Thursday, 24 November 2016

Average price of Canadian home sold in October up 5.9% from year ago

October was another record month for Canadian real estate, even as the average price increased by a relatively modest 5.9 per cent.

Last month, Ottawa implemented new stress test rules for first-time buyers aimed at making sure they are capable of paying a higher interest rate on their mortgage than the one they have been offered. That change kicked in last month, and it's going to be a factor in the numbers over the long term, CREA said.
Typically not a strong month for home sales, October 2016 was the strongest on record for the month, up more than two per cent from last year's strong level, with sales going up in about 60 per cent of Canada's housing markets.

Source:  CBC News

Wednesday, 5 October 2016

Refreshing your home this fall?

Great idea! Touching up paint marks or chips makes a real difference. In fact, I've just dome the same myself. I found a great tip for how to store felt over paint written by Danny Seo in the first issue of "Naturally".

"If you only need a little bit of left over paint to save for touch ups down the road try this upcycling idea: Use old plastic water bottles. Start with a clean, dry water bottle and lace a funnel on the top. Pour leftover paint into the bottle until it's about 95% full, remove the funnel and toss in about 6 glass marbles. Replace the cap tightly and secure it with a few strips of painters tape. When it's time to use the paint, shake it; the marbles will blend the paint, and you'll be good to go to till in any nicks or scratches."

Thursday, 8 September 2016

Conditional Building Permits: A Very Useful Tool

There are many situations in which a developer may need to begin construction before a certain date, but cannot get their building permit in time. In Ontario that is usually because they cannot yet meet some very minor "applicable law" requirement that, according the Building Code Act, they must comply with in order to obtain the permit.

A conditional building permit can often get around this problem, even though many municipalities in Ontario use them so infrequently that they seem barely aware that they have the authority to issue them. Conditional building permits allow an applicant to proceed with construction even though all "applicable law" requirements necessary to obtain a building permit have not yet been met. Instead, there is only a much shorter and less onerous list of "applicable law" requirements that must be met. Even in larger municipalities conditional building permits are not always raised as an option to applicants, even if they could potentially benefit in reduced fees and commence their construction much sooner.

Some of the more common circumstances in which a conditional building permit can be useful include:
  • Beating an upcoming development charge (or other fee) increase, typically payable upon issuance of the first above-grade building permit;
  • Where a Record of Site Condition pursuant to the Environmental Protection Act has not yet been secured and is expected to delay issuance of the building permit significantly;
  • Where a Committee of Adjustment has approved variances but the statutory Ontario Municipal Board appeal period has not yet expired.
The conditional building permit agreement that is required typically sets out the timelines within which the applicant must comply with the remainder of the "applicable law" requirements for a building permit, and deals with how and if the site must be restored should those requirements not be fulfilled.


Wednesday, 17 August 2016

Home sales volume down 1.3% in July

The Canadian Real Estate Association says July marked the third consecutive month of fewer home sales. The number of transactions fell 1.3 per cent nationally between June and July, as more than half of all markets tracked showed declines in July. However, despite the drop in the number of sales, the national average price for a home sold in July was $480,743, up 9.9 per cent compared with a year ago.

Overall, the number of newly listed homes in Canada rose by 1.2 per cent in July compared to June, while the national sales-to-new listings ratio eased to 61.6 per cent in July. It was the second monthly decline.
CREA says a sales-to-new listings ratio between 40 and 60 per cent is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets, respectively.

Source: Financial Post 

Thursday, 7 July 2016

Home sales down month-over-month

Although Canadian home sales started off the year at a torrid pace, the Canadian Real Estate Association says sales in the country's hottest markets are expected to slow in the second half in the face of high prices and a shortage of available properties.
Still, due to the strong start to the year, the association raised its full-year forecast for home sales to a record 536,400, an increase of 6.1 per cent. That compared with its March forecast calling for an increase of just one per cent to 511,400.
The new forecast came as CREA reported that home sales through its MLS system dropped 2.8 per cent month-over-month in May. But compared with a year ago, sales in May were up 9.6 per cent and stood 15.1 per cent above the 10-year average for the month.
The national sales-to-new-listings ratio climbed to 64.8 per cent in May, suggesting a seller's market and the highest reading since October 2009.
The national average price of a home sold in May was $509,460, up 13.2 per cent from a year ago.

Source:  CTV News

Wednesday, 1 June 2016

Disclosure Obligations in Residential Real Estate Transactions

What happens when the home you bought turns out to be not quite what you expected? Perhaps the roof leaks or there is a rodent infestation. Maybe the plumbing is faulty or the construction defective. What recourse does a purchaser have against the vendor?
The critical question is what disclosure obligations the vendor has when selling their property. As is often the case in legal matters, there are competing principles at play in determining who bears the loss for such defects. In many cases, a purchaser should retain an inspector to inspect the property and the failure to do so cannot shift blame to the vendor.
A competing principle is consumer protection. This means the court will intervene to prevent fraud and non-innocent misrepresentation where a purchaser has been lied to about a property’s condition. However, the court may also intervene where a vendor has failed to disclose material (meaning dangerous) latent defects about the property that they knew about or ought to have known about. A latent defect is one that is not discoverable by a purchaser through reasonable inspection and inquiry. But not every latent defect will result in a remedy against a vendor.  It must be a defect of “substance” that makes the property uninhabitable or dangerous.
Most residential sales involve the vendor providing a Property Disclosure Statement (PDS). A PDS is meant to identify any problems or concerns with the property, not to give detailed comments in answer to the questions posed.  A vendor need only say that they are or are not aware of problems.  When completing a PDS, a vendor must correctly and honestly disclose their current actual knowledge about the property, but that knowledge does not have to be correct.  The contents of a PDS are representations upon which a purchaser can rely.
If you are caught up in the residential real estate frenzy, remember that generally it is “buyer beware”. Before you close a purchase, properly inspect the property and, if necessary, retain professionals to help you.  As a purchaser, if you want a promise of fitness for the home you are going to buy, your safest bet is to negotiate express warranties by the vendor to that effect by the vendor.


Thursday, 19 May 2016

April home sales set record, Canadian Real Estate Association says

The number of homes sold in Canada last month hit a record as supply tightened. There were 57,669 homes sold nationwide over the Multiple Listing Service in April, a 10.3 per cent increase from the same month last year, according to the Canadian Real Estate Association .
The rise in sales came as the number of new homes put up for sale slipped 3.7 per cent from a year ago to 103,028. Compared with March, sales were up 3.1 per cent in April, while new listings declined 0.2 per cent.

The national average price for homes sold in April rose 13.1 per cent from a year ago to $508,097.
Excluding the greater Vancouver and greater Toronto markets, the average price was $369,222, up 8.7 per cent from April 2015.
The national sales-to-new listings ratio rose to 64.5 per cent in April, the ratio’s tightest reading since October 2009.


Saturday, 7 May 2016

How to use your RRSP to invest in real estate

As the Canadian real estate market continues to rise, some investors want to put their RRSP money to work in a real estate investment. While there are limitations, there are also several options available to investors.

Unfortunately, those looking to buy a rental property with their RRSPs are out of luck. Tax-free RRSP withdrawals of up to $25,000 can be taken under the Home Buyer’s Plan (HBP) to buy or build a qualifying primary residence to live in, but not for a rental property investment.

Real estate investment trusts (REITs) are RRSP-eligible investments that pool together income-generating real estate. Typically the pool includes residential, office, retail, industrial, self-storage, healthcare or hotel properties. REITs are a way for investors to invest indirectly in real estate that is managed by a professional team.

It is also possible to hold your own mortgage in your RRSP, effectively making you your own lender. Fees may be a couple thousand dollars on set-up and then a couple hundred dollars a year thereafter.
For conservative investors, it can be an enticing option because the mortgage rate used is the posted rate, which guarantees you a much higher fixed return than you could otherwise earn on a GIC or high-quality bond. That said, it means you are borrowing at a higher rate – albeit from yourself – than you could otherwise borrow from a bank.

One concern with holding your mortgage in your RRSP is that if you could otherwise borrow at a lower rate of interest and possibly invest at a higher rate of return in a balanced investment portfolio, you might be missing out twice. This is especially true at today’s low interest rates, in particular when you take into account the up-front and ongoing costs.

Anyone considering a real estate investment given the long run-up in Canadian real estate prices should consider their existing exposure to real estate, not only through their stocks and mutual funds, but also their primary residence.

Many Canadians have a high allocation to real estate already in their net worth without targeting real estate specifically in their RRSPs, so use proper asset allocation as the primary test to determine if you should be investing further in real estate in the first place.

Source:  Financial Post

Sunday, 27 March 2016

Examining opportunities in the student housing market

The Canadian housing market and where it is headed has been the subject of heated debate among investors and Canadians in general for several years now. Among the countless stakeholders in this important issue are students of Canadian universities and colleges across the country. As of 2013, there were 950,000 full-time students enrolled in 82 of the largest educational institutions across Canada, a number that has since grown closer to one million. Obviously housing is an important factor in the decision-making process of students and one that is not taken lightly considering the cost. This holds particularly true for international students seeking an education in Canada. In fact, the international student market comprised approximately $8 billion in Canada as of 2014, factoring in both tuition and living expenses. This group accounts for approximately 10 per cent of full-time university students across the country.

Investors have taken notice of this high demand for affordable student housing. In the “university towns” of Waterloo, London and Guelph, private groups have long been interested in building and developing units for students. Students are often more willing to rent by the bed as opposed to entire units. This provides further income to property owners as they are able to generate more revenue from a single unit. It is not only private investors who have taken notice to this opportunity but also the universities and colleges themselves.

Based on this information, it is clear that an opportunity presents itself in the rental housing market. Both domestic and international student numbers keep growing.

Sunday, 21 February 2016

Mortgage rules requiring more than 5% down on Canadian homes over $500K

Starting this month you'll need to put upwards five per cent down on a home selling for more than $500,000 in Canada. The new mortgage rules, announced last December by Finance Minister Bill Morneau, dictate that buyers must put down 10 per cent down on the portion of the home's price above $500,0000. The move's intended to keep housing prices affordable for anyone wishing to enter some of Canada's hottest real estate markets.
Buyers can still put down five per cent for homes $500,000 and under. For example, if you want to buy a $750,000 home, you'll need to have a minimum down payment of $50,000, which is what you get when you add five per cent of $500,000 and 10 per cent of the remaining $250,000.
Homes that cost more than $1 million still require a 20 per cent down payment.

Wednesday, 6 January 2016

How virtual reality could better connect buyers with properties for sale

Canadian real estate could soon be donning headsets and touring upcoming condo developments in virtual reality by turning floor plans of new developments into 3D, immersive mockups that can be experienced in virtual reality, according to the founder of a Toronto-based technology firm. Potential buyers can now, from the comfort of their own home, view any floor plan that they want, with the finishes they want, and feel like they're actually inside that home.

Rather than building model suites, the building company uses technology to create virtual reality mockups of its upcoming development providing a significant cost saving for the company.

While the appeal of immersive tours for foreign buyers is obvious, REALTORS note that the technology has benefits for local home buyers, as well. For example, it can help a home-hunter narrow down his or her list of options, ultimately cutting down on the amount of time spent driving around town touring homes.

Source: CTV news