Toronto Condo and Real Estate Blog

By Peter Vukanovich

For most Canadians, homeownership is as much about financial well being as it is about comfort, security and a sense of pride.

That’s why Genworth Financial Canada believes that consumers need to be well informed before they make one of the most important financial decisions of their lives.

Building equity in your own home, while enjoying the experience of being a homeowner, is a priority for millions of Canadians. And now there are more options available to help you realize the dream of homeownership.

Best to start by understanding your current financial situation. Assess your own credit conditions and speak to a mortgage professional about obtaining a pre-approved mortgage.

Check your credit rating, available from such agencies as Equifax Canada Inc. and TransUnion Canada. Consider your total debt obligations and weigh your ability to manage mortgage payments.  You should budget to spend no more than 32% of your pre-tax income on housing costs (mortgage payments, property tax & heating costs) and use no more than 40% of your income to service all debts including your mortgage.

New mortgage products, such as extended amortizations, can help you make the transition to homeownership. In addition to the traditional 25-year mortgage amortization (the time you’ll take to pay the loan back in full, with interest), there are now 30-, 35- and 40-year amortizations available.

Extended amortization products can help buyers with good credit become homeowners sooner. But they’re not without some drawbacks.

A home purchased with a 40-year amortization mortgage will carry significantly higher interest costs over the life of the mortgage than one purchased with a 25-year mortgage, assuming you use the entire amortization period to repay the loan. For example a $250,000 mortgage at 6.5% with monthly payments paid over 40-years will cost $445,177 in interest. If that amortization were 25-years, the consumer would pay $252,368 in interest, a savings of $192,809.

Extended amortization products should be viewed as a tool to help you become a homeowner sooner. However, there are options available for paying down mortgage debt more quickly than the original amortization period chosen.  For example, mortgage loans in Canada generally end after five years, after which time you have the option of choosing a shorter amortization period.  By doing so, you’d save interest charges and eliminate your mortgage sooner. Similarly, the average Canadian moves every seven years, which ends their mortgage and provides an opportunity to choose a shorter amortization period.

Also consider that mortgages in Canada offer pre-payment allowances of between 15-20% of the original mortgaged amount, usually on an annual basis. Some consumers use their income tax refund from RRSP contributions for this purpose.

Accelerated payment options are another great tool to reduce mortgage debt. For example, a 40-year amortization period can be cut to about 32 years by moving from a monthly to accelerated bi-weekly payment schedule. If you make additional payments or double-up your mortgage payment through-out the year, you can also significantly reduce the number of years to pay off your mortgage.

Most Canadians (78% according to a recent survey) are interested in paying their mortgage off as quickly as possible, and using the above strategies will allow you to do just that.

So, if a 40-year amortization is more expensive in the long-term, why choose it at all? Besides lower mortgage payments, there are other reasons why these products may make sense.

For example, you may purchase a ‘fixer upper’ and keep the extra cash flow available for renovation costs. Once the home is renovated, you can make accelerated payments or choose a 25-year amortization when renewing your mortgage term.

Similarly, for young professionals who still have student loans to consider, a 40-year amortization may make initial sense. It will allow them to pay down those loans and later pay their mortgage more aggressively after their income level rises and they’re free of that debt.

Extended amortization products will continue to offer informed consumers the flexibility they need to begin to realize their dream of homeownership. Genworth has launched a new website which provides consumers a wide range of information about the homebuying experience. Visit www.homeownership.ca to learn more.

Peter Vukanovich, CA, is President of Genworth Financial Canada and is Past President (2004-05) of the Canadian Association of Accredited Mortgage Professionals.

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

GTA resale housing market moderate last month, but prices up

With 8,762 houses sold in the Greater Toronto Area, April’s resale housing activity was down only 7% from the record 9,452 transactions from the same timeframe a year ago, Toronto Real Estate Board President Maureen O’Neill announced today.

“The market is showing signs for a healthy 2008 compared to the diminished activity we saw in the first quarter of the year,” said Ms. O’Neill. “We continue to experience a supply and demand situation and to-date, it remains a sellers market.”

Sales activity however, was markedly different in the 416 and 905 regions. With 3,467 transactions in the City of Toronto, sales were down 10% from a year ago. The 905 region was down 5% from April 2007 sales, with 5,295 homes changing hands.

April’s GTA average price was $398,687, up 8% from the same period a year ago. In the City of Toronto, the average price was $446,781, up 6% from last April. In the 905 region the average price increased 5% compared to a year ago, to $367,196.

Several neighbourhoods experienced strong sales in April.

Scarborough East (E08) saw an 8% overall sales increase compared to April 2007, driven by robust detached home sales.

Caledon (W28) experienced a 15% increase compared to the same timeframe a year ago as a result of strong condominium sales.

Condominium sales also drove Willowdale (C07) to a 32% increase from a year ago.

In Thornhill sales increased 8% from last April due to strong detached home sales.

“The number of listings on the Toronto Real Estate Board’s Multiple Listing Service has increased to 24,539, up 7% from a year ago, which is good for homebuyers, who will find a greater range of options in the market,” said Ms. O’Neill.

“With prices continuing to appreciate and increased listing inventory there are favourable factors in today’s market for consumers.”

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

High Park Lofts takes its cue from the church that once graced the site

By Diane Tierney - Globe and Mail

The curtain has risen on High Park Lofts and it unveils its cast of character-rich design features. Harry Stinson, co-developer of the project says, “It has an interesting history. Par of the site was occupied by St. Jude’s Church, which was being rented by Mirvish Productions as a rehearsal hall for “The Lion King.” When the owner defaulted on the mortgage, the church was bought by Stinson and his partners.

“The original intention was to renovate the church into a small loft project of about 30 suites. We spent a lot of time planning the conversion job and it was a very complex building. We tried to preserve its architectural elements. However, we ended up with a magnificent product that was a little too magnificent. Preserving the elements was not going to be cheap.”

Fate intervened when the elderly owner of the adjacent property passed away. It has a Kentucky Fried Chicken outlet on it and they were able to buy the site.

“This completed the block and allowed us to have three sides of the corner. It offered a huge strategic design difference to the project. When we reviewed the whole overall site with this addition, we decided to start from scratch and build a new building of 80 suites. But at least with the first exercise, we knew what we wanted to do and the design, price and features that would prove to be most popular,” say Stinson.

The new High Park Lofts building deliberately incorporates design elements such as an enormous interior atrium allowing suites to be flooded with light on both sides. This gives a cathedral-like ambiance to the building. It is 120 feet long and 60 feet high and has gracefully arched beams, and domed skylights of stained glass.

“This atrium will be a dramatic space designed to look like it’s been there for 100 years. It won’t be a hollow core cut through the middle of the building. The atrium runs north-south and at the south end there’s a very tall window. So when you’re outside you’ll be teased by the colour and plants and the life inside,” say Stinson.

It’s a vital building, not just a slab on the corner. High Park Lofts will be recognized by its grand, town hall-style tower, with its backlit, antiques clocks. On the upper levels there are two-storey, stepped-back townhouses with a garden in front,” he says. Massive brick buttresses, huge arched widows and stained glass accents also recall the original church to give the High Park Lofts building cathedral-like character.

Just as much effort and imagination has been applied to the High Park Lofts suites, most of which are unusual because of their split-level, through building layouts, with the living rooms facing the outside and bedrooms that overlook the interior atrium.

Standard finishes include flooring of solid hardwood (oak, maple or bamboo, not engineered veneers) and limestone, marble, slate or ceramic. The High Park Lofts suites have 11-foot ceilings, gas fireplaces, stainless steel appliances, built-in library shelving, built-in Murphy bed for guests, counters of granite, marble or man-made solid surfaces, a parking space and locker.

Condo fees will be about $350 per month, which include the heating and air-conditioning costs. The High Park Lofts has a geothermal system that utilizes natural subterranean heat, rooftop solar panels, and numerous energy conservation mechanisms to make the entire building virtually self-sufficient.

“This is rather timely considering all the energy deregulation. I think we’re going to get a big shock in a couple of years and if a building is able to stabilize its energy costs then that’s going to be a big deal,” he says.

At High Park Lofts‘ doorstep is Roncesvalles Village, a long-established residential neighbourhood with corner grocery markets, local shops, bakeries, coffee shops, banks, cinema and hardware stores. “Some people might confuse the area as being like Parkdale because they are not too sure about the west-end communities, but Roncesvalles Village is sort of like the Beaches before it got trendy,” say Stinson.

High Park is down the street. Dundas West subway stop is two blacks north. Parkside Drive provides quick access to the Gardiner Expressway and a streetcar runs pasts the High Park Lofts front door directly to King and Bay.

“There aren’t many loft-type buildings in Toronto that are in areas that are civilized. That’s what’s proved to give this project a lot of appeal. The area is far more urban, not the stuffy neighbourhood we thought it might be. We feel part of an awakening of sorts for this area,” say Stinson.

Stinson admits to being obsessive about design and wanted a building that really stood out. “Builders can go the cost-route and squeeze every nickel out of a project so they can offer something for $149,900 and that’s certainly a fool-proof method. Or, builders can try to make the design outstanding even though it will be more expensive.”

This is a turnkey, deluxe product. “You don’t go into Mercedes dealership and get charged for the radio. This is the same approach. It’s a little more expensive per square food, on a perception basis, but that’s because everything is included. People might pay $250 per square foot elsewhere but then they have to buy a parking space and install better flooring, or upgrade features. We just set the high standard up front because we want to known as such.”

Architecturally, the High Park Lofts building is going to stand out. “It’s something people will refer to with pride,” says Stinson.

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