This will be a short letter this month as it is summertime and many of you are enjoying your holidays and time with the family.
I am very pleased to announce that our retail shop on the Danforth, formerly known as Wash Up & Brush Company, has been renamed Drysdale & Co. Since the business no longer offers hair salon services we felt that this new name would be more reflective of where the business is headed, – the focus now being 100% on cool gifts and accessories. For more information, check out our newly designed website at www.drysdaleandco.com.
So what’s the latest in the Toronto real estate and income property market? In the GTA, resale housing prices continue to rise while the actual number of trades soften. Traditionally there is a little slow down in the summer months of July and August. The Toronto Real Estate Board reported that moderate activity and strong prices continued to characterize the Greater Toronto Area (GTA) resale housing market during the first half of July.
The average price in the GTA during the first half of July was $379,072, which is a one per cent increase from the $374,254 recorded in the first two weeks of July 2007 and a nine per cent increase from $346,267 recorded during the same period in July 2006. In the 416 area, the average price was $419,199, up one per cent from the $414,321 recorded during first half of July 2007 and up 14 per cent from the $367,541 recorded during the same period two years ago.
At $353,257 the 905 region’s average price was up two per cent from $345,741 recorded in the first half of July 2007 and up six per cent from $332,733 recorded during the same period in July 2006. Sales activity remained moderate in the first half of July, with 3,497 homes changing hands in the GTA. This is a decrease of 11 per cent from the 3,947 properties sold in the same period in 2007 but an eight per cent increase from the 3,251 transactions recorded in the first two weeks of July 2006. Sales in the first two weeks of July 2007 saw a 21 per cent increase from mid-July 2006.
In the 416 area there were 1,369 sales, down 17 per cent from the 1,641 recorded during the first two weeks of July 2007 but up eight per cent from the 1,264 sales recorded in the same period in July 2006. Before the Land Transfer Tax went into effect, sales increased 30 per cent in the first half of July 2007 compared to the same period in July 2006. Sales in the 905 region came in at 2,128 in the first half of the month, down eight per cent from the 2,306 recorded during the same period last year but up seven per cent from the 1,987 sales recorded during the first half of July 2006. Sales in the first two weeks of July 2007 saw a 16 per cent increase over mid-July 2006.
It seems that continued strength in house prices throughout the GTA indicates that consumers continue to recognize the value of real estate as a long-term investment.
Many of you have likely read that the federal government is aiming to avoid a housing meltdown like the one that hit the U.S. They will no longer guarantee 40-year or zero-down mortgages in an effort to avoid a housing crisis such as the sub-prime mortgage meltdown that rocked the housing market in the United States. And that could cause the housing market to cool even further. In an announcement a couple of weeks ago, they announced government-backed mortgages would require a minimum down payment of five per cent and would be limited to a maximum amortization period of 35 years.
The borrower would also need a specified minimum credit score. “Today’s announcement marks a responsible and measured approach by the government to ensure Canada’s housing market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada,” a release issued by the federal Department of Finance said. All mortgages issued by federally regulated lenders with down payments of less than 20 per cent require insurance, and the government backs the insurance whether it is provided through the Canada Mortgage and Housing Corp. or private insurers, such as Genworth Financial.
The new rules are to take effect Oct. 15, 2008 to allow existing mortgage pre-approvals to be used or expire, the government said in its release.
That’s it for now. Next month we’ll do a wrap-up of the major duplex and triplex sales in the GTA over the summer and look ahead to the fall market.
Enjoy your summer everybody!