Archive for the 'Canadian Real Estate Market' Category

Determining a property’s list price can be hard at the best of times, but when the real estate market is constantly shifting, it’s even trickier. In today’s rocky Canadian housing market, how do you establish a house price?

With increasing interest rates, new Canadian mortgage rules, and a record-high level of Canadian household debt, setting a list price might feel a little like shooting in the dark. But having a good understanding of your target market, the area where you’re selling, and using technology to your advantage can make the process a lot easier.

  1. Look at Comparable Sales and Listings

Understanding the Canadian real estate market is your best bet to establishing a list price, even in rocky economic times. Pulling data of every similar home in the neighbourhood that was listed in the past three months can give you a good idea of what other houses are selling for.

If you’re pulling comparables, also keep in mind:

  • The distance — your search shouldn’t be too broad unless you’re selling in a more suburban or rural area.
  • Neighbourhood dividing lines and barriers, such as railways, a major road, a highway, etc.
  • Similar square footage.
  • Similar home age.

When you’re assessing comparable listings, also question the sales history. How many days were they on the market? Compare the original list price to the final sales price and the final sales price to the actual sold price.

The GeoWarehouse Comparable Sales report can give you this information at your fingertips.

  1. Look at the Property’s Sales History

How much has this house sold for in the past? Whatever the results are, file them away with a grain of salt. Remember, the housing market might have been completely different then, but it is still valuable information to know.

The GeoWarehouse Property Details report contains a detailed sales history that will help with your decision.

  1. Consider the Neighbourhood Desirability

Is this an up-and-coming location? Is it close to schools and parks? Is it near a highway or busy road? These can all play a role in how you price the home and can make a less attractive property more appealing and a more attractive property less appealing.

GeoWarehouse Aerial Imagery can give you a birds-eye-view look at the neighbourhood that you can show potential buyers.

  1. Honestly Assess the Property Value

Different tools can give you an appraisal of the property’s worth. For instance, with GeoWarehouse you can access the Property Details report, which includes Land Registry information and MPAC assessment data. When you have a value in mind, compare it with the comparable sales and honestly assess the property you are looking at.

  1. Know Your Target Market

Where do your leads come from? What types of marketing do you have in place and what might work for this property? If you’re not sure, this could be a sign that you need to do more research. Tools like the GeoWarehouse Demographics Report can help you identify important neighbourhood information, such as the age distribution, average household income, and more. Every property is different of course but understanding your potential buyers can go a long way towards establishing list price.

The other factor to consider are the changing market conditions themselves. Analysis such as the Teranet Market Insights report can give you an idea of what types of properties are selling where and an overview of the Canadian housing market as a whole.

The next time you’re trying to establish house prices for listing, access all of GeoWarehouse’s reports, images, and data at www.geowarehouse.ca and find out how you can become a subscriber.

Facebooktwittergoogle_pluspinterestlinkedinmail

Looking at news outlets, the current state of the Canadian real estate market can seem pretty doom and gloom. Interest rate increases combined with new Canadian mortgage rules and a declining housing market have presented challenges, to be sure, but could there also be an advantage?

While the housing market has been slowing so far in 2018, the flipside is that houses have become more affordable. For instance, the Teranet-National Bank House Price Index reported in the final quarter of 2017 that the housing affordability measure fell 0.2 per cent. This is the first time that’s happened since the second quarter of 2015.

Even as we are seeing interest rate increases and stricter Canadian mortgage rules, Canadian wage growth is going up. Increased wages and more affordable housing could definitely present real estate sales opportunities if your target market is affected.

Changes to the Canadian real estate market can also be navigated with flexibility, for example, shifting your target market to adapt to new trends. The Teranet Market Insights report March 2018 edition reported that condo demand continues to be high, particularly in Toronto. Not only that, but new condo development is also remaining strong.

According to the Canadian Press, some families are actually choosing smaller living over larger suburban dwellings. Families of five are living in 1,000 sq. ft. condos, or 950 sq. ft. houses. The right buyer might be tempted to consider some out-of-the-box housing arrangements.

BuzzBuzz News Canada reports that there is still more demand in the Canadian housing market than supply, meaning many real estate agents are seeing more buyers than sellers. If that’s the case for you, you can take advantage. Use property valuation tools to identify selling opportunities in your target area and identify new leads.

Another advantage of these changes is that real estate sales professionals aren’t the only ones dealing with them. Mortgage brokers and mortgage lenders also have to work with the same constrictions and they’re developing products to meet shifting demands. You can take advantage of this by making these industry connections. When you know how mortgage professionals are adapting, you can have more options to offer your clients who might be seeking financing.

It’s difficult to say exactly where the Canadian real estate market is headed in 2018, but you can find a way to adapt and perhaps profit even more from recent changes. Understanding your target market is key to identifying new opportunities. Technology, like GeoWarehouse, puts vital property data at your fingertips so you can quickly and efficiently access the information you need to know when you need to know it.

Not only that, but the GeoWarehouse store also provides important fraud detection resources, like Parcel Registers* and Instrument Images*. These tools let you find out whether there’s an encumbrance, such as a lien or an undisclosed mortgage, on a property so you’re not caught unaware.

Not a GeoWarehouse subscriber? You can become one today. It’s easy — just visit www.geowarehouse.ca to learn more.

* An official product of the Ontario government pursuant to provincial land registration statutes.

Facebooktwittergoogle_pluspinterestlinkedinmail

After a flat March, the Teranet–National Bank National Composite House Price IndexTM  rose 0.2% in April. In the 20-year history of the index it was the fourth-smallest April advance, after those of 2009 (a recession year), 2013 and 2015. There were nevertheless gains in eight of the 11 metropolitan markets surveyed: Quebec City (1.5%), Hamilton (0.8%), Halifax (0.6%), Vancouver (0.3%), Edmonton (0.3%), Toronto (0.2%), Montreal (0.2%) and Victoria (0.2%). The index for Calgary was flat. Indexes for the remaining two markets were down on the month, Ottawa-Gatineau −0.1% and Winnipeg −0.8%.

It was the 14th rise in 16 months for the Vancouver index, which has set records in each of the last five months. However, its recent gains have been smaller than before, which is consistent with the loosening of market conditions apparent from data published by the Real Estate Board of Greater Vancouver. The cooling of the Vancouver index advances has been the most obvious for dwellings other than condos. The Toronto index is down 7.1% from its peak of last July, its decline concentrated in dwellings other than condos. The raw index* for Toronto declined similarly over that period, both for the market as a whole and for the non-condo segment. The index for neighbouring Hamilton market is down 5.2% from August, with declines in six of the last eight months. The index for Ottawa-Gatineau has declined in six of the last seven months, for a cumulative retreat of 2.4% since September. For Calgary it was a fifth consecutive month without a gain. The index for Edmonton has retreated in five of the last seven months. In sum, the composite index in April was down 1.6% from its peak of last August, although it stabilized towards the end of last year.

Thanks to strong advances from April to August last year, the composite index was nevertheless still up 5.6% from a year earlier. It was the smallest 12-month rise since September 2015 and a 10th consecutive deceleration from last June’s record 12-month gain of 14.2%. The April 12-month rise was led by Vancouver (15.9%) and Victoria (11.0%), the only markets with 12-month advances exceeding the countrywide average. They were followed by Halifax (5.3%), Hamilton (4.5%), Montreal (3.9%), Ottawa-Gatineau (3.0%), Quebec City (2.4%), Toronto (1.9%), Winnipeg (1.2%), Edmonton (0.4%) and Calgary (0.2%).

In addition to the Toronto and Hamilton indexes included in the composite index, indexes exist for the seven other metropolitan areas of the Golden Horseshoe. In April, six of the seven (Guelph, Brantford, Kitchener, St. Catharines, Barrie and Oshawa), like Toronto and Hamilton, were well below their various peaks of July, August or September 2017. The exception was Peterborough. Indexes not included in the composite index also exist for seven markets outside the Golden Horseshoe, five of them in Ontario and two in B.C. The indexes for these last two, Abbotsford-Mission and Kelowna, like those for Vancouver and Victoria, were at record highs in April. The same was true of the indexes for Windsor and Thunder Bay. The indexes for Sudbury, Kingston and London were only slightly off peak.

The historical data of the Teranet–National Bank House Price Indices™ are available at www.housepriceindex.ca.

 

 

The Teranet–National Bank House Price Index™ is estimated from sale prices recorded in public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method; a complete description of the method is given at www.housepriceindex.ca.

The Teranet–National Bank House Price Index™ is an independently developed representation of average home price changes in 11 metropolitan areas: Victoria, Vancouver, Calgary, Edmonton, Winnipeg, Hamilton, Toronto, Ottawa-Gatineau, Montreal, Quebec City and Halifax. The national composite index is the weighted average of the 11 metropolitan areas. The weights are based on aggregate value of dwellings as retrieved from the 2006 Statistics Canada Census. According to that census**, the aggregate value of occupied dwellings in the metropolitan areas covered by the indices was $1.416 trillion, or 64% of the Canadian aggregate value of $2.207 trillion.

All indices have a base value of 100 in June 2005. For example, an index value of 130 means that home prices have increased 30% since June 2005.

*Note on methodology: The current-month data used to calculate the index are those of closed sales registered in the provincial land registry. To illustrate the home price trend, the published indexes of the 11 metropolitan markets entering into the Teranet–National Bank Composite House Price Index™ are moving averages of the last three months of raw indexes, a procedure that evens out month-to-month fluctuations. More granular monthly data are available upon request, subject to subscription fees. For our full methodology, please visit www.housepriceindex.ca

** Value of Dwelling for the Owner-occupied Non-farm, Non-reserve Private Dwellings of Canada

By:

Marc Pinsonneault

Senior Economist

Economy & Strategy Team

National Bank Financial Group

Teranet–National Bank House Price Index™ thanks the author for his special collaboration on this report.

 

 

 

Facebooktwittergoogle_pluspinterestlinkedinmail

April showers (or snowstorms as is sometimes the case in Canada) bring May flowers — and in the case of the Canadian real estate market, spring home buying season.

Historically, the highest number of residential listings occur in May. In May of 2016, for example, there was an average of 94,000 listings, according to Canadian Real Estate Association data. May and June also tend to have the highest number of sales, with an average of 52,000.

How can you be prepared for the spring Canadian real estate market? Our top tips can help you get started.

  1. Assess Your Market

The spring home buying season of 2018 could look different from spring buying seasons of years past due to new factors — specifically, rising interest rates and new Canadian mortgage rules. Understanding your real estate market and how they may be affected by these changes is important to being prepared. At the very least, you may receive questions about these changes and if your target market is particularly affected, you may want to look into different products and promotions that could help your clients.

There is an easy way to understand the make-up of your target market — a Demographics Report. For example, the Demographics Report from GeoWarehouse tells you age distribution, marital status of residents, average household income, and much more. Another tool that can help you understand the current real estate market is the Teranet Market Insights report. View the latest edition here.

  1. Reach Out to Your Network

Leading into the spring buying rush is a good time to get your ducks in order, and that might include connecting with your network. There are two main networks you might want to consider, the first being mortgage agents and lenders. Reaching out to your contacts in these fields can help you understand what products they are offering that your clients can access.

The second market you can touch base with before the rush are your leads, prospects, and current clients. Checking in to see how things are going could alert you to new opportunities or you could notify potential clients of opportunity they may not even be aware of — such as the value of their home or comparable sales in their neighbourhood.

  1. Have a Real Estate Marketing Plan in Place

The spring season can be competitive, but you can stand out from the crowd with a solid real estate marketing plan. Knowing where you’ll spend your advertising dollars and having your marketing components, be it real-world or digital, created in advance can save you a lot of time and effort once busy season hits.

Identify the top places for new real estate leads with tools, such as the GeoWarehouse Property Details Report, or the Comparable Sales Report. This data can help you target up-and-coming neighbourhoods and prospects.

  1. Prepare Your Team

If you work with others in your office, make sure you are all on the same page. Understanding who does what and how priorities might shift during the busy season can help you cope when the rush does come. Any tasks that aren’t essential to you can be delegated, giving you more time to work on identifying new leads and working with clients.

  1. Use Technology to Speed Up the Sales Process

Once the spring home buying season is underway, you’ll want the sales processes to be as smooth and efficient as possible. Technology can help with this. For example, GeoWarehouse’s reports, images, and searches make finding property information quick and easy so you’ll be able to identify the value, mitigate fraud risk, and save time and money.

Are you a GeoWarehouse subscriber? If you are a real estate sales professional, you may already have access through your real estate board. If you’re not and would like to become one, learn more about our services at www.geowarehouse.ca.

We’ve also got even more great reports in our online store, including property ownership history, instrument images, surveys, plans and other vital data that could make or break your deal. Get more information at http://www2.geowarehouse.ca/buy-now/.

Facebooktwittergoogle_pluspinterestlinkedinmail

April 2018 won’t be seeing an interest rate increase the Bank of Canada announced this week.

On April 18, 2018, the Bank of Canada (BOC) decided to hold its key interest rate at 1.25% but warned of hikes to come in the future. They cited the Canadian real estate market as a factor in this decision.

“Slower economic growth in the first quarter primarily reflects weakness in two areas,” BOC wrote in its release.

“Housing markets responded to new mortgage guidelines and other policy measures by pulling forward transactions to late 2017. Exports also faltered, partly owing to transportation bottlenecks. Some of the weakness in housing and exports is expected to be unwound as 2018 progresses.”

The mortgage guidelines and other housing policy measures were referenced as well in the March 2018 BOC announcement.

The lack of change means that those with variable-rate mortgages, or those who are up for mortgage renewal, have more time to lock in to a fixed rate if they so choose before interest rates increase again.

The recent quarterly MNP consumer debt index survey found that 43% of respondents said they are already feeling the effects of higher interest rates in Canada. 51% said they fear the rising interest rates could affect their ability to pay down debt. One-third of the respondents said the rising interest rates could possibly push them toward bankruptcy.

One thing BOC made clear in the April 18 announcement is that more interest rate increases are coming.

“Some progress has been made on the key issues being watched closely by Governing Council, particularly the dynamics of inflation and wage growth,” BOC stated.

“This progress reinforces Governing Council’s view that higher interest rates will be warranted over time, although some monetary policy accommodation will still be needed to keep inflation on target.”

Despite the housing market cool off in the beginning of the year, BOC expects inflation and wage growth to pick up the slack in the coming months.

Experts are predicting there will be more interest rate increases in 2018. The next BOC announcement is scheduled for May 30.

GeoWarehouse can help you identify new real estate leads and opportunities even with increasing interest rates. Our tools include accurate, up-to-date, accessible property information that makes you the expert.

Learn more about how we can help your real estate business thrive at www.geowarehouse.ca.

 

Facebooktwittergoogle_pluspinterestlinkedinmail

Are desperate homebuyers being pushed into sidestepping Canadian mortgage rules in favour of shadier methods of financing? Some Canadians may be having a harder time buying a home due to the change in mortgage rules last year.

Now that the Bank of Canada has raised the overnight rate, and new federal mortgage rules have made it that much harder for customers looking for short-term mortgages, home renovation loans, or debt consolidations, many homebuyers or home refinancers may be forced to consider turning to riskier alternatives for financing their home.

Canada’s financial watchdog is advising regulated subprime mortgage providers to avoid partnerships with unregulated providers who may skirt the rules that were put in place to end risky lending in the first place! The Office of the Superintendent of Financial Institutions (OSFI) recently suggested banning co-lending arrangements, or bundled mortgages, that sidestep rules designed to stamp out risky lending.

Lenders can offer combined mortgages worth up to 90 percent of a property’s value with a “bundled loan” or co-lending agreement with an unregulated rival. However, federal rules prohibit regulated lenders from lending more than 65 percent of the value of a home to borrowers with bad or no credit. They also can’t lend more than 80 percent even to borrowers with good credit without government-backed insurance.

However, with “bundled loans”, lenders can offer borrowers up to 90%, circumventing rules on how much mortgage providers can lend against a property. As Canadian regulators tighten lending standards to shield borrowers in case a decade-long housing boom goes bust, these arrangements have increased in number.

Under Canadian mortgage rules, all high-ratio insured homebuyers are required to take a ‘stress test’ to qualify for mortgage insurance at a rate that is greater than their contract mortgage rate or the Bank of Canada’s conventional five-year fixed posted rate. With the rising level of debt amongst Canadian consumers and the rising costs of houses, this means more people may not qualify for a mortgage and choose risky lending alternatives. Now, the OSFI is proposing requiring stress tests for all uninsured mortgages and adjusting maximum lending amounts for local market conditions.

Are buyers with poor or no credit left with no choice but “bundled loans”? Do they put Canada’s real estate market at risk? Are the new rules helping at all, and if so, how? As a real estate professional, tell us how the recent changes to Canadian mortgage rules and rate increases have changed the way you do business. Join the conversation @GeoWarehouse.

To learn more about the tools and resources available with a GeoWarehouse subscription, visit www.geowarehouse.ca.

Facebooktwittergoogle_pluspinterestlinkedinmail

The Ontario housing market continues to be red-hot. House prices have increased significantly because of supply and demand challenges, often leading buyers to go above and beyond asking prices, engaging in bidding wars in an effort to find housing in a market that can’t seem to meet the demand.

While some homeowners have enjoyed this increase in home values and sold to their own benefit, others have not been able to enter the market because of various factors, including a lack of supply, sky high prices and larger down payment requirements.

The cost of housing isn’t just impacting homeowners. Many renters are also feeling the effects as some landlords choose to arbitrarily drive up rental costs.

This has led many to call for housing reform and governmental action – and the government seems to be listening.

Just last week, the Ontario Government announced a list of measures aimed at cooling the market and making housing more affordable for all (both renters and homebuyers).

Dubbed the Fair Housing Plan, the announcement included 16 measures that, it is hoped, will do just that – make housing prices a little fairer across the province. Here are some of the highlights:

New Taxes

  • A new 15% foreign buyer tax – this means that non-Canadian citizens, non-permanent residents and non-Canadian corporations will be charged this new tax on residential properties that have 1-6 units. This tax will apply to property purchases in the Golden Horseshoe area.
  • A provision that would allow Toronto and other municipalities (if interested) to charge a tax on vacant or unoccupied units.

New Regulation

  • An expansion of rent control which will apply to all private rental units built after 1991. The goal is to protect tenants from “sudden and dramatic” rent increases.
  • Examination of ways to investigate practices like paper flipping (shadow flipping).

New Opportunities

  • Identify new opportunities for the government to create affordable housing on provincially owned surplus lands.

Supporting Developers

  • A $125 million, 5-year program aimed at encouraging the construction of new apartment buildings.
  • The creation of a new Housing Supply Team. Their goal will be to identify challenges that housing developers are facing and help them work more effectively with municipalities.

As long as supply and demand continue to be issues, Ontario’s market will continue to accelerate. These changes are expected to be a step towards easing that acceleration. You can view the full announcement here https://news.ontario.ca/opo/en/2017/04/making-housing-more-affordable.html.

What do you think? Do you think these will eventually help to cool the market? Join the conversation @teranet_social.

 

 

 

Facebooktwittergoogle_pluspinterestlinkedinmail
July 11, 2016

geo2The first quarter of 2016 has closed so we thought, what better time to recap Canadian housing numbers? A good starting point is the Teranet – National Bank House Price Index™ (HPI). The Teranet National Bank House Price Index reports the rate of change of Canadian single-family home prices.

We like to rely on this index for two reasons:

  1. Where the data comes from – data is derived from property records of public land registries – which is the most accurate source for land data.
  2. Coverage – the HPI covers 11 major Canadian Cities – Victoria, Vancouver, Calgary, Edmonton, Winnipeg, Hamilton, Toronto, Ottawa, Montréal, Québec and Halifax.

Here is how Q1 played out:

  • Jan 2016 – Home prices dropped by 0.1%
  • Feb 2016 – Home prices increased by 0.6%
  • Mar 2016 – Home prices Increased by 0.8%
  • Q2 Teaser: April 2016 – Home prices increased by 1.2%

Good news for real estate sales professionals – 3 out of 4 months saw increases. In fact, the past 3 months consecutively have shown increases.

The Vancouver and Toronto markets continue to fuel the market with red hot increases to property values as evidenced by house price indices across the board. The average price of a single family detached home in Canada was widely reported to have soared over 1 million dollars coming into 2016 with Canada’s average recently reported by CBC to be over $500,000 – you can read more on this here: http://www.cbc.ca/news/business/crea-house-prices-march-1.3537143.

Many have speculated that foreign investment is, at the least, behind what seems to be a boom in British Columbia, to the point where the government has even expressed concerns over supply vs. demand. Here are some interesting articles on the topic to whet your appetite:

Meanwhile, in Toronto, soaring house prices are pushing buyers to look outside of the city and we don’t just mean in the GTA. Toronto’s market has led to booms in Hamilton, Barrie and other cities that are not considered the GTA.

No doubt that the Bank of Canada maintaining the incredibly low lending rate of 0.5% is helping as well. With a strong first quarter, all indicators seem to point towards a strong spring and summer in this ever exciting Canadian real estate market. Let’s keep our fingers crossed that things continue to grow as they have been over the last few months!

For more on the Teranet – National Bank House Price Index™ please visit: http://www.housepriceindex.ca/.

Want to take advantage of the tools that give you a bigger piece of the action? Visit www.geowarehouse.ca today.

 

 

 

 

Facebooktwittergoogle_pluspinterestlinkedinmail

Browse by Category