{ Create an Account }   { Login }   { Contact }

Archive for the ‘Condominum’ Category

Why Condos Are a Good Investment

Thursday, February 8th, 2018

You’ve been saving and a small nest egg has accumulated and now you’re wondering if the real
estate market is good place to invest your money.

The condo market is a good place to start. Not only have condos posted year-over- year gains,
making them an attractive investment opportunity, they are also likely the most affordable
piece of real estate money can buy in the GTA.

Purchasing a condo as an investment is a wise move now for a number of reasons. Vacancy
rates in Toronto are extremely low, somewhere below one per cent. As with any supply-
demand scenario this inevitably means renters will need to pay more and competition for
desirable rental space will be stiff. With rental prices on the higher side and a low supply of
rental space, tenants are reportedly engaging in bidding wars by offering landlords extra
months of rent up front just to secure a space.

It’s said that the majority of condo investors look to a formula of 25 per cent in and 75 per cent
rent coverage. What that means is if you invest 25 per cent into the price of your condo, the
rent you charge should cover your remaining costs, including property taxes, mortgage and
maintenance fees.

If you are buying a condo as an investment, try to buy in the very best location you can afford.
Make sure the condo is close to transit, multiple forms are even better, as many renters don’t
own vehicles.

There are plenty of advantages to condo living that you don’t always get in a single-family
home. Your access to community is virtually built-in given the closer quarters design of most
condos. Many possess an added level of security that is non-existent in other homes. And
finally, the condo lifestyle frees up your time for other pursuits as grass cutting, snow shovelling
and window washing are chores that are relegated to someone else to take care of.

Don’t ignore what amenities are in your condo simply because you won’t be living there.
Renters will pay attention to what your building offers and they want to benefit from some of
the amenities they enjoyed when living in a single-family home. Many condos feature patios,
pools and party rooms for entertaining larger groups. Barbecues are often available. And just
think what renters can save on their fitness club memberships once they start using the gym
provided by your condo.

Finally, pay attention to the cost of utilities as well, since your renters will want some idea of
these costs.

Why Condos Are Having a Moment

Monday, January 8th, 2018

Condos often fit the bill where other housing is either too large, too expensive, too far from the action and often, for many, too much work.

That the Toronto condo market is having a moment right now makes sense. With an average selling price of just over $500,000, condos are a very affordable option for buyers seeking to own their own living space.

According to the Toronto Real Estate Board (TREB), approximately half of those hunting for a house in the city are comprised of first-time home buyers. It can be assumed then that these buyers are typically younger and, as such, possess less money and earnings to carry a single-family home in the million-dollar range. Condos are the perfect entry point to owning real estate in Toronto. As you pay off your mortgage, the value of your investment goes up, allowing you to eventually use your increased capital to buy a larger home or perhaps fund a vacation home or some other such comfort.

The average selling price for condos in the city was $510,206 in the third quarter of 2017, up by nearly 23 per cent compared to the average price of $415,894 that condos sold for during the same period a year earlier.

“The condominium apartment market segment has exhibited the strongest average rates of price growth since the spring, relative to other major market segments,” says TREB president Tim Syrianos. “Competition between buyers remains strong, as listings remain below last year’s very constrained levels.”

Syrianos also touched on the fact that the condominium apartment housing market is not protected from the ravages of a listings shortage. And this factor is also likely driving the condo market.

According to TREB, there were 5,684 condominium apartment sales reported through the MLS system in the third quarter of 2017. This was down from 7,991 sales reported during the same period in 2016.

New condominium apartment listings were also down on a year-over-year basis by 10 per cent to 9,845 in the third quarter of 2017 compared to 10,967 in 2016.

A consumer poll taken for TREB by Ipsos last spring indicated more interest in buying condos.

“Condominium apartments will likely account for a greater share of home sales as we move forward,” says Jason Mercer, TREB’s Director of Market Analysis. “With this in mind, it is not surprising that we have continued to see robust price growth, as demand has remained strong relative to available listings.”

As with any type of housing, there are issues with these vertical homes, but if you’re looking for a space that is centrally located, low-maintenance and affordable, condos can’t be beat.

See Freeman Real Estate Ltd., Brokerage – Condos to learn more about our condo listings.

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.

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.

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.

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.

Good New for Home Buyers

Wednesday, June 7th, 2017

Buyers eying the GTA will be happy to hear that the Toronto real estate market finally appears to be taming down somewhat.

The Toronto Real Estate Board reported that existing home sales fell in May by 20.3 per cent from the previous May, while prices edged down by about six per cent from April to May.

Though it’s too early to tell for sure, it’s believed the provincial government’s institution of new rules designed to control the housing market is the reason for the cool down.

“The actual, or normalized, effect of the Ontario Fair Housing Plan remains to be seen,” said TREB’s market analysis director Jason Mercer. “In the past, some housing policy changes have initially led to an overreaction on the part of homeowners and buyers, which later balanced out.”

In April, the province announced a 16-step plan to tame Toronto’s out-of-control real estate market. The plan targeted foreign investors with a 15 per cent non-resident speculation tax on property purchases and more rent controls which serve to restrict rent hikes.

While home buyers will be pleased with softer prices, they can also expect to benefit from a greater housing supply. Active listings rose nearly 43 per cent in May from the previous May. As for the breakdown, low-rise homes including detached and semi-detached houses and townhouses were up considerably in May from a year ago, while condominiums were down.

“The increase in active listings suggests that homeowners, after a protracted delay, are starting to react to the strong price growth we’ve experienced over the past year by listing their home for sale to take advantage of these equity gains,” Mercer said.

All of these factors contribute to a less frenzied buying model, which means less pressure plus more time and room to think for those looking to purchase.

Some say the Toronto market is echoing Vancouver, which also slapped foreign buyers with a 15 per cent tax last August. While the market subsequently softened it appears to have recovered with sales and prices again on the rise last month in Greater Vancouver.

Brexit & Canadian Real Estate

Wednesday, July 13th, 2016

Instability in the UK in the wake of the recent Brexit vote could actually crank up the heat on Toronto’s real estate market, say experts.

The uncertainty in global markets thanks to England’s decision to leave the European Union could serve to fuel Canada’s red-hot housing market because interest rates will likely remain low, according to BMO Nesbitt Burns.

“In that event, the Fed will remain on ice even longer and Canadian rates will again probe all-time lows, keeping mortgage rates at an extremely low ebb and thus further fanning the flames in the domestic housing market,” said BMO chief economist Douglas Porter and senior economist Robert Kavcic.

The pair issued the warning in their latest report, which dealt with the various factors driving the out-of-control price increases in Vancouver and Toronto.

Brexit could be good news for those interested in investing.  According to Mortgage Broker News, there is a phenomenal amount of capital looking for commercial real estate and those foreign investors think an investment in Canadian real estate is a sure thing. Expect foreign investment in Vancouver and Toronto to continue.

As for how Brexit will impact mortgage rates, Toronto’s mortgage planner David Larock suspects the vote would not have any damaging effects on Canadian borrowers, at least not for the foreseeable future.

“Over the longer term, while the Brexit heightens global financial risks and raises the potential for increased volatility in financial markets, any related flare ups should trigger a capital flight to safety that would be expected to put downward pressure on our bond yields and therefore our mortgage rates,” the analyst wrote.

Given the state of Canada’s economy, which the Bank of Canada warned will push the country back into a recession in the second quarter, it’s very likely interest rates will remain at historically low levels.

“As we’ve grown to expect, rock bottom interest rates are expected to keep mortgage lenders busy for the foreseeable future,” wrote Sam Bourgi at www.canadianmortgages.ca

 

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.