A"MAY"ZING MONTH!

Condo resale market climbs in May
By Josh Skapin
Calgary Herald, June 8, 2012

Calgary’s condo resale activity climbed 35 per cent in May, compared to the same time last year, says the Calgary Real Estate Board.

In fact, there were 675 apartment or townhouse sales last month after only 500 condo units changed hands in May 2011.

The average resale price for condo apartments last month was $280,030. For townhouses, the average price was $330,446.

High-end condo sales are also on the upswing in the city.

After the first five months of 2012, 10 townhouses priced from $900,000 were sold in the city — only three units in that price range changed hands during the same period in 2011.

For condo apartments, eight units have sold for at least $900,000 so far in 2012, compared to five units last year.

Zone C, which roughly covers southwest Calgary, paced the city in condo sales last month with 385. The zone also saw the highest average resale price at $322,204. It also paced the city in inventory with 1,016 available units.

Located in Zone C, Connaught topped all Calgary communities in May with 49 units sold. Also in Zone C, Springbank Hill had the highest average price at $571,200.

A distant second to Zone C’s sales totals in May was Zone A, which roughly corresponds to northwest Calgary. It saw 189 sales at an average resale value of $295,682.

Zone D, which roughly covers southeast Calgary was third in sales totals last month with 69 at an average resale value of $263,609.

The slowest area of the city for condo sales was Zone B, which roughly covers northeast Calgary. It had 32 sales at an average price of $170,893. The community with the lowest average price in the city was Forest Lawn at $88,000.

With the new day comes new strength and new thoughts. Eleanor Roosevelt

Calgary’s new condo market emerging from economic downturn
Sales increasing for new projects
By Mario Toneguzzi
Calgary Herald March 6, 2012

CALGARY — Calgary’s new residential condominium market is in the early days of a recovery from the 2008 economic downturn, says a new housing report by AltusGroup.

The report said new condo apartment sales had plummeted in Calgary with the recent economic crisis and stayed low through 2010, but the market turned around in 2011.

New condo apartment sales in Calgary more than doubled in 2011 to just under 2,500 units, up from just over 1,100 units in 2010.

The report said a large number of new project launches boosted the number of units in projects on the market at year-end to about 8,000 units, up 26 per cent from a year earlier, split almost evenly between low-rise and highrise buildings.

“The weakness in the Calgary market in 2008-2010 was at least in part due to the exit of investors,” said the report. “However, improving economic conditions and lower vacancies are attracting investors back into the market.”

TIME FOR TAKE OFF

Move over Toronto, Calgary’s condo market about to take off in 2012
Garry Marr
Financial Post Mar 2, 2012

A new report suggests Toronto’s condominium market may have finally peaked in 2011 but Calgary’s may be just catching fire.

The report from real estate research firm Altus Group notes new condominium sales climbed more than 100% in 2011 from a year earlier in the oilpatch.

“New condominium apartment sales in Calgary had plummeted with the recent economic crisis and stayed low in 2010. However, the market turned in 2011,” says Altus, in its report. Sales of new condominiums climbed from 1,100 in 2010 t0 2,500 in 2011.

Altus says the number of unsold units was steady from the end of 2010 as new projects saw strong initial sales. The group says improved economic conditions and lower rental vacancies are attracting investors back into the market.

“The weakness in the Calgary market from 2008-2010 was at least in part due to the exit of investors,” says Altus.

Meanwhile, Toronto has to deal with a large potential supply of new condominiums in the pipeline. RealNet Canada says more than 79,000 condominium apartments were under construction or in pre-construction in the greater Toronto area at the end of 2011.

“Planned occupancies extend as far as 2016,” Altus says, noting it takes about five years for all units released for sale in any given year to be completed.

Even if half of those condos under construction become rentals, that would add 40,000 units to the supply of condo apartments, meaning demand for rental would have to increase by 8,000 units per year to maintain current vacancy levels.

“While this was achieved last year it is more than double the average annual growth,” says Altus, adding government plans are encouraging condos as a percentage of new home sales.

The issue in Toronto remains whether rental levels can be maintained for investor-owned apartments, although a portion of investors are said to be off-shore buyers with less concern about their returns in the short-term and medium term.

“Looking ahead our expectation is that GTA new condominium apartment sales peaked in 2011, and more moderate sales levels will emerge over the next few years,” says Altus. “In Calgary, there is a potential for further improvement in sales during this cycle.”

SOME LIKE IT HOT!

More mortgage rules planned if housing market gets too hot
Garry Marr
Financial Post Jan 23, 2012

A new round of mortgage rules from Ottawa could include tough new measures for calculating how the self-employed qualify for loans and tighten regulations for condominium buyers, according to two separate sources.

Ottawa remains concerned about the possibility of an inflated housing market and wants to crack down on the practice where consumers self-disclose what they make when applying for a loan. In the case of the condominium buyer, the government continues to consider a proposal that would have 100% of condo fees count when assessing how much debt a consumer could afford.

“None of this is happening just yet. The housing market has slowed down and the government wants to see what will happen next,” said one source. “If the spring market picks up, then we will see more changes to the rules.”

Bank of Canada Governor Mark Carney said Sunday that some parts of the Canadian real estate market are “probably overvalued” and policymakers are monitoring to see if further steps are needed to cool it.

“We see that in a number of real estate markets in Canada, valuations are at a minimum, firm; in others, they’re probably overvalued. So there are risks there. We’re watching it closely. We’re working with our partners, the federal government, the superintendent of financial institutions,” he said in an interview broadcast on Sunday on CTV.

” Measures have been taken. They’ve been effective. We’ll keep up that vigilance. If more needs to be done, I’m sure the appropriate authorities will take those measures.”

Stated-income products have become very popular during this housing boom, allowing more banks to get involved in loaning to the selfemployed.

“These are individuals that are self-employed, have great credit and won’t be able to validate their ability to pay if they are not showing their income on their notice of assessment,” said one source.

He says those people with stated income could have to make an even higher down payment than the normal 20% that exempts consumers from buying expensive mortgage default insurance.

The source said some self-employed are qualifying for loans based on the assumption they have a lot of write offs, like car payments and housing costs associated with home office costs.

“They get to include that based on the assumption that self-employed people have an advantage from a tax perspective,” said the source. “The government is trying to figure how they would present this.”

A source with one of the banks said the government is trying “zoom in” on marginal borrowers so it doesn’t get into a U.S. type of situation where they were not verifying income.

“What banks are doing usually when it comes with self-employment is not dealing with declared income because nobody believes it. What they do is look at their behaviour and put more weight on it,” said the source, referring to how those consumers handle their debt. “With an employer, you can call and verify their income.”

The labour market is roughly about 13% self-employed so new rules could have a major impact but the source indicated it does not mean those people would be shut out of the loan market. “It will be just more difficult for them. You are going to have to prove income in a more precise way,” he said.

The suggestion the government might crack down on condo buyers is not new, having been scrapped last year in favour of tougher new rules on amortization lengths and refinancings. Most people in the real estate sector now believe amortizations will be reduced to 25 years after having been as long as 40 just three years ago.

Brad Lamb, a Toronto real estate broker and condo developer, has heard the government is again considering including 100% of condo fees in calculating debt levels but doesn’t think it will happen.

“The 25 year amortization is a no brainer, they should do it,” said Mr. Lamb. “It’s not smart to have loose lending rules. But the condo market is hot because of investors not speculators. These investors are coming [from around the globe]. This silly [condo fee] change will do nothing. These people are buying with cash.”

Photo By: Todd Klassy

THE LOGICAL SONG

Housing market to continue to defy logic
Garry Marr
Financial Post,  Dec. 6, 2011

Even one of Canada’s leading real estate companies agrees the rising housing market may not appear to make much sense.

But appearances are deceiving and Re/Max says both sales and average prices will continue to climb in 2012.

“Canadian residential real estate defied conventional logic and outperformed expectations in 2011,” the company said in its year-end report on the market.

Re/Max expects 2011 to finish with prices up 7% and the average home across the country selling for $363,000. The market won’t be as robust in 2012 but consumers can still expect another 2% jump in prices.

Sales figure for 2011 are forecast to climb by 3% from a year earlier with 460,000 homes having changed hands by year end. For 2012, expect less than a 1% increase in activity with only an additional 4,500 sales.

“The Canadian housing market has demonstrated tremendous resilience in recent years but 2011 stands out,” said Michael Polzler, executive vice-president of Re/Max Ontario-Atlantic Canada. “Instead of responding to economic concerns both here and abroad with a retreat in sales and prices, residential real estate markets actually experienced an upswing in the volatile third and fourth quarter.”

Re/Max looked at 26 markets across the country and predicts 23 will show an increase in average price for the year. Sales were up in 22 of those 26 markets. The company says 81% of markets studied will see price increases in 2012.

Among the reasons cited for the Canadian housing market’s continued strength against the odds has been population growth which has gone up by 11% since 2000. Re/Max notes by 2031, the country will have 42 million people.

“Population growth and immigration are major factors expected to prop-up housing demand and household formation in the coming years,” says the company.

Condominiums are expected to continue to garner a growing share of the housing market with investment and income-producing properties in high demand. Low vacancy rates are said to have driven those markets in 2011 and those conditions are expected to continue.

Photo By: Bru76

A NOTABLE MENTION!

GTA condo sales this year smash record
Garry Marr
Financial Post Nov 22, 2011

Condominium sales are taking over the Greater Toronto Area new housing market and some parts of the country are following closely behind as rising costs push consumers into vertical housing, a new report suggests.

The Building Industry and Land Development Association said there were 23,747 condo sales in the Greater Toronto Area through the first 10 months of the year, smashing the previous high of 22,316 in 2007 — with two months yet to go.

High-rise sales accounted for approximately 61% of all sales in GTA from January-October. At this point last year high-rise sales only accounted for 57% of the overall market.

“It’s very much becoming a condo market,” said Joe Vaccaro, acting president of BILD. “Ten years ago the split was 25% high-rise versus 75% low-rise.”

The trend appears contained not just to Toronto’s urban core but is now moving to the suburbs. “There seems to be a new trend setting in over the last couple of months with the 905 [suburban] areas outperforming Toronto when it comes to [condo] sales,” said Mr. Vaccaro.

Suburban land costs have skyrocketed because of what the industry refers to as regulatory inertia with no new land developments approved in the suburbs over the last five years. It has led to the hoarding of land and rising prices for single detached homes.

A report Tuesday from Altus Group suggests the GTA will not see any sort of slowdown in new condo construction in 2012.

“New condominium apartment sales in Toronto and Ottawa continue to hum along, which will continue to buoy apartment starts in Ontario through 2012,” said Altus.

Peter Norman, chief economist for the Altus Group, says population growth has supported the Toronto condominium market. “That number of people generates a fair amount of housing demand no matter what is happening,” says Mr. Norman. “Add in the interest rate environment, and them not going up, and that adds to it. There has been a restriction on [new] lots and a lot of people have been shoved into apartments.”

The group looked at 10 real estate markets across the country and found only Alberta is set to rise in 2012. Regina, along with Toronto, is forecast for flat sales.

“Calgary and Edmonton employment growth in 2011 has more than made up for 2010’s declines,” says Altus. “Although employment growth will be more moderate in 2012, the strong showing this year is favourable for stronger housing starts in 2012.”

Altus is forecasting apartment starts to jump to 5,475 in 2012, up from 3,975 in 2011. Single family construction is also forecast to jump to 22,325 in 2012 from 20,906, putting high-rise construction at almost 20% of the Alberta market.

Phil Soper, chief executive of Royal LePage Real Estate Services Inc., says his company has noticed the trend in top condominium apartments in its corporate owned franchises in Toronto and Vancouver. “There is the cost of the commute, the hard costs like gas and insurance but then there is the soft costs in time,” he said, noting consumers look for housing that is closer to subways and urban cores.

If anything, he says Canadian cities, including Toronto, are playing catchup when it comes to high-rise construction. “Look at big established mature cities like New York. They have much more vertical living per resident than we do, they just don’t have as much on per capita basis that is new,” says Mr. Soper. “We have hundred of thousands of new Canadians that have to be accommodated in Toronto.”

Photo By: Surrealplaces

APARTMENT SALES ENLARGEMENT

Mondo condo sales for 2011
Lisa Van De Ven,
National Post, Sept. 10, 2011

If you ask Ben Myers, 25,000 is the magic number. There may still be a few months left of 2011, but Mr. Myers, executive vicepresident and editor at real estate research firm Urbanation, already has his forecast for the year. He expects there will be 25,000 new condominium sales by the end of 2011. If he's right, it'll be a new record, surpassing 2007's previous record of about 22,500 new condo sales.

"We're certainly on pace to have the most condominium sales in any one year in 2011," Mr. Myers says. And with the Toronto new-condo market coming off a busier-than-normal summer and a record-setting second quarter, he's not surprised.

Urbanation recently released its second-quarter results. From April to June, Mr. Myers says, 9,455 new condo units were sold in the Toronto CMA. That's a record in itself; the previous best quarter was 2007's second quarter, when 6,997 units were sold. That wasn't the only Q2 number to be beat, though. The quarter also set records for the number of active projects, the number of active units, the number of new condominium launches and the number of projects and units under construction.

"There was a huge number of new projects coming on line," Mr. Myers says. "And surprisingly, even with all of this extra supply, they had the highest absorption rate ever of new product. Even in the face of all this additional supply, they sold better than any other new release that we had in a quarter."

But Mr. Myers is quick to dispel any talk that the Toronto market might be in the middle of a real estate bubble. Prices, he says, have remained "pretty consistent" over the past five years, with 7% to 9% increases in the new condo market from year to year.

"A bubble is characterized by rapid increases in prices, and we haven't seen that," he says. "That's the type of thing you obviously saw in the United States and you even saw in Calgary a few years ago, where you saw 20% and 25% increases year over year, and in our market in the '80s where we saw prices double in three years."

Developers, he says, have been doing their homework and "setting fairly moderate pricing." They're also, it seems, paying less attention to the sales seasons of the past. Whereas spring and fall are still the prime selling times, more developers decided to release their projects in the summer this year. Since the market is being driven by investors more than ever, Mr. Myers says, there was less need to wait out the summer season, when end users are typically on holiday and less focused on condo buying.

According to the Building Industry and Land Development Association (BILD, using data provided by RealNet Canada), 1,490 new condo units were sold throughout the Greater Toronto Area in July, up almost 20% from last year. "Forget the old conventions of a spring and fall market," says Stephen Dupuis, BILD's president and CEO. "The market's that much bigger now - it's active all the time."

Photo By: GalleryLoftsCA

GOTTEN GAINS

Condo market gains strength
By Kathy McCormick, Calgary Herald
August 6, 2011

The story of the resale condo market in Calgary is positive, albeit fragile, say some of the city's realtors.

For the first time since April 2010, sales of resale condos have gone up year-overyear - and in terms of new condos, several inner-city highrise projects that were in limbo have been brought back to the market.

For April 1 to the end of June, sales of resale condos reached 1,617 within the city.

The Calgary Real Estate Board's Zone C - which roughly corresponds to the city's southwest and includes the Beltline - posted the most sales from April 1 to the end of June at 881.

Not surprisingly, the busiest communities during that period were in the innercity neighbourhoods of Connaught with 95 sales and Victoria Park with 50 sales.

"Condo sales bounced back this month (in July) and we now have less than four months of supply on the market," says Sano Stante, president of the Calgary Real Estate Board. "Stronger condo sales, combined with a decline in inventory, will lend more balance to this market in the months to come."

The key, though, is prices, says Marlene Swinton of Real Estate Professionals Inc.

"Buyers today are extremely nervous and a lot of them come in well below list price," she says.

"A lot of sellers, on the other hand, haven't recognized that prices have changed. They don't want to hear that the marvellous prices they heard they could get for their place once isn't there anymore."

That resonates with Chris Zaharko of Royal LePage Foothills. "My gut feeling is that people are only in the position to buy and pursue it if they think it's the absolute bottom line."

Prices during the second quarter of the year averaged anywhere from $77,600 for five sales in Forest Lawn in the board's Zone B - which roughly corresponds to northeast Calgary - to $850,000 for one sale in Bayview in Zone C.

But overall, affordability was key. A total of 30 communities within Calgary had average sale prices under $200,000 - with more buyers purchasing condos under that price range this year compared to last year during the same period.

"Buyers in this market expect value and many are taking advantage of some affordable buys in both the single-family and condo markets," says Stante.

He expects this fall to be more active. "I think as the inventory is absorbed, more particularly in condos, the shift will be to sellers and there will be slight increases in price."

Swinton, who has a condo apartment building of 11 units among her portfolio of properties for sale, says she had three calls for showings for that development on the last weekend of Stampede - traditionally a very slow time for real estate transactions.

"It was priced well and a good product, but still, that is investors looking to buy, so that's positive."

Zaharko, too, points to the new condo market where several highrise developers are starting marketing or re-starting projects that had been on hold during the downturn in the inner city.

"The big developers are coming back to the table," he says.

"They've got their pulse on the market, and see what the oil and gas industry will be doing in the next couple of years. The timing is right to start now."

Typically, a highrise project can take two years or more for construction to be complete.

Zone C, which is mostly southwest Calgary and the inner-city neighbourhoods in the Beltline, was not surprisingly the most active for resale condos in the second quarter.

It also had the highest average price and highest median price at $317,301 and $285,000 respectively. The median price is the mid-point of all sales.

Overall, most condos took an average of 54.5 days to sell - but if it's the right product at the right price in the right location, it will sell quickly.

A $835,000 condo in Eagle Ridge in Zone C, for example, sold in just nine days during that period; another condo in Citadel in Zone A went for $440,000 in just four days.

THE LOW DOWN ON LOW FEES

The common cents of strata fees
Keeping costs low may put future building maintenance, repairs at risk
By Tony Gioventu, The Province
June 19, 2011

Q: Our strata council is under a lot of pressure from our owners to keep our strata fees down, but it means we are going to have to reduce maintenance and services to our building.

We have been checking out strata fees in the Abbotsford area, and while we are a bit on the higher side, we do have some additional services that other apartment complexes do not.

Is there some way to compare our strata fee rates in a 61-unit woodframe building with other regions of the province? It would be helpful if there was some way of knowing whether our fees are in line or not.

We had a real estate agent at our AGM in May who recommended we keep our fees low and simply have special levies when we needed them for repairs, but that appears to us to be self-serving for the agents and not realistic for the strata corporations to be able to operate; and if we maintain strata fees at exactly the same rate as last year, we will likely be facing a

A: Comparing your fees to another strata corporation will only establish a comparison of the amount, but will not take into consideration any of the services, amenities, maintenance or operational functions, geographic variations, landscaping functions, or even the basic building construction and durability of each of the properties.

Strata fees are set by approving the annual budget. The annual budget is proposed by the strata council to the owners at the annual general meeting, and based upon the amount approved in the annual budget and the contribution to the contingency reserve fund, that amount is used to calculate the monthly contribution of each strata lot.

We did a research comparison in 2008 between two almost identical properties in Richmond and Nanaimo.

Both were approximately the same age, design, number of units, basic construction, and offered the same services. Both had central heating and hot water which were included in the monthly strata fees and had a comparable history of operations. The one main difference was that strata fees were almost 50-per-cent higher historically in the Nanaimo strata, and the main influence was an integrated maintenance and operations plan in their annual budget.

At the time, the Nanaimo strata was not facing any special levies for major repairs, while the Richmond strata was facing two levies for roofing and balconies.

The process of annual budgeting really has little benefit if a strata corporation has not created a maintenance and operations plan and simply agrees that last year's budget seemed to work because it balanced at year end.

What you should really assess is: "What did we leave out last year?" A basic inventory of your major building components and an understanding of the maintenance and inspection requirements each year will have an overwhelming benefit to your strata corporation if you provide enough funding to meet those obligations.

With an aging strata inventory, the grim reality of neglected maintenance and repairs is rapidly setting in. Much of that problem is caused by underfunded budgets and low strata fees, the genesis of which was often created by the development industry showing artificially low budgets to make new housing more affordable and attractive.

Consumers are now faced with rising special levies for the replacement and renewal of major building systems that have not served out their full life expectancy, often due to neglect; and that neglect is usually linked to lack of funding with no planned maintenance and operations plan.

In addition, rising energy costs are absorbing the desperately needed increases for maintenance and renewals.

If you show a simple graph of a building aging and the costs to operate, both lines should run on a rising parallel.

For every year a property increases in age, the life of the roof, windows, balconies, plumbing, elevators, proportionally decreases until they are renewed. The more important question ever yone should ask: " Are our strata fees high enough?"

Tony Gioventu is executive director of the Condominium Home Owners' Association.

MOTIVATING MOVES

Making the switch to condo living
Financial security a major motivator behind the move
By Denise Deveau
For Postmedia News March 30, 2011

For Sara Kinnear, an investment firm lawyer in Winnipeg, moving from her house to a condo was the perfect way to simplify her life.

After three years of owning a detached home, she realized that the maintenance chores were more than this busy professional wanted to handle.

"There weren't any big problems, just the normal stuff around the house," she says.

"But having to arrange time to be at home to have people fix things and getting estimates .. It was too much of a drain on my time."

Condo living suits her lifestyle much better, she says.

"I like the fact everything is on one floor, it's on a better bus route and I don't have to have people look at the roof when it needs fixing," says Kinnear.

"Someone else will do that for me now. And I don't have to shovel snow when it's -40 C or mow the lawn when it's 30 C."

Kinnear is not alone in preferring the maintenance-free lifestyle that condominium living has to offer after experiencing the ups and downs of home ownership.

Jack Courtney, assistant vicepresident of advanced financial planning for Investors Group in Winnipeg, says he's seen the trend happening within many families, including his own.

"My in-laws sold their house to move to a condominium, not because it meant a cost savings but because it could give them more freedom to go to the lake and other things."

They made the move despite the fact they had a home with a pool that overlooked a golf course.

"He liked to golf, but didn't want to have to cut the grass or look after the pool anymore to do it," Courtney says.

Urban centres are seeing a growing influx of people moving back to condominiums after going through the life cycle of home ownership, confirms Andrew Bodnar, a sales representative with Re/Max Condos Plus in Toronto.

"Maintenance is a big reason or they simply kept a house to accommodate a family that has moved out. With condominiums, there's a lot of comfort, less stress and enough room and amenities for people to enjoy themselves."

Financial security is also a major motivator, he adds.

"We see people in different financial stages of savings who want to use the equity in their home to increase their cash flow later in life."

Courtney agrees the transition is often motivated by a need to free up capital for retirement.

If this is the intent however, he advises that prospective buyers make sure they understand all the expenses involved when making the move, from closing costs and commissions, to acquisition and maintenance fees.

A major consideration in making the switch from house to condominium is the nature and extent of the capital repair funding for the property you're considering.

"Sometimes capital repairs on a condominium property can be significant if there isn't a sinking fund in place," Courtney says.

"In fact, if you're looking at a property and the condo fees seem out of whack or too low, I would be suspicious and start asking questions."

Otherwise, you may get hit with a big assessment for a major repair to a parkade, for example.

"I knew of one property that was a converted highrise apartment block, where the tenants were stuck with a huge foundation repair issue and there was no fund put aside," he says.

The best defence for prospective owners is to examine the condominium owner's agreement carefully, Courtney advises.

"I would hope that a real estate agent dealing in condo sales would be familiar with the process," he says.

"A lawyer definitely should be. Have them review the terms and explain them so you have a better understanding of what you are getting into. Don't be afraid to ask, where is that $400 a month fee going and how is it used?"

When it comes to fees, Bodnar says it's relatively easy to manage them based on the available amenities.

"Most recognize there's a correlation between fees and amenities. You might have a couple looking to streamline expenses, so if they are concerned about costs, they may look at properties that have a smaller gym or don't have a pool."

He advises restraint for people on tight budgets who need to secure financing.

"A $100-a-month reduction could be the difference between getting that approval or not."

"POISED FOR DRAMATIC GROWTH"

Condominium market heating up: Re/Max
By Derek Abma
Financial Post November 1, 2010

OTTAWA -- Condominiums have become a hot sector of the Canadian real estate market, particularly as an option for first-time homebuyers spooked by the escalating prices for single-family homes, says a report released Monday.

Real estate-services firm Re/Max says affordability, lifestyle, investment opportunities and urban renewal efforts are among the reasons condo sales have spiked over the last year in some Canadian markets.

"As one of few affordable housing options available to first-time buyers, the concept is poised for dramatic growth in years to come," Michael Polzler, executive vice-president for Re/Max's Ontario-Atlantic Canada operations, said in a statement.

Re/Max said condo sales in the Greater Toronto Area are up 10.4 per cent, year-to-date, as of September, and now represent one out of every three homes sold there. In Ottawa, sales are up 11.9 per cent.

"The lifestyle has also gained a foothold with younger, hipper audiences as the definition of home ownership evolves with the changing demographic," Polzler added. "Dreams of the small home with a white picket fence are being replaced by the funky loft apartment in proximity to shops, restaurants and entertainment."

Other factors driving the condo market include urban redevelopment that favours intensification over urban sprawl, empty nesters seeking low-maintenance retirement properties and investors hoping to sell when prices appreciate, the report said.

Re/Max said the "vast majority" of newly built condominiums in Toronto are purchased by long-term investors from Asia and the Middle East, who will rent them until they find the price they want for them.

PHOTO: ACTIVE LISTING - #4, 1935 35 Street SW by Christina Hagerty

MEASURING THE MARKET!

Sales decline within city
Where have first-timers gone?
By Marty Hope, Calgary Herald
September 25, 2010

Calgary appears to be bucking the national real estate trend -- and not in a good way.

On a seasonally-adjusted basis, sales across Canada in August were up slightly more than four per cent, says the Canadian Real Estate Association.

Sales in Calgary declined 32 per cent in August compared to the same month last year -- and for January to August, down almost 14 per cent compared to the same period in 2009, says the Calgary Real Estate Board.

"Calgary's housing market has been undergoing a measured correction over the past four or five months," says CREB president Diane Scott. "Sales are trending lower as a result of a decrease in first-time home buyers entering the market and a decline in pent-up demand following a strong post-recession recovery."

From January to August, the number of sales were up 2.2 per cent compared to the first eight months of last year.

Transactions rose sharply during the second half of 2009, reaching levels unlikely to be matched in the home stretch of 2010,

"High sales activity late last year and earlier this year borrowed from sales this summer and will continue do so over the coming months," says chief economist Gregory Klump of CREA. "This makes the return to more normal levels of sales activity look like a steep downward trend."

What he termed the "hangover from accelerated home purchases" is likely to continue for rest of 2010, he says -- adding that while economic figures and job growth are expected to be "tepid, they will continue to support housing markets."

Activity was cooking, though, in Ontario and B.C., with monthly gains in these two provinces accounting for most of the improvement in national sales activity in August -- and that's despite the introduction of the harmonized sales tax.

Seasonally adjusted sales activity either increased or remained stable in over half of all local markets across Canada, says CREA.

In Calgary, the listings story is mixed.

They increased for detached single-family homes, but pulled back in the condominium area. Provincially, though, listings were on the decline.

The number of new listings brought to the Canadian market edged up 1.9 per cent in August compared to the previous month.

Despite having edged slightly higher in all provinces except Alberta, new listings remain 16 per cent below the peak reached last April on a national basis.

The average price of homes sold via Canadian MLS systems in August was $324,928, which is on par with the same month last year ($324,843).

Average home prices eased slightly in Alberta and New Brunswick in August, but gains in every other province exceeded the national increase.

Average prices rose or were stable in nearly two-thirds of all local markets on a year-over-year basis, but increases were shrinking in Canada's most active and priciest markets.

Again in Calgary, the direction of prices was dependent on what was being bought.

Detached homes fetched an average of $445,617 last month, down about $8,500 from a year ago, while the condo average went up slightly more than $3,000.

"Rising interest rates and a projected slowdown in job growth mean that the Canadian housing market is expected to continue to cool," says CREA president Georges Pahud.

"This is overlooked in recent commentary that suggests further changes to mortgage regulations may be needed. A further tightening of regulations could negatively impact Canada's softening housing market and consumer confidence."

Photo by: Jek in the Box

CHANGING THE RULES YOU LIVE BY

Condo can't-do
Ground rules are essential when hundreds of strangers live in one building
By Helen Morris, National Post

Moving into a shiny new condo for the first time can be pretty exciting. If you have been renting for a while, now you have a place you can more or less call your own. If you are downsizing from a house, you may be pleased not to have to take care of your own garden, or look forward to decorating your unit.

But the people at the Ontario Ministry of Consumer Services who try to help consumers understand how condo legislation works want to make sure condo owners know their rights and responsibilities.

"Most condo owners are not terribly aware of what it is to own a condo and the responsibilities of owning a condo," says Vishnu Kangalee, manager of consumer services bureau, Ontario Ministry of Consumer Services. "There is so much misinformation about what the condo owner really does own and what they own in concert with the other owners of the condo corporation."

The Ontario government has launched an online survey (Ontario.ca/condos) to "take the pulse" of condo owners, in order to try to clear up some of the confusion.

"One of the misconceptions is that people think we are a government agency that regulates in the same way as the landlord-tenant board [would]. There's a big difference between being a condominium owner and a tenant," says Joseph Kavanagh, consumer services officer, Ontario Ministry of Consumer Services. A frequent question he receives is whether there is a maximum increase in common expense fees. "I have to tell them 'No'," he says. "It's not like landlord-tenant legislation where landlords can only raise the rent a certain percentage every year. In condominiums, if you don't like the way the board is operating, you vote them out."

According to the Canadian Condominium Institute, misunderstandings can take root even before condo owners move in.

"There needs to be some very significant changes to the pre-purchase information. Information is provided by the barrel load," says Mario Deo, vice-president, Torontochapter, Canadian Condominium Institute, but "the problem is, the purchasers don't understand what it means. They're caught up in the euphoria of purchasing a condominium unit."

Mr. Kangalee says that condo purchase documents are incredibly complicated and abstruse. His colleague agrees there is complexity.

"Number one," Mr. Kavanagh says, "we always advise consumers who are buying a condominium to consult with a lawyer or real estate professional at least during the 10-day cooling-off period, so they can go through the documentation."

Once you move into the condo, many aspects of how you live will now be subject to the condominium documentation.

"The main big difference is when you're owning your own [house], you're not subject to [any restrictions within] the condominium documentation," says Mr. Deo. "There can be hundreds of restrictions, but the main ones are repairs, insurance, how you deal with your neighbours, pets, how you decorate and renovate and the use of your property. All of that is not controlled as much when you own [a house, though] of course there are municipal by-laws, etc."

Mr. Kangalee says some consumers who call his office misunderstand how condo ownership works.

"There is no direct ministerial role here. This is what is known as a declarative statute. It states what the law is. Condo owners are the owners of the corporation, they run the corporation, it's like a microcosm of a democracy," Mr. Kangalee says. "They elect the board of directors and it's incumbent upon them to ensure the efficient functioning of the corporation by being proactive and taking part in the meetings and voting. They even have the authority to vote out directors if they are unhappy with them. There are a lot of consumer protection rights given to them in the Condominium Act."

Mr. Kangalee emphatically states that, should a condo owner have a dispute with their board, on no account should he or she refuse to pay their monthly fees. The board can get a lien on the unit and even sell it if the fees aren't paid.

INVESTING IN WHAT WE LOVE

Invest in real estate and in your kids
Garry Marr, Financial Post
Published: Friday, May 07, 2010

Here's one way to tackle the red-hot Canadian housing market: Get someone to buy you a home.

That someone would be your parents. According to a new survey from TD Canada Trust, 10% of Canadians are considering buying a condominium for their adult children. A year ago, only 5% of parents thought about buying the kids a condo.

"It could be something that the parents are looking at as a long-term source of income, letting their children live it in for now," says Chris Wisniewski, associate vice-president of real estate and secured lending with TD.

It could also be that parents know condominium prices, like detached homes, have climbed to unprecedented levels, making it difficult for adult children to come up with a minimum 5% down payment, let alone the 20% needed to avoid costly mortgage default insurance.

Toronto condo research firm Urbanation Inc. says the average existing condominium in the city sold for $331,000 in the first quarter of 2010. Based on an average $369-per-square-foot price, that's a 900-square-foot unit.

For a new one, prices averaged $443 per square foot in the first quarter, so about $400,000 for that same-sized condo.

Ms. Wisniewski says low interest rates are convincing parents to step up and buy their children homes. The condominium represents an attractive alternative to those parents because the costs are stable.

"They know what the maintenance costs will be," she says. "[Parents] are thinking, ‘I'm not worried my children are too young to accept the responsibilities of home ownership if I set them up in an apartment. They don't have to recognize the responsibilities of maintenance in an apartment.' "

Parents might also see a condominium as a way to get their kids to start a family. The survey found 36% of Canadians are willing to raise families in a condo.

"One of the reasons for that is affordability," says Ms. Wisniewski. "Where are the new condominiums being built? They are being integrated in really nice existing neighbourhoods with all the infrastructure and all the schools and amenities."

Brian Johnston, president of developer Monarch Corp.'s Canadian division, says he doubts families will ever be integrated into the condominium stock, but does agrees with the premise that parents are helping to buy housing for their children. He says parents often want to keep children close to them so they'll chip in for a condominium in a nearby neighbourhood.

"How do we know they're helping out? They tell us when they are writing the cheques for the deposit," Mr. Johnston says.

Mr. Johnston said when it comes to recent immigrants to Canada, there is "lots of help" from family members to get that first home. "Condominiums are not inexpensive and they're going to need that help, particularly if the younger ones have not had time to build up their finances."

The builder has his own children and, based on today's prices, he figures he's going to have to lend a helping hand. "I don't expect them to be able to buy a condo ... before they are 30. That is just part of the deal [for parents]," says Mr. Johnston.

It's not like Baby Boomers don't have the cash. There have been endless studies that suggest the Boomers are set to inherit billions of dollars in the coming years from their parents.

Craig Alexander, deputy chief economist with TD Bank Financial Group, says there is no hard data to suggest how much parents are helping children, but they certainly have the financial capacity to lend a hand.

Canadians have $1.5-trillion invested in stocks and mutual funds with $500-billion of that figure in capital gains.

"The generation before the Baby Boomers were big savers and, as a consequence, there is a very large income transfer going to take place over time," says Mr. Alexander, adding it makes sense that some of that money is going to end up in housing and real estate.

For first-time buyers facing rising rates and increasing prices, the helping hand couldn't come at a better time - just ahead of tighter mortgage financing rules. Most of them probably hope their folks go from "considering" buying a condo to actually doing it.

Photo By: Remodeleze

COMING UP ROSES IN FEBRUARY

Housing market shows 'momentum' in February
Real Estate Sales, Prices Firm Up
By Mario Toneguzzi, Calgary Herald
March 2, 2010

The local housing market showed signs of balance, not a bubble, in February, according to the Calgary Real Estate Board.

In releasing its official MLS numbers for the month, the board said sales and average prices increased in both the single-family home and condominium markets compared with year-ago levels.

"We're just pretty steady and we're getting some momentum, but that's fairly typical in a normal year and I don't even compare it to last year because last year wasn't a normal year," said board president Diane Scott.

"Right now, where we sit in February, it's pretty stable. It's a comfortable market and we're almost close to equal buyers and sellers."

Single-family home sales for February were 1,035 units, up 25.5 per cent from February 2009's 825 units. The average sale price hit $458,254, an increase of 10.3 per cent from last year's $415,568.

Also, condo sales were up a whopping 56.3 per cent to 536 units compared with 343 sales in February 2009. The average price also increased by 5.2 per cent, to $282,880 from $268,971.

Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said market watchers have to be careful when comparing February numbers with a year ago.

"In many ways it would be like comparing apples to oranges," Cho said.

"Market conditions now are stronger compared to this time last year, when conditions were more uncertain. We are still seeing steady demand for homes, especially for the entry-level product. Low mortgage rates continue to support demand for home ownership.

"The selection of homes for prospective buyers has also improved, with active listings trending up. The resale market has settled into balanced conditions, putting modest pressure on prices."

A year ago, Cho said, people were losing their jobs. They were waiting on the sidelines to see where the economy was going and where house prices were headed.

Now, with things improving and the economy and housing market stabilizing, prospective buyers are more comfortable with making larger purchases such as homes, added Cho.

Scott agreed the economic situation last year had an impact.

"We were in such a slump and there was no consumer confidence," she said. "It looked like we were going downhill for a long period of time.

"This year, the consumer confidence is up, the interest rates are low still and hopefully that will stay for a little while longer and afford-ability is there. A lot of people who were sitting on the fence last year are coming off."

She said the Calgary housing market has shifted from fragile to fervent in just over 12 months. The city is also seeing a moderate rise in the number of competing offers on homes.

For towns just outside Calgary, sales were up 55.8 per cent to 335 units from 215 a year ago but the average sale price dropped by 4.82 per cent to $353,912 from $371,829.

In the country residential market, which includes acreages, sales increased by 84.38 per cent, going from 32 last year to 59 last month, with the average price remaining virtually the same at $748,506.

Scott said many first-time buyers are seeing this as the time to take advantage of record-low interest rates.

"We will see a rise in both our inventory and demand this spring -- and we expect both to stay in a healthy balance. Prices will edge up as the year progresses, but the rise in prices will be moderate," added Scott.

Single-family listings in Calgary added for the month of February totalled 2,154, a 4.72 per cent jump from a year ago.

New listings for condominiums for February were 1,109, up 24.3 per cent from last year.

"The story of the housing market is all about interest rates at the moment," said Scott. "When the rates will rise is the wild card. Canada's economic recovery showed marked improvement in the final quarter of last year. This will put pressure on the Bank of Canada to begin raising rates sooner than planned to curb inflation."


Calgary Home Sales In February

Single-family homes 2009 2010 Change

Sales 825 1,035 25.5%

Average Price $415,568 $458,254 10.3%

Median Price $375,000 $411,000 9.6%

Condominiums 2009 2010 Change

Sales 343 536 56.3%

Average Price $268,971 $282,880 5.2%

Median Price $249,900 $265,900 6.4%

Source: Calgary Real Estate Board