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May/Jun 2015 Real Estate Newsletter

Posted by David on May 28, 2015
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Your Greater Toronto Real Estate Newsletter
May – Jun, 2015



The frigid weather earlier this year didn’t slow down the real estate market. Anyone who decided to wait for the spring weather missed out on a lot of homes for sale.

This year’s market started strong and then got another boost when the Bank of Canada lowered its overnight interest rate in January. People who thought the market had no pent-up demand were proven wrong as sales took off again.

The trend continued in March, as sales jumped by 11 per cent in the GTA compared to last year. New listings were up too but by only 5.5 per cent. Toronto Real Estate Board (TREB) president Paul Etherington believes there would have been even more sales if it weren’t for a lack of good listings.

“The fact that sales growth has continued to outpace listings growth suggests that there is pent-up demand in the marketplace, especially for singles, semis and townhouses,” says Jason Mercer, TREB’s director of market analysis. “This is why we have experienced a sustained period of strong price growth for low-rise types.”

TREB data shows that a greater share of high-end detached homes sold in March than sold at the same time last year, resulting in a bump in average prices. In the City of Toronto, the average detached home now sells for more than $1 million. In the 905 regions, detached houses sell for an average price of just over $700,000.

For all housing types, the average selling price for the month of March was $613,933, an increase of 10 per cent compared to a year ago.

While low mortgage rates continue to drive the market, other factors keep Toronto’s real estate market hopping. Immigration to the city is steady, including people returning from out west after the drop in oil prices eliminated job prospects there.

Manufacturing and exporting industries are benefiting from lower energy costs and the depreciated Canadian dollar, which is already leading to more job creation. The Ford plant in Oakville, for example, has added 1,400 positions in the last six months.

Naysayers suggest that high household debt is a major concern in this country, which could lead to problems in the housing market. Recently Sal Guatieri, senior economist for BMO Capital Markets, said that while there are reasons for concern “the debt isn’t as onerous as some believe.”

Guatieri continues, “Tougher mortgage rules, combined with warnings from the Bank of Canada, Ottawa and the IMF, have kept borrowing on a tighter leash. Barring a further decline in interest rates, credit is unlikely to accelerate…” Guatieri believes most Canadians don’t have a debt problem “and will have little trouble managing their finances when interest rates finally normalize.”



Canada ranks dead last out of 17 countries and gets a “D” grade on municipal waste generation, according to a 2013 report by the Conference Board of Canada. Waste generated in Canada has been rising steadily since 1990 and we generate more waste per capita than the United States, the United Kingdom, France, Italy and Germany.

This spring, Toronto City Council approved a 2.25 per cent annual increase for all solid waste user fees and increased the cost of using the largest garbage bin to $340.60 per year. There are four bin sizes available and the smaller your bin, the less you pay.

There are many ways to reduce the amount of garbage your family generates. You could avoid buying items that come with a lot of extra packaging. Use reusable containers and take your own bags when you go shopping. Plan your weekly meals before you go to the grocery store, so as to minimize your food waste.

Reuse items instead of throwing them away. If you don’t have a use for them, consider having a garage sale or donating good-quality used items to a non-profit group.

Be a good composter and recycler to keep garbage out of landfills. Make sure your food and organic waste goes into the green bin. If you haven’t recently reviewed everything that can go into the blue bin, you may be surprised at what is now accepted. If you have something you don’t know what to do with, visit The Waste Wizard at



How much real estate in Toronto is currently owned by foreign investors? A recent report by Canada Mortgage and Housing Corp. discovered that about 2.4 per cent of Toronto’s condo apartments may be foreign-owned. No figures are available to tell us how many single-family homes are owned by people from outside the country, but a combination of the dropping value of the loonie, the recent interest rate cut and the improving American economy could result in more foreign investment in our real estate.

Brian Johnston, CEO of Mattamy Homes, told Postmedia News that foreign investors think “the Canadian market has gone on sale.” On the other hand, for Canadians who want to buy property in the US, “The reverse is true…the price of US real estate just went up by 10 per cent.” Snowbirds who were thinking about buying in the US may now set their sights on a Canadian alternative.

For Chinese investors, our real estate has become even more attractive as the Canadian dollar has depreciated by 20 per cent versus the renminbi, which is China’s official currency.

Dropping oil prices have put the Canadian economy in a tailspin, hurting Alberta in particular. However, Ontario has benefited as low oil prices and a lower loonie helps exporters and manufacturers. While foreign real estate investors may have some concerns about how Canada’s economy will weather the oil price storm, it’s still expected that the “bargain” real estate prices will lure more buyers.



Condo buyers are jumping into the market in a big way in 2015. According to the Toronto Real Estate Board, March sales for condo apartments were up 12.9 per cent in the city and 19.4 per cent in the 905 regions.

Most of us thought that mortgage interest rates could not get any lower, but the Bank of Canada’s move to cut rates in January has now filtered down to create a mortgage rate war among banks and other lenders. The low rates are creating a flurry of condo sales.

The average price of a GTA condo apartment in March was $368,915. That’s about the same as last year at this time in the city and about 4.4 per cent more than at this time in 2014 in the 905 regions.

There has been a lot of noise in the media about the amount of new condo construction in the GTA and its potential impact on the market when the units are all completed. Ben Myers of Fortress Real Developments reports that in January 2015 a record number of units – 9,457 – were absorbed, more than the previous eight months combined. With all of those units completed, some people predicted the resale market would either be flooded with listings or that it would plummet because everyone would be buying a new unit instead of a resale suite.

In fact, the resale market has not seen a spike in listings, nor has there been a drop in sales. It’s quite the opposite.

There were also a record number of completions in 2014 and Myers says this was “a great test case for the theory that the “glut” of completed units would result in increased listings and depressed resale/rental condominium/price movement.

According to research firm Urbanation, “there were fewer resale condominium apartment listings in 2014 in comparison to 2013, resale prices increased about four per cent annually and condo rental rates increased about one per cent year-over-year.”

Urbanation’s research also found that less than 3 per cent of units completed and registered in 2014 ended up in the resale market, whereas 24 per cent were rented out on the MLS System.

The numbers indicate that there are few “flippers” in the market, those people who buy new or pre-construction condos and then immediately putting them on the resale market to cash in their equity. Most people who buy condos are end-users who plan to enjoy the condo lifestyle or investors putting their units on the rental market with no plans to sell immediately.

Clearly there is still plenty of demand from both buyers and renters for condo apartments in the GTA.



Normal Maintenance
lf you strip away the cosmetics, a house is made up of the structure, roof, exterior envelope and the “systems” of the house. The “systems” are things like heating, plumbing, electrical and cooling.

All Components and Systems Eventually Wear Out
Fortunately, they don’t all wear out at the same time. Different components have different life cycles. Houses tend to settle into what you might call a “normal maintenance pattern”.

The 1% Rule
A reasonable annual estimate of the cost of normal maintenance is 1% of the value of the house. One year you may replace the furnace; a few years down the road you may re-surface the roof. Throw in the odd unexpected repair in between and you average 1% per year. This rule is not far off regardless of the value of the house.

What’s the Message?
A homebuyer should arrive at the home inspection with realistic expectations. If you are buying a 12-15 year old home, you may need a new roof. If you are buying a 60 year old home, you may have to update some plumbing.

How Long Does it Last?
Here is a short list of typical life cycles of the most common components of the home. Keep in mind that there will be exceptions in every category.

Conventional asphalt shingles 12-15 years
Top quality asphalt shingles 25-30 years
Low slope shingles 10-15 years
Gutters and downspouts 20-30 years
Aluminum siding 50 plus years
Wood siding maintenance dependent
Stucco maintenance dependent
Exterior paint 4-6 years
Deck 10-20 years
Asphalt driveway surface 10-20 years
Concrete driveway 30-40 years
Garage door opener 8-12 years
Conventional furnace 20-25 years
Mid efficiency furnace 20-25 years
High efficiency furnace approx 20 years
Steel boiler 20-30 years
Hunidifier 5-10 years
Electronic air filter 10-20 years
Air conditioning condenser 10-15 years
Copper pipe indefinite
Toilet 30-40 years
Sink 12-20 years
Faucet 10-15 years
Water softener 5-15 years
Water heater 8-12 years

The above article is reprinted with the permission of Carson, Dunlop & Associates Ltd., Consulting Engineers – Expert Home Inspections.


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These sites are believed to be reliable. However, their accuracy cannot be guaranteed.


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