Year 2010 was the Year Of Condos In Greater Toronto Area

High rise condominium sales in the Greater Toronto Area accounted for more than half the new home sales last year for the first time ever, according to figures released by RealNet Canada Inc.
“The popularity of condos has been an increasing trend that we have seen over the last decade,” said George Carras, president of RealNet .
High rise sales accounted for 52 per cent of all purchases last year, compared with 42 per cent in 2009. Affordability issues, along with a lack of buildable lots for low rise development have helped condos become the popular choice with new home buyers.
“Within the last decade, the share of the GTA housing market captured by high rise condo developers has risen steadily from one quarter, which was considered normal, to a third, which was called the new normal,” said Building Industry and Land Development president Stephen Dupuis. “To the point today where more than half of all new home sales annually are high rise.”
Dupuis notes that when condo sales hit the 40 per cent level some builders dubbed that the year of the condo. But this is the first year on record that condos officially passed the half way mark.
All that condo building has some analysts worried that there is a massive oversupply in the works. Analysts have been warning that there could be a correction in prices as a result.
So far that hasn’t happened.
Carras says one problem is structural. Builders are going flat out, but they can only put so much supply on the market.
In 2010 there were 15,874 occupancies for high rise buildings, about average for the decade.
“They’re not sitting idly by. But they only have so many resources. It’s not like you’re Ford Motor Company and you can put on an additional midnight shift. So the supply is not coming on as fast as the demand,” says Carras.
That has helped to hold prices up, at least so far.
New home prices also hit new records at the end of 2010.
Average prices of single detached homes exceeded the $500,000 threshold, closing the year at $503,190.
Condominiums passed the $400,000 threshold, hitting an average price of $441,663.
Many of the recent sales have been to foreign investors from Asia and the Middle East. There is some concern that units will ultimately come back on the resale market if investors do not see price appreciation, or if they are unable to rent their properties because of a glut.
Part of the popularity of condos though is by default. Low rise sales have taken a hit because builders have had trouble finding lots. Another complaint has been red tape at city hall in getting project approvals.
“You can’t sell what you don’t have,” says Carras. Sales of low rise homes decreased by 10 per cent over 2009, facing the second worst year since 2000.
Overall, 2010 sales were up by 8 per cent to 33,996 units compared with 2009.
However, that makes it the third worst year since 2000.
The low was in 2008 was when the recession hit hard and consumers were paralyzed with indecision. Sales plummeted to 26,768.
In terms of builder sales, Mattamy Homes, had the biggest year selling 1,815 new homes.
Monarch Homes was in second place at 1,403 and Tridel Corp. came in third at 1,277.

Source: http://www.moneyville.ca/article/925581--2010-was-gta-s-year-of-the-condo

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Home resales strong despite January slide

January sales for existing homes in the Greater Toronto Area has stumbled out of the gate, at least compared to last year.

Sales were down by 11 per cent in the first two weeks of 2011 according to figures released by the Toronto Real Estate Board Wednesday.

The board reported 1,583 sales compared with 1,749 at the same time last year. This is the first indicator of the health of the market for 2011.

“While off the record pace experienced last January, sales remain high from a historical perspective and market conditions remain tight enough to support a sustainable rate of price growth,” said Toronto Real Estate Board president Bill Johnston.

But new mortgage rule changes announced this week which reduces the maximum amortization to 30 years from 35 effective in March, are expected to bring forward buyers in the coming months.

Prices still remained solid at $413,565, up five per cent from the first two weeks of 2010.

In the city of Toronto prices were $418,951 compared with $401,120 in 2010.

In the 905 region, prices were slightly lower at $409,947 compared with $391,353 a year earlier.

http://www.moneyville.ca/article/924425--home-resales-strong-despite-january-slide

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Will new mortgage rules trigger winter buying?

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Canadian Real Estate Association is concerned that changes to mortgage rules will force Canadians to buy homes through the traditionally slow winter market rather than waiting until the spring.

The federal government said that in 60 days, Canadians will no longer be able to obtain mortgages that have an amortization period of longer than 30 years. This will raise mortgage payments on a typical resale home by some $1,400 a year compared to the 35 year amortization rate available today.

With interest rates expected to move higher by the summer, CREA vice-president of government relations Randall McCauley said many would-be buyers could be tempted to jump into the market early to secure lower payments.

“Frankly, we’re concerned that the announcement came today when tomorrow there will be all sorts of speculation about interest rates even if they don’t change,” he said, referring to a Bank of Canada meeting Tuesday, when Governor Mark Carney is expected to hold his benchmark rate stead. “Even if rates don’t change, people will speculate about when they will change. That could bring people into the market early, since [the amortization change] is not coming into effect for 60 days.”

Finance Minister Jim Flaherty announced Monday that new federal rules will reduce the maximum amortization period to 30 years from 35 years for government-backed insured mortgages when a buyer has a down payment of less than 20 per cent. He also said he would lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes and said it would withdraw government insurance backing on lines of credit secured by homes.

The last time the government made changes – last year it made it more difficult for Canadians to qualify for mortgages by forcing them to qualify for a 5-year fixed rate rather than the lower variable rate – buyers went a buying binge that drove prices to an all-time high by May (the changes came into effect in April).

Sales then slumped across the country in July, and picked up slowly to end the year on a relatively steady note that had some economists suggesting the market had corrected itself without any need of government intervention.

“At the risk of dipping deep into cliché, the Canadian housing market appears to have achieved a perfect soft landing after its flying start in the recovery,” BMO Nesbitt Burns deputy chief economist Douglas Porter said on Friday. “

“The market is relatively well balanced and prices are still meandering ahead. We expect no fireworks in 2011, with rates poised to slowly grind higher later in the year, job growth decent but not spectacular, and buyers potentially constrained by concerns over record household debt levels.”

Calling the changes “prudent,” the Canadian Real Estate Association cautioned that the effect of changes to the amortization period aren’t easily gauged and will have to be monitored closely.

“We understand where the government is coming from and you’d have to have your head in the sand not to have noticed this has been a topic of conversation,” Mr. McCauley said. “We think by and large the changes are wise and prudent. But we are a little concerned – the amortization change is not a precise instrument – you can’t make a change an know it will have a certain effect.”

The average Canadian resale home sold for $344,551 in December. Assuming a five-year mortgage at 4 per cent interest, and the minimum 5 per cent down payment of $17,227, a 35-year mortgage would have monthly payments of $1,441. Shorten the amortization period to 30 years, and the monthly payment increases to $1,555.

The Canadian Association of Mortgage Professionals spoke to the government frequently over the last three months, and was pleased that the changes didn’t include any modification to the minimum down payment required to buy a home. And while president Jim Murphy said that he generally approves of the changes to amortization lengths, he hopes the government shows the same willingness to change if the market cools further.

“We understand why he did what he did,” Mr. Murphy said. “But we hope when the time comes, he’ll revisit that decision. Real estate is very important to the economy, and it’s crucial that we find a balance because you don’t want to overreact to temporary market conditions.”

He said a better choice would have been to keep 35 year amortizations, but force all applicants to qualify with the assumption of a 25 year amortization.

CAAMP, which represents the mortgage brokerage industry, released a study late last year that showed mortgage debt in Canada surpassed $1-trillion for the first time in 2010. About 22 per cent of all new mortgages had amortization rates longer than 25 years, up from 18 per cent the year before.

There was a jump in the number of Canadians using their mortgages to free up cash, with 18 per cent taking out equity as the cited a need for “debt consolidation or repayment.” The average amount borrowed against home equity was $46,000. Given that there are 5.65 million mortgage holders in Canada, CAAMP estimated the borrowing at $41-billion, about the same as last year.

“It is estimated that 30 per cent of the takeout was for debt reconsolidation and repayment,” the report states. “Therefore, while the amount of outstanding mortgage debt would have increased by this amount, totals for other types of debt would be correspondingly reduced. About $15-billion was taken out for renovations, $6-billion for education and other spending, $7.5-billion for investments and $4-billion for other purposes.
http://www.theglobeandmail.com/report-on-business/economy/housing/will-new-mortgage-rules-trigger-winter-buying/article1872727/ 

HST fears fuelled record housing sales

Fear of a phantom 13%-tax bite on resale homes fuelled record sales in the spring but that’s unlikely to be the case in the coming year, the Toronto Real Estate Board says,

“It was booming. It was crazy with tons of multiple offer situations,” said TREB president Bill Johnston of the market in the first quarter of 2010.

“Once they get the clear message, they tend to overlook these taxation issues and get on with their lives.”

Johnston said many prospective home buyers misunderstood how the Harmonized Sales Tax (HST) would be applied once it kicked in last July, and believed it would add “a big whack” to the purchase price of any home they bought.

In fact, the HST doesn’t apply to resale homes and is only levied on new homes, although buyers can get some of the tax rebated on purchases of $500,000 or less.

TREB reported first quarter home sales in the GTA set a record in March this year with total sales of 22,418. New listings that month were 42% higher than the previous march, the board said.

And while that fell off after the HST came in on July 1, Johnston said sales still held up credibly for the rest of the year and he’s optimistic about 2011.

“I think we’ll see a stable market, frankly,” he said. “The economic news, as you know, has been relatively positive for Canada and the U.S. seems to be showing more signs of life than it did this time last year.”

Ending the City of Toronto’s Municipal Land Transfer Tax — as new Mayor Rob Ford has promised to do — would be a big boost, Johnston said.

But he said he doesn’t expect Ford to move on that promise until 2012. The tax brings in almost $200 million a year to the city.

The Canadian Chamber of Commerce also believes home buyers in Ontario and British Columbia pushed forward purchases in the first half of the year because the HST was looming, president Perrin Beatty said in a news release Monday.

The cooler housing sector and cautious consumers will mean moderate economic growth next year, Beatty said.

“The Canadian economy is chugging along but not at full steam,” Beatty added.

Source: Toronto Sun

http://www.torontosun.com/news/torontoandgta/2010/12/27/16684631.html 

2010, A Year of Real Estate In Review

Here’s a look at some of the events that made headlines this past year:

Source: propertywire.ca Written by:WRITTEN BY DAVID HATTON, EDITORIAL TEAM

2010 has been a year that resembled an amusement park roller coaster ride, complete with twists & turns . But the year will also go down in the record books as the year that realtors took a good look at the value added services clients are paying for. Or choosing not to.

Here’s a look at some of the events that made headlines this past year:

The year in Toronto got off to a good start with reports that 87,308 transactions were processed during 2009 – a 17% increase over 2008. That included 5,541 properties bought and sold during the month of December 2009 alone. The average home price climbed 4 % in 2009 to $395,460, according to the Toronto Real Estate Board (TREB).January

A survey of 1,225 Royal LePage agents and brokers across Canada revealed buyers were still nervous about the stability of the economy. When asked to comment on the most common fears they heard from home buyers during the last three months, 38% of Royal LePage agents and brokers cited economic stability and related factors such as job security. 23% said home buyers fear they may not be able to sell their existing homes at the price they are hoping for, while 12% said buyers are hesitant because they believe prices have not yet hit the bottom of the cycle.

Meanwhile, realtors in the Halifax area were encouraged by news that sales from November 2009 to January 2010 were up 27.5% compared to the same months last year. Nova Scotia Association of Realtors president Linda Smardon explained it was no surprise. “This time last year we were experiencing large decreases so we fully expect our numbers to be up provincially. With listings down and sales up, the real estate market is more balanced,” she said in a news release, adding the average price in the province was up 8.5 %.

February

February was the month of Valentines Day, and TREB released statistics showing clients loved buying and selling properties, reporting that there were 4,986 transactions in January, a “huge” increase over the 2,670 sales during the same period in recession battered 2009.

Century21.ca announced they would be adding Chinese language support for sales representatives and brokers in the Century 21 System. “Cantonese and Mandarin are commonly spoken languages in Canada’s metropolitan centres such as Toronto, Vancouver, Calgary and Montreal,” says Century 21 Canada President Don Lawby. “We now offer a unique advantage to franchises and sales representatives whose clients predominantly speak these Chinese languages.” Century21.ca already serves Canadians in the country’s two official languages – English and French – and the addition of Chinese makes it the first trilingual, nationally branded real estate website in Canada.

March

Greater Toronto realtors reported 10,430 sales through the MLS in March, pushing total first quarter 2010 sales to 22,418 – the best result on record under the current TREB boundaries.

March was also when CREA filed its response to the Competition Bureau’s challenge of its MLS rules, calling comments by commissioner Melanie Aitken “preposterous”. “There is simply no legal, economic or factual basis upon which to order the remedy sought by the commissioner,” a statement from CREA said.

CREA’s response, filed with the Competition Tribunal March 26, stated the challenge was “fundamentally misconceived. Contrary to the commissioner’s allegations, is it simply untrue that consumers have only one option if they want to sell a house using a MLS system operated by a local real estate board or association?”

CREA even went after Aitken for statements to the media. “The commissioner of competition has stated in multiple media statements that (CREA’s MLS rule amendments) amount to a ‘blank cheque’ because new anti-competitive rules could be introduced by CREA or its member boards. In CREA’s view, this allegation is preposterous. CREA has and always has had the ability to make rules, as do its member boards. CREA and member boards...comply with competition law,” says the response.

CREA officials also addressed the Competition Bureau’s statements that “MLS restrictions have caused at least one broker to exit the relevant market.” It’s a reference to the Toronto firm Realtysellers, which has pending legal action against TREB and CREA. In its response, CREA added, “Realtysellers suspended operations because of impending disciplinary proceedings. The Real Estate Council of Ontario commenced proceedings to strip Realtysellers of its broker registration because the conduct of its principal Stephen Moranis afforded ‘reasonable grounds for belief that he will not carry on business in accordance with the law and with integrity and honesty.’” It said the RECO investigation and proceedings against Realtysellers were commenced prior to CREA’s March 2007 introduction of the interpretations to the MLS rules.
Finally, the last word went to Michael Polzler. The Re/Max Ontario-Atlantic executive vice-president took out an advertisement in one industry publication, taking aim at part-time realtors who do one deal per quarter. He questioned their professionalism and value and launched a website for realtors to voice their thoughts.

CREA and RECO declined to comment specifically on Polzler’s letter, although RECO’s communications manager Sherri Haigh suggested Polzler take his concerns to Ontario’s Ministry of Consumer Services.

April

In April, real estate boards and associations across Canada were trying to get rid of land transfer taxes. The Winnipeg Real Estate Board released a study showing Manitoba had seen its land transfer tax revenues increase from $31 million in 2006 to $44.8 million in 2008, representing a 44 % increase. The board cited a November 2007 land transfer tax study by Will Dunning, the chief economist of the Canadian Association of Accredited Mortgage Professionals (CAAMP), showing “the taxes levied on land transfers are far in excess of any social or governmental ‘costs’ that result from the activity of home buying and therefore these discriminatory taxes are not justifiable.”

Dunning compared 1997 to the first nine months of 2007 and showed over a slightly less than ten year period, the tax payable had gone up more rapidly than house prices.

TREB officials released a poll showing that 70 % of Torontonians believe the Toronto land transfer tax was not a fair way for the city to address its budgetary needs. That was up from 62 % of Torontonians who felt the same way according to an earlier Environics poll conducted for TREB in 2007, prior to the implementation of the tax. That still didn’t stop TREB from also reporting 10,898 sales through MLS in April, representing a 34 % increase compared to April 2009. There were also 20,683 new listings in April –a 59 % annual increase. Both the sales and new listings results amounted to new records for the month of April under the current TREB boundaries

May

Greater Toronto realtors reported 9,470 sales though the MLS system in May, representing a one % dip from May. 2009. In comparison to previous years, this was the third highest May sales result on record.

Century 21 Canada unveiled a new branding direction during May as part of a multi-year online marketing strategy that it says has seen the number of visits to Century21.ca rise by nearly ten-fold since late 2007. “The goal behind our new tagline, Connected to More, is to communicate to home buyers how Century 21 has evolved as a brand,” company president Don Lawby said in a news release. “It also represents our vision for how we want consumers, potential sales representatives and franchisees to relate to the Century 21 brand in the future.”

May was also when realtors got suspicious and angry with Real Trends. The US-based research firm had been producing a list of Top 500 brokers for 22 years, ranking everyone by number of transactions and closed sales dollar volume. When it attempted to release a Canadian Top 200 list, however, there were initial problems with accuracy. Real Trends said it was due to not all brokers returning their surveys, and still wanted to do the lists on an annual basis.

June

The battle between CREA and the Competition Bureau heated up in June with the tribunal chair turning down Lawrence Dale’s request for intervenor status in the case. The co-founder of the former Realtysellers discount brokerage was expected to be a witness in the case while another applicant, Stephen Skelly, vice-president of operations for the National FSBO Network, was granted intervenor status. Skelley was asked to submit an affidavit for cross-examination by counsel for both parties in the case.

In other news, Greater Toronto realtors reported 8,442 sales through MLS in June. This represented a 23% decrease compared with the 10, 995 originally sold during June of the previous year.

That was still substantially less unit volume than in the Vancouver area, where the Real Estate Board of Greater Vancouver reported 2,972 properties were sold, a decline of 30.2% compared to the 4,259 properties that changed hands in June 2009, the highest selling June on record for the board.

But Edmonton realtors were still satisfied with the pace in their market with sales of 1,539 properties in June, said Larry Westergard, president of the Realtors Association of Edmonton. “There was less external pressure on the market from incentives or rate changes last month and as a result the market seems to be operating in a normal controlled manner...It has been...very busy in REALTORS® offices as they list client’s properties for sale, book showings for buyers and attend open houses. This has not resulted in immediate sales, however, and, in anticipation that this slowdown will continue through the year, we have reduced our 2010 sales forecast by 2,000 units from 21,000 to just 19,000.” There were 9,406 residential properties in inventory at the end of June as a result of 3,473 new residential listings and sales of the 1,539 properties. The sales-to-listing ratio was 44%. The average days-on-market was up at 47 days. The record inventory levels were set in September 2007 at 9,913 residential properties available through the Edmonton MLS system, according to Edmonton board officials.


July

On July 1st, Ontario and British Columbia joined  the Atlantic provinces of New Brunswick, Newfoundland and Nova Scotia when they introduced the controversial Harmonized Sales Tax (HST).  The new tax is 13%  in Ontario and 12%  in B.C.

Meanwhile, over a dozen Kitchener Waterloo area realtors met with Ontario PC leader Tim Hudak to discuss the controversial land transfer tax. Hudak had advocated for a one year land transfer tax holiday to give buyers a break for that first year.

August

CREA launched a new national television commercial month called Faces, that was intended to highlight the value realtors bring to home buying and selling. In the 30-second ad, viewers see and hear testimonials from several individuals about their experience with their realtor. Men and women representing people from all walks of life talk about their unique needs when buying and selling a home. While they talk, their faces continually change, eventually becoming another person with another positive story.

September

Keller Williams Realty announced plans to launch a Keller Williams Realty Commercial Division this fall. “Our goal is to expand our platform and make Keller Williams Realty the real estate company of choice in both the residential and commercial worlds by providing our associates the technology, marketing tools, and resources to succeed in the commercial business,” Mark Willis, CEO of Keller Williams Realty, said in a press release.

Re/Max launched a new entrepreneurial series for its top sales representatives, led by real estate coach Ken Goodfellow. The entrepreneurial program, exclusive to Re/Max, provides sales associates who have achieved Platinum Status (more than $250,000 in annual commission) with “the skills necessary to create a ‘systems driven’ business, including strategies to achieve long-term growth, financial planning and leadership skills for better results,” the company said.

October

October will be remembered as the month when The Big Vote took place.

Representatives of the country’s 101 real estate boards crowded into the ballroom of a Newfoundland hotel to vote 97% in favour of a deal that some warned could mean the end of the Canadian Real Estate Association. Visitors rushed to the PropertyWire.ca website almost immediately, making it the most-read story of the year.

There were also reports that the federal Competition Bureau may not be finished with organized real estate and set its sights on investigating how MLS data is stored.

The Ontario Real Estate Association (OREA) was also upset this  month, but over another issue. The group commissioned an Ipsos Reid survey that showed 56% of Ontario residents mistakenly believed the new Harmonized Sales Tax (HST) applied to the full purchase price of a resale home, when it is only levied on the various transaction fees associated with the purchase. “We’re doing our part to inform our clients, but we shouldn’t have to do it alone. We’re calling on the Ontario government to launch an immediate public awareness campaign to educate taxpayers and end the HST confusion,” said Dorothy Mason, President of OREA.“For average homebuyers, learning that the HST does not apply to the full purchase price means a $40,000 saving they weren’t expecting.”

TREB reported 6,681 sales through the MLS system in October 2010, while the REBGV showed home sales were steady the past four months, lending a sense of stability to the market. According to the MLS Link Housing Price Index (HPI), the benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 4.6% to $579,349 in October 2010 from $553,702 in October 2009. Since June, however, residential home prices in Greater Vancouver have remained relatively unchanged, declining 0.2%. “We’ve seen a lot more consistency and less volatility in recent months when it comes to both number of sales and pricing, although it’s important to remember that conditions often vary between communities and neighbourhoods,” Jake Moldowan, REBGV president said.

November

CREA announced that, after a six month review of potential candidates, Gary Simonsen would become its next CEO when Pierre Beauchamp retires next spring.  Well-known within organized real estate in Canada, Simonsen has been CREA’s chief operating officer since 2008, having previously served for a decade as associate executive officer.

Toronto area realtors reported 6,510 existing home sales in November – down 13 % from 7,446 sales in November 2009. New listings were also down 13 % annually to 8,642, according to a news release. Meanwhile in Greater Vancouver, residential home sales improved in November compared to the previous four months, with the number of sales posted on the MLS coming in slightly higher than the 10-year average for that month. REBGV reports that the number of residential property sales in Greater Vancouver totaled 2,509 in November 2010. This represents a 7.4% increase compared to October 2010 and an 18.6 % decline from November 2009.

December

According to the sixth Annual State of the Residential Mortgage Market report from the Canadian Association of Accredited Mortgage Professionals (CAAMP), Canadian homeowners are comfortable with their mortgage debt, have significant home equity and could withstand an increase in their mortgage interest rate.

With a month to go in the year, Winnipeg realtors were preparing to celebrate a new record for dollar volume sales. MLS sales totaled $2.58 billion as of the end of November, surpassing the previous record of $2.47 billion set in 2009. “In many respects,” said WinnipegREALTORS president Claude Davis, “the first 11 months bore a striking resemblance to last year with the exception that prices are continuing to climb, as they have been doing year-over year since 2003. “Looking ahead to the end of the year, WinnipegREALTORS has already set a new annual MLS dollar volume record and will see MLS sales finish over the 12,000 unit mark — a level only surpassed five times previously,” he added. With 11,583 units sold by the end of November, year-to-date MLS® sales were virtually deadlocked with last year’s total of 11,563. November MLS unit sales were down less than one % to 829 transactions. On the other hand dollar volume sales during last month rose by 10 % to $182.2 million when compared to the same month in 2009, which is a new record for the month.

We could not include everything in our yearly review but we'd like to hear from you; what was your highlight of 2010 so far? Tell us about your highs, and lows, this past year in the comment section below.

GTA Realtors Report Mid-Month Resale Housing Market Figures

All in all, 2010 is set to close out at good levels, according to a recently released report from TREB.

These figures indicate a 19 % decrease compared to the 3,079 sales recorded during the same period in last December. Year-to-date sales amounted to 84,316 – a one % drop from the 2009 total of 84,888.Today, the Greater Toronto REALTORS reported 2,509 sales through the Multiple Listing Service (MLS) during the first two weeks of December 2010.

"While off the 2009 record, the level of December transactions remains strong from a historic perspective. The number of transactions in 2010 will be the third highest on record," said Toronto Real Estate Board President Bill Johnston
Prices have also shown an increase both in the City of Toronto, and in the rest GTA itself, from Dec 2009- with the city of Toronto increasing from $460,828 during the same period in 2009 to $ 470,918. Similarly, the rest of the GTA was at $393,918 in 2009, increasing to $408,118 in 2010.

December mid-month transactions came in at an average price of $435,225 – a three % rise compared to the average of $423,103 tallied during the first 14 days of December 2009.

"Market conditions remain tight enough to support moderate growth in the average selling price. Expect the three per cent annual rate of growth reported for the first two weeks of December to be the norm in 2011," said Jason Mercer, TREB's Senior Manager of Market Analysis.

 Source: propertywire.ca 

New home prices 0.3% higher

Canada's new housing price index rose 0.3 per cent in November after a 0.1 per cent advance in October.

Statistics Canada said prices increased the most in St. John's, N.L. (up 4.2 per cent), followed by Ottawa-Gatineau (1.6) and Halifax (1.2).

In St. John's, prices rose as a result of increased labour costs and higher land development fees, while increases in material and labour costs were the main factors in Ottawa-Gatineau and Halifax.

The largest price declines were recorded in the Ontario cities of Windsor (down 1.8 per cent) and St. Catharines-Niagara (down 1.1), followed by Charlottetown and Victoria (both down 0.4).

The agency says some builders in Windsor and in St. Catharines-Niagara lowered their prices to generate sales while others offered discounts and bonus incentive packages in November.

Year-over-year, the new housing price index was up 2.3 per cent in November after a 2.5 per cent increase in October.

Read more: http://www.cbc.ca/money/story/2011/01/12/new-home-prices-november.html#ixzz1Ari489ze

Flaherty expected to tighten mortgage rules

Federal Finance Minister Jim Flaherty is expected to announce tighter mortgage rules on Monday to combat concerns over high Canadian household debt.

The announcement is set for 8 a.m. ET in Ottawa.

Among the expected changes are the lowering of the maximum number of years the government will back mortgages — from 35 to 30.

Ottawa is also expected to:

• Limit the insurance coverage by Canada Mortgage and Housing Corp. on lines of credit.
• Reduce the upper limit that Canadians can borrow against their home equity to 85 per cent from 90 per cent.

The changes come following recent warnings from the Bank of Canada on household debt levels.

In December, bank governor Mark Carney cautioned Canadian households and businesses not to be lulled by current low interest rates, because repercussions from a hike could be swift.

Last week, Agathe Cote, a deputy governor at the bank, told a Kingston, Ont., audience that a sudden weakening in the Canadian housing sector could affect other areas of the economy given the high debt loads of some households.

If that shock hits, Canadians would be expected to cut back on their spending, she said

Read more: http://www.cbc.ca/money/story/2011/01/17/flaherty-mortgage-changes.html#ixzz1BIUWxgQy

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