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Condos in Toronto

I started off selling mainly condos, helping first time buyers get a foothold in the Toronto real estate market. Now working with investors and helping empty nesters find that perfect luxury suite.

Toronto Real Estate

For all of your Toronto real estate needs, contact Laurin. I am dedicated to helping you find that perfect and unique new home to call your own.

 

Toronto Real Estate

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Printers Row Lofts - 525 Logan AvenueRare, stunning loft conversion by Bob Mitchell, known as Printer’s Row. This vintage architectural gem located in the heart of Riverdale features soaring ceilings and 15-foot windows with a south view. This boutique 12 unit loft building is nestled in a lovely residential area. The suite’s walkout to private terrace was the original entrance to the building and overlooks a picturesque garden. Large master bedroom with two closets. Open concept main floor has a spacious upper loft overlooking the living room. MORE DETAILS HERE

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In Toronto, home buyers find price counts – but speed counts more

Carolyn Ireland – The Globe and Mail

As fast-paced as Toronto’s real estate market has been for years, it always seems to find a new gear.

Even buyers in the echelons well above the average price of $1,040,018 – the new milestone achieved in February – feel pressured to move with blistering speed.

Our recent “Home of the Week” at 128 Sherwood Avenue was listed with an asking price of $1.795-million and sold to a “bully” the first day it came to the market.

The bully turned out to be Toronto-based restaurateur Sebastien Centner.

“I only had a chance to see it for half an hour before we had to make a decision,” says Mr. Centner of making the leap with his wife, Sheila Centner.

The Toronto Real Estate Board’s latest data show how sizzling the market has been: For the Greater Toronto Area, sales jumped 11.3% in February from a year earlier.

Last week, it was headline news when the same report showed the average price of a detached house in Toronto had broken through the $1-million mark.

Comment: And now at $1.099m for the first half of March.

128 Sherwood Avenue
Bank of Montreal chief economist Douglas Porter believes the Bank of Canada’s surprise interest rate cut in January may be fuelling some of the current enthusiasm among prospective buyers in Toronto and Vancouver.

Comment: Nah, rates were low and the market was hot before that.

Headlines about price gains in those those cities also keeps their markets tilted in favour of sellers, Mr. Porter said following a speech at a Queen’s University real estate investment seminar in Toronto. “Strength often begets strength. There is a sense among some buyers that they have to get in before things rise even further.”

Comment: They do. It isn’t just a feeling. If they don’t buy now, prices and/or mortgage rates will be higher in the future. Or both. Think about it this way: if a house is $1-million today, with rates of 2.79%, then a mortgage payment with 10% down would be $4,262.73. Now, if prices rise 8.6% in the next 12 months and mortgage rates rise 1%, then the monthly payment rises to $5,151.40. That is an increase of almost 21% per month, almost $900 more… over $10,000 per year just in mortgage costs. Then there is the added $8,600 in down payment cash required. Income requirements rise from $165,000 for the current mortgage to around $179,000 in 12 months. And you wonder where the pressure comes from for people to buy RIGHT NOW.

Mr. Porter told seminar participants he is not worried about overvaluation in the broad Canadian housing market. Still, the central bank’s move did make him worry that such low rates could lead to overheating in markets that have already had a long run.

Comment: Note that he said he is “not worried about overvaluation”.

“I did think there is the risk it could get overdone. I’ve been covering the Toronto housing market for 30 years and the last time it came even close to this feel is the late 1980s.”

Mr. Porter observes that the recent shift in Calgary’s real estate market could actually help to buoy housing in Vancouver and Toronto because fewer people are likely to leave those cities for the oil patch. As energy prices have tumbled, home sales in Calgary have seen double digit drops while listings have surged. Mr. Porter warns that that dynamic inevitably will lead to a drop in prices if it continues.

Comment: And people could move from Calgary to Ontario. Happened 6-8 years ago when their market bubbled the last time.

He doesn’t expect Calgary’s problems to spread to Vancouver or Toronto. Vancouver’s market has lots of support from overseas investors, he says. Toronto’s market will likely benefit from an improving economic outlook in Ontario, which he ties to the strength of the recovery in the U.S. economy and the lower Canadian dollar.

Comment: Seeing as we don’t have an oil-based economy, how could it spread here?

Still, he says, a severe downturn in Calgary’s real estate market could undermine the confidence of buyers in other cities. “It might make them think twice.”

Comment: I doubt it. The average home buyer in Toronto, or Montreal, they aren’t thinking about Calgary. Vancouver, maybe.

Over all, Mr. Porter has a cautious view of the Canadian economy, which has been roiled by the decline in commodity prices. The fall of the Canadian dollar against the U.S. currency and signals from the long-term bond market also point to caution, he adds. “We can almost feel the landscape shifting below our feet.”

Comment: But the lower dollar helps Canada. Tourism increases, manufacturers benefit, exporters sell more. It helps the US economy, in an indirect way, which then helps Canada even more indirectly. Some banks estimate that a 10% drop in the CAD could translate into a 1.5% GDP increase. And, if it does lower the longer-term markets, that brings interest rates down, which further decreases mortgage rates. The betting line is still 50-50 on whether or not Poloz will drop the overnight rate further, to 0.5%.

On a more positive note, the U.S. consumer seems to be putting some steam back into that country’s economy. “At long last the U.S. economy is finally finding its stride. That is unambiguously good news for Canada.”

As for Mr. Centner in Toronto, he had never actually heard the term “bully offer” before, but agent Ronit Barzilay of Harvey Kalles Real Estate Ltd. advised the couple not to wait a week for the night scheduled for reviewing offers by listing agent Cailey Heaps Estrin of Royal LePage Real Estate Services Ltd.

The Centners didn’t know it but within hours the first bully offer had already been made at the full asking price. Owners Gina and Peter Schafrick turned it down. Typically, a “pre-emptive offer,” as real estate agents sometimes call them, comes with a large premium above the asking price so that sellers won’t be tempted to hold out for the offer night.

The Centners offered $1.9-million, or $105,000 above the asking price. The Schafricks quickly accepted.

Mr. Centner acknowledges that the deal didn’t come together without some angst. He and his wife never fight, he says, but that night over dinner she had to persuade him to push ahead. “We had a huge fight,” he says with a laugh. “I couldn’t wrap my head around it.”

The couple had been only loosely contemplating the idea of moving closer to Bay and Bloor from the North York home where they had lived for nearly two decades.

As the president and chief executive officer of catering company Eatertainment, he heads most days to the Manulife Centre to oversee the company’s two establishments, the Bloor Street Diner and The One Eighty (formerly known as the Panorama).

But once Ms. Centner saw 128 Sherwood land on the market, she immediately called her husband.

The circa-1980 house near Mount Pleasant and Eglinton was designed by Ms. Schafrick, an architect, for her own family.

The Centners loved the open plan, Bulthaup kitchen and modern design. “All of the lines in the house were so clean,” Mr. Centner says. “It just screamed attention to detail.”

He felt even more certain when he turned over a dining room chair and saw that it was a genuine Eames and not a knock-off of the style designed by Charles and Ray Eames. “That told us that they did not cut corners,” he says.

He says he has developed a real appreciation over the years for how precise the design of a modern house must be because flaws can’t be hidden behind elements, such as baseboards and mouldings. “Everything has to be perfect.”

The couple was confident they could afford to spend $1.9-million for a house and this one was move-in ready. From their research, they had figured they would need between $2.5-million and $3-million for a Toronto house with top-quality finishes.

The kitchen was particularly appealing to Mr. Centner, who says the two are “serial partiers” who constantly entertain.

Still, Mr. Centner says he had a sleepless night after the agreement was signed not least because the next morning the couple had to think about selling their own house. Fortunately, he says, their home near Yonge and Sheppard didn’t need a lot of staging or preparation.

Eighteen years earlier, the Centners had purchased the small house at 98 Franklin Avenue in the popular Lansing-Westgate neighbourhood.

Thirteen years ago, they had architect Lorne Rose design a large, modern addition at the rear while maintaining the appearance at the front. “When we renovated we basically blew off the back.”

A few years after that, an in-ground swimming pool and entertaining area were added in the backyard.

As soon as the deal for Sherwood was struck, they speedily listed the house with an asking price of $1.699-million and set an offer date a week later. They received a bid a few days in, but declined and invited the bully to return on offer night.

The bully didn’t show up but they did get two other offers. They had a bit of back-and-forth with one purchaser and signed the deal for $1.899-million, or $200,000 over asking.

“It was unexpected,” says Ms. Barzilay, who adds that everyone was elated when the negotiations were over. “We celebrated with champagne with the new buyers.”

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.

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BMO cuts one 5-year mortgage rate amid falling outlook for home sales

BMO is lowering the posted rate on its promotional five-year mortgage to 2.79%, effective immediately.

Madhavi Acharya-Tom Yew – Toronto Star

Bank of Montreal has slashed the posted rate on a fixed five-year promotional mortgage, kicking off the spring home buying season amid fears of a slowdown in real estate – and rising household debt.

Comment: No one is afraid of a real estate slowdown. Except in Alberta.

BMO, as the bank is known, said Tuesday that it has reduced the rate on its Smart Fixed Mortgage to 2.79% from 2.99%, effective immediately.

The rate for the standard five-year fixed mortgage remains at 4.74%, according to BMO’s website.

Canada’s other big banks quickly followed suit.

Comment: So the experts who all warned of rising rates ruining real estate… what do they say now?

Mortgage rate cut
The 2.79% rate is the lowest-ever posted five-year mortgage rate from one of Canada’s Big Banks, said Penelope Graham, editor at RateSupermarket.ca.

Some smaller lenders and mortgage brokers are currently offering five-year rates as low as 2.59%, Graham added.

Comment: There are variable rates in the 2.05% range.

“This is the time of year when the mortgage market gets really competitive. Everyone is coming out of hibernation and hitting the open houses and they’re really looking right now,” Graham said.

“This is the time of year when people really do make that decision on a housing purchase. The lenders know this and they price their products accordingly to capture as much market share as possible.”

TD Canada Trust quickly matched the move, lowering its five-year fixed rate to 2.79, effective Wednesday, a spokesperson said in an email to The Star. The current rate has been posted at 3.09% since Jan. 27.

Spokespersons for Royal Bank of Canada and Canadian Imperial Bank of Commerce told the Star in separate emails that they can match the 2.79% offer, though the posted five-year rates at both banks are higher. Scotiabank has a posted rate of 2.85% for a five-year mortgage, according to its website.

Five-year mortgages are one of the most common ways for consumers to finance the purchase of a new home, and competition among lenders often heats up during the spring when buyers and sellers tend to be more active.

Home sales in Toronto exceeded expectations in February, with sales rising 11.3% from the same period a year ago, and the price of an average detached exceeding $1 million.

Comment: Who is afraid of a slowdown?

The average price of a Vancouver property rose 1.8% to about $825,000 in January from a year earlier and climbed 4.9% to $576,000 in Toronto, according to the Canadian Real Estate Association.

“There’s these very low mortgage rates that make it cheaper than ever to borrow but the sums you have to borrow are just astronomical,” Graham said.

Comment: Yes, but it is all about the monthly cost. And low rates today, even with the high prices, are almost the same as they were 30-35 years ago. Prices may have been lower, but the 18-21% mortgage rates more than offset that.

However, the Canadian Real Estate Association recently cut its outlook for home sales this year.

The association predicts the impact of declining oil prices on consumer confidence in some provinces will push down home sales by 1.1% to 475,700 units countrywide.

Comment: Yes, if you average the drop in Alberta across the whole country. But oil prices will actually push sales and prices higher in Ontario.

Oil-price shock sends Canadian pessimism to recession-era levels

At the same time, household debt levels have hit a new record, according to figures released this month from Statistics Canada.

Canadians now owe a record $1.63 for every $1 of disposable income.

Comment: This is not a record, we have been at 163% before. Not that it is good, but it is not some new high-water mark. It was 162.6% in 2012, for instance. It would be nice to see that go down, but it is not as bad as it is being portrayed. If we calculate it the US way, then we are only at 153%. But 25 years ago, we were only at 80% – a point to aim to get back to.

The Bank of Canada and its governor Stephen Poloz have repeatedly warned consumers to reduce their debt levels because interest rates will eventually rise.

However, the central bank surprised markets by cutting its benchmark overnight rate in January, as part of an effort to shield the economy from the impact of collapsing prices for crude oil.

Some observers worry that the interest rate cut will fuel already-blistering real estate markets in Toronto and Vancouver, encouraging some Canadians to take on more debt at record-low rates.

The International Monetary Fund also warns that Canada’s hot housing market and rising household debt levels are key risks for the domestic economy.

Comment: Debt is a risk, yes. But how is real estate a risk?

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.

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Developers say foreign investors still a small segment of condo market

Garry Marr – Financial Post

Some of the country’s leading developers shared their own statistics on the composition of today’s condominium buyers and the consensus is foreigners are a small minority of the group.

“There are a lot of myths in the condominium industry,” said C. Hunter Milborne, of Milborne Real Estate Inc., at the Queen’s Real Estate Roundtable in Toronto. “One of the myths is that the predominate buyers are foreign investors.”

Comment: And who knows better? Those who sell to them or those who don’t?

The subject has long been the source of speculation with the fear that foreign buyers are propping up the high-rise sector, inflating prices and could ultimately fuel a crash if they suddenly moved out of their investments.

New Toronto Condos
In late 2014, Canada Mortgage and Housing Corp. produced data that showed 2.4% of Toronto high-rise units and 2.3% in Vancouver were in foreign hands, figures that many still dispute.

Mr. Milborne acted for a recent Four Seasons condominium development in Toronto in which he says about 5% of buyers were foreign. He said the notion of high foreign ownership doesn’t hold water based on his findings that are backed up by contracts tracking a buyer’s connection to Canada.

Comment: So “experts” can doubt the figures all they want, the developers have names and contracts and paperwork proving where buyers are from.

“When we take an agreement of purchase and sale, we need a [social insurance number] and photo identification,” he said, adding lenders providing construction financing demand to know the origin of money before they go ahead. “We kind of know what percentage of buyers are foreign buyers.”

James Ritchie, senior vice-president of sales and marketing with Tridel Corp., which built its first condo in 1968 and currently has 5,400 high-rise suites under construction in the Greater Toronto Area, said of about 2,000 suites closed by his company last year only 2.9% of purchasers came from outside Canada.

“It really depends on where you are, the further away from the core the less interest you have from outside the country. The closer to the core, the taller the building, the more interest,” Mr. Ritchie said about foreign buyers.

He said of those 2,000 suites this firm closed last year, only nine defaulted and none was foreign bought.

“I think a lot this has to do with deposits. Anybody who lives in this country must deposit 20% on the transaction when it’s in pre-construction. That mitigates risk. The banks are adverse to it and so are we as prudent developers,” Mr. Ritchie said, adding the 35% deposit for foreign buyers is required because “there is no way to mitigate our loss for people outside the country. There are a lot of legal remedies that accrue to the developer if you are inside the country.”

Comment: And it is this small number of foreign buyers, putting down 35%, that the “experts” are saying will bring down the condo market.

Deposits are regulated by the government, but 20% for domestic buyers and 35% for foreigners has become the de facto standard between builders and banks before said buyer can count as a sale. Banks demand between 60% to 70% of a high-rise be pre-sold before providing construction financing.

—————————————————————————————————–
Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.

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