Tag Archives: intense competition
Toronto real estate sales boom in October
ctvtoronto.ca – with a report from CTV Toronto’s Paul Bliss
The development industry says new home sales in the GTA are at their highest level in more than two years.
The Building Industry and Land Development Association (BILD) said Friday that there were 4,150 sales in October, the best results since July 2007.
Sales of homes, primarily in the 905 area, “were up an astounding 173%,” it said Friday.
High-rise condo sales, primarily in Toronto, “rose by an impressive 77%,” BILD said, citing RealNet Canada Inc. as the data source.
“The turnaround in new home sales has been nothing short of remarkable, with homebuyers taking advantage of ultra-low interest rates and intense competition among builders,” Stephen Dupuis, BILD’s president and CEO, said in a statement.
“The low-rise new housing market picked-up in late Spring while the high-rise condo market has sprung back this fall, accounting for 60% of total new home sales in October,” he said.
“With year-to-date sales now running 2.5% ahead of last year and a decidedly up-note in the market, it looks like total new home sales in 2009 will end up far higher than anyone could have anticipated earlier in the year.”
In Toronto, real estate agent Krysten Fleischhacker of Coldwell Banker told CTV Toronto that the condo business has been crazy.
“There’s so much competition. There’s been multiple offers on every unit that’s under $400,000, it seems — even higher,” she said.
One issue is that inventory is low. Fleischhacker said it’s so tough to get into the resale market, many are finding better deals in new condos.
“They do offer incentives, like cash-back on closing or up to $5,000 in upgrades, which could include laminate floors throughout …,” she said.
So long as interest rates and inventory stays low, Fleischhacker said it’s likely to remain a seller’s market.
CTV Toronto’s Paul Bliss said some agents are lining up to buying units in new buildings before turning around and selling them again.
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Contact the Jeffrey Team for more information - 416-388-1960
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Risky to build & costly to buy — loft conversions keep their value
Buyers attracted by historic buildings, but developers face the challenge of structural ‘surprises’ that often lead to cost overruns
By Derek Raymaker – The Globe and Mail
They only account for 5% of the overall condominium market, but Toronto’s lofts have gained a disproportionate amount of influence over the marketing and consumer preferences.
The exposed brick walls and vents, polished-concrete or distressed-wood floors, lack of walls, half walls, sliding barn doors, metallic finishes, multipaned floor-to-ceiling windows — these have become popular features in many new condominium towers. But they trickled down from the first wave of loft conversions in the mid-1990s that transformed some of Toronto’s warehouse and factory landmarks.
Before that, few developers and even fewer consumers saw past the traditional condominium design, says Barry Lyon, one of the leading high-rise marketing consultants in Canada and principal of N. Barry Lyon and Associates.
“Lofts told us that a lot of conventional apartments could benefit from loft-like elements,” he says.
Developing “hard lofts” (converting older buildings into residences) has never been easy. For builders, a conversion is fraught with expensive surprises, not unlike the renovation of an old house, and construction difficulties and added costs are not exceptions but rules. It is also why lofts cost in the neighbourhood of 10% more than traditional condominiums of equal square footage.
But even with those risks, loft conversions have added value as spectacular landmarks. For example, the Tip Top Lofts across Lake Shore Boulevard from the Canadian National Exhibition grounds, resurrected from the hulk of a former textile factory, has served as a memorable brand for Context Developments for the past four years of sales and construction.
Construction of the Tip Top Lofts went fairly smoothly, all things considered, according to marketing director Craig Taylor. “There was nothing drastic, but there’s always surprises,” he said.
The project has a wide range of prices and sizes, from $234,990 to $1.4-million, so owners come from a wide range of backgrounds, age groups and income brackets.
The target market for hard lofts is made up of people who are attracted to unique design and historic structures. “It’s mostly people who really want to live in an iconic building,” Mr. Taylor says. “Traditionally, you would think of really creative people.”
After a large number of loft conversions in the 1990s, loft builders (a special breed in any event), are having trouble finding appropriate sites to take on.
Some have done conversions of churches, and while the spaces that can take shape are dramatic and unique, they are difficult ones in which to create living quarters.
“They’re extremely expensive spaces to work with, and when they’re finished, they’re very attractive,” Mr. Lyon says.
“But you rarely see a developer do a second one. You always face cost overruns and structural problems, and they don’t yield much in terms of parking.”
Another challenge facing hard loft developers is the competition for downtown office space. It turns out loft conversions are also popular with commercial real estate developers, and for their purposes, often easier to do.
They’re aided greatly by the city of Toronto’s zoning gods, who have faced intense competition from the suburbs in efforts to retain jobs in the city’s core. Toronto will often designate derelict buildings for commercial use, with the knowledge that exposed wood beams and brick walls are just as popular as business headquarters, particularly for creative, technology savvy companies, as they are for loft buyers.
The sum of these market forces adds up to a brisk and positive resale market for loft owners, which is not likely to peter out any time soon.
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Get off the home owning fence
Angela Self – Globe and Mail
I’ve had the same rent-versus-own discussion with a close friend of mine for years. Every now and then she’ll see a new statistic from the Canadian Real Estate Association about where prices are headed and rethink the decision she made just months before.
My advice to her today is: it’s time to get off the fence. Although mortgage rates rose last week, money is still cheap right now. Given the slowdown in the housing market, which is also showing signs of picking up, there is a slim selection in housing stock and less time to make a decision and put an offer on a home – with intense competition. And it might get worse.
A combination of other factors means it is the perfect time for property virgins to make their move. The federal government’s 2009 operating budget has contributed two important ingredients to the mix: the option to withdraw as much as $25,000 from your RRSP (compared to $20,000 in 2008) and a First-Time Home Buyers’ Tax Credit that provides up to $750 in tax relief when buying a starter home.
If thinking about becoming a home owner for the first time makes you nauseous, don’t worry – that’s natural. Getting into the real estate market is a good idea, as long as you do your research, view it at a long-term investment and have the money to do so.
Let’s start with the most important element – getting the green stuff. The first step in the home-buying process is getting pre-approved by a mortgage broker.
Once you get the green light you may be compelled to open-house hop down the ritziest street in your hood. While test-driving your dreams is OK, touring too many homes beyond your budget is a waste of time. If you’re serious, search only in your approved price range and know that starting small and building equity will give you a chance to upgrade in the future.
If you’re trying to estimate how much you can reasonably afford, take this as a general rule: according to the Canada Mortgage and Housing Corporation your monthly housing costs – including mortgage principal and interest, taxes and heating expenses – shouldn’t be more than 32% of your gross household monthly income (for the math-weary: that’s your annual gross salary multiplied by 0.32 and divided by 12).
Equally – if not more – important is your credit score. Ranging from 300 to 900, it determines how much interest you’ll likely pay when you apply for a loan. The higher your score, the lower the risk creditors will consider you – and the less interest you’ll pay. A low interest rate could translate into thousands in savings over the life of a loan.
According to myfico.com, a score of 720 or higher is ideal. You can review your score – which is calculated by a credit bureau based on personal financial information – at www.transunion.ca or www.equifax.ca for about $20.
It’s possible to buy a home for as little as 5% down, but anything less than 35% means you’ll need to have your mortgage insured by a third party. Insurance costs can be paid in a lump sum at the time of purchase or worked into the principal balance.
CMHC is the main mortgage insurer in Canada. To see the full table of premiums, click here.
When you broach the subject of buying property with your broker or banker he or she will tell you what you can afford. Immediately aim to spend less. The last thing you need as a first-time buyer is to be house-poor. Remember, you’ll need money to pay closing fees (which can be 1.5% to 4% of a home’s value), as well as any unexpected costs that crop up (one leak in the roof could mean a flood of new expenses).
There is a great downloadable Excel spreadsheet that calculates your monthly expenses (including property taxes and condo fees), as well as tallies your land transfer tax. It even has different sections depending on whether or not you are self-employed or not. Download it here.
In terms of doing your research, don’t get wrapped up watching national housing averages or analyzing what the six o’clock news has to say about the market. The only market you should pick apart is the neighbourhood you want to move to. Using national stats to determine trends in your area is like comparing condos to townhouses. Real estate changes from district to district, sometimes from street to street.
A qualified realtor will help you with research and connect you to the right team (lawyer, inspector, mortgage broker). Always work with a realtor as a first-time buyer. There’s too much you don’t know to go it alone, plus you don’t pay commissions – the seller does.
Still hanging out on that fence? Click over to www.myhomeplanner.ca for a rent-versus-own calculator.
Emotion has no place in purchasing property, especially as a novice buyer. You’ll feel more confident in your decision if you simply stick to working the numbers, doing your research, gathering a good team.
Then you can do all the sitting around you want – as a home owner on your very own fence.
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Contact the Jeffrey Team for more information - 416-388-1960
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