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. So far we have seen no media ...
The Fair or 'Vote Getting' Housing Plan
April 24, 2017
Ontario's Expansion on Rent Control
April 21, 2017
Why the Government’s sudden preoccupation with rent controls? The media has reported two cases where the landlord doubled the rent from $1600 to get rid of a tenant. The current rules of the Rental Tribunal make it very difficult to evict a tenant for non-payment of rent or for carrying out illegal activities. This is the only resort for landlords to get a speedy resolution. In both instances, the landlord needed to sell the unit as vacant. We can tell you that landlords value good tenants and want to keep them. By keeping a good tenant, you avoid vacancy costs and you save on leasing commissions. Good tenants can usually get rents below market for these reasons. But there are more tenant voters than landlords. Hence, we have rent controls which will not be good for tenants in the long term. We currently have a vacancy rate under 1 ...
Market Report April-May 2017
April 21, 2017
Sales Commentary Paranoia seems to have set in with the rapid rise in real estate prices over the past year – almost 30% year over year. And most of this increase has happened in just the past four months. Now Governments at all levels are ready to act! But wait! The market in terms of prices has already begun to plateau. It started in the last 10 days of March and has extended into the first two weeks of April. So what has changed? We started from a market with a shortage of listings to one where listings are now at more normal numbers. In the first 14 days of March we averaged 450 new listings per day. Over the last 17 days of March we averaged 630 new listings. At that rate we would have 19,000 new listings in April. So why the increase? For years, many people in ...
Can 'Coming Soon' Signs Hurt Sellers?
April 11, 2017
"Coming soon", what is that suppose to mean?! I've heard of "for sale" and "sold" and even "sold conditionally", but "coming soon"? Coming Soon means a listing has been signed, it's coming to MLS, but no one can do anything but look at the sign. Does this work for the Listing Agent? Absolutely, they're hoping for sign calls. The Agent wants to line up potential buyers, maybe even take them through the property when no one else can. Does this help the Seller; after all, this is what it's all about? Not really. Do you think potential Buyers will see the "coming soon" sign and stop looking at other properties? Not likely. If I was a Seller, I would get it on the market right away, or I would get my ducks in a row and make a big splash putting my property on MLS. "Coming soon" sounds like you're ...
Form 244: The Solution to Bully Offers
April 4, 2017
In a hot real estate market, Bully Offers are the biggest problem, not just for Buyers, but for Agents too. In every listing primed for multiple offers the Broker remarks say, "no offers until 7pm on such-and-such a date" then… guess what? A Bully Offer arrives 10 days early and the Seller wants to consider it. Now the Listing Agent has to race around to phone every other Agent who has booked an appointment to tell them the good news, or the bad news. We feel that if a property is primed for multiple offers, then that is the way it should be sold. Listing Agents complain that they did not want to entertain Bully Offers, but the Seller changed their mind. However, there is now a specific OREA form to solve the problem. It's called Form 244: A Sellers Direction in Property Offers. Once the Seller signs this ...
Toronto Condo Market Report March-April 2017
March 22, 2017
Sales Commentary February sales on the Toronto Real Estate Board were up by 5.7% over February of last year – a slower increase than any month in almost a year. Is this a sign of a slowdown in buyers? No. The problem is a continued lack of listings to buy. At January month end, we had 5,000 ‘active listings’ and by month end for February we were at 5,400. When you factor out those listings that will never sell and you look at 12,000 buyers per month for the spring market, you see a problem. Continued price increases that show no signs of easing. In the downtown condo market, sales were up by 12.8% in February and in Humber Bay, sales were up by 35% over the same month last year. But more concerning is the drop in ‘active listings’ in these two markets – down 64% and 70% from ...
Conditional Clauses when Buying a Property
March 15, 2017
Every offer usually has some sort of conditions and they're all written for the benefit of the buyer. Take financing for instance, why is it written as "financing satisfactory to the buyer"? What does that mean, a 0% interest rate or 100% financing? No, the clause should state what type of financing is being arranged, not a clause that's open ended for the buyer to change their mind and walk away. What about a status certificate? It usually reads "to be approved by the sole option of the Lawyer". You know, most Lawyers can't even read a Status Certificate. I had one Lawyer tell me that he did not want his client to buy a condo, so he would not waive it. Once again, the clause is not to be used as an 'out clause', but rather to insure that the Condo Corporation can meet its financial obligations. Why not ...
What's In Store for Toronto's Crazy Real Estate Market?
March 6, 2017
Everyone is talking about our crazy real estate market, and in particular prices, they're up 20% in just 4 months. You know I've been in this business for over 30 years (can't you tell) and I've never seen anything like this. But, I'm not alarmed about the level of today's prices, rather the rate of increase. Toronto prices are not out of line with other major cities in the world. Will prices level off? Yes, they always do. Will prices fall? No. The only time prices fall are when people are forced to sell when they can't afford their mortgage and mortgage rates are not rising anytime soon. If you think individuals have a problem with their debt levels, just look at our Governments, they're in even worse shape. We live in a high tax country. The average person stores their wealth in their property, just look at Europe ...
How to Compete and Win in a Bidding War
February 27, 2017
Today's market is dominated with multiple offer sales. Many people have to make 6-8 offers to finally land that property. So, how do you compete and win in this market. Here are 5 easy steps to follow. 1.Market Analysis First, realize that many properties are under priced to attract multiple offers. You should first do a market analysis to determine the market price of the property. 2. No Conditions Secondly, you need to go in with no conditions. Get a home inspection or status certificate ahead of time. Make sure you have financing for the price you want to pay. 3. Big Deposit Come in with a big deposit. The norm is 5% so come with 10%. 4. Save Some for Round Two Usually there will be two rounds of bidding. Save something for the second round. 5. Pick a Maximum Number Pick a maximum number you will pay for ...
Market Report February-March 2017
February 21, 2017
Sales Commentary The Toronto Real Estate Board no longer publishes mid-month sales numbers hence we are forced to guess the market going forward, based only on January results. In January, overall sales were ahead by 12% over January of 2016, but active listings were 49% lower than the 2016 number. We are starting to see all listings sell at over the list price. Some by as much as $200,000 which is scary! In terms of the downtown condo market, January sales were up 23% over the same month last year but ‘active listings’ were down by 57% from last year. The result is the same as the overall market, multiple offers and most sale prices above the list price. This is the first time, we have been concerned over the state of the market. This imbalance has caused prices to spike by over 20% in the last twelve months. But ...