New home prices up for 12th straight month

The cost of new homes has risen again, the 12th consecutive rise, according to Statistics Canada. Nationally, the cost of new housing rose 0.2 per cent in March, the same as in February.

Ontario and British Columbia saw the largest overall gains in new home prices with the combined Toronto/Oshawa region and Vancouver advancing 0.4 per cent. The metro with the largest gain was London, up 0.8 per cent.

Windsor and Winnipeg were both up 0.3 per cent but there were declines for Saskatoon (down 0.4 per cent) and St John’s (down 0.1 per cent) while 11 of the 21 surveyed metros saw no change.

On an annual basis, new home prices were up 2 per cent from March 2015.



Source: http://www.canadianrealestatemagazine.ca/market-update/new-home-prices-up-for-12th-straight-month-207333.aspx

Millennials set to drive change in real estate market

They have the potential to be the biggest home-buying cohort in history — even bigger than their baby boomer parents.

But where Canada’s millions of millennials will end up living, and how they will impact the real estate market, has just started to play out.

The first wave — boomers’ kids who range in age from 15 to 34 and make up about one-quarter of Canada’s population — are just moving into their prime home-buying years. Many live in Toronto and Vancouver, where job growth has become a major magnet.

Already, those fortunate enough to find a decent, dependable job, rather than just contract work, have been helping drive competition for starter condos and single-family homes.

“Affordability will play a huge factor in who buys what,” says Dana Senagama, principal GTA market analyst for Canada Mortgage and Housing Corp., which has surprisingly little data so far on how the might of the millennials is being felt so far.

“They’re going to be a force to be reckoned with over the next decade, especially as they move into their prime child-rearing years and will need more space.”

Even the Toronto Real Estate Board, which assesses the state of the GTA resale market twice a month, seems to know little about the buying intentions of millennials. It’s set to launch surveys of the sector in the new year.

One thing is clear so far: Millennials have had a huge impact on the GTA rental sector because of their willingness to pay a hefty price — on average about $1,800 a month — to rent sky-high new glass-and-granite condos an easy walk from work.

That’s helped fuel the unprecedented condo boom in the GTA, especially in the downtown core where, despite thousands of new suites on the market, the rental vacancy rate remains below 2 per cent.

With the average resale price of even a Toronto condo now inching toward the $500,000 mark, developers are starting to shift their sights to building rental units, anticipating that many millennials will be renters for life.

“Millennials have much less of an attraction to owning a single-family home and a car. They’ve got much more of an attraction to a lifestyle and a job,” says James McKellar, director of the real estate and infrastructure program at York University’s Schulich School of Business.

“And many of them, especially in the United States, have become skeptical of this notion of a house as an investment.”

But with 1.5 million millennials in the GTA region alone, they’re likely to keep sending shock waves through the housing market, just as their parents did before them.

“There’s a shifting sensibility around how we define home,” says Toronto developer Mazyar Mortazavi, whose company, Tas DesignBuild, is now focusing on midrise condo projects in neighbourhoods just outside the core.

“Millennials and the subset before them, the late 30-somethings, are probably the first generation of people who are living their early adult life in urban centres. For them, home has more to do with being part of a complete community than it did in their parents’ generation, when it was about having a backyard, a picket fence and a two-car garage.”

 

Source:https://www.thestar.com/business/real_estate/2016/01/02/millennials-move-up.html

Kitchener-Waterloo realtors report strong April sales

Sales in the Kitchener-Waterloo region in April continued the strength seen in the market this year. Sales through the Kitchener-Waterloo Association of Realtors MLS were up 9.5 per cent from a year earlier. The 667 sales figure was 19.5 per cent above the 5-year average for April.

“We’re seeing record setting sales activity this month, but it’s a different story on the inventory side,” commented Charlotte Zawada, KWAR president. New listings were down 29.4 per cent on a year earlier at 1,272.

The average sale price of all residential sales increased 2.9 per cent to $367,444 compared to April 2015.




Source: http://www.canadianrealestatemagazine.ca/market-update/kitchenerwaterloo-realtors-report-strong-april-sales-206837.aspx

Millennials holding back on homebuying

Younger Canadians are in no rush to buy a home, preferring to wait until they have saved enough to be able to get the home they really want. A survey by BMO found that although 60 per cent of millennials say they are tired of renting, 70 per cent will wait until they can afford a home that meets their requirements.

 "More than the intangibles, the return on a home purchase is important to millennials and they take a thoughtful approach to how their home will fare in the current housing market. These are all areas where a mortgage specialist can help guide them through," commented BMO’s director of home financing Damon Knights.

The survey also found that millennials view a home purchase as an investment and will not be pressured into buying to achieve the Canadian Dream; they are cautious about buying when prices may impact the return on the investment.

More than a third (38 per cent) are concerned that buying a home will leave them without disposable income; 31 per cent say paying down debt is a higher priority than homebuying; just 26 per cent of respondents are planning to buy a home within 2 years.



Source: http://www.canadianrealestatemagazine.ca/market-update/millennials-holding-back-on-homebuying-206395.aspx

Canadians may be forced to sell homes for retirement funds

Homeowners approaching retirement may be forced to sell their homes to fund their retirement. That’s according to a report from Re/Max which shows that 56 per cent of 55 to 64-year-old homeowners are considering selling as they need the equity.

However, there is an additional issue for those soon-to-retire Canadians who live in the hot markets of Vancouver and Toronto – where do they move to?

The report suggests that sellers in those areas are reluctant to become buyers there due to high prices. However, there is high expectation among younger Canadians that their parents will help them to fund their home purchase, putting further pressure on equity released from parents’ home sales.

Source: http://www.canadianrealestatemagazine.ca/market-update/canadians-may-be-forced-to-sell-homes-for-retirement-funds-206163.aspx

How to protect yourself against provincial offences

The biggest worries for most landlords is a bounced rent cheque, an unexpected major repair or damage to the property caused by the tenant. However, all of these concerns pale in comparison to receiving a summons indicating that the landlord has been charged with provincial or criminal offences.
 
Although there are a variety of offences that a landlord could be charged with, the most likely to occur is a charge under the provincial fire code or related statute. Many landlords might assume that a fire code offence is not a serious concern, but the penalties can be steep. 

In Ontario, for example, an individual can be charged up to $50,000 per count. If the owner is a corporation then the fines can be up to $100,000 against the corporationand $50,000 against individual officers and directors of the company per count.

Although rare, both individuals and officers and directors can be imprisoned for fire code offences. Compounding the severity of the penalties is the fact that, in most cases, multiple infractions are discovered at once. I have seen many cases where the landlord is looking at a cumulative fine of $500,000 or more.

So, what do landlords need to know to protect themselves against these types of charges?
 
1. How can I protect myself?
 
First and foremost, landlords should become familiar with what the law requires of them. This will depend on the type of unit they own. A legal rooming house, for example, will have different requirements than a one-bedroom condominium, which will in turn have different requirements than an apartment building. When the property is acquired the landlord should ensure that it is legally compliant. 

Additionally, investors should be inspecting the parts of the property that can lead to charges whenever they are at the property for any reason, and at a minimum on a bi-annual basis. It only takes 30 seconds to make sure that hallway doors are properly latching, exits are clear of debris and smoke alarms are properly functioning. Failure to stay on top of the small things can lead to a massive fine which can erase years of profit from the landlord’s bank account.
 
2. Assume the property will at some point be subject to an inspection
 
Anything that might put the fire department in the vicinity of the property could lead to an inspection. If there is a fire, big or small, at your property you can safely assume that your property is going to be inspected afterwards. Although one could argue that the chance of a fire is rare, it is still a possibility and an event that is completely outside of the landlord’s control. 

Additionally, a fire in the property is not a prerequisite to an inspection. For example, perhaps an accident occurs at the property and something catches the eye of EMS or the fire department while they are on site.  A landlord has no way of protecting themselves from being inspected, so the best protection is to operate under the assumption that an inspection could occur at any time, because it can.
 
3. What to do If you get charged
 
Contact a lawyer as soon as possible. While this may sound obvious, many landlords will delay contacting counsel either because they are unsure of what to do or, worse yet, think that they can rectify the situation on their own.

Many offences are extremely difficult to defend given their nature. For example, there is almost no defence available for failing to have functioning smoke alarms in the property. In cases where there is no defence, the landlord will need to go into damage control as quickly as possible in order to mitigate the ultimate penalty that they will have to pay.

Most prosecutors (with whom you may ultimately try to arrange a plea) and adjudicators (who have the final say on the nature of the punishment) are looking to see that the problems have been rectified and in a timely fashion. Even though the offence has already been committed, time is of the essence and getting prompt legal advice is imperative.
 
In addition to rectifying the problems, prosecutors and adjudicators will want to see how diligent the landlord was in maintaining and inspecting the property. As stated above, regular inspections can be a life-saver for the investor. Even in cases where the tenant is directly responsible for the offence (for example, if they remove a smoke alarm, or improperly prop open stairwell doors) fault will still rest on the landlord’s shoulders unless they can demonstrate that the problems occurred even in the face of their diligent inspections and property management.
 
Most investors pay no mind to the thought of being charged with an offence until after the charges have been laid, by which time most of the damage has been done. While it is understandable to believe that it could never happen to you, the reality is that it certainly could. Given that the consequences are so severe, it is a risk that no prudent investor should take.

Source: http://www.canadianrealestatemagazine.ca/expert-advice/how-to-protect-yourself-against-provincial-offences-197471.aspx

No photos! Court rules against landlord’s access to photograph property

A panel of three Ontario Divisional Court Judges have held that residential landlords are not permitted to photograph a property while it is occupied by a tenant unless the lease explicitly permits such photographs to be taken, or the landlord obtains the express consent of the tenant.

The Ontario Landlord and Tenant Board ordered a tenant to be evicted when she refused to allow the landlord access to the property for the purpose of photographing it so that it could be listed for sale. The tenant refused on the basis that her privacy would be invaded if photographs of her and her children’s personal possessions would be disseminated to the public via the Internet to advance the sale of the property.

The Landlord and Tenant Board held, erroneously, that the lease in question provided the landlord with entry “in any circumstances” and that the landlord was therefore permitted to enter and take pictures. On appeal, the Divisional Court judges noted that the lease did not contain any such provision.

The Divisional Court reviewed the relevant sections of the Residential Tenancies Act, 2006 that pertain to a landlord’s right to enter the rental premises and found that none of the statutory provisions permitted entry for the purpose of taking photographs to market the property for sale or lease.

Sections 26 and 27 of the Residential Tenancies Act, 2006 provide that a landlord may enter a rental unit for, among other reasons:

1. in cases of emergency;
2. to clean the unit if the lease requires the landlord to do so;
3. to show the unit to prospective tenants (if notice has been given to end the tenancy);
4. to carry out a repair, replacement or to do work;
5. to allow a potential mortgagee or insurer to view the property; and
6. to carry out an inspection of the unit.

A landlord is also permitted to enter a property if they have the consent of the tenant or “for any other reasonable reason for entry specified in the tenancy agreement.”

The Divisional Court noted that the lease in question allowed the landlord to enter on notice “for showing the premises to prospective tenants or purchasers,” but also pointed out that “there is no clause permitted entry by an agent to take photographs in furtherance of a sale.”

The Divisional Court held that the landlord had no right to enter to take photographs without the tenant’s consent (although they could take measurements) and overturned the eviction order that was made on the basis of the tenant’s refusal to allow entry.

Interestingly, the Divisional Court distinguished the current case from a past case where a landlord took photographs of a property in connection with a damage inspection. In that case, the photographs were permitted due to the fact that they were taken in connection with an inspection, which is expressly allowed by the legislation and presumably also due to the fact that the photographs would not impact the tenant’s privacy rights given that they would not be published on the Internet.

This recent decision is another reminder of how a little forethought when drafting a lease can avoid complications down the road.


Source: http://www.remonline.com/no-photos-court-rules-against-landlords-access-to-photograph-property/?utm_source=REM+Inbox+Update&utm_campaign=070e64a949-15_April_20164_15_2016&utm_medium=email&utm_term=0_3f4c7c7b65-070e64a949-62536693