Housing market not in free fall, report argues | #Toronto #realestate

Housing market not in free fall, report argues

Canada’s cooling housing market continues to put the brakes to residential building plans in Canada

 

Canada’s cooling housing market continues to put the brakes to residential building plans in Canada

Photograph by: Mark Blinch/REUTERS, Mark Blinch/REUTERS

OTTAWA — Canada’s cooling housing market continues to put the brakes to residential building plans in Canada, although the slowing trend in no way signals a U.S.-style housing free fall, the Conference Board said Wednesday.

The Ottawa-based think-tank weighed in on the housing-bubble debate on Wednesday, after Statistics Canada released data showing the value of building permits for residential construction fell for the fourth straight month in July.

The 2.4% decline, to a monthly rate of $3.5-billion, follows similar data showing housing starts and resale activity in Canada declining for months now, along with reports arguing that Canada’s housing market is a bubble waiting to burst.

Not so, the Conference Board of Canada argued in a report Wednesday.

“The housing market has lost its lustre. No doubt about it,” said Mario Lefebvre, the centre’s director for municipal studies.

“However, this will not lead to a free fall for Canada’s housing market. This country will not experience home-price declines to the tune of what we have witnessed in the United States over the past few years.”

Signs of a slowdown were unmistakable in Statistics Canada’s report. It showed weakness in residential permits was much more broadly based than in the nonresidential sector, with declines registered in six of 10 provinces, said Scotia Capital economist Derek Holt.

Yet, he added, the report “is directionally in line with expectations for softer housing markets,” and that the number of residential permits “nonetheless remains 31% higher than a year ago.”

Mr. Lefebvre conceded in his report that the next few months will be weak, thanks to a slowing economy, the arrival of the harmonized sales tax in Ontario and B.C., declining consumer confidence, European debt worries and a jobless recovery in the U.S.

At the same time, home prices now average more than $300,000 in Vancouver, Edmonton, Calgary, Toronto, Ottawa and Montreal — far above the $150,000 to $200,000 historical average — according to a recent report from the Centre for Policy Alternatives which said those markets have all the hallmarks of an “accident waiting to happen.”

But Mr. Lefebvre argued the country will only see a pause in home-price growth, with some possible small declines in a few markets.

Mr. Levebrve said prices have held up despite declining resales because those sales “are coming off incredibly high levels in most markets — levels that were simply not sustainable.”

The board said it does expect housing starts to decline. But like the resale market, this will mark a return to more normal levels rather than a collapse in the market, which, in the case of the U.S., was the result of laws that allow mortgage deductibility for tax purposes and the “ring-fencing” of mortgage debt, which prevents lenders from pursuing other assets of a mortgage holder, the board said.

 

 

Advertisements

MLS rival launched by real estate companies | Money | #Toronto #realestate

MLS rival launched by real estate companies

http://torontocondoinfo.files.wordpress.com/2009/04/housing-market-recovery.jpg?w=250&h=300

Five real-estate companies have launched what they claim is Canada’s largest commission-free sales network, mounting a challenge to the dominant Multiple Listing Service.

The network was formed after the recent acquisitions of ComFree in Alberta, Skhomes4sale.com in Saskatchewan, ComFree in Manitoba and PrivateRealEstate.ca in Ontario by Quebec-based ByTheOwner.com and Duproprio.com.

The network currently has 12,000 properties listed for sale and expects to double the business every year. Fees for sellers range from between $499 to $699.

Martin Rygiel, general manager for ByTheOwner.com, said the network is likely to be a real contender to the Canadian Real Estate Association’s Multiple Listing Service (MLS), which currently accounts for about 90% of real-estate transactions in the country.

“It would be absurd to think that it would not be,” he said. “From what we know, the public is in desperate need of this kind of service.”

“When it comes down to the costs of trading real estate, it’s the No. 1 concern of clients,” he added.

Rygiel said the average selling price for a house in Toronto is about $330,000, which would generate commissions of as much as $20,000 for real-estate agents.

“It’s a very interesting move and smart strategy to combine five companies,” said John Andrew, director of executive seminars on corporate and investment real estate at Queen’s University. “They are the first to do this on anything, but a very local scale, and I’d be willing to predict they’ll do very well.”

The majority of properties in Canada are still sold through the Canadian Real Estate Association’s Multiple Listing Service.

The association has come under pressure from the Competition Bureau, which has raised concerns rules imposed on agents are anti-competitive.

The system keeps key sales information – including newly listed properties, past selling prices and neighbourhood comparisons – hidden from non-members.

Critics have also said it forces sellers to pay for services from real-estate agents that they don’t want or need.

Andrew said the arrival of networks such as ByTheOwner.com is likely to help the Competition Bureau to achieve its aims.

“I’d bet there will be an explosion in agents allowing clients to pick from a menu of services,” he said.

Rygiel said the five companies combined have so far sold more than 85,000 properties, saving customers more than $1 billion in commissions.

The network is designed to be a one-stop shop for consumers, who can list their properties through the system, but also gain access to expert advice on things like how to showcase their properties and prepare legal documents.

“The client is assisted throughout the entire process,” he said. “We provide a service that is revolutionary across the board, as the traditional industry isn’t efficient any more.”

 

CBC News – Money – The mood among Canada’s small businesses may surprise you

SMALL BUSINESS

The mood among Canada’s small businesses may surprise you

Last Updated: Tuesday, September 21, 2010 | 4:17 PM ET 

Dianne Buckner has reported on entrepreneurs for two decades. She hosts Dragons' Den on CBC Television and is part of the business news team at CBC News Network.

Dianne Buckner has reported on entrepreneurs for two decades. She hosts Dragons’ Den on CBC Television and is part of the business news team at CBC News Network.

Energized! Subdued. Optimistic! Frightened.

Which word do you think best describes the mood of small business people in Canada these days?

That’s the question I found myself pondering, shortly after CBC asked me to begin writing this weekly column about small business.

Getting a status report from those on the front lines as our economy battles its way back to better times seemed like a good place for me to start.

First, a bit of background: I’ve been reporting on entrepreneurs since I was hired in 1991 to be a reporter at Venture, CBC’s long-running and popular business program. Eventually I became the host and executive producer of that program. Nowadays, I host Dragons’ Den, which begins its fifth season tonight, and I’m part of the team of business reporters at CBC News.

So I’m connected to small business people in a number of ways. I’m interested in their mood — as a journalist, yes, but also as a citizen who understands their role in the overall health of our economy, and therefore my own prospective prosperity.

Entrepreneurs in ‘subdued’ mood: economist

Depending on the year and on whose numbers you believe, small businesses create 30 per cent to 80 per cent of the new jobs in an economy. That’s a big deal.

And it’s a brave and demanding undertaking. People who decide to build businesses are creative, resourceful, committed and incredibly hard-working. I’ve loved being involved with programs that inspire and inform or even just entertain entrepreneurs.

So what do I know about their mood right now?

Well, there’s the latest survey from the Canadian Federation of Independent Business. According to its monthly Business Barometer, a regular survey of 1,000 small business people, their confidence has dropped for the third month in a row.

“Subdued” is the word the group’s chief economist, Ted Mallet, offered to describe the mood of entrepreneurs right now. He points out all the negative economic indicators that fill the headlines these days — flagging real estate, weak employment growth, financial woes south of the border.

Business interests’ mood matters

But do those headlines influence the mood of small business people?

“No,” says Kevin Jackson. He’s a Gormley, Ont.-based entrepreneur I met recently at a business event. His company, Biz-Zone, sells web-based software to professional organizations. He also runs a resource website for small business people.

“In my opinion, small business people are most closely connected to three things,” Jackson told me. “Cash flow, their customers and their sales activities.”

https://i0.wp.com/www.gmal.co.uk/SiteCollectionImages/small-business-web.jpg

He describes his own mood as “optimistic,” and believes plenty of entrepreneurs feel the same.

In other words, just because the OECD is warning of a weaker-than-expected recovery, or Ireland’s economy is in the toilet, a business person in Canada isn’t going to kibosh expansion plans, especially if he or she has orders pouring in faster than Conrad Black’s legal bills.

‘It’s not as horribly pessimistic as it was 18 to 24 months ago, but it’s hard to know just how bright things are going to be.’—Brett Wilson

“The most important indicator influencing the mood of a small business person is really the number of footsteps across their front door,” admits Mallett.

Calgary oil & gas baron Brett Wilson has invested in 25 small businesses as a Dragon in the Den, so he has an interest in knowing what the mood out there is like as well.

“Most entrepreneurs I talk to these days are enthusiastically curious,” he says. “Enthusiastic because they’re optimistic about their prospects — they wouldn’t be doing what they’re doing if they weren’t hopeful. And curious because the future just isn’t clear at this point. It’s not as horribly pessimistic as it was 18 to 24 months ago, but it’s hard to know just how bright things are going to be.”

Of course, it’s an impossible task to get an accurate read on something as amorphous as “mood,” especially on a sector as broad and varied as small business. But it’s worth trying, because all of us are affected by our moods, and that affects our behaviour.

In the case of small business people, how they feel about the future will determine what they may — or may not — contribute to our economy.

Myself, I’m feeling pretty delighted these days — to be writing a new column and connecting in another, new way to a dynamic group of people. I intend to keep a sharp eye on anything and everything I think may be of interest to people who are already running a small business, and those who dream of becoming an entrepreneur. Watch this space!

via cbc.ca

 

SunEdison Awarded 2.2 MW of Solar Rooftop Projects for GE Capital Real Estate

— Sep 21, 2010

https://i1.wp.com/alternativesourcesofenergy.net/wp-content/uploads/2010/03/solar-powered-homes.jpg

SunEdison, a leading worldwide solar energy services provider and subsidiary of MEMC Electronic Materials, announced Sept. 15 that it has executed an agreement to develop 15 industrial rooftop solar photovoltaic (PV) projects for GE Capital Real Estate, a global real estate investment company.

Under the terms of the agreement, SunEdison will finance, build, own, operate, monitor and maintain PV solar energy systems with capacity totaling 2.2 megawatts (MW). GE Capital Real Estate will receive lease revenue for rooftop space allocated to the projects, without any upfront capital equipment costs. The projects will be hosted at GE Capital Real Estate facilities, and the Ontario Power Authority (OPA) will purchase the energy produced under the terms of Ontario’s Feed-in Tariff Program (FIT).

Construction on three of the 15 rooftop PV systems is expected to begin this fall. The majority of projects will be located in the Greater Toronto Area (GTA) including Vaughan, Brampton, Burlington, Markham and Mississauga, with additional systems located in London. Over 20 years, the systems are expected to generate more than 47 million kWh of clean energy — with the potential to offset an estimated 9.8 million kilograms of CO2 into the atmosphere, which is the equivalent of removing 5,515 of cars from the road for one year.

GE Capital Real Estate is focused on being at the forefront of environmental leadership in commercial real estate, said Kathy Lee, managing director at GE Capital Real Estate Canada. Our partnership with SunEdison and the installation of rooftop solar arrays is an important step in meeting our sustainability goals.

As the largest North American solar energy provider, SunEdison has a solid background in bringing solar projects to fruition, said Jason Gray, Canada country manager for SunEdison. Working with GE Capital Real Estate and the Ontario government, our goal is to help build a greener tomorrow for Canada.

 

Banks hold most of the cards in mortgage game | #Toronto #realestate

Banks hold most of the cards in mortgage game

By John Greenwood, Financial Post September 19, 2010  

A new home under construction in the Montreal suburb of Brossard. Canadian homeowners have much less choice when shopping for mortgages than Americans, and that oligopoly among the big banks, together with the protection against default offered by CMHC, allowed Canadian banks to remain unscathed during the financial crisis.

 

A new home under construction in the Montreal suburb of Brossard.

Canadian homeowners have much less choice when shopping for mortgages than Americans, and that oligopoly among the big banks, together with the protection against default offered by CMHC, allowed Canadian banks to remain unscathed during the financial crisis.

Photograph by: Shaun Best, Reuters

To understand the housing market and where it’s headed, it’s a good idea to take a close look at the big banks.

As providers of more than 60% of home loans in Canada they are major players, determining everything from who gets to be a buyer to what people can afford to pay.

It’s no surprise that mortgages are the biggest single asset class held by the banks. According to the Bank of Canada, the chartered banks had $495-billion of mortgages on their balance sheets as of this month, or about half of all outstanding home loans — and that doesn’t include the billions of dollars of home loans that the banks have sold into the Canada Mortgage Bond program.

Mortgage finance is big business for the banks, and it’s also a cash cow for several reasons. For one, because banking is an oligopoly in Canada, players pretty much get to decide how much they will charge. Unlike the United States where thousands of lenders compete tooth and nail for business, the industry in this country is concentrated in the hands of the banks and the credit unions, with a handful of smaller players focusing on borrowers the banks don’t want to deal with.

Bill Downe, chief executive of Bank of Montreal, recently explained it this way to an investor conference: “We don’t believe we compete on price.”

Another reason banks like the business is because the riskiest mortgages are insured by the Canada Mortgage and Housing Corp., a Crown corporation. In the event of a worst-case scenario, it is the taxpayer who shoulders the risk of default. The idea is to make mortgages cheaper and therefore more affordable for those at the lower end of the income scale.

In practice the banks don’t pass on all the positive lift from government support to their customers.

“The system is founded on a sovereign entity that guarantees risky mortgages,” said Peter Routledge, an analyst at National Bank Financial.

In the late 1990s, the banks added a new twist to the business model as they began securitizing, or selling, parts of their mortgage portfolio. Securitization had caught on in the United States long before it did in Canada, so lenders in this country were merely copying what they saw as a proven and highly beneficial innovation.

Essentially, it allowed them to swap baskets of loans that might not pay off for several decades for a lump sum. In other words, instant liquidity, which they could then use to make more home loans. The result: The market for Canada Mortgage Bonds has jumped to nearly $300-billion today from less than $10-billion in 2001.

During the financial crisis, while private sector investors fled, the Bank of Canada and the federal government kept the securitization market going, buying up tens of billions of dollars of securitized mortgages so Canadian banks could continue to lend. It proved to be a vital lifeline to the banks during the tough times, providing a key source of liquidity that was virtually absent from the global banking system.

As a way to keep the Canadian financial system going it was a great strategy, but there were unintended consequences.

For instance, banks soon came to rely on securitization to boost their results.

According to a 2009 BMO Capital Markets report, as much of 15% of quarterly bank profits were generated by securitization that year. The problem is that such gains are but a one-time boost instead of a steady stream of interest payments that would amount to a much bigger profit if the mortgages stayed on bank balance sheets.

“This isn’t a positive development,” said the BMO report by analyst Ian de Verteuil (now with the Canada Pension Plan Investment Board).

Yet another concern is the impact on consumer behaviour. Because of the profits that mortgages and securitization generate, banks have enormous incentive to grow the business, which they do by keeping interest rates low and easing loan conditions. Consumers have responded by taking the cheap money offered and bidding up house prices across the country. So even as real estate was collapsing in the United States and much of Europe, the market in this country — apart from a brief period in 2008 and 2009 — continued to expand.

Canadian household debt compared to income is now sitting close to record levels, according to Statistics Canada, and that’s prompted a spate of warnings from rating agencies and others. This week the OECD said in a report that ballooning consumer debt has left Canadians with “growing vulnerability” to adverse economic shocks.

Meanwhile, equity markets have been treading water since the start of the year and the economic recovery is looking increasingly wobbly. In a worst-case scenario a spike in mortgage defaults would likely result in a significant housing market correction.

The good news for the banks is that they are largely protected from such a situation because the riskiest mortgages are covered by CMHC insurance.

Experts, however, say that despite the concerns, Canada’s housing market remains relatively robust.

Over the past 12 months lenders along with the CMHC have taken steps to gently tighten mortgage conditions, shortening the maximum amortization and requiring borrowers to put up more capital. As a result, they say, the froth has come off the market and “balance” has returned.

The bottom line is that “the system is moving in the right direction,” said Mr. Routledge.

Financial Post

jgreenwood@nationalpost.com

 

 

Canadian Mortgage Broker News – Flaherty not worried about slowing house market

Flaherty not worried about slowing house market

| Friday, 17 September 2010

https://i0.wp.com/communications.uwo.ca/com/media/images/Welcome_To_Western2008/Flaherty.JPG

Federal finance minister Jim Flaherty said Thursday he is not worried about the slowing house sales in some Canadian markets and isn’t planning to reverse mortgage restrictions made earlier this year.

Housing sales dropped significantly last month in Calgary, Victoria and Greater Vancouver compared to last year.

“I, for one, am not particularly concerned about the softening we’ve seen in some markets in Canada in residential real estate,” said Flaherty, who was in Calgary delivering a speech on Ottawa’s proposal for a national securities regulator. He noted that Ottawa has twice limited mortgage rules. “This is entirely intentional, to tighten the market, so that we avoid the excesses that we’ve seen in other countries. If we have to do more, we’ll do more.”

Though housing foreclosures in U.S. are expected to reach more than 1 million this year, Canada’s banking system has mostly withstood the recessionary effects of its neighbour to the south.

 

 

Incredible Space Maximization in a Small Studio Apartment

Incredible Space Maximization in a Small Studio Apartment

You’ve seen a lot of ingenious ideas on how to decorate small apartments on Freshome. Here is another tiny crib that manages to maximize space and create a cozy living environment as well. The East Village Studio comes from JPDA Architects, stretches over an area of 46 square meters (500 square feet) and was built as a little “nest” for the owners who also work here. It has all the utilities a common looking contemporary home has and dare we say a lot more. This original crib has storage space and shelves in the most unusual and unexpected places, reducing clutter and contributing to a clean and fresh interior design. The wood gives this home its warmth which is “intensified” by the friendly vegetation pots spread around the open studio.

Incredible Space Maximization in a Small Studio Apartment

studio apartment small

 

very tiny loft studio design 2 554x434 Incredible Space Maximization in a Small Studio Apartment

very tiny loft studio design 6 554x540 Incredible Space Maximization in a Small Studio Apartment

very tiny loft studio design 5 554x434 Incredible Space Maximization in a Small Studio Apartment

very tiny loft studio design 4 554x738 Incredible Space Maximization in a Small Studio Apartment

very tiny loft studio design 8 554x436 Incredible Space Maximization in a Small Studio Apartment

very tiny loft studio design 7 554x707 Incredible Space Maximization in a Small Studio Apartment

very tiny loft studio design 10 554x891 Incredible Space Maximization in a Small Studio Apartment

very tiny loft studio design 9 554x820 Incredible Space Maximization in a Small Studio Apartment

 

very tiny loft studio design2 Incredible Space Maximization in a Small Studio Apartment

very tiny loft studio design Incredible Space Maximization in a Small Studio Apartment

very tiny loft studio design 11 554x554 Incredible Space Maximization in a Small Studio Apartment