Home ownership is more affordable than rent in these Toronto locales

Toronto condo prices have reached historic highs with a 6.5% year-over-year increase in Q2 2018, up to $603,480.

Accompanying record-low rental vacancy rates of below 1%, these factors are increasingly pushing home ownership as the more sensible path in sections of the red-hot market, according to a new analysis by real estate information firm Zoocasa.

Using second-quarter pricing data from the Toronto Real Estate Board, the study found that monthly payments for a mortgage are lower than those of rent in 21 out of 35 City of Toronto neighbourhoods. This is assuming a 20% down payment, a 3.05% mortgage interest rate, and a 25-year amortization, while not taking into account utility costs, insurance, condo fees, and property taxes.

Read more: Will large-scale transit plan make condo investment lucrative again?

The following neighbourhoods (with TREB notations) have average monthly mortgage payments lower than the average rent:

• W05: Black Creek, York University Heights - buying saves $606/month (average rent of $1,939; average mortgage of $1,333)
• W09: Willowridge, Martingrove - buying saves $600/month (average rent of $2,107; average mortgage of $1,507)
• E10: West Hill, Centennial Scarborough - buying saves $576/month (average rent of $1,650; average mortgage of $1,074)
• W10: Rexdale-Kipling - buying saves $551/month (average rent of $1,834; average mortgage of $1,283)
• E11: Malvern, Rouge - buying saves $490/month (average rent of $1,751; average mortgage of $1,261)

Meanwhile, paying for a mortgage and paying for rent is roughly at the same level in these locales:

• C07: Willowdale West - buying saves $14/month (average rent of $2,341; average mortgage of $2,327)
• C14: Willowdale East - buying saves $12/month (average rent of $2,246; average mortgage of $2,234)
• C13: Don Mills, Victoria Village - buying saves $11/month (average rent of $2,064; average mortgage of $2,054)
• C15: Hillcrest Village, Bayview Village - buying saves $10/month (average rent of $2,011; average mortgage of $2,001)
• C01: Downtown - renting saves $51/month (average rent of $2,563; average mortgage of $2,614)

Source: https://www.canadianrealestatemagazine.ca/news/home-ownership-is-more-affordable-than-rent-in-these-toronto-locales-245862.aspx

Dear seller, please pick me to buy your home

Having a mortgage offer and being in a position to move fairly quickly are not unusual traits of a successful homebuyer but having a gift for letter writing is less common.

However, that’s beginning to change, as desperate homebuyers turn to a personal approach in hope of persuading sellers that they are the best buyers.

A report from the Canadian Press says that letters contain a variety of persuasive tactics, from praising the home’s features – flattery can often be a winning strategy – to a heart-tugging back-story of single parents and young families desperate for their dream home.

The article says that it’s not unusual for real estate agents to be asked to deliver notes to sellers and while few are likely to opt for sentiment over finance, it seems that sellers can be influenced to some degree by the gesture.

In business, experts say that people are more likely to buy from people they know, like, and trust.

In competitive housing markets, it could just be that people will sell to those they know, like, and trust; and letters are helping to establish those connections.

Source: https://www.canadianrealestatemagazine.ca/market-update/dear-seller-please-pick-me-to-buy-your-home-245596.aspx

Impact of tighter lending rules appears to be easing says TD

The latest data on Canadian existing home sales suggests that the impact of the tighter mortgage rules introduced this year may be easing.

In a report reacting to the latest CREA sales data for June, TD Economics economist Ksenia Bushmeneva says the sales release was a “Goldilocks report.”

Sales increased while prices stabilized and inventory declined to further tighten market conditions.

“Taken together, these changes support the notion that housing market is stabilizing after significant volatility in the first half of the year related to the implementation of B-20 rules,” Bushmeneva writes.

She adds that historically, the impact of policy changes such as those taken by OSFI in January, is swift but short-lived.

“We expect that resale activity hit its trough in Q2 and will begin to gradually recover thereafter. As a result, residential investment should start contributing positively to GDP growth in Q3 and Q4 of this year,” Bushmeneva predicts.

In addition, the TD Economics’ report highlights the recent BoC Senior Loan Officer Survey which indicated easing credit conditions for mortgages as lender competition intensifies. This, it says, should also help with the normalization of the housing market.

Source: https://www.canadianrealestatemagazine.ca/market-update/impact-of-tighter-lending-rules-appears-to-be-easing-says-td-245330.aspx

Opportunities in seniors housing Why a seniors housing development could be the best option

With attractive developments harder to find in many areas of the Ontario real estate market, investors are starting to think outside the box when it comes their portfolio. The rapidly growing seniors housing sector appears to tick many of the required boxes for those searching for security, income, and an investment that has the possibility of being passive in nature.

“One of the greatest benefits of seniors housing for purchasers is the stability of the income source,” explains Bruce Stewart, lead developer of the Founders Residences - Westboro. “In Canada, the senior population is expanding more than any other sector in the country. That growth is only projected to increase which creates an even stronger demand for housing with specialized services.”

Stewart’s view on the growth of the senior demographic is backed up by data and research. According to Statistics Canada, the average life expectancy for Canadians increased to 80.4 years in 2005 from 77.8 years in 1991. Fast forward to 2018 and that has increased even further.  Statistics Canada also confirmed that the 75 and 85-plus age segments in Canada are anticipated to be among the fastest growing segments over the next two decades. One age segment lower, which includes the population of those over age 65 is expected to more than double in size by 2031.

As well as being an attractive niche in terms of growth, the seniors housing segment represents a more secure option for buyers. When renting out traditional properties, it can be difficult for landlords to decipher between an excellent and terrible tenant. A solid credit report and verified references never tell the full story and nearly all investors have a tenant horror story to tell. Purchasing in a seniors housing development eliminates most of these challenges.

“With the rapid expansion of the Seniors sector in Canada in the past decade, new developments have more senior centric improvements including monitoring systems and amenities that put pressure on older facilities to compete.” Stewart says. “There are currently a number of retirement residences in West Ottawa with a total capacity of almost 2,000 suites. This level of supply underserves the current and growing demand. Independent studies confirm both independent and assisted living markets offer opportunity for expansion of supply.

Source: https://www.canadianrealestatemagazine.ca/infocus/opportunities-in-seniors-housing/why-a-seniors-housing-development-could-be-the-best-option-242620.aspx

Lawyer urges condos to draft cannabis rules now rather than later

Real estate lawyer Brandon Hicks called on condo dwellers to establish pot-use rules for their buildings now rather than later.

Hicks, who also serves as the president of a condo board representing 18 stacked units in Regina, stated that waiting after the drug becomes legal on October 17 to draft said rules might prove difficult – not to mention deeply unpopular among landlords already up in arms about the very real possibility of tenants smoking or growing the plant inside their units.

The lawyer said that in anticipation of cannabis legalization, his board has already formed a 4-member committee that will review the building’s rules and suggest revisions, which will include a full ban on all types of smoking (including vaping) that will cover patios, as well.

Residents will be voting on the prohibition at the condo board’s annual general meeting before October. Saskatchewan’s Condominium Property Act mandates that any changes to a building’s bylaws needs to get the approval of 2/3 of the condo board’s voting members.

“There's just too many issues, we thought, that could potentially come up: smoke migration between units, decreases potentially in property values,” Hicks told CBC News.

Alberta-based real estate lawyer Robert Noce emphasized the importance of this point.

“The simple reason is to avoid the scenario where you may have to grandfather an existing tenant for that particular use,” Noce said, adding that should there be an actual need to grandfather existing members, “deciding the issue now will at least set a clear demarcation line.”

Hicks also noted that they have to consider the rights of people (e.g. medical marijuana users) in light of the inimical effects of smoke, which other residents will be forced to deal with.

“We’re going to probably see some struggles even in the condominium context when you peel down to the medical level and try to figure out how those rights to make it a smoke-free building interplay with a medical patient’s rights to consume their cannabis,” Ontario cannabis lawyer Trina Fraser agreed.

“I think ultimately it will probably evolve to the point where you're going to either know you're buying a unit within a cannabis-friendly condominium or a cannabis-banned condominium.”

Source: https://www.canadianrealestatemagazine.ca/news/lawyer-urges-condos-to-draft-cannabis-rules-now-rather-than-later-244996.aspx

Land transfer taxes hound first-time buyers in hottest markets

In Canada’s hottest housing markets, first-time buyers are forced to deal with both elevated home prices and the significant impact of land transfer taxes, according to a new analysis by real estate information portal Zoocasa.

As the tax is a non-mortgagable amount that must be paid in cash upon the closing of a deal, this leads to “buyers in the most expensive and heavily-taxed housing markets [saving] for years longer to have that cash in hand, compared to more affordable markets with a moderate fee structure,” Zoocasa noted.

The analysis looked at average home prices (as of May 2018), land transfer tax structures, and applicable home buyer rebates to determine which major metropolitan markets impose the greatest tax burdens upon first-time buyers.

The Canadian cities with the highest land transfer taxes for first-time buyers are:

• Rank 1 (Highest): Vancouver, BC - $20,076 (average home price of $1,103,803)
• Rank 2: Toronto, ON - $16,687 (average home price of $805,320)
• Rank 3: Victoria, BC - $12,270 (average home price of $713,485)
• Rank 4: Abbotsford, BC - $8,780 (average home price of $538,999)
• Rank 5: Kelowna, BC - $8,659 (average home price of $532,972)

Fortunately, first-time buyers can find respite from land transfer taxes in these markets:

• Windsor-Essex, ON - $0 (average home price of $303,183)
• London & St. Thomas, ON - $0 (average home price of $366,096)
• Edmonton, AB - $239 (average home price of $386,750)
• Calgary, AB - $269 (average home price of $471,030)
• Niagara Region, ON - $629 (average home price of $407,693)

Source: https://www.canadianrealestatemagazine.ca/news/land-transfer-taxes-hound-firsttime-buyers-in-hottest-markets-244880.aspx

Homeowners are more satisfied with their insurers

Rising home insurance premiums have been squeezing household budgets but it seems homeowners are generally happy with their insurance providers.

J.D. Power says that overall satisfaction has risen for the third consecutive year and its index is now at 786 out of 1000.

Insurers have been working to improve how their customers can interact with them and these channel improvements appear to be paying dividends.

“Insurers understand the important role channels play in shaping customer satisfaction,” said Tom Super, Director of the Insurance Practice at J.D. Power. “Within an environment that has experienced both premium increases and several large CAT events, an effective channel strategy can help mitigate the negative effects of those events if managed properly.”

Where do homeowners pay the highest premiums?
Although experiencing the highest price increase since 2016 (13%), customers in the Quebec region still pay the lowest annual home insurance premiums ($960), followed by those in the Western region ($1,200). Homeowners in the Atlantic/Ontario region have the highest median annual premiums ($1,284).

Homeowners in the Quebec region are the most satisfied with their home insurance company, with a region satisfaction average of 810. Homeowners in the Western region have the lowest satisfaction level, averaging 769.

Which home insurers are owners most satisfied with?
In the Atlantic/Ontario region, RBC Insurance ranks highest in overall satisfaction with a score of 814. The Co-operators (809) ranks second and Allstate (803) ranks third.

In the Quebec region, The Personal ranks highest with a score of 823, followed by La Capitale (818) and Intact Insurance (816).

In the Western region, BCAA and The Co-operators rank highest in a tie with a score of 799. TD Insurance (778) ranks third and Alberta Motor Association (776) ranks fourth.

Source: https://www.canadianrealestatemagazine.ca/market-update/homeowners-are-more-satisfied-with-their-insurers-244665.aspx