DORIANA ZOHIL’S MARKET REPORT
Your Greater Toronto Real Estate Newsletter
Nov – Dec, 2014
SELLERS’ MARKET CONTINUES – STRONG SEPTEMBER SALES
It’s a sellers’ market in Toronto. In September, sales were up by 10.9 per cent compared to September 2013. The average selling price was $573,676, an increase of 7.7 per cent compared to the same time last year.
In the City of Toronto, the average detached home price in September was $951,792, up 11.5 per cent from a year ago. Semi-detached homes sold for an average of $689,414, up an impressive 12.2 per cent from September 2013.
In the 905 regions, detached homes sold for an average of $656,003, up 8.0 per cent, while semi-detached homes averaged $447,485, up 10.1 per cent from last year.
The condominium market was also busy, with an average selling price of $366,588 across the GTA. That’s an increase of 7.1 per cent compared to September 2013.
“The sales results for the first two weeks of September showed strong growth for most major home types, indicating that home buyers continue to find homes that meet their needs and budgets,” says Toronto Real Estate Board president Paul Etherington. The board noted there was competition among buyers for detached homes, semis and townhouses.
“A 30 basis-point drop in mortgage rates earlier this year has delivered households an offer they can’t refuse,” says Diana Petramala, an economist with TD Economics. “With mortgage rates at record low levels, housing affordability has improved. Cuts to interest rates of that degree have typically boosted sales by 30 to 40 per cent over a six-month period, which suggests the momentum may continue into October.”
Petramala says she’s surprised by the lack of listings on the market, which has helped boost prices for the last couple of years. According to Petramala, prices may continue to rise through the fall.
But in a report, Petramala wrote that while housing activity has been “lofty,” mortgage credit is growing at its slowest pace since 2001 since homeowners have taken advantage of low interest rates and are paying back mortgage principal more aggressively than they have in the past. Homeowners are also taking less equity out of their homes to pay for other things than they have in the past.
A BMO Financial Group survey found that most people have revised the amount they expected to spend on a home since they started their search.
“Housing prices in Canada have risen 18 per cent over the last four years,” says Martin Nel, a BMO vice-president. “As prices rise, house-hunters need to ensure their savings are keeping pace, especially first-time buyers who don’t have the leverage of a current house in the market.” Housing costs should not be more than one-third of total income.
TAX CREDITS FOR SENIORS – HELP WITH HOME RENOVATIONS
If you are 65 or older and planning to renovate your home to make it more accessible, you may be eligible for a tax credit of up to $10,000.
To qualify for Ontario’s Healthy Homes Renovation Tax Credit, you must be 65 by the end of the year for which you are claiming the credit or living with a family member who is a senior. Income doesn’t matter.
Your modifications must make the home safer or more accessible. Some renovations that qualify include:
- walk-in bathtubs
- wheel-in showers
- widening passage doors
- lower existing counters or cupboards
- grab bars around the toilet, tub and shower
- handrails in corridors
- wheelchair ramps, lifts or elevators; non-slip flooring in the bathroom
- swing-clear hinges on doors to widen doorways
- motion-activated lighting
The credit does not apply to plumbing or electrical work, roof repairs, installing new windows, heating or air conditioning. You also can’t claim the credit for equipment such as home safety monitoring, home medical monitoring, wheelchairs, walkers, side-swing ovens, fire extinguishers, smoke alarms or carbon monoxide detectors. Services such as landscaping or housekeeping are also not eligible.
For more information, call 1-866-668-8297 or visit www.Ontario.ca/healthyhomes.
PREVENT DRYER VENT FIRES – CHECKING THE RISK
An American report states more than 15,000 fires are started from clothes dryers clogged with lint in the U.S. every year. And, as happened in the GTA last year, some of those fires can be fatal.
Canada Mortgage and Housing Corp. (CMHC) says dryer lint can accumulate in several places: at the outdoor hood bird screen, along the length of the duct, at duct fittings and at the dryer lint screen. Systems can also be clogged if the vent is crimped behind the dryer or if the duct is crushed or blocked prior to installation.
In some homes, the dryer has a long vent to the outside, which makes it more susceptible to blockage and fire. CMHC warns consumers to keep the vent length, including allowances for elbows, transitions and outdoor hood assemblies, within the dryer manufacturer’s recommendations.
Here are some signs that a dryer vent may be clogged:
- clothing may be unusually hot after a drying cycle
- clothing may not be completely dry after a normal drying cycle
- clothing may have a musty odour following the cycle
- the high temperature heat limit switch that may deactivate the appliance if it gets too hot
You should inspect and clean your dryer lint systems at least once a year. There are professional cleaning companies that can do this job for you. Cleaning the vent also makes the appliance operate more efficiently.
CITY CONDOS ARE HOT – SALES AND PRICES RISE
There seems to be no end in sight to the condo boom, especially in the City of Toronto. As the chart shows, prices keep rising. In September, the average selling price for a condo apartment in Toronto was $395,505, an increase of 9.2 per cent compared to the same time last year. The average price in the 905 regions was $300,273, up 3.5 per cent from a year ago.
Why are all these condos selling while even more are under construction? Clearly the demand is strong. With several new office buildings under construction in the city, more people are attracted to work and play downtown. About 75,000 new people arrive in the area every year and need places to live. Although it seems like many of the new buildings would take buyers away from the resale market, Toronto’s construction industry is only able to complete about 19,000 units a year – not nearly enough to satisfy demand.
Real estate investors are also interested in buying condos to rent out as Toronto has few purpose-built rental buildings and a low vacancy rate.
Despite the rising prices, condos are still affordable. Mortgage interest rates are at rock-bottom and are unlikely to start rising until some time next year.
Demographic trends also support the condo market. People who live alone are the fastest-growing type of household in Canada. The never-married, separated, divorced and widowed are population categories that have all increased since the 1970s. Between 1996 and 2006, the homeownership rate for one-person households increased from 40 per cent to 48 per cent. During the same period, the overall homeownership rate went up by only 5 percentage points, to 68 per cent.
In 2006, of the 915,725 households that lived in owner-occupied condominiums, about 41 per cent were people living alone, says Canada Mortgage and Housing Corp.
“As a consequence of population aging and the increased tendency to live alone, one-person households are expected to show the fastest pace of growth to 2036, making it the single biggest type of household by the 2020s,” according to the CMHC.
DEALING WITH COLD WEATHER POWER OUTAGES
Last year’s major Christmas power outage in the GTA may be a distant memory, but that ordeal left 350,000 households in the dark for somewhere between one and ten days. Homeowners should see that experience as a wake-up call. Are you prepared for power outages in freezing temperatures? While the ice storm that caused the outage was an anomaly, it’s still important to make sure you’re prepared. Here are some tips for handling a winter power outage.
- Freezing pipes
As long as the temperature in your home is above freezing, pipes should continue to operate smoothly. If the house temperature drops below freezing, you can expect issues to develop. It’s best to run a bit of water at every tap, which will keep the pipes from freezing. Remember also that traps below every fixture and floor drain can also freeze. Generally, it doesn’t make sense to shut off the water and drain the pipes unless the house is below freezing for an extended period of time or if the home is vacant.If the freezing situation persists for a longer period of time, shutting off water and draining pipes may prevent flooding damage if the pipes burst. You may find localized damage to areas where water was not drained, but in severe conditions that may be the best you can hope for. [Sai: I took out the part about anti-freeze as it seemed rather confusing. Is it suggesting that you add anti-freeze somehow to the water? around the pipe? Maybe someone handy knows what this means but I suspect a lot of readers will wonder about it. Safer to take it out or else explain it in more detail.] If your home runs on a hot water boiler and radiators, turning it off will probably leave water in low spots. - Adding heat
Focus on heating just one room, preferably one with little or no exterior wall surface. You will not be able to heat the whole house. Insulate the doors and windows of that room as much as possible. If you have a gas or wood-burning fireplace, they will add heat. Gas fireplaces are typically more efficient than wood fireplaces and wood stoves are much more efficient than open fireplaces.Candles used for light or heat create the risks of both starting a fire and inhaling toxic gases such as carbon monoxide so make sure to have a battery-powered smoke alarm and carbon monoxide detector on hand.Do NOT bring your BBQ inside as a heat source. Do NOT use your gas stove for heat. If you have a gas or propane generator, run it outdoors; NEVER indoors. The carbon monoxide gas from these devices may kill you.
- Electricity from vehicles
Power inverters can provide 120 volt power for charging phones, tablets, and other devices from your car. Some vehicles have 120 volt receptacles you can plug into directly. You can also purchase inverters that plug into cigarette lighters and convert the DC power in your vehicle to AC power for household plugs.
The above article is reprinted with the permission of Carson, Dunlop & Associates Ltd., Consulting Engineers – Expert Home Inspections.
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