Category Archives: condo living

When you break up a year after buying a condo together

Should you let your ex buy you out of a mortgage?

Q: My son and his common-law partner bought a condo together in Vancouver last year—which has since gone up in value. The relationship did not last and she would like to buy him out as both their names are on title. Are you aware of the steps involved to legally proceed with a real estate buy out and is it a wise move from an investment point of view?

— Norma R.

A: Hi Norma. I’m sorry to hear that your son is in this position. Break-ups are hard and can be exasperated when a division of assets is necessary.

I’m assuming your fear is that if your son accepts a buyout from his ex, he may then be priced out of Vancouver’s hot property market.

To minimize the impact of future property price appreciation, he should take the money and buy his own condo or home.

Your fear—that by giving up ownership of the condo he misses out on future appreciation—neglects how difficult decisions can be with someone you choose to no longer build a future with. Just imagine it’s five years from now. Your son has met someone new and he is happy. Very happy. He wants to buy a place with his new love and asks his ex if she could buy him out of this condo. His ex, on the other hand, has just gotten out of another relationship; she is unhappy, bitter and feeling defensive. How well do you think your son’s request will be taken? Probably not all that well. Of course, things could work out totally different, but that’s just it, we don’t know. For that reason, I’m of the belief that it’s always a good idea for each part of a dissolved partnership to sever emotional, physical and financial ties. As soon as possible. Remember, it’s already hard to make unemotional decisions about what to do with an asset when hurt or regret or anger or disappoint lingers, never mind when years have passed and life has unfolded in unpredictable ways.

The dilemma, then, is how to make sure that both your son and his ex are treated fairly when splitting this asset. This should be relatively easy, as long as they agree to pay for some expertise. The first is to pay for an appraiser who specializes in divorce settlements. This appraiser will be able to provide a “fair market value” report—a snapshot of what the property is currently worth if it were sold in as-is condition on this specific day. This FMV report would give a price or price range that your son’s ex could take to the bank in order to obtain mortgage financing. She would then be responsible for paying your son half of the condo’s FMV. He can accept this money free and clear, as he doesn’t have to pay taxes since the condo was his principal residence.

As to your fear of losing out from an investment perspective, remember that he will be selling his portion of the condo to his ex and, if he chooses, buying a new condo in relatively similar markets. That puts him in a net-net position—what he gained in price appreciation on the sold condo will help with current, higher condo prices.

Finally, when it comes to the legal process please advise your son to pay a mediator or lawyer. A few hundred or even a few thousand spent on professional, unbiased advice is well worth the money spent. If he wants to focus on a quick resolution, look for a lawyer or mediator that specializes in uncontested divorces. These professionals realize that not everyone wants to battle over every cent in court and will work to find a fair, quick resolution. Also, by employing a legal professional you are assured that all the paperwork and documentation required to remove your son’s name from the property title and the mortgage documents will be complete and filed, leaving him free and clear to enjoy the rest of his life.

Source: MoneySense.ca – by   

 

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Is it cheaper to buy a house than a condo in the GTA? This expert thinks so

While many first-time buyers look to condos as a relatively affordable option, one Toronto housing market expert says that it is actually less expensive to buy a low-rise home in the GTA.

According to Realosophy Brokerage co-founder John Pasalis, when you control for the size difference between low-rise and condos in the GTA, condos are more expensive per-square-foot.

In the Maple neighbourhood of Vaughan a 1,385 square-foot rowhouse costs $685,000, while a condo of a similar size in the area would likely cost $684 per-square-foot, or $947,000. It’s just one example of a price difference that can be seen across markets in the GTA.

Pasalis believes that this discrepancy in prices can be chalked up, in part, to investor demand.

“The majority of new condominium construction is driven by investor demand — not demand from families,” he writes in a recent blog post. “Investors are willing to pay much more (on a per-square-foot basis) than end users are.”

Pasalis says that investors prefer smaller units, which typically have a better return on investment, which means that developers are creating units that are too small for families, at prices they cannot afford.

“When developers are pricing a unit, they’re thinking to themselves, why would I charge this much when I can get this much?” Pasalis tells BuzzBuzzNews. “And those prices don’t make sense for a two- to three-bedroom unit, which is likely why we’re not seeing as many of those units being built [in the GTA.]”

In order for a condo to be good-value-for-money for a young GTA family, Pasalis says that low-rise prices would have to increase at a much faster rate than they currently are.

“The rate of appreciation for low-rise homes in the 905 region isn’t going to be very high in 2018,” says Pasalis. “So I don’t see this trend changing in the next year or so.”

While Pasalis admits that for families with a budget of $400,000 or less, a condo may be the only option for homeownership, he says that those with one of $700,000 or more should consider their options.

“They can choose to buy a two-bedroom 1,000 square-foot condo in Maple for that price, or a three bedroom 1,385 square-foot row house with a finished basement and backyard. For most, it’s a pretty simple choice,” he says.

Source: BuzzBuzzHome.com –  

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Is Steeltown a steal for investors?

Source: Canadian Real Estate Wealth – Neil Sharma13 Nov 2017
With the cost of condos in Toronto surging, it’s only a matter of time before investors find the next hot market. And as it turns out, they might not have to go far.

Hamilton is enjoying a renaissance that’s, in part, being catalyzed by the astronomical cost of living in Canada’s largest city. While Hamilton’s amenities are no match for Toronto’s, they’re showing enough promise to lure millennial-aged Torontonians westward.

Brad Lamb, owner of Brad J. Lamb Realty Inc. and Lamb Development Corp., says investing in Toronto’s vertical homes is producing diminishing returns.

“It’s getting harder and harder in places like Toronto and Vancouver to buy a home, like a condo, and rent it and have it make any sense as an investment because you’re paying $1,000 per square foot,” he said. “You’re paying $500,000 for a one-bedroom condo apartment that’s 500 square feet and you’re going to rent it for $2,000 a month, but when you add up your mortgage, your condo fees and taxes, it doesn’t cover it. It certainly doesn’t cover in Vancouver, where that property is $650,000.”

Lamb says Hamilton has benefited from the black hole Toronto’s become. Steeltown has quietly cultivated a strong cultural scene in the city’s downtown, mostly in the James St. radius.

“Toronto’s real estate unaffordability shines a nice light on Hamilton, so investors are looking at alternate places to invest and prospective homeowners are looking for other places to live, where they can have a decent life in a nice home,” said Lamb. “Hamilton is a real city with a real urban vibe. It has a great parks system and an amazing amount of amenities. It’s a real city with a great food scene, and a great art scene, and a great music scene, so to me it makes sense that Hamilton is the next city. It’s a much more vibrant city now than ever. Every year it’s going to get larger, better, richer, and more expensive.”

The Hammer is a medium-sized city with over half a million residents, so it has retained its quaint, small-town charm, but Lamb believes it’s on the cusp of a population boom. Its downtown is lively on Friday and Saturday nights, and Lamb says business always follows in the tracks of younger people.

“Every month I see new things popping up that are very cool,” he said. “What gets me excited about a city is great retail. When you see young people out, it makes you want to visit and it makes businesses want to open there, because businesses want to be where young people are.”

Many millennials are flocking to Hamilton’s tech sector, where they’re paid good wages and promised bright futures, however, the linchpin is the city’s quality of life.

“Hamilton is going to experience a population growth much higher than what they’re projecting,” said Lamb. “More and more young people are frustrated with the cost of living in Toronto, and the inability of Toronto to create housing at a pace that is needed. I believe Hamilton will grow by 10,000 people a year.”

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GTA’s hottest market outside of downtown Toronto

Source: Canadian Real Estate Wealth –  Neil Sharma

Mississauga has become the GTA’s largest condo hub after Toronto, and its torrid pace of residential, infrastructure and amenity development are conspiring to make it ripe for investment.

In tandem with the Places to Grow Act, Mayor Bonnie Crombie has recalibrated the city’s growth plan to quickly turn it into an urban hub. Mississauga’s city centre already has a dazzling skyline, and it’s expecting 23 new mixed-use condominium towers.

Major builders like Daniels, Amacon, Camrost and Solmar all have major projects going up there that promise to bring life to what’s been a sleepy downtown. However, without a crucial piece of infrastructure, some of these developments might never have been conceived.

“The timing is largely a result of the LRT breaking ground next year,” Crombie told CREW. “It is 20-kilometres long with 22 stops, beginning in Port Credit, and then looping around downtown where there will be four stops. It will pull into the transit terminal – the second-biggest in the GTA – then go into Brampton.”

The city centre in Canada’s six-largest city has long been built around Square One Shopping Centre, which just received a major facelift and extension, but there are newer arrivals. Sheridan College has two campuses in or near the city centre, with a third in planning stages, and University of Toronto Mississauga isn’t very far away, either. Apartment buildings in the area are being outnumbered by condos, and students will naturally rent them.
Over the next two decades, Peel Region is expecting 300,000 new residents and 150,000 jobs, of which 60% are projected to be in Mississauga.

Zia Abbas, owner and president of Realty Point, a brokerage that’s grown to 26 franchises in only two years, says the cost per square foot in Mississauga’s condos make investing there a no-brainer.

“The average of any new launch in downtown Toronto is around $1,000 (per square foot),” he said, “with the cheapest I’ve seen in Liberty Village starting around $850 to $900 per square foot before parking. In Mississauga it’s between $640 and $670, parking included.”

Abbas says the LRT will add substantial value to the city centre’s condo cluster, and added that Mississauga has other hot spots too, like Erin Mills and the Hurontario and Eglinton neighbourhood.

“Compared to downtown Toronto where eight out of 10 people rely on transit infrastructure, in Mississauga it’s five out of 10, I’d say.”

But as Crombie’s vision for an urban Mississauga materializes, that number could start rivalling Toronto’s.

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Map Charts Toronto Condo Prices By Subway Stop

condo prices ttc stop toronto

When it comes to Toronto condo prices, location really is everything. Sure, buying any unit in the city is going to be expensive, but when you see how prices vary based on the TTC subway map, it’s obvious that Line 1 reigns supreme.

Toronto realtor Davelle Morrison recently put together this map of condo prices by TTC stop, which reveals the area around Summerhill Station as the most expensive place in the city. It’s followed closely by Museum, Bay, Bloor-Yonge, and Rosedale as other high cost areas.

condo prices ttc stop toronto

On the flip side, the most reasonable condo prices in Toronto can be found in less dense areas of the city like Scarborough and the eastern portion of North York, which includes stations like Wilson, Sheppard West, and Lawrence West.

Also interesting are the TTC stops that yield no data. The map charts condo prices within 0.3 kilometres of each station, which means that there are plenty of blank entries because there just aren’t condos within the radius under examination.

When you think about it, that’s kind of troubling in terms of Line 2. There are too many stations that lack the kind of density that urban planners laud as key to successful city building.

Source: BlogTo.com  Derek Flack

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What share of GTA condos are flipped? New report offers insight

gta-condos

Soaring price appreciation in the Greater Toronto Area’s high-rise segment is encouraging condo investors to flip their units more rapidly.

So suggests the latest quarterly report from Urbanation, a Toronto-based real estate consulting firm.

This burgeoning trend is reflected in the 9,932 condo units that changed hands in the first quarter, a 73 per cent increase over activity in the first three months last year as well as a quarterly high.

Looking only at units in condo developments that were completed by builders and registered in the last two years, a total of 1,059 transactions were recorded in the first quarter.

In the first quarter of 2016, condo owners sold a total of 625 units in buildings completed throughout the preceding two-year window.

“The shortening of holding periods for some condo buyers is an outcome of the rapidly accelerating market,” says Shaun Hildebrand, senior VP of Urbanation, in a statement.

The average sale price of a resale condo unit in Q1 this year was $510,000, representing a 24 per cent increase over that period last year, according to Urbanation.

“Following the recent strength in condo price appreciation, Urbanation noted an increase in resale activity within newly completed buildings as well as more units transacting twice within shorter timeframes,” the consultancy’s report reads.

In fact, according to past Toronto Real Estate Board numbers, resale condo prices were increasing annually by a far more restrained 9.3 per cent as recently as September 2016.

With year-over-year appreciation well above 20 per cent now, a relatively recent development, it’s easy to see why some recent homebuyers would be compelled to sell sooner.

However, Urbanation’s Hildebrand notes flipping is not widespread — for now.

“Although the share of short-term condo market participants still appears relatively low, it will be important to monitor the situation closely going forward as market conditions evolve,” he adds.

Source: BuzzBuzzHome.com – 

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Is your condo board above board? Tips for evaluating condo governance

Condominums have proliferated in the downtown cores of Canada's biggest cities.

Condo corporations are effectively a 4th level of government, says one expert

Condominium governance is in the spotlight after an investigation by CBC Toronto reporters unveiled questionable practices at a series of downtown Toronto buildings.

Owners and property managers in those buildings say a group of people have aggressively sought control of the boards and budgets of multiple condos. The allegations include voting irregularities and contentious contracts.

If you’re wondering whether your condo board is operating in a trustworthy manner — or if you simply want to get a better grip on how your condo works — here are a few tips from experts in the field of condo governance.

Learn who runs the place

Not just anyone should sit on the board of directors of a condo corporation, experts say.

“You want people who are financially literate, who have some business experience, preferably,” said Audrey Loeb, a lawyer with Miller Thomson who specializes in condo law.

“You don’t want the board of directors managing the building, you want the board of directors overseeing the manager.”

That property manager should be independent of the board, with a good reputation, Loeb added.

Condo board directors should own a unit in the building, and ideally live in that unit, said Loeb. If not, that’s a potential red flag for owners.

Conflicts of interest on condo boards are another red flag, according to Brian Antman, who audits condo boards as a partner with accounting firm Adams and Miles and serves as a director of the Canadian Condominium Institute’s Toronto chapter.

Board directors shouldn’t have any financial interest in transactions with the property manager or their vendors, Antman said. Directors, he added, should also sign and follow a code of ethics.

Put on your reading glasses

Condo owners ought to take the time to read their building’s declaration, said Antman. (A declaration is essentially a condo’s charter or constitution.) They should also read any bylaws and rules instituted by the board, according to Antman.

Potential owners of new condo buildings need to read the disclosure statement provided by the developer, and should have it reviewed by a lawyer with experience in condo law, Antman said. (For resale condos, a “status certificate” replaces a disclosure statement.)

“It’s probably the most significant purchase they’ll ever make, and they shouldn’t be surprised by anything going into it,” he said. “I see a lot of people who don’t do their due diligence up front, and are surprised.”

Toronto condos

Potential condo owners should be sure to read disclosure documents or status certificates provided by the seller, one expert says. (Cole Burston/Canadian Press)

Communicate with the board, and participate

“The best way to tell how well-run your condo is… is to ask for documents, and see if you get them,” said Loeb, the condo lawyer.

Minutes of board meetings are a common record that a board should share.

“If you get them in a timely fashion, ask for the monthly financial statements,” said Loeb. “Any owner is entitled to see that stuff.”

Most condo board meetings are closed, but Loeb said owners should absolutely take the time to attend annual meetings.

If owners can’t attend an annual meeting but still want to vote on condo issues by proxy, Loeb recommends electronic proxy voting, by which proxy documents are emailed directly to owners.

Vancouver condos

Condominium buildings are administered by a condo corporation, which is controlled by a board of directors. (Darryl Dyck/Canadian Press)

If a condo owner is concerned about their condo corporation’s board, they can try to shake things up.

​”If they’re unhappy with the board, or a board member even, they can requisition a meeting to replace the board or the board member,” said Antman.

The owner can even try and join the board themselves, if they feel up to the task.

“This is their biggest investment, and if they want it to be run properly maybe they need to get involved,” Antman said.

Be warned, though: sitting on a condo board can be “a hugely time-consuming job, if it’s done well,” said Loeb.

“People have no clue what hard work it is, especially in the first two years of a condo’s life when you’re just trying to figure out what’s going on,” she said.

Make sure professionals are involved

Good condo administration often requires professional expertise, said Antman, an auditor.

“The [condo] corporation should hire a solicitor, an auditor, an engineer who’s doing the reserve fund study,” he said. “And all of these people that you’re hiring should be people that are experienced in the industry.”

A solicitor is especially important when things go wrong, said condo lawyer Audrey Loeb, who described how condominiums have become “very complex entities” over the years.

“My philosophy has always been that the condo is the fourth level of government,” said Loeb. “After the feds, the province and the city, you’ve got your condo [corporation].”

Source: By Solomon Israel, CBC News Posted: May 23, 2017 5:00 AM ET

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