Toronto Condo and Real Estate Blog

With interest rates at historic lows, many people are considering buying a home.

The first thing any prospective homebuyer needs to do is determine whether they can afford to buy the home they want.

Many people believe they have to save a large down payment. Thanks to mortgage insurance, however, you can buy a home with as little as a 5% down payment. Some banks even offer 0% down options!

A down payment of 25% or more will qualify you for a conventional mortgage. If it is less than 25%, the mortgage must be insured with a mortgage insurance company, such as CMHC or GEMI.

Mortgage insurance serves homebuyers by helping them achieve homeownership through low down payment mortgages. Because lenders are protected by mortgage insurance, they are able to offer loans to homebuyers with as little as 5% of the purchase price as a down payment at competitive rates. This insurance benefits lenders and investors while helping homebuyers.

Once you’ve determined how much you can put toward a down payment, it’s time to approach a lending institution for a mortgage.

Most mortgage lenders look at five factors when determining whether you qualify for a mortgage loan: your income, debts, employment and credit history and value of the property you want to buy.

One of the first questions a lender will consider is how much of your total income you’ll be spending on housing. This helps the lender decide whether you can comfortably afford to buy a home.

A lender will then look at your debts, which generally include house payments as well as payments on all loans, charge cards, car payments, etc. that you make each month.

A history of steady employment, usually with the same job for several years, helps you to qualify. But a short history in your current job shouldn’t prevent you from getting a loan, as long as there have been no gaps in income over the last two years.

Good credit is very important in qualifying for a loan. Make sure you have maintained all of your payments and limit the number of credit cards you have to no more than three. The lender will also want to know what the house is worth and the price you plan to pay.

The size of your down payment affects the amount of your monthly mortgage payments. A smaller down payment will mean your monthly mortgage payments will be higher, but it may allow you to buy sooner rather than later.

Mortgage payments for principal, interest and taxes generally should not exceed 30% of your gross monthly income. Simply multiply your gross monthly income by 0.30 to determine your maximum monthly payments. If your gross monthly income is $4,000, the most you can afford is $4,000 x 0.30 = $1,200.00 a month to cover mortgage payments plus property taxes.

You should also remember that there are other expenses over and above your mortgage payments. These include the land transfer tax and legal fees to close the purchase of your home. Plus other monthly expenses such as condominium fees, heat, hydro, water, property tax, insurance and household maintenance.

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A virtual dream team has been working on a new condo development in Toronto - Glas Condominiums. The four individuals behind the design, development and sales are: architect, Peter Clewes of architectsAlliance (Four Seasons, Radio City, 18 Yorkville, Tip Top Lofts); developers Mark Hewitt of Niche Developments (the former VP of Development behind CityPlace and the former executive director of Emaar Properties Dubai), and Walter Harhay (developer of Zen Lofts, Abbey Lane Lofts, 169 and East); and Brad J. Lamb, condo broker of over 80 new projects in central Toronto. These guys know what they are doing.

From the outset, the idea behind Glas Condominiumswas development without compromise. The team wanted to create a landmark infill high rise that would stand the test of time. It would be a modern icon that people would stop to stare at.

“From the start the shape of the site allowed for the creation of the wide-shallow suite, the holy grail of floor plans,” says broker Brad J. Lamb. “These plans are twice as wide as they are deep allowing for maximum glass, which is very rare in the city.

“The development sits in the hot spot of King Street West and Spadina, just steps from the financial district, the theatre district, and the entertainment district,” says Lamb. “Charlotte Street is a quiet street that connects King Street West to Adelaide Street West, so you’re in the heart of the city yet ensconced in a quiet lane. It is a part of the city that feels very much like Soho in New York City; it is one of Toronto’s most exciting developing neighbourhoods.”

Glas Condominiums was conceived to be all about light and glass – essentially it is the epitome of modern architectural design. The nature of small infill-type sites allows for interesting buildings.

The main level of Glas Condominiums has seven lofthouses ranging from 1,250 to 1,500 sq. ft. Ceiling heights soar to 20 ft. high in the living room and are 10 ft. high everywhere else. All lofthouses feature two bedrooms and include an attached parking garage with locker.

“We invented the lofthouses for Glas Condominiums, which are totally unique to Toronto. Buyers really like the two level through designs with private parking, as four homes have already sold,” says Lamb. The second to 10th floors have flats with nine-ft. ceilings ranging in size from 410 to 1,000 sq. ft. The 11th to 16th floors have lofts and penthouses with 10-ft. ceilings ranging in size from 625 to 1,850 sq. ft. “The two-level penthouses have large terraces and spectacular finishes,” says Lamb. “Our penthouses are incredible!

Each has a huge terrace off the living and dining areas. They range from 1,100 sq. ft., two bedrooms to 1,850 sq. ft., three bedrooms.”

The team has assembled a unique array of finishes including Italian-style kitchens, gas cooking, gas on all balconies or terraces, four premium stainless steel appliances, stone counters, premium hardwood floors and contemporary bathroom fixtures and styling. “The finishes at Glas Condominiums are the best I’ve ever seen offered in Toronto. There is truly no need to upgrade,” adds Lamb.

“We did not want to just build an average building.” says Mark Hewitt of Niche Developments. “This is a small infill site that could have been lost to a marginal development; instead we are building something here that is beautiful inside and out. Peter Clewes [architectsAlliance] has outdone himself.”

The development is now 50% sold out and the application for building permit has been submitted with construction to start in the fall. Prices at Glas Condominiums start at $153,900 and run to $904,900.

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Many condos still being built in Toronto, but market volatility will continue, analysts say

Canadian Press

OTTAWA - Housing starts on an annual rate fell to 213,700 units in August, from 236,500 units in July, Canada Mortgage and Housing Corp. reported.

The drop was attributed to a decline in multiple starts, the agency said.

“After three consecutive months of increases, the volatile multiple starts segment dropped to its lowest level of the year in August,” said Bob Dugan, chief economist at the corporation’s market analysis centre.

“Single-detached starts moved higher from their lacklustre performance in July, but not markedly so.”

On a seasonally adjusted annual rate, urban starts declined 11.3% to 179,300 units in August, compared to July.

Urban multiples decreased 22.2% to 87,800 units in August, while singles were up 2.6% to 91,500 units.

Urban starts fell in four out of five regions in August compared to July. Starts fell 21.3% in British Columbia, 19.8% in Ontario, 18% in the Atlantic region and 10% on the Prairies.

In Quebec, urban starts rose 19.6%.

Rural starts in August were estimated at a seasonally adjusted annual rate of 34,400 units.

“Total starts for the first eight months of this year remained ahead of last year’s pace,” Dugan said. “However, strong house price gains will continue to dampen demand for new homes in the latter part of this year.”

Housing starts in the Toronto census metropolitan area dropped by a greater than expected 20% in August to the lowest number since February of this year, according to CMHC.

The seasonally adjusted annual rate of starts was 33,100, down from 41,600 in July. Much of the decline was due to a big drop in the volatile condominium sector.

“We are certainly off the peak, and you can expect some volatility as we trend lower,” said housing analyst Will Dunning.

“We are at a mature stage of this housing cycle,” said Jason Mercer, senior market analyst for the CMHC.

“New construction has remained above average but will decline over the next two years.”

CMHC is forecasting that starts will be 40,000 this year, down from 41,596 in 2005 and from the peak in 2003 of 45,475.

CMHC considers a home started once the concrete foundation is poured.

Analysts warn that the monthly figures can be volatile because one large project can make a big difference to the monthly figures.

With so many condominiums being built in the Toronto area, the numbers have been up and down all year, making it especially difficult for economists to detect a consistent trend.

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