TORONTO, January 5, 2012 — Greater Toronto REALTORS® reported 4,718 transactions through the TorontoMLS® system in December 2011. The December result capped off the second-best year on record under the current Toronto Real Estate Board (TREB) boundaries. Total sales for 2011 amounted to 89,347 – up four per cent in comparison to 2010.
“Low borrowing costs kept Buyers confident in their ability to comfortably cover their mortgage payments along with other major housing costs,” said TREB President Richard Silver. “If Buyers had not been constrained by a shortage of listings over the past 12 months, we would have been flirting with a new sales record in the Greater Toronto Area,” added Silver.
The average selling price in December was $451,436 – up four per cent compared to December 2010. For all of 2011, the average selling price was $465,412, an increase of eight per cent in comparison to the average of $431,276 in 2010.
“Months of inventory remained below the pre-recession norm in 2011. Very tight market conditions meant substantial competition between Buyers and strong upward pressure on selling prices,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
“TREB’s baseline forecast for 2012 is for an average price of $485,000, representing a more moderate four per cent annual rate of price growth. This baseline view is subject to a heightened degree of risk given the uncertain global economic outlook,” continued Mercer.
Real estate predictions for 2012
Analysts have predicted Toronto’s real-estate apocalypse every year for the past six years. Nevertheless, here are our five predictions for 2012.
As we turn the page on another year in Toronto real estate, experts are trying to forecast what 2012 will bring. It’s easier said than done and nobody has a crystal ball—analysts have predicted Toronto’s real-estate apocalypse every year for the past six years (eventually they’ll get it right, no?). Nevertheless, here are my [David Fleming ] five predictions for the new year.
A New Year’s resolution: Don’t sue in 2012
Only lawyers win lawsuits. So make the following New Year’s resolution: No matter what happens in a real estate deal or any other part of your business or personal life you’ll try and find answers without suing.
I worked in Bell Canada’s legal department some years ago and we ran an ad campaign around a Yak, that shaggy cow-like animal found in Central Asia. The campaign was called Yak all you want. Rogers ran an ad one day called ‘Yak attack’ — with a dead upside-down Yak. The advertising folks wanted me to sue Rogers. I said: “You want to spend $50,000 in legal fees to give Rogers $100,000 worth of free publicity? Even if they lose the case, they’ll be winners.”
In the end we didn’t sue, but it illustrates the point.
Home sales rise, listings decline in November
OTTAWA — Canada’s resale housing market tightened slightly in November, as sales rose in more than 50% of markets while the number of listings declined, the Conference Board of Canada said Tuesday.
Sales rose in 16 of the 28 markets the board tracks for its metro resale index, with seven of those markets posing a gain of more than five per cent over October’s number. Year-over-year sales rose in 15 areas, down from October, when 20 of the urban areas posted sales growth over 2010.
“The supply of new listings fell in 23 of 28 markets in November, but still exceeded year-earlier levels in 20 jurisdictions,” the board said. “An easing in supply of listings, combined with slightly weaker sales gains, lifted the sales-to-listings ratio in November in 23 markets. This left four areas as ‘sellers’ markets, while 21 remain ‘balanced’.”
The drop in listings resulted in higher prices in 17 areas month-over-month, while the year-over-year price was higher in 19 — with 16 markets recording growth of four per cent or more.
The Metro: Still X-rated, still for sale
This week, the Star is catching up with some of the fascinating people we’ve covered. Today: Karim Hirji, owner of The Metro, the last theatre in Ontario showing triple-X movies. The Star last wrote about the theatre near Bathurst and Christie Sts. nine years ago, when Hirji planed to sell it for $2 million. Yet, it is still here, and so are the movies.
Ready to co-habit? Call lender, lawyer
Moving in with a partner, whether you are married or not, can be a major step for some and a natural progression for others. It becomes more complex if your partner already owns a home, and you move in; you will have to decide whether to become joint owners of the property and how mortgage and living expenses will be split.
“The title transfer itself is a pretty basic process; a deed is done from the current owner over to the current owner and the new partner,” says J. Alan Hodgson, a barrister and solicitor in Toronto. However, he adds that “there are pretty serious implications that can come up in relation to that type of transfer.”
If the house has a mortgage, the lender will have an interest in any change in ownership.
“Anytime you do a transfer of title … if there is a mortgage on the property [it usually requires] that the bank consent to that transfer,” Mr. Hodgson says.
An unmarried couple may be subject to land transfer tax if one partner buys into the property, including taking over part of the mortgage.
Over the years, I have found that the things that arise in the practice of law are often stranger than the stories you see on TV shows.
A young landlord came in to see me and said: “The tenants in my condominium are driving me crazy, can you help me evict them?” My first question was: “Are they paying the rent on time?” The answer was yes. Next question: “Do you need the unit for a member of your family?” The answer was no. Next question: “Are they doing anything illegal in the unit?” The answer was: “They are selling marijuana.” I replied, “OK, how can we prove it?” The landlord answered: “I buy from them.” I told her that under the circumstances she was better off paying them to leave early.
Toronto house prices hit new record
The Toronto housing market slipped back into sellers’ territory in November, helping propel prices even higher to a record average of $481,305.
That’s a 2.1 per cent increase from October and, when adjusted for seasonal fluctuations, almost 10 per cent more than the average GTA home was worth a year ago, according to figures released Thursday by the Canadian Real Estate Association.
In fact, November sales across Canada were 7 per cent above the 10-year average for the month, resulting in the fourth highest level of sales on record for what’s typically the slow season, CREA noted.
Muskoka Lake condos up for sale – again
Some 19 Lake Muskoka condos near Gravenhurst are up for sale again — this time the conventional way — after a recent auction created more bitterness than buzz.
At least two people were told they had the “winning bid,” only to find out a few days later their offer had been rejected by the developer of the Muskoka Wharf project, Evanco Corp.
Some condos have rental restrictions
When I was condo hunting earlier this year, a big consideration was whether I should buy in a complex that allowed rentals.
Condo buildings have bylaws that might restrict whether you can rent your unit out, so it pays to check the bylaws carefully before you make an offer.
Rachelle Berube, President of Toronto’s LandlordRescue.ca, believes that for owners who don’t intend on renting, a building that has rental restrictions, or does not allow rentals at all, might be best.
“Owners have a stake in the building,” she says. “For the most part, they understand that if they dirty the building, they pay for the clean up – so they just don’t do it. This applies to a wide range of issues [like] noise, cleanliness, pet restrictions, and damages. In a perfect world, you can’t tell the difference between owners and renters. It’s only when things go wrong that it becomes an issue.”
This couple had a two-dog condo problem
Jack and Susan thought they found the condominium of their dreams at 5 Rowntree Rd. in the Kipling and Finch Aves. area of northwest Toronto. They loved the building, the view and the amenities. They could take their two dogs on long walks in the area.
So they bid on the unit, got involved in a bidding war and won the auction. The deal was conditional on their being satisfied with the building’s certificate of status.
The status certificate has all the condo rules along with other important information, such as who the management company is, the financial statements, the amount of money in the reserve fund and when the last reserve fund study was completed.
It was at that point that Jack and Susan came to see me. It turned out the rules only allowed one pet and the pet could not be more than 25 pounds. Their dogs weighed closer to 50 pounds each and they wanted to know if this rule could be easily changed.
The 15 most outrageous home sales of 2011
The U.S. housing market is still in the pits, closing another year marked by falling prices, lackluster sales volumes and a steady stream of foreclosures. For the rich and famous, though, it’s been a year of record-breaking purchases.
We sorted through the biggest, splashiest home sales of the year to bring you a recap of the 15 we deem the most outrageous.
One of the biggest purchases of the year just closed: an US$88-million penthouse condo in New York City’s billionaire-coveted 15 Central Park West. The 6,744-square-foot apartment, which hit the market in November, sold less than six weeks later to Ekaterina Rybolovleva, the 22-year old daughter of Russian billionaire Dmitriy Rybolovlev, reportedly for the full US$88-million asking price.
Housing industry shy on new rules
It was just another set of numbers but the housing industry says the latest figures from the Canadian Real Estate Association are further proof the sector does not need any more regulation.
The federal government has already cracked down on mortgage requirements on several occasions during this housing boom, including measures to force down payments, shrink amortizations lengths and reduce refinancing limits for existing homeowners.
But speculation continues to grow Ottawa will be back at it again with Toronto-Dominion Bank chief executive Ed Clark suggesting this week that amortization lengths should be lowered to 25 years. Consumers were allowed to amortize mortgages over 40 years back in 2008 but the federal government has whittled that down to 30 years.
“Letting the market sort things out itself is the preferable option because it is so difficult to tweak one element of public policy,” said Phil Soper, chief executive of Royal LePage Real Estate Services, adding CREA’s statistics show the market is already correcting.
Commercial real estate chugs ahead. But for how long?
If 2010 was the year that Canada’s commercial property market largely thrived – rather than imploding, as many industry watchers had predicted – 2011 will likely go down as another year that exceeded expectations.
“Everyone thought the market would run out of steam, and it just didn’t,” said John O’Bryan, Toronto-based vice-chairman with CB Richard Ellis Canada. “People are waiting for what’s happening in Europe and the U.S. to have a major impact here, and that’s definitely gotten inside the corporate psyche.”
He credits a conservative approach: “Canada has a relatively small group of commercial developers who are very well financed, and tend not to take on projects that aren’t pre-leased before shovels go into the ground.”
The numbers are good. National downtown office vacancy rates dropped in the fourth quarter to 6.1 per cent from 8 per cent a year earlier, according to CBRE. That improvement was driven largely by continued demand in the financial sector, while average Class A net office rents held steady year-over-year, hovering at $23.65 per square foot in the fourth quarter.
Nationally, suburban office vacancy rates closed the year at 10.7 per cent, with Class A net rents at $17.08 per square foot, compared with 11.3 per cent and $17.18 a year earlier.
Investing in property: a young person’s game?
You buy a duplex, get a mortgage, find tenants and collect monthly rent cheques. What could be easier?
With stock and bond markets spinning their wheels, many Canadians are looking for alternative places to park their money. And while buying an investment property might seem like a good way to diversify, you should do your homework before jumping into the housing market.
“Real estate investing is not for everyone,” says Vancouver-based Don Campbell, president of the Real Estate Investment Network.
“You cannot do it sitting in your basement in your pyjamas, like you can when you trade stocks. When you buy a property, immediately upon getting the key, you are running a business.”
Aging baby boomers helping change Canada’s housing market: CMHC
Demographic changes from aging to immigration flows are helping shape Canada’s housing market of the future, the federal housing agency suggests in its annual report.
The Canadian Mortgage and Housing Corp.’s study of housing trends sees continued demand for condominium and smaller homes, institutional buildings such as old age facilities, as well as a lively market for renovators.
The oldest of the baby boom generation entered retirement age this year, but by 2036, seniors will represent about one quarter of the total population in Canada, the report stresses.
That will mean more older households and more headed by single seniors, who will demand a different kind of residence from the two-story detached home they raised families in.