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Toronto Resale Homes Market: Fall 2007 Summary and 2008 Housing Market Forecast

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Submitted by Jasmina on Fri, 2007-11-23 01:37.

Sales of existing homes in Greater Toronto Area set an annual record early!

TREB, November 19, 2007 -- 2007 has already become the best year on record for resale homes in the Greater Toronto Area. 84,994 properties have changed hands, as compared to 84,145 sales in 2005, our previous best year, Toronto Real Estate Board (TREB) President Maureen O’Neill announced today. "All of the economic conditions remain in place for a strong housing market in the GTA. The unemployment rate fell by approximately half a percent last month, Statistics Canada anticipates sustained immigration throughout the next decade and mortgage rates remain historically low," said Ms. O’Neill. "Toronto is a very vibrant city in which to live and compared to other urban centres like New York, Los Angeles and London, our housing is very affordable."

Toronto Star, November 20, 2007 -- "Generally speaking, it's odd to see a real estate cycle last this long," says Ted Tsiakopoulos, Ontario regional economist for the Canada Mortgage and Housing Corp. "It seems we've reached a new paradigm where low interest rates, low inflation and a steady job market have kept this going a while longer than most people thought." Other factors at play in 2007 include the introduction of longer-term amortizations in the market, which has allowed new buyers to get a foot in the door, and higher new-home prices that have pushed people back into the resale market, says Tsiakopoulos.

November GTA Home Sales Highlights

  • Newmarket (N07) saw an increase of 50 per cent compared to the midway point of last November, due to a substantial number of detached and semi-detached home sales.
  • In the Toronto Downtown core (C01) condominium apartment transactions resulted in a 32 per cent overall increase as compared to the first half of last November.
  • In West Agincourt (E05), transactions were up 39 per cent as compared to the same timeframe a year ago, driven by a significant increase in detached home sales.
  • Northwest Cooksville (W15) experienced an overall sales increase of 27 per cent compared to mid-November 2006, mainly as a result of condominium townhouse sales.

October GTA Home Sales Highlights

  • In Central Richmond Hill (N04), a combination of detached sales and attached/row-house sales, contributed to an overall increase of 54 per cent.
  • Willowdale (C07) experienced the same combination of strong detached sales and sizeable condominium apartment transactions, which led to a 67 per cent increase in overall sales.
  • In Pickering (E13), overall activity was up 34 per cent, led by strong detached sales and a doubling of condominium apartment transactions.
  • In Riverdale (E01) the number of transactions to mid-month jumped 29 per cent compared to the same timeframe a year ago due to strong sales in all housing types.
  • Condominium apartment sales also pushed the South Humber area (W07) to a 60 per cent overall increase in activity.
  • Streetsville East (W19) saw a significant increase in the sale of semi-detached homes, which helped push overall sales up 48 per cent compared to mid-October 2006.

Demand for ownership housing in the GTA will remain very strong in 2008

CNW, November 8, 2007 -- GTA homebuyers will remain confident in their ability to purchase and pay for a home over the long term, according to Jason Mercer, Canada Mortgage and Housing Corporation's (CMHC) Senior Market Analyst for the Greater Toronto Area (GTA). "Steady growth in jobs and household earnings coupled with rising but still historically low borrowing costs will keep consumers upbeat about the purchase of a home in 2008," according to Mercer.

CMHC released its forecast for the GTA at the annual CMHC Housing Outlook Conference. Highlights of the report include:

  • Strong existing and new home sales will result in average annual price growth above the rate of inflation.
  • Rising prices will result in a greater number of home buyers turning toward less-expensive home types, including condominium apartments. In Ontario, there will be increasing demand for multi-family homes.
  • Higher mortgage carrying costs and slower job growth in higher paying employment sectors in 2008 across Ontario will shift demand towards the less expensive multi-family home sector, which includes townhomes and apartments.

Housing Market Outlook: Canadian Real Estate Not About to Burst

Patricia Lovett-Reid, senior vice-president with TD Waterhouse says:

Canadian investors and homeowners worried about a meltdown in the real estate market here in Canada can relax. The subprime mortgage crisis in the U.S. isn't likely to happen up here in the cooler, more fiscally conservative north. The Canadian housing market is not a bubble waiting to burst and owning a home is still a good investment and wealth management strategy, financial experts believe. Canadians don't need to be worried about the subprime mortgage crisis in the U.S.

Housing analyst Will Dunning says in November 2007 Housing Market Digest:

There is a mix of strongly positive economic drivers (wealth effects from housing and the stock market and relatively low interest rates), versus the strongly negative effect of the Canadian dollar. Commodity prices are a positive factor for the west but a negative factor east of Manitoba. For all of Canada, the balance from these factors is positive.