Toronto's Changing Real Estate Market

06 July 2017

Everyone knows that our real estate market has changed, except for Buyers and Sellers. Sellers think the prices of March and April are still happening today, wrong. Buyers think that prices are still going to drop by another $100,000, wrong again! So, what happens when Buyers and Sellers can't agree on a price? No sales. In fact, in June Sales have dropped by over 50%. In most markets, prices drop until demand and supply, (Buyers and Sellers) come into line. That is what economists forecast in every market, but not real estate. Sellers are speaking by not lowering their price, but canceling their listing and saying that they will come back next year. Buyers can wait and hope for further price drops, or they have an opportunity without multiple offers, to negotiate hard for their preferred property, today. So, even today some properties will sit on the market for months ... Read More

The Fair or 'Vote Getting" House Plan

24 April 2017

The dust is now settling from Premier Wynne's photo op on the 16 point Fair Housing Plan from last Thursday, April 20th. We call it a 'vote getting plan' for the next election. In reality, there are only two points that impact the real estate market today. The First is the 15% non-resident buyer tax and the second is rent controls. We don't believe the non-residential buyer's tax is a big factor in our market. We have far fewer non-resident buyers than Vancouver. When you look at Vancouver, sales and prices did drop initially, but today, prices are back to last year and sales are picking up. In Toronto, we expected a similar, but smaller 'pause' in the market. We expected some price softening, then prices to regain their upward momentum. This is because Toronto has lots of buyers and very little product.

Who Regulates Realtors®?

16 November 2016

Recently, the media has pointed the finger at unscrupulous Realtors® in terms of self-dealing and unethical behavior. They want change and they point the finger at self-regulation. RECO, The Real Estate Council of Ontario was established to enforce the real estate and business brokers act and to deal with consumer complaints. It was set up by the Ontario government supposedly to provide self-regulation. In reality the government just out-sourced the cost of regulation onto the shoulders of salespeople and brokerages. Today, 6 out of 9 directors are appointed by the Government. Realtors® elect only 3. All RECO employees are government employees. Realtors® have no say on hires and Realtors have to say on introducing new regulations. So, if the public wants change, don't blame realtors, blame the Ontario Government for inaction. Read More

Implications of Canada's New Mortgage Rules

17 October 2016

On October 3rd, a firestorm hit the real estate market when the minister of finance announced two changes to mortgage rules. Last week we discussed what those mortgage rule changes where. This week we want to take a look at what the implications will be of the new mortgage rules, especially those of people having to qualify for the posted rate as opposed to the actual rate for their mortgage. Will Prices Fall? First off, with buyers having less money to purchase, will prices fall? The answer is no. In real estate, if the Sellers don't get their price, that is what the last property sold for, they just take the property off the market. They do not reduce their price. What About First Time Buyers? First time Buyers will have two choices going forward, buy smaller, not low rise but condos, or continue to rent. For those trying ... Read More

New Mortgage Rules

07 October 2016

On October 3rd, a firestorm hit the real estate market when the minister of finance announced two changes to mortgage rules. Closing the Loophole The first rule was to remove the principal residence exemption for non residents. But think about it, how can a non-resident have a principal residence in Canada, Impossible! But now we're closing that tax loophole and that will have little impact on the real estate market. 'Stress Test' on Insured Mortgages The Second change is more serious. Now, both high ratio and conventional mortgages insured under CMHC and two other companies must be qualified under the posted rate, and not the actual rate. Remember, for people who took out 5 year mortgages, they used to be able to qualify at the actual rate. The bad news is that the posted rate is about 2% higher than the five year rate.

State of the Union When it Comes to New Mortgage Changes

05 October 2016

The Federal Government continues to tinker with mortgage rules that it can control in an attempt to slow down real estate markets, particularly in Vancouver and Toronto. The first change, to remove the Principal Residence Exemption, for non-residents described as closing a tax loop hole is a nothing. Revenue Canada has never defined a Principal Residence and so non-residents claimed it. Think, how can a non-residenct have a principal residence in Canada? Impossible! But that is what you get from bureaucracy. Almost all non-residents buying property in Canada never considered this a factor in buying. Neither should you when advising clients. The second change, making BOTH high ratio and conventional (under 80% loan to value) borrowers qualify under the Posted Rate instead of the fixed five year rate of their mortgage will reduce the amount of money that people can borrow.

Big Problems with the Foreign Buyers Tax

15 August 2016

A few weeks ago, we talked about the 15% sales tax on non-residents buying property in B.C. We said it would not have much of an impact on the property market but it was a great P.R. move. However, just the opposite is happening. Bad P.R. And real estate deals falling through. The B.C. Government announced this policy change on July 25th, effective August 2nd. This was probably not the smartest move. They made the changes effective closings when it should have been effective on the offer date. What is happening now is that you have residents, those are B.C. Voters who sold their house in July, closing in August to a non-resident and the deal will fall through because the deposit is less than the 15% tax. In this situation, it is just cheaper to walk away from the deal.