Our weekly roundup of real estate news from Toronto, Canada, the U.S., and around the world ending July 21, 2017.
Plunging GTA home sales lead to biggest national monthly decline since 2010 (The Toronto Star)
Home sales in June posted their largest monthly drop in seven years, driven by a plunge in the Greater Toronto market, the Canadian Real Estate Association said Monday, the latest evidence that a cool-down in the housing sector is taking hold.
Transactions last month were down 6.7 per cent compared with May on a national basis, the third consecutive monthly decline, with the Greater Toronto Area registering a 15.1-per-cent drop.
Two GTA real estate agents say they are seeing fewer potential buyers attend open houses in the area as the local real estate market cools in the wake of the Ontario government’s new housing measures.
Danyelle Boily, a real estate agent with Bosley Real Estate, told CBC Radio’s Metro Morning on Tuesday that the number of people going to open houses has dropped sharply since measures were introduced in April.
Toronto still the focal point of foreign home buyer activity in Ontario — report (Canadian Real Estate Magazine)
Latest data from the Ontario government showed that half of real estate transactions involving a foreign buyer in the Greater Golden Horseshoe region took place in Toronto the month after the province introduced a new tax on non-residents.
The Ontario government reported that there were 857 residential and agricultural real estate purchases by foreigners in the Greater Golden Horseshoe — which stretches from the Niagara Region to Peterborough, ON — between April 24 and May 26.
Gary McNeal, a building contractor and roofer, claims that in June 2014, he and his stepdaughter, Shannon Lorraine, agreed to participate in a “flip” regarding a waterfront property in Maple Ridge.
The property at 20194 Wharf St. is located on the Fraser River and at the time of the purchase had a dilapidated house that could be renovated, says McNeal’s notice of civil claim filed in B.C. Supreme Court. It represented a “ripe opportunity” for those involved in flipping real estate, adds the suit.
Market in the midst of soft landing: Big bank (Canadian Real Estate Magazine)
Canada’s market may be in the midst of a soft landing, and the foreign buyer tax is having an impact, according to recently released stats.
“The Canadian housing market is now in its third month of what is expected to be a soft landing. The weakness was triggered by changes to provincial and federal housing policy, but it will ultimately be higher interest rates that help solidify it,” Diana Petramala, economist with TD Bank, said in her analysis of CREA’s release. “Mortgage rates have moved in tandem with the Bank of Canada rate hike last week and will likely to continue to edge higher with three additional rate increases expected by the end of next year.”
Canada’s new real estate war (Maclean’s)
The basement, wrote the French philosopher Gaston Bachelard in The Poetics of Space, an architectural treatise, “is first and foremost the dark entity of the house, the one that partakes of subterranean forces. When we dream there, we are in harmony with the irrationality of the depths.”
Imagine what Bachelard might say we dream of when we dream in our self-storage lockers, the rectangular, padlocked, infinitely uniform spaces where we are increasingly stowing our things.
U.S. homebuilders should be feeling pretty good about their business, given the nation’s severe shortage of homes for sale, but a sharp spike in the cost of lumber is weighing heavy on their bottom lines.
A monthly index of homebuilder confidence in the single-family market fell 2 points in July to 64 from a downwardly revised June reading. Economists had expected a reading of 68. Anything above 50 is considered positive, but this is the lowest reading on the National Association of Home Builders/Wells Fargo Housing Market Index since November — before the presidential election.
U.S. Builder Confidence Dips Two Points in July (World Property Journal)
According to the National Association of Home Builders, U.S. builder confidence in the market for newly-built single-family homes slipped two points in July 2017 to a level of 64 from a downwardly revised June reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). It is the lowest reading since November 2016.
“Our members are telling us they are growing increasingly concerned over rising material prices, particularly lumber,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “This is hurting housing affordability even as consumer interest in the new-home market remains strong.”
Foreign Buyers Drive Record $153 Billion of U.S. Residential Sales, Miami Top Market (World Property Journal)
The National Association of Realtors is reporting that a substantial increase in sales dollar volume from Canadian buyers, foreign investment in U.S. residential real estate skyrocketed to a new record-high, as property transactions grew in each of the top five countries where buyers originated.
This is according to an annual survey of residential purchases from international buyers released this week by the National Association of Realtors, which also revealed that nearly half of all foreign sales were in three states: Florida, California and Texas.
Rents in Britain’s private rental sector increased by 1.8% in the 12 months to June 2017, unchanged for the third consecutive month, the latest official data shows.
Rents in England increased by 1.9%, in Wales they were up by 1.1% while Scotland saw rental prices increase by 0.2%, according to the figures published by the Office for National Statistics (ONS).
Australia on Wednesday ordered the country’s biggest banks to raise capital for the second time in two years and signalled further action to shore up their burgeoning mortgage books, potentially squeezing shareholder returns.
The banking regulator said it would release a discussion paper later this year to include risk weights on mortgages among other changes, in-line with expected rules due to be finalised
by global regulators.
Flat fees for buy to let mortgages at lowest level for a year (Property Wire)
The flat fees for buy to let mortgages are now lower than they have been at any point in the past 12 months, according the latest lending costs index.
The average flat fee among buy to let mortgage products fell by more than 5% in the second quarter of 2017, down to £1,370 from £1,446, the data from the index from Mortgages for Business shows.