Toronto Real Estate Blog

Many untapped areas of Toronto that are both desirable and affordable

The Toronto Real Estate Board President’s Column as it appears each Friday in the Toronto Sun’s Resale Homes and Condos section

With Toronto real estate activity continuing at a strong pace, some homebuyers may view a condominium purchase as their only launching point into the market. While condo living is an excellent choice, there are also many untapped desirable neighbourhoods where great prices on single detached homes can still be found.

One such example is the area around Wilmington Park in North York. Located south of Finch Avenue and West of Bathurst Street, 1950s era bungalows and side-splits on wide lots are prevalent in this area, which has an abundance of greenspace. Here you can find a home that is still close to central Toronto and you’ll save several thousands of dollars by not paying the premium associated with the Yonge Street corridor. In recent months detached homes in this neighbourhood have sold for $549,635 on average, that’s compared to $865,467 in central Toronto.

Along the eastern border of North York, but also still centrally located you’ll find Parkwoods – an area dominated by 1960s and 1970s era detached homes that are currently selling for $503,040 on average. Parkwoods runs east of the Don Valley Parkway between Highway 401 and Lawrence Avenue, offering residents the natural beauty of the Don River Valley at a lesser price than you would pay in Don Mills. Although it has a suburban feel, its proximity to the Don Valley Parkway means that you’re only minutes away from city life as well.

Offering even easier access to downtown Toronto is East York, which runs along O’Connor Drive between Pape and Woodbine Avenues. Established in 1924, East York’s growth occurred primarily between 1946 and 1961 when its housing stock nearly doubled in size. Known as Canada’s only Borough (until 1998), this area features well-loved brick bungalows, increasingly being left behind by seniors and snapped up by young professionals. In recent months, a detached home in East York could be found for approximately $493,870.

The southwest section of downtown Toronto is also a popular option. Beaconsfield Village, named after former British Prime Minister Benjamin Disraeli, who was given the title of Lord Beaconsfield by Queen Victoria, has undergone extensive gentrification in recent years. This area, along with neighbouring Little Portugal, is popular with Toronto’s arts community, which has gradually migrated west along Queen Street. Immediately north of this area is Dufferin Grove, a community that has been completely revitalized by improvements to its focal point, the 14-acre Dufferin Grove Park. You’ll find even greater affordability just west of this area in Brockton Village where detached homes have recently sold for $496,911. Throughout these neighbourhoods you’ll find a variety of single and semi-detached homes, which offer a fair price in exchange for some elbow grease.

Further west, in Etobicoke, you can find another gem of a neighbourhood in New Toronto. Originally planned in the 1890s as a working town near the rail lines, this area has begun to attract young professionals thanks to its proximity to both downtown and most significantly, the waterfront. Petite detached homes and cottages, currently selling for $382,750 give this neighbourhood a cozy feel.

These are just a few examples of neighbourhoods that offer affordability all within reach of downtown Toronto. By working with a Realtor, you’re certain to find many more that are tucked away.

Tom Lebour is President of the Toronto Real Estate Board, a professional association that represents 28,000 Realtors in the Greater Toronto Area.

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Contact the Jeffrey Team for more information  -  416-388-1960

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Real estate sales this October less spooky than last

Helen Morris, National Post

The market for existing homes made healthy gains in the first two weeks of October – then again, this is compared to the angst-ridden days of last October.

According to the Toronto Real Estate Board, Toronto real estate agents reported 3,631 sales of existing homes in the first two weeks of this month. This represents a 34% jump, compared with the same period last year. Buyers were obliged to dig deeper into their pockets, as the average sales price rose to $414,479, a 17% increase for the first two weeks of October 2008.

“While demand for existing homes has remained strong, it is important to recognize the context of current statistics,” says TREB president Tom Lebour in a release. “We are now making comparisons to the fall of 2008 when we experienced a marked decline in sales and average price.”

Comment: But last year, when sales were down, no one wanted to say that we had to be careful because we were comparing to a record breaking year in 2007. So we go out of our way not to qualify bad numbers, but make sure that good numbers are made to not look so good.

Taking the total sales for 2009 thus far, numbers are up to 69,964, a more modest 6% increase on the same period last year. The average price for year-to-date sales in 2009 is $389,687, a 2% rise on last year’s number.

“Tight market conditions throughout the GTA will continue to exert upward pressure on home prices in the fourth quarter,” says Jason Mercer, TREB’s senior manager of market analysis in a release. “Expect more listings in 2010, as homeowners react to the price gains experienced in the second half of 2009.”

While the Toronto real estate market strengthened, it was a different case for housing activity south of the border.

According to the U.S. Census Bureau, building permits decreased to a seasonally adjusted annual rate of 573,000 in September – a 1.2% drop on the previous month and a hefty 28.9% dip for last September.

“Building permits are down in two of the past three months [largely due to weakness in multiples], and the number of units under construction continues to decline,” says Sal Guatieri, senior economist at BMO Capital Markets. “This could reflect nervousness ahead of the looming Nov. 30 deadline for the first-time homebuyers tax credit, though the administration has said that it is considering a proposal to extend the credit. The bigger concern likely stems from rising foreclosures in the resale market amid ongoing job losses.”

The U.S. Census Bureau reported that housing starts in September reached a seasonally adjusted annual rate of 590,000. This is just 0.5% above the revised August numbers and a marked 28.2% down on the same month last year.

“More broadly, the sector is stuck in the range of 500,000 to 600,000 with little immediate prospect of a robust exit. While U.S. home prices are finally beginning to rise (with plenty of positive implications for the U.S. economy), it remains considerably less certain whether this will translate into additional construction due to a substantial overhang of inventories,” notes Eric Lascelles, chief economics and rates strategist at TD Securities. “And even as the official inventories are whittled down, it seems that banks and builders may be holding on to shadow inventories that will preclude the need for serious construction activity for quite some time.”

The traditionally more stable single-family component of the housing starts suggested that there might be a more positive underlying trend.

“Tempering the disappointment somewhat is that single-unit construction, which accounts for four-fifths of the total and is a more reliable gauge of underlying trends than the overall figure, rose for the sixth time in seven months, and by a solid 3.9% in September,” notes Mr. Guatieri. “It is up a whopping 40% from earlier lows and down just 9% from a year earlier. That said, the near-term outlook remains iffy, as homebuilder sentiment dipped unexpectedly in October.”

According to the National Association of Home Builders, builder confidence in the market for new single-family homes fell one point to 18 in October. This represented the first decline in the index since June.

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Contact the Jeffrey Team for more information  -  416-388-1960

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Repositioning themselves for next phase of their lives

William Hanley, Financial Post

Tom and Jane, long-time friends of ours, last year sold the house they had lived in nearby in east Toronto for more than 30 years and bought a condo on Lake Ontario in Burlington, 60 kilometres away. Retired and in their mid-sixties, they had three reasons for selling up and leaving the house and neighbourhood they loved: First, they wanted to be nearer their daughter and their grandchildren. Second, they came out $250,000 ahead on the transaction. And third, they wanted the convenience of living on one floor in a brand-new condo they could lock up in the winter and head south to the sun.

Tom and Jane are part of a vast cohort of retirees and Boomers heading into retirement who are in the throes of making life-changing decisions about where they will live out their years, helping to stir and shape the real estate market.

The housing surge of the new millennium — and the recent re-surge after a year-long pullback — has been partly fuelled by first-time buyers and other younger people embracing low mortgage rates and other tax incentives. But Boomers and retirees are responsible for much of the buying and selling as they reposition themselves for later life.

U.S. studies have shown that a vast majority of people like to stay put in their region and/or town when they retire, preferring to “age in place,” as the demographers put it. But even these folks will often have an impact on the real estate market by selling the family home and buying a smaller bungalow or condo, or perhaps renting a house or apartment.

The Boomers, who are still retiring in massive numbers even though the recession has derailed many plans, continue to have a profound effect on all aspects of society and commerce, real estate included.

A Canadian study published several years ago forecast that Boomers and those older would fuel about 75% of residential real estate activity in the decade after 2006. That sounds like an outsized prediction. But remember, the nine million Canadian Boomers began turning 60 in 2005, and by 2020 about one in five of us will be 65 and over.

Meanwhile, your average 65-year-old of 2009 is not your average 65-year-old of 1969. Such are the advances in life spans and attitudes about aging and life’s possibilities that 65 is the new 55, that older people often have the emotional and financial resources to engineer profound changes in their lives, including where and how they live.

I am a case in point. I turn 65 next March and made a pre-emptive retirement strike eight years ago when we sold our semi-detached house in east Toronto, bought a modest condo not far away and pocketed a nice chunk of cash, some of which has been sagely invested in winters in the sun.

That’s it for us. They will carry me out of here feet-first, unless I happen to expire elsewhere. So, in all likelihood we will not, like Tom and Jane, be helping the legions of real estate agents get their commissions.

But millions of others will, helping to drive the real estate market until the late Boomers reach 65 in 2030.

Today, Boomers and those older, have more choices of where and how to live: They can stay in their home as long as they’re physically able. They can sell and downsize to a smaller house or condo in the same area or elsewhere and use some of the proceeds to enhance their lives. They can sell and rent, using the cash for snowbirding. They can sell and move to one of the scores of retirement communities springing up across the country. They can sell and move to new retirement-friendly areas where real estate prices are low.

Who knew Ontario had a “sunshine coast,” which is how the area on Lake Erie around Kingsville is being promoted?

Tony Hill, a real estate broker at RE/MAX Unique Inc. in Toronto, says southwestern Ontario “has a big push on promoting a milder climate, vineyards, beaches and dirt-cheap real estate to retiring Torontonians,” adding that the promotion has potential, especially among those looking for cheaper accommodation after their retirement savings have been dented by the stock-market slump.

Yes, the slump in equities and the accompanying crash in fixed-income returns have modified many retirement plans, even to the point of postponing retirement itself for some. Yet most people of a certain age will at least be questioning what might best serve their accommodation needs.

Our friends Tom and Jane are thrilled with their new digs, the extra money in their pockets and the proximity to their daughter and her family. It was an arrangement whereby financial common sense intersected perfectly with location, location, location.

It would be nice to think that millions of other people of similar vintage will be able to enjoy the same happy ending to their real estate quests.

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Contact the Jeffrey Team for more information  -  416-388-1960

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The Canadian Real Estate Association said the average sale price of a home last month was $331,602 last month, a 13.6% from a year ago. After bottoming out in January, sales activity in Canada is up …

Garry Marr, Financial Post

Yasmin Denner remembers the tough questions when she bought her first house in Toronto in the 1990s.

“I had 15% down but that wasn’t enough. They wanted to know where I’d gotten the money from,” said the self-employed IT specialist with a laugh as she recalled Canada’s borrowing environment.

Flash forward 15 years. She and her husband Trevor moved to the United States, settling in the suburbs outside of Washington D.C. where they bought a relatively spacious 3,000 square foot home for their future family of three.

As the U.S. house market roared, and credit was easy to come by, Ms. Denner said she saw more than a few neighbours pull up stakes and buy twice as much house only to find themselves in trouble a few years later when the market went sour.

“I have a friend who was at a dinner party at one of these McMansions, something like 6,000 to 8,000 square feet. She asked why it was so cold in the house and was told it was too expensive to heat,” says Ms. Denner.

There is something about the way she was raised in Canada that told her not to bite off more house than she could chew, even in the face of lax mortgage rules and tax benefits that allow you to deduct the interest on your mortgage from your income.

“We considered a bigger house. Sure you can write your interest off but it’s not that much money. Still it’s tempting for people here,” says Ms. Denner, adding most of the transplanted Canadians she knows remained conservative as the American housing market exploded.

While the U.S. market has paid dearly for its rapid with an almost three-year slowdown, Canada’s housing market has bounced back in a mere eight months. The Canadian Real Estate Association said the average sale price of a home last month was $331,602 last month, a 13.6% from a year ago. After bottoming out in January, sales activity in Canada is up 63% from the low.

Perhaps Canadians are inherently more conservative than Americans and that has kept the market steadier but Don Lawby, the chief executive of Century 21 Canada, says we also have a more structured housing market.

As the U.S. housing market was approaching its peak four years ago, many in the Canadian real estate community were lobbying loudly for U.S. style breaks like mortgage interest deductibility – a popular measure that hardly encourages you to pay down the debt on your home.

“I own a home in the U.S. I get the maximum loan I can get, then I go out and buy a new car a, new boat. But what happens when suddenly my home is worth less. I’ve got a car, a boat and a house I can’t sell,” says Mr. Lawby. “People in the U.S. see the value of their home more as an ATM than in Canada.”

Mr. Lawby says the banks in Canada deserve a lot of credit for not creating products with low interest payments up front that eventually give way to balloon payments. No money down loans have been banned by Ottawa for government insured mortgages and interest-only loans where you pay no principal are rare in Canada.

But one of the biggest differences between the Canadian market and the U.S. market is the ability to walk away from your housing commitment. In the U.S. people have handed over the keys to their bank as the value of their homes has shrunk below their mortgage.

Don’t try it in Canada, says real estate lawyer Steve Brett. “In the U.S. obviously if you have the ability to walk away there is less of an incentive to stay and tough it out. We simply don’t have that here to the same extent.”

What would have happened in Canada if the market had not improved and prices declined say 25% – something that occurred in Toronto in the late 1980s?

“If you just say hand your keys back to the Bank of Montreal, the bank is entitled to take back possession of your property and resale it under the terms of the mortgage for the best price they can get,” says Mr. Brett.

But if the best price they can get is less than your mortgage, you have a problem because most Canadians sign a personal guarantee when they get a loan. “If [the bank] suffers a loss after they’ve repaid themselves the principal, the interest, all of the costs including legals fees, real estate commission and fixing up the property, they are entitled to sue the owner,” says the lawyer.

Once the bank has a judgement against you saying you owe them money, it will follow you forever. Try getting another mortgage with an outstanding judgement. The judgement automatically attaches itself to any future property you buy. With a judgement against you, the bank can also try and garnishee your wages.

But what’s the reality? Would the banks actually pursue this route? That’s exactly what happened in the 1980s. “Walking away from a property isn’t a possibility at all, if you’ve got other assets,” says Mr. Brett.

Bank of Montreal director of Mortgages John Turner agrees walking away from property will trigger an action against you if there is not enough equity in the home to cover a mortgage and associated costs.

It’s not just the rules in place, Canadians don’t want many of the products found in the United States. “We’ve done some research and Canadians are more conservatives than our cousins south of border. we are wired differently,” says Mr. Turner. “Our products are different because that’s what people want.”

He admits if Canadians were offered more exotics mortgage products, there would be some interest. But Mr. Turner adds there is more of an advisory focus here to steer people away from certain products. “There are more brokerage intermediaries in the U.S. The fiduciary responsibility remains with the banks here in Canada,” says Mr. Turner, adding mortgage brokers in Canada act more as a go between for the banks and customers.

Even some in the real estate industry admit Canada’s conservatism has probably paid off. Brian Johnston, president of Monarch Construction, says it’s probably been a blessing.

“I was with a friend [who is living in] Iowa and he was telling he didn’t have a mortgage on his house but he’s Canadian. He’s unlike everybody else there who has big mortgage on their house because it’s a tax planning strategy,” said Mr. Johnston.

Now that the Canadian market is showing much better consistency will it quiet down demand for changes in Canada that makes buying a home easier? “If I was sitting in the Canadian Home Builders’ Association I would say don’t ask for changes,” says Mr. Johnston, “because finance is going to tell you, ‘looked what happened in the U.S.’.”

Don’t get the idea, the Canadian market is perfect. It has had its speculators. Some parts of the country like Alberta and Saskatchewan have seen price appreciation of 50% in those markets over a year and have pulled back since. But Marc Pinsonneault, senior economist with National Bank Financial Group, said it has hasn’t been as dramatic and has been much more short-lived.

“Their market was stimulated by exotic mortgage products and you add it together with everything else and fueled house prices more than was reasonable,” says Mr. Pinsonneault. “Clearly you can say it’s not something we’ve had in Canada.”

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Contact the Jeffrey Team for more information  -  416-388-1960

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Building boasts great city views from the edge of the Don River

A new soft loft at the edge of the Don River, the DVP, the West Don Lands, Corktown, even downtown.

But in a few years, Edge Lofts will be at the core of a revitalized eastside area, a rejuvenation that began with the development of the Distillery District and will continue with the reinvention of Regent Park and the urbanization of the West Don Lands.

The 66-unit loft building is located at the southeast corner of Queen Street East and the East Don Roadway, on the site of a former used-car dealership.

Streetcar Developments began with a loft project on Queen Street East, near Woodbine Avenue. It was the enthusiastic reception of that venture – Academy Lane Lofts – that led to the company’s main-street development philosophy and its willingness to move its office to the same area as the project. The company is also developing a multi-building project in Corktown, the Corktown District.

Located on a slight hill on the east side of the Queen Street-Leslieville bridge, the six-storey Edge Lofts literally stands out against the lower elevations of the surrounding structures.

Edge Lofts also provides some great views of the downtown skyline. West-facing units have a completely unobstructed view of the city, and higher units have a view of the lake.

Quadrangle Architects, the firm that designed the BMW dealership visible from the Don Valley Parkway, also designed Edge Lofts. They tried to take some elements from that building – aside from some charcoal-grey brick in the recessed balconies of the units, Edge Lofts is almost all glass.

All but three of the units have balconies or terraces. Lofts range in size from 637 square feet to 1,086 square feet. Outdoor space ranges up to 434 square feet! Monthly condo fees are around $0.35 per square foot.

Exactly half the lofts are one-bedroom plus den. The rest are evenly split between one-bedroom and two-bedroom units. The building has two levels of underground parking, and 4-by-8-foot lockers. Loft designs are open concept with sliding partition doors between the bedroom and living space and floor-to-ceiling windows.

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Contact the Jeffrey Team for more information  -  416-388-1960

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