Low home prices lure first-time buyers
May 27, 2009Tony Wong Toronto Star
Canadian first-time home buyers are a cautious lot, but they will strike if the price is right.
While the economy remains a huge concern, lower prices and interest rates are spurring them to buy in the spring market, according to a report released yesterday by Royal LePage Real Estate Services.
According to a poll by Pollara Research, done for Royal LePage, 86 per cent of Canadians say lower interest rates make them more likely to buy a home. Eighty-one per cent say lower prices are another motivating factor.
But the economy remains a stumbling block, with 76 per cent citing job security and 64 per cent saying a stable economy are important factors in their buying decisions.
"The true impact of job loss is understated because, beyond the 8 per cent unemployment rate, you have a section of the population who are concerned about their jobs, and that is feeding into their choice to buy a home," Royal LePage CEO Phil Soper said in an interview.
Still, some buyers have returned to the market this spring. A first-time homebuyer's tax credit and a home-renovation tax credit for 2009 have been cited by potential purchasers as influencing factors.
First-time buyers are key to the market because they allow move-up buyers to sell their homes while continuing up the housing chain to more expensive properties.
"The proof in the pudding will be whether we see if demand is sustainable to summer and early fall," Soper said.
So far, Canadian developers have avoided a disastrous spring, with new-home sales down by 26 per cent in April compared with last year, representing the slowest deceleration in six months. Sales totalled 1,880 in April, compared with 2,541 the year before, according to figures released yesterday by the Building, Industry and Land Development association.
Still, year-to-date sales are down by 52 per cent compared with 2008.
Toronto existing-home prices have also been surprisingly resilient, down by less than 1 per cent from the same period last May.
By contrast, in the United States, the Case-Shiller housing price index reported yesterday that homes have now lost an incredible 32.2 per cent in value since the correction.
In the Toronto market, condominiums remain the preferred choice of many first-time buyers based on affordability.
Some buyers are gravitating to condos built within the past five years, "questioning the viability of new build projects within the current economic climate," LePage said, as some buyers worry that some projects will not be started due to poor sales.
The typical first-time buyer is 25 to 30 and willing to spend up to $400,000 on a home for couples. Singles, mostly women, are purchasing within the $250,000 to $300,000 range according to the real estate company.
Developers say new projects are still selling, but there is uncertainty in the market over a proposed harmonized sales tax in Ontario, which would meld the GST and PST and push up the prices of homes selling for more than $400,000. Builders say the new tax could bump up costs by as much as 6 per cent on sales in a given project, making some developments unfeasible.
"We have a situation where I have no idea what to tell my customers if they are going to get hit with the tax," said Frank Giannone, president of the Ontario Home Builders' Association in a meeting this week with the Star's editorial board.
Giannone said he is about to launch a development in Don Mills, but uncertainty over the tax is causing buyers to hesitate.
The builders' group wants the province to give an exemption to buyers signing sales deals before next July, when the tax is to be implemented. Under the proposed tax, homes under $400,000 are exempt from the tax, while homes between $400,000 and $500,000 will pay a portion. Homes over $500,000 bear the full brunt.
Asher Ullah
Broker
www.homesforgta.com
Wednesday, May 27, 2009
Monday, May 11, 2009
Warming up to Sunshine - residential solar hot-water systems
Enbridge Gas Distribution Inc. and Bullfrog Power Inc. plan to install 1,200 residential solar hot-water systems in Ontario over the next two years.
Courtesy: Tyler Hamilton Energy Reporter, TORONTO STAR
Solar thermal technology goes mainstream as utility tests sun-powered hot water systems in 1,200 homes
Natural gas utility Enbridge Gas Distribution Inc. and green electricity retailer Bullfrog Power Inc. have teamed up on a pilot project that aims to install 1,200 residential solar hot-water systems in Ontario within the next two years.
The two companies will launch the project in Ottawa today in partnership with Natural Resources Canada and solar-thermal equipment maker EnerWorks Inc. of Dorchester, Ont.
It's a sign of the times. Once considered a niche technology embraced by the most eco-conscious consumers, solar thermal hot-water systems are now seen as an economical way to reduce the use of natural gas and electricity by extracting clean energy from the sun.
The systems, which range in price from $6,000 to $9,000 installed, don't produce electricity like their photovoltaic cousins. Instead, they use sunlight to preheat cold water before it enters the hot-water tank in your basement. The more heated water you get from the sun, the less natural gas or electricity you consume.
The fact that a natural gas giant such as Enbridge is taking the lead on the project shows the technology is gaining mainstream acceptance, observers say.
``The entry of Enbridge is a wonderful development,'' said Mary Pickering, acting executive director of the Toronto Atmospheric Fund, which is overseeing its own solar-thermal project involving more than 100 homes in the city's Riverdale neighbourhood.
``I think people feel comfortable working with their utilities. They're credible, they're there for the long term and we already pay our money to them,'' Pickering said.Enbridge vice-president Arunas Pleckaitis said if the project is successful the company may look at ways of expanding it into a mainstream product offering.
``You'd have to be from another planet to not realize things are changing,'' he said. ``We clearly realize the role of the utility is going to change. The question is, how quickly and what technologies, and what direction will we take?
``It could be geothermal. It could be micro-generators in people's homes. It could be heat pumps. There are all sorts of different technologies we're looking at.''
Enbridge, which has 1.9 million customers in Ontario, will manage the selection of certified installers, operate a call centre to handle inquiries and help customers arrange financing through TD Bank.
Installers will help homeowners determine if solar thermal is right for them based on their hot-water use and the suitability of their roof. Installers will also be responsible for getting all necessary municipal permits.
Bullfrog Power will help Enbridge market the program to existing customers. ``Frankly, our customers want us to do more of this,'' Bullfrog president Tom Heintzman said, calling the project an ``experiment'' from which the company hopes to learn. ``Changing people's behaviour is critical to increasing the penetration of solar thermal, and that's something we have some expertise in.''
The companies are taking advantage of generous solar incentives offered by the federal and provincial governments. Ottawa's EcoEnergy program recently increased the rebate on solar thermal hot-water systems to $1,250 from $500 contingent on an energy audit. Homeowners can also get 15 per cent back on the purchase through the federal Home Renovation Tax Credit.
Ontario doesn't charge provincial sales tax on the systems and offers a $500 rebate, which could rise to $1,250 if Queen's Park, as it has indicated, matches the federal rebate. It means homeowners who get a $7,500 system could get back up to $2,875, and potentially $3,625 if Ontario ups its rebate.
Phil Whiting, president of EnerWorks, said his was the first solar-thermal company to get its product certified by the Canadian Standards Association. The systems were designed to handle cold Canadian winters and blistering hots summers, he said.
``I can't imagine Enbridge and Bullfrog wanting to lend their names to any product that's not absolutely first-rate,'' he said, adding that EnerWorks is committed to building its business in the province. ``I'm a big believer we can become a world player in solar thermal out of Ontario.''
Asher Ullah
www.homesforgta.com
Courtesy: Tyler Hamilton Energy Reporter, TORONTO STAR
Solar thermal technology goes mainstream as utility tests sun-powered hot water systems in 1,200 homes
Natural gas utility Enbridge Gas Distribution Inc. and green electricity retailer Bullfrog Power Inc. have teamed up on a pilot project that aims to install 1,200 residential solar hot-water systems in Ontario within the next two years.
The two companies will launch the project in Ottawa today in partnership with Natural Resources Canada and solar-thermal equipment maker EnerWorks Inc. of Dorchester, Ont.
It's a sign of the times. Once considered a niche technology embraced by the most eco-conscious consumers, solar thermal hot-water systems are now seen as an economical way to reduce the use of natural gas and electricity by extracting clean energy from the sun.
The systems, which range in price from $6,000 to $9,000 installed, don't produce electricity like their photovoltaic cousins. Instead, they use sunlight to preheat cold water before it enters the hot-water tank in your basement. The more heated water you get from the sun, the less natural gas or electricity you consume.
The fact that a natural gas giant such as Enbridge is taking the lead on the project shows the technology is gaining mainstream acceptance, observers say.
``The entry of Enbridge is a wonderful development,'' said Mary Pickering, acting executive director of the Toronto Atmospheric Fund, which is overseeing its own solar-thermal project involving more than 100 homes in the city's Riverdale neighbourhood.
``I think people feel comfortable working with their utilities. They're credible, they're there for the long term and we already pay our money to them,'' Pickering said.Enbridge vice-president Arunas Pleckaitis said if the project is successful the company may look at ways of expanding it into a mainstream product offering.
``You'd have to be from another planet to not realize things are changing,'' he said. ``We clearly realize the role of the utility is going to change. The question is, how quickly and what technologies, and what direction will we take?
``It could be geothermal. It could be micro-generators in people's homes. It could be heat pumps. There are all sorts of different technologies we're looking at.''
Enbridge, which has 1.9 million customers in Ontario, will manage the selection of certified installers, operate a call centre to handle inquiries and help customers arrange financing through TD Bank.
Installers will help homeowners determine if solar thermal is right for them based on their hot-water use and the suitability of their roof. Installers will also be responsible for getting all necessary municipal permits.
Bullfrog Power will help Enbridge market the program to existing customers. ``Frankly, our customers want us to do more of this,'' Bullfrog president Tom Heintzman said, calling the project an ``experiment'' from which the company hopes to learn. ``Changing people's behaviour is critical to increasing the penetration of solar thermal, and that's something we have some expertise in.''
The companies are taking advantage of generous solar incentives offered by the federal and provincial governments. Ottawa's EcoEnergy program recently increased the rebate on solar thermal hot-water systems to $1,250 from $500 contingent on an energy audit. Homeowners can also get 15 per cent back on the purchase through the federal Home Renovation Tax Credit.
Ontario doesn't charge provincial sales tax on the systems and offers a $500 rebate, which could rise to $1,250 if Queen's Park, as it has indicated, matches the federal rebate. It means homeowners who get a $7,500 system could get back up to $2,875, and potentially $3,625 if Ontario ups its rebate.
Phil Whiting, president of EnerWorks, said his was the first solar-thermal company to get its product certified by the Canadian Standards Association. The systems were designed to handle cold Canadian winters and blistering hots summers, he said.
``I can't imagine Enbridge and Bullfrog wanting to lend their names to any product that's not absolutely first-rate,'' he said, adding that EnerWorks is committed to building its business in the province. ``I'm a big believer we can become a world player in solar thermal out of Ontario.''
Asher Ullah
www.homesforgta.com
Tuesday, May 5, 2009
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