This week’s news: Toronto housing market shows first signs of cooling down
Our weekly round-up of real estate news in Toronto, across Canada and the world for the week ending May 5, 2017.
The price of real estate in Toronto remains sky high, but the market might finally be showing signs of a cool down.
The Toronto Real Estate Board has just released its numbers for April, and while the average selling price was up by 24.5 percent, there was also a huge surge in listings.
Need for tax on foreign housing buyers questioned (Toronto Sun)
The Toronto Real Estate Board says there is fresh evidence indicating that speculation and foreign ownership make up a small component of the city’s housing market, raising questions about the need for Ontario’s plan to tax foreign speculators.
The board released new data on foreign buyers at the same time as it reported that prices continued to soar last month, though there were signs the market may be cooling as the number of transactions slipped.
There were 33.6 per cent more sales listings for Toronto homes in April compared to the same month a year ago, but the cost of the average home rose to nearly $921,000, according to new figures.
Sales last month, however, edged down by 3.2 per cent year over year, according to the Toronto Real Estate Board (TREB) data released Wednesday.
Two things happened last week that were a reminder of just how vital real estate has become to Canada’s economy.
On Friday, Statistics Canada released gross domestic product data that showed February was a banner month for sectors linked to housing. The real estate industry, residential construction, financial and legal services generated a combined 0.5 per cent increase in output, the biggest one-month gain since 2014. Without those, the overall economy would have contracted slightly in February.
Say goodbye to the Bank of Canada’s noon exchange rate: say hello to indicative rate (Financial Post)
Hold your groans, but the sun has set on the noon exchange rate published by the Bank of Canada.
The rate, which has been around for more than a decade and which was used in the calculation of all sorts of foreign contracts, has disappeared.
Fate of Walton Group’s real estate provides test of ailing Alberta market (The Globe and Mail)
The financial woes of Calgary real estate firm Walton Group are likely to be a litmus test for Alberta’s ailing commercial real estate market, with industry players closely watching the fate of the developer’s lucrative sites.
Walton, an international real estate investment and development firm, filed for creditor protection earlier this week under the Companies’ Creditors Arrangement Act, owing hundreds of millions of dollars to thousands of retail investors, as well as to major Canadian banks and construction lenders. The court-supervised restructuring applies only to the company’s Canadian subsidiaries, which represent about 15 per cent of Walton’s entire assets.
Zillow Launches New U.S. Listings Portal RealEstate.com (World Property Journal)
Zillow Group announced this week the launch of RealEstate.com, a new consumer real estate website tailored to first-time home buyers, many of whom are millennials.
On RealEstate.com, buyers can search for homes in a completely new way — by the monthly payment and down payment they can afford.
Trump tax plan could bruise REITs (The Real Deal)
On Wednesday, Treasury Secretary Steven Mnuchin and National Economic Director Gary Cohn laid out the basic principals of the White House’s tax reform plan. While scant on many important details, it hinted at some major changes: Taxes for corporations and other businesses, including pass-through entities like LLCs and S corporations, would go from the current top marginal rate of 35 percent (plus local tax) to 15 per cent, and individual rates would go from a seven-bracket system to just three, a massive shift that could change the incentive structure for numerous investments.
One of the investment vehicles that could be significantly impacted by these tax shakeups is the real estate investment trust, or REIT.
Millennials are becoming homeowners much later than baby boomer did, but when they get there, they’re spending more for renovations, according to an annual survey released Thursday.
That’s a positive sign of confidence in the housing market, according to the Houzz & Home Survey.
Saudi Arabia is close to striking deals with South Korean and Chinese firms under a $100 billion project to build 1 million low-cost homes over the next five years, its housing minister said on Wednesday.
The government, which last year signed memorandums of understanding with those countries to develop some 200,000 properties on state land, expects to receive final proposals from the companies by mid-May, Majed al-Hogail said in an interview.
Securitization to Become a Key Financing Model for China’s Growing Property Sector (World Property Journal)
According to JLL’s newly released report titled Financing China’s Real Estate: Pragmatism and Creativity Will Prevail, China’s rapid-developing real estate finance sector stands at a crossroads.
JLL’s new report gives a comprehensive picture of the various financing models currently used by China’s real estate developers, including bank loans, domestic and foreign corporate bonds, senior debt, perpetual bonds, trust firms, P2P lending, crowd-funding, and joint ventures. In addition, the report conducts in-depth studies of the opportunities and challenges faced in China by emerging financing models such as CMBS and REITs.
London estate agents have begun to offer free cars worth £18,000, stamp duty subsidies of £150,000, plus free iPads and Sonos sound systems to kickstart sales in the capital’s increasingly moribund property market. The once super-hot central London market has turned into a “burnt-out core” according to buying agents Garrington Property Finders, prompting developers to offer ever greater incentives to lure buyers.
At one development in Muswell Hill, a relatively affluent part of north London, sales agents said this week they would be giving away a Renault Zoe electric car (RRP £18,045) to every house buyer. They would also pay stamp duty on the £1.99m homes, at £153,000.