Stephen Dupuis – Toronto Sun

In an interactive webinar earlier this week, RealNet Canada Inc., BILD’s official, independent source of new home market intelligence, provided an in-depth analysis of the housing market’s performance in the third quarter of 2010.

I was on the panel as one of the speakers, and I was in very good company with RealNet president, George Carras, Toronto Real Estate Board senior manager of market analysis, Jason Mercer and N. Barry Lyon Consultants Ltd. president Barry Lyon.

Carras led off with an overview of the investment market which saw about $1.5 billion in property transactions in the third quarter. Residential land sales represented a big chunk of the $1.5 billion and the trend-line saw low-rise land prices increasing and high-rise land prices holding the line.

What builders pay for land tells you a lot about future home pricing, and the point is they are not going down, even if they appear to be.

To explain the previous statement, Carras noted that the high-rise price index declined during the quarter, but further analysis revealed that while the price per square foot remains stable in the high-rise market, decreasing unit sizes (down to about 834 sq. ft.) are resulting in lower end prices to condo buyers.

Affordability is a hot topic

Drilling down to new home sales, Carras revealed total sales of 6,503 units during the quarter, which honestly isn’t one of the better third quarters ever, although Carras noted a distinct upturn as September came to a close.

Speaking of prices, affordability was yet another topic of discussion that morning. Despite all reports to the contrary, Jason Mercer presented a series of slides proving that homes are still very much affordable, with the possible exception of new, low-rise homes, which is explained by the continuing shortage of supply, hence increasing land prices.

As Mercer pointed out, interest rates are hitting record lows this year, with today’s figures sitting at or below rates of the 1950s, believe it or not!

Factor that in when you consider the average household income and it turns out that with a down payment of 20%, a five-year fixed mortgage and a 25-year amortization, the average home will cost most homebuyers less than the recommended affordability rate of 32% of your income.

What the future holds

The really cool part of the webinar was an interactive survey where participants (primarily industry insiders) were asked a series of topical questions in real-time with the results coming back in less than 60 seconds for the panel and the participants to see

It seems the survey participants believe the 416 market will be the hottest area in the next little while with projected sales at 55% of the GTA’s sales total. Right now the average is 44%.

When asked to define the emotional mood for today’s market, the poll was split evenly between the optimists and pessimists at 46% and 45% respectively.

On the price question, 66% of the survey participants voted that prices would remain flat (37%) or rise slightly (29%).

Keep in mind that the survey participants are seasoned industry players, so this is bankable info.

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Contact the Jeffrey Team for more information  –  416-388-1960

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