Posts Tagged ‘barrie’

Barrie Real Estate Report July 2009

Comments: 0July 8th, 2009 by admin

(Free-Press-Release.com) July 7, 2009 –
Mortgage rates are currently at temptingly low levels for anyone looking for home financing
, and the value of homes are at a point that makes it perfect for homeowners to move up into areas that may have been financially out of reach just a couple o years ago.

According to Calvin Lindberg, President of CREA, “We are caught in a cycle where consumer confidence has been eroded because of job losses, and consumer confidence is an essential ingredient for housing sales activity.” However, it must be recognized that life goes on, and people will always need to upsize, downsize and move homes for any number of reasons. Because of the current market climate, sellers must acknowledge that it’s more important than ever to emphasize and maximize the positive features in their sales presentation.

Mr. Lindberg makes a practical observation about today’s real estate market by noting that: The essential selling ingredients in today’s market are realistic pricing, marketing and preparation. The se crucial points are where an experienced real estate sales representative makes all the difference.

As your real estate representative, I have my finger on the pulse of both countrywide housing trends and local real estate activity. I invite you to call me for help with all your real estate needs.

http://www.free-press-release.com/news/200907/1246980126.html

reviewed by Moishe Alexander, CFC CEO

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Posted in CMHC, Housing Market, Ontario

Moishe Alexander’s review of the Barrie Rental Market and CMHC Outlook Report fall 2008

Comments: 0February 18th, 2009 by admin

February 8, 2009 — Moishe Alexander’s review on how the current world economy and Canadian economic turndown is affecting the Barrie Rental Market

Moishe Alexander’s Review

Highlights

Barrie, Ontario - Credit Ken Lund, Flickr

Barrie, Ontario - Credit Ken Lund, Flickr

Moishe Alexander says that the overall vacancy rate has increased slightly from 3.2 per cent last year to 3.5 per cent this year. A moderating economy and less full-time youth employment led to increased vacancies. The rental market is expected to continue easing. The vacancy rate will increase to 3.8 per cent next year and the average monthly rent for a two-bedroom apartment will inch higher to $968.

Overall Rental Market Softens

Moishe Alexander says that the overall vacancy rate for apartments has gone up slightly from last year, with the increase driven by higher vacancies among the two-bedroom units. A slowing economy coupled with less migration of newcomers into Barrie, and fewer households moving from renting to home ownership caused the area’s rental market to soften.

Rental Demand Slows – Youth Employment Gains Mainly Part-time

Moishe Alexander says that after a sustained period of growth, employment in Barrie is starting to decline, as the decrease in full-time employment has more than offset any gains in part-time employment.

For the 15-24 age groups, the decline in full-time employment was marginal and was more than offset by growth to part-time employment, bringing overall employment above last year’s level. However, part-time employment is not as stable or financially rewarding as full-time employment. Therefore, fewer youth are choosing to enter the rental market.

Demographics Less Supportive of Current Rental Demand

Moishe Alexander says that according to the 2006 Census, the Barrie Census Metropolitan Area (CMA) has a higher proportion of people under the age of 24 relative to Ontario, over 34 per cent and just under 32 per cent respectively. This is a sizeable group for future rental demand in Barrie. However the proportion of young people between the ages of 15 and 24 in Barrie is only slightly above the same proportion in Ontario (13.6 per cent to 13.4 percent), and the 20-24 age group is smaller (6.3 per cent compared to 6.6 per cent in Ontario). This is a key group for the rental market as it signifies the point in life associated with youth moving out of their parents’ homes and into their first rental unit. The relatively smaller size of this group is contributing to the slowdown in the number of new entrants into the rental market.

Migration Eases

Moishe Alexander says that migration of people into Barrie has been one of the factors for the prolonged economic and housing market growth in the region. However migration has slowed, and with fewer people coming into Barrie, demand for rental units has moderated. The number of people new to Barrie has dropped to about 5,500 this year and will stay at the same level next year. This is a sizeable decrease from the over 10,000 people who arrived in 2000, and is a factor contributing to higher vacancy rates.

Movement From Renting To Owning

Moishe Alexander says that the Barrie rent-to-mortgage carrying cost-ratio averaged about 69 percent this year and last. Although this is down from over 100 several years ago, it is still higher than the average for Ontario which is about 60 percent. Higher ratios reflect market conditions which give renters an incentive to become home owners. Barrie’s housing market, both rental and ownership, had been tight enough over the last few years that the relative closeness of monthly rental costs and monthly mortgage costs enticed many to exit the rental market and purchase a home. Given the economic uncertainty and high prices, fewer households continue to enter the home ownership market, both new and existing. This would reduce the vacancy rate but this trend has been more than offset by the employment and migration trends already noted.

Large Buildings Popular

Moishe Alexander says that the increase in the overall vacancy rate from 3.2 per cent to 3.5 percent reflected increases for most mid-size buildings. However, the vacancy rate for buildings with 100 units or more dropped sharply from 1.3 per cent to 0.3 per cent. The larger buildings tend to be more popular because they may offer more amenities and often are located closer to the city core. The largest buildings also charged the highest rents, underscoring their popularity.

Availability Up

Moishe Alexander says that the availability rate, a measure indicating what is on offer on the market (both currently vacant and soon-to be vacant), has gone up by close to two percentage points from last year. The majority of the growth in the overall availability rate came because of increases in the rates of both two bedroom and three bedroom units, with the most growth in the two-bedroom unit rate.

Rents Rising Faster Than Inflation

Moishe Alexander says that the percentage change of average rents from a fixed sample is a measure that estimates the rent movement due to changes in market conditions. The estimate is based on structures that were common to the survey sample for both 2007 and 2008 Fall Rental Market Surveys. Despite the increase in the vacancy rate, the average increase for apartment rents was 4.4 per cent. On a per type basis bachelor, one-bedroom and two-bedroom units had significant increases above the rate of inflation, which drove the overall rent up.

Secondary Rental Market Expands

Moishe Alexander says that the stock of secondary rental housing increased significantly from last year. The majority of this growth was due to a strong increase in the number of single-detached homes put on the market for rental purposes. Furthermore, while the share of secondary rental units decreased for all other dwelling types, the share of single-detached homes increased substantially. Overall, the average rent in the secondary market was up significantly. Single-detached, semi-detached, row houses, and duplexes accounted for the marked average rent increase, while the average rent for accessory suites was lower. Because their rents are the highest, the increase in the share of single-detached houses in the secondary rental market pulled up the average rent in this market. Given the region’s preference for low density housing, some people not ready to enter the home ownership market but looking for similar types of housing are moving to the secondary market. This choice is supported by the fact that rent levels are similar to those in the purpose-built market.

Rental Market Outlook

Moishe Alexander says that given the moderation of the economy, which will not begin to improve until late next year, the sluggishness in the region’s rental market will continue into next year. The vacancy rate will increase from 3.5 per cent to 3.8 per cent next year. A significant increase in supply will be the main factor pushing up the vacancy rate. The average rent for a two-bedroom apartment will continue to increase, albeit by less than the rate of inflation, given the slowing demand. The average two-bedroom apartment rent will be $968 per month, up slightly from the current $954.

You can find the entire report in PDF format through the following link:
http://www.cmhc-schl.gc.ca/odpub/esub/65772/65772_2008_A01.pdf

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Posted in Alberta, British Columbia, CMHC, Housing Market, Manitoba, Newfoundland, Ontario, Quebec, Rental Market, Uncategorized

Moishe Alexander’s review of the Barrie Housing Market and CMHC Outlook Report fall 2008

Comments: 0February 18th, 2009 by admin

February 8, 2009 — Moishe Alexander’s review on how the current world economy and Canadian economic turndown is affecting the Barrie Housing Market

Moishe Alexander’s Review

New Homes Market – New Home Construction Losing Steam

Barrie, Ontario - Credit Ken Lund, Flickr

Barrie, Ontario - Credit Ken Lund, Flickr

Moishe Alexander says that new house starts are expected to be up strongly in 2008, but moderate in 2009. Post 2010 and until 2012, new construction will pick up. Single-detached homes, the historically preferred housing type in Barrie, will continue to represent the majority of all new construction in the area, but apartments will carve out a bigger share of the pie over the forecast horizon. After strong growth in 2008 new home prices will grow modestly in 2009. Overall, over 1,600 new starts are expected this year, a significant jump upwards of over 60 per cent from the previous year. The significant increase in starts this year can be attributed to a substantial increase in apartment starts. The robust growth in new starts will subside over the next few years as the economy decelerates and the high number of apartment starts decrease. As a result, post 2010 until 2012, housing starts will grow at a more subdued pace and average about 1,200 new starts. Single-detached homes will account for the majority of new housing being built not only this year but also next year. Apartment starts will make up over 20 per cent of all construction in each of the next two years. Apartment starts will make up an increasing share of total construction since there is less available land for housing development and they are the most affordable new housing option. The price of a new home is expected to average $353,000 in 2008. In addition to the general appreciation of house prices, the average is being pulled up by the mix of houses being built. In Springwater Town and Innisfil Town, homebuilders are building larger homes, which command higher prices and thus drive up the average price in the CMA. From January to June of this year, new homes in the Barrie CMA averaged 271 square metres. During the same period, homes in Springwater averaged 919 square metres and in Innisfil 267. By contrast, homes in Barrie City averaged 190 square metres. This strong price growth will slow next year as home buyers become more cautious. As a result, the average price will increase two per cent to $361,000 in 2009.

Existing Homes Market – Existing Homes Market Continues to Ease

Moishe Alexander says sales of existing homes in 2008 will moderate from 2007. They will ease again in 2009. Following a strong 2007, for both the new homes and existing homes markets, some of this momentum will continue for new listings in 2008 and 2009. The sales to- new listings (SNL) ratio, which over the last few years has indicated the resale market favoured sellers, will ease down in both 2008 and 2009 as supply and demand become balanced. Prices of existing homes will grow at a rate a little over two per cent this year and next. In 2008, sales of existing homes will moderate by just over 14 per cent from the record set in 2007. The 4,300 units expected to change hands this year is a strong number and remains well above the average for the current cycle. The easing in existing homes sales will continue into 2009 with 4,100 units exchanging hands, a drop of five per cent. The moderation in existing home sales can be attributed to a weaker job market and higher prices. Given the price appreciation in Barrie’s housing market, the number of existing homes being put on the market for sale will continue to rise in 2008. Listings will rise by close to two per cent in 2008 to 8,000 new listings. Despite the economy and markets easing in the latter part of 2008 and into 2009 the number of new listings will continue to increase. Listings next year are expected to increase by just over six per cent to 8,500 new listings. The SNL ratio will move into “balanced market” territory this year and will stay there for 2009. Over the next two years the SNL will stay in the 48- 53 per cent range. Following very strong price appreciation of existing homes last year the price growth this year and next will continue to be positive but more moderate than in 2007. The average price of an existing home in 2008 will report growth of just over 2 per cent to $268,000 and similarly, next year prices will grow by slightly less and settle at $274,000.

Economy – Labour Market

Moishe Alexander says that employment will ease in 2008 but begin to edge up in 2009. Consequently the unemployment rate will increase only marginally in both years. Given some moderation in key sectors such as trade, construction, and finance, insurance, and real estate, total employment in Barrie will dip just over four per cent this year to 96,500. For 2009, the prospects should begin to improve as the global economy begins to recover and the Canadian dollar stabilizes to more “trade friendly” levels. Employment is expected to grow by less than one per cent with a majority of the growth coming from part-time labour rather than more stable full-time employment. The weak labour growth will force the unemployment rate slightly up over the next two years. The unemployment rate is expected to be in the 5.4-5.6 per cent range over the next two years. Net migration, the difference between people moving to and residents leaving Barrie, will average 5,500 people in 2008 and 2009, a drop of 15 per cent from 2007. Given the cooling labour market, fewer people will be moving to Barrie. Net migration has been one of the significant components of population growth. About 30 per cent of workers living in Barrie commute to Toronto and its surrounding communities daily. They moved to Barrie because homes cost less there. Despite rising gasoline prices, the home price advantage remains considerable. The majority of workers commute to the City of Toronto, where house price advantage would be gone only if gasoline prices reach $1.90 per litre. Higher gasoline costs are unlikely to lead to changes in migration and commuting patterns.

Mortgage Rates

Moishe Alexander says that mortgage rates are expected to be relatively stable throughout the last quarter of this year, remaining within 25-50 basis points of their current levels. Posted mortgage rates will decrease slightly in the first half of 2009 as the cost of credit to financial institutions eases. Rising bond yields, however, will nudge mortgage rates marginally higher in the latter half 2009. For the last quarter of 2008 and in 2009, the one year posted mortgage rate will be in the 6.00-6.75 per cent range, while three and five year posted mortgage rates are forecast to be in the 6.50- 7.25 per cent range.

You can find the entire report in PDF format through the following link:
http://www.cmhc-schl.gc.ca/odpub/esub/65712/65712_2008_B02.pdf

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Posted in Alberta, British Columbia, CMHC, Housing Market, Manitoba, Newfoundland, Ontario, Quebec, Rental Market, Uncategorized