Hamilton Home Review, February 2018 Edition

We’ve re-launched Hamilton Home Review, this time focusing on investors, especially those who are members of Venture Property Investments. I have been acting as the RE Liaison with Martin and Chris of Venture for about a year now and this is how we keep in touch with our clients, new members, and past owners.

If you click this link, it will take you to the February edition

If you click this link, it will take you to the most recent edition

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Major lenders hike rates following Bank of Canada decision

Businessman presenting chart

Canada’s major banks have been quick to react to the Bank of Canada’s decision to raise interest rates to 1.25%.

CIBC, RBC, Scotiabank and TD were among the first lenders to increase their prime lending rates by 25 basis points to 3.45%; the new rates take effect from today (Jan 18) more

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Government thinks these measures will cool the hot market. Are they aiming at the right places?

As a REALTOR, part of me wants to see the gov’t do something about escalating prices. But the other side of me has investors who are paying too much for homes, then being forced to pass it on to renters with higher initial rents. Capping increases will help, yes, but what about the high starting rent? And these investors aren’t foreigners, their Toronto investors coming to Hamilton. Conrad Zurini (Remax) said today on radio that Hamilton has been undervalued for years and that some of these prices are accurate. But the banks don’t agree since they don’t appraise them for the amount we’re paying in bidding wars.

What’s the answer? Anybody’s guess. We’ll see what they actually do. In the following article, the gov’t is hinting at dealing with REALTOR practices (big surprise), as well as foreign investment. I don’t think they’re aiming in the right direction. Shouldn’t banking practices be brought into play also? After all, they are the industry making the most money in this environment.

Here’s the article: http://www.repmag.ca/business-news/ontario-to-place-15-per-cent-tax-on-foreign-buyers-to-cool-gta-housing-market-sources-224385.aspx

Housing issues won’t involve reducing the Greenbelt

Ontario Premier Kathleen Wynne says that as the province looks to tackle housing supply issues, it won’t reduce the Greenbelt lands.

She says the government is actually committed to expanding the Greenbelt, which is about 800,000 hectares of protected land that borders the Greater Golden Horseshoe area surrounding Lake Ontario.

Wynne says the Greenbelt is “like the lungs of this highly populated part of the province.”

 

(more)

Ontario hints at cooling hot real estate market

Finance Minister Charles Sousa says the upcoming spring budget will include a package of measures dealing with housing affordability.

The Liberal government has promised measures to help curb rising home prices in some markets, particularly in the Greater Toronto and Hamilton Area.

(more)

Why are house prices going so high?

Comparing the inventory today to that of 10 years ago is sobering.

The lack of inventory – often cited as a reason for skyrocketing prices – hit a very real and, perhaps concerning, low last month.

That has one association calling the situation a crisis

“February data demonstrates, quite clearly, that our housing supply crisis in the GTA is getting worse,” BILD President and CEO Bryan Tuckey said. “Our members are building to current provincial intensification policy and we are building less low-rise single-family housing and more high and mid-rise housing but consumer demand for low-rise homes has not dropped.

“Today in the GTA we have a scarcity of single-family ground-related housing that is not just unprecedented – it is almost inconceivable,” Tuckey continued. “As a result we are seeing record breaking condo sales and continued price growth.”

Indeed, across the GTA, a mere 1,001 new low-rise homes were available in February. And there were only 324 new detached homes available.

10 years ago there were 17,304 low-rise homes and 12,064 detached homes available.

Let’s let that one sink in for a second.

“If I were shopping for a single-family home ten years ago, I would have been able to choose from among 500 different sites and nearly 18,000 units,” Patricia Arsenault, Altus Group’s EVP of research consulting services said. “Today, there are less than 100 projects with any available units to purchase, totalling only about 1,000 units. And I would have to act very quickly to get one of those.”

The reality, though, is that there is dwindling land available to build low rise homes within Toronto {and some surrounding areas.}

Another issue, according to BILD, is legislative roadblocks.

“While the February results point to a trend decades in the making, the severity of the monthly figures, is jarring,” Tuckey said. “As the current data demonstrates, legislative guidelines and planning policies have real impacts on real people. With significant declines in builder inventory and record prices (for both low and high-rise homes), the GTA housing market is in crisis and it is time for governments to work with us to address the problems.”

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