Toronto Condo and Real Estate Blog

Getting in touch with your greener side

By Pat Baker - New Dream Homes and Condos

The condo market in Toronto changes with the times, and the time has come for a focus on the environment. Today’s developers are taking environmental sustainability seriously, by incorporating energy-saving features and innovative technologies. We hear a lot about “green” building practices, as builders respond to a market of Toronto condo buyers who are more environmentally conscious than ever.

In April, the Greater Toronto Home Builders’ Association - Urban Development Institute will present the first-ever “Green Builder of the Year” award at the organization’s 27th Annual Home Builder Awards. This widespread concern is a breath of fresh air in the Toronto condo world.

One driving force in this trend is Canada’s LEED® Green Building Rating System. Several Toronto condo developers have registered their buildings for certification from LEED, which stands for Leadership in Energy and Environmental Design.

This relatively recent program helps architects, engineers and construction professionals to improve the efficiency of the buildings and measure their sustainability. Residential buildings can be certified only after they are built and occupied, so as many of these registered buildings take shape, we will start to see more LEED-certified condos in the future.

Green building practices come in many other forms, such as providing ENERGY STARâ„¢ rated appliances in condos themselves. Some builders are offering low-rise condo townhomes, constructed to the ENERGY STARâ„¢ standard, which saves owners on monthly energy costs and qualifies purchasers for CMHC’s Energy Efficient Mortgage Loan Insurance rebate and 35-year amortization. This provides a tremendous financial incentive for first-time buyers and people who have previously been unable to afford to buy a home.

Enwave Energy Corporation’s successful deep-water cooling system, that is replacing conventional air conditioning in many downtown Toronto condo buildings, is lowering hydro costs substantially. The Residences at The Ritz-Carlton Hotel in Toronto will be cooled by this remarkable system that uses water from Lake Ontario, and through advancing technology, the process may be brought farther north. Amazing, isn’t it?

The trend toward greening is gratifying, too. Purchasers are interested in anything that will help to save the environment, and so are builders. Providing energy-efficient plumbing fixtures, recycling construction waste on the job site, using heat transfer technology to transfer excess heat from warmer spots in the building to cooler areas, even designing lush landscaping and urban parks into condo neighbourhoods – these and other efforts of our conscientious developers are all adding up to a greener future for Toronto’s urban landscape.

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May 16, 2007 – The Toronto real estate market got off to a roaring start in May, with 5,003 sales reported during the first 15 days of the month, Toronto Real Estate Board President Dorothy Mason announced today. This is an 11% increase over the first half of May 2006 and the highest midmonth sales total in the Toronto Real Estate Board’s history.

“All signs point to a very healthy real estate market for the remainder of the spring,” Mrs. Mason said. “In terms of activity, this year is about 6% ahead of last year’s pace, and that’s an indication that there’s a lot of confidence in this market. Now is an excellent time to get started in the Toronto real estate market or make a move.”

The average price in the first half of May was up 2% to $377,612 from the $369,543 recorded during the first half of May 2006. Year-to-date prices were nearly 5% ahead of the same time last year. Meanwhile average time on market for a listed home fell to 28 days, and the average list-to-sale price ratio rose to 99% of the asking price.

In Scarborough’s West Agincourt neighbourhood (E05), condo transactions more than doubled as the area saw a 39% overall increase compared to the middle of May in 2006.

Strong condo activity also pushed Mississauga’s City Centre (W15) to a 49% overall increase compared to the same timeframe a year ago.

In the Downtown Toronto / Harbourfront area (C01), 34% more condos and homes changed hands compared to mid-May of last year, fueled mostly by highrise condos.

In central Vaughan (N08), detached homes and town homes were the most active types as overall transactions increased from mid-May of last year by 59%.
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From The Condo Guide Magazine

Almost every time that we help arrange mortgages for our clients, they ask us whether they should go with a shorter or longer term. Our answer: for some people, having a long-term mortgage makes a lot of sense; for others a short-term mortgage will best meet their needs. Of course, there is no one right answer, but here is an important list of things to consider.

When you are selecting the term for your mortgage, it is important to recognize that generally, the longer the term of your mortgage, the higher the interest rate. A good way to think of the difference between a short vs. a long-term rate is as an insurance premium. The financial institution generally wants to be compensated by you in order to guarantee the rate of your mortgage over a longer period of time. What you have to decide is whether or not the insurance premium (difference between short- vs. long-term rates) is worth paying in your circumstances.

Many people have heard the theory that you are better off continually renewing with short terms and paying down your mortgage. This philosophy has held true in the past, provided that the extra amount saved from selecting a short term is applied to reducing your principal mortgage balance outstanding. There is potential to gain by using this method, but you are also exposed to the risk that rates could be substantially higher by the time you have to renew.

Many of the consumers in today’s market are buying homes with 5% down and extending their debt servicing to extreme levels. While I believe that the dream of home ownership is a very fulfilling and worthwhile pursuit, I caution that you should do your financial planning carefully.

It is important to realize that interest rates today are at near historical lows. Many people who can afford homes today would never have been able to make such a purchase at the interest rates five years ago. It is critical that you understand the following: You repay very little of your principal balance over the first few years of your mortgage. This means that people who expect to see very little pay increase over the next few years should definitely consider the consequences. Over the last 30 years, the average five-year mortgage rate has been approximately 11%.

Ask yourself this question: if mortgage rates are at 11%, when it’s time to renew, will you be able to afford to keep your home? If your answer is a comfortable “yes,” then I suggest that you choose the term with which you feel happiest. If your answer is even possibly no, then find as long a term as possible. By the time a 10-year term comes up for renewal, you will at least have paid off a larger portion of your principal, and may be able to extend your financing over a longer term in order to make your payments more affordable.

If the property you are financing is being used, or is going to be used, as an investment property, then again, the longer-term mortgage product makes sense. It offers you peace of mind and the opportunity to do fairly accurate projection of revenues and expenses for the term that you choose.

Remember, there is no mortgage product that can be all things to all people. Make sure you are informed and find the product that best meets your needs. Until next time, best of luck finding your mortgage and home.

New Homes & Condos Magazine is an excellent source of housing information for those looking for information on new homes and condos in Ontario, Canada. We offer the most up-to-date information on new communities across the Greater Toronto Area.

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