Toronto’s real estate market continues to confuse the people trying to predict what it will do next. The rebound in sales in the first half of September was even more eye-popping than the jump in August. The Toronto Real Estate Board reported this week that sales increased 29 % in the first 14 days of September, 2013. What’s more, the already large condo apartment market led the way.

Over all, new listings slipped 2 per cent while prices rose by 4 per cent on an annual basis.
Toronto Real Estate Board’s senior manager of market analysis, says, “the only argument that makes sense is for continued home price growth in the Greater Toronto Area for the remainder of 2013.”

All segments of the market had a bump, but sales of the condo apartment market in the Toronto core increased by a whopping 42.6 %.
The market during last August and September was  in terminal decline that it’s easy to look good in comparison.
Sales in cities across Canada were no doubt juiced by potential buyers who were jumping in with their pre-approved mortgages before rates move higher.

No one predicted a big mid-year bounce in home sales at the start of 2013 and in fact most media reports forecasted a considerable decline in prices, which all proved totally wrong. While the sales figures have been up and down like a yo-yo over the past year, prices just keep quietly churning ahead.

This mortgage news article was taken with a Credit to : National Post , Canada’s business voice, Tuesday, January 21,2014

TORONTO • Falling bonds yields could push mortgage rates lower in coming weeks as banks compete in the spring housing market, traditionally the strongest real estate period of the year.

Rob McLister, editor of Canadian Mortgage Trends, reported on his website Monday that Royal Bank of Canada had dropped its deep discounted rate on its fixed, closed five year mortgage to 3.69%. It was just a 10 basis-point cut, but with the way bond yields have started to drop since the beginning of the year, the question is whether there is more to come.

Royal Bank acknowledged it did lower rates 10 basis points on two-, three- and five year fixed rate terms. “Rates were lowered to match competitor pricing. Competitors have been pricing at lower rates for several weeks, and this rate change now puts us in line,” said a spokesperson.

“The big banks like to cut only enough to maximize their profits,” said Mr. McLister, who is also the founder of ratespy.com. “The fact is when a big bank changes course like this and cuts it advertised rates generally speaking it’s evidence of further change to come in the short-term.”

TORONTO– Canadian existing home sales rose 0.3% in February from January as real-estate activity rebounded in some Canadian cities that were hit by harsh winter weather, the country’s real-estate trade group said in its monthly report Monday. This is impacting the home price Canada wide.

Compared with a year earlier, home sales were up 1.3% in February, the Canadian Real Estate Association said. The Multiple Listing Home Price Index, which is weighted to compensate for fluctuations in the composition of sales, rose 5.1% year-over-year in February, CREA said.

CREA said the number of newly listed homes rose 0.6% month-over-month in February. The number of regional housing markets where February sales were up was roughly even with the areas where sales declined, reflecting little change in activity among most of Canada’s large urban markets, CREA said.

“Sales in February rebounded in some of the smaller local markets where activity was impacted by harsh winter weather in January,” Laura Leyser, CREA president, said in a statement. The average, the non-seasonally adjusted home price in Canada rose 10.1% year-over-year in February, CREA said, to 406,372 Canadian dollars ($367,424).

CREA said the price gain reflects strong sales activity in some of Canada’s most active and expensive markets, including the Greater Vancouver area, which posted the biggest year-over-year increase in sales activity by a large margin.

The real-estate trade group also updated its forecast for home sales activity for 2014 and 2015. CREA now expects home sales to reach 463,700 units in 2014, an increase of 1.3% from 2013 but down from the 475,000 sales the trade group had forecast back in December.

Home sales are forecast to rise 1.2% in 2015 to 469,400 units as affordability is expected to restrain activity in Canada’s most expensive markets. CREA forecasts the national average home price to rise by 3.8% to C$397,000 in 2014, slightly higher from its December forecast of C$391,100. Prices should rise by a further 1.1%, to C$401,400, in the following year.

“Marginally higher mortgage rates are likely to counterbalance the lift provided by stronger economic and continuing job growth, and restrain the momentum for sales activity,” said Gregory Klump, chief economist at CREA, said in a statement.

Source: http://online.wsj.com/article/BT-CO-20140317-705778.html

Most residential tenants are long term tenants who pay their rent on time and properly look after a landlord’s property. The trick is to do the proper research and rental check in advance so that you do not end up with the tenant from hell. Here are some tips to follow:

1. Do a rental check when you advertise for tenants, whether on Kijiji, Viewit or gottarent.com. State “we do background and credit checks.” You will receive a greater percentage of qualified tenants.

2. Do a proper credit check using Equifax or TransUnion. The cost is approximately $20.  Or join a group such as the Ontario Landlord Association where after becoming a member, you can do a credit check for as low as $10, and receive use of all of their supporting materials to assist you.

3. Call all references, especially prior landlords. Remember that the current landlord may be lying just to get rid of them. Start with the previous landlord.

4. Check social media. Google the tenant to make sure the information checks out with their rental application. In addition, if you are concerned about possible pets, check Facebook. If the tenant has a pet, there will likely be a picture of them with the pet on Facebook.

5. In a face to face interview, there are signs that may indicate that the tenant is not being truthful. This can include one or more of the following: incomplete answers, not looking at you when they speak, changing the subject, fidgeting, dropping names of important people, or volunteering to do odd jobs for you.

6. Ask open ended questions such as “Tell me about yourself or why are you leaving your current apartment?” You will be surprised how much you can learn about someone with such simple questions.

7. Interview the tenant where they currently live. You will see first-hand how they treat someone else’s property. It is also hard to hide the smell of a pet, if you are concerned about that.

8. After your rental check, its not a bad idea to give the tenant a good deal. It should not be about charging the highest rent possible.  When tenants think they overpaid, they will almost immediately start looking for another place to live. Give tenants a break and they will be happier, and stay longer.

9. Give tenants incentives. Why not a $10 gift card if the rent is paid on time? Or a Christmas present, just to show that you appreciate your tenant. Treating a tenant with respect often results in the tenant not only paying the rent on time, but they will also take care of your property better.

10. Consider rent to own. In a rent to own, you give the tenant the option to buy your property at a set price two to three years from now. In this way, you can guarantee your profit if the tenant exercises the option and the tenant has extra motivation to look after the property even more carefully, since they may end up buying it later.

By doing the right research in advance and treating your tenants with respect, you can ensure that your real estate investment continues to increase in value.

Credit for this article goes to Toronto Real Estate Lawyer : Mark Weisleder, https://www.constantcontact.com/ca/index.jsp

The doom and gloom stories have started again about the Canadian real estate market. Here are some signs

• Canadians debt to income ratio is at 160 per cent, which means $1.60 or debt for every $1 of income;
• Canadian real estate is 20 per cent overvalued
• In Toronto, too many condominium units are coming onto the real estate market. If there are no buyers or renters, prices will fall.
• If interest rates rise 1 percentage point, many of those with a mortgage will be in trouble.

Canada is not creating jobs as quickly as the U.S. I see it another way. If you look at the market fundamentals, you can conclude the real estate market is extremely healthy.

I spoke to Brad Lamb, one of Canada’s leading real estate brokerages, who has developed projects in Toronto, Ottawa, Calgary and Edmonton.  You would expect him to put a positive face on things, but here are his arguments why things aren’t what they seem.

1. No place to build low rise homes anymore in today’s Real Estate Market

In 2001, 30,000 new homes were built in the GTA, of which 22,000 were low rise homes and the rest were condominiums. Buyers were able to find new detached homes in the GTA in areas such as Mississauga, Oakville, Oshawa and Milton. However, as land became more expensive and more greenbelts established across Ontario, the result is not enough land available to build that many low rise homes. As such, for the last few years, we have seen the opposite;  22,000 new condominium units every year and 8,000 detached homes being built. But we still have the same number of buyers coming into the GTA, who need to find a home to work or raise a family.

2. There are few apartment buildings being built anymore.

Due to the rent control laws, it has made more sense for years for developers to build condominiums instead of rental apartments. Yet young people entering the workforce still need a place to live. That is why the vacancy rate for new condominiums in Toronto is still close to 1%. If the units are filled with tenants or owners, prices cannot crash.

3. Will interest rates go up at all?

For the past 4 years, banks have been saying that rates should begin to rise within 18 months. Same story today. Although it is true that governments cannot by themselves influence interest rate policy, the fact is that most of the countries in the world have so much debt that they would likely go broke if interest rates rose, so this is the number 1 reason why this will not happen. In addition, rising rates go along with an overheated economy. Canada is very far from being over-heated, with growth averaging about 2% the last few years and likely to remain the same.

4. The debt to income ratio is a misleading statistic.

When analysts comment on the 160% ratio between debt and equity, they do not distinguish between credit card debt, which Brad likes to refer to as “stupid debt” and mortgage interest debt, which is the interest you pay on your home or on investment properties.

With interest rates at historic lows, most Canadians are able to carry the cost of their own mortgage debt and the rental income from their investment properties in most cases pays for all of the property expenses. If these analysts would do the right thing and separate out the good debt of Canadians from the bad debt, we would be nowhere near any dangerous debt levels in Canada. Do the math. Canadian real estate remains one of the best investments out there.

Credit for this article goes to Toronto Real Estate Lawyer : Mark Weisleder, http://www.markweisleder.com

There is a lot of confusion out there by buyers and real estate salespeople as to what insurance is required when buying a condominium. The mistake is thinking that the insurance policy for the building will always cover your situation. In most cases, the buyer will still have to pay for part of the damages, even if they have done nothing wrong.

Here’s why:

Condominium buildings do have an insurance policy that insures the building and the units. However, it will not cover any improvements to the unit made by the owners or the owners’ contents, should damage occur, whether by water leakage, fire or smoke damage. In addition, if someone you invite into your unit gets hurt, they can sue the owner personally for liability. As a result, most condominium buyers purchase a policy that provides coverage for their contents, any upgrades that they do to their unit and liability insurance to protect them if someone gets hurt visiting their unit.

What is confusing to most buyers is that just about every condominium insurance policy has deductibles, which become the owner’s responsibility should any damage occur, even if it is not the owner’s fault. The deductibles are usually $5,000 but I have seen many policies that have $10,000 deductibles. What this means is that let’s say you leave the bathtub overflowing and water damages the unit below you. You are responsible to pay the deductible, and the condominium will pay for any damage above the deductible. This will also be the case if you are responsible for the HVAC equipment in your unit and any malfunction causes damages to the building or to other units.

Let’s say the pipes in the wall burst, your unit was damaged and you did nothing wrong. Although the pipes may be the responsibility of the condominium corporation, you will still have to pay the deductible before the condominium pays anything extra to repair the damages. The only way to fight this is if you could prove that the condominium corporation was negligent in conducting repairs and should have known that the damage could occur. In my experience, you will pay more in legal fees to fight this than the deductible, so it is just preferable to have the proper insurance instead.

In every condominium status certificate, there is a summary given of the insurance policy for the building, including any deductibles. One way to protect yourself is to send this certificate to your own insurance company and tell them that you wish to buy extra coverage for the deductibles noted on the policy.

A better idea, in my opinion, is to use the same insurance company that your building is using for your own insurance package. This company likely understands the deductibles better than anyone and will make sure that your package covers any gap that may exist in the building insurance policy.

If you are buying a condominium as an investment, you still need to make sure that you have this type of insurance protection. Most tenants purchase insurance for their belongings and to cover liability. If you want the tenant to also pay for insurance for the deductibles, you need to say so in your lease agreement and make sure that the tenant provides proof that they have obtained all required insurance coverage before you give them the keys to the unit.

When you understand the insurance you need before you move into a condominium unit, you will be prepared should anything occur later.

Credit for this article goes to Toronto Real Estate Lawyer : Mark Weisleder, http://www.markweisleder.com

The average selling price, which combines all housing sectors including condos, hit $635,932.

By: Susan Pigg Business Reporter, Published on Tue May 05 2015 in Toronto Star.

The spring house-buying spree hit record levels in April, with sales up a stunning 17 per cent year over year across the GTA and house prices up 10 per cent, according to figures released by the Toronto Real Estate Board Tuesday, see full report.

That sales surge resulted in the strongest April for sales ever recorded by Toronto realtors. Some 11,303 homes changed hands across the GTA.

The fact that demand remains so high in the face of limited supply – new listings were up five percent in April, but active (total) listings down more than 10 per cent over a year ago – means strong price gains are likely for the remainder of 2015, said TREB’s director of market analysis, Jason Mercer.

The average selling price, which combines all housing sectors including condos, hit $635,932, up 10 per cent in April as first-time and move-up buyers flooded open houses.

But the MLS composite benchmark price, which factors out sales at the extreme ends, was only up 8.4 per cent, signalling that the sales numbers were skewed by a higher number of high-end sales, the board noted.

Even condo buyers couldn’t get a break in April, despite the fact new units are coming on the market monthly.

The average sale price of a Toronto condo surpassed $400,000 for the first time in April, hitting an average of $407,612, up 5.8 per cent from April of 2014. House prices were growing even stronger in the 905 suburbs where condo prices averaged $318,471, a 7.4 per cent increase from a year ago and far outpacing inflation and income gains.

Condo sales weren’t that far behind those of low-rise houses across the GTA, with a 16.1 per cent spike in sales. The biggest surge (up 21.5 per cent) was in the 905 region, compared to almost 14 per cent sales growth in the 416 region, according to TREB’s monthly figures.

The fact that townhouses have become the new go-to housing for those priced out of the detached market, but not keen on high-rise condo living, was reflected in the April sales figures. Sales in that sector climbed above 20 per cent, with an almost 29 per cent increase in sales in the highly sought after 416 region.

The average sale price of a townhouse was up about 10 per cent, with average prices at $551,231 in Toronto (up 10.3 per cent year over year) and $448,236 (up 9.5 per cent) in the 905 regions.

Detached home sales saw a 17 per cent spike across the GTA, with sales gains stronger (18.2 per cent) in the 905 regions than the City of Toronto (up 13.8 per cent.) The average price of a detached remained above $1 million in the 416 region, up 9.2 per cent year over year in April to $1,056,114. The average detached price was up 13.1 per cent in the 905 regions to $729,961.

Sales of semi-detached homes climbed by almost 15 per cent across the GTA and house prices hit a new high of $727,875 (up 3.5 per cent) in the City of Toronto and $489,796 (up 10.5 per cent) in the 905 regions.

TORONTO, November 25, 2014 — Greater Toronto, November 25, 2015 – Demand for home ownership remains strong in the GTA, and dynamics around housing supply are impacting prices and redefining the market, said the Building Industry and Land Development Association (BILD) and the Toronto Real Estate Board (TREB) at their first ever joint briefing on the state of the GTA housing market.

Through the first 10 months of 2015, there were 124,123 new and resale homes sold in the GTA. A record number of sales were reported through TREB’s MLS(R) system. New home sales reported by RealNet Canada Inc. (an Altus Group Company) were consistent with the 10-year average, but the mix and type of new homes being sold as well as their prices have changed. Total new home inventory levels have remained within the normal range at 26,388 homes, but more than 81 per cent of those homes are high-rise condominiums, according to RealNet Canada Inc. (an Altus Group Company).

Builder inventory of new low-rise homes, including detached, semi-detached and townhomes, was at 4,980 homes at the end of October, a near record low. As of October 31, there were 10,014 low-rise properties available for sale on TREB’s MLS(R) system. There were 16,079 new and 12,773 existing low-rise homes available for sale at the end of October 2005. While the supply of low-rise homes has trended lower over the last decade, demand has remained strong, pointing to more competition between buyers and very strong price growth.

The average price of a new low-rise home as of October 31, 2015 was $802,376 – more than double the average price in 2005, which was $387,369.

A similar trend has been noted for TREB MLS(R) transactions. The MLS(R) HPI Single-Family Benchmark Price increased to $669,400 in October 2015 from $363,100 in October 2005.

The new high-rise market saw an increase in supply in the last 10 years. There were 21,408 new high-rise homes available for sale across the GTA at the end of October 2015 compared to 13,006 a decade ago. The average price of a new high-rise unit was $440,382, up from $288,587 in 2005.

Price growth for TREB MLS(R) transactions was similar over the same time period with the MLS(R) HPI Apartment Benchmark Price in October at $331,400 compared to $207,800 in October 2005. It is important to note that while we have seen strong new condominium apartment completions and subsequent new listings on TREB’s MLS(R) system, these newly listed units have been largely absorbed. Far from seeing a glut in supply, the months of inventory trend has declined and growth in the MLS(R) HPI Apartment Benchmark Price has accelerated compared to last year.

The size of new condominiums brought to market has decreased over the last 10 years. The average new high-rise home in October 2015 was 767 square feet, compared to 908 square feet in 2005. “As an industry we continue to find innovative ways to provide a range of housing choices,” said BILD Chair Steve Deveaux, vice-president of Tribute Communities. “But it is becoming increasingly challenging to design, build and sell the homes that many people, especially first-time buyers, want to and can afford to purchase.

For new homes, single-detached homes saw the largest year-over-year price increase in October. The average price of a new detached home in the GTA was $962,312.

“To comfortably afford that home with a 20 per cent down payment, the buyer would need an annual income of $174,854,” Deveaux said. “With a smaller down payment, the required income would be even higher. According to Statistics Canada, the average total family income in the Toronto area in 2013 was $107,200.”

The development industry is building more condominiums than it did a decade ago, but as the GTA continues to grow by up to 100,000 people every year, demand for low-rise homes has not decreased. Deveaux said that demand for detached, semi-detached and townhomes is outpacing supply, which is limited due to a lack of serviced land designated for development.

TREB president Mark McLean said the industry is concerned about the disconnect between some current government policy initiatives and home ownership affordability. TREB cites the Ontario government’s plan to allow municipalities to charge their own municipal land transfer tax as the most recent example.

“Homebuyers in the GTA presently benefit from a diversity of new and existing home options that are affordable at different income levels,” McLean said. “Sadly, the provincial government seems bent on hampering home ownership affordability. Studies have shown that municipal land transfer taxes will have a negative impact across Ontario, not only from an affordability perspective, but also by undermining our economy and costing thousands of jobs.”

Government fees and taxes amount to an average of one-fifth the cost of a new home in the GTA, according to a BILD-commissioned study in 2013. Home ownership and the resale market is affected due to the increasing cost of new homes.

The organizations stated that it’s important for governments to educate residents about the effects public policy changes will have on the state of the housing market and home ownership in the GTA.

“This industry is extremely important to the economic growth and prosperity of our cities and it’s important for GTA residents to understand what drives and impacts it,” Deveaux said.

About BILD

With more than 1,450 members, BILD, formed through the merger of the Greater Toronto Home Builders’ Association and Urban Development Institute/Ontario, is the voice of the land development, home building and professional renovation industry in the Greater Toronto Area. BILD is proudly affiliated with the Ontario and Canadian Home Builders’ Associations.
www.bildgta.ca

About TREB

Greater Toronto REALTORS® are passionate about their work. They are governed by a strict Code of Ethics and share a state-of-the-art Multiple Listing Service. Over 42,000 residential and commercial TREB Members serve consumers in the Greater Toronto Area. TREB is Canada’s largest real estate board.
www.TREBHome.com

January 27, 2016 — Toronto Real Estate Board President Mark McLean announced that Greater Toronto Area REALTORS® reported 5,595 condominium apartment sales through TREB’s MLS® System during the fourth quarter of 2015. This result was up by 12.6 per cent compared to the same period in 2014 meaning the condo market is growing.

Over the same period of time, the number of new condominium apartment listings entered into TREB’s MLS® System was also up, but by a substantially lower annual rate compared to sales, at 3.3 per cent. The result was tighter market conditions compared to an year earlier and a more competitive condo market.

“The condominium apartment segment is integral to the overall housing market in the Greater Toronto Area. Over the past decade, the trend has been to increasingly build up due to provincial land use policies. As new projects have completed, a number of investor-held units have been listed for sale on TREB’s MLS® System. These units have been absorbed quite rapidly, with enough demand relative to supply to prompt continued price growth,” said Mr. McLean.

The average selling price for condominium apartments in the fourth quarter was up by 4.1 per cent year over year to $382,070. Throughout the fourth quarter, the MLS® Home Price Index (HPI) Apartment Benchmark Price was up by between four and six per cent on an annual basis.

“First-time buyers account for approximately half of all buyers in the GTA and even more so in the City of Toronto. Condominium apartments represent an important entry point into home ownership for a lot of households. This is a key reason why we experienced continued growth in sales for this home type over the past year,” said Jason Mercer, TREB’s Director of Market Analysis.

Condominiums are becoming an increasingly important part of the GTA’s housing market mix and condo sales are up as the development in the region grows more intense.

For those seeking affordable home ownership, a condo is likely the only viable option, given the skyrocketing prices of detached houses.

That is if they can find a condo to buy.

New condo sales in the first four months of 2016 significantly outpaced supply, with 6,229 sales but only 3,892 new units added, according to Altus Group. This has resulted in a decline in the already limited number of new-condo options. As of the end of April, there were only 17,698 new condos available for sale across all GTA condo projects.

That may sound like a lot of units, but bear in mind only 1,622 of them were actually built and unsold. The bulk of the condos, 9,801 to be precise, were in pre-construction status, meaning three to five years away from delivery. The remaining 6,275 units were unsold and under construction, representing just 12 per cent of the 51,392 units being built in the GTA and slated for delivery in the next three years.

Prices for ground-oriented homes have been increasing at double-digit year-over-year rates, up 11.4 per cent to a record $864,181 in the first four months of 2016, according to Altus Group. Meanwhile, GTA condo prices were up 2.8 per cent year-over-year, to $461,281. On the resale side, detached home prices increased 18.9 per cent, to $986,691, compared to a 5.9 per cent jump in condo prices, to $413,925, according to the Toronto Real Estate Board’s May figures.

And prices will only keep going up, as record land costs and the introduction of new development charges create unprecedented cost pressures for those developing the future supply of new condos, units that won’t be available to consumers for another two years.

For those who do manage to secure a condo, more potential complications loom. Purchasers of units in larger projects can find themselves in interim occupancy for a full year, resulting in the payment of interim occupancy fees (paying rent to stay in their own unit until the building’s registration) that could total more than $10,000 before they’re able to obtain ownership title and begin paying off their mortgages.

And, with projects being designed to minimize capital costs in order to stay competitive on selling prices, building systems will likely require maintenance, repair and replacement earlier than in the past. So condominium fees after the first year of operation are likely to rapidly escalate.

Condos can offer a carefree lifestyle. But that doesn’t mean home-hunters should be carefree when making their condo purchase decisions.