June 2, 2008

CONDOS BOOM IN TORONTO

Financial Post:  Reports that Toronto has become the biggest condo market in Canada.  Toronto has more condo units under development than Manhattan, Chicago and Los Angeles.  Although figures shows a 7.3% drop year over year in the housing market in Toronto, builders are still optimistic as "demographics, immigration, government regulations and cultural change will continue to skew demand for housing towards condominiums."  Property developer Peter Freed, expects that there will be roughly about 75,000 people per year moving into the city core for the next 20 years. 

May 31, 2008

CANADA FOLLOWING THE STATES?

Financial Post:  Jacqueline Thorpe reports that Garth Turner states that Canada is following the US in sub-prime mortgage lending.  Turner states that there is currently a decline in housing sales because prices are now beyond the reach of the average buyer.  Like the US, in order to keep the industry going, mortgage companies will start subprime lending.  Turner also stated that the trend is already beginning with the 40 year mortage that has just recently started in Canada.  However, Derek Holt, vice-president of Scotia Capital dismisses Turner's claims citing that Canada has a much more rigourous standard than its southern neighbour.  Furthermore, demand for living space has always been driven by income and wealth.

May 22, 2008

FIRST TIME PURCHASERS STILL FUEL MARKET

REM: Reports that first time home buyers still remain strong in the market.  Despite higher home values and reduced inventory, first time buyers are determined to enter the real-estate market.  Buyers are finding ways to enter the market by sacrificing size, location, and long-term financial freedom in order to purchase a home.  Entry level purchasers are also taking advantage of longer amortization periods in their financing. 

June 25, 2007

Price Drive Due to Greedy Real Estate Agents

According to the Re/Max Ontario Market Trends Report, the average price in Toronto continues to increase by 4% since that of last year to an average of $371,905.  Single-detached homes in central Toronto are moving closer to the $1 million dollar mark.  However, an article from the Toronto Star, states that these prices are anything but normal expectations.  Michael Manley of the Prudential Properties Brokerage states that increase in house prices are mainly due to “phantom offers” made by greedy manipulative agents. 

Currently, agents control all the information in multiple offers situations.  It is impossible to identify actual registered offers or phantom offers that they divulge to their clients to increase the price of the buyer’s offer.  Some agents even claim that the listing agent tell their friends to appear at the house with expensive vehicles on the offer date to create the appearance of interest. 

Another tactic that agents use is the double-ended deal.  This occurs when the same agent represents both the buyer and the seller.  The agent will get double the commission from the sale because there are no other agents involved.  The agent will only work with his clients and ignore any other bids that are offered by buyers represented by another agent.  However, those bids will be mentioned to the clients to drive up the price.