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Toronto Real Estate Market Watch — November 2015

In an announcement made by Toronto Real Estate Board President Mark McLean last week, GTA REALTORS® reported 7,385 home sales through TREB’s MLS® System in November 2015 – a 14 per cent increase compared to November 2014 and a record number for November sales to date.

Toronto’s real estate market saw 96,401 sales for the first eleven months of this year. There is no doubt that 2015 will go down in history as a year Toronto real estate made the record books. High housing prices, the number of homes sold, and benchmark indexes as well as a low number of active listings, average days on market and the amount of square footage you get for a dollar–not to mention the value of the Canadian Dollar itself. However, as the year winds down, people are turning their focus away from the red-hot real estate market and putting themselves in gear for the holiday season.

record highs for GTA housing market

Credit: Toronto Real Estate Board

December is often an interesting month in for the Toronto real estate market–sometimes, buyers bid to get into the market right before the new year while other years they wait for the fresh listings that often arrive in January. Mr. McLean remains optimistic for December, as well as the upcoming year. With one more month to go until 2016, we’ve still managed to set a record in for home sales in the TREB market area for an entire calendar year (the previous record set in 2007 and reflected all 12 calendar months).

McLean believes the widespread demand for homeownership is a priority for families in the GTA and attributes it to real estate being the best long-term investment. Despite rumours of a housing crash, Toronto continues to prosper and doesn’t seem to show signs of stopping. The other question remains–if there is no crash, will there be a correction? Will the market get out of control?

The federal Department of Finance wants to step in and increase the minimum down payment for a home from 5 per cent to 10 per cent. With stiffer borrowing rules, the market has a better chance of cooling without a drastic crash. An increase will also alleviate the taxpayers exposure to insured default losses and possibly boost sales in the condo market. First time home buyers who are only prepared to put a 5 per cent down payment must either wait until they have twice the amount of money they initially had or settle for a condo. While all these pros sound fantastic for markets like Toronto and Vancouver, other markets in the Country, especially cities that have already experienced losses in the housing market, will suffer. When will these proposed changed come into effect? We can expect the Federal Department of Finance to present the motion for additional 5 per cent on down payments to the Minister of Finance as early as January 2016.

With what seems to be a very small window to decide whether to toss the whole idea of buying a home, borrowers looking to put a smaller down payment on a home should seek the advice of a mortgage professional and reassess their budgets realistically. Increase or not, the New Year is the perfect time for families to analyze their finances to ensure sound decisions in the future.

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TREB Market Watch, October 2015 — Are Mortgage Rates on the Rise?

Are Mortgage Rates in Canada on the Rise?

In an announcement made last week by Toronto Real Estate Board President Mark McClean, GTA home sales showed the best results on record to date. With 8,804 home sales reported through TREB’s MLS® system, October was a favourable month for Greater Toronto Area REALTORS®.

toronto-condo-market-october-2015

Additionally, The MLS® Home Price Index (HPI) Composite Benchmark was up by 10.3 per cent year over year in October. Over the same period, the average selling price for all home types combined was up by 7.3 per cent to $630,876. Price growth continued to be driven by the low-rise market segments.

treb_oct_15
Source: Toronto Real Estate Board

Although sales are robust and predicted to climb in the upcoming year, some believe that the province-wide municipal land transfer tax that the Wynne government plans to introduce could affect the market. When asked their opinions on the new tax, the vast majority of Ontario residents surveyed opposed it.

In mortgage-related news, Stats Canada released new data on the labour force, which showed improvement during the month of October. A total of 44,000 new jobs were created, the majority of which, however, were part-time. There was also a substantial increase in employment in the manufacturing sector, which shows hope for the state of our Loonie. If this trend continues, we could head toward a more sustainable economy. How does this all affect mortgage rates? It is predicted it is less likely that we will experience another cut in the Bank of Canada’s lending rate, and mortgage rates will eventually rise. Last week, five-year fixed mortgage rates increased across the board and range between 2.54% to 2.69%. There is no need to worry, as there is no sign of a significant spike, just a more optimistic outlook for our economy. Another contributing factor to a change in rates is what our neighbours to the south are planning—it’s a matter of time before their rates go up, and inevitably, we must follow suit.

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Liberal Party Policy Change–Additional Land Transfer Tax for Buyers in Ontario

The Municipal Land Transfer Tax is coming to a town near you, and most likely, your town as well.

Real Estate Professionals in Ontario up in arms about new land transfer tax

The dreaded Municipal Land Transfer Tax (MLTT) might be spreading across Ontario as an additional taxation measure backed by the Liberal Government. This tax will be on top of the existing Provincial Land Transfer Tax (PLTT) levied upon closing a land or property transaction in Ontario. As a buyer, the amount you paid for the land as well as your mortgage or remaining debt related to the purchase of the property are factors that determine the tax payable.

In 2007, Toronto City Council approved the Municipal Land Transfer Tax to the dismay of Realtors® and hopeful residents alike. Currently, Toronto is the only city in the province that levies an additional tax on top of the Provincial Land Transfer Tax. Although the MLTT has caused some homebuyers to consider, properties outside of the city, buyers in Toronto seem to be more accepting of the tax as of late. In a competitive market where the cost of an average detached home is over $1 million, what’s another $15,000 in municipal taxes?

Several Realtors® are up in arms about the possibility of the Liberals moving forward with this decision, as it may have a significant impact on the housing marketing in cities outside of Toronto. Although Toronto’s housing market is robust, during its first five years, the MLTT is said to be responsible for a severe decline in home sales. The Ontario Real Estate Association (OREA) is requesting that the Liberals reconsider giving municipalities the power to levy this tax. Homebuyers in Ontario can expect this new tax to implement as early as next year, and if the Liberals do follow through with the policy change, Ontario will become North America’s most taxed jurisdiction.

As investors, what can we do to prepare for this? Not much, however, we can expect increased competition in housing markets in the surrounding GTA, especially luxury homes in York Region. With the policy change looming near, there is even more incentive to invest in property on the outskirts of Toronto. Do the suburbs suddenly sound more appealing? We think so too.

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Setting Your Sights on the Suburbs of Toronto

The 2015 Toronto Real Estate Market – An economic landscape where supply rarely meets demand, low-rise houses are highly coveted, and detached homes can fetch well over $1 million. We already know the 416 housing market is red hot right now, but what about the Suburbs of Toronto?

Suburbs of Toronto

Suburban GTA — Living here can really pay off

This year, Toronto has seen an increase in sales of freehold (low-rise towns, semis, and detached) homes, however, the actual figure may surprise you.  From January 2015 to August 2015, there has been a marginal increase of only 2 per cent.  This is mainly due to the lack of active listings as well as affordability.  What might be more surprising is the sales activity in the 905 area – in York Region, freehold housing sales saw radical increases this year, with a 20 per cent jump in New Market alone.

As housing prices in the 416 continue to become out of reach for many, hopeful homebuyers set their sights on the suburbs for a place to call home.  With larger lots, newer homes, less hustle and bustle, and basically more bang for your buck, the suburbs of the GTA are a winning choice for buyers in search of family homes as well as investors looking to stretch dollars.

The following Top 10 List covers housing markets in the GTA which saw the most significant price growth for low-rise homes in 2015, and figures representing a year to date comparison for 2015 and 2014.

Newmarket

Average 2015 House Price 2015: $693,190 – (25% increase)
Average 2014 House Price: $551,413

Total Sales 2015: 1173
Total Sales 2014: 999

Average Days on Market 2015: 16
Average Days on Market 2014: 20

Richmond Hill

Average 2015 House Price 2015: $1,011,031 – (20% increase)
Average 2014 House Price: $833,913

Total Sales 2015: 2014
Total Sales 2014: 1838

Average Days on Market 2015: 16
Average Days on Market 2014: 17

Vaughan

Average 2015 House Price 2015: $886,727 – (16% increase)
Average 2014 House Price: $764,782

Total Sales 2015: 2283
Total Sales 2014: 1981

Average Days on Market 2015: 16
Average Days on Market 2014: 21

Whitby

Average 2015 House Price 2015: $506,715 – (16% increase)
Average 2014 House Price: $437,082

Total Sales 2015: 1424
Total Sales 2014: 1327

Average Days on Market 2015: 14
Average Days on Market 2014: 16

Markham

Average 2015 House Price 2015: $935,272 – (15% increase)
Average 2014 House Price: $814,173

Total Sales 2015: 2287
Total Sales 2014: 2073

Average Days on Market 2015: 14
Average Days on Market 2014: 16

Aurora

Average 2015 House Price 2015: $734,735 – (15% increase)
Average 2014 House Price: $637,213

Total Sales 2015: 656
Total Sales 2014: 536

Average Days on Market 2015: 15
Average Days on Market 2014: 17

Ajax

Average 2015 House Price 2015: $515,318 – (14% increase)
Average 2014 House Price: $451,483

Total Sales 2015: 1414
Total Sales 2014: 1361

Average Days on Market 2015: 12 – (Ajax saw its homes sell the fastest in the GTA
Average Days on Market 2014: 15

Mississauga

Average 2015 House Price 2015: $717,661 – (11% increase)
Average 2014 House Price: $647,571

Total Sales 2015: 4317
Total Sales 2014: 4,166

Average Days on Market 2015: 17
Average Days on Market 2014: 18

Milton

Average 2015 House Price 2015: $521,548 – (10% increase)
Average 2014 House Price: $427,923

Total Sales 2015: 1,443
Total Sales 2014: 1,399

Average Days on Market 2015: 14
Average Days on Market 2014: 17

Pickering

Average 2015 House Price 2015: $563,823 – (9% increase)
Average 2014 House Price: $515,671

Total Sales 2015: 716
Total Sales 2014: 616

Average Days on Market 2015: 14
Average Days on Market 2014: 17

 

Source: Toronto Real Estate Board

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Tenants From Hell (and How to Avoid Them)

Landlord Tip: Do NOT rent to this guy.

They make up a small percentage of renters and as much as we’d like to think they don’t exist, tenants from hell are out there and you need to know how to avoid them

 

 

You’ve heard about them and may have had one, or two yourself – late rent payments, excessive partying and noise that disrupts the entire neighbourhood, and let’s not forget the ones who through plain negligence destroy your property, resulting in hundreds to thousands of dollars’ worth of damage, not to mention the headaches and legal fees that come with evicting them. The Tenants from Hell – a landlord’s worst nightmare.

Recently, a Toronto couple’s story made headlines when they discovered that their four-bedroom Victorian home in the Dundas and Ossington area was turned into an illegal boarding house while they were working abroad. Journalists Wilf Dinnick and Sonia Verna rented their home to a man who said all the right things – he was a successful business development executive at a Toronto tech company, drove a Range Rover, had over $44,000 in his chequing account and even offered to pay $4,000 per month in rent — $400 above asking to secure the lease when other potential tenants showed interest.

The tenant, Jesse Gubb, created a number of partitions in the house and illegally sublet the rooms, housing up to 16 people at a time, charging each person up to $560 per month in rent. Upon inspection, nine violations were logged resulting in over $50,000 in fines that the landlords were responsible for. Luckily, the fines were dropped due to their cooperation in the investigation leading up to Gubb’s fraud conviction. They also later discovered he was no stranger to the law, having been convicted on previous fraud and drug possession charges.

property+damage+toronto

We’d like to believe that up to 99% of tenants are good people, however, there is that lingering one percent that you’d need to watch out for. Although the boarding house incident was an extreme case, it still serves as a resounding wake-up call to landlords and property investors. Properties don’t run on autopilot and damages don’t pay for themselves. One must be knowledgeable about the legal intricacies involved in renting out a property as well as the work involved. Hiring a reputable property manager to deal with everything from background, reference and credit checks, to repairs, routine maintenance, inspection and rent collection gives investors security and peace of mind, knowing that their property is being cared for and has not secretly turned into a circus venue.

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Tenanted Investment Property — Priced to Sell

45 Vanguard Drive, Brooklin

Price: $474,900.00

 

 

Approximately 2000 -2500 Square Feet

Whitby (Baldwin and Winchester)

3 +1 Bedroom /3 bath 2-Storey Detached Home

Rental Amount – $1850
Lease term – Sept 30/2015
Property Tax – $4259

1 Garage – 3 parking spaces
Great investment opportunity in In Beautiful Brooklin, just north of Whitby. Outstanding 3 Bedroom, 3 Bath Home With Backyard and Deck. Lots Of Green Space For The Kids To Play. Located Close To All Amenities And Easy Access To Highway 407 & New Hwy 412 Connection To Hwy 401. This Lovely Home Has An Open Concept.

• 3 + bedrooms (or den)
• Unique Gem! Inverted design – MORE TRUE LIVING SPACE
• Cathedral ceilings – amazing great room / kitchen area
• LOCATION, LOCATION, LOCATION
• Vipond Park within a 5 min walk (sidewalk path through houses to Denbury Ct)
• French & English Public school within walking distance (Meadowcrest – French & Chris Hadfield {Brand NEW} – English)
• Walking distance to; Brooklin Community Center & Library, historic downtown Brooklin shops and restaurants. – Music in Grass Park every Thursday during the summer!
• Quick access to 407 and highways ie. Toronto – new 407 interchange coming soon
• Plus everything else the house as to offer.

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HighGate Property Investments Inc: Your Source for Professional GTA Real Estate Services