per cent throughout 2012, but it continues to hint at a possible rate hike in 2013. The banks followed suit and left Prime Rate unchanged at 3 per cent. While 2011 saw variable rate mortgages offered at Prime – 0.90%, those discounts are long gone. It makes sense to lock-in with a fixed rate mortgage now, if a rate hike would put a strain on your household budget. And homeowners are apparently listening. The share of new fixed rate mortgages in Canada skyrocketed to 79 per cent, a sign that homeowners are aware of the threat rising interest rates can pose.
Household Debt Balloons While Homeowners Pay Down Debt
Household debt continued to balloon in 2012, reaching levels reminiscent of the U.S. housing crash. In the second quarter of 2012, household debt made headlines when the debt-to-income ratio reached 163.4 per cent. The headlines have apparently spooked homeowners, as Canadians are repaying debt at a faster pace, which is good for when rates eventually increase. For first-time homebuyers with only the minimum 5 per cent down payment, the fear of a major housing correction (which could wipe out their equity) became a good motivator to pay down debt.
New Mortgage Rules Cool the Market
The mortgage rate wars, coupled with the fear of a housing correction, saw the fourth round of mortgage changes in four years in July 2012. If you’re a first-time homebuyer, the new mortgage rules created a major hurdle for homeownership. The maximum mortgage amortization was reduced from 30 years to 25 years for high-ratio mortgages, increasing the mortgage payments for homebuyers and making it more difficult to qualify for a mortgage at all. While the new mortgage rules seem to have averted a housing correction, it has put a heavy burden on first-time homebuyers who must now save a larger down payment and/or pay down debt, to qualify.
The real estate markets in Toronto and Vancouver are like night and day, from the start to end of 2012. In reaction to the new mortgage rules, more homebuyers are sitting on the sidelines. Toronto and Vancouver started off the year red-hot, but the new mortgage rules have put a serious damper on both markets, with sales volumes down and prices following behind. If you’re looking for a detached house, there’s still a lot of competition. But the condo market – the most common entry-point for first-time homebuyers – has cooled considerably this year.
2013 and Beyond
2013 seems to look rosy for homebuyers. With the real estate market seemingly stabilizing after the new mortgage rules, we are seeing a more balanced market, which is good news for homebuyers. While a rate hike is possible, there’s still plenty of time to lock into a 5-year fixed rate mortgage, which are still available at historically low rates. While we shouldn’t expect a similar red-hot start to the year, 2013 looks to be a decent year for homeowners and homebuyers alike.
Photo by Shandi-lee Cox
2012 has been a big year for RateHub.ca: we launched our first – and second – infographics, began to produce video content with new partner sites, and added a number of new members to the team. We also wrote a lot of content for our blog, both in-house and with the help of our contributors. Today, we’ve rounded up a handful of our favourite blog posts from the past year. Enjoy!
With closing costs totaling anywhere from 1.5 to 4 per cent of the cost of your new home, it’s a large expense to save and pay for on the day you get your keys. According to a TD report released earlier this year, 6% of first-time homebuyers surveyed didn’t budget for anything other than their down payment, 13% forgot about one-time fees like land transfer tax or a home inspection, and 60% said they wish they had been more thorough when budgeting for a home purchase. So what was our best financial tip this year? In short: don’t forget about closing costs. Save early and be prepared.
#4: How Does the Toronto Land Transfer Tax Affect the Market and What Can We Do?
When you buy a home almost anywhere in Canada, you have to pay a land transfer tax (LTT). However, if you’re purchasing property in Toronto, you have to pay two land transfer taxes: your regular Ontario LTT and another, equally as expensive, municipal LTT. As the only city in Ontario to have this extra tax, it is a heavily debated issue. This guest post, written by Toronto realtor Aleksandra Oleksak, takes a look at how this tax has been affecting real estate sales here in the city. Continue reading
CMHC Releases Tenth Annual Review of the State of Housing in Canada – CMHC
CMHC has released its tenth annual Canadian Housing Observer report, which gives a broad range of statistical information on the state of the Canadian housing market. The report is available both online and in print and, new for 2012, readers can now access interactive data tables that provide local reports on various housing indicators for over 160 municipalities.
Some of the important highlights in the Observer include: