It's the first week of September which means it's a busy time for renting. Unlike past years, we now have rent controls. So how will this impact Toronto renters? This is not a panacea for Tenants, in fact, rent controls can cause a big problem for Tenants, for the short, and long term. Short Term In the short term, Landlords are jacking up rents for new Tenants - increases are running at 10% plus. That's because, with rent control, Tenants who stay put will look at increases of only 2% in the second year. That increase will not cover the increase in operating costs for Landlords. So, Landlords want their money up front first. In other words, new Tenants end up paying for Tenants who do not move. It sounds like the City of Toronto Land Transfer Tax. Because city property taxes are lower in areas outside of Toronto, they slapped ...
Will Rent Controls Actually Hurt Tenants
August 31, 2017
Should You Walk Away from a Real Estate Deal?
June 13, 2017
With the sudden change in the market, some buyers who bought at the end of March and early April are thinking they might have paid too much. Should they just walk away from the deal and lose their deposits? Bad Idea! Walking away is the most expensive thing you can do. A Seller will then resell the property, probably for less money because you the Buyer will cover the losses. The Buyer will also pay for the extra legal fees, carrying costs of the property, extra costs for where the Seller is moving to, and so on. You get the picture, big bucks! Close now. We don't care what it costs you. The market will bounce back in September and prices will be back to March and April prices by this time next year. Remember, real estate is a long-term investment, think short-term and you can loose. Think long term ...
The Problem with 'Double Ending' Part Two
June 6, 2017
Welcome to Part Two of Double Ending, or Dual Agency. In Part One we concluded that problems only arrive with Dual Agency when we have multiple offers on a property. This is a Toronto problem. In smaller communities all across Ontario, most top agents double end over 50% of their sales, without any problem. Banning Dual Agency is a bad idea. The solution, as I've said before is to change the act. Listen to me RECO, on all multiple offers, let all buyers and their agents see all offers. Right now, all we can disclose is how many offers and who the buyer agents are. Make everyone see all the offers. Right now, only the listing agents see them, and what an advantage that is if they have their own offer. That's where all the complaints come from too. Simply change that section of the act and the problem is solved ...
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 ...
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 ...
Buying & Selling Assignments
February 10, 2017
The Assignment market for condos is making a big come back. There are two reasons for this: First, there is a lack of resale condos to buy, forcing many people to look at the assignment market. Secondly, with tougher mortgage qualifications, many investors who bought pre-construction condos 3 to 4 years ago may not be able to close and will want to sell. While the opportunities are great and you can probably avoid the multiple offer scenario, the market is hard to track. Assignments are not usually found on MLS but are exclusive and the contracts can be difficult. Assignments are not really selling a property, it may look like that, but really it's just selling the paper. The paper is, the right to buy an option to close on a sale with a developer made 3 or 4 years earlier. Trying to buy or sell an assignment on your ...
The Perfect Market for that Less than Perfect Condo
January 23, 2017
Never have I seen a market with such little market inventory - properties for sale. Many owners, myself included, have said 'If you don't need to sell, sit on it", the market is still rising. But, this is also the best time to unload what I call, 'less desirable properties' and put them up for sale. In a normal market, these properties are difficult to sell and they sell at a discount. However, in today's market, they will sell at full value and quickly. So what do I mean by less desirable properties? Sell that condo on the second floor overlooking the garbage bins. Sell that condo on the fifth floor that sits beside the Gardiner with windows that are never allowed to open, and sell that condo gets no sunlight. You know what I'm talking about. Never has there been a better time for sellers to unload a property ...
The Trump Effect (On Toronto Real Estate)
December 13, 2016
With the election of Donald Trump in the U.S. people are asking me about the Trump effect on Toronto Real Estate. First, don't expect any Americans to move here, that was just celebrity talk. Do expect more people to move here from other parts of the world. That's all thanks to the Donald, who has made the U.S. less hospitable to immigrants. The other impact from this election is a jump in interest rates. Bond rates, which impact Mortgage rates are 1% higher today than the market low in the summer. However, they are still below rates in 2014. The primary reason for the rise is investors are worried about inflation and massive Government deficits from Trump's plan for massive infrastructure spending. My take? Not all the spending will take place, and there is still too much cheap money in the world. Rates will level off around these levels. In the ...
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 ...
Toronto Real Estate Bubble
June 15, 2016
Everyone is talking about real estate bubble in the Toronto real estate market. The trouble is, no one knows what a bubble is. The formal definition is three years of double digit price increases. For houses, we've experienced two years in a row. For condos, this is the biggest year yet, but it is only 8%. Previously, we've averaged just 3-5% per year for condos. Why do experts focus on this? The concern is that incomes will not grow this fast, so no one can afford these higher prices, and those who own will default on their mortgages. Right now we have a shortage of listings for sale. The only way for a price correction is if a lot of properties are dumped on the market. That would be if owners are foced to sell because of mortgage problems. However, did you know that the mortgage arrears number for Ontario ...