Whenever I see the phrase 'think tank' I cringe - basically a company that develops opinions, and is probably funded by another company that wants a certain opinion.
There is no housing crisis, at least not in this country. In fact since I started in real estate in 2006, it's become increasingly easier for people to purchase homes, particularly for the first time. Land Transfer Tax is being waived, there are 0% options (recently extended to investment properties as well), longer amortizations, etc.
Interestingly, many current opinions (be forewarned, this link is slightly self-serving to our industry) say that we're going to have a great year, and prices will hold reasonably steady with 2007.
From The Whig Standard:
If you want a good price on a house and you don't mind living 19 hours north of Kingston, consider moving to Thunder Bay.
The northern city may be the western world's most affordable housing market, according to a survey released yesterday by the Frontier Centre for Public Policy, a Winnipeg-based independent public policy think tank.
The survey of 227 housing markets in Canada, the U.S., the U.K., Australia and New Zealand found Kingston is among 40 moderately unaffordable housing markets.
An online calculator provided by the centre (http://www.fcpp.org/main/citycal.php) indicates the median cost of buying a house in Thunder Bay is about $233,000 less than in Kingston and takes about four years less to pay off, based on the Thunder Bay annual median household income of $58,500.
Despite being ranked, "moderately unaffordable," Kingston fared a lot better than most communities surveyed. A total of 38 were deemed "seriously unaffordable," while 90 were labeled "severely unaffordable."
Canada had three communities in the top 25 least affordable markets and eight communities in the top 25 most affordable markets category.
Thunder Bay was marked the most affordable of all 227 with it costing only 1.8 times the median household income to buy a home.
While it may cost a lot more to buy a house in Kingston than in Thunder Bay, Frontier Centre policy analyst David Seymour said the Limestone City is in pretty good shape.
That's because it's only 0.2 basis points off the median multiple of three that marks the line between an affordable market and an unaffordable one.
"Kingston is in a pretty good position overall," said Seymour. "It's only 0.2 of the median multiple basis point from from two- to three-year affordability zone where the average family can realistically pay off their house and go on to have a good lifestyle without too much trouble."
The 48-page report claims there is a housing affordability "crisis" that is making it difficult for people to buy their own houses. It blames "prescriptive planning" or "smart growth" strategies that aim to restrict the outward growth of cities.
The report says unless homes are in short supply, demand does not drive up prices. Instead, it says, house prices rise as a result of prescriptive planning that sets urban boundaries and drives up the price of property. House prices are also pushed up by infrastructure charges, which communities charge suburban developers who then pass the cost to home buyers, the report says.
"You can have smart growth, but bear in mind that there's a cost and that's the cost to housing affordability to Canadian families," Seymour said.
In Canada alone, there are huge disparities in affordability as well as the rate of change.
For example, in Vancouver 41 per cent of the median household income was required to pay the median mortgage in 2000. By 2007, 71 per cent was required, the report says.
In Ottawa, 18 per cent of the median household income was required to pay the median mortgage in 2000. By 2007, this had risen to just 25 per cent, the report says.
The harm caused by unaffordable housing doesn't just hurt household budgets, Seymour said.There are also social consequences, he said.
With home ownership more out of reach for younger households and lower income earners, it's more difficult to save for retirement. Thus, national pension systems and government assistance programs are more heavily burdened.
The extra money going into paying the mortgage also doesn't get investment in the local community, Seymour said.
While this is the first year Kingston has been examined, he said this city doesn't appear to be in danger of becoming a less affordable housing market.
"The key driver behind housing affordability ... [depends on] the attitude of municipal planners and people being able to purchase and develop land at the city fringes," Seymour said.
A quick look at this municipality's website convinced him that city planning staff are "reasonably reflexive and accommodating" to developers, he said, adding that Kingston also appears to have a lot of space around it, which helps.
"As long as municipalities are prepared to allow people to keep building, then there's no reason why house prices have to go up any further," Seymour said.
Wednesday, January 30, 2008
Tuesday, January 22, 2008
First-time buyers holding their own
New article with some interesting stats on first-time buyers. Buying a home has never been easier and more affordable, with the Ontario government expanding the Land Transfer Tax rebate for first-timers (up to $2000, which covers a purchase price of $227,500 or less). The former program was solely for new home purchases, but now covers all purchases (specifically existing properties). Mortgages are also being offered with more attractive premiums for unconvential mortgages (20% down as opposed to 25%), longer amortizations (30, 35, 40), and zero down options all make buying a home considerably easier. The last 4 properties I've sold have been to first-time buyers.
Incidentally, Kingston's price per square foot currently resides somewhere in the $160/psf range for new homes.
Despite years of escalating house prices across Canada, first-timer buyers are successfully financing and buying homes that meet their needs, says a national survey by Century 21 Canada brokers.
Don Lawby, president of Century 21 Canada, says first-time buyers have maintained their presence in the housing market by combining innovative buying and financing strategies with practical compromises.
“First-time buyers often enter the market with an unrealistic list of expectations, but soon find they need to decide on a smaller house or accept a longer commute time,” says Lawby. Once they choose a home, first-time buyers must tailor mortgage terms to meet their circumstances and lifestyles, he says. “Savvy first-time buyers are asking mortgage brokers to sort through the dozens of alternatives available from banks and other lending institutions.”
He says more first-timers are also getting a significant down payment from their boomer parents as an advance on their inheritance. “In other cases, parents are providing no or low interest loans to help their kids get into the market.”
The Century 21 national house price survey of typical first-time homes included 128 neighbourhoods within 55 cities and towns across Canada.
The most expensive cities for first-time buyers based on price per square foot are Vancouver, where a 412-square-foot condo in the downtown is $281,000 or $682 per square foot; the Toronto suburb of Thornhill, where an 800-square-foot bungalow on a 3,500-square-foot lot is $480,000, or $600 per square foot; and downtown Toronto, where a 340-square-foot condo in trendy Liberty Village is $200,000 or $588 per square foot.
The least expensive cities for first-time buyers based on price per square foot are St. John’s (2,150-square-foot two-storey bungalow, $170,000 or $79 per square foot), Halifax (1,408-square-foot semi-detached house, $129,900 or $92 per square foot), Windsor, Ont. (850-square-foot 1½-storey house, $91,000 or $107 per square foot), London (1,000-square-foot townhouse, $120,000 or $120 per square foot), and Sudbury (969-square-foot 1½-storey house, $140,000 or $144 per square foot).
The survey also found that the most expensive smaller centres for first-time buyers based on price per square foot are Fort McMurray, Alta., where the oil sands boom continues (1,120-square-foot bungalow, $565,500 or $505 per square foot), and Canmore, Alta., in the majestic Rockies just east of Banff National Park (1,100-square-foot townhouse, $445,000 or $405 per square foot).
The most affordable prices in smaller centres for first-time buyers based on price per square foot are in Fort Erie, Ont., 30 kilometres south of Niagara Falls on Lake Erie (1,157-square-foot 1½-storey house, $96,000, or $83 per square foot), Summerside, PEI (1,083-square-foot 1½-storey house, $89,900, or $83 per square foot), and Yorkton, Sask., 190 kilometres east of Regina (896-square-foot bungalow, $83,000, or $93 per square foot).
From: http://www.remonline.com/remonline/detail.aspx?dt=1051179&menu=26&app=153&cat1=473&tp=12&lk=g
Incidentally, Kingston's price per square foot currently resides somewhere in the $160/psf range for new homes.
Despite years of escalating house prices across Canada, first-timer buyers are successfully financing and buying homes that meet their needs, says a national survey by Century 21 Canada brokers.
Don Lawby, president of Century 21 Canada, says first-time buyers have maintained their presence in the housing market by combining innovative buying and financing strategies with practical compromises.
“First-time buyers often enter the market with an unrealistic list of expectations, but soon find they need to decide on a smaller house or accept a longer commute time,” says Lawby. Once they choose a home, first-time buyers must tailor mortgage terms to meet their circumstances and lifestyles, he says. “Savvy first-time buyers are asking mortgage brokers to sort through the dozens of alternatives available from banks and other lending institutions.”
He says more first-timers are also getting a significant down payment from their boomer parents as an advance on their inheritance. “In other cases, parents are providing no or low interest loans to help their kids get into the market.”
The Century 21 national house price survey of typical first-time homes included 128 neighbourhoods within 55 cities and towns across Canada.
The most expensive cities for first-time buyers based on price per square foot are Vancouver, where a 412-square-foot condo in the downtown is $281,000 or $682 per square foot; the Toronto suburb of Thornhill, where an 800-square-foot bungalow on a 3,500-square-foot lot is $480,000, or $600 per square foot; and downtown Toronto, where a 340-square-foot condo in trendy Liberty Village is $200,000 or $588 per square foot.
The least expensive cities for first-time buyers based on price per square foot are St. John’s (2,150-square-foot two-storey bungalow, $170,000 or $79 per square foot), Halifax (1,408-square-foot semi-detached house, $129,900 or $92 per square foot), Windsor, Ont. (850-square-foot 1½-storey house, $91,000 or $107 per square foot), London (1,000-square-foot townhouse, $120,000 or $120 per square foot), and Sudbury (969-square-foot 1½-storey house, $140,000 or $144 per square foot).
The survey also found that the most expensive smaller centres for first-time buyers based on price per square foot are Fort McMurray, Alta., where the oil sands boom continues (1,120-square-foot bungalow, $565,500 or $505 per square foot), and Canmore, Alta., in the majestic Rockies just east of Banff National Park (1,100-square-foot townhouse, $445,000 or $405 per square foot).
The most affordable prices in smaller centres for first-time buyers based on price per square foot are in Fort Erie, Ont., 30 kilometres south of Niagara Falls on Lake Erie (1,157-square-foot 1½-storey house, $96,000, or $83 per square foot), Summerside, PEI (1,083-square-foot 1½-storey house, $89,900, or $83 per square foot), and Yorkton, Sask., 190 kilometres east of Regina (896-square-foot bungalow, $83,000, or $93 per square foot).
From: http://www.remonline.com/remonline/detail.aspx?dt=1051179&menu=26&app=153&cat1=473&tp=12&lk=g
Saturday, January 19, 2008
The toilet seat world of real estate
A great show on CBC radio, GO!, had a highly entertaining today focusing on some highly entertaining takes on the Vancouver real estate market. Unfortunately I was in and out of the car and had to miss a few bits, but it featured Cam Phillips exposing a few real estate cliches like 'central location,' 'motivated seller,' ' character home,' etc.
They also discussed 'lookie loos' - which is a phrase I first heard in this great video. Enjoy!
They also discussed 'lookie loos' - which is a phrase I first heard in this great video. Enjoy!
Monday, January 14, 2008
604 Stanford Street
It'd be foolish of me not to shamelessly promote my own listings occasionally - though the majority of the posts here will be more on real estate-related news, projections, personal commentary, etc.
Huge lot, approx. 3000 sq. ft. of finished living space, needs updating, vendors willing to consider all offers!
Friday, January 11, 2008
Kingston-area housing starts likely to dip this year, analyst predicts
Interesting stats and comments here (though not sure about 'harsher weather' this January, confusing weather perhaps?!). 2008 should be a good year for the condo market as the Royal George nears completion, Admirals Walk begins construction, and it looks like Caraco will have a new high-rise in the West End.
From today's Whig-Standard:
The number of new houses being built in the Kingston area is expected to decline this year, the Canada Mortgage and Housing Corporation's analyst for Kingston said yesterday.
Housing data released by the CMHC yesterday shows housing starts skyrocketed in the fourth quarter of 2007, reversing a four-year downward trend. But CMHC market analyst Abdul Kargbo said he doesn't think the growth will last.
"For 2008, we're expecting a downward trend in total starts and single-housing starts are actually going to go down," Kargbo said.
From October to December, construction began on 240 new houses in the Kingston Census Metropolitan Area, 100 more than the same period in 2006. The Census Metropolitan Area includes Kingston, Frontenac Islands, Loyalist Township and South Frontenac.
Kargbo attributed the spike to predictions of a long, harsh winter. Instead of waiting until spring to start putting up new homes, local builders took advantage of milder temperatures to lay foundations in November, he said.
"People are expecting harsher weather [in] January through the rest of the winter, so I strongly believe, as a result of it, the builders decided to lay as many foundations as possible," he said.
While November's housing starts spiked at 129, December's were historically normal at 83.
"It was the highest since May of 1989 ... [when] we had 130 starts," Kargbo said of November's data.
While the number of new houses built has been falling over the last four years, the number of existing houses sold is rising.
Kargbo said that's because prices of new homes have been extremely high since 2005 and people are seeing better value in previously owned homes. Meanwhile, no apartment buildings were completed in the fourth quarter of 2007.
Kargbo said developers may have decided they built enough units in 2006 and 2007 for the short term.
n total, construction began on 280 apartment units in 2007, 207 fewer than 2006.
Kargbo said that decline represents a more typical level of activity.
From today's Whig-Standard:
The number of new houses being built in the Kingston area is expected to decline this year, the Canada Mortgage and Housing Corporation's analyst for Kingston said yesterday.
Housing data released by the CMHC yesterday shows housing starts skyrocketed in the fourth quarter of 2007, reversing a four-year downward trend. But CMHC market analyst Abdul Kargbo said he doesn't think the growth will last.
"For 2008, we're expecting a downward trend in total starts and single-housing starts are actually going to go down," Kargbo said.
From October to December, construction began on 240 new houses in the Kingston Census Metropolitan Area, 100 more than the same period in 2006. The Census Metropolitan Area includes Kingston, Frontenac Islands, Loyalist Township and South Frontenac.
Kargbo attributed the spike to predictions of a long, harsh winter. Instead of waiting until spring to start putting up new homes, local builders took advantage of milder temperatures to lay foundations in November, he said.
"People are expecting harsher weather [in] January through the rest of the winter, so I strongly believe, as a result of it, the builders decided to lay as many foundations as possible," he said.
While November's housing starts spiked at 129, December's were historically normal at 83.
"It was the highest since May of 1989 ... [when] we had 130 starts," Kargbo said of November's data.
While the number of new houses built has been falling over the last four years, the number of existing houses sold is rising.
Kargbo said that's because prices of new homes have been extremely high since 2005 and people are seeing better value in previously owned homes. Meanwhile, no apartment buildings were completed in the fourth quarter of 2007.
Kargbo said developers may have decided they built enough units in 2006 and 2007 for the short term.
n total, construction began on 280 apartment units in 2007, 207 fewer than 2006.
Kargbo said that decline represents a more typical level of activity.
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