September Home Prices and The National Index There has been a lot of discussion lately around the recent slow downs to the real estate markets in Toronto and surrounding areas. A number of factors can be said to be contributing to the changes in these previously hot markets, including a number of measures introduced by the Ontario government earlier in the year intended to have just such an effect. These include the new foreign buyers tax – under the Non-Resident Speculation Tax (NRST) there is now a 15% tax on the purchase or acquisition of an interest in residential property located in the Greater Golden Horseshoe Region by individuals who are not citizens or permanent residents of Canada or by foreign corporations and taxable trustees. Changes to the mortgage market introduced last year have also affected the market by increasing the qualification requirements for buyers with a down payment of less than 20%, effectively reducing the size of mortgage that these buyers are able to qualify for. Changes to the financing market have also hindered the ability of many non-bank lenders to compete in the mortgage market, thus stifling overall competition in the financing sphere. We have also seen increases to interest rates offered by lenders in conjunction with the recent Bank of Canada rate increases. The icing on the cake appears to have come today with OSFI releasing its revised final guidelines setting out new mortgage qualification requirements which are set to take effect January 1, 2018 and will affect all borrowers. Details can be found here. With so many recent changes factoring into the market in a relatively short period of time, it is difficult to predict how the market will react in the longer term. There has not been enough time to adjust to one change before the next one is being implemented, making it impossible to gauge how significant the cumulative effect will be. For now however, the market in Toronto (and surrounding areas) has clearly cooled off and the national composite house price index has suffered due to the falling home prices in Toronto. According to the Toronto Star, the national index fell 0.8% compared with the previous month – the largest month over month drop since September 2010. In the month of September the price indexes of the 11 cities included within the national index moved as follows: Toronto (fell 2.7%) Quebec City (fell 2.3%) Hamilton (fell 1.9%) Halifax (fell 0.4%) Ottawa-Gatineau (up 0.3%) Calgary (up 0.7%) Montreal (up 0.3%) Winnipeg (down 0.3%) Victoria (flat) Vancouver (up 1.3%) Edmonton (up 0.2%) Devry Smith Frank LLP has experienced Real Estate lawyers in Barrie. If you require a real estate lawyer or have any questions, call us directly at 705-812-2100. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Real EstateOctober 17, 2017June 18, 2020
Toronto Housing Market Update: August 2017 Home sales slowed down through August so much that there was a 34.8 per cent drop in sales compared to last year. This marks the fourth month in a row where sales and home prices have dropped. July’s average price was sitting at $746,033 while August had an average price of $732,292. Since the introduction of the 16 measures in April, the current average price has seen a significant drop. April’s average price was almost $1 million. Not to mention, the number of new listings was the lowest recorded for August since 2010, and down 6.7 per cent from last year. If you are currently searching for a property or have a plan to purchase property in the near future, contact our Real Estate Group with any questions or concerns you may have. Browse our Real Estate lawyers page and contact them directly, or, call our office at 416-449-1400 for more information. By: Nicolas Di Nardo “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Real EstateSeptember 6, 2017June 18, 2020
Barrie’s Real Estate Market Struggle Many home-buyers got caught in the spring real estate downturn. As a result, many homes have had delayed closings and people have even backed out of real estate deals, not caring that they will lose their deposit. Most of this stems from the buyers deciding to purchase a home in the heat of the market, placing a competitive down payment, only to realize that as their closing date approaches the value of the home has decreased significantly, sometimes more than the deposit that was made. Others have not been able to close due to the mortgage amount not meeting the purchase obligation of the home. Peggy Hill, a real estate agent for Keller Williams said, “closings have been stalling [everywhere] since the end of June.” In Barrie, even though prices are not at the level that Toronto has seen, the drop has been precipitous. Barrie’s average price for a home was $471,822 in July, while March was $570,199. That’s a $100,000 difference in a matter of months. Back in July of 2016, 208 of 260 homes listed were sold, but this July saw 201 sales with 683 active listings. The real estate frenzy in Barrie mimicked that of Toronto, with home selling in a week well over list price. Barrie homebuyers were even experiencing the same competitive market when looking to buy, resulting in bidding wars, and competing with people who live outside of the region, like buyers from Toronto who wanted to get out of the city. Unfortunately, the tough lesson here is that “a heated market does not automatically translate into a true market value. When you take away the heat, it settles down into something that is perhaps more reflective of what true market value is,” says Appraisal Institute of Canada’s CEO Keith Lancastle. Buyers tempted to walk have to realize that they may face a lawsuit. For example, if a house is bought for $500,000 and you decide to forfeit the deposit, the seller goes and gets $450,000 from another buyer, you can be sued for the difference. Realtors may also sue, because they are not getting a commission and have to incur additional legal and carrying costs. Some advice, be careful in the current real estate market. If you can wait it out, it may be a better idea than investing now, you don’t want to end up backing out of a deal only to realize you owe money to the seller and/or are being sued by a realtor. If you are in need of a Barrie Real Estate or Commercial Real Estate lawyer, please visit our website and contact one of our Barrie Real Estate lawyers today. If you are in need of any other services or have any questions, you may also contact our Barrie office directly at 705-812-2100. By: Nicolas Di Nardo “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Real EstateAugust 28, 2017June 18, 2020
Is Toronto Now a Buyers’ Market? By: Nicolas Di Nardo The CREA has stated that the GTA has had the biggest drop in sales in June, and Toronto has now fully moved from sellers’ territory (ratio above 60 per cent) to buyers’ territory (ratio under 40 per cent). Patterns of sellers facing difficulties offloading properties as buyers sat around hoping for prices to come down, may have led the change. Sales-to-listings ratios are also a benchmark that is utilized to determine the territory, which the following can be identified: Balanced: 50 per cent (5 homes are sold for every 10 that come on the market) Sellers’: 60 per cent plus Buyers’: 40 per cent and below This is a significant change in Toronto’s market. If you take a look at the ratio in March, that stood at 86 per cent. Considering the effort put in by the government to assist in cooling down the hot Toronto market, it seems to now be taking some effect. Not only has it changed the way people are now looking at the housing market, but they are beginning to deter buyers from snatching up every single property within Toronto, due to the new initiatives in place. This drop is the largest monthly decline since 2010. Homes priced at $1.5 million and above have seen very little action, with low attendance to open houses, and being on the market for weeks rather than just a weekend. It will be interesting to see if the decline will continue, or if the current market trend and prices will stay stagnant into 2018. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Real EstateJuly 19, 2017June 22, 2020
Reasons Why A Starter Home is No Longer an Option By: Nicolas Di Nardo Toronto’s chief planner Jennifer Keesmaat says you won’t be able to have the traditional starter home that previous generations have had in the city of Toronto anymore. With current prices, increased condo and apartment developments, and fewer single-family homes being built, the idea of a starter home with a patch of grass is starting to disappear. As stated in previous blogs about: Affordable Housing Should Be a High Priority for the Next Provincial Election Toronto Must Figure Out Housing Solutions or Risk Losing Top Young Talent Toronto Housing Solution: Laneway Suites Affluent Boomers are Taking Pressure from ‘YIMBY’ Groups in the GTA All expectations must now change, as Toronto’s housing landscape takes a turn. Jennifer has even encouraged her own children to imagine raising a family in an apartment, rather than a house. From previous research conducted, as mentioned in our previous blog, housing preferences for the next set of homebuyers is out of sync with what is currently available, as well as what home-buyers are capable of affording. With the statistics listed in the above blog post: In April, Toronto’s detached re-sale homes hit $1.6 million on average. To make matters worse, young professionals aged 18-39 say: 32% plan to buy a home in the next year 58% say high prices are why they won’t buy a house in the next year 19% will stay in their current home 17% want a townhouse 51% want a detached house 13% want a semi-detached 17% already own a home It makes housing a much more important issue when you compare the above stats with the single statistic that, 83 per cent of housing built from 2011 to 2016 in Toronto consisted of midrise and high-rise apartments. Jennifer went before the Toronto Region Board of Trade (TRBOT) with all of her concerns, and even suggested that condo developers should reconsider the amenities they put into their buildings. For example: Replace pools with gymnasiums Introduce craft and media rooms As a result, there will be a focus on young children and provide a more welcoming environment for families. From all of these developments in the Toronto real estate market, young professionals are the ones most effected. As mentioned in another blog post and in Jennifer’s speech, young professionals are fighting against foreign investment, rising prices, and the fact that the housing they want is either occupied or sought after by other parties. To make matters worse, millennials are faced with these obstacles while on an entry level salary or position, pushing them further and further out of the market and the city. Hence, the push for laneway suites and town-homes. These two solutions could help increase the housing options in the city while using existing structures and limiting the development of new communities. This idea was discussed following Jenn’s speech and was also a topic for one of our previous blogs and it is believed that if this is implemented, it will add “gentle density” to areas around the city. Considering 62 per cent of land in the city is zoned for single family homes and Toronto has 300 kilometres of laneways, there is space to work with for the development of town-homes and laneway suites. The Fair Housing policy, along with the involvement from developers, the city, other levels of government, and public support, Toronto’s housing will eventually become affordable and provide an abundance of housing options for all levels of income and preference. Once the YIMBYs can outweigh the influence of the NIMBYs, everything will fall in place for Torontonians. At least, that’s the hope. If you are in need of a real estate lawyer, please visit our website and contact one of our real estate lawyers today. If you are in need of any other services or have any questions, you may also contact our Toronto office directly at 416-449-1400. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Real EstateJune 23, 2017June 22, 2020
Affluent Boomers are Taking Pressure from ‘YIMBY’ Groups in the GTA By: Nicolas Di Nardo During the recent Ontario Housing Summit the main focus was on millennials and home ownership, and the consensus of the Summit was that there is a need for more affordable housing supply. Some of the points that were made are: Boomers are restricting access to prime property Boomers would like to move out, but don’t see any suitable alternatives in their area Trade down houses (townhomes, midrise condos, duplexes) are not zoned in desired area “Missing middle” or those defined as trade down houses for boomers, starter homes for millennials, are not available NIMBYs, “not in my backyard” homeowners oppose development of such buildings in single-family home neighbourhoods However, there is a rise in YIMBYs in Toronto. YIMBYs are the supporters of affordable housing, or as the name goes, “yes in my backyard” homeowners. Toronto’s YIMBY group is known as Housing Matters, they are a group of activists. They are growing fast and hope to bring change to Toronto’s affordable housing, however, they must take more action than just utilizing social media to get their message across, they must approach the city and other groups with hard facts and evidence that affordable housing will be able to benefit not only the city, but the neighbourhoods they will be in. Until the city can determine what to do, it is a waiting game. For now, we’ll have to see what the government’s current measures to cool down the market will do, as it seems to have some impact on the housing market in Toronto already. If you are in need of a real estate lawyer, please visit our website and contact one of our real estate lawyers today. If you are in need of any other services or have any questions, you may also contact our Toronto office directly at 416-449-1400. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Real EstateJune 21, 2017June 22, 2020