Tag Archives: Greater Toronto Area

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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The 5 priciest homes in one of the country’s hottest markets

Take a look at some of the country’s most luxurious homes currently for sale.

These are the most expensive homes currently for sale in and around the country’s hottest housing market.

As someone who covers housing for a living, there’s nothing quite like perusing some good old fashioned real estate porn. I’m sure you faithful readers can agree.

While modern builds with their sky-high windows or hard lofts with their sprawling floorplans are always fun to explore, there’s nothing quite like gandering at some of the country’s priciest homes.

And there seems to be a few more than usual currently on the market.

Pont2Homes, an online agency, rounded up the 10 most expensive homes currently for sale in and around Toronto. Check them out below.

1. A Yorkville Penthouse

Yorkville is one of the most sought-after neighbourhoods in Toronto (there are even rumours that Mike Babcock, current coach of the Toronto Maple Leafs, chose to coach in Toronto over Buffalo due to his wife’s desire to live in the posh ‘hood).

It’s home to some extravagant shopping spots and swanky restaurants; and also to the province’s current most expensive home.

Listed at a cool $36,000,00, this beauty is located at the top of the Four Seasons Hotel.

2. A Bridle Path mansion

“Millionaire’s row” is home to this 10 bedroom behemoth befit for Batman himself.

For a cool $35,000,000, this home includes a 5,000 square foot pavilion, a tennis court, a 50 foot indoor pool, and a hand-carved Louis XV fireplace.

3. A multi-million dollar country home

If city living isn’t your thing, this $24,950,000 equestrian estate in King City may be just what you’re looking for.

The rugged and rich outdoorsman (or outdoorswoman) will surely be drawn to the 80 acre property that is home to a pond and waterfall, skating hut, walnut grove, and groomed hiking trails.

4. A lakefront compound

If one home isn’t enough, this estate in Oro-Medonte is situated on a 17 acre lot with a 525 foot private beach on Lake Simcoe.

The lot is also home to two 12,500 square foot homes.

5. 10 bedrooms in Bridle Path

This estate has its own ballroom, a spa, a salon, and in in-home theatre.

All for the reasonable price of $19,380,000.

Source: Canadian Real Estate Magazine – by Justin da Rosa29 May 2017

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As uncertainty sets in, Toronto homeowners are cashing out

A pedestrian walks between homes for sale in the Leslieville neighborhood of Toronto, Ontario, Canada, on Saturday, March 4, 2017. In Toronto prospective buyers have found themselves in bidding wars, due in part to the largest price surge in almost 30 years and coupled with an ever tightening inventory supply. (Mark Sommerfeld/Bloomberg/Getty Images): A pedestrian walks between homes for sale in the Leslieville neighborhood of Toronto, Ontario, Canada, on Saturday, March 4, 2017. (Mark Sommerfeld/Bloomberg/Getty Images)

TORONTO – Sarah Blakely recalls feeling some trepidation when she and her husband shelled out more than $300,000 for a modest 1 1/2-storey house in a less-desirable part of Toronto.

Seven years later, they found themselves on the right side of a hot housing market, with values tripling in a ‘hood suddenly considered up-and-coming for young families seeking detached homes.

They recently sold that renovated three-bedroom for more than $1 million and now expect to live mortgage-free in a four-bedroom purchase in their hometown of Ottawa.

The 34-year-old says it made sense to cash out of a city that was draining their finances, energy and family time.

“My husband and I saw an opportunity to take advantage of the recent gains in real estate and to move to a less expensive city to live mortgage-free, support our savings for retirement and also to be closer to family,” says Blakely, whose new home has nearly twice the square footage.

And they may have taken action at just the right time.

Blakely’s real estate agent Josie Stern says the market appears to be cooling, and doubts Blakely could fetch that same jackpot sale today.

“A little bit of air has been let out of the bubble,” she says.

Many buyers and sellers are waiting to see what will come of Tuesday’s scheduled meeting between Finance Minister Bill Morneau, Ontario Finance Minister Charles Sousa and Toronto Mayor John Tory, who are expected to discuss ways to rein in Toronto’s hot housing market.

Meanwhile, the Ontario government is promising to announce affordability measures soon.

Stern says some buyers are delaying their purchase in anticipation of possible fixes.

“Buyers have been in such a stressful situation for so long that now they think somebody is going to save them and they’re waiting,” says Stern. “They’ve dug their heels in, they’re tired of competition and then there’s those that are still proceeding, but there’s been quite a big pullback from buyers.”

Sellers who’ve bought new homes are rushing to list their old property, she adds, but many are not getting the high bids seen a month ago.

The Toronto market has been astonishing, with the average sale in the Greater Toronto Area skyrocketing last month to $916,567. That’s up 33.2 per cent from a year ago.

With strong demand and limited supply, it wasn’t uncommon for bidding wars to result in sales hundreds of thousands of dollars above asking. And a lot of those sellers took those dollars out of the Greater Toronto Area where they can get more acreage, less congestion and still pocket a fair bit of cash.

“We’re finding that a lot of people are leaving the city,” says Stern, who estimates that about a third of her 35 sales this year involved sellers either downsizing to condos or moving to more affordable markets.

“It’s empty-nesters, it’s (couples with) babies, it’s all kinds of people that are doing this.”

Toronto skyline (Shutterstock)© Used with permission of / © Rogers Media Inc. 2017. Toronto skyline (Shutterstock)

Even with a new uncertainty in the air, it’s still a seller’s market, she adds.

One of her biggest sales was a $2-million listing that went $575,000 over asking in February. The sellers moved to the commuter city of Burlington, Ont.

They’re joining buyers priced out of the Toronto market who have gone looking for cheaper housing in smaller communities across the Golden Horseshoe, spurring other sales spikes in the region – Hamilton-Burlington homes jumped 22.6 per cent during the first two months of 2017 compared to a year earlier.

Still other buyers are looking farther afield.

Remember that relatively inexpensive Nova Scotia mansion that dominated Facebook last month?

Real estate agent Wanda Graves of Eastern Valley Real Estate says it’s sparked more inquiries from Ontario, Manitoba, Alberta and B.C. house hunters suddenly hip to Eastern Canada’s charms.

Nova Scotia sellers are taking notice, and are marketing to out-of-province buyers now considered increasingly likely to make an offer.

“They know that there are buyers out there and now it’s, ‘How do we reach them?”’ says Graves.

Before selling for $455,000, the mansion in Newport Landing, N.S., drew more than one million views on her company’s website and 36,000 shares on Facebook.

It’s a story Vancouver real estate agent Melissa Wu knows well.

Years of record-setting sales saw Vancouver homeowners cash out for smaller markets with more space.

But that changed after the B.C. government introduced a 15 per cent foreign buyers’ tax last summer, which Wu says especially soured interest in west Vancouver luxury homes priced at more than $4 million.

Detached homes in the $1-million to $2-million range in east Vancouver are doing well and still notching close to record highs, says Wu.

Her recent sales included a $2-million get for a century-old home owned by a retired couple. Their plan is to downsize to an older condo costing less than $500,000. The rest of the proceeds will go to their kids and retirement fund.

She says the sale was a record high for the neighbourhood, but it took an agonizing three weeks to secure – longer than it would have last year, she says.

She advises Toronto homeowners thinking of selling to take advantage while they can.

“There’s always a shift coming in,” she says of this hot market. “Sell before it corrects.”

Stern would like to see a crackdown on real estate speculators in Toronto, citing one buyer who bought 15 properties in the last two years.

And she cautions those tempted to cash out that there’s always a risk the market won’t co-operate.

“People have been asking themselves that question since the year 2000: Should I sell? Should I cash out?

“And there have been people who have cashed out and have regretted it because they’ve seen what the market has (done) – they’ve never been able to rebuy the houses that they’ve sold.”

 

Source: MSN Money

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Buying an unbuilt condo? Think twice, agent says

Being exceedingly careful in one’s condo purchase is never a bad thing, especially in light of the $3-million class action by over a hundred condo owners in Ottawa.

Toronto-based real estate agent David Fleming, who says that he has never been involved in a pre-construction condo transaction in his 13 years as a professional, advocates one simple bit of advice: “Never buy new.”

“I liken it to buying a pair of jeans. If you walked in [to a store] and you couldn’t try them on and didn’t know how long they would be, and what the waist was … that’s a hundred-dollar pair of jeans. So why would someone buy a million-dollar condo the same way?”

The most important aspect that buyers should remember is the fact that they can back out with no penalty, as Ontario provides a 10-day “cooling off” period that can serve as an out for hesitant consumers. The countdown for the 10-day duration starts once the would-be buyer receives a copy of either the disclosure statement or the fully signed purchase and sale agreement, whichever comes later.

Another wise step would be to always hire a lawyer, who should be tasked to review all of the documentation involved in the transaction. If the lawyer suggests amendments to areas of concern, these proposals should be forwarded to the developer.

“If the developer says no, then don’t go ahead with the transaction.”

Fleming also noted that it would be helpful to remember that the people in the showroom are still salespeople who work for the developer, no matter how warm and accommodating they might seem. Working with one’s own real estate agent should help a consumer avoid an ill-advised purchase.

Source; Canadian Real Estate Wealth – by Ephraim Vecina 03 Apr 2017

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A potential way to end Toronto bidding wars

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New home buyer Marko Sijakovic and his fiancée had to contend with months of looking and 10 bidding wars before they were finally able to purchase their first home.

Adding to the stress of a record-breaking market was the fact that Sijakovic didn’t how many other buyers he was up against, or how much they were bidding.

“You don’t know who you’re going against you don’t know how many there are. It’s a really grey area of what’s really happening,” he said. “Sometimes I felt like I was negotiating with myself instead of a counter party.”

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That is the case in much of Canada, where information on other bidders or a home’s history is not revealed by realtors. Today, Ontario’s Finance Minister Charles Sousa admitted to CityNews that there is a transparency problem.

“Buyers are frustrated every time they get into these bidding wars. We recognize more and more are happening not just in Toronto but it’s expanding beyond Toronto and the GTA,” he said.

He revealed it’s an issue he’s going to bring to the table when he meets with Mayor John Tory and federal Finance Minister Bill Morneau.

However, there is a way for buyers to get a little more transparency about who else is interested in their potential dream home. In July 2015, the Real Estate Council of Ontario introduced Form 801 – giving buyers the power to request documents with the names of other potential buyers and their agents. However, exactly how much people are bidding is still top secret for potential buyers.

In other jurisdictions, more transparency is the norm. In Australia, home bidding auctions take place on the property’s front door. All interested parties come face to face and go head to head.

Buyers there can also obtain home inspection results, sale-price histories and information on recent sales of comparable and neighbouring homes — without going to an agent to get the information.

In Nova Scotia, people in the market for a new home have access to a house’s history and information about properties in the neighbourhood. And over the border in Buffalo, every time a house changes hands, the old and new owners and the selling price are listed in the local paper.

Sijakovic says that he would have welcomed information like that when he was looking for a home

“In any real market the transparency needs to be there. It doesn’t matter what you’re going to buy,” he says.

Getting the Ontario market to make the change to public bids may make sense for buyers, but real estate experts say not everyone would embrace the change.

“It’s a different way of thinking, and getting the market to adopt that is going to be an uphill battle,” says MoneySense senior editor Mark Brown. He adds that more transparency wouldn’t be much help in cases where there’s only one offer on a house, or when a home is in a highly coveted neighborhood.

Realtor David Batori says when you’re on the other side of the bid, it’s better not to reveal information. Greater transparency for bidders may mean sellers don’t get the generous offers they’re hoping for.

When it comes to concerns about phantom offers, Batori believes it’s a thing of the past. But even realtors can never be sure.

“Sometimes you have a feeling,” says. “But I can never say for sure because you just don’t know.”

Source: 680 News – by NEWS STAFF Posted Apr 6, 2017

 

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Condos are king in the GTA

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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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What’s in store for Canadian real estate in 2017?

We have the answers to all your investment questions in our Property Forecast Guide — the industry’s very own crystal ball, which will appear in the January issue of CREW.

Think of the guide, which spans dozens of pages, as your handbook for investing in real estate in 2017. Want to know what’s in store for the economy? How about hot, up-and-coming areas? This guide will help you get rich – or even richer – by giving you the best research, right in your lap. 

We spoke to veteran investors, respected economists and profiled every market and every trend that investors need to know about.

Below is just a sample of what you can expect.

Dan Campbell on GTA and the surrounding area

Tech Triangle (KWC) 
Strong and growing economy, stable and growing post-secondary institutions, airport, expanding highways, increase Go Train service and now a rapid transit system all point to a strong year for the KWC real estate market. Rental demand will continue to grow, especially around the new LRT and Go Train stations as well as the renewed downtown cores. This region is growing into Millennial Central and that bodes well for market demand for decades to come.

Hamilton 
It is still a market where investors and homeowners need to have very localized knowledge in order to ensure they aren`t buying in neighbourhoods that will underperform the market. 2017 should begin a slowing of demand from investors and landlords, but increased Go Train service, a renewal of Hamilton`s reputation and the promise of LRT will keep interest high.

Barrie and Orillia 
Although two very separate cities, they are economically co-joined. In one year Barrie will lead in growth and housing demand, and in the following Orillia will. Orillia looks to grab the lead in 2017 with the Hydro One purchase of the local utility and the development of a high-tech research center bringing in above average salaried employees. The demand in Barrie’s mid-range market should continue to be strong as new mortgage rules push people out of Vaughn and Toronto.

GTA 
Anything ground-oriented (single family homes, semis, townhomes) are poised to outperform the rest of the market, especially given the Provincial Places to Grow act limiting the amount of new-land sprawl, thus driving up the price of developable land within these constrained boundaries. Condo demand will continue with a movement to larger and therefore further from the core units beginning to feel the upward demand pressures as young families begin to grow and require more room. Units located within 800 Meters of TTC subway stations or 500 meters of street car stops will feel the highest demand increases in both rental and purchase in 2017.

Canadian Real Estate Wealth is the country’s premier guide for real estate investors. It includes the most timely and in-depth market analysis, delivered right to your doorstep six times a year.

Source: by REP 11 Nov 2016

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