The U.S. Federal Reserve Bank has indicated that they will be raising their lending rate in December. A number of experts are telling the public that this is the start of a climb back to significantly higher interest rates. But hold on there, currently the federal rate is 1/4 percent and it will rise by 1/4 percent to ½ percent in total. That’s the same rate as the bank of Canada rate right now, 1/2%. Currently, both fixed and variable mortgage rates are under 3%. Do we expect a slight bounce in rates in the near term of ¼ percent? Probably. Our best guess is that rates will remain where they are in 2016. While everyone seems concerned about whether buyers and homeowners can stand the stress of an interest rate increase, instead we should worry about Governments being able to pay interest on billions of dollars’ worth of debt ...
2016 Outlook on Canadian Mortgage Rates
November 24, 2015
Market Report November-December 2015
November 17, 2015
Sales Summary Sales were unusually strong in October according to the Toronto Real Estate Board. The pre-occupation with the Blue Jays was more than offset by the good weather in October. Sales were ahead by 3% over October of last year. Our commentary from last month remains unchanged in that 2015 sales are now close to those of 2014 on a monthly basis since the summer. Remember, weather only impacts the timing of sales, not the total number of sales over a lengthy period of time such as a year. Buying real estate is not time sensitive for most – unlike buying groceries each week. Let’s look at last year. Normally the Spring Market starts at the end of February and into March. Record cold temperatures in February delayed the start until April, yet we experienced a strong, record breaking sales market throughout the balance of the year. Another market ...
Rental Guarantees for New Condo Developments
November 10, 2015
This week Inside the Real Estate Market I want to talk about rental guarantees for new condo developments. This is the latest trend offered by developers. Usually how it works is a developer will pay the buyer somewhere around 6% per year of the purchase price for a period of two years. A $300,000 condo will generate $18,000 per year or $1,500 per month. The developer is responsible for renting out the unit, paying the commissions, and any vacancies. The developer also keeps the rent. What does the buyer get? The Buyer receives peace of mind and a guarantee return for two years max. Why does the developer do it? They offer this service to attract more buyers. Real Estate can be risky and real estate can also involve some work dealing with tenants. The idea is to get passive investors involved in real estate, making it feel like buying ...
Is Your Company Brand Important?
November 2, 2015
All agents seem to think that the key to success lies in ‘personal branding’. Forgotten is the importance of your Company’s brand. I am reminded of a meeting I had with an agent who had passed the 100K plateau and was nearing the end of his second year. He was explaining to me how all his presentations – both listing and buyer – were all about helping the customer and selling them on why he was the best person to meet their needs. He told me that the Company never came up for discussion so why did he need the Company or for that matter me? I asked him two questions: first, did he introduce himself with his business card; and secondly, how long was his presentation? He said, of course he gave them his card and the presentation lasted about 40 minutes. I then asked him what would happen if ...
How Will a Liberal Government Affect the Toronto Real Estate Market?
October 27, 2015
It has been a week since the election and everyone is asking “What will be the impact on the Toronto Real Estate market with a Liberal government majority?” In the first year with a Liberal government not much will happen. We will start to run government deficits, money will be handed out to everyone and only those making over $200,000 per year will have to pay more. While infrastructure spending, particularly on public transportation for big cities will help, you only need to look at our current subway extension to York University, hundreds of millions of dollars over budget and years late. That’s what you get from big government spending, waste and inefficiencies. After five or ten years we might have a slightly better public transit system. However, we will also have a massive deficit to pay for through higher taxes for all and a $0.65 dollar. Don’t forget higher ...
Market Report October-November 2015
October 21, 2015
Sales Summary While many people focused on September sale results as being a record for the month, the reality is that the market is instead plateauing. Sales on TREB for September were 8200 units which were up by 2.5% over last year. In August we were 5.7% higher than the same month a year ago and if you go back to the Spring Market, we were running 10% higher each month. Still if we match 2014 sale numbers over the last three months we will hit the record and magical number of a 100,000 units sold on TREB for a single year. The key will be October sale numbers which are always higher than September. For the first 14 days of October sales were ahead by 4% over the same period in 2014. A positive sign. Looking at the Downtown Condo Market, sales were down by 1% from September of ...
Why Condos are Better for the Small Investor
October 13, 2015
While most of our blog posts center on buying a place to live in, this week we want to talk about investing in real estate instead, specifically, why condos are better for the small investor than a detached house. There are four reasons for this; 1. First, condos are cheaper than houses. You can buy one for less than half the price of a house. 2. Secondly, condos are better for renting. There is a bigger pool of renters and people renting condos move 12 months of the year and not just in June and September. 3. There is less maintenance to worry about for a landlord. As a condo landlord, are liable for only the appliances. For houses, there are furnaces, roofs, and shoveling snow. Yes, it is the landlord's, not the tenant’s responsibility for shoveling snow and the same goes for grass cutting. 4. Finally, if you buy ...
What is Fueling the Toronto Real Estate Market?
October 5, 2015
The number one question we are always asked is why is the Toronto real estate market continuing to roll along and be so strong? The his has continued to fuel salesobvious answer is a continuous population growth. There are a million more people in the GTA since 2007. Most of them want to live in central Toronto and t. There is also a second, less obvious reason. Stock markets and stock market volatility have not been kind to investors; hence more and more people want to invest in real estate. It’s funny, but North Americans think of real estate as just buying a place to live in, but people from other parts of the world believe in real estate as a great place to store wealth and earn consistent returns over a long period of time. Toronto is an international city; we attract investors from all over the world. We ...
Dont' Be A Secret Agent: Why Social Media is Important in Real Estate
September 25, 2015
This week, Inside the Real Estate Market, I want to discuss social media in real estate. Not how to do it, there are plenty of trainers and programs for that, but why? If we want to be recognized as a top agent, we must engage in social media. There is more information on real estate than any other industry on social media, from listings, to agent promotion. After all, we are the mobile generation. That's how we get our information and that's how we communicate with each other, on Facebook, Twitter, Linkedin and Instagram. With real estate agents, no one is more mobile than they are. Realtors are never in the office, they're always in the car, on appointments and they even learned how to do the majority of their business by smart phone. So how can one be informed as an agent in today's real estate market if you ...
Market Report September-October 2015
September 17, 2015
Sales Summary August sales on the Toronto Real Estate Board continued the strong summer market. Sales were 5.7% higher than in August of last year. But at 8,000 sales, this was 19% lower than July. Both the market and real estate agents were taking a break! Historically, both September and October sales numbers should be higher than August, but lower than July’s. That would suggest sales in the 9500 range per month which would be well ahead of last year and tracking for 100,000 units for year end which would be an all time record. So how do we explain the strong demand for real estate? Certainly the population growth in Toronto is a factor. We are about one million more people than when the all-time record was established in 2007. However, also important is that many people have lost faith in stock markets. Volatility and the feeling that one ...