Monthly Archives: January 2016

What the Smart Home Might Look Like in 2016

The annual Consumer Electronics Show was earlier this month in Las Vegas, and a lot of focus was on the Internet of Things, a collection of devices and products fitted with electronics, software, and Wi-Fi connectivity. Smart home technology in 2015 has, for the most part, been viewed as a series of “cool-but-not-necessary luxury tech products” being purchased by a small group of tech fanatics. But in 2016, the internet of things, particularly the networked connectivity of devices in private residents, is poised to take off.

Smart home devices will inevitably become as commonplace and ubiquitous as smartphones, with companies like Nest and SmartThings becoming household names. That being said, what kinds of innovations can we expect to see in 2016 with regards to smart home technology and the internet of things?

Victoria Woolaston of The Daily Mail reported on a recent announcement made by Samsung, which states that the company is integrating SmartThings software into their line of Smart TVs, effectively transforming all of their TVs into smart home hubs. The SmartThings allows people to access all their smart devices directly from their smartphone and SUHD TV, rather than having to control individual devices with separate apps. If you add the Apple TV and Google’s new OnHub router to this discussion, and the potential for smart home hubs to become commonplace in the home becomes all the more possible.

Streamlining Data

According to Chris Klein of The Next Web, companies that build devices for the Internet of Things need to find a better way to streamline the overwhelming amount of data being collected by smart home devices, in order to create a better experience for the user. He argues that the way companies like SmartThings, Notion, HomeSeer and Canary process the abundant amount of information on user activity, preferences and goals they collect needs to change. As it stands right now, users of smart home devices are barraged by notifications, in order to give users as many insightful tips as possible. But as more and devices become “smart,” companies will need to find a way to better prioritize the notifications, or come up with an entirely different system altogether.

The Importance of Software

In the past, when purchasing a household item or appliance like a refrigerator or microwave, you knew exactly how the appliance would function just by looking at it. The only way to get an upgraded, possibly better functioning piece of hardware was to upgrade and purchase a new one. But as Klein points out, “now that IoT companies have mastered hardware, 2016 will be the year of sophisticated, forward-thinking software.” IoT companies will start to broaden the value of their hardware platforms with the addition of advanced upgrades and integrations with professional software services. Through these integrations, users will gain better features, more possibilities and more value from the same hardware they already own.

A Focus on Security

As IoT products continue to connect more aspects of our lives, it means more of our private information is being entrusted to big IoT companies. In 2016, these companies need to be more mindful of security breaches and hacks that threaten people’s privacy.

TORONTO REAL ESTATE MARKET WATCH: RECORD YEAR FOR HOME SALES IN 2015

“Home ownership is a quality long-term investment that families can live in while the value increases over time. A relatively strong regional economy in the GTA coupled with low borrowing costs kept a record number of households – first-time buyers and existing homeowners alike – confident in their ability to purchase and pay for a home over the long term,” said Toronto Real Estate Board President Mark McLean.

A record year for TREB MLS® home sales in the GTA for 2015, with the second best sales result on record for December. With a total of 4,945 sales reported in December, brought the 2015 calender year total to 101,299 – an astonishing 9.2 per cent increase compared to 2014 as a whole.

“If the market had benefitted from more listings, the 2015 sales total would have been greater. As it stands, we begin 2016 with a substantial amount of pent-up demand,” continued Mr. McLean.

INFOGRAPHIC.DEC2015

The average selling price for 2015 as a whole was $622,217 – up 9.8 per cent compared to $566,624 in 2014. The MLS® HPI Composite Benchmark Price was up by a similar annual rate of 10 per cent in December. GTA home price growth was driven by the low-rise segments of the market, but condominium apartment price growth was generally well-above the rate of inflation as well through 2015.

“TREB will release its official 2016 outlook later in January, but suffice to say that the demand for ownership housing is expected to remain very strong in 2016. Despite stricter mortgage lending guidelines and the possibility of slightly higher borrowing costs, on average, there will be many buyers who remain upbeat on the purchase of ownership housing,” said Jason Mercer, TREB’s Director of Market Analysis.

Will Home Prices in Toronto Rise or Fall in 2016?

There is growing speculation among analysts observing the Canadian real estate market that home prices in 2016 are set to fall. Experts at Royal LePage are among the biggest advocates of this idea, arguing that the national real estate market as a whole will slow this year due to decreased affordability in Canada’s two largest markets, Toronto and Vancouver, as well as the fallout from declining oil prices in the West.

If that’s the case, than a price reduction couldn’t would be a welcomed change for most potential homebuyers, with prices in the last quarter of 2015 showing exceptional increases across the board. As CBC reports, Royal LePage’s latest market analysis revealed that the average price of a Canadian home increased 6.5% to $500,688 in the fourth quarter of last year, compared to the same period in 2014. With regards to specific unit types, the price of bungalows increased 5.4% year-over-year to $420,082, while condos grew 3.1% to $341,448.

Royal LePage CEO Phil Soper argues that “frenetic” price growth in certain large real estate markets is likely to moderate:

“While most of the country will continue to see house value appreciation in 2016, we expect that the pace of price increases in Greater Vancouver and the Greater Toronto Area — where real estate appreciation has significantly outpaced job and wage growth — will settle to a more sustainable, single-digit price increase trajectory.”

Mike Crawley of CBC News (http://www.cbc.ca/news/canada/toronto/5-reasons-toronto-house-prices-won-t-crash-in-2016-1.3393299) outlines five reasons he believes home prices in the GTA will not fall in 2016. To be clear, Crawley isn’t saying the market isn’t inevitably headed for a crash, but he believes we won’t see the bubble burst this year. His first reason has to do with population growth in the GTA, which is likely to continue to rise, bringing more families to the city looking to purchase a detached home. There is still little space to build more single family homes, meaning that the number of new listings on the market will continue to be outstripped by the number of buyers. The second reason has to do with the current state of the economy, which shows no signs of slowing down or collapse. In times of economic recession, people lose their jobs, are forced to sell their homes, prices drop as supply increases. But available evidence and economic indicators point to a recession free Toronto in 2016.

John Pasalis, whose opinion on the matter appeared on the website Move Smartly, makes a fairly convincing argument for why home prices will continue to increase by looking at potential homebuyer behavior. He says the most common fear among homebuyers is purchasing a home one month, only to see the value of the home drop a month later once the bubble finally bursts. But Pasalis argues that this is an irrational fear; that home prices do not have the same volatility as, for example, stock prices. It is extremely unlikely that you’ll see a massive decline in prices in the span of a few weeks. Before we see the prices of homes fall in the GTA, we will need to see a decline in demand first, which Pasalis also believes, is not in the cards this year. Once demand drops, supply increases, which will ultimately reduce prices.

Toronto’s Record Breaking Year

Toronto is one of two main outliers in the Canadian real estate scene, with Vancouver being the other hot market. Most other markets demonstrated more modest price increases, or in some cases, price decreases, in 2015. The Canadian Real Estate Association released data in December that showed the average resale home price was up 10.2% year over year. But when you remove Toronto and Vancouver from the equation, the average increase was just 3.4%.

The calendar year 2015 was one of the best years on record for home sales in the GTA, with multiple monthly and annual records being broken. Amazingly enough, as good as 2015 was, it could have been better, with a skyrocketing demand for residential homes not being met by the current supply. Amy Grief of BlogTO (http://www.blogto.com/city/2016/01/toronto_breaks_another_real_estate_record/) reports that 101,299 homes were sold by Toronto Real Estate Board (TREB) members, up 9.2% from 2014. And it wasn’t a crawl to the finish line, with sales finishing up strong at the end of the year; the Toronto-area had 4,945 residential sales in December of 2015, the second-highest on record for a December.

TREB president Mark McLean stated in a press release:

“If the market had benefitted from more listings, the 2015 sales total would have been greater…As it stands, we begin 2016 with a substantial amount of pent-up demand.”

TREB also had a few other revealing stats to share. The average price for all Toronto-area homes, including condos and semi-detached and detached houses, is $622,217, a 9.8% increase since 2014. For detached houses, the average selling price in the city hit $1,039,658 in December, up 11.8% in a year. An alternative price measurement shows a similar price increase. The MLS home price index for the Greater Toronto Area, which measures the rate at which prices change over time by tracking price changes in “typical” homes, was up 10 per cent from 2014, to $573,500.

The Huffington Post also looked at the TREB figures, noting that the Greater Toronto Area and other parts of southern Ontario experienced stronger demand than most Canadian markets — outdone only by parts of British Columbia in the Greater Vancouver and Lower Mainland areas.

The Toronto Real Estate Board believes that sales could have been much higher, shattering previous records, had their been more properties available to satisfy the pent-up demand. But that demand should carry over into the new year, which should boost early 2016 home sales.

Jason Mercer, TREB’s director of market analysis, made this statement:

“TREB will release its official 2016 outlook later in January, but suffice to say that the demand for ownership housing is expected to remain very strong in 2016.”

According to a Canadian Press report, TREB will release its outlook for 2016 on January 18. Many are expecting to see no slowdown in sales for this year, even with the introduction of new mortgage rules by the recently elected Liberal federal government.