Happy Valantine’s Day Everyone,
Below are a few Real Estate related articles that came out over the last month. My favourite was the inverted shoe-box house that sold on Coxwell last month.
GTA REALTORS® Release Monthly Market Figures
TORONTO, February 3, 2012 — Greater Toronto REALTORS® reported 4,567 sales through the TorontoMLS® system in January 2012. This number was 8.8 per cent higher than the 4,199 sales reported in January 2011. Sales growth was strongest for low-rise home types in the regions surrounding the City of Toronto.
“A favourable affordability picture bolstered by very low posted fixed mortgage rates has kept home buyers confident in their ability to achieve the Canadian goal of home ownership,” said Toronto Real Estate Board President Richard Silver. “The buyer pool remains diverse in the GTA with strong interest in home types across the pricing spectrum,” continued Silver.
The average selling price for January 2012 transactions was $463,534 – up by almost nine per cent compared to January 2011.
“Low inventory levels have kept competition between buyers strong, resulting in robust annual rates of price growth over the last year. Strong price growth is expected to attract more listings. A better supplied market should result in a slower rate of price growth, especially in the second half of 2012,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis.
GTA REALTORS® Announce New MLS® Home Price Index
TORONTO, February 3, 2012 — On Monday February 6th, 2012, The Toronto Real Estate Board (TREB), in conjunction with the Canadian Real Estate Association (CREA), Fraser Valley Real Estate Board (FVREB), Greater Vancouver Real Estate Board (GVREB) Calgary Real Estate Board (CREB) and the Greater Montreal Real Estate Board (GMREB) will launch a new system to measure home prices and home price growth: the MLS® Home Price Index (MLS® HPI).
The MLS® HPI provides a less volatile measure of home prices and home price change compared to traditional average and median measures, which can swing dramatically in response to changes in the share of very expensive or inexpensive home sales from one time period to the next.
Detailed information on the new MLS® HPI will be provided at a Media Technical Briefing Conference on Monday, February 6th, at 12 noon Eastern.
This briefing will begin with a short presentation on the MLS® HPI, provide details on methodology and conclude with a Question and Answer session.
On Monday, February 6th, the official launch date, TREB will also issue a news release providing MLS® HPI information specific to the TREB market area as well as to announce the official launch of the MLS® HPI website www.homepriceindex.ca.
No sale, but agent still gets $9,446
When you put your house up for sale and expect a real estate agent to spend time and money marketing and advertising your property, you have to take the process seriously. If not, you may have to pay a commission later, even if you change your mind about selling.
Here’s a recent small claims court case that was heard in October in Woodstock, Ont.
Average Toronto house price nears $500,000
Low interest rates, and low inventories of houses for sale, helped push house prices up almost 9 per cent across the GTA this January over last, according to statistics released by the Toronto Real Estate Board Friday.
The average sale price across the GTA hit $463,534 in January. But average price of a home in the Toronto 416 regions came in just shy of $500,000 — $499,045 — compared to $442,380 in the 905 regions, TREB says.
Some 4,567 GTA homes changed hands through the MLS system last month, up 8.8 per cent from almost 4,200 sales in January, 2011.
Toronto’s tiny cube house sells again for $475,000
A 27-year-old graphic designer has paid $475,000 for the ultimate artistic statement — with help from mom and dad.
Samantha Turnbull was one of six bidders who’d offered over the $349,000 asking price for the unusual 800-square-foot Coxwell Ave. house on stilts. But she thought she’d been beaten out by a couple with two young children based on vision — the architect/interior design duo had sketched out plans to expand the house — rather than money.
In the end, however, the buck stopped with Turnbull.
That deal fell through this week and she was offered a second chance at her dream home — three 16-by-16 floors of eco-friendly heated concrete slab on busy Coxwell Ave. carefully crafted by Toronto architect Rohan Walters.
“You are not going to find that house again,” Turnbull said in a telephone interview Thursday, ecstatic at the end of a year-long search for a home different from all others. “It’s not your cookie-cutter house and that’s exactly why I love it.”
‘Increasingly liberal’ mortgage standards worry regulator: FOI report
Canadian lenders are loosening standards on mortgages that are similar to U.S. subprime loans, posing an “emerging risk” to financial institutions, according to the country’s banking regulator.
Banks and other lenders are becoming “increasingly liberal” with mortgages and home-equity credit lines that don’t require individuals to prove their income, according to documents obtained by Bloomberg News under freedom of information law from the Office of the Superintendent of Financial Institutions.
The mortgages, typically granted to the self-employed and recent immigrants, “have some similarities to non-prime loans in the U.S. retail lending market,” the documents show. “Non- income qualified” lending has been added to a list of issues to be considered by OSFI’s “emerging-risk committee,” the documents show.
“It just speaks to the general easing in lending standards, which has contributed to a booming housing market,” said David Madani, an economist in Toronto with Capital Economics, which estimates that Canadian housing prices may fall 25 per cent over the next few years. “The problem is sort of baked in now, so I’m not sure there’s a way to prevent a weakening of the housing market.”
Canadian housing is ‘pricey,’ but far from a bubble: BMO
The Bank of Montreal says Canada’s somewhat pricey housing market is likely to cool, not crash.
The bank’s economists say the only real trouble spot is Vancouver, where there are plenty of vacant high-priced condos going begging.
The report suggests that alarms about Canada’s housing market by international observers, from the International Monetary Fund to The Economist magazine, are exaggerated or simplistic.
Even Toronto’s hot condo market — one of the subjects of many of the warnings — is more likely to cool rather than collapse, the economists say.
Why it’s a good time to buy a home
I believe there has never been a better time to buy a home. I’ve been in the industry for 28 years as a lawyer and I haven’t seen so many positive signs for housing, whether you are thinking or buying or locking in a mortgage.
Here’s why:
Mortgage rates at historic lows: They can’t get any lower. Four to five-year fixed mortgages at 3 per cent are unheard of. It is lower than the variable rate that most Canadians have been paying for years. Rates have nowhere to go but up, either later this year or next. If you are paying a variable interest rate, lock in now.
Canada’s appeal: This country has everything going for it — a stable banking and political environment, steady real estate market, the natural resources people want and few social tensions. That makes us a safe haven in a volatile world.
Our immigrant draw: Because of the above, we’re a draw for immigrants, often wealthy ones. When they get here, they need a home. So in my view while the real estate market may level off in some areas of Ontario, it should stay strong in most of the GTA and likely Canada’s other large urban centres as well.
Mortgage defaults: According to CMHC, over 99 per cent of Canadians pay their mortgages on time. It quite a different picture in the U.S. where 7 million homes are in foreclosure and perhaps another 7 million homeowners are under water. This represents almost 15 per cent of all homes. So while the American housing market will likely be weak for the next few years, this should not occur in Canada. Our banks are not dumping homes onto the market, so there is no downward pressure on prices.
Mimico house sells $200,000 over asking
Toronto homebuyers, brace yourself for a hot spring.
The short supply of properties — coupled with low interest rates and continuing high demand — played out with a passion this week in a 31-person bidding war in Mimico that has realtors talking.
The rundown, four-bedroom, 1,200 square foot house sold for $570,000 — almost $200,000 over the $379,900 asking price.
“I wasn’t surprised by 31 bids,” says listing agent Tom Kioussis.
Ritz-Carlton five-star condos proving a tough sell
The million-dollar view from this 28th floor corner condo at the Ritz-Carlton Hotel and Residences is beyond one of a kind.
The CN Tower is so close you can almost touch it from the kitchen table and the setting sun lights up the living room’s wall of west-facing windows.
But for a very long time, no one was buying.
This “mansion in the sky” took 180 days to sell. And it’s far from alone.
Some 29 of The Ritz’s 161 granite-and-glass clad condos have been for sale for months now on MLS. And that’s not counting 12 units the developer is still marketing in the 52-storey project, the first of four five-star hotel-condo developments to hit the Toronto market.
How Ontario residential and business leases differ
Two recent rental stories have created quite a stir. Owners of the popular Real Jerk Caribbean restaurant, a fixture on Queen St. East for the past 28 years, were told by their new landlord that they were going to have to close at the end of the month.
In another story, it was announced that Porter Airlines was raising the rents of its tenants on the Toronto Island by 300 per cent, with as little as 45-60 days’ notice.
Many readers have asked me how a business landlord can act so quickly to kick someone out or raise their rent while a residential landlord has no such ability. Even if a residential tenant is not paying rent, it can sometimes take months before a landlord can evict them.
Looser mortgage lending raises worries
Financial institutions appear to be cracking down on rules for borrowers with self-declared income, a move that comes as Finance Minister Jim Flaherty said he’s concerned about a lack standards in the sector.
Responding to a question about whether the Office of the Superintendent of Financial Institutions was looking into the practice of banks loosening their standards for so-called stated income mortgages, Mr. Flaherty confirmed it is an issue.
“OSFI’s concern arises out of some work that OSFI has done as part of it – the ordinary course of its business to look at some of the — some of the loans being made by financial institutions. I was informed of what their assessment showed with respect to a few financial institutions which is a matter of concern and that is — that is being corrected,” he said.
The Financial Post first reported last month that the government was looking at another round of tough new mortgage rules, among the considerations being a crackdown on how the self-employed qualify.
Ivanhoé Cambridge buys rental buildings in London
For the better part of a year, real estate prices for central London’s choicest addresses have been soaring as hungry buyers pile cash into the British capital.
Some are rich international investors scrambling to flee the eurozone mess. Others are from the Middle East,
eager to put their money to work. Little supply, lots of demand.
And now Canada’s largest pension fund manager is buying in.
Ivanhoe Cambridge, a real estate subsidiary of the Caisse de dépôt et placement du Québec, said Wednesday it is spending more than $150-million to buy four multi-residential rental buildings housing 207 units in some of central London’s most sought-after neighbourhoods including South Kensington, Hyde Park, Bayswater and Marylebone. The deal marks Ivanhoe’s third acquisition in the residential space in the past seven months.
“London never goes on sale. The fact that they’re able to get their hands on something I think says volumes,” said Ross Moore, director of research in Canada for CBRE Ltd. “It’s a good place to put your money.”
Trump opens Canada’s tallest condo tower with $6-million suites
Trump International Hotel & Tower Toronto, Canada’s tallest residential building, opens Tuesday, capping a seven-year effort to bring the brand of billionaire Donald Trump to the country’s largest city.
The $500-million Trump tower is the first of three luxury hotel-condominium projects opening this year in Toronto, after The Ritz-Carlton opened last year. The Four Seasons Hotel and Private Residences and the 66-storey Shangri-La Toronto are also set to open this year.
Toronto’s rise of luxury hotel residences follows a record year for tourism, with more than 9 million hotel-room
nights sold in 2011, according to Tourism Toronto. The industry association said the availability of luxury hotel options attracts “high-value visitors” to the city.
About 60% of the 118 residential units in the 65-storey tower have been sold, with the remaining condos priced from $2.3-million to $6.3-million, according to Talon International Development Inc., the owner and developer.
Canada Mortgage and Housing Corp. is cutting back on mortgages it insures as the Crown corporation edges closer to a $600-billion cap imposed on it by the federal government, the Financial Post has learned.
A CMHC spokesman confirmed that it had approached a number of lenders at the end of 2011 about reducing its “bulk or portfolio insurance” after third-quarter results showed the agency had committed to back $541-billion in mortgages. CMHC, which guarantees mortgages held by financial institutions, is ultimately backed by the federal government and needs approval to go over the $600-billion limit — something that would create greater risk for taxpayers should the housing market collapse.
“CMHC has recently received an unexpected level of requests for large amounts of CMHC portfolio insurance.” said Charles Sauriol, a spokesman for the Crown corporation, in an email.
“To ensure equitable access to portfolio insurance within CMHC’s annual limits, an allocation process is being established which has caused some delays. Portfolio insurance provides lenders with the ability to purchase insurance on pools of previously uninsured low ratio mortgages and does not impact CMHC’s transactional business.”
Apartment REIT M&A may be on the rise
Merger and acquisition activity in the apartment real estate trust sector could be on the rise in 2012, according
to one Bay St. analyst.
That was the message Mario Saric, an analyst with Scotia Capital, took from the investment bank’s 7th annual apartment luncheon in Toronto this month.
“Fundamental outlook is encouraging; M&A worth monitoring,” said Mr. Saric, in a note to clients. “Absent from M&A since 2004, we think heightened pension fund interest and value discrepancies between large-cap and small-cap REITs may support apartment M&A in 2012.”
The analyst says high occupancy rates and drive rental growth across the board while savings on utilities will boost margins. The biggest risk in the sector might be deferred maintenance concerns and “unpredictable” political intervention.
He raised his target prices in the sector 3%, increased net asset values by 5% and adjusted funds from operations by 2% based on lower financing costs, high net operating margins and lower equity risk premiums. He also expects above average growth fro AFFO in 2013.
Mr. Saric’s advice is to build positions on unit price weakness as apartments should perform well in a rising rate environment and provide some defense from housing market weakness.
Northern Property REIT remains his top pick.
Why that condo rental might not work
Toronto condominium investors might find themselves disappointed in rental rates, according to a new survey.
“Investors have been able to rent out their condominiums units in Toronto — but not necessarily at the rents they were expecting,” says Altus Group, a real estate research firm, in a new report. “The addition of more than 9,000 condominium apartments units to the Toronto rental stock in the past year has kept average rent increases to a minimum.”
The addition of new 9,000 units to the Toronto marketplace compares with 650 the year before and comes as demand in the city has been strong enough to reduce the overall vacancy rate.
The vacancy rate in Toronto dropped from 1.7% to 1.1%. The surge in supply has kept down average rental rates which climbed to $1,608 per month for a two bedroom apartment, up 0.8% from a year earlier.
Across the country, condominiums are increasingly becoming an important element in the rental stock with not much purpose-built rental stock going up.
The report notes condo units are on the rise in all six markets survey which in addition to Toronto include Edmonton, Calgary, Ottawa, Montreal and Vancouver. In Edmonton and Calgary, condo units are 17% and 24% of the rental stock respectively which compares with 10% and 6% five years ago.
Maybe you shouldn’t lock in your mortgage rate just yet
It’s never looked more attractive to lock in your mortgage rate for five years but news the U.S. Federal Reserve won’t be hiking rates until the end of 2014 should make you think twice.
Bank of Montreal stunned the Canadian mortgage world with its 2.99% rate on a five-year fixed rate mortgage, the lowest in Canadian history for that term.
The deal, which ends on Jan. 25, had a number of catches — among them a 25-year amortization and prepayment terms of only 10% of the mortgage per year. Nevertheless, the move pushed a number of banks to lower their rates.
It’s never looked more attractive to lock in your mortgage rate for five years but news the U.S. Federal Reserve won’t be hiking rates until the end of 2014 should make you think twice.
Bank of Montreal stunned the Canadian mortgage world with its 2.99% rate on a five-year fixed rate mortgage, the lowest in Canadian history for that term.
The deal, which ends on Jan. 25, had a number of catches — among them a 25-year amortization and prepayment terms of only 10% of the mortgage per year. Nevertheless, the move pushed a number of banks to lower their rates.
Expect home prices to keep rising in 2012: Royal LePage
Canada’s housing market will continue to be strong this year, with rising property values expected in all major markets, real estate brokerage firm Royal LePage said Thursday.
The company’s forecast called for prices across to country to rise 2.8% by the end of 2012, after stronger gains last year.
It said in the fourth quarter of 2011, the average price of a standard two-storey home was $375,427, up 4.2% from a year earlier. The average rate of a detached bungalow was up 6.1% to $344,392, while condominiums gained 3.6% to $234,680.
“Widespread calls for a major real estate correction in 2012 simply can’t be justified,” Royal LePage CEOPhil Soper said in a statement. “The industry has significant momentum entering the year, and buoyed by the stimulative effect of very low interest rates, we expect the market to continue to expand — albeit at a slower pace.”
Statistics Canada reported Thursday that its new housing price index rose 0.3% in November, following on a 0.2% increase in October, and was up 2.5% year-over-year.
What $250,000 will buy in housing markets around the U.S.
In Wisconsin, US$260,000 buys you a plot of land featuring a barn that has been converted into a three-story home and another barn that could serve as a garage.
But in New York and Boston, that same price point buys a one-bedroom condo.
What might sound like a ton of money in one region’s real estate market is barely enough to secure an apartment just a few states away.
Our friends at Zillow helped us figure out what a home buyer can get for around US$250,000 in real estate markets across the country. Price points range from US$250,000 to US$275,000.
Click here to see how far $250,000 will go >
In Toronto’s Little Portugal, a mix of building scale and a taste of what’s to come
Toronto’s Little Portugal is an old downtown residential neighbourhood that’s gradually gentrifying, hence becoming less distinctively Portuguese (and Brazilian) all the time. But the demographic shift isn’t the only change the district is destined to undergo. The rather tired low-rise stretch of Dundas Street West that runs through the area’s heart is ideal for the new mid-rise housing that city planners want to see on our arterial routes. Architectural transformation is afoot in Little Portugal.
The 600,000 new citizens we’re expecting to show up here over the next 20 years, so official reasoning goes, must have safe, comfortable places to live. If these people are not going to be pushed out into suburbia – an unworkable option for all kinds of reasons – room must be made for them in the central city. Very little undeveloped land is available for new homes in downtown Toronto, which means main streets traditionally lined with low-rise buildings (such as Dundas Street West in Little Portugal) will have to be redeveloped and intensified. It’s not a perfect scheme. But if anybody is proposing a more hospitable or sensible way for the city to accommodate our new neighbours, I haven’t seen it.
Phone app brings Toronto architecture to life
It is, perhaps, the most memorable scene from the 2002 sci-fi flick Minority Report: performing a sort of upper-body ballet, Tom Cruise whips through pages of information, fast-forwards through video and enlarges stills on transparent computer screens using two-fingered, light-tipped gloves.
Less than a decade later, some of that fiction would become reality when Apple’s finger-flicking-good iPhone was launched and, a few years after that, a popular video game system would do away with joysticks to transform player into controller.
But for Luddites, or those not inclined to pantomime skiing or auto racing in their living rooms, there has been little incentive to embrace this somewhat intimidating new technology.
Until now: Recently released by Ryerson University, a free app for iPhones and Android phones uses geo-positioning for an interactive downtown architectural experience like no other.
Hold the phone in front of you, and the phone’s camera shows the view in real time; “floating” on top of that view are photographs of architectural landmarks in close proximity. Walk towards a landmark and its photo grows larger in a modern-day version of the “You’re getting warmer” game; tap that photo and layers of information appear. In some cases, it’s an archival photograph of what occupied the site a century ago; or floor plans and concept sketches; in all cases, the Ryerson app will deliver text information on the building explaining why it’s significant.
Which is better for under my sink: A pedestal or cabinet?
The question
I’m looking for a cabinet for the powder room of my Craftsman-style home. Do you prefer a pedestal or a cabinet? I like the look of a pedestal, but I prefer to hide a garbage can (however stylish) under the sink.
The answer
The original proponents of the Arts and Crafts period employed toilet paper, as far as I know, and would have been compelled to hide it. In that era, household goods weren’t commonly exposed. A typical Arts and Crafts cabinet would be simple and utilitarian, rendered in dark-stained wood with details similar to Mission style and drawers large enough to house the toilet paper and conceal the garbage.
For a perfect balance of function and beauty, look for a cabinet-style sink with long legs and three deep side-by-side drawers beneath the vanity. (Ask the plumber to bring the water pipes out from the wall instead of the floor; it’s always more fun to guess where the water supply originates.) Personally, I’m just not a fan of a pure pedestal, as it leaves little room for a dish with soap – and where do you lay out the hand towels? As for what to do with the wastepaper basket, my rule is the same for any bathroom: Put a lid on it.
8 important trends from one of the world’s most influential design shows
Here’s a roundup of the standouts, from a sly new spin on matryoshka dolls to the year’s (surprising) hottest hue from Paris’s Maison + Objet, one of the world’s most influential interior design shows.
Sea-to-sky blue
Pinky orange honeysuckle may have been anointed Pantone’s much-ballyhooed colour of the year for 2012, but it seems the rest of the design world has another favourite: turquoise. (At least if the wash of blues at Maison + Objet is to be believed). Unquestionably, multiple variations on turquoise – from morning-sky misty to Caribbean Sea intense – dominated upholstery, home accessories and even wall coverings. Most notably, French furniture company Ligne Roset featured a selection of its iconic seating produced in various soft blues. Turquoise also married nicely with neutrals at Roche Bobois. Denmark’s Normann Copenhagen showed tableware in deep teal. Honeysuckle, should we send out a search party?