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Residential property

Home Prices Still Steadily Rising in Toronto

Industry experts are starting to call the problems in the Toronto housing market a “blip” rather than a bursting bubble. While it is true that in some areas, housing prices are going down, overall prices are still up year-over-year in the Toronto area.

Flood of listings sellers trying to cash in at “peak”

The primary driver behind the dip in Toronto home prices has been a flood of supply on the market, mostly from sellers looking to cash in on what experts had determined was the “peak” of the housing market in early 2017. Generally, when you are told prices are the highest they are going to get, you’re going to make the decision to sell.

However, the new listings are high-priced, and there are a limited amount of buyers that can afford the average home price of $746,218 across the GTA. Even condos, which used to be the entry-level option to the housing market, have an average price now of $519,000 – which is definitely out of reach of the single income individuals who usually purchase these properties. So while sales have decreased, prices remain steadily growing at a single-digit pace, in accordance with the Toronto Real Estate Board’s prediction earlier in 2017.

Will buyers come in off the sidelines after seeing steady price increases?

There are three things that could happen with prices in the Toronto housing market. The first sees sellers lowering their prices significantly in order to sell their properties. But since the primary driver for these sellers was to “cash in”, this is highly unlikely – although it is what buyers want to happen. The second option – the inventory will be pulled off the market or turned into rental properties, as there is a rental crunch in Toronto and the GTA, and non-selling properties could make their owners more money if they become rental properties.

A third option, and one advocated by the TREB which has so far predicted every move in the Toronto housing market correctly for 2017, is that buyers waiting on the sidelines for prices to decrease see them increasing instead, and decide to purchase homes in the fourth quarter of 2017 and the first quarter of 2018. Those hoping for a deal will see steady price increases month-after-month and will realize that the deals won’t materialize. What remains to be seen is if there are enough people with the incomes to afford Toronto and GTA housing at current prices to snap up the current supply.


Sales need to decline for a number of months to see a price drop

Big price drops don’t realistically happen unless sales decline over a long stretch of time – and there are other factors at play, such as sellers deciding to convert their properties to short-term or long-term rental properties rather than selling them if they don’t get the price they want. For now, real estate agents and industry experts are predicting an “insane” fall season for property sales in Toronto and the GTA.


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Toronto Real Estate Board: Expect Single-Digit Price Increases Through 2017

The Toronto Real Estate Board’s June Market Watch outlined a number of key trends in Toronto and surrounding area real estate. An increased supply of listings has led to less price growth than we have been used to seeing in the market, but the price growth is still healthy at 6.3% year-over-year.


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4 Tips to Prepare Your Toronto Rental Property for “Forever Renters”

With real estate prices being out of reach of even well-salaried Torontonians, we’re at the start of the era of long-term renting. This makes it extra important to vet tenants properly, make sure your prices are set right initially, and all of your legal obligations as a landlord are met in terms of the upkeep and ongoing maintenance of the property. It’s also the right time to start looking at a property management company to protect your investment. (more…)

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New Detached Home for Sale in Pickering

Our newest property listing is a four bedroom detached home perfect for family living in Pickering.

661 Eramosa Crescent is a detached family home conveniently located close to the 401 for an easy commute. It features an open concept design with blend of plush broadloom, ceramic flooring, and hardwood flooring. Ample windows provide excellent exposure and natural sunlight. Large entrance/foyer area and spacious family room. Kitchen features stainless steel appliances. Large fenced yard.

Price: $908,000
Property Taxes: $4849/annually (last figure from 2016)

View property on MLS

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Renting Out Your Ontario Cottage: The Pros and Cons

Life gets busy. Sometimes you just aren’t able to get up to your cottage as much as you would like. And then there is the off-season – you have a property that is sitting there being completely unused. You could rent out the cottage for a week or a weekend at a time and have it make you money when you aren’t using it – but you do have to get a few ducks in a row first.


  1. Determine if your cottage can be rented

Renters expect a home-like experience at a cottage these days. If it doesn’t have wi-fi (and we’re talking wi-fi that can stream Netflix), the prospect of renting it out  is usually dead in the water. Bedrooms, bathrooms and the kitchen should be in good repair; if any appliances need a bump in a special spot to work, you’ll have to replace them if you want to rent out your retreat. While you can list it as a rustic spot with limited Internet, at the very least all appliances, water systems, and sewage handling should function without a page-long list of instructions.


  1. Talk to your insurance company

If you plan on renting out your cottage, you’ll need to clear it with your insurance company or broker and likely take out additional insurance. If any extensive damages happen to your property while you have renters in there, it may not be covered by your insurance company under your current cottage insurance plan.


  1. Line up local contractors

If you are in Toronto and your renters are in Muskoka Lakes, you probably don’t have the time to drive up there and fix a toilet. Line up local contractors who can preferably be contacted on weekends who can take care of fixes for you. Better yet, see if local realtors can refer you to a good property management company in the area. Be sure to line up your contractors and other services well in advance of your renter’s arrival date; cottage country isn’t like the GTA in terms of availability and they could have shuttered their business even if it’s still in the Yellow Pages.


  1. Take care of yourself legally

Go to a real estate lawyer and have them draw up a cottage rental contract. Be sure to talk to your insurance company first as they may have stipulations that have to go into the contract. Have the renters sign it before they get the keys. Determine how much you should take for a security deposit – standard practice is $250 or 10% of the rental fee, whichever is greater. Since this amount needs to be returned, determine if you want to charge cleaning fees or make the cleaning fee part of the rental fee itself. To determine your rental fee, look at what similarly sized cottages are renting for in your area on cottage rental websites.

Even if the tenants leave it sparkling clean, you’ll probably need to get someone to check in on the property before the next tenants arrive, so a local cleaning service may be a good idea for cleaning in-between renters. They will also be able to alert you to any damages to the property. Most cottage renters expect to pay the full amount of the rental before they get the keys, and to have their security deposit refunded within two weeks of their last day. If there are damages above and beyond the security deposit, your contract can demand that they be paid, but the matter will likely end up in a small claims court if there is a dispute.

To avoid disputes, it is best practice to get timestamped photos of each room, and particularly the kitchen and bathroom, before the keys are handed over. This will help your case if a tenant tries to claim damage was there when they got there.


  1. Vet your renters right

AirBNB is easy to use – but it doesn’t let you properly vet your renters before you hand over the keys. There are a number of cottage rental websites – including – that allow you direct contact with your renters. If you have the time, it is better to meet them in person than it is to deal with them over email. But since this isn’t a long-term rental situation, you are usually safe as long as you get the rental fees and security deposit in advance.


  1. Don’t do long-term rentals if you can avoid it

Renting out your cottage for a week or weekend at a time isn’t a big deal. Renting it out for a matter of months to a year puts you squarely in landlord territory, which means that the Residential Tenancy Act applies and you are on the hook for repairs, complaints, and much more. If you want to seriously pursue renting your cottage long-term, contact a property management company local to your cottage to discuss it with them. A long-term rental will also incur additional insurance costs, so you should also contact your insurance company if you are considering this to get a quote.


If you’re looking into a rental or investment property in the Toronto area, contact Highgate Property Investments. We’re both Realtors and a property management company, so we’ll help you find the best income-generating property for your needs – both commercial and residential.

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Toronto Property Managers: The One-Property Landlord’s Friend  

Many people who own one or two GTA or Toronto rental properties try to “go it alone” when it comes to managing their properties. This can be for various reasons – they think they’re saving money, they think they can handle the duties of property management, or they think that property management companies only handle multi-tenant apartment buildings. All three of those notions are incorrect. (more…)

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Toronto Real Estate Board Data Reveals Foreign Buyers, Speculation Low

Shortly after the Ontario government introduced legislation designed to curb foreign real estate buyers and real estate speculation, the Toronto Real Estate Board undertook a data analysis exercise to understand just how many foreign buyers there are in Toronto and the GTA, and just how much real estate speculation is really going on in this area. (more…)

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The New Ontario Foreign Buyer’s Tax: What You Need to Know

The Ontario government recently introduced the Fair Housing Plan, which includes sweeping legislation for the real estate market – most of which will have an impact on landlords in Ontario. One of the measures was the Non-Resident Speculation Tax (NRST) of 15%, which is meant to curb speculation by foreign investors in southern Ontario.


The brass tax of the NRST


The NRST has been in force since April 21, 2017. It imposes a 15% tax on real estate purchases of any property that would be considered a single-family residence that is purchased by a foreign national, entity or corporation. The full text of the NRST is available here.


Refugees and immigrants are not subject to the NRST. Additionally, a rebate program is available for foreign nationals who obtain Canadian citizenship – they can receive a rebate of the tax if they become a citizen within four years. Students enrolled in a Canadian institution for at least two years are also exempt from the NRST. A foreign national student would only receive the rebate after two years of full-time attendance at a Canadian university or college.


The NRST’s geographic scope expands well beyond Toronto and the GTA. It includes the following municipalities:


  • Brant
  • Dufferin
  • Durham
  • Haldimand
  • Halton
  • Hamilton
  • Kawartha Lakes
  • Niagara
  • Northumberland
  • Peel
  • Peterborough
  • Simcoe
  • Toronto
  • Waterloo
  • Wellington
  • York


Vancouver foreign buyer’s tax sparks GTA’s NRST


After a foreign buyer’s tax of 15% was levied to cool housing prices in Vancouver, there was evidence that firms marketing Canadian real estate shifted their focus to Toronto. However, the Toronto Real Estate Board surveyed Toronto area Realtors and found that only around 5% of real estate transactions conducted in 2016 were from foreign buyers.


Around a quarter of those purchases were rental investments, with the rest being purchases of homes for the individual or a family member. The percentage of foreign buyers was much higher in Vancouver – it was just above 15% before the B.C. government introduced its foreign buyer’s tax in 2016. It subsequently dropped to about 4% as of December 2016 – only a percentage point below the TREB’s estimated percentage of foreign buyers in Toronto and the GTA.


The Ontario government first showed a distaste for introducing a similar tax in 2016, preferring to let market forces prevail. However, winds changed as the public became increasingly concerned with skyrocketing housing and rental costs in Toronto and the GTA and the Fair Housing Plan was introduced in April 2016 with the NRST as a prominent plank in the Plan.


Various Reactions to the NRST


The Toronto Real Estate Board didn’t have anything specific to say about the NRST in its statement reacting to the Fair Housing Plan, but did say that more empirical data is required before policy decisions are made. We didn’t really know the numbers of foreign nationals that were buying into the Toronto and GTA markets prior to the enactment of the Fair Housing Act; that data will be available to the government once the Plan has been in force for a few months.


Tim Hudak, CEO of the Ontario Real Estate Association, had this to say about the NRST. “The main culprit behind rapidly rising house prices is the GTA’s unbalanced market – housing supply cannot meet demand – not foreign buyers.”


TD Economist Beata Caranci argues in favour of the tax, stating that it has worked well in international jurisdictions such as Hong Kong, Singapore and Melbourne to cool housing markets but not to slow them down. However, she added in a joint statement with other TD economists that “Ultimately, it is unknown what degree of home sales are related to this speculative behavior.”


Will the NRST cool a hot housing market?


Tim Hudak’s argument for supply not meeting demand seems sound, but it remains to be seen how much of that demand was generated by foreign investors. Parsing it out further, how much of that demand is being generated by foreign investors speculating on the market? If 25% of homes purchased by foreign nationals in 2016 were rental property investments, that’s an income-generating venture which allows for more rental supply for tenants, not speculation.


Until the data comes in, we won’t have any numbers – and that is the TREB’s point. The B.C. government did it right by gathering data prior to enacting its legislation, and found that a high percentage of property purchases were coming from foreign buyers. The Ontario government has put the cart before the horse, and will no doubt reap the tax rewards of such a move, but it isn’t evidence-based policy decision making.


One thing is certain – the NRST is an effective tool to curb speculation for those who were looking to speculate in the Vancouver market and shifted gears to Toronto. However, the number of transactions which occurred because of that shift is unknown – we’ll know soon enough. In the meantime, bidding wars will continue in Toronto and the GTA, and the only change is that foreign buyers may not be parties to those wars.

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Massive First Quarter in Toronto and GTA Housing Market: TREB

The first quarter of 2017 has started off on a strong note in the Toronto and GTA real estate market. According to the Toronto Real Estate Board (TREB), both sales activity and average prices have both risen from its 2016 numbers. Despite a rise in sales, supply problems continue to plague Toronto and the GTA. Demand for housing is expected to grow for the rest of the year, especially from first-time buyers.


January 2017 – New year, same supply problems

The beginning of 2017 continued where the previous year left off – sales activity saw an 11.8% rise over the previous year, with 5,188 transactions compared to 4,640 in 2016. This rise was particularly strong for condominiums and apartments, and less so for low-rise homes.


Supply continued to be a problem within Toronto and the GTA, with new listings seeing a significant drop from 2016. January’s new listings were down 17.6% from January 2016’s numbers. Demand for housing is expected to continue to grow significantly, but it is feared that many prospective owners will struggle to find homes that meet their needs.


February 2017 – GTA households see home ownership as a long-term investment

Sales continued to rise in February, seeing a 5.7% year-over-year increase with 8,014 sales compared in 7,583 in 2016. Low supply numbers have led to a significant increase in sales price, with the average price rising by 27.7% year-over-year.


Demand for housing continued to rise throughout February, unmatched by the falling supply – 2017 experienced a drop of 12.5% for new listings. This phenomenon most likely means that current Toronto and GTA homeowners see owning real estate as a worthy long-term investment. According to a recent survey, TREB saw an even split in first-time buyers and current homeowners looking to purchase real estate in 2017 – meaning demand for Toronto and GTA real estate continues to grow for all types of housing.


March 2017 – New listings up amidst potential policy shakeups

March saw TREB urge against a new provincial tax on foreign buyers of real estate in Ontario, as the Board thinks it would not address the supply shortage currently facing Toronto and the GTA. The supply of Toronto area real estate has reached a 15-year low in 2017, and TREB has pledged to continue providing in-depth analysis on the issue.


Sales once again rose in the month of March, this time growing by 17.7% year-over-year. After a disappointing drop in new listings during the first two months of the year, March saw a much needed 15.2% rise in new listings. This doesn’t mean that the market is out of the woods yet, as the new listings growth is still lower than needed to compete with the sales growth numbers.


All in all, the first quarter of 2017 has proven that the real estate supply problem facing Toronto and the GTA is continuing to grow, which continues the trend of raising real estate prices.


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