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Housing bubble has already burst says BMO’s Porter

THE KW MARKET has undergone such changes as in the GTA in the last few months. Are we moving away from a sellers market to our normal balanced market? Many believe so as I do. Now as the fall market begins to heat-up is a great time to begin your search. – dP

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Not everyone agrees that Toronto has been in a housing bubble but BMO’s chief economist is in no doubt.

“By any traditional definition, we were in the grips of a full-on bubble earlier this year,” Doug Porter told CBC’s Metro Morning on Friday. He backed that up with stats on house prices rising 40% in around 15 months, a situation last seen in the late 1980s which was widely accepted as a bubble.

Porter continued that the Ontario government’s measures to cool the market helped burst the bubble.

Although prices remain elevated in the GTA, there has been a 13% drop in four months and Porter expects softening to continue with a “full-blown buyer’s market ahead.”

He believes that further interest rate rises will continue to affect affordability even as prices ease, with first-time buyers still facing challenges to home-ownership.

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Is this economist Correct? Many have missed their predictions greatly.

Canada’s hottest housing markets are heading towards a severe downturn according to Capital Economics’ David Madini.

The economist warns that the rise in sales in Vancouver is a temporary jump while the slowdown in Toronto’s larger market is indicative of a price correction.

Madini says that the impact is likely to be felt outside the housing market with a drag on second-quarter GDP, perhaps taking it to just 1 per cent; but if not then the longer-term outlook “appears to be worsening.”

There could be a reduction in housing investment, lower consumer consumption and financial stability could even be impacted.

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April, a Bounty of Sales for K-W

KITCHENER-WATERLOO, ON (May 3, 2017) ––It was another record setting month for home sales as 766 residential transactions were recorded through the Multiple Listing System (MLS® System) of the Kitchener-Waterloo Association of REALTORS® (KWAR), an increase of 14.3 percent compared to April 2016.

Residential sales in April included 492 detached homes (up 14.7 percent compared to April 2016), 161 condominium units (down 1.2 percent) which includes any property regardless of style (i.e. semis, townhomes, apartment, detached etc.). Sales also included 52 semi-detached homes (up 30 percent) and 53 freehold townhouses (up 60.6 percent).

The average sales price of all residential sales increased 39.7 percent to $512,656 compared to April 2016. Detached homes sold for an average price of $594,453 an increase of 40.1 percent, while the average sale price for an apartment style condominium was $267,455, an increase of 18.3 percent. Townhomes and semis sold for an average of $377,531 (up 39.3 percent) and $415,709 (up 47.7 percent) respectively.

Vigorous demand for homes in Waterloo region meant homes were snapped up quickly. The average days on market in April were 10, compared to 33 days a year ago. On a month to month basis, it took four fewer days from list to sale date in April compared to March.

The KWAR cautions that average sale price information can be useful in establishing long term trends, but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold. Those requiring specific information on property values should contact a local REALTOR®, Denis Pellerin who has his fingers on the pulse of the market. denisPellerin.REALTOR, (519) 577-8181 or dpellerin@coldwellbankerpbr.com.

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KW a HOT 1st Qrt. market

“This is the first time we’ve seen residential sales come anywhere close to the 700-unit mark so early in the year,” says James Craig, President of the KWAR. “These are exceptionally strong numbers, in fact’ we’ve only surpassed 700 units in a single month three other times: May 2007, and then not again until May and June of last year.”

 

During the first quarter of 2017, there were 1,532 home sales, 13.4 percent above last year’s result for the same period and 30 percent above the previous 5‐year quarterly average. On a monthly basis, home sales were 41 percent above the previous 5‐year average for the month of March.

The average sale price of all residential sales increased 32.3 percent to $493,226 compared to March 2016. Detached homes sold for an average price of $583,144 an increase of 35.6 percent, while the average sale price for an apartment style condominium was $265,524, an increase of 25.4 percent. Townhomes and semis sold for an average of $368,554 (up 29.9 percent) and $412,226 (up 49.1 percent) respectively.

Once again in their latest monthly news release, the Canadian Real Estate Association called the disparity between limited housing supply and robust demand in Ontario’s Greater Golden Horseshoe “without precedent”. In Kitchener‐Waterloo, the number of months of inventory has stood at or below one month for eight consecutive months.

The KWAR cautions that average sale price information can be useful in establishing long term trends, but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold. Those requiring specific information on property values should contact your local REALTOR® Denis Pellerin at (519) 577-8181 or dpellerin@coldwellbankerpbr.com.

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Just a friendly reminder to set your clocks ahead one hour this Sunday.

Did you know: Benjamin Franklin is credited with the idea for Daylight Saving Time back in 1784, but the idea was not implemented until 1895 and was first used in 1908 in Thunder Bay, Canada.

In most of Canada Daylight Saving Time begins at 2:00 a.m. local time on the second Sunday in March. On the first Sunday in November areas on Daylight Saving Time return to Standard Time at 2:00 a.m. local time. When Daylight Saving Time begins turn your clocks ahead one hour.

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HOME SALES IN FEBRUARY WERE THROUGH THE ROOF

For the month of February there were 474 residential sales within the MLS® System of the Kitchener-Waterloo, an increase of 4.2% compared to February 2016.

“Sales in February were well above what we would see in a typical February,” says James Craig, President of the KWAR.  The 10-year average for residential sales in Kitchener-Waterloo and area for February is 405 units. “Last month’s sales would have been much higher still were it not for the fact that we continue to have a real shortage of listings.”

Residential sales in February included 299 detached homes (up 5.7 percent compared to February 2016), 107 condominium units (up 3.9 percent) which include any property regardless of style (i.e. semis, townhomes, apartment, detached etc.). Sales also included 32 semi-detached homes (down 3 percent) and 31 freehold townhouses (up 3.3 percent).

A lack of listings to satisfy the strong consumer demand is fueling multiple offers often resulting in sale prices above the actual asking price, which pushed the total residential average sale price in February up 27.5% compared to the same month last year to $463,355.

Detached homes sold for an average price of $549,691 an increase of 30.7 percent, while the average sale price for an apartment style condominium was $246,736, an increase of 8.8 percent. Townhomes and semis sold for an average of $388,721 (up 20.6 percent) and $369,624 (up 31 percent) respectively.

For more information, contact Denis at (519) 577-8181, dpellerin@coldwellbankerpbr.com

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Living In the Bahamas offered by Coldwell Banker CORAL BEACH FANTASTIC BEACHFRONT CONDO ONLY $65,000

Situated in the beachfront community of Coral Beach, this studio is an ideal vacation spot. Enjoy beachfront condo living with cool prevailing southeasterly breezes. This unit features a lovely pool with a large deck overlooking the Atlantic Ocean, poolside furniture and snack bar, Tiki huts and beach chairs, Fenced and gated parking lot. On site 24-hour security, Management staff.

 

For more information, contact me at (519)577-8181, email at dpellerin@coldwellbankerpbr.com

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Fed announces interest rate decision

As expected, the Federal Reserve held interest rates steady today as they assess where the economy is headed – and the agency intimated that rates might stay low for a good while to come.

Most experts felt the Fed’s policymaking committee would decline to raise rates today as the agency feels out the likely economic effects of the new administration.

What does this mean for Canada? It could be that we will hold also. In so far as Real Estate is concerned, this will mean a status quo on the more affordable rates we have been seeing for some time.

For more details, contact me at (519) 577-8181 – Denis Pellerin, Salesperson, CBPBR

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ENERGY INCENTIVE PROGRAM

Ontario’s Home Energy Conservation Incentive Rebate Program

Kitchener Utilities customers can now apply for Ontario’s Home Energy Conservation Incentive Rebate program. Customers are eligible for a rebate up to $5,000 and must select a certified energy advisor to get started. The incentive is part of the province’s $100 million contribution to the Green Investment Fund, an initiative designed to strengthen the economy and fight climate change. Learn more at www.ohecip.ca