New Regulations Will Slow Condo Sales FiguresNew policies put into effect by the Federal Government, may stem some of the growth in the Toronto Condo Market, however it may not be enough to bring the market to a halt. Although there are some people out there seemingly on hands and knees praying for the Toronto Condo Market to "Implode" or "Burst" It won't happen as we've now had the chance to examine 6 months of higher federal regulation of the Toronto Condo Market, and the national housing market as a whole. Even though Toronto Condo sales were sliding even before these new policies came into effect, there may be some long term benefit in cooling the market, now and building a more solid base, for future sales and prices growth in the Toronto market into the future.
Busy Condo Market Boosts Toronto Home Sales
With fewer homes in the detached category available in Toronto, new home buyers seem to be opting for new condos, with sales heading forward at a rocket pace last month. Sales of Existing Homes in the Toronto area moved up by a whopping 2.1% in February 2014, and that is compared to the same time period last year. That was mainly due to a 12.5% increase in the sales of condos within the city so stated by the Toronto Real Estate Board. That will contrasts with the sales declines that occurred in townhomes, detached and semi-detached housing during the month, which was mainly due to a constrained supply of those housing types.
The Canadian Home Mortage Corporation (CMHC) set to alter Mortgage Insurance Rates
The federal agency which regulates mortgage insurance in Canada is set to alter the rates which is charges new home buyers to insure their mortgages against the risk of default. These premiums which new homeowners must pay to get CMHC insurance may also impact the ability of homebuyers to purchase their homes. The federal government has been trying for quite some time to reign in the Toronto and Vancouver Housing markets where the average cost of a single family detached home has now reached over $1 million dollars.
RBC Financial Group Warns, that Rising Mortgage Rates will Make Home Ownership Unaffordable for Most Canadians.
The Royal Bank of Canada is warning that the tide of rising interest rates will make home ownership for most Canadians unaffordable. This will be very true in Toronto and Vancouver where home prices have recently climbed over $1 Million dollars for a single family detached home. Servicing of interest related to home ownership such as mortgage rates, as well as mortgage insurance are set to rise, or have been rising over the past year. The longer term interest rates are moving at such a pace that the incomes of most Canadians will not be able to keep up. The good news however is that the rising interest rates foretell a improving economy for most Canadians looking to improve their financial situation
New Report States: Alberta to Lead Canadian Construction Through the Next Decade
The Alberta Home Construction Industry is set to become the new leader on the Canadian scene as states a new report from BuildForce Canada 2014-2023 Construction and Maintenance Looking Forward Forecast which sees the pace of expansion in the western province expanding at an exponential rate. Home construction in Alberta has now passed the 2008 peak and is set for further growth. Also on the Alberta front outside of homebuilding, the Oil and Gas Sector looks set to power Alberta’s economy into the next decade. The Alberta Construction Industry has adapted well to conditions on the ground and looks set for future growth.
Sotheby’s Agent Tells Tales of the Toronto Real Estate Market
One agent, points out a 1500 square foot condo near the High Park area, it is already asking for a price well over $1.5 million dollars. This is the time we live in the agent states, as the supply of single family detached homes slows, and the supply of condos increases, so too do the prices which these properties command on the open market. Toronto is no different than New York City in a sense, the agent bemuses. He tells tales of homes listed for 735,000 dollars going over 1 million dollars and above. These homes appeal to a certain demographic, one that wants the convenience of downtown living, as well as having a detached or semi detached home close to the core.
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