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Archive for the ‘Annex Real Estate Toronto’ Category

Are New Mortgage Rules Overkill?

Sunday, October 15th, 2017

It’s about to get tougher to qualify for a mortgage thanks to new rules recently proposed by Canada’s federal banking regulator.

The Office of the Superintendent of Financial Institutions (OSFI) is taking aim at uninsured mortgages or those who have down payments of 20 per cent or more. The regulator wants to see stress tests for those borrowers similar to what is happening in the insured market.

That would mean buyers now need to qualify based on the highest posted five-year fixed rate, which is a rate of 4.64 per cent, about two per cent higher than the rate offered by most lenders.

Since buyers will have to qualify for a higher interest rate under this new proposal that means their purchasing power will diminish some estimate by as much as 20 per cent because they won’t be able to borrow as much as before.

But is extending tougher mortgage rules to all borrowers the right tact to take? Or is this another heavy-handed measure that will pop another air hole in the housing market and possibly flatten the wider economy?

This would definitely be a more controversial policy change than those made in the past, says Toronto mortgage broker David Larock. It impacts the borrowers with large down payments who don’t need mortgage default insurance, and that’s a large swath of the market. It’s starting to seem like our regulators are going to keep making changes until they put our real estate markets on their backs.

The new rule not only affects home buyers but also home owners looking to refinance.

About four out of five Canadian mortgages are conventional, uninsured loans with the big six banks holding 32 percentage points of that total. Credit unions have eight percentage points and six percentage points are held by small to medium-sized institutions, including mortgage investment corporations.

The proposal comes following a move by Ottawa last year to require that all insured mortgages undergo a stress test to establish if borrowers could make their payments in the event of such changes as a job loss or interest rate hike. The move is Ottawa’s response to the growing debt of Canadian households, the highest among G7 countries.

Expect the new rule to be in place by next spring at the latest.

A Realtor’s Take on Gratitude

Monday, October 9th, 2017

Oprah and the other of our world insist that having gratitude in our hearts is the means to a happy and fulfilling life.

That sounds reasonable. After all, gratitude is an emotion that expresses thanks and appreciation for what you have. It focuses on your glass as half full, not half empty. At the same time, being grateful is a constant struggle for many because it is in direct conflict with our consumer-driven culture that perpetuates a never-fully satisfied desire for more.

Let’s look, for example, at where we live. How fortunate are we to live in a vibrant, culture-rich city that’s only volatility has been the real estate market. Believe it or not, as realtors, we’re happy to see the market returning to some sense of normalcy. The unpredictability of the spring market was never sustainable and it’s good for everyone now that cooler heads prevail.

So as we approach Thanksgiving, in the spirit of expressing gratitude, here’s a lighthearted look some of the people and things we want to publicly appreciate:

The Media: Buyers and sellers need to sit up and listen. The real estate market is no longer what it once was. You want scores of multiple offers and how much over your asking price did you say you wanted? Probably not going to happen. We’re glad the media continues to harp on the GTA’s cooling market but is anybody paying attention to the news?

FOMO: The Fear of Missing Out is a common and repeated folly of not just social-media addicted youth. FOMO also takes root in the real estate market. Just look at the frenzied April market in which more than 77 per cent of Toronto sales went for over asking. FOMO fuels real estate activity so we kind of love it. Sorry.

Foreign Buyers: We are most sympathetic to your plight given the Ontario government’s move to curb foreign ownership with a non-resident speculation tax.

Condos: What’s not to love? They’re attractively and affordably packaged homes minus a lot of the work, often with great amenities and views to boot. And the condo market is still experiencing somewhat of a boom with increased prices and sales. Your kingdom for a condo? You bet.

Pumpkins: Dotting streetscapes and front porches from St. John’s to Victoria, these big orange jack-o-lanterns add a pop of happy to neighbourhoods as fall foliage displays a variety of warm colours in preparation for winter. Best of all, is the gastronomic enthusiasm with which people use the gourds. From ravioli, cookies and salsa to potato chips, candy and bagels, if there’s a food that can be pumpkinized, someone has already thought of it.

Hope everyone had a well resting Thanksgiving!

 

 

Under One Million: New GTA Benchmark

Tuesday, September 12th, 2017

What goes up must inevitably come down and for the first time in months the average sale price in Toronto did just that with detached homes dipping in July to below $1 million.

That figure is notable for more than just psychological reasons. With price tags below a million dollars, the real estate market is open to more consumers and that’s good news for everyone.

According to the Toronto Real Estate Board (TREB), August figures show the average detached home in the GTA sold for $972,212. That’s down from $1,000,336 at the end of July.  The average price in August has fallen about $230,000 or 19 per cent since the market’s peak in March.

It’s widely believed the provincial government’s new housing rules introduced in April put the brakes on the city’s red-hot real estate market, controls some believe were necessary to calm out-of-control housing prices.

While the price drop is great news for buyers, TREB says the market in the GTA is expected to post a record year nevertheless. According to TREB, the average sale price of a detached home in July was $996,970, which is still a 13.3 per cent hike over house prices from one year ago.

Says TREB’s board president Mark McLean:  As we move towards a new record for home sales this year, it is important to point out that home ownership demand has been driven not only by low borrowing costs, but also by the fact that the greater Toronto area economy has been performing quite well, with the unemployment rate lower compared to last year.

The under one million figure is an average that combines house sales numbers from across the GTA. If you’re looking at detached homes strictly in Toronto you are likely still paying in the seven-figure range. Based on TREB figures from August, single-family homes there still average about $1.2 million, though that figure is down considerably from March when it hit a peak of $1.56 million.

The $1 million mark is significant because of changes introduced in 2014 which excluded government-backed mortgages on homes sold for more than seven figures. The ban targeted hot real estate markets in Toronto and Vancouver.

 

Mortgage Borrowing Clout Way, Way Up

Friday, September 8th, 2017

Think foreign investment is the cause behind high-priced homes in Toronto and Vancouver? Or how about the immigrant population growth in those centres? Could it be a lack of developable land or maybe it’s speculators?

With the exception of something catastrophic, it’s rarely a single cause that will prompt the kind of heavy volatility we’ve seen recently in those housing markets.

In fact, the Fraser Institute, an independent, non-partisan Canadian public policy think-tank asserts that higher home prices are the result of declining interest rates and rising incomes that allowed Canadians to qualify for much bigger mortgages over the past two decades.

Increased borrowing power, brought about by falling interest rates and rising incomes, is potentially the most overlooked and least understood factor influencing home prices across Canada,  Niels Veldhuis, president of the Fraser Institute, said in a media release last month.

The study ” Interest Rates and Mortgage Borrowing Power in Canada ” says that between 2000 and 2016, interest rates dropped from 7 to 2.7 per cent. During that time, the lower interest rates increased a potential home buyer’s mortgage-borrowing power by 53 per cent.

At the same time, average family incomes grew by 53 per cent. And when you factor in low interest rates with higher wages, the mortgage-borrowing power of the average Canadian climbed by a whopping 126 per cent.

In terms of city centres with the highest mortgage-borrowing power, Calgary came in first at 161 per cent, followed by Vancouver at 118 per cent, Montreal at 115 per cent and Toronto at 100.

This increase in borrowing power ”in simple terms” means that an average Canadian family, dedicating the same share of their income to monthly mortgage payments, can afford a mortgage that’s more than twice as big now as it would have been in 2000, Veldhuis said.

Canadians potential to borrow more money has resulted in homebuyers bidding up the price of homes since the supply of housing is not immediately responsive to changes in demand.

As would-be homebuyers and governments contend with rising prices across Canada, policy makers should look closely at the impact of interest rates, rising incomes and increased mortgage borrowing power on home prices, Veldhuis added.

 

 

 

Toronto’s Housing Looking Up Again

Monday, August 14th, 2017

The dip in Toronto’s housing market is expected to bounce back soon, says the federal housing agency.

The Canada Mortgage and Housing Corp. (CMHC) says the city’s current decline will be short-lived and real estate prices will pick up again as demand returns. According to the Toronto Real Estate Board, prices in the city fell from an average of $919,589 in April to $793,915 in June; however, the CMHC expects a rise in prices again due to a strong economy and a lack of housing supply.

Toronto’s red-hot real estate market was curbed in the spring when the Ontario government introduced measures designed to cool an overheated market. Included in the measures was a controversial 15 per cent tax on foreign buyers.

The CMHC said similar taxes imposed against foreign buyers in Vancouver worked to calm the market there by reducing the number of foreign buyers. However, the Vancouver market has since picked up again.

“The response we’re seeing in the Toronto market seems almost emotional and a knee-jerk reaction to some of the changes, which suggests that these impacts will be short-lived,” Dana Senagama, CMHC’s principal market analyst for Toronto, told the Canadian Press.

The province’s measures also include more rent controls and legislation that allows municipalities to tax vacant homes.

“If job creation continues in Toronto … and the economy continues to fuel the housing demand, we can expect some of the pressures on house prices in Toronto to resume,” said Bob Dugan, CMHC’s chief economist.

In the CMHC’s recently released housing market assessment, the agency ranked its overall risk rating for the national housing market at strong. The quarterly report is based on information collected from the first quarter of 2017.

Staging Your Home

Tuesday, August 8th, 2017

Staging your house for a quick and lucrative sale might sound like a daunting and expensive task but there are ways to do so that don’t break the bank or test your patience.

Here’s how:

Curb appeal

Enhance your house’s outside appearance by making sure all is clean and tidy. Wash your front windows, power wash siding and walkways, make sure your lawn is trimmed, weed flower beds and sweep up fallen debris. If your porch needs freshening give it a lick of paint or stain. These simple efforts will help lure in potential buyers.

Welcome visitors

Keep your porch lights on at night. Make sure your doormat is clean and keep an arrangement of blooming flowers or pretty plants by the entrance. Don’t clutter your entrance with too many pieces of outdoor furniture. Select a few nice pieces and arrange them artfully.

Elbow grease

A clean home is a happy home and potential buyers will be thankful for your efforts. This is one of the most inexpensive ways to prepare your home for staging. Clean and polish floors, scrub grout, remove cobwebs from corners and make sure the bathrooms gleam.

Clear the clutter

This is also fairly inexpensive but it is perhaps one of the most difficult things to do. You’re used to living the way you do and that may mean jam-packed countertops and closets loaded to the brim. Get rid of unnecessary and unsightly things. Potential buyers want to be able to envision themselves in your space and your mess makes that more difficult.

Rearrange the deck chairs

Is your furniture inviting or oddly laid out? Use symmetry to balance it. Pairs of chairs, lamps, even sofas work well at creating a cozy conversation area. Use sophisticated neutral shades to paint walls and pull your furnishings together. This also applies to bedrooms and bathrooms. And don’t forget to add different types of lighting, ambient, task and accent.

Clean out your closets

Clear out excess junk so that closets and storage areas have some open and unused space. Store stuff outside your home if you have to. The point is to make your space lived in, but not too lived in.

Kids and pets

Don’t leave toys strewn around because that looks messy. Find a good storage bin that you can tuck away under a bed or in a corner or closet. Same goes for pet toys. Also be sure to tackle pet odors by cleaning carpets and kitty litter.

Spare rooms

It’s not unusual to have a spare bedroom or other room that becomes a catch-all for household odds and sods. Transform the room into something usable by adding an armchair and a table or turn it into a yoga studio. Giving the room a purpose will add value to your home.

Add natural colour

Fresh flowers, plants and clippings from your lilac tree or forsythia add splashes of colour. You can bring nature indoors in the fall and winter, too, with fall foliage and a poinsettia.

Chemical-Free Fixes for your Lawn

Monday, July 31st, 2017

Most of us enjoy having lawns and gardens that are pretty and lush. But the problem with achieving the kind of leafy green grass that your neighbours will envy is that it’s hard on the environment, not to mention your wallet.

We’re big spenders when it comes to our grass. It’s been said that Canadians spend at least $2-billion per year on seed, sod and chemicals, a number that’s been rising steadily, according to Planet Natural.

Bear in mind, too, that much of lawn care products help your turf in very superficial ways so you should question whether degrading the soil, polluting nearby water sources and posing health threats to humans, pets, wildlife and the birds and the bees is worth it.

Fortunately, attitudes about perfect lawns are beginning to change. Dozens of municipalities and even a few provinces including Ontario have passed laws that severely restrict pesticide use.

Let’s look at some ways to reduce our addiction to lawn chemicals:

Spot treat weeds with vinegar

Mix the vinegar with a little dish soap and Epsom salts and apply with a hand-pump sprayer. Try to be precise when applying to weeds only because the mixture can burn grass.

Corn Gluten

This non-toxic by product of corn processing can kill young weeds in days. An added benefit is that it adds nitrogen to your soil. It’s believed that after several years of use, the gluten can control up to 90 per cent of weeds. Apply in early spring.

Make the switch

Convert your lawn to a grass that is drought resistant and lower maintenance. Eco lawn grass requires little or no mowing and fertilizer.

Let clippings chill

This process is sometimes called grass-cycling as it provides a good nutrient boost of nitrogen, phosphorus and water. Clippings don’t cause thatch. To do this properly make sure the grass is three inches high and set your mower height to chop one-inch of grass. The clippings will disappear among the blades of grass. Think of the time and effort saved, not to mention the benefit to your landfill site.

Watering

Avoid over-watering your lawn because that is more damaging to your grass than under-watering. Try to water early in the morning. If you wait till the middle of the day, much is lost to evaporation. Water deeply but not frequently. Most healthy lawns need about one inch of water per week.

Clover

This is a good weed to have. It often appears when soil is low in nitrogen so the solution is to let the clover clippings fall where they may after cutting, which will fix the problem without using fertilizer.

Dandelions

These indicate you’re having nutrient problems with your soil or that your grass isn’t developing healthy roots. Get a soil test to determine your issue. Corn gluten applied early in the growing season prevents dandelions from germinating and makes your grass stronger and more weed resistant.

 

 

Going Solo: Tips for Single Homebuyers

Monday, July 17th, 2017

Singles are one of the fastest growing demographic groups in the country and as such those who live solo comprise more than 25 per cent of Canadian households.

According to Canada Mortgage and Housing Corporation, in 2011 a full 42 per cent of owner-occupied condos housed singletons, and single person households are expected to continue growing.

Here are a few pointers if you’re thinking of taking the plunge by yourself:

Do your homework

There’s a saying about information being power and that’s true here. Whether you are buying for the first time or relocating to a new area talk to friends and colleagues about their house-buying experiences. Ask about neighbourhoods, realtors and public transportation. Search for info online, read books, attend seminars and explore different lenders.

Wish list

Knowing what you want is usually a good thing, unless your wishes are completely out of whack with reality. Condos and townhouses are often ideal for singles. Living on your own means you need less space and a mortgage payment that fits a single income. A smaller living space also means less time, money and resources spent on maintenance.

Safe & sound

Living alone often means issues around security; safety and privacy are high on your priority list. Look for neighbourhoods with lower crime rates, a home with an alarm system, fenced-in yards, secure windows and doors and an attached garage accessible from within your home. Condos fit this requirement quite well with such features as a concierge, underground parking and gated entrances.

Rainy day fund

As a solo homeowner, since you’re the only one to depend on, it’s critical that you begin to build an emergency fund. Being able to handle unexpected expenses without taking on more debt is important. A general rule to thumb for emergency savings is to have enough money to pay today’s bills plus living expenses for three to six months.

Cooperative buying

Because house prices have skyrocketed in the GTA and many prefer to stay in the city rather than move to cheaper towns and cities, there’s a small movement of folks looking to buy a house with other likeminded people. This arrangement can lead to many different buying scenarios so lining up knowledgeable realtors, lawyers and lenders is key.

Renovate or Relocate?

Thursday, July 13th, 2017

Deciding if it’s time to renovate your home or buy a new one can be a hand-wringing exercise that has you changing your mind from one hour to the next.

Yo-yoing from one plan to another is not a great way to live but it means you’re open to options and that you’re carefully mulling over possible scenarios before taking the plunge either way.

There are a number of factors that should go into your decision to move on or remodel your current home. For starters, how emotionally attached are you to your neighbourhood? Can’t live without your neighbours? Think the area schools are the bomb? Feel a strong and abiding connection to your local dry cleaner, burger joint and chiropractor?

Typically, though, when families and possessions grow, elderly parents move in or working from home means it’s time to create an office space the decision to love it or list it comes down to cold hard cash. How much would a home reno cost versus purchasing a bigger or more suitable house?

According to Money Sense, contractors quote in the $90 to $225 per square foot range, though bathrooms, kitchens and additions involving your basement foundation can cost more. Plumbing, granite, new fixtures and appliances will push costs up while just dry walling your basement will bring the price down.

Unless you’re a wizard at design and architecture, you might want to consider hiring a professional to help you plan your renovation. They often see things you don’t. For example, your attic space. Is that usable, as-yet-untapped square footage? If you have an attic with open space and plenty of headroom building stairs to get to it might just be worth it.

Additions can reveal expensive surprises such as old knob-and-tube wiring so try to be as prepared as possible before the work begins. It’s also a good idea to have a contingency fund for unexpected work in the order of 25 per cent of your reno budget.

Also, be prepared to either move out and then back in or share your home with workers and trades people for some time. According to Realtor.com, a kitchen remodel can take three to six months. If ductwork, plumbing or wiring has to be addressed, it could take longer. A bathroom remodel can consume two or three months, while a room addition can require one or two months. Patience is clearly a virtue here.

Bear in mind that not all renovations are equal. Most upgrades do not pay for themselves in terms of higher resale value. Some do manage to recover 80 to 90 per cent of their costs while others only see a return on investment of 50 per cent.

Are you the type who can oversee a big renovation project? Does talking to architects and contractors intimidate you? You may not be suited for a home improvement.

Moving, on the other hand, can also be costly, especially given Toronto’s overheated prices. Realtor fees are about five to six per cent, while lawyer fees run about $1,200 to $1,500. Then there are the land transfer taxes plus actual moving costs.

One clear way to save money is by moving to a city or town in which house prices are considerably less than the GTA. Think Hamilton or Pickering.

Any which way you go, there is a sizable price to pay. Probably the best advice is to really know yourself and the needs of your family so you can determine the best and least disruptive path.

 

 

Are Home Inspections Worth It?

Saturday, June 17th, 2017

There was a time not too long ago when homes were bought and sold without the assistance of a professional home inspection. Your trustworthy and handy brother-in-law kicked the tires, so to speak, and his opinion was pretty much all that mattered.

Then all that changed in the ‘90s when home inspections became more and more common, to the point where the majority of Ontario resale home buyers (nearly 65 per cent) hire an inspector.  But Toronto’s red hot real estate market saw the trend change again as buyers skipped inspections to present clean, condition-free offers in an effort to win bidding wars. In this market, homes come with a pre-list home inspection obtained by the seller, which meant a significant drop in the number of home inspections overall.

There has been a good deal of controversy swirling around the profession. Critics say its lack of regulation means unqualified inspectors can set up shop and perform inspections with little expertise. And up until now, home buyers had little recourse if a problem was later discovered that a home inspector should have red flagged.

In April, the Ontario government finally passed a law that will impose new rules on the profession. The Putting Consumers First Act will require home inspectors to be licensed, carry insurance and abide by a code of ethics. The legislation will introduce minimum standards for home inspection reports, contracts and disclosures. Inspectors who breach the code of ethics could face fines of up to $25,000.

According to the Toronto Star, there are an estimated 1,500 home inspectors in Ontario charging between $350 and $600 for a home inspection.

So is spending a few hundred dollars for a home inspection worth it?

That depends.  Many believe it’s a relatively small investment given the cost of real estate. Home inspectors are especially useful for first-time home buyers, who know little about the process. A home inspection can help calm the nerves of a buyer who has no idea what shape the roof is in, where the water shutoff is or how to replace a furnace filter.

But if you’ve bought a few homes in your life, you can probably make due with a Seller Property Information Statement instead. Also known as an SPIS, these optional forms protect the seller down the road should the new owner try to pin a problem on the seller.  Filling one out also demonstrates to buyers that you’re being honest and open because you’re willing to disclose defects or issues.

The SPIS is a two-page document that covers questions regarding zoning, taxes and encroachments. Questions are asked about soil contamination, flooding, oil tanks and grow houses. Other questions focus on moisture problems, types of insulation and renovations or addition made to the house.

So get a home inspection if you’re new to real estate of feeling a bit leery about a property. If you know what to look for, skip the inspection and request an SPIS.

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Toronto Real Estate Board. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.