HOMES

industry insider
STEADY SALES
SIGNIFY STABILITY
It’s easy to get caught up in
numbers when it comes to
new home sales in the Greater
Toronto Area. According
to the most recent statistics from
RealNet Canada Inc., from January to
September 2013, lowrise sales totalled
8,878, noticeably lower than the
11,823 sales of the same period in 2012.
At first glance, you might wonder
what’s happened to the popularity of
lowrise homes. However, looking at
housing based on numbers alone can
be misleading as to the health of
the industry.
In fact, new home sales began with
562 in January, then jumped to 1,078 in
February, and have fluctuated between
777 and 1,152 month to month as the
year has progressed. This steady pace
reflects the ongoing demand for lowrise
housing in the face of the significant
reduction in land supply, low inventories
and near-record high prices. In short,
people still buy homes, and there are
many reasons to feel encouraged
about the future.
Home buying has been fuelled by the
fact that mortgage interest rates remain
low. With no major adjustments to those
rates during the year, and no major
increases forecast, many buyers have
the confidence to purchase. However,
it is still important that builders provide
buyers with incentives that can help
achieve a sale.
For example, if you purchase a home
from plans with a closing date nine
to 12 months away, you should take
advantage of a capped-rate mortgage,
which is often available through the
builder. This financial tool caps the
mortgage rate you’ll be paying when
your home is ready. And, should rates
come down while you are waiting, you’ll
benefit from the lower rate. While banks
and mortgage brokers offer capped
rates, in general they are often only
valid for up to 120 days; you’ll find
builders may offer a capped rate which
coincides with a longer closing date.
There have been no significant
contract negotiations with lowrise
trades this year, and stable labour
relations mean that progress on new
home construction sites is full steam
ahead. There has also been a conscious
effort by the Building Industry and
Land Development Association (BILD),
through various media, to highlight the
inner workings of land development
and construction. This exercise helps to
further underline for new homebuyers
the costs associated with housing.
It is worth remembering that
Ontarians enjoy the highest building
code standards in the country, and that
these criteria are continually evaluated
and advanced to keep up with new
materials, methods and techniques.
On the whole, Canadians still value
homeownership for its sense of stability
and the security of knowing that they
are building equity over time. Sales
statistics alone do not provide the entire
picture nor reflect the importance of
this underlying desire that keeps our
industry thriving.
GERANIUM HOMES
Boaz Feiner is President, Housing Division for Geranium Corporation.
This article is the 18th to appear in HOMES Magazine. Previously published articles can be viewed at geraniumhomes.com.
52 H O M ES M AG.CO M | DECEMBER 2013/JANUARY 2014