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 ...
Toronto's Changing Real Estate Market
July 6, 2017
The Fair or 'Vote Getting' Housing Plan
April 24, 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. So far we have seen no media ...
Who Regulates Realtors®?
November 16, 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.
Implications of Canada's New Mortgage Rules
October 17, 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 ...
New Mortgage Rules
October 7, 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. People then will be forced ...
State of the Union When it Comes to New Mortgage Changes
October 5, 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. The Posted Rate is the average posted rate ...
Big Problems with the Foreign Buyers Tax
August 15, 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. Not only that, you have landed immigrants working in ...
How Will Vancouver's New Foreign Home-Buyers Tax Affect the Real Estate Market?
July 29, 2016
The BC Government has announced a 15% tax on buying properties for non-residents in Vancouver effective August 1st. The big question is, will this new tax curb property prices in Vancouver? No. The problem is still a lack of supply and non-residents represent only a small minority of buyers. Here is what it will do! First, it's a tax grab for the BC Government that will not offend voters. Secondly, it's a public relations win. It looks like the government is doing something even if it is doing nothing. Will this new tax come to Ontario? They are already studying it and my guess is 'yes'. Just because it's an easy tax grab that won't affect voters and it looks like they are being proactive. What the Ontario Liberals need to do is to encourage more housing to be built. Now that takes some planning. Want to stay up to date ...
Average Price: The Worst Statistic in Real Estate
April 5, 2016
The worst statistic most often quoted in Real Estate is the average sale price. Did you know that the average sale price of an area can change when there are no actual changes in prices of any real estate? This is because the mix of sales always changes over time. For Example, one month you can have one $1,000,000 property sale and nine $100,000 sales, the average price works out to be $190,000. Next month, 10 more sales of similar $100,000 properties will give you an average price of $100,000. The newspapers will report a 47% drop in average prices. If you look at the Toronto Real Estate Board, the average sale price in May is always higher than the average sale price in October, every year! Do you think sale prices fall every year throughout the year? No, it’s just the mix of sales that changes. There are fewer ...
4 Things Renters Need to Know
July 22, 2014
Welcome to inside the real estate market. Hi there, I’m Jamie Johnston, Broker Owner of RE/MAX Condos Plus. Today I’d like to talk about 4 things renters need to know. 1. Act Quickly The market for condo rentals is tighter than for condo sales. So what does that mean? It means that the best units are only on the market for a few days, so you have to act quickly. 2. Be Prepared Get all your stuff together first before you go out. What does that mean? Fill out a rental application, get your credit bureau done, and get your letter of employment ready to go. And oh yes, don't forget your checkbook. The best properties are gone the day that you see them. 3. Connect with your REALTOR® The third point I’d like to say is, agents don’t make much money from rentals. So what does that mean? They’re ...