Important Update For Condo Owners

If you currently own a condominium property - especially those who have Tenanted investment properties, these new changes will be of interest. Long overdue, we are finally seeing an up date to the Condominium Act giving Landlords more tools leverage when issues arise.

The Government of Ontario has introduced new changes to the Condominium Act, 1998 related to an expansion of the jurisdiction of the Condominium Authority Tribunal (CAT) – the Province’s virtual tribunal that helps resolve condo-related disputes.

As of January 1st, 2022, the CAT will be granted the authority to handle disputes involving nuisances, annoyances, and disruptions.Specifically, prescribed nuisances under the Condominium Act 1998 will now include “unreasonable” instances of:

• Odour

• Smoke

• Vapour

• Light

• Vibration

Previously, these issues were dealt with through mediation, arbitration, or the courts, leading to costly and time-consuming proceedings. Under the current rules, landlords and condo owners often have to foot the bill for these types of disputes.

The new rules will provide a faster and more cost-effective dispute resolution mechanism for condo owners and their tenants. It is important to note that the expanded jurisdiction of the CAT will not have a direct impact on eviction proceedings, as those issues are still governed by the Landlord and Tenant Board.

Applications for condominium-related disputes can be found on CAT’s online portal and dispute resolution services are offered at a total cost of $200.

OREA will be releasing more information on updates to the CAT’s jurisdiction as they become available. For more information about the CAT, please visit the Condominium Authority of Ontario’s website at: www.condoauthorityontario.ca.

We will post more details as further information is released.

2021 Federal Election Reviewing Parties Platform on Housing

Canada’s millennials want to own homes: it’s part of the Canadian Dream. But the housing affordability crisis means that dream is slipping out of reach for first-time buyers and young families.

All the major parties have put forth ideas to make the home ownership more affordable. Here’s a brief overview:

Increasing Housing Supply

Canadians want to own homes, but the lack of supply is causing a crisis with more buyers chasing fewer and fewer homes. Creating more supply is essential in addressing the affordability crisis:

• Liberals: Building, preserving, or repairing 1.4 million homes over four years; converting empty office spaces into housing with $300 million in new funding; creating the Multigenerational Home Renovation Tax Credit to support secondary suites in homes; creating a Housing Accelerator Fund worth $4 billion to help cities build homes faster.

• Conservatives: Build 1 million homes in the next three years; release 15% of federal real estate for housing; encourage developers to invest in rental housing by extending the ability to defer capital gains tax when selling a rental and reinvesting in rental housing.

• NDP: Set up a dedicated fast start fund to streamline the application process; mobilize federal resources for co-op, social and non-profit housing by repurposing unused and under-used properties; spur the construction of affordable homes by waiving the federal portion of the GST/HST on the construction of new affordable rental units.

When it comes to increasing housing supply, all three parties have promised to build more homes, and all three have a plan to repurpose under-utilized federal properties, a move that OREA strongly supports. Repurposing such properties will create thousands of new housing supply options and encourage further development.

The Liberal multi-generational renovation tax credit could encourage provincial governments to continue creating policy that would reduce red tape on things related to the development of secondary suites and give more buyers access to this affordable form of housing.

The CPC’s commitment to building homes alongside transit infrastructure aligns with the Ontario Real Estate Association's position on using zoning to encourage the development of transit-oriented communities and encourage density near transit hubs by removing barriers to housing construction.

The NDP’s idea to waive the GST/HST on affordable rental housing addresses the need for a wide range of new housing to young families. A lack of housing supply causes a ripple effect: because first-time buyers can’t get into the market, they are staying in rental units longer, which means people can’t move out of social housing and into apartments.

Supporting First-Time Buyers

It is not a surprise that first-time home buyers are facing the greatest challenge when it comes to Ontario’s real estate market. Millennials and young families want to own homes, but it has never been tougher to achieve due to rising home prices pushing home ownership out of reach. New supports for first-time buyers are sorely needed:

• Liberals: Introduce a tax-free First Home Savings Account to allow Canadians under 40 to save up to $40,000 for a home; make the first-time home buyer (FTHB) incentive more flexible to give Canadians the option of a deferred mortgage loan as an alternative to the current shared equity model; double the FTHB Tax Credit.

• Conservatives: Encourage a new market in seven- to ten-year mortgages to provide stability for first-time buyers and lenders; increase the limit on eligibility for mortgage insurance and index it to home price inflation to allow those in high-priced real estate markets with less than a 20% down-payment an opportunity at homeownership.

• NDP: Double the FTHB tax Credit; re-introduce 30-year terms on CMHC insured mortgages on entry-level homes for FTHB.

Both the Liberals and NDP have promised to double the first-time homebuyer tax credit (taking it from $5,000 to $10,000), which will save the average buyer roughly $1,500 at closing.

Housing Affordability

Canadians want government to take action to make home ownership more affordable, with all three parties having proposals to help with the cost of homeownership:

• Liberals: Reduce monthly mortgage costs by reducing the price charged by the CMHC on mortgage insurance by 25 per cent.

• Conservatives: Fix the stress test to stop discriminating against small business owners, contractors, non-permanent employees, and casual workers; remove the stress test requirement on mortgage renewals.

• NDP: Provide resources to facilitate co-housing (co-ownership agreements) and ease access to financing by offering CMHC-backed co-ownership mortgages.

The Liberal plan to lower mortgage insurance rates by 25 per cent would result in an average of $6,100 in savings for an insured mortgage holder and broaden the pathway to home ownership.

Government restrictions like the mortgage stress test are unfairly disadvantaging home buyers, especially millennials looking to enter the market for the first time or young families looking to move up.

One of the biggest barriers to entering the market for first-time homebuyers is coming up with the cash capital needed to afford a down payment. The Liberals and NDP both support co-ownership/share equity models as a solution to improving housing choice and making it easier for more people to enter the market, adding legitimacy to the rent-to-own model.

— Courtesy CREA

A busy Summer season!

As we move from Spring into Summer, historical trends tell us that the Real Estate market tends to slow, as people begin to focus a little on family activities as school ends for the year. Well 2021 has continued to surprise! Despite various models suggesting that our ‘bubble’ was due to burst, or that we would start to see some rapid corrections in the market, we’ve seen virtually none of that at all. While volume is down slightly, the sales that are occuring are still very strong - this is clearly continuing to be a ‘sellers’ market.

We’ve been heads-down working with our Buyer and Seller clients, navigating this incredibly fast-paced environment, and are thrilled with our success! With pandemic restrictions slowly fading away, as our communities as a whole become vaccinated, we expect that as things slowly return to normal, we will once again get to enjoy a bit more face-to-face work with our prospects and Clients — heck, we actually kind of miss our famous VIP Open Houses!

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This month has been a busy one, and are thrilled to announce some fantastic sales and purchases with our Clients!

118 Gilson Street - Just Purchased!

2 Eldad Drive - Record Price!

645 Atwood Cres - Record Price!

24 Peter Street - Sold!

Updated for 2021: First-Time Home Buyer Incentive

The First-Time Home Buyer Incentive helps people across Canada purchase their first home. The program offers 5 or 10% of the home’s purchase price to put toward a down payment. This addition to your down payment lowers your mortgage carrying costs, making homeownership more affordable.

New Program Update available Spring 2021!

First time home buyers purchasing a home in the Toronto, Vancouver, or Victoria Census Metropolitan Areas will be eligible for an increased Qualifying Annual Income of $150,000 instead of $120,000, and an increased total borrowing amount of 4.5 instead of 4.0 times your qualifying income.

What Is It?

The First-Time Home Buyer Incentive makes it easier for you to buy a home and lower your monthly mortgage payments. This program is a shared equity mortgage. This means that the government shares in the upside and downside of the property value. It allows you to borrow 5 or 10% of the purchase price of a home. You pay back the same percentage of the value of your home when you sell it or within a 25-year window.

Some Basic Qualification Guidelines

These are a few criteria to determine your eligibility for the First-Time Home Buyer Incentive:

• your total annual qualifying income doesn’t exceed $120,000 ($150,000 if the home you are purchasing is in Toronto, Vancouver, or Victoria)

• your total borrowing is no more than 4 times your qualifying income (4.5 times if the home you are purchasing is in Toronto, Vancouver or Victoria )

• you or your partner are a first-time homebuyer

• you are a Canadian citizen, permanent resident or non-permanent resident authorized to work in Canada

• you meet the minimum down payment requirements with traditional funds (savings, withdrawal/collapse of a Registered Retirement Savings Plan (RRSP), or a non-repayable financial gift from a relative/immediate family member)

Full Program Details

Follow the link below for details on this excellent program for first-time Home Buyers!

Mortgage Stress-Test Changes Coming June 1, 2021

New Qualification Standards

Canada’s banking regulator has proposed changes which would require borrowers applying for uninsured mortgages (typically those with more than a 20% down payment) to qualify at their mortgage contract rate plus two percentage points or 5.25%, whichever is higher.

Buying Power Changes

This will effectively reduce the buying-power of many purchasers, versus today’s rates. For example, if you currently qualified for a $1,000,000 mortgage, with the new qualifications, your maximum purchase would be reduced to $955,000. The stress test currently has a minimum qualifying rate of 4.79%, nearly 50 basis points lower.

There’s no word yet if changes to the insured mortgage stress test will be forthcoming - which would directly impact many first-time purchasers, who typically have higher-ratio (low down payment) mortgages. Final adjustments to the proposed changes will occur by May 24th, with the new rate implemented as of June 1st.

If you have been planning to make a purchase - it may be wise to start that process sooner than later!

GTA REALTORS® Release January 2021 Stats

With the January sales numbers rolling in, our thoughts on the recent activity in the market are proving correct all around the GTA. Differing opinions if this is truly a ‘bubble’, but regardless, the market is certainly on fire.

• January 2021 home sales amounted to 6,928 – up by more than 50 per cent compared to January 2020. This strong start to 2021 included sales growth across all major segments including condominium apartments, both in the City of Toronto and surrounding GTA regions.
  

• New listings were also up on a year-over-year basis in January, but not by the same annual rate as sales. This means market conditions tightened compared to January 2020, resulting in the continuation of double-digit growth in the MLS® Home Price Index and the average selling price.

• The average selling price for January 2021 was up by 15.5 per cent to $967,885 year-over-year. The MLS® HPI Composite Benchmark was up by 11.9 per cent over the same period.

• Price growth was driven by the low-rise market segments, while the average condo apartment price was down in Toronto. However, if we continue to see condo sales growth outstrip condo listings growth, we could start to see renewed growth in condo prices later this year.

You can review the full details of the most recent statistics by downloading this months MarketWatch (PDF).

Toronto & GTA: Market Perspective

It is almost like you need to do a double-take and check the calendar to see if it is indeed 2021, and not 2017. Toronto and most of the GTA has been experiencing all the hallmarks of a continually strong ‘Sellers’ market, with many of the same hallmarks of the 2017 peak.

Mostly attributed to the detached market, we are back to seeing multiple-offer situations on nearly every property on the lower side of the price range. If you are looking for a detach or semi-detached home and have less than $1.7MM to spend, you should prepare yourself for some solid competition.

Condos are a bit of a different scenario - in December we had sales of 2,193 units, and there are currently available for sale 2,934 units on MLS, which equals about 1.33 months' supply. While it has been difficult to move some of the smaller bachelor and studio condos, with a bit of time the larger units are still moving well. Compare that to a total availability of just 1,045 freehold (detach, semi, town) available in all of Toronto.

For comparison purposes, a typical ‘balanced market’ usually has about 4-6 months of ‘supply’ available, versus the sales volume. Interesting to consider - with a total of just under 4,000 total properties for sale, and over 58,000+ registered Agents in the Toronto Board… you can see how there can be immense pressure on what is available.

Unfortunately, that competition for properties - and between Agents - often comes along with a lack of proper advice, borderline unethical behaviour, and some Agents putting their own needs ahead of their Clients. We are seeing all sorts of crazy ‘offers’, especially for new Buyers, going into situations they are simply not prepared for — no protection for arranging financing, or home inspections in many cases. The lesson here is that despite the bit of bedlam the current market is bringing us, it does not reduce the liability of an Agent, nor mean that you should ignore all the risks just to try to win a deal.

There are many other ways to protect yourself as both a Buyer or a Seller, do things the right way, and still come out ahead.

If you are thinking of buying or selling, before you make a move - call us! We are always available to talk about strategy, the marketplace, and of course here to offer the best possible advice and guidance we can, no strings attached.