This past week the media featured several stories which helped calm any potential jitters Buyers might be having as they navigate the real estate market.
On Thursday, The Globe and Mail published an article on the rapid decline of high-ratio mortgages (those purchasing with less than 20% down) requiring insurance from Canada Mortgage & Housing Corporation (CMHC), the federal institution that protects lenders should Canadians default on their mortgage debt. CMHC revealed that they wrote $8.2-billion worth of insurance during the first quarter of 2013, compared to almost $19-billion during the same period a year ago. That’s a 54 per cent decline from 114,045 last year to 52,078 in the first three months of this year. It signals the moves by the Bank of Canada to rein in the high debt loads of Canucks by tightening insurance rules and amortization periods may be working, setting a dynamic for a soft landing rather than the crash ‘n burn many of us in the Toronto housing market have feared. You can click HERE to read the article.
The Toronto Star shared a report by the Bank of Montreal on Thursday which revealed consumer confidence in the Toronto condominium market remains healthy, with an increasing number of respondents saying they hope to buy a condominium within the next five years. While we’re not confident that a poll of 1000 consumers is an accurate reflection of the market as a whole, the fact that condominium prices are stabilizing does indicate Buyers have not fled. We’re certainly seeing our competitively-priced condominium listings garnering sufficient interest and offers to acknowledge that, while prices are down from this time last year, they aren’t sinking. You can click HERE to read the Toronto Star article.
To contrast, sales for freehold housing remain strong with an increase in prices over the past three months, even though we’re not experiencing the same volume of trading in the resale market. The Globe and Mail published an article citing the surprise of economists on how Toronto prices continue to escalate – now at an average of $543,838 – compared to $516,089 in May of 2012. And while sales during the first two weeks of May dropped 9.7 per cent compared to the same period last year, for those of us working in the real estate trenches we continue to see a lack of ‘good’ listings come for sale. You can click HERE to see the article.
From our perspective, the demand for centrally located houses in decent condition continues to outstrip the supply, even as the number of listings coming to market climb. According to Mark Mclean, our manager of the Bosley Queen West office, new condo listings increased by 200% over the previous week while freehold home listings have jumped by a staggering 400%. The biggest increase was in the $700,000 to $1.5M category by 520%. Wow!
At urbaneer.com, we’re here to guide you through the complexities of Toronto’s real estate market. Did you see our Spring / Summer 2013 Real Estate Forecasts? Click HERE to read the one of the Freehold Housing Market, and click HERE to link to the one on Toronto’s Downtown Condominium Market.
And please know we’re here to help!
~ Steven and the urbaneer team
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