Alexandre Malkhassiants

Greater Toronto REALTORS® reported 6,232 sales through the Multiple Listing Service® (MLS®) in August 2010. This represented a 22 per cent decrease compared to the 8,035 sales recorded during the same period in 2009. New listings decreased by one per cent year-over-year to 10,488.

The average price for August transactions was $411,012 - up six per cent compared to the average of $387,921 reported in August 2009. Market conditions have remained tight enough to support higher home prices in comparison to last year.

In August, the median price was $358,000, from the $338,000 recorded during August of 2009. August marked the first year-over-year decline in construction starts of detached single-family homes since June 2009.

"The momentum on new construction experienced earlier in the year has started to slow, given the elevated competition from the resale market and the expectation of rising new home inventories," says Richard Cho, senior market analyst for CMHC in Calgary.


‘Rising interest rates and a projected slowdown in job growth mean that the Canadian housing market is expected to continue to cool. This is overlooked in recent commentary that suggests further changes to mortgage regulations may be needed. A further tightening of regulations could negatively impact Canada's softening housing market and consumer confidence,' said Georges Pahud, president of CREA.

High sales activity late last year and earlier this year borrowed from sales this summer and will continue do so over the coming months, according to Gregory Klump, CREA's chief economist.

‘This makes the return to more normal levels of sales activity look like a steep downward trend. The hangover from accelerated home purchases is likely to persist over the rest of the year. Although economic and job growth are expected to be tepid, they will continue to support housing markets,' he added.

1. Know your current lifestyle costs. Running a home is no different than a business, and understanding expenses is non-negotiable. So, study your bills and bank statements and figure out what it really costs you to live now, pre-mortgage.

2. An illness, job loss or any number of troubles can quickly erode your finances. So in today's slow economy, put aside - and keep - a comfortable six months' worth of living expenses.

3. Know your float factor. This is the equivalent of executive risk, vis-à-vis real life. That mortgage may be affordable now when you're floating, but if interest rates or another unforeseen expense take you out of that zone, you're sunk. Don't be lulled into a false sense of security.

4. Consider alternative financing. When dealing directly with a bank, your solutions are limited. But mortgage brokers have access to any number of financing sources and programs. They understand lenders' criteria, and will offer the best suggestion for your personal circumstances.

5. Become knowledgeable. A home is most people's biggest asset and piece of financing. Read, research and talk to as many experts as you can. Learning costs only time, and better-informed decisions can save you a fortune.

6. Understand your creditworthiness. Not all debt is created equal. Neither are all borrowers. Your credit score depends on many factors, and the better it is - the easier (and generally cheaper) the financing. Mortgage carrying-costs are some of the most reasonable debts, so pay down credit cards and other higher-interest obligations first.

7. Don't hesitate to double up. The ability to pay extra directly on the principal is a must-have for almost any mortgage. Even a small amount -$50 a week - can mean big savings over time. And, if you must miss a payment, a "double-up" can help you stay on track and avoid other penalties. Talk to your financer.

8. Understand interest rates. Know the difference between fixed- and variable-rate mortgages, and the pros and cons of each. With a fixed-rate mortgage, you're bound to the terms for the length of the contract. A fixed-with-double-up option is the best of both worlds.

9. Beware of the "extras". With a down payment of less than 20 per cent, you must insure the mortgage with the Canada Mortgage and Housing Corporation or Genworth Financial Canada. Consider also buying personal term insurance, which sometimes pays the mortgage off if you die, or provides salary replacement if you're critically ill and unable to work. Other "incentives", such as lump-sum-cash-back payments, increase your carrying costs and make you further indebted to your financier.

10. Never fall in love with the deal. House hunting and mortgage shopping must be treated as business transactions. Don't become enamoured with any one house or financing offer until you're sure that it's the best available to you.

For more information go here - http://www.torontogreathomes.com/

Alexandre Malkhassiants, Sales Representative and Mortgage Specialist,
Right at Home Realty, Centum Mortgage Decision
Office: (416) 391-3232
Cell: (416) 723-9383
E-mail: amalkhass@rogers.com
Web site: www.torontogreathomes.com
Toronto real estate market blog: http://torontorealestate.wordpress.com/

The seasonally adjusted annual rate of housing starts was reported as 189,100 units in May, according to Canada Mortgage and Housing Corporation, down from the revised 201,800 units in April.

"Housing starts decreased in both the singles and the multiples segments in May," said Bob Dugan, chief economist at CMHC's market analysis centre. "The decrease in housing starts in May is consistent with our forecast that housing starts for 2010 will reach 182,000 units."

The seasonally adjusted annual rate for urban starts decreased by 9.5 per cent to 165,200 units in May.

Housing starts were previously expected to come in at an annualized rate of 205,000 for May. But the revised number is more in line with Canada's typical household-creation rate of 175,000 a year.

Greater Toronto REALTORS® reported 4,887 sales through the Multiple Listing Service® (MLS®) during the first two weeks of May.

This represented a seven per cent increase compared to the 4,561 sales recorded during the same period in 2009. New listings increased by 48 per cent annually to 10,059.

"The average household looking to purchase a home continued to benefit from affordable opportunities in the first half of May," said Toronto Real Estate Board President Tom Lebour.

"The number of done deals will remain high for the remainder of 2010, but will dip from record levels."

The average price for May mid-month transactions was $448,641 - up 12 per cent compared to the average of $399,811 recorded during the first 14 days of May 2009.

"The total number of homes currently listed in the GTA is now within a more normal range. As buyers benefit from more choice in the second half of 2010, average selling prices will grow at a slower pace," said Jason Mercer, TREB's Senior Manager of Market Analysis.

For more information go here - http://www.torontogreathomes.com/

• Housing starts rise in January and are now 23% below their trough in April of last year.

• Weekly jobless claims move up and barely budge on a four quarter moving average basis.

• Headline inflation falls to 2.6% from 2.5% in December. Core inflation falls to 1.6% from 1.8%

• The Canadian Federal Department of Finance announced three changes to mortgage insurance rules that will help to cool the Canadian real estate market.

• Canadian Resale housing market data over the last three months suggest activity is cooling. Homes sales fell 2.8% in January, the first decline in over a year. However, a lack of supply continued to push upward pressure on prices, and home prices rose 22% from year ago levels.

• Canadian headline CPI rose 1.9% in January, up from 1.3% in December, the largest increase since November of 2008. The Bank of Canada's core measure of inflation rose to 2.0%.

• Canadian retail sales rose 0.4% in December. Stripping out price effects, the month's gain was slightly stronger at 0.6%. The gain was broad based with 9 of the 12 components of retail spending increasing in the month, and underscores the strength in the Canadian domestic economy.