Many economists predicted a local real estate crash this
year, with prices falling by up to 25 per cent. I didn’t see that prediction
coming true and it didn’t. Nor will do I believe it will happen in 2013.
1. Homes are more affordable
In 1990, the average GTA home cost half of what it does
today. But interest rates were 12 per cent for a five-year term at the time. So
if a two- bedroom condo cost $250,000 in 1990 and you had a 20-per-cent down
payment, your monthly carrying costs, including interest, taxes and common
expenses, were about $2,500. The average rental for a two-bedroom condo at the
time was $1,100, according to the Housing New Canadians research group. So the
economics of ownership made no sense.
Today, even with a price of $500,000, if you have a
20-per-cent down payment, with current interest rates at 3 per cent, the total
monthly payment is what it was in 1990. It is still $2,500 per month, including
common expenses and taxes. But in downtown Toronto, the average rent paid for a
two-bedroom unit is now close to $2,500 per month.
Most tenants who can afford $2,500 a month or more in rent
can probably afford to buy a home now, if they have 10 per cent down payment or
2. The lesson from 2012
Toronto Real Estate Board statistics up until Nov. 30 show
82,200 units had sold in the GTA so far this year. In 2011, it was 84,900, and
in 2010 it was 81,900. The average price on Nov. 30 was 2 per cent higher than
a year ago. If anything, the market has remained very stable for the past three
3. Impact of mortgage rule changes is minor
The mortgage rule changes imposed in early July lowered
the amortization period to 25 years if you were putting less than 20 per cent
down and lowered the percentage of your income that could be used for borrowing
from 44 per cent to 39 per cent. The result was that buyers who would have
purchased in late summer or fall moved up their purchasing decision to the
spring. By fall, this meant many would-be first-time buyers were looking to
rent instead of buy. This contributed to low vacancy rates.
4. 2013 will be fine
Despite the doom and gloom, Toronto condo rental vacancy rates are 1.7
per cent. This means that for those people who cannot sell their condos, there
are plenty of renters who can cover the monthly costs.
5. Debt-to-income ratio not relevant
As our American friends like to say, “that dog won’t
hunt.” Every month we are told that because the ratio of household debt to
household income continues to rise — and is now at 164 per cent — there is a
danger of a real estate collapse.
What this really means is that the average Canadian
household has an income of $100,000 and total debt of $164,000 (of which their
real estate debt constitutes-two thirds). Again, as stated earlier, with
interest rates at 3 per cent, this is not a dangerous problem.
If interest rates were 12 per cent, as they were in 1990,
or if all your debt was on your credit cards (with interest rates averaging 18
per cent), then this would be a serious problem.
Note to readers: pay down or eliminate your credit card
debt in 2013.
Note to government: with mortgage interest rates at 3 per
cent, it is almost criminal for lenders to be able to charge 18 per cent on
consumer credit cards.
6. Interest rates may not rise until 2015
The U.S. Federal Reserve is now saying it won’t raise rates
until 2015. Our rates can’t differ much from theirs without harming our economy
with a strong dollar and slower growth.
These are all things to keep in mind in the coming year. Somebody has
been predicting a Canadian real estate market collapse for the past 12 years.
It hasn’t happened yet and won’t happen in 2013.
By Mark Weisleder | Fri Dec 21 2012 at www.moneyville.com
Bradford, Bradford West Gwillimbury
Announcing a price reduction
on Tigertail Cres in Bradford Ontario, a 3,270 sq. ft., 3 bath, 4 bdrm 2 story. Now
- Backs onto ravine.
Grand Opening: November 16th, 2012
The design of the Microsoft stores in the U.S.
incorporates many of the elements that made Apple stores a hit – gleaming wood
floors, lots of glass and products to sample. Microsoft has added big comfy
chairs and benches to the décor in the U.S. locations.
At Apple stores, customers stand at counters featuring
tethered Apple products.
Jason Dubroy, vice president, shopper marketing, DDB
Canada, said the Microsoft move isn’t surprising, given that malls still draw
crowds, including Baby Boomers, who still control about 60 per cent of all
dollars spent in Canada.
While many are savvy online shoppers, others prefer the
look, feel and service of a physical shopping environment.
But Dubroy said Microsoft is late to the game, both in
the tablets and bricks-and-mortar stores.
“They will need to be able to differentiate their
experience proposition quickly… or they won’t see the sales-per-square-foot
traction they will need to justify expansion.”
“I think a retail presence is a logical next move,” said
John Gerzema, executive chairman of BAV consulting. “Microsoft has gained a lot
of consumer momentum over the past year with popular products like Kinect (for
Xbox 360) and now, tablets.
“Among Canadians in our Brand Asset Valuator (BAV)
surveys, Apple is seen as trendier and more progressive. But Microsoft
outperforms Apple on being more trusted and caring for customers. The challenge
of course, will be to define a retail experience that stands apart from Apple.”
The Apple store design was revolutionary when it was
launched in 2001 as a spare and serene environment for customers to test-drive
Apple products. It was conceived by Ron Johnson, the man behind the bubbly
Target brand, which is set to enter Canada in 2013.
excited to this new store opening. Competition is good!
November 5th, 2012
The U.S. slid from the
top 10 most prosperous nations for the first time in a league table which
sixth in the world for the second year in a row.
fell to 12th position from 10th in the Legatum Institute’s annual prosperity
index amid increased doubts about the health of its economy and ability of
politicians. Norway, Denmark and Sweden
were declared the most prosperous in the index, published in London Monday.
With the presidential election just a week away, the research group said
the standing of the U.S.
economy has deteriorated to beneath that of 19 rivals. The report also showed
that respect for the government has fallen, fewer Americans perceive working
hard gets you ahead, while companies face higher startup costs and the export
of high-technology products is dropping.
Check out these questions and answers before making decision to walk away from the deal you made last night.
- Can a buyer sign an offer
and then walk away?
real estate contract gives a buyer 24 hours to pay the deposit, once the offer
is accepted by the seller. The buyer cannot just change their mind or they can
For example, the buyer offers $300,000 for a house which
is accepted. The buyer changes his mind and doesn’t pay the deposit and walks
away from the deal. The seller resells the property for $275,000. They can
still sue the first buyer for the difference, or $25,000.
- Is there a buyer’s remorse
period in Ontario?
If you are buying a new condominium from a builder, you
have 10 days to change your mind. You do not need a reason. This does not apply
if you buy a new house from a builder and does not apply if you are buying a
resale home or condominium. Why condos only? The clause is included in the
- Can buyers use conditional
clauses as escape hatches?
Most real estate contracts are conditional on the buyer being
able to get a mortgage and being satisfied with a home inspection. Other
conditions include being satisfied with a condominium status certificate when
buying a resale condo.
Many buyers think these conditions give them the right to
just change their minds. It is not that easy. The case law has demonstrated
that buyers must try and satisfy any condition in good faith. This means that
you need a legitimate reason why you found the home inspection report or
condominium status certificate unsatisfactory.
- Who gets the deposit when
buyers change their mind?
In most cases, the deposit is held by the seller’s real
estate brokerage, in trust. Under the law, when a deal breaks down, the
brokerage cannot pay the deposit to anyone without either a mutual release or
direction signed by both the buyer and the seller, or an order of the court. As
such, when deals do not close, if there is no agreement, the deposit can be
locked up for a long time, and the buyer will not have access to it to make an
offer on another property.
- Is there a “legal” way for a
buyer to get out of a deal?
It depends. If for example, there was a right on your
title for the City to access 20 per cent of your property for any reason, known
as an easement, and that was not disclosed to the buyer, they can usually
cancel the agreement without penalty. However, there have been other cases that
indicate if there is a problem with a city work order or title problem for
which the seller can obtain title insurance to protect the buyer, then the
buyer cannot refuse to close. A buyer can also cancel if there has been
substantial damage to the property before closing, such as a flood that was not
repaired. You can’t refuse to close if the oven is not working.
The better answer in all of these situations is to be very
careful and serious before you make any decision to buy a home. Changing your
mind later can be very expensive. Get legal advise before you make such steps.
TORONTO, September 18, 2012 – Greater Toronto Area (GTA) REALTORS® reported 2,544 transactions through the TorontoMLS system in the first 14 days of September. This result was down by 15 per cent compared to the 2,995 sales reported during the same period in 2011.
"The combination of stricter lending guidelines, rising home prices and the added upfront cost associated with the land transfer tax in the City of Toronto resulted in a slower pace of sales during the summer of 2012 compared to a year ago," said Toronto Real Estate Board (TREB) President Ann Hannah.
The average selling price for sales during the first two weeks of September was $496,786 – representing an annual rate of increase of more the 9.5 per cent. Average selling prices were up for both low-rise and high-rise home types, including condominium apartments sold in the ‘416’ area code.
"Price growth continued to be strongest for low-rise home types during the first two weeks of September. This segment of the market has been very tight, with months of inventory remaining low from a historic perspective," said Jason Mercer, TREB’s Senior Manager of Market Analysis
The Bank of Nova Scotia has released a new forecast which tells Canadians to expect low interest rates until 2014.
In the forecast, Scotiabank economists Dov Zigler and Derek Holt estimate the economy will likely average 1.9 per cent growth this year, and 1.8 in 2013.
“At best, we’re going to see a very slow-growth environment with downside risks,” said Holt.
He went on to note that most developed countries will be in a similar position. He expects that strong growth will come from emerging economies like India, Indonesia, and China.
The report noted these factors should keep the Bank of Canada on hold at the current policy interest rate setting into 2014.
This goes against indications from Mark Carney who has signalled there may be a rate hike in the future. An article from The Canadian Press explains Holt’s argument, saying “that given that many global central bankers are easing lending conditions, any counter action from Canada will light a spark under the dollar, further weakening exports.”
Mortgages with variable
rates or fixed terms under five years typically require that you qualify at a
higher rate (called the “qualifying rate.”).
For example, if you apply
for a 2.25%, 5-year variable mortgage, the lender might make you qualify at
their posted 5-year rate (5.39% for example).
Qualifying rates are used
to ensure borrowers can handle their payments if rates go up.
In practice, lenders use
the qualifying rate to calculate your debt service ratios. Lenders then check
to ensure your debt ratios are low enough to meet their guidelines.
Here are a few things to
keep in mind:
- Your payments are typically based on the
contract rate (i.e., the regular rate you are quoted), not the qualifying
- As of April 19, 2010, all insured variable and
1- to 4-year fixed mortgages over 80% loan-to-value must be qualified
using the posted 5-year fixed rate, as published every Wednesday by the
Bank of Canada.
- Some lenders also apply the Bank of Canada
qualifying rate to uninsured mortgages, and mortgages with a loan-to-value
of 80% or less.
- Other lenders allow lower qualifying rates if
the loan-to-value is 80% or less (e.g. they use a 3-year discounted fixed
rate instead of the posted 5-year fixed rate).
Have you thought of being pre-approved before start looking for a home? It will give you many advantages. Some of them are : Knowing maximum mortgage you can afford, winning in bidding wars by having pre-approval in 'your pocket', avoiding frustration of selecting the house you cannot afford, etc.
Looking for your first home? your next home? your investment property? Call Natalie now! Full support and professional service guaranteed.
Once again, Mark Carney
and committee have left Canada’s
core interest rate
Our economy still isn’t
firing on all cylinders, says the Bank of Canada. This suggests that mortgage
holders can likely expect the 3.00% prime rate to remain
as is for a number of months.
Here were some focal
points from today’s Bank of Canada statement:
- “Global financial conditions have…deteriorated
- “Housing activity is expected to slow from
- “Canadian exports are projected to remain below
their pre-recession peak until the beginning of 2014”
- “The economy is expected to reach full capacity
in the second half of 2013”
- “To the extent that the economic expansion
continues and the current excess supply in the economy is gradually
absorbed, some modest withdrawal of the present considerable monetary
policy stimulus may become appropriate”
That last quote is what
the markets keyed in on. The Bank of Canada chose to retain this phrasing as a
reminder that borrowing costs could jump if inflation threats emerge. That
said, we’d likely have to see surprisingly strong economic performance for 3-4
months in a row before that happened.
Time to buy? Call Natalie Korchuk now!
traditionally been the cautious, fiscally conservative society, watching
American economic dynamism from a safe remove (and subsisting on a small cut of
the branch-plant spoils). For us, paying off the mortgage was once the
equivalent of forgiveness for our acquisitive sins. Our public policies were
more prudent than the U.S.
policy of allowing home owners to deduct the interest on mortgage debt.
Canadian leaders rejected mortgage interest deductibility and fortunately
Canadians only briefly embraced the subprime mortgages that are still a huge
factor in Americans’ fiscal woes.
For the moment, it seems
that the risk-averse Canadian tortoise has the lead in the race against the
risk-taking American hare, who has singed his feet on his rocket pack. How
Canadians will respond to this at the household level remains to be seen. Are
we naively careering toward American-style (pre-crash) financial behaviour with
loaded credit cards, second and third mortgages, and a lax approach to savings
in a headlong pursuit of materialism, hedonistic pleasures, and instant
gratification? Or does it say something about our abiding national character
that we have so many sober souls in positions of power who will mete out
regular scoldings like the clergy in pulpits of old and do things like change
our mortgage rules to protect us from ourselves?
By Michael Adams , a president
of the Environics Institute and the author of
Fire and Ice: The United States, Canada, and the Myth of Converging
Currently, the average
Canadian household is more than $40,000 richer than the average American
household. (According to the latest Environics Analytics WealthScapes data, the
average household net worth in Canada
was $363,202 in 2011; in the U.S.
it was $319,970.) And these are not 60-cent dollars, but Canadian dollars more
or less at par with the U.S. greenback. Furthermore, these figures ignore
public-sector (government) debt that presumably people on both sides of the
border or their children will some day have to pay. Such debt is higher in the U.S. as a percentage of GDP than it is in Canada.
experienced a sudden surge of productivity or entrepreneurial genius? Not
exactly. Our resource sector is certainly firing on all cylinders, but the
biggest reasons for Canadians’ deep pockets relative to Americans’ in recent
years are the related phenomena of the 2008 economic crisis and the collapse of
housing market. Because house prices in the U.S. have plunged, the real estate
held by Canadians is now much more valuable than that held by Americans (worth
over $140,000 more on average). In fact, Canadians hold more than twice as much
real estate as Americans and, once mortgages are factored in, have almost four
times as much remaining equity in their real estate. Americans’ liquid
(non-real estate) assets are still greater than Canadians’.
to be continued..
Greater Toronto REALTORS®
reported 5,142 transactions through the TorontoMLS System during the first 14
days of May 2012.
This result was up by more than
14.5 per cent in comparison to the first 14 days of May 2011. The number of new
listings continued to grow at a slower pace than sales – up 13 per cent
year-over-year to 8,749.
“Annual growth in sales was
experienced across the GTA for all major home types in the first half of May.
Sales growth was strongest for the condominium apartment segment. While the
condo market has generally been the best supplied market over the past year, we
have continued to see enough demand to exert moderate upward pressure on
average selling prices in this market segment,” said Toronto Real Estate Board
President Richard Silver.
The average selling price for
transactions in the first 14 days of May was $517,242 – up by six per cent
compared to the same period in 2011.
of listings in the low-rise segment of the market has resulted in a lot of
competition between buyers and above average annual rates of price growth.
Tight market conditions are expected to remain in place for the balance of
2012,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
April 18, 2012 – Greater Toronto REALTORS® reported 4,557 transactions through
the TorontoMLS system during the first two weeks of April 2012.
This represented an increase of almost seven per cent in
comparison to the same period in April 2011. The number of new listings grew
over the same period, but by a lesser annual rate than sales, which means
market conditions tightened compared to last year.
“Competition between buyers remained strong in many parts of
the Greater Toronto Area during the first half of April, with many listings
attracting a lot of attention. Strong competition meant that, on average,
sellers priced within market value range received offers that matched their
asking prices within three weeks,” said Toronto Real Estate Board President
The average selling price during the first two weeks of
April was $506,954 – up by five per cent compared to the first half of April
2011. The annual rate of price growth was stronger in the GTA regions
surrounding the City of Toronto.
“Growth in listings has not kept up with growth in sales. In
the City of Toronto,
new listings for low-rise home types during the first half of April were
actually down compared to last year. This helps explain why some of the
tightest market conditions in the GTA can be found within the ‘416’ area code,”
said Jason Mercer, TREB’s Senior Manager of Market Analysis
cleaning bug is upon us, but it doesn't have to stop at old clothes and
couches…. You might want to spring clean" your computer.
I don't mean
wiping down your keyboard, mouse and screen - which isn't a bad idea - but
rather squeezing some additional life out of your existing computer.
your PC or Mac can speed up performance, free up hard drive space and ensure
you're protected against the latest cyber attacks.
1. Back up important files
thing is to back-up all your important files and store them in a safe place. A
spare USB thumbdrive in your desk drawer should do the trick for documents, but
you might consider a free "cloud-based" online back-up solution, such
as Windows Live SkyDrive (25GB of free storage, per account), which you can
access from virtually any computer in the world.
Clean up the desktop, hard drive
programs you no longer need. This should be pretty simple.
Don't just delete the desktop icon, but for Windows users, click Start
(bottom-left corner), Control Panel and finally Add/Remove Programs (or simply
Programs) and uninstall old or unused software one-by-one. You should clear up
a lot of hard drive space, and also clean up the icons on your desktop, so you
can see your wallpaper again.
You can also
right mouse-click on your C: drive (in Windows Explorer) and click Properties,
followed by Disk Cleanup. Now check off the desired boxes -- such as
"Temporary Internet Files," "Recycle Bin" and
"Downloaded Program Files" - and it will tell you how much space it
can free up.
the built-in system tools
is another way to help your computer operate faster with more stability. Click
on the Start button, find All Programs, select Accessories, then System Tools
and finally Disk Defragmenter. Run the program on your hard drive to give your
PC maximum efficiency.
It might take a while but you should notice a marked performance improvement
when it's done. Because it's not recommended to use your computer while you're
defragging, perhaps you'll want to start the process before you go out for
lunch or before you go to bed (but turn off your monitor to conserve
your operating system and other software
second-last step to spring-cleaning your PC is to download the latest free
software updates for your operating system (Start>All Programs>Windows
Update) as these updates plug security holes and add functionality.
I have Windows 7 scheduled to download and install new updates whenever they
become available so I don’t have to manually do it. On a related note, be sure
to download all the updates to your favourite programs – such as a web browser,
media player and computer games – as they usually fix issues (like technical
bugs) or add new features.
A quick way to see if there's an update is to go to the About, Help or Settings
section of your software and you should see an option to check for updates.
There are often new updates for hardware accessories, too, such as a printer,
monitor and webcam, so you can also look for that online beginning with the
official website for the product.
anti-malware software for real-time protection
always recommended to have good antivirus and antispyware programs. The former
refers to software that can detect and remove online threats (such as viruses
or worms that can propagate through your address book), while the latter are
tools that can protect your PC from sneaky programs that hide on your hard
drive, monitor your web surfing behaviour, hijack your browser home page and
slow down your computer's performance.
Collectively, these threats are called "malware" (malicious
software). And if you've read the news lately, Macs aren't bulletproof, either.
Many free antivirus and antispyware tools are available from Download.com –
check out the Top 5 downloads on the main page – and once you start using one
be sure to regularly check for updates (if it doesn't do it automatically) to
ensure you're protected from the latest online threats.
Many complains come after the buyer moves in and reveals problems in the house.
Most complain about sellers who fail to disclose defects or home inspectors who fail to find them. The system is far from perfect. However, there are steps that buyers can take before and during a home inspection to protect their interests.
Simple steps you can do yourself:
Check all electrical outlets to make sure that they work.
Open windows, even in the winter, to make sure they are not stuck or painted shut.
Look under any area rug or bed and behind any picture to check for cracked tiles, stained carpets or walls. Lift anything on the kitchen counters to look for defects.
Do any of the appliances show any rust? How old are they? If they are discontinued models, you will likely have to replace them if they break down because of the difficulty of finding replacement parts.
Start the dishwasher at the beginning of any home inspection. By the end, it should have gone through its entire cycle, without leaking.
Put a thermometer inside the oven and turn it on to 350 degrees. After 10 minutes, check the temperature. Test stove burners.
Put a cup of water in the microwave for 45 seconds. Does it heat up?
Flush every toilet and see whether it stops running after it is filled.
Check sinks, tubs and showers in the house. Is there proper water flow from each faucet and does everything drain properly?
You may want to consider turning all the faucets on at the same time and then flushing a toilet upstairs to see whether the water pressure slows or stops in any sink. This could indicate a problem with the system.
In older homes, consider a separate sewage inspection. Stan Collini, the President of Roto-Rooter Plumbing and Drain Service in the GTA, tells me that for $295, you can do a video camera of a property’s sewer system to see if there are any problems that would not be visible on a typical home inspection.
Check under the water heater for leaks or stains on the floor.
Ask how old the air conditioning unit is and when was it last serviced Is there sufficient hot or cold air reaching all of the rooms in the house?
Does the owner have a plan with their gas company to inspect the furnace once a year? When was the last inspection conducted?
If the house has an addition, ask whether any upgrade was done to the heating or cooling systems to account for the additional living area.
Look for water stains in the ceiling which could indicate leaking from the roof or other problems with the plumbing system.
When your inspector is on the roof, ask them to check for broken or cracked shingles. If it is a flat roof, look for the low spots where water can collect for any evidence of a problem. Check the eaves to see if there is any rot or decay. If any concerns are noted, consider bringing in a roofing contractor for an additional opinion, especially if the home is 15-20 years old and it is still the original roof.
You may also want to consider a separate inspection for mould or termites, as these may not be visible on a home inspection but can result in significant costs to repair later. Check if this is a known problem in the area.
Always ask the seller and the seller’s agent if they know about any hidden defects that are not visible. They must answer truthfully if you ask them.
Consider looking into after-sale warranty protection. Many of these products on the market will generally cover problems with a home electrical, plumbing, heating and cooling system, as well as the major appliances. But like any warranty, ask about deductibles and what is excluded from coverage.
By being properly prepared and asking the right questions both before and during any home inspection, you will be better protected against costly surprises after closing.