Real Estate Market Watch: Can we keep this going? Is the GTA's Real Estate market sustainable?

Once again, more signs or questions of the certainty that we are out of the worst of this recession are surfacing. Now, the Real Estate industry across Canada is having a hard time swallowing that there's been a complete turnaround in the Real Estate housing market.

When 1,153 agents and brokers were surveyed across the country about whether they thought the housing market's recent performance was sustainable, only 707, or 61% said yes. Another 28% said no and 11% didn't

know.

The truth of it when it comes to our local Real Estate markets in Oakville, Mississauga, Toronto and the rest of the GTA is that widespread small sample surveys of brokers and salespeople across Canada sheds only a glimmer of light on what is happening here at home.

I've been preaching now for a while that national statisctis and information on the Real Estate market should be taken for what they are - averages of different market conditions in a wide range of cities and communities across Canada.

Yes, Canadian housing sales have climbed 18.2% in July and again in August from a year ago and are now on pace to beat 2007 sales, a record year. This dramatic recovery and 'strong home sales numbers' comes after sales were all but frozen over the winter, with January 2009's activity at a decade low.

The trouble is in many areas across Canada, housing prices are still declining. In Ontario and in particular Oakville, Toronto, Mississauga and the GTA as a whole, housing prices are not declining right now.

Our median and average prices are rising and year-to-date up, granted less than 0.5% from last year, but still UP. So while for many affordability is improving, here in Oakville and Mississauga, many people are feeling locked into their homes. If they were to sell their home or condo, they would find themselves having to pay more in many cases.

In the survey sample. of the real estate agents who don't believe the market is sustainable, 36% said the recovery will end when interest rates climb which they say is inevitable. Another 20% of those who don't believe in the housing recovery said there has not been enough job growth to sustain the real estate sector.

This is important. There are a number of reports of improved economic factors like employment rates or rather the slowing of unemployment, but there are still many, many companies that are under wage freezes and budget tightening. How can housing prices continue to rise away from incomes??

Do you think the Real Estate market has recovered in Oakville and Mississauga?

What are your thoughts about the current cost of housing in Oakville and Mississauga?

Read Garry Marr’s entire article “Even Canada’s Real Estate industry questions housing turnaround" in the Financial Post - Septemeber 10, 2009

Related posts:

• Oakville Real Estate Watch: Healthy market or Micro Bubble?
• Housing market will moderate in 2009, improve in 2010

Oakville, Mississauga & GTA Real Estate Market Update: August 2009

GTA REALTORS® Report August Resale Real Estate Market Figures

In August 2009, Oakville, Mississauga & Greater Toronto area REALTORS® reported 8,035 Real Estate transactions, up 27% per cent from August 2008. The average price for August’s Real Estate transactions was $387,921 – up 6% compared to the same period last year.

"The increase in demand for existing homes has been widespread across different housing types and price ranges," said TREB President Tom Lebour. "This suggests many categories of home buyers have chosen to make a long-term investment in housing, from first-time buyers to move-up buyers or buyers who are seeking a lifestyle change."

Year-to-date sales, at 58,421 were up 2% compared to the first eight months of 2008.

Average prices of homes and condos over Oakville, Mississauga and the rest of the GTA, at $385,978 are up by less than one-half of one per cent.

"We have heard more positive economic news lately. The improved housing market has played a key role,” explained Jason Mercer, TREB's Senior Manager of Market Analysis. "Home sales have helped other sectors of the economy through home buyers’ spending on things like financial and legal services, moving, renovations and home furnishings."

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Greater Toronto REALTORS® are passionate about their work. They adhere to a strict Code of Ethics and share a state-of-the-art Multiple Listing Service. Serving over 28,000 Members in the Greater Toronto Area, the Toronto Real Estate Board is Canada’s largest real estate board.

Oakville New Homes: The Gardens at Coronation by HUSH

Discover a new infill community in south-west Oakville. 'The Gardens at Coronation' aim to take advantage of its secluded setting admist lush, mature trees by creating a serene & comfotable, private setting for these fourteen, unique, English garden inspired custom homes.

The location of this new home development offers country estate style living with all the amenities of Oakville living. Situated in desirable south-west Oakville, between Oakville's two harbours it enjoys the numerous parks and trails, charming village areas, recreational facilities and other amenities. It's a stone's throw to the lakefront Coronation Park and minutes of the shops and restaurants of nearby downtown Oakville or Bronte Village.

Builder Hush Inc. has succeeded in making the most of this mature setting. The luxury homes will have lot frontages of up to 100 feet with home sizes ranging from approximately 2,500 square feet to over 4,000 sq.ft. The homes' feature rich, natural tones, bold lines and lush foliage.

The interiors of the luxury homes at 'The Gardens' are designed to reflect the character and prestige of each unique residence. With HUSH's signature attention to best-in-class detail, nothing is overlooked. Interior spaces are designed to be dramatic, but still efficient. Fine details like hardware finishes, hand-made cabinetry, stairecases & railings have all been carefully selected to ensure that each home reflects everything it was intended to be - a customized unique luxury home customized to each homeowner's lifestyle and needs & built to unsurpassed standards.

The homes of 'The Gardens at Coronation' will be priced from $1.295 million to over $2 million. For more information on specific home designs, plans and finishes contact Ryan Chelak or visit www.BuyAndSellYourHome.com/The Gardens at Coronation.

Real Estate News: HST could cause a boom in the fall '09 housing market.

Thinking of buying a new home or condo?

You might want to take action sooner rather than later. That is, if you don't want your Real Estate purchase to be subject to the proposed harmonized sales tax.

The proposed HST is planned to take effect in Ontario July 1, 2010. That's when the 8 per cent provincial sales tax will be blended with the 5 per cent federal GST into a single 13 per cent tax. Presently. only the 5 per cent GST currently applies to new homes and condos.

If the new home or condo you're looking at is priced at $400,000 or less, things shouldn't change much for you. There is to be a rebate of 75 per cent – 6 % of the of the provincial portion of the tax. But if your new home or condo exceeds that amount, you can expect to pay significantly more.

"For example, on a $600,000 house, you'll be paying $12,000 more in tax than you do now (factoring in the rebate up to the $400,000 mark, the current 2 per cent "embedded" tax in home prices, etc.) That's a significant improvement over the original Ontario government proposal, where the buyer of a $600,000 home would have had to pay the full 8 per cent provincial portion of the tax on the entire purchase price."

The HST rebate is only for principal residences. This means new cottages, ski chalets or a weekend condos, will be subject to the full 8 per cent tax increase.

If you sign an aggrement of purchase and sale now and close before June 30 next year, it is said that 'the deal' will be "grandfathered" and only GST will apply. But if weather or other issues delay closing beyond July 1, the new house or condo will become subject to the new HST (the exaqct amount depends on the degree of completion at July 1st, 2010) and your agreement should specify if you or the builder pays the tax if that happens.

There are various ways builders can pass on the HST to buyers and he thinks most builders will absorb it up to $400,000 and above that, will sell houses at an "all-inclusive" price. "It remains to be seen how the market will react," he said. But as Ontario consumers are used to paying an all-inclusive price for homes (currently, with the GST included), they would likely prefer this option to having a house marketed without the tax included in the advertised price.

"Most people are going to freak out about the HST," says Paul Pettipas, chief executive officer of

the Nova Scotia Home Builders Association, where the HST was implemented in 1997. "But Canadians just get excited for awhile and then accept it. It will (most likely) affect new home sales for about three years, then things will get back to normal."

Frank Giannone, president of the Ontario Home Builders' Association, says anyone contemplating a new home purchase, especially a new house or condo priced above $400,000, would be wise to act now and try to have it close by June 30. He advises that builders should try to build as much as they can too, to capitalize on the possible pre-HST sales rush.

Veteran builder Hugh Heron of Heathwood Homes would like to see the provincial government take things farther and not charge the new tax on any sales deal signed before July 1, 2010, even for homes and condos closing after then.

"I'm certainly not a fan of the tax and this is a great opportunity to stimulate the economy, especially in the GTA where unemployment is at 10 per cent," says Heron. "It's an easy way to create jobs without spending any money. Making every home sold before July 1, 2010 exempt from the HST regardless of the closing date will stimulate jobs, I'm convinced of that. It's a no-brainer way of stimulating the economy."

Giannone says he's already getting customer complaints about the HST as some of his Fram Group's projects won't close until after the HST is in effect; but he says most people intending to buy new will do so anyway, but will likely look at slightly smaller homes or condos than they originally intended.

The HST still has to receive legislative approval, says Giannone, but he has no doubt it will become law. That's why his association has been turning lobbying efforts to the federal government, not only on the reno issue, but also to urge it to offer a progressive tax/rebate structure for the GST, as Ontario is doing with its portion of the HST.

Read Tracy Hanes' full article "New tax could trigger mini boom" in the Toronto Star (August 29, 2009).

Similar blog posts:

"McGuinty softens blow to Real Estate Buyers: Is it enough?" June 22, 2009