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By: Ryan Gallagher (100594210)
Money Matters Assignment #2
Teacher:  Harpreet Kochhar

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This article gives a good insight on the current real estate situation in the GTA. Downtown areas and homes located in city of Toronto proper are popular right now with many homes and condos bringing in over 10 offers. Homes in York region however aren't moving as quickly, as prices may seem to be high and with less sales due to speculation driving up the market last April. Durham region home prices have risen between January and March due to factors such as the 407 expansion and extended go train service.

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"Sizzling" might be overstating the warming property market. But the real estate industry is finally predicting a return to a traditionally brisk spring - the kind of season that was virtually lost last year when, after months of bully bids and frenzied buying, sales soared in March and then stopped almost overnight.

Oakville broker Tracy Nursall says it's been longer than a single aberrant year since the Toronto Region experienced a typical spring market. This year is more similar to 2013 or 2014 than any season since, she said. There was a long run-up to last March's historical peak of a 34 per cent year-over-year price increase. The exceptional activity dates back to 2015, she said.

"Everybody's taking 2017 out of the numbers, they should take 2016 out of the picture as well," said Nursall of Sage Real Estate, who says the market west of the City of Toronto is still coming out of hibernation. But she expects sales to heat up with the later spring weather.

Downtown agents tell a different story. They say that the right properties in desirable neighbourhoods are attracting multiple offers, while still allowing room for negotiation.

Even in Durham Region - traditionally an island of affordability in the Toronto area - prices are rising and properties are moving faster than they were at the beginning of the year, said Dennis Roberts, president of the Durham Region Association of Realtors.

Even if the volume of transactions remains relatively low in the Toronto area, demand is building, said Soper.

Young people who haven't been able to move out of their parents' house are reaching the stage of life where they are going to buy houses and Canadians from outside Ontario are still flocking to the Toronto area's job opportunities, he said.

"There were 25,000 new Ontarians, and most of them in the Greater Toronto Area last year based on people moving from other parts of the country. That is sharply up from what it was two years ago," said Soper.

But macroeconomic factors will weigh heavily on the Canadian housing industry, he warns.

"What looks to be a very bright future could dim rapidly if a few things go wrong in trade, in mega-projects, even a sharp turn to protectionism or anti-immigration sentiment in Canada at the provincial level," said Soper.

John Pasalis, president of Toronto real estate brokerage Realosophy, says he's not expecting "crazy gains" this spring. But if prices stay where they are, by July or August, prices could hold steady or even rise slightly year over year by the end of 2018.

"The market's going to do a little bit better than most people are expecting," said Pasalis.

There is still only about two months' housing inventory in the region, he said. That level would be rising to four or five months if sales and prices were going to slow further. That's what happened last spring.

"While it's slow in Richmond Hill, that means it's really competitive in other parts. As a whole it's pretty balanced right now," said Pasalis.

Even the 905 communities that were hardest hit when the market deflated last April and May, are starting to improve, he said.

"Downtown is still insane. There's no slowdown," said Pasalis and that extends to central neighbourhoods such as Leslieville, Wallace Emerson and Dufferin Grove where buyers are competing for property.

Pasalis's comments come a week after the Toronto Real Estate Board (TREB) reported a 14 per cent year-over-year drop in the average home price in March and a 40 per cent plunge in home sales. But month-to-month figures showed some warming, with last month's prices 2 per cent higher than February's and the third month-to-month rise.

"First-time home buyers - with the new rules - are really challenged to get into the market," said Chris Alexander, regional director at Re/Max Integra.

Re/Max 2018 Spring Market Trends report predicts prices will fall around the GTA in comparison to last year. It predicts year-over-year declines between April and June from -2.5 per cent in Mississauga; -4 per cent in Brampton and -5 per cent in Toronto, to -15 per cent in Durham Region and -10 per cent in Oakville.

But the 2017 comparator is especially suspect given the unique circumstances of last spring and Alexander is predicting that by year's end, average home prices for 2018 will end up around where they began this year.

"(Buyers) will show up for the good properties," he said.

"Sellers are going to have to come down to reality and understand this isn't 2016 or the first part of 2017," said Alexander.

"There are certain neighbourhoods in Toronto that have performed very well despite government intervention and the cooling markets around them," he said, mentioning Etobicoke, Rosedale and Yorkville.

But Markham and Richmond Hill will still see softening, he predicted.
Breaking down the market
How much heat buyers and sellers experience this spring will depend on the kind of property and the area in which they are trading.
Downtown
If there's a heat island in the GTA, it's downtown where properties are routinely getting snapped up, says Desmond Brown of Royal LePage.

Brown reports that the take-no-prisoners atmosphere of 2016 and early 2017 has mellowed. Even in competing bid situations, the selling price for houses tends not to be a crazy amount over asking and there's frequently room to negotiate.

A buyer on one property that had multiple bids had a successful offer that included a home inspection, he says. Financing conditions can also be written into offers.

Still, he advises, if you're buying, "You've got to do your best to have the cleanest offer possible." That can mean arranging a home inspection before the offer date or asking for one the seller has done in advance. Buyers should also make sure their financing is pre-approved, he says.

It's a real estate cliche, but it really is all about location and that's truer than it was during the peak, says Brown.

"Last year, where we were seeing things selling in just about any location, this year buyers are a lot more discerning," he says. They will pay attention to the condition of neighbouring homes, and properties on main streets will take longer to move.

"A lot of young people in financial services and the tech industry have the money to spend. They want to be within walking distance for work or a short transit ride and they're still paying top bucks," says Brown.

The $1-million price that would be a psychological barrier doesn't apply to the hot downtown market, says John Pasalis, president of Leslieville brokerage Realosophy.

"Prices of $1.3 million, $1.5 million - those are still competitive down here - if you're on the subway line," he says. "It's when you get north of $2 million that it starts getting slower."
The 905
The pain of the real estate bubble lingers in the communities outside Toronto, particularly in areas like York Region where speculation played a big role in driving up the market before last April, says Realosophy's Pasalis. Overall, he's expecting a balanced market, but the farther from the core you are, the more inventory there is, he says.

In Durham Region, one of the most affordable areas of the GTA, the average price rose to $598,000 from $578,000 between January and March, says Dennis Roberts, president of the local real estate association. The average number of days on the market has dropped from about 30 to 18 during the same period. The extension of Highway 407 and expanded GO train service are raising Durham's value because commuters to Toronto have alternatives to sitting in congestion on Highway 401.

Lower-priced properties are moving more quickly than bigger houses, but the empty nesters living in those have fewer options in Durham where condo development has lagged other areas of the GTA, he says.

"They really don't have many options of where to go. So we need to get a bigger choice for them. We need more supply for that bungalow-condo market, larger condos. They don't want to go down to 800 sq. ft.," says Roberts.

Mississauga and Oakville are starting to climb back out of the January doldrums, but the heat generated in downtown always takes a while to work its way west in the Toronto region, says Tracy Nursall of Sage Real Estate.

"We're just heading into spring now where Toronto's already in spring market," she says. "April is coming out of the gate a little faster, but it's not bolting out of the gate."

Increasingly, buyers in 905 communities are looking for the same kind of destination neighbourhoods that make downtown Toronto attractive, says Nursall. They will be quick to pounce on the new neighbourhoods being built around Port Credit in Mississauga, she says.

"Hamilton's taking a lot of eyeballs because they've got a great culture and foodie scene," says Nursall.
Condos
Condos are the housing market that uniformly evoke superlatives and challenge buyers. It's not unusual for a downtown condo to draw 10 to 15 offers, says Christopher Alexander of Re/Max.

"The condo market just continues to defy expectations," says Andrew Harrild of Condos.ca

Multiple offers and over-asking prices are the norm. But, he says, supply is an issue as condo owners struggle to make their next move.

"It's very difficult for buyers to afford a house in the city," he says.

Downtown condos also offer a lifestyle their owners value, says Harrild. He says he recently met with a couple who were considering listing their downtown loft, but they were struggling with whether they could stand to live farther than a two-minute walk to the stores and restaurants they enjoy.

"If you want that patch of grass are you willing to sacrifice on location to get it," he says.

Royal LePage's Brown calls the condo market "completely nutty on everything under the $700,000 range."

Once the price approaches about $800,000, condos start to look expensive. Add in maintenance fees and the cost resembles a $1.1 million house, he says.

Brown cites a condo in Regent Park that was listed for $455,000. He figured it might be worth up to $550,000. It sold for about $600,000 after atttracting 13 offers.
Home buyer behaviours
56%

Ontarians who feel they can afford to buy a home that suits their family's needs.

53%

Ontarians who put access to parks and green spaces as their top home-buying consideration, compared to 50%, who put proximity to work as their chief concern, followed by access to stores (45%) and nearby public transit (36%)

29%

Ontarians who had to compromise on the size of home and their budget because of government regulations.

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GTA housing market poised for spring thaw | The Star

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"Sizzling" might be overstating the warming property market. But the real estate industry is finally predicting a return to a traditionally brisk spring - the kind of season that was virtually lost last year when, after months of bully bids and frenzied buying, sales soared in March and then stopped almost overnight.

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This is the government of Ontario's ministry of finance website. It gives an overview of the rules and regulations regarding the new "Non-Resident Speculation Tax" that was introduced April 21st, 2017. This tax is described on the site as "a 15 per cent tax on the purchase or acquisition of an interest in residential property located in the Greater Golden Horseshoe Region (GGH) by individuals who are not citizens or permanent residents of Canada or by foreign corporations". This tax only applies to properties containing 6 or less residences and doesn't apply to Commercial, Agricultural, or Industrial land. This tax does not apply to Protected Persons (refugee's). The tax  is also exempt to Foreign nationals that wish to purchase property Jointly with their spouse (whom must be Canadian citizen, permanent resident, or protected person).

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Greater Golden Horseshoe Region Data Summary: Land Transfer Tax Additional Information

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This website goes over 11 of the cheapest places to purchase a home in Canada. This list would be of high interest for first time home buyers looking to get into the Canadian real estate market for the first time. Unfortunately, in places like Toronto many people are "out-priced" and can't seem to find a home within their budget. Buying a home in one of these cities would be a good way to enter the market, and also to have a smaller mortgage at the end of the day.

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British Columbia is known for its beauty, but not cheap home prices. Vancouver and the surrounding area has some of the most expensive real estate in the country with prices near, and often over, the $1 million mark. Toronto and Montreal, although in different parts of Canada, are pricey as well, with averages of $630,858 and $328,862 respectively. Fortunately, there are places where the price of a home is much more affordable. There are so many beautiful places in Canada, and there are more reasonable options to the pricier areas. Here are the 11 cheapest places to buy a home in Canada, listed in no particular order.

1) Thunder Bay

The port city of Thunder Bay is located on Lake Superior in Ontario. The average home price is $196,803. Due to the lake, it has a humid continental climate with less snowfall than the United States side of the lake. The city also gets a lot of sun, and more than the easternmost cities. There are plenty of recreational activities including golf courses, ice rinks, indoor and outdoor pools, public beaches, ski hills and cross-country skiing courses. Being the largest city in Northwestern Ontario, Thunder Bay is the region's commercial and medical center. The Ontario government, city, school system, Bowater Forest Products, and Thunder Bay Health Science Center are major employers. Unfortunately, Thunder Bay struggles with a high violent crime rate. It was ranked 2nd for robbery and 5th for aggravated assault in 2016.

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11 Cheapest Places in Canada to Buy a Home - The Financial Word

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British Columbia is known for its beauty, but not cheap home prices. Vancouver and the surrounding area has some of the most expensive real estate in the country with prices near, and often over, the $1 million mark. Toronto and Montreal, although in different parts of Canada, are pricey as well, with averages of $630,858 and $328,862 respectively.

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This video is courtesy of re/max Canada. It identifies some buyer trends that were observed in the year 2017 as well as gives a prediction that home prices in Canada will rise 2.5% in the year 2018. It also states that there are stricter mortgage rules that went into effect on January 1st of 2018. The new rules require mortgage applicants to prove they would be able to service their debt if interest rates were to go up 2%.

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2018 Housing Market Outlook - RE/MAX Canada

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This Video is by CBC news. It outlines that the overall housing market has "cooled off" due to various stress test factors. The average home price in the GTA has declined sharply between march 2017- march 2018 falling from $915,126 to $784,558. Sales Volume is also down 39.5% for that same time period. The condo market however, seems to be experiencing a spike in recent months with the prices increasing as well as demand.

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Canada's housing market slows, but experts warn it's temporary

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This is an ad by realtor.ca. It stresses the importance of finding a good realtor to purchase a home through. You can use the realtor.ca service to locate a licensed and experienced realtor in your area

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1. What did you learn about the topic that most surprised you?
What most surprised me was the difference between markets in such a small area like Toronto, where homes in certain areas are gaining value quicker than others due to certain factors. It really comes down to 1 thing: Location
2. Provide a real life example of how this topic is relevant or interesting for you.
This topic interests me because i will hopefully be looking into purchasing a home in the next 5-10 years and it is important to be knowledgeable about what your purchasing and what you can expect to happen to the value of a property that you purchase.
3.Which research did you find most interesting?  Why?
I found the research that i did on youtube while searching for videos to post on my wall the most interesting. There is a lot of different opinions and insights that people have when it comes to real estate. I found more than 5 videos that were of interest to me.

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I chose this image because it symbolizes my belief that the price of real estate will continue to rise no matter what. The rate at which it rises may go up or down but it will always go up with time. This is because us as humans will always need somewhere to live, and as the population increases, so does the demand.

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This video describes the best neighborhoods to purchase a home in the city of Toronto. The ranking is based on thee main criteria: Value, Market Momentum, and expert insight. The video later goes on to list the best city to buy a home in Canada. Brantford comes in as #1 on the list where homes can be found in the $500,000 range. Due to expanding of manufacturing in the city as well as an influx of people wanting to move there from the GTA.

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The top neighbourhoods to buy property in Toronto right now

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This is a picture of one of the most expensive homes listed for sale in Canada at the moment. To my surprise, it happens to be a 4 bedroom 8,000 sq ft condo located in Vancouver. Who would've thought that one of the most expensive homes in the country isn't a detached house?