Resale home price gains slow - Toronto Star 01/13/06

I found this interesting Article from the Toronto Star. I think that it is interesting that the press is still trying to predict the end of this hot market. The Toronto Real Estate Board statistics from this year so far dispute the declining of the market as sales are up over the same time last year. Enjoy...

Riverdale, Beach, Scarborough and Markham lead

Rising prices likely to moderate this year and next

Jan. 13, 2006.
By Tony Wong
BUSINESS REPORTER

Despite a record-breaking year for home resales in the Toronto area, higher inventory levels in 2005 meant home prices have not appreciated as rapidly as in previous years and they are expected to moderate even more in coming years, says a survey.

The average price of a benchmark two-storey home in Toronto increased by 4 per cent to $461,282 by the fourth quarter of 2005, compared to the same period a year earlier.

The condominium boom, meanwhile, kept a lid on condo pricing as a surplus of inventory, particularly in mid-range two-bedroom units, meant prices rose a relatively mild 3.6 per cent to an average $242,202 year over year.

Home buyers who purchased detached bungalows did the best, with prices appreciating 6.6 per cent to $362,611, according to a quarterly survey of 24 Toronto area neighbourhoods released yesterday by Royal LePage Real Estate Services.

"2005 will go down as one of the great years in housing activity. But we've been climbing this mountain of appreciation for a while now, and the top has been in sight, which I think we'll finally reach in 2006," Phil Soper, president and chief executive of Royal LePage, said in an interview.

This year and next will be spent "on what feels like flat ground compared to what we're used to," said Soper, who is forecasting home prices to moderate even more. He says average home prices should match or go up by slightly more than inflation over the next two years.

While the strong economy helped to maintain demand in the Toronto market, some entry-level buyers opted to remain out of the market as higher vacancy rates created pressure on landlords to reduce rents, according to the LePage report.

More resale homes were also placed on the market as homeowners moved up to newly built condos and homes.

Meanwhile, homeowners in the Toronto neighbourhoods of Riverdale, central Scarborough, the Beach and Markham, saw the biggest price appreciation in the value of a typical two-storey home last year, says the survey.

A two-storey home in Riverdale increased by 13.8 per cent to $330,000 as buyers started to look for affordable housing in a family friendly neighbourhood.
"Riverdale is still a relatively affordable core city neighbourhood that is half the price of some other central neighbourhoods, so people are responding to that," said Soper.

Central Scarborough homes are now averaging $304,000, up 9 per cent, while homes in the popular Beach district are up 8.7 per cent to $500,000. Markham homes are up 7.5 per cent to $385,000.

Unlike other surveys, Lepage's looks at specific types of housing within a range of Toronto area neighbourhoods, rather than taking a look at all housing types and giving one average price.

The Toronto Real Estate Board reported last week that 2005 was the best year ever for home resales. Last year, 84,145 homes changed hands, up 1 per cent from the record set in 2004.

Most housing analysts were expecting 2005 to be slightly below 2004, but good job growth and affordability meant that the housing market remained buoyant.
Still, Toronto's more mature housing market means that it is something of a laggard in house prices.

Victoria led the pack with a standard two-storey home up by a staggering 21.2 per cent to $394,000 at the end of 2005.

Calgary, which is experiencing a housing boom because of rising energy prices, experienced a 15.5 per cent increase to $282,989, while Winnipeg hit $189,100, up 13.2 per cent.

"Over the next few years you will see a continued geo-political shift as wealth and migration transfers to the western provinces," Soper said.

Still no ceiling on home prices - Toronto Star 01/12/06

What else is new? Another member of the Canadian Press that is predicting a slow down in the market. These people, as well as the CMHC economists, have been wrong for the last 3 or 4 years. I don't think it will slow down very much, if at all.

Jan. 12, 2006.
By TARA PERKINS
CANADIAN PRESS

Canadian housing prices remained strong in the fourth quarter of 2005 and should rise about six per cent this year on average, says a report by Royal LePage (TSX: RSF.UN).

But the number of homes sold will likely drop, bringing the market into balance and giving buyers more clout in the market, says Phil Soper, CEO of Royal LePage Real Estate Services.

"We've been climbing this mountain. We reached the top in 2005 and now we're on a very high plateau," said Soper.

According to Thursday's report, the average price of a two-storey home in Canada rose seven per cent, year-over-year, to $327,269 in the fourth quarter of 2005.

Increases ranged from 21.2 per cent in Victoria (to $325,000), to 15.5 per cent in Calgary ($245,089), 13.2 per cent in Winnipeg, 11.6 per cent in Vancouver ($630,750), 10.2 per cent in Halifax (180,500), four per cent in Toronto ($443,737) and 2.6 per cent in Montreal ($301,181).

A sound and growing economy in Central and Atlantic Canada is fuelling moderate price increases, while demand for homes in the energy-rich West caused prices to surge, Soper said.

For 2006, Royal LePage forecasts the price of the average Canadian home will rise six per cent. Calgary and Edmonton will likely see increases of eight or nine per cent, but prices in Toronto, Montreal and Ottawa will rise by less than five per cent.

Soper says buying activity peaked in 2005, pushing the market into the next stage of the housing cycle this year, as the number of homes sold is expected to fall by three per cent. "There will be less homes sold, but just barely, making it the second most active year in history," Soper said.

"We've lived through a seller's market now for several years, in which if you owned a home and didn't have to move into another one, it was a great time, because you had many more people looking at your property," he added.

"We're coming to a period now where that demand has been satisfied, and where buyers and sellers are entering into negotiations on a more equal footing."

That's not true for all parts of the country. Cities like Calgary and Edmonton will still have inventory constraints as buyers continue to demand more homes than there are for sale.

"But in a lot of parts of the country, buyers do have the ability now to put reasonable conditions on their offer," Soper said, such as making it conditional on financing or a home inspection. "Those are the kinds of conditions that fall away in a very hot market, when there's always someone else wanting to buy the same house," he said.

Earlier this week, Statistics Canada released data showing the prices of new homes rose by about five per cent in 2005 for the third year in a row.

"A steady market for new housing, combined with higher building material and labour costs, pushed up new housing prices at the national level," the statistical agency said.

"The upward pressure on home prices continues," says BMO Nesbitt Burns chief economist Sherry Cooper, adding that prices in Calgary "are suddenly spiking."

Statistics Canada's price index measures the cost of new housing, using the year 1997 for a benchmark of 100 points. On Tuesday, Statistics Canada said the index stood at 132.4 in November, up 0.5 per cent from October, compared with a 0.7 per cent increase the previous month. On a 12-month basis, prices were up 5.5 per cent.

Calgary saw prices increase 3.5 per cent, mainly due to higher costs for drywall, flooring, lumber and excavation and higher lot values.

On Thursday, Royal LePage said that during the fourth quarter, detached bungalows posted the biggest price hikes, rising on average 9.1 per cent from a year earlier to $269,810, while the average price for a condominium unit rose to $190,123, up seven per cent.

Housing prices still on the rise - Toronto Star 01/12/06

$142,667 as an average price in Newfoundland? Wow!!
On the grand scheme of things, Toronto is still very affordable when compared to BC. In fact, compared to most of the major cities in North America, Toronto is still a steal. This explains all of the foreign real estate investment from overseas.

Jan. 12, 2006.
CANADIAN PRESS

Canada's housing market was remarkably strong in the fourth quarter, with most markets, including Toronto, experiencing increases in average prices, Royal LePage Real Estate Services reported Thursday.

The highest average price appreciation occurred in detached bungalows, which rose to $269,810, up 9.1 per cent from a year earlier.

The average price for standard two-storey properties rose to $327,269, up 7 per cent, while the average price for a condominium unit rose to $190,123, also up 7 per cent from the fourth quarter of 2004.

Homeowners in the energy-producing West saw the value of their properties appreciate at a much higher rate than elsewhere in Canada, Royal LePage said.
Partial results from the survey, based on prices for detached bungalows:

Halifax: $173,333, up 7 per cent
Saint John, N.B., $143,900, up 9.6 per cent
St. John's, Nfld., $142,667, up 7.0 per cent
Montreal: $201,714, up 4.0 per cent
Ottawa: $274,000, up 4.1 per cent
Toronto: $362,611, up 6.6 per cent
Winnipeg: $200,857, up 13 per cent
Saskatchewan: $156,958, up 8.1 per cent
Calgary: $272,289, up 17.0 per cent
Edmonton: $203,286, up 13.5 per cent
Vancouver: $611,250, up 11.4 per cent
Victoria: $352,000, up 18.1 per cent.

Luxury Living - Toronto Star 01/07/06

Well-heeled crowd accepting bigger, beautiful suites as desirable option

By Tracy Hanes
Jan. 7, 2006

Pat Baker speculates about what might happen if a Hollywood star like Catherine Zeta-Jones came to town to shop for a Toronto pied-à-terre.

"If Catherine Zeta-Jones was thinking of moving to Toronto, she wouldn't buy a house," theorizes Baker, president of Baker Real Estate Corp., which specializes in high-end real estate. "She'd want to buy a beautiful, exotic apartment. Fifteen years ago, she wouldn't have been able to find one, but she can now."

Glamorous apartment-style digs aren't just for movie stars, though. Baker says one of the biggest changes on the Toronto condo scene, since it began two decades ago, has been the emergence of the market for large, luxury condos.

The strength of that market was one of the biggest surprises in the last Urbanation report, the quarterly publication that tracks GTA condo market, says its editor, Jeanhy Shim. And with the next Urbanation out later this month, Shim expects the trend to show no signs of abating.

Shim points to the success of projects like 100 Yorkville, a 96-unit condo project that sold about 90 per cent of its suites during its opening weekend last summer. Prices range from $600,000 to more than $2 million for suites 1,280 to 3,700 square feet at the Invar Building Corp. project.

There was similar success at One Eleven Forsythe, a luxury project by the Daniels Corp. on a downtown waterfront site in Oakville.

Well-heeled buyers have also embraced other new projects, such as Churchill Park, the Avenue and the Ritz Carlton.

Even with no advance media, there was a huge waiting list of buyers for the Ritz Carlton when it was launched in the fall. Suites range from $900,000 to $12 million for a penthouse, with the average unit selling between $1 million to $3 million, says Baker.

"The larger suite market has only developed in the last few years," she says. "The change is the European influence. In Europe, people have lived in apartments for centuries and, here, people are now accepting condos as a replacement for a house. But they still want great kitchens, beautiful living rooms and dining rooms; they still want beautiful master bedrooms and ensuite baths.

"The city is growing up, people are travelling more and more are coming from Europe," she says. "And downtown Toronto living is becoming more desirable."

Baker says it's not just a change of thinking by Toronto residents, who are accepting big, upscale apartments are part of the city's culture, "but people from other parts of the world are wanting to move here."

She says many buyers of the deluxe suites also have homes in places like Florida, and split their time between the two locales.

"They want a lovely place in Florida and they want a gorgeous place in Toronto, too. They don't want to scrimp on either one," Baker explains.

She says in cities like New York, in buildings such as the Pierre, where condo apartments are 3,000 to 4,000 square feet, "people have made a tremendous amount of money in those buildings," and she envisions a similar future for Toronto.

The buyers fuelling this market are primarily baby boomers/empty nesters who own large houses in some of the city's more desirable neighbourhoods, such as Bridle Path and Forest Hill, and are looking to move to homes with less maintenance but still want space to entertain and a lavish lifestyle.

"People aren't necessarily trading up, but trading over," Baker says. "They need the same living area, they want great kitchens, grand living and dining rooms but they don't need other extraneous space once their kids have grown up."

"To my mind, it's (the demand for larger luxury condos) not overly surprising, it lies in the demographics," says Niall Haggart, vice-president of sales with the Daniels Corp.

He says One Eleven Forsythe, a 12-storey building in Oakville that took several years to get approved, is high-end, with fixtures and finishes similar to Daniels' Kilgour Estate.

Kilgour is another luxury condo, launched late in 2004 on Bayview, just south of Lawrence Ave. Response was so positive that Daniels launched phase two last June, earlier than anticipated, with 200 condo suites and a 22-Georgian-style townhouses on a site adjacent to the Burke Brook Ravine.

To emulate the north Toronto community's architectural look, Daniels is using smaller bricks and pre-cast concrete elements such as corner quoins, arches over balconies, and decorative bands along terraces. The condo will cascade down toward the ravine, offering terraced suites and views of the ravine to the north, of the lake and downtown skyline to the south, and cityscapes to the east and west.

Penthouses and terraced ravine suites will include ultimate top-of-the-line appliances such as Sub-Zero refrigerators, Wolf ranges and Miele dishwashers. Phase II units are priced from the $300,000s to more than $1.5 million.

Haggart describes the two Daniels projects as "attainable luxury," which means "a buyer can sell a house in Toronto for $1.5 million, buy a luxury condo and still have some money to put in the bank."

(A project he cites as ultra luxury is One St. Thomas in the Bay and Bloor neighbourhood, where suites start at $1 million for 1,200 square feet in the 29-storey, stepped-tower building on the corner of Charles and St. Thomas Sts. The top end is about $10.6 million for a 7,400-square-foot penthouse. Buyers start moving in this spring.)

"The Kilgour has grand suites, which will appeal to the Bridle Path area buyers," notes Baker. "There is nothing else there and this is the first new project in the area is a number of years."

Shim says One Eleven Forsythe, which commanded prices of $800 a square foot, "is quite remarkable in that it's located outside of Toronto."

It appeals to affluent Oakville residents who don't want to pick and move to the city, she says.

Shim says an exceptional location is the key to success; a fact illustrated by One Eleven Forsythe, which is on the harbourfront in the heart of Oakville, "the equivalent of Yorkville — very charming, very village-like".

"That project likely would not have worked in a different Oakville site," she says. "The move-down buyer wants location and won't move unless it's right."

She says very special locations are shared by all luxury condos currently on the market.
"100 Yorkville is a very rare location, the Avenue is a special location because there's not many developable sites left in Forest Hill, and Churchill Park is across the street from Sir Winston Churchill Park." (The Churchill units will be priced from $800,000).

Yorkville is one of the hottest high-end neighbourhoods in Toronto. The Regency on Yorkville and 18 Yorkville are examples of luxury projects that are under construction and sold well.

Baker says several new projects feature a combination of suites in various price ranges. One such site is the Uptown Residences in Yorkville, at the corner of Yonge and Bloor Sts., steps from Holt Renfrew, Gucci and Chanel. Units range from the $300,000s to more than $2 million.

Finishes are another key component in attracting the luxury buyer.

"We take the level of finishes to the moon, or buyers can dial back," says Haggart. "Our challenge is in creating a selling environment, which talks to the finishes. There is a certain level people expect. It's a demanding audience and you have to get it right."

Getting it right involves finishes such as hardwood, marble, slate or limestone flooring, cornice mouldings, granite countertops, top-of-the-line stainless steel appliances and features like rotundas, coffers, 10-foot ceilings, soaker tubs and frameless glass showers.

And buyers demand amenities such as valet parking, 24-hour concierge, guest suites, upscale fitness centres, spectacular lobbies and lavish landscaped gardens and courtyards.

Home sales, prices set records in 2005 - 01/07/06 Toronto Star

Hot market defies analyst forecasts: Low rates, income gains fuel growth

By Tony Wong
BUSINESS REPORTER
Saturday, January 7, 2006

It was supposed to be the year the hot housing market finally cooled down, but 2005 turned out to be the best year ever for resale homes in Toronto Real Estate Board history.

A record-breaking 84,145 existing homes changed hands last year, the board reported yesterday, beating the previous record of 83,501 sales recorded in 2004 by almost 1 per cent.
Homeowners can also rejoice, since the average price was the highest ever recorded for the Toronto area at $335,907, up 6 per cent from the previous year.

``It comes down to the same issues over and over again, and that means affordability combined with good job and income growth, which helped drive the market,'' said Peter Norman, vice-president of Toronto housing research firm Clayton Research.

Most analysts, including Norman, were expecting 2005 sales to lag slightly behind the 2004 record, especially since the current upswing in the housing-market cycle, which started in 1996, has been a particularly long one.

But the economy was far more resilient than most economists had bargained for.

``At the start of last year we were worried about high oil prices impacting the economy, then it was the high Canadian dollar and interest rates shooting up, but we ended up with better economic and employment growth than expected and interest rates didn't go up quite as high as people expected,'' Norman said.

More jobs and good income gains resulted in more buyers being able to afford a home.

The Toronto Census Metropolitan Area's 3.9 per cent year-over-year GDP growth rate was the highest the city has recorded since 2001, according to housing analyst Will Dunning.

"While manufacturing is weak, expansion in the financial services sector is generating growth in the Toronto economy," Dunning said.

Still, the solid numbers resulted in more than 4,255 sales in December alone, the second-best performance on record for that month.

Economists see 2006 as the year home sales will — finally — wind down. Norman says one sign is that new home construction already peaked in 2004 and the resale home market tends to follow that trend.

"There is obviously room for the market to slow down, especially since at some point in time you run out of pent-up demand and first-time buyers in the market," said Norman.

New construction has also been on a tear, which will add to the pool of available homes, helping to moderate the market.

``From a long-term demographic standpoint, especially on the new construction side, we have been overproducing,'' Norman said.

For 2006, Dunning expects average prices to rise by a moderate 4 per cent, to $348,100.

"Listing volumes remain high, and the sales-to-new-listings ratio continues to indicate that price growth should decelerate," said Dunning in a recent report.

However, the analyst warned that "strong growth in the financial sector is generating a lot of new wealth, which is supporting continued house price growth."

Dunning also expects new- home sales, particularly in the hot condominium market, to drop from 16,500 high-rise sales in 2005 to 11,700 in 2006.

So many condos are being built that Dunning expects the vacancy rate in the city to rise significantly in the coming years, peaking at 6.1 per cent in 2009. The forecast for 2006 is 4.6 per cent.

Slowing employment growth will likely reduce demand for apartments, Dunning said.

Treb Marketwatch for December - Record Sales in 2005

Record Sales in 2005!

Friday, January 6, 2006

TORONTO - TREB (Toronto Real Estate Board) Members reported a record-breaking 84,145 sales during the course of 2005, TREB President John Meehan announced today. "Last year was the best annual performance since statistics have been kept," the President noted. "It is up one per cent over the 83,501 sales recorded during our previous record year, which was 2004."

During December alone, 4,255 sales were transacted through the TorontoMLS system, the second best showing ever for that month, and up from the 4,232 recorded during December 2004.

On the pricing front, the average rose a healthy but not excessive six per cent in 2005, to $335,907 from 2004's figure of $315,321. For December the average was $327,216, up four per cent over December 2004.

Breaking down the total, 1,661 sales were reported in TREB’s 28 West districts and averaged $304,348; 776 sales were reported in the 14 Central districts and averaged $407,473; 806 sales were reported in the 23 North districts and averaged $365,210; and 1,012 sales were reported in TREB’s 21 East districts and averaged $272,949.

Neighbourhood Corner

City of Toronto
In 2005, the City of Toronto (E-1 to E-11, W-1 to W-10, and C-1 to C-15)saw 34,366 single-family dwelling sales, up one per cent over the 33,963 sales transacted in 2004, and the best annual performance for the city ever recorded. The average price of these sales was $361,055, a 10 per cent increase over the previous figure of $326,514.

House Prices keep Rising - Globe & Mail 01/10/06

House prices keep rising

By TAVIA GRANT
Tuesday, January 10, 2006

These are golden days if you happen to be selling your house — especially in Calgary.

New housing prices continued the biggest string of increases since at least 1981, edging 0.5 per cent higher in November from October, Statistics Canada said Tuesday. Prices in Calgary posted the nation's biggest monthly gain for the third time in a row. Nationally, prices were 5.5 per cent higher than a year earlier.

The agency attributed November's gains to a steady market for new housing, along with higher building material and labour costs. Yet, unlike in U.S. housing markets, while Canadian real-estate prices have continued to streak upwards, economists don't foresee a sudden, steep slowdown here.

“Although the Canadian housing market merits close watching in light of recent strength, it does not warrant nearly the same degree of concern as is directed at the white hot U.S. market,” said Eric Lascelles, strategist at TD Securities Inc.

Prices have climbed every single month since September, 1998, according to Statscan's Randy Sterns.

But signs of cooling are already appearing, with housing permits falling more than expected in November and housing starts likely to ease next year, separate reports showed today.

“This suggests that the Canadian housing market may be beginning to ease in an orderly fashion,” Mr. Lascelles said. “This should be viewed as good news, because it has never been in doubt that the volume of housing activity in recent years was unsustainably strong.”

Among cities, St. Catharines-Niagara, Kitchener, Edmonton and Québec City also led price gains, while Ottawa and Hamilton registered modest monthly declines.

Price increases in Calgary were mainly due to higher material and labour costs, specifically for drywall, flooring, lumber and excavation. Higher lot values were also a factor, Statscan said.

Since 1997, prices in Calgary have risen 59 per cent, the most in Canada, followed by increases in Ottawa, Regina, Montreal and Edmonton. They've risen the least in the Sudbury and Thunder Bay area.