Tag Archives: downtown Toronto

Real estate market uncertainty is forcing appraisers to take a second look

The potential for rapidly dropping prices in southern Ontario is forcing appraisers to have a second look at properties they have already assessed to see how much the market has shifted.

Claudio Polito, a Toronto appraiser and principal owner of Cross-town Appraisal Ltd., says lenders basing mortgage decisions on value, as opposed to income and credit history, are really trying to stay on top of a market that appears to be changing rapidly.

By his estimates, prices in the Greater Toronto Area have dropped anywhere from five per cent to 15 per cent over the last 30 days. The next set of statistics from the Toronto Real Estate Board are due out Monday and will mark the first full month of data since provincial changes to cool the market that included a tax on foreign buyers.

“Lenders I deal with they want to know if your property is still worth $1 million if they are loaning you say $650,000,” said Polito. “They don’t base it on anything else. We have to be precise because it’s not a bank, (smaller lenders) can’t afford to lose a dollar.”


It wouldn’t be the first time, appraisals have lagged purchases prices — a phenomenon that previously caught some Vancouver buyers by surprise when it was time to close.

A lower appraisal could increasingly be an issue for people with previous deals, not yet closed, in Toronto, especially when buyers are coming up with only the minimum 20 per cent down payment for a non-government backed loan.

If you buy a home for $1 million with $200,000 down, you need an $800,000 loan to close. But if your appraisal comes in at $900,000, your financial institution will only agree to a maximum $720,000 loan based on 80 per cent debt to 20 per cent equity. Those buyers are left searching for a second mortgage — at a higher rate — to get the extra $80,000 if they can find someone to loan them the money.

“We are seeing some people walk away from deals,” said Polito, because they can’t close — a move that comes with myriad problems if the sellers seek legal damages. “What we are seeing is properties sold in January and February, values are still there but if it sold in March, it is very hard to support the value.” Toronto prices rose 33 per cent in March from a year earlier.


Keith Lancastle, chief executive of the Appraisal Institute of Canada, said the warning for buyers is probably not to get into bidding wars if they don’t have a cushion to come up with a higher down payment. “I would expect it’s quite routine where the appraisals are being done and it’s coming in at lower than people hoped to see.”

He says the volume of sale in Toronto makes it easier to find comparable sales but the pace at which the market is changing makes it “tough to keep up” and that forces appraisers to look at some data and consider whether it’s an anomaly or part of trend.

A more difficult market to assess is one like Calgary, which has seen transactions drying up, making comparisons hard to find.

“The more valid data you have access to, the simpler the task of preparing the appraisal becomes,” said Lancastle. “When the Calgary market was slow, the lender would say we want sales that are within the last 90 days for comparable. If nothing has sold for comparable for 90 days, you ask the lender if they want to extend the time or the geographic window.”

Nicole Wells, vice-president of home equity financing at Royal Bank of Canada, said her institution is relatively conservative when it comes to appraisals to begin with — limiting the impact of a shifting market.

“Given how quickly prices rise, you really have to make sure you are adequately appraising the property,” said Wells. “We always promote affordability, making sure you know what you want and what you can pay. It’s really dangerous to get into a bidding war (with the minimum down payment).”

Source: Financial Post – Garry Marr | June 1, 2017 

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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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SOLD: Uptown Home Sold For $1 Million Over Asking!!!

With so many house selling way over asking in Toronto these days, the tendency is to declare the expression meaningless. The value of a home, so the argument goes, is better judged by what nearby properties have sold for.

375 Glencairn Avenue TorontoThat’s mostly sound reasoning, but once in a while we get a bit of inside baseball from realtors about Toronto home sales, and this sheds some more insight on the wild prices that are being fetched of late.

375 Glencairn Avenue TorontoThis elegant and well equipped home at 375 Glencairn Avenue, for instance, just sold for $1,165,000 over asking after being on the market for seven days. During that period realtor André Kutyan of Harvey Kalles tells us that 165 people came through the home.

375 Glencairn Avenue TorontoOf the army of potential buyers who toured the property, nine made offers, which drove the price way up from its listing at $3,595,000. Worthy of note is that the listing price mostly reflects the sale prices of other nearby homes sold over the last 30 days.

375 Glencairn Avenue TorontoThe sample size might be too small for this to prove a trustworthy metric (only five other homes sold within 1,500 metres during this period), but one thing’s for sure: there was a ton of interest in this property.

375 Glencairn Avenue TorontoThe Essentials
  • Address: 375 Glencairn Ave.
  • Type: Detached house
  • Bedrooms: 4 + 1
  • Bathrooms: 7
  • Lot size: 50 x 219.66 feet
  • Realtor: André Kutyan
  • Hit the market at: $3,595,000
  • Time on market: 7 days
  • Sold for: $4,760,000
375 Glencairn Avenue TorontoWhy it sold for what it did

This house has a lot going for it. It’s been recently renovated, the enormous basement features a wine cellar, games room, mini movie theatre, and sauna, multiple bedrooms feature en suite washrooms, and the finishes around the house are top of the line.

375 Glencairn Avenue TorontoWas it worth it?

There are plenty of very nice homes in Lytton Park, but this one stands out when compared to recent listings. That alone was likely enough to start the bidding war that drove the price up into the ultra luxury range.

375 Glencairn Avenue Toronto375 Glencairn Avenue Toronto375 Glencairn Avenue Toronto375 Glencairn Avenue Toronto375 Glencairn Avenue Toronto375 Glencairn Avenue Toronto375 Glencairn Avenue Toronto375 Glencairn Avenue Toronto375 Glencairn Avenue Toronto375 Glencairn Avenue Toronto375 Glencairn Avenue Toronto375 Glencairn Avenue Toronto375 Glencairn Avenue Toronto375 Glencairn Avenue Toronto

Lead photo by Realtor

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How Does Toronto Compare



Source: Genworth Canada

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Condos are king in the GTA


Condo sales were up 79% year-over-year in February and far outstripped home sales for low-rise units.

“In the GTA in February, there were more than twice as many new condo apartments sold (as) low-rise units,” the Building Industry and Land Development Association (BILD) said in its latest report. “Altus Group recorded 3,542 sales of condo apartments in stacked townhouses and mid and high-rise buildings, and 1,541 sales of new detached and semi houses and low-rise townhomes.”

Condo sales more than doubled the ten year average.

Toronto led the way in terms of sales (1,661 units), followed by York (1,299), Peel (370), Halton (107), and Durham (105).

A lack of low-rise supply and, indeed, skyrocketing prices, are the market forces driving many buyers to the condo sector.

“Today in the GTA we have a scarcity of single-family ground-related housing that is not just unprecedented – it is almost inconceivable,” BILD President and CEO Bryan Tuckey said. “As a result we are seeing record breaking condo sales and continued price growth.”

That’s also leading to inventory issues in the condo market.

Units hit a new low in February, dropping to 10,342.

Still, that’s much better than the current availability of single-family homes.

Across the GTA, a mere 1,001 new low-rise homes were available in February. And there were only 324 new detached homes available.

10 years ago there were 17,304 low-rise homes and 12,064 detached homes available.

Source: Canadian Real Estate Wealth – by Justin da Rosa27 Mar 2017

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The one market to target in Toronto?

It may be the one market many investors are now overlooking, but one industry veteran argues Toronto is still a great buy for potential landlords.

“Everyone is concerned about all the condos being built in Toronto but every year there are 81,000 new permanent residents coming to the city,” Andrew Adams, vice president of finance and investments for Capital Developments, told Canadian Real Estate Wealth. “Compare that to the 95,000 total new residents in Toronto; prices and rents are growing.”

Prices in Toronto jumped 14.9% year-over-year in February to $685,728. Condos, however, remain a more affordable option at an average of $403,392.

One neighbourhood Adams is bullish on is the Yonge and Eglinton area in mid-town Toronto.
“The Yonge and Eglinton area is one of the strongest markets for investors in Toronto,” Andrew Adams, vice president of finance and investments for Capital Developments, told Canadian Real Estate Wealth. “It’s got the Yonge line and the Eglinton LRT and it’s one of the strongest rental markets in the city.”

According to Adams, there are two types of condo buildings available in the neighbourhood; older, circa 1970 apartment-style condos and new-build condos that boast modern amenities and finishes.
The older condos often yield rents in the $2.60-$3.00 per square-foot range, while the newer units earn investors, on average $3.00-$3.50 per square-foot, Adams says.

“The Yonge and Eglinton neighbourhood has everything you need; the RioCan Centre has recently been updated, it has great access to public transit, and its surrounded by great amenities,” he said.

Source: Canadian Real Estate Wealth by Justin da Rosa 23 Mar 2016

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In Toronto’s hot real estate market, everyone wants to be an agent

Broker Jeffrey Joseph (Mark Blinch For the Globe and Mail)

Not long ago, real estate broker Jeffrey Joseph was having lunch with a friend at an elegant downtown hotel. The server must have overhead parts of the conversation, Mr. Joseph says, because as he was wrapping up the bill, she sought his advice on becoming a real estate agent.

Soon after that encounter, Mr. Joseph handed his business card to a tow truck driver who was towing one of the family cars to a garage for repair. The driver was also planning a move into real estate.

“Real estate is on the lips of everyone more than any other subject at every social gathering,” Mr. Joseph says, so he’s never surprised when people raise the subject. And while he’s happy to provide some guidance after working in the industry since 1968, he is sometimes amazed at how many people are segueing into the business.

With the Toronto Real Estate Board predicting that the Greater Toronto Area will tally a record 100,000 transactions this year, and with the average deal approaching $600,000, the busiest agents are undoubtedly able to afford to keep the shine on their luxury SUVs.

That’s one reason the number of agents has also soared to a record in Toronto – with more than 42,000 licensed at last count, according to TREB.

In the 416, where the average detached house changes hands at above $1-million, a 5-per-cent commission sits at $50,000.

As house prices soar, so too does the number of buyers and sellers complaining about the cut that goes to agents. There are endless tales of houses that sell with hordes of competing offers in a week or less. Some agents have taken to Twitter to defend the commissions they make and to itemize the brokerage fees and other expenses that take a big chunk out of commissions.

John Pasalis, president of Realosophy Realty Inc., says there is sometimes a perception among consumers that agents are making easy money.

“I think that’s everyone’s fantasy – I’m going to go into real estate and double-end a sale of a million dollar house,” he says of deals where the agent represents the buyer and the seller. Typically, commissions are split between the two sides.

But those transactions are very rare, he says. Instead, agents with long-established businesses are vying for each listing. People see the business booming, he adds, but in fact it’s more difficult these days to make a living because the competition is so much more intense and consumers have so many options. They’re also very knowledgeable. “It’s brutally hard. You’re competing with four to five people. It’s a harder life than I think most people think.”

While most agents starting out rely on their family and friends for those first listings, that strategy doesn’t take them very far. “Most of my friends probably know two or three other agents.”

Mr. Pasalis points out that roughly 57 per cent of TREB realtors sell three or fewer houses a year. A sale price of $550,000 produces an average commission for the buying and selling agents of $13,750 each.

Agents recording six sales a year might make $82,500 before expenses, which can lower their gross income to between $60,000 and $75,000.

Mr. Pasalis says about one-third of registered agents don’t sell anything, while those who become wealthy are usually in the top 1 or 2 per cent.

Those with marquee names likely spend $10,000 a month on billboards, along with photographers, stagers, brochures and even vases of fresh-cut flowers. “Their overhead is big.”

Mr. Pasalis’s firm typically offers a commission of 4 per cent instead of 5 per cent, so clients don’t haggle, he says; agents who charge 5 per cent will sometimes shave a small amount off of their rates to win business, he adds. The agents charging full freight are often paying for staging as part of their fee, he points out, so their expenses are higher.

Mr. Pasalis will pay for a consultation with a stager but not all of the expenses of sprucing a place up.

He adds that agents who stay in the business for the long haul have to expand their networks through referrals and lengthy presentations to potential new clients. “People underestimate the sales side of it.”

Mr. Joseph says he was selling cars on the showroom floor for his father at the age of 17. He learned the importance of making connections with people and staying in touch. “Some people don’t like to make phone calls to people they don’t know. They have to get over that.”

But Mr. Joseph says putting clients into houses and condos is a very different process from selling cars and other merchandise. “Because every house is one of a kind, it has to sell itself. We sell the value.”

If the house doesn’t feel right to a buyer, he says, you have to find one that does. The expertise comes from understanding the client and what trade-offs they might be willing to accept for the price. “They have to want to buy it. We can’t sell it to them.”

Mr. Joseph, who specializes in neighbourhoods from Bloor Street to Highway 401, says trying to estimate how much any agent makes from the business is difficult because there are so many variables. Typically, the higher the price range they work in, the fewer transactions they will do.

Some agents post eye-popping sales tallies on their websites but often those agents have a team of up to 10 or 15 people pooling their listings. Those new to the business will join a team for the brand recognition of a star agent and the veteran’s sales numbers will be boosted.

David Fleming, an agent with Bosley Real Estate Ltd., says some people are attracted to the business because they have a genuine passion, but others have poured in as real estate has been glorified by television. Barriers to entry are low, he adds.

He says statistics from a data analysis company show that, of 42,825 agents, 41 per cent – or 17,536 – record zero or one transaction in a year.

“At the end of the day, just because you have a business card with your name on it, doesn’t mean you’re in the business. You actually have to sell something.”

Mr. Fleming says he routinely works 75 hours a week but he does encounter part-time agents who seem to think that they can work six or eight hours a week. In his Toronto Realty blog, he cites one example where he submitted a low-ball offer on behalf of a buyer as a way to launch negotiations. The seller’s agent never answered his phone before 5 p.m. so Mr. Fleming suspected he also had a day job. Still, he was shocked when the agent agreed to the deal without pushing to see if more money was on the table. “They’re very easy for me as an experienced agent to take advantage of.”

While some properties sell quickly with multiple offers, many do not. This week, he was on day seven of a negotiation in which he represents the seller. His strategy is to stay cool and wait out the buyer’s agent.

“I know that the only way to get the best price for my seller is with the long game. Every time they call me instead of my calling them, I know I’ve got a little more leverage. If it takes two weeks, I’m on board for that.”

Source: CAROLYN IRELAND The Globe and Mail Published Thursday, Nov. 05, 2015 8:00AM

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