Thursday, March 30, 2006

Toronto CMA Housing Starts Sag in February


Toronto CMA Housing Starts, SAAR
Total housing starts in the Toronto Census Metropolitan Area (CMA) declined in February.  Construction began on 1,539 homes, representing a 33 per cent drop from the same month in 2005.  On a seasonally adjusted basis, the annual rate of housing starts dipped to 28,300 versus the January rate of 46,300.

The major factor contributing to February a sharp decline was the complete absence of new condominium apartment construction.  Condominium apartment starts are volatile, because they reflect the laying of foundations for entire multiple unit buildings at one time.


OWNERSHIP DEMAND REMAINS STRONG
February starts of the other lower density housing types decreased by a much smaller amount.  New footings for single-detacsemi-detachedached and town (row) houses were down by only 4.6 per cent.  New home construction will remain well above average in 2006.  The demand for ownership housing remains strong due to steady growth in employment and real wages coupled with very low borrowing costs.  Households remain confident in their ability to purchase and pay for a home over the long term.

Conclusion

However, due to the expected increase in the share of condominium apartment construction, starts will not be uniformly distributed throughout the year.  Rising average prices have shifted home buyer demand away from single and semi-detached houses toward less-expensive town homes and condominium apartments.  Year-to-date, the average price of a completed and absorbed single-detached home in the Toronto CMA rose to almost $457,000.  This price point is arguably too high for most first time buyers and many move-up buyers as well. From CMHC Market Analysis Centre - Toronto 2006

Wednesday, March 29, 2006

Toronto Real Estate Board (TREB) - Function and Purpose


The Toronto Real Estate Board (TREB) was founded in 1920 by a small group of real estate practitioners. TREB is now Canada's largest real estate board. There are more than 23,000 Members of TREB.

As stated in their policy manual, the Toronto Real Estate Board (TREB) is committed to advancing the interests of real estate sales people and brokers who comprise of TREB's membership. Members of TREB are also members of the Ontario Real Estate Association (OREA) as well as the Canadian Real Estate Association (CREA).

The Toronto Real Estate Board is the main real estate board in the Greater Toronto Area (GTA) that is the home board for real estate agents in the GTA and surrounding areas. These agents belong to and use TREB on a daily basis to promote the mls listings of their clients. Members also utilize the mls data in the area. TREB is one of the largest organized real estate boards in all of North America.

TREB is also responsible for membership, ethics and arbitration decisions and mandates much of the direction of the membership with regards to the public and the government.

REALTORS® who are members of TREB are licensed professionals who must abide by a strict code of ethics and meet continuing education requirements to maintain their status.

The Multiple Listing Service (MLS®) should not be confused with any information advertised on any site or the multiple listing service site operated by CREA. The Multiple Listing Service is a tool accessed only by REALTOR® members with extensive depth and functionality.

Toronto Real Estate Board Members utilize various fundraising events to raise money to make significant contributions to local and national charities such as the Hospital for Sick Children and Habitat for Humanity Toronto. These fundraising activities have also resulted in the construction of a Habitat home for a family in need.

The Toronto Real Estate Board issues news releases twice a month. This includes a full statistical update on local real estate market conditions at the beginning of each month. The publication is called Market Watch and is available from any member realtor

ConclusionThe Toronto Real Estate Board is a very large real estate board that runs the MLS system for listings in the area. TREB helps many agents in the greater Toronto area supply timely and relevant information purchasers and to promote vendor client listings across the GTA and the Southern Ontario region.

Thursday, March 23, 2006

What is CREA and how do they help Buyers, Sellers and Agents in Canada?


The Canadian Real Estate Association (CREA) is a trade association in Canada and it represents more than 82,000 real estate people across Canada .

CREA's primary mission is to represent its members at the federal level of government. CREA also defends the publics right to own and enjoy property in Canada .

CREA owns the MLS® trademark logo and name and has a proprietary interest in the REALTOR® trademark that is used in the United States . The REALTOR® trademark can only be used in Canada by members of The Canadian Real Estate Association. These members much accept and respect a strict Code of Ethics set out by CREA.

CREA also administers and owns the mls.ca site for the public. The real estate database systems operated by other member Boards (such as TREB) provide an ongoing inventory of available properties to mls.ca The website mls.ca ensures maximum exposure of properties listed for sale across Canada . This is important because most resale homes in Canada are listed on their local real estate boards and are available through MLS®. This also gives maximum exposure to any seller who decides to sell their property through a local real estate agent.

Buyers can access the mls listing for any property in Canada that is listed on a board that is a member of CREA.

Sellers benefit from CREA by the fact that their mls listing is available to all buyers across Canada and the world who wish to use the online version of the mls system created by CREA.

Conclusion

As you can see, CREA is a major force in organized real estate in Canada. CREA assists not only real estate agents, but also helps many sellers market their property through mls.ca and gives any potential buyer easy access to all mls listings in Canada.

Wednesday, March 22, 2006

You & Realtor Agency relationships explained in Ontario


The Real Estate Council of Ontario (RECO) has always required that a seller and buyer clearly understand the nature and different types of relationships that are available to them with their broker. Under the newly rewritten Real Estate and Business Broker's Act (REBBA) that is coming out in March of 2006 this disclosure requirement is now law.

The Ontario Real Estate Association has produced an updated brochure that is called Working with a Realtor and it clarifies representation and customer service agreements and arrangements with your real estate agent. The brochure also includes a section that explains your real estate agents obligations and requirements under the Code of Ethics. The Code of Ethics was also rewritten and updated with many new sections added or modified.

I can email you a copy of this new brochure so you may improve your understanding of agency relationships and take some of the confusion out of the entire process.

Please send me more information about Agency Relationships

Monday, March 20, 2006

Breaking Ontario Real Estate News - if your listing just expired - agents cannot contact you

Breaking News - if your listing just expired - agents cannot contact you

The question at hand is can a real estate agent contact a seller who had a listing on the mls that has now expired? The answer to this question falls under the privacy act.

A recent ruling by the Privacy Commissioner was that the agent used the expired mls listing to obtain the vendors name and address and used this information to market services to the seller and that this was improper.. Although the seller had authorized the original listing broker and the real estate board to use and disclose the information contained within the mls listing the seller did not consent to other brokers using any of that personal information being used by any other brokers to market their services.

The Privacy Commissioner explained that regardless of where the real estate agent found the sellers contact information, there is a link between the sellers previous intent to sell (as shown by the previous mls listing) and the sellers contact information. The ruling was that the real estate agent violated the personal information and property PIPEDA (find out what this means) from the information on the mls listing without the consent of the seller.

It is possible that all future mls listings will contain a clause that would give sellers the option of consenting to being marketing by other real estate agents after their listing expires.

Conclusion

The bottom line is that real estate agents cannot use the information contained in an expired mls listing agreement to contact those sellers without their prior consent. Even with a consent clause in all listing agreements, it will remain the decision of the seller to allow or deny other agents marketing their services to them after their listing expires.

Friday, March 17, 2006

Latest News from the Canadian Real Estate Association (CREA) - March 7, 2006


February strong month for MLS®
Records broken in some major markets
Some of Canada's largest real estate Boards reported record MLS® sales in February, despite a new survey indicating a drop in the number of Canadians intending to buy a home in 2006.

The Toronto Real Estate Board also reported a nine per cent increase in MLS® sales in February compared to the same month a year ago. TREB President John Meehan said the 6,756 transactions represent the second best February ever, within two per cent of the record set in February of 2002.

"The performance of the Toronto area market early in the year has been very encouraging," Meehan said. “We are not yet at the peak of the spring season, but consumers are showing confidence in what is consistently proving to be a solid, healthy real estate market." TREB statistics showed that during February, two of the most expensive areas within the city of Toronto also ranked amongst the most active in terms of sales, compared to February 2005.

"The market is very stable," Meehan added. "Great conditions exist right now and smart consumers understand that it's a good time to buy that first home or make the move to a different one." The average transaction price reported by TREB also cracked the $350,000 mark for the first time in February.

Montreal's residential resale market broke another record in February by generating more than $1 billion in sales for the month. "All indicators point to another strong year for real estate in 2006," said Michel Beausejour, CEO of the Greater Montreal Real Estate Board.

A total of 4,978 sales were registered on the board's Multiple Listings Service® in February, up four per cent from 4,803 sales in the same month of 2005. The total sales dollar value in February was $1.02 billion, up 10 per cent compared with the $932 million recorded in February, 2005 on the Montreal area MLS® system.

The increase in average prices is one reason for the jump in total value. The average price of single-family homes in Montreal rose four per cent to $312,000.

The Winnipeg Real Estate Board says MLS® sales in February were the best for the month in the 103-year history of the Board. $115 million worth of properties were sold last month through the board's Multiple Listing Service®, an increase of 28 per cent from the $90 million sold in February of last year, which had been the best February on record. Last month also tied with 1988 for the best February on record for unit sales, with 794 properties changing hands.

"It just goes on and on," WREB president Walter Boni said in an interview yesterday. "And personally, I don't see it letting up any time soon, when you see the number of people out looking.” Boni said he hosted an open-house recently that drew more than 40 prospective buyers, and he knows of another that attracted more than 50. "That tells you what the demand is like," he said.

In Calgary, residential MLS® sales totaled 3,060 units, a 37.7 per cent increase over February 2005's sales of 2,223, and a 27.1 per cent increase over January 2006's sales of 2,408. The average combined residential sale price for February 2006 was $304,560 a 26 per cent increase over February 2005, and a 5.3 per cent increase over January 2006's average price of $289,130.

“The February real estate market continued to demonstrate the power of an open and competitive market; supplies remain limited and demand high resulting in increased prices and fast sales in many communities” explained CREB® President, Kevin Clark. “Despite the opportunity for many, we are not reading about the losers; if one chooses not to sell competitively or one buys without assistance the market can cost you a lot of money.”

A national survey of buying intentions published by the Royal Bank said home buying intentions are at their lowest level since 2000. "While the intention to buy is still evident, a natural slowdown following several record buying seasons may partially explain the mood among Quebecers when it comes to ... home buying," said Danielle Coutlee of RBC personal finance services. (CREA 07/03/2006)

Thursday, March 16, 2006

Real Estate Investment Property Purchase - 7 Important Considerations


Real Estate Investment Property Purchase - 7 Important Considerations

If you are considering an buying an investment property, there are 7 important items to consider.
1. Financing, typically lenders will only lend up to 65 percent of the value of the property when it's for investment purposes. This limit is in place because lenders consider an investment property a higher risk

If you have equity in your current principal residence or in other property, then you may wish to borrow from those sources to maximize your mortgage and financing Generally speaking your investment property. The reason for this objective is because you are allowed to use mortgage interest paid on your investment property to reduce the amount of income and hence tax paid on your investment property.

2. Another important consideration for your investment property is choosing the best location. If you are considering a townhouse or a high-rise condo for your investment, then you want to ensure that it is located close to major shopping, transportation and schools and amenities that will appeal to prospective tenants. Often tenants will only have one vehicle and require these types of amenities to be located close to the property. You will usually get higher rent when your location is desirable.

3. Generally speaking, a high-rise condominium will allow you the most flexibility and least amount of effort and maintenance during the tenancy compared to any other type of property. Once a high-rise condo is rented, it is nearly a hands free investment. This does not come without any cost, as the maintenance fees associated with a high-rise condo will be much higher compared to a townhouse or other type of property. Your second choice for maintenance free investment property may be a townhouse. The reason is that all of the exterior maintenance, such as snow shoveling and lawn and garden maintenance will be taken care of by the condo corporation and not the tenant. The only items that you and/or the tenant will have to take care of are the interior items and these are usually minor in nature.

A freehold townhouse, semi or detached home will require more maintenance and effort on your part and the tenant throughout the year. This may be more desirable or not, depends upon your circumstances. Many investors choose freehold properties for their investment properties as they have the time or prefer to do some of the maintenance themselves or at least have control over the entire property compared to condo type properties.

4. As a continuation of the items considered in number 3, these different properties will appreciate at different rates, all things being equal. For example, if a high-rise condo has an appreciation of 10% in a year, then a townhouse may appreciate 12 to 14% and a freehold property may increase 15% or more. This larger appreciation would be offset by the fact that more maintenance may be required by you the owner.

5. It is important to consider all the expenses when you purchase an investment property. The obvious expenses are the principal and interest costs associated with the mortgage or financing on the property, the annual taxes and any monthly maintenance fees if the property is a condominium.

You may wish to consider regular maintenance items to protect the value of your investment property and the systems that are associated with your property. Other expenses you may incur are regular maintenance items such as furnace cleaning and maintenance and inspection. This is a very important item if your investment property is a freehold. Other items such as the condition of the roof, foundation, interior and exterior walls and windows, appliances, lighting and window coverings, electric garage door openers and any other systems or items that are mechanical in nature should be checked on a regular basis to not only protect the value of your investment but also to prevent the failure of these items as opposed to regular maintenance.

6. Once you have purchased your investment property your other major consideration is finding a good quality tenant. In my nearly 20 years of experience I have found that there are two major considerations in your tenant. The number one consideration is that you find a tenant who has the ability to pay the rent and if possible can show a good history of paying the rent. The second most important item is to make sure that your tenant will take care of the property for you in your absence.

Other items you will have to consider are that you must investigate the credit worthiness of the tenant, their personal and credit history, their employment status and confirmation of employment. You may contact their previous landlord and personal references that they supply on the application. These items can be critical and will give you insight into your prospective tenant. In my experience, the degree to which a prospective tenant completes all fields on a rental application and provides all the information you request and is straightforward and forthright with all answers to your questions and inquires will give a good indication of the quality of the tenant that you are looking at.

7. You have to decide to find the tenant yourself or use a real estate agent. When you attempt to find the agent yourself, you can personally meet the tenant ahead of time and see the type of people that will occupy your property. You will have to do all the credit and personal investigations of the tenant. I have found that when you use a real estate agent to find a tenant for your property, the quality of the tenants are usually better than through private means. The reason for this is that tenants who are relocating with their company or those tenants that have better employment and personal history know that the properties on the mls are better compared to the private properties and will utilize the mls to find their property. As well, the mls is a much more efficient method of finding a rental property and many tenants use the mls to find their next rental.

Of course, a real estate agent can find you a good quality tenant and perform all of the credit and personal investigations on your behalf. In the Toronto and GTA, the typical fee to have your property rented through the mls is one months rent commission.

Conclusion

As you can see, there are many important items to consider with an investment property that you are considering to purchase. Your personal situation, financial ability and degree of involvement in your investment property will ultimately determine the type of property that you will purchase.

I can assist you with all of the complexities when you purchase and rent out your investment property. Please don't hesitate to email me

Friday, March 10, 2006

How is the bank rate set in Canada and how does it affect the mortgage interest rates?

How is the bank rate set in Canada and how does it affect the mortgage interest rates?Bank of Canada Historical Interest Rates

The Bank of Canada today announced in early March that it is raising its target for the overnight rate by one-quarter of one percentage point to 3 3/4 per cent. The operating band for the overnight rate is correspondingly increased, and the Bank Rate is now 4 per cent

The Bank of Canada hiked its trend-setting Bank rate in December 2005 to 3.5 per cent. The Bank began raising it in the autumn of 2004, when it stood at 2.25 per cent.

The Bank has signaled its intention to continue hiking the Bank rate, which is widely expected to rise by a further one quarter of a percentage point between now and the late spring of 2006. The Canadian Real Estate Association expects the Bank rate to top out and stabilize at 3.75 per cent by mid-year.

The Bank is concerned about the potential for renewed inflation since. This has been the banks main concern over the past 5 years or so. There is ample evidence that there is virtually no slack in Canada's product and labour markets. Canadian economic growth is forecast to be 2.9 per cent in 2006, which slighter faster than its estimated non-inflationary rate of 2.8 per cent.

Financial markets think a rising Bank rate hike will keep inflation under wraps. Since bonds respond to inflation expectations and mortgage rates track bond yields, the five-year conventional mortgage rate is expected to rise by no more than one-half of a percentage point in 2006.

At the end of 2005, the five-year conventional mortgage rate stood at 6.3 per cent with this being the posted rate. Stiff competition among mortgage lenders continues to help borrowers negotiate discounts of about one per cent or even more off the advertised rate. Higher mortgage rates are expected to only gradually cool resale housing activity in 2006 and should have an effect on the Toronto Real Estate market prices.


Does the Bank of Canada set all interest rates?

No. The Bank of Canada sets the "target for the overnight rate." The overnight rate is the interest rate that banks charge each other to cover their short-term daily transactions. The target for the overnight rate is a half-percentage-point band.

If, for instance, that band is 3.25 per cent to 3.75 per cent, it means that banks will charge 3.75 per cent interest on money they lend to other banks and pay 3.25 per cent interest on money deposited by other banks. A nice setup!

The chartered banks use the overnight rate as a guide in setting their prime lending rate – the rate at which the bank's best customers can borrow money. When the central bank changes its overnight rate, it's sending a signal to the chartered banks that it wants them to change their prime lending rates. The banks always follow suit; if the central bank raises its overnight rate and a bank leaves its prime rate unchanged, it will make less profit.

The Bank of Canada does not directly set mortgage rates or credit card rates. Variable mortgage rates and other floating rate loans like lines of credit move up and down in lock step with the prime lending rate. But the rates for fixed mortgages depend more on the bond market.

Banks rely on the bond market to raise money for those kinds of mortgages. Interest rates on the bond market can move up or down more frequently than the prime rate because the bond market is far more sensitive to market fluctuations. Rates move when traders believe the central bank may be about to increase – or reduce – interest rates. You can find more about this and other Bank of Canada Monetary policies at Bank of Canada. This information is mostly from cbc.ca/news

You may wish to read more at google about how the Bank of Canada sets interest rates and it's policies

If you have any questions about bank rates or mortgage rates please email me.

Thank you,

Mark

Thursday, March 09, 2006

Toronto Real Estate Average Prices up 6% and Sales up 9% in February


Greetings from Fabulous Mississauga!


The real estate market in Mississauga and the GTA is off to another roaring first two months!

You may notice this is a significantly shorter version of my newsletter. You may read a much more detailed version at this online link

I hope that everything is going well for you and that you receive this in good health.

Mark


Graph of Average Sales Prices in the GTA



If you would like more information or have any questions or suggestions, please email me at mailto:mark@mississauga4sale.com

I wish you and your family All the Best!

Click here to see Mark's Overview Page!


This Month's Statistics This Month's Stats Read More about Prices...

Friday, March 03, 2006

Two articles about mls.ca and it's positive and negative impact on our industry.


Two articles about mls.ca and it's positive and negative impact on our industry.

This article talks about how mls.ca continues to help the public

This article talks about how mls.ca confuses the public

The two articles above are interesting comments from 'both sides of the fence' regarding mls.ca I believe that we agents have to always think about what is in the best interests of the public and our clients. Isn't this our job anyway?

The current shift of having all (or most) of the information available on the internet is inevitable because of many factors. The most important factor is control. When the public feel they have control over their searches and that they are not "missing out" on any possible properties, then they will use and like the system. The second important factor is anonymity. If you can search the mls on your own without the intrusion or 'closing' of a real estate agent, then the public wins again.

Agents who list properties certainly win with mls.ca and why shouldn't they? We were all taught, 'list to last' and this still holds true in 2006

The comment about the used car purchase is right on the mark. Think about your last 'nightmare' search and purchase of a used (or even new) car. If there was some organized public system that allowed you to search for all the current vehicles in your area using online methods from the privacy of your own home before you stepped into a car dealership you would be ecstatic. This is exactly why mls.ca works so well!

We have to embrace technology and use it to our advantage. This holds true in almost any industry in the marketplace today.

I wish you all the best in your real estate career and most important in your family life!
A. Mark Argentino P. Eng. Associate Broker
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987
BUS 905-828-3434
Website:
Mississauga4Sale.com