Coping With the Ever-Shrinking Condo

Great artice in www.TheStar.com

New condominium prices in the GTA have declined by 6.4 per cent from last year, according to RealNet’s Highrise Index Price.

What’s the primary reason for this price decline? Is it the tightening in mortgage rules? An oversupply of new housing? Perhaps, you might think, it’s because development costs have decreased.

Well, no, no and no.

The actual reason for the decline in the price of a new condominium can be captured in a word that will be familiar to Seinfeld fans: shrinkage.

New condominium prices are lower because the units being offered for sale are smaller.

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Please contact me direct at 416-520-6746 or by email, David@TorontoRealEstate.ca

July 2012 GTA Market Report

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GTA Prices Up in July

 

Greater Toronto Realtors reported 7,570 sales through the MLS in July 2012. The number of transactions represented a 1.5% decrease compared to July 2011.  The decline was most pronounced in the condominium apartment segment in the City of Toronto where sales declined by 13.0%. Sales in the rest of the GTA were up from the same period last year.  

New listings, at 13,888, were up by a 11.9% compared to July 2011. 

“Very strong annual sales growth in the first half of 2012 and an earlier peak in sales this spring compared to 2011 help explain more moderate sales this summer,” said Toronto Real Estate Board President Ann Hannah. “ New mortgage lending guidelines and the additional upfront cost of the City of Toronto land transfer tax also prompted some households to put their buying decisions on hold

The average selling price continued to grow in July up by 4.0% from the same time last year to $476,947. Price growth continued to be driven by the low-rise market segment. 

“The GTA housing market became better supplied in recent months. Buyers benefited from more choice in the market place, resulting in less upward pressure on the average home price in July,” said the Toronto Real Estate Board’s Senior Manager of Marker Analysis Jason Mercer. ”

“ The mix of homes sold in July 2012 versus July 2011 also appears to have changed, further influencing the average selling price”

“TREB’s baseline forecast for 2012 is for an average price of $485,000, representing a more moderate 4.0% annual rate of price growth. This baseline view is subject to a heightened degree of risk given the uncertain global economic outlook,” continued Mercer.

 

 

 

 

 

 

Sales of Toronto (416 area code) condominium apartments decreased by 13.0% from July 2011. The average price of a Toronto condo decreased by 1.0% from the same time last year

Condominium apartments accounted for 23.2% of total sales in the GTA for July 2012 while detached homes accounted for 47.3% of the total sales.

Other notable statistics include the average days on the market for July at 26 days. Active listings were 20,318 in July -up 16.0% from July 2011. The sales-to-listings ratio for July was 37.3%  which is classified as a Seller’s market. A ratio from 24%-28% is considered a balanced market.  

Sellers are looking for market value for their property. I prepare a comparative market analysis (CMA) for all of my Buyer clients prior to submitting an offer to determine the property’s market value range 

Real estate is very neighbourhood specific and even very street specific in some areas. The numbers as reported above are GTA averages. Results in one neighbourhood or on one street do not indicate that all other neighbourhoods or streets are experiencing the same results. We are still seeing multiple offers in some areas for the best homes

 

 

 

 Please contact me direct at 416-520-6746 or David@TorontoRealEstate.ca

Toronto Condo Resale Market Hot as New Market Cools

Urbanation Inc., the leading source of information and analysis on the Toronto condominium market since 1981, today released its Q2-2012 market overview.

In the Toronto Census Metropolitan Area (CMA) there were 5,050 condominium apartment resale transactions in Q2-2012, an increase of 30% over the first quarter, and 9% over Q2-2011. The average unit sold for $407 psf, an increase of 4% annually from $391 psf from the second quarter of last year.

“Following three quarters of flat pricing and declining sales-to-listings ratios, we expected that the additional supply registering had finally depressed the market,” says Ben Myers, Urbanation Executive Vice President and Editor. “We were very surprised by the resale results in the second quarter. A healthy appetite for condominiums from end-users still exists”

Click here for the press release.

Please contact me direct at 416-520-6746 or by email, David@TorontoRealEstate.ca

Nest Egg: Sorry, No House for You

Great artice in http://life.nationalpost.com/

Finance Minister Jim Flaherty recently introduced changes to the mortgage rules, ostensibly as a means of reining in runaway consumer debt. But just how effective do financial advisors feel the changes will be at achieving this goal? And how will the new rules affect those who often need large-size mortgages the most: first-time buyers, especially those with young families?

Most of the changes focus on government-insured mortgages, those backed by the Canada Mortgage and Housing Corp. — a legal requirement when the purchaser has a down payment of less than 20% of the purchase price. The new rules reduce the maximum amortization period on these mortgages to 25 years from 30 years. Also, homes worth more than $1-million are no longer eligible for CMHC-backed mortgages. And for those who are refinancing, the maximum you can borrow against your home’s equity is 80% of the market value, down from 85%.

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Please contact me direct at 416-520-6746 or by email, David@TorontoRealEstate.ca

How New HELOC 65% LTV Affects You

Great artice in BorrowBetter :

The thinking behind reducing the maximum loan-to-value (LTV) on Home Equity lines of credit (HELOCs) was to reduce borrowers’ exposure to long-term debt holdings and, for those with the lowest equity positions, force them to repay at least a portion of their debt immediately. While no bank has yet publicized their change, nor have they publicly released any associated policy in terms of what types of mortgages or qualification they intend to use to structure these deals, we did want to take a moment to consider the impact of this new standard. Here is our initial take on a few of the practical changes that may affect borrowers should they need or choose to refinance to 80% LTV – and be forced to incorporate a mortgage AND a line of credit…

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Please contact me direct at 416-520-6746 or by email, David@TorontoRealEstate.ca

How to Win a Landlord-Tenant Dispute

Great artice in www.MoneyVille.ca 

Whether you are a landlord or a tenant, if you expect to win before the landlord and tenant board, you better be acting in good faith. Here are some recent decisions that make that clear.

10 per cent recent rent hike denied: In a case heard in Waterloo, the tenant had a pet and lived in a building that was not subject to rent review. The landlord tried to raise the rent by 10 per cent claiming that since pets were damaging his property, he needed to raise the rent of those tenants who had pets to pay for it.

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Please contact me direct at 416-520-6746 or by email, David@TorontoRealEstate.ca

Selling a Condo? Beware the Taxman

Great artice in www.MoneyVille.ca 

When you sell a property that isn’t your principal residence and make a profit, half of the amount is taxable. This is the so-called capital gains tax and it’s pretty straight forward, but every situation is different. It all depends on how the Canada Revenue Agency views the transaction.

Real estate agent Romano Giusti bought a condo on Richards St. in Vancouver in November 2006 and re-sold it in June 2007 for a profit of $30,831. When he filed his tax return, he paid no tax on the profit, saying it was his personal residence

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Please contact me direct at 416-520-6746 or by email, David@TorontoRealEstate.ca

Housing Market Turns Corner; U.S. Home Values Post First Annual Increase In Nearly Five Years

Great article in www.Forbes.com

  Zillow’s second quarter Real Estate Market Reports, released today, show home values increased 2.1% from the first to the second quarter of 2012 to $149,300 (Figure 1). On an annual basis, home values rose 0.2% from June 2011 levels (Figure 2), marking the first annual increase in U.S. home values since 2007. In addition to showing both quarterly and annual appreciation, national home values also rose for the fourth consecutive month, increasing 0.7%. Notably, home value appreciation in the second quarter was the highest since the fourth quarter of 2005.

Nationally, home values reached their bottom in February of 2012 and have since appreciated at very robust monthly growth rates. Despite encouraging monthly growth, we do not believe that this monthly rate is sustainable and expect it to taper off towards the end of the year. According to the Zillow Home Value Forecast, we expect national home values to appreciate by 1.1% over the next year (June 2012 to June 2013).

 Click here for more.

Please contact me direct at 416-520-6746 or by email, David@TorontoRealEstate.ca