With increasing interest rates and the mortgage stress test throwing a curve into the market, more and more developers are seeking financing from non-traditional sources. Enter Cameron Stephens. Business is brisk. We’re busy putting together exceptional financing packages for our clients both old and new. See some recently funded Cameron Stephens projects or read about Market Intel and more in our Spring 2019 newsletter.
Have a look at one of our satisfied customers, Streetcar, profiled here in our Deal Talk video. These videos showcase one of our “partners” in every issue of The Ground Up. Enjoy!Watch Video
According to the Canadian Real Estate Association, 2019 will limp along as stricter mortgage qualifications and rising interest rates continue to put pressure on home buyers across Canada.
Sales figures released for January 2019 were down four percent from January 2018 – the weakest performance since 2015. Coupled with this, housing prices are down 5.5% on average across Canada to $455,000.
The weakness in the markets also affects mortgage lending. It will be interesting to watch the effects on the earnings reports from the Big Five banks in the coming quarter.
Compared to the rest of Canada, Toronto looks a little brighter.
|TREB MLS® System Sales||92,782||101,213||113,040||92,264||77,375||83,000|
|TREB MLS® System Average Price||$566,624||$622,121||$729,837||$822,587||$787,195||$820,000|
Accord to TREB President Gerry Bhaura, 2019 will show moderate improvement in terms of sales and average selling prices. “Although we won’t experience record levels, we do expect to see a better year in 2019 for sales and selling prices reported by GTA REALTORS® through TREB’s MLS® System. Many buyers who moved to the sidelines over the past year due to various government policies, including the OSFI-mandated mortgage stress test, have re-evaluated their positioning in the marketplace vis-à-vis home type, location and price point. It makes sense that Ipsos, in its Home Buyers Survey conducted for TREB, found that the share of intending home buyers has increased.”
At a recent Economic Summit hosted by The Toronto Real Estate Board, (Feb 22, 2019), the overall market conditions for 2019 in York Region look like this:
Source: Press Release, Mary Gallagher, Senior Manager Public Affairs, TREBnet.com
Back in December 2018, we met with industry expert Hunter Milborne, who provided us with a snapshot of the new condominium market. As the CEO of Milborne Group, Canada’s largest brokerage for new real estate, Mr. Milborne’s perspective is right from the trenches. We found his information so compelling, we asked him for his take on the current market for this issue of From The Ground Up. (to read Mr. Milborne’s original article, click here)
In the last three years, we at Milborne Real Estate Inc., have sold almost 17,000 residential condominium units. This represents almost $9 Billion, which is roughly 20% of the GTA total.
What did we learn? CMHC recently came out with an analysis— conclusions as follows: based on the projected increase in Federal immigration, anticipated domestic immigration to the GTA and the influx of new students each year, the GTA needs 50,000-55,000 new house units per year for at least the next five years.
Presently, we are getting 20,000 to 35,000 new condos per year and roughly 3,000 to 7,000 new single, freehold townhomes. Basic supply and demand economics will tell us that this strong demand with limited supply will keep prices moving up and mitigate any downward pressure that might arise for a variety of reasons.
There is a lot of condo development activity in Hamilton, Niagara, Kitchener-Waterloo, east to Bowmanville, and even Kingston. Even in these suburban markets, prices are strong and are based on a demand pull and a cost push.
Prices in Yorkville for super prime new condos have climbed to over $2,000 p.s.f. average for high-end developments. 50 Scollard, by Norman Foster Architects/Lanterra Developments, the “gold standard” is now about 25% sold.
At the other end of the spectrum, St. Clair and Keele’s “Stockyards” is over $800 p.s.f. average, at Keele and Sheppard – Mattamy’s ‘Saturday on the Park’ in Downsview is $800 p.s.f. There is nowhere in GTA that is less than $800 p.s.f. Again, a function of necessity based on costs and ability to sell based on demand.
There you have it, probably 17,000-20,000 new condo pre-construction sales will be made this year with an average price of about $650,000, so that it is still some what affordable for now!
In December 2018, Cameron Stephens participated in the Santa Shuffle Fun Run to support The Gateway – a Salvation Army drop-in program which provides a place of safety and warmth for Toronto’s most vulnerable and helps prevent homelessness. Proudly, CSMC raised $25,000 through individual fundraising and donation matching – making Cameron Stephens the largest contributor to the event!
This year, the event will be held on Saturday December 7, 2019.