Toronto Loft Conversions

Toronto Loft Conversions

I know classic brick and beam lofts! From warehouses to factories to churches, Laurin will help you find your perfect new loft.

Modern Toronto Lofts

Modern Toronto Lofts

Not just converted lofts, I can help you find the latest cool and modern space. There are tons of new urban spaces across the city.

Unique Toronto Homes

Unique Toronto Homes

More than just lofts, I can also help you find that perfect house. From the latest architectural marvel to a piece of our Victorian past, the best and most creative spaces abound.

Condos in Toronto

Condos in Toronto

I started off selling mainly condos, helping first time buyers get a foothold in the Toronto real estate market. Now working with investors and helping empty nesters find that perfect luxury suite.

Toronto Real Estate

Toronto Real Estate

For all of your Toronto real estate needs, contact Laurin. I am dedicated to helping you find that perfect and unique new home to call your own.

 

Tag Archives: resale homes

Why 2013 has been a good year for GTA housing

Last December, many pundits were predicting a big housing slowdown in the GTA. Here’s why it didn’t happen.

Mark Weisleder – Toronto Star

Last December, many pundits were predicting a big housing slowdown in the GTA as an oversupply of condos in particular, rising interest rates and slowing demand put a dent in sales and prices.

My view was different. I expected the market to stay strong and prices to hold up — which is what has happened.

By the end of September, 68,909 new and resale homes had changed hands in the GTA, 1,000 units less than the same period last year. But the first half of October was strong — about 20% higher than a year ago. So, it seems that sales for the year will exceed 2012’s 82,200 units.

Average prices are also almost 5% higher than a year ago and there are still bidding wars in many areas, because there are more buyers than listings.

Here’s why this is happening:

1. Low interest rates: Events such as the U.S. “fiscal cliff” crisis, civil war in Syria and instability in the Middle East, have had little impact here. Canada remains an island of stability. Things will only improve as economies in the U.S. and European Union continue to improve. Interest rates may rise a little over the coming year, but the moves are unlikely to have a serious impact on the market.

2. Canada’s appeal to immigrants: We continue to be the envy of the world when it comes to quality of life and the fact that so many cultures and communities can live in harmony. That is why more than 150,000 people come to Ontario each year, with the majority to the GTA. They have to live somewhere.

3. Low rental vacancy rates: The Toronto condo market has slowed somewhat, but prices haven’t crashed. The reason is that the vacancy rate for rental condominium units in downtown Toronto is 1.7%. As a result, the average rent for a two-bedroom condominium is about $2,500, which is also the amount an investor needs to carry an average two-bedroom condominium, even if it costs $500,000. If you can carry your condo, you are in no rush to sell or lower your asking price.

Things could get better with a few changes to rules and regulations:

The tighter mortgage rules announced by Ottawa a year ago mean fewer people are qualifying for new homes. Those who do qualify are much less likely to default on their mortgages. This means the CMHC is making more money because it is paying out fewer claims. Why not pass on some of these savings to buyers with lower premiums?

Comment: Amid all the talk of what happens when everyone in the country defaults on their mortgages, everyone forgets what CMHC has in the bank. Never mind that the default rate has only been 0.34%-0.35% for about 70 years now. But they have some $26 billion in assets and revenues just shy of $5 billion annually. It has a fiscal surplus of $2 billion every year. The average outstanding mortgage balance is $158,642 with average house values at $379,000. So even if everyone in the country defaulted, there is more than enough value to cover the debt – without dipping into their bank account for a cent. There are 9.2 million owned homes in Canada, with an average value of $379,000 – a total value of $3.487 trillion. But the outstanding mortgage debt on them is only $1.460 trillion. A default rate of only 0.35% means that $5.108 billion of mortgage debt goes south every year – on properties worth $12.203 billion. And CMHC has $26 billion in the bank and adds $2 billion to that every year. No matter how you do the math, there is no impending CMHC / mortgage / default crisis looming. Even with some 32,000 mortgages defaulting every year, CMHC manages to put $2 billion in the bank. The mortgage default rate would have to jump to around 0.90% just to eat into CMHC’s annual fiscal surplus – without touching their assets. Truly, there is nothing at all to worry about there.

Some sellers who sell homes by themselves are refusing to pay any commission at all — even to the buyer’s real estate agent — believing they can make more money that way. The commission can exceed several thousand dollars on a typical sale.

What these sellers don’t factor in is the fact that the buyers will then have to pay their agent themselves, meaning they’ll offer less money to buy the home.

Comment: Uh… no. Buyers never pay commissions, that does not happen around here. If sellers refuse to pay any commission at all, then they will find that no agents want to show their property.

As the rules stand now, buyers cannot include commissions as part of the mortgage. But if the rules change to include commissions as part of the loan application, more buyers would be able to afford a home.

Comment: That would be interesting, but will never happen. Buyers don’t pay commissions, so there is no demand. Typically sellers pay commissions and buyers pay taxes. How about rolling the exorbitant land transfer taxes into mortgages? That would certainly help buyers! When the bill is over $12,000 on a $500,000 purchase, that takes a HUGE chunk out their savings and down payment.

People have been predicting the real estate market crash in the GTA for the past 13 years. It hasn’t happened yet and won’t happen next year either.

Comment: Amen brother. This reads exactly like I had written it.

—————————————————————————————————–
Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto Realtor with Century 21 Regal Realty. He did not
write these articles, he just reproduces them here for people who are
interested in Toronto real estate. He does not work for any builders.

—————————————————————————————————–