Virtually Toronto Real Estate: News and Information
for June 2003
TODAY'S TOPICS
-Toronto Real Estate Board 'MarketWatch'
June 2003
CANADA'S MORTGAGE RATE LOWEST IN 46 YEARS
CANADIAN COTTAGE OWNERSHIP CLIMBS AS POPULATION AGES
TORONTO DOWNTOWN JAZZ FESTIVAL
-MARKET WATCH-June 2003-
May Cracks 8,000 Sale Barrier
For only the third time in history, 8,000 plus existing home
sales were
recorded through the Toronto MLS system, TREB President Ann
Bosley
reported today. "Although the precise figure of 8,025 sales
is down
marginally from last May's 8,042, it is by far the best result
for 2003 to
date. Given our city's troubled spring, to see such a robust
Toronto
re-sale market is very encouraging.
Prices continued their upward progress in May, going to $298,451
from
April's $292,783, a two per cent increase, and up seven per
cent over
May of last year. "This is clearly good news for sellers,"
Mrs. Bosley
said. "However, active listings climbed eight per cent
during the month,
to 21,747. Eventually the increase in inventory will exert a
welcome
moderating effect on sold values."
Breaking down the total, 2,050 sales were reported in TREB's
28 West
districts and averaged $244,292; 3,061 sales were reported in
the 14
Central districts and averaged $274,189; 1,299 sales were reported
in
the 23 North districts and averaged $412,733; and 1,615 sales
were
reported in TREB's 21 East districts and averaged $321,263.
TREB Market Watch (June 2003)
-CANADA'S MORTGAGE RATE LOWEST IN 46 YEARS-
It's been 46 years since Canadians could get a deal this good
for a mortgage.
But 46 years ago, there were few places to go if you wanted
a mortgage.
Most people went to their local banks, hat in hand, and took
whatever
terms were offered.
Now, Canada's largest banks are setting up subsidiary mortgage
companies
to help them compete with dozens of other financial institutions
and
mortgage brokers, and the winners are consumers.
Five-year mortgages are now available at less than five per
cent, and there's
a chance the rate could drop even more. This week the Bank of
Canada
decided to not to raise interest rates, responding to weak global
economies
and a slowdown in Canada's economic performance. Forecasts at
the
beginning of the year suggested that interest rates would rise
slowly
during 2003, as the Bank of Canada hiked rates to keep inflation
in
check. But a slower than expected U.S. economy, plus concern
about
the impact of SARS on the Toronto area, resulted in the rates
remaining unchanged.
The housing market, although not as strong as last year, is
still expected
to post its second-best year ever for MLS sales, and rock-bottom
interest rates can't hurt.
To earn the mortgage business, several financial institutions
are trotting
out new promotions and mortgage products.
For example, Scotiabank recently introduced a mortgage that
provides home
buyers with a down payment equal to five per cent of the property
value.
Both TD Canada Trust and the Royal Bank of Canada are taking
a page from
the automotive industry and offering "no haggle" mortgage
deals.
TD Canada Trust launched an advertising campaign promising that
it
will give customers its best rate mortgage, because it says
Canadians don't
like to haggle.
Mortgage brokers have made big gains in residential mortgage
market
share in recent years, although last year they reported that
market share
had slipped a little as the financial institutions became more
aggressive
in their marketing. Mortgage brokers are working toward setting
national
standards for their industry, which they hope will give consumers
more
confidence in using their services.
In the meantime, more than ever, if you're looking for a mortgage,
it pays to shop around.
(realty times)
-CANADIAN COTTAGE OWNERSHIP CLIMBS AS POPULATION
AGES-
The percentage of Canadian households that own vacation homes
is on the rise.
In 1977, about six per cent of households owned recreational
property. By 1999,
growth had only gone up by about one percentage point, to seven
per cent.
But in recent years, vacation properties have become a much
sought-after
commodity. A recent survey by pollster Ipsos-Reid, on behalf
of Royal LePage
Real Estate Services, shows about eight per cent of Canadian
households now
own vacation properties. During the next three years, six per
cent of those surveyed
say they will purchase a recreational home or property. Only
17 per cent of
existing owners say they plan to sell within the next three
years.
"In 2003, there will be four Canadians seeking recreational
properties to every
one cottage owner who plans on selling, and this scarcity of
supply continues
to exert pressure on property prices across the country,"
says Sherry Chris,
executive vice-president for Royal LePage. Chris says low interest
rates,
investors redirecting their money into real estate from the
stock market, and
an increase in U.S. buyers are pumping up demand and prices
in cottage
country. European buyers are also becoming a factor in some
parts of
the country.
LePage says multiple offer situations are common in recreational
areas in
Quebec, Ontario, Manitoba, Alberta and British Columbia.
The survey says more buyers are willing to consider creative
methods of
finance in order to afford a cottage, including renting the
property out when
it's not in use. It says 40 per cent of prospective buyers plan
on renting the
property to help cover some of the costs. Only 10 per cent of
existing cottage
owners say they rent it when it's not in use.
Recently Canada's largest mortgage broker, Mortgage Intelligence,
launched
a new product aimed at the vacation home market. The mortgage
is available
for owner-occupied ski chalets, cottages, and non-winterized
or seasonal
properties with year-round access in known vacation areas.
"Secondary properties are generally considered less than
desirable for
traditional lending institutions," says Bob Ord, president
of Mortgage
Intelligence. "These purchasers are often advised to take
out an equity l
oan or place a second mortgage on their principal residence
to finance
their recreational property."
Features of the mortgage include loans of up to $600,000, with
up to
85 per cent financing of the property. The mortgage is available
in
three-year and five-year fixed rates, and in a five-year variable
rate.
Rates are guaranteed for up to 60 days.
Mortgage Intelligence says the average age of vacation home
owners
is 52, and that during the next several years, aging baby boomers
will
fuel demand for recreational properties.
The LePage survey asked potential purchasers what they were
looking
for in a cottage lifestyle. Half of respondents said wanted
a place that
offered peace and tranquillity, while 38 per cent said they
wanted quality
family time and nine per cent were looking for place in which
to arty
and let loose.
The party crowd seems to be finding what they are after, because
15
per cent of current cottage owners have had to ask their neighbours
to keep the noise or music down. In addition, 37 per cent of
cottage
owners and prospective buyers said that police patrols on cottage
lakes and waters is currently inadequate.
Royal LePage says the least expensive areas of the country
for a standard
cottage with waterfront access are Silver Lake, B.C. ($34,000),
and Deer Lake
and Ocean Pond in Newfoundland ($40,000 to $45,000). Standard
cottage
prices in Prince Edward Island range from $60,000 to $145,000;
in New Brunswick
from $50,000 to more than $80,000; in Nova Scotia from $95,000
to $200,000;
and in Quebec from $225,000 to more than $275,000.
In Manitoba, standard cottages with waterfront access range
from $100,000 to
$150,000 except in the Lake of the Woods area, where buyers
are paying more
than $250,000. Saskatchewan prices are about $150,000, while
in Alberta the
range is $399,000 to $550,000. Prices in B.C. range up to $350,000
in the
Cranbrook area for properties with waterfront access.
Ontario's prices range from about $75,000 in northern areas
of the province,
to more than $1 million in the province's most popular vacation
destinations.
(realty times)
-TORONTO ISLAND PARK-
For an easy daytrip get-a-way--visit this interesting group
of islands just
minutes from the centre of the city.
http://www.city.toronto.on.ca/parks/to_islands/island_index.htm
