Each week, The Glenn Team provide highlights from the weekly CP office meeting to provide a balanced overview of the Toronto and GTA markets and relevant issues affecting real estate markets. Meetings are overseen by Chestnut Park's CEO and Broker of Record, Chris Kapches, LLB, who provides weekly analysis and commentary. Additional input is provided by the CP Toronto office Realtors who give a day to day, real life perspective of the local markets.

NO MORE WEEKLY/BI-MONTHLY TREB STATS

TREB announced this week that they will no longer provide weekly or mid-month reports sighting they didn't want the data to misrepresent the current state of the market. Not surprising perphaps given the way the media has used TREB stats to make big headlines and possibly influence government action. Chris has begun to put together his own set of stats, though admittedly they may not be quite up to TREB standards as they only now cover the Central, East and Western districts of the GTA which don't take into account the numbers in the 905. Not wholly accurate but at least reflective of true Toronto prices. 

CASE STUDY: BUYERS WHO FAIL TO MEET CONTRACT

Though only one of two instances in our CP offices where deals have failed to close, a deal in Muskoka went south when the buyer failed to complete an inspection condition and didn't deliver the deposit within 24 hours of acceptance. In this instance, many Realtors may feel that a mutual-release from the contract would be best however, our on-staff lawyers, Richard Stewart and Chris Kapches disagree. As a breach of contract has clearly transpired and the sellers ability to re-market the property and potentially lose money on it's subsequent sale, there are clearly grounds to sue on breach of contract. As a better solution to the problem, a Notice of Default was instead issued and a clause for a non-refundable deposit was included in the deal. 

IS RBC'S MORTGAGE PORTFOLIO CAUSE FOR CONCERN?

Citing an article from the Globe and Mail, Chris detailed how RBC's CEO assesses their risk in the mortgage market. A fascinating look into what many rarely glimpse, Dave McKay doesn't seem concerned about the over $100B in uninsured mortgages or the $106B in insured mortgages that, should they default, be the responsibility of the Canadian government to bail-out. Find out more about how RBC heges their mortgage bets.

Each week, we are bringing you highlights from the weekly CP meeting. We present analysis of the Toronto and GTA markets from the perspective of Chestnut Park's CEO and Broker of Record, Chris Kapches, LLB and the CP Toronto office staff.

NO NEW TREB DATA

As we've yet to get TREB's weekly or mid-month stats for September there isn't much to discuss in terms of stats. Anecdotally however, last week saw both bully and multiple offer situations from at least a few realtors in the office. The National Bank of Canada seems to agree. It came out with a report said that The ratio of Toronto house listings compared with monthly sales has moved back into long-term balance, limiting the potential for significant further price corrections in the region. The report (published early September) goes on to indicate that the ratio of listings to sales were finally in balance and had been for some time, comapred to the April market highs which clearly favoured sellers. This report gives more credence to what CP agents seems to be experiencing. More information on that report here. Once the mid-month data comes in, we'll have a better indication of exactly where the market is. Chris feels we have enough data to indicate that we've hit the bottom of the market lows. 

HOUSING SHORTAGE

The Toronto Star reported that Mayor Tory and the Minister of Housing announced that it's moving forward on creating 2000 market-rent and affordable rental housing units. Based around surplus lands (in the West-Donlands) that the province intends to sell, developers anticipate paying less for these lands due to the developments being used for affordable housing and the city intends to waive the tax levies associated with the property, which would amount to just under $28M. Of the first phase of development (approx. 600 units), 30% will be allocated for affordable housing; renting at 80% or below the average rental price in the city (about $1,600). The reality however is that the current waiting list for affordable housing is around 181,000, and critics like Kenneth Hale, director of legal service with the Advocacy Centre for Tenants Ontario, said that most families may not even be able to afford those units. Chris feels this isn't money well spent. We'd be curious as to your thoughts!

RESIDENTIAL TENANCIES ACT CHANGES

New guidelines to the Residential Tenancies Act continue to roll out. Among them are changes to how landlords deal with termination notice to tenants and how that might affect buyers of these properties. For any existing landlord, or purchasor of a property with an existing tenant, temination of occupancy is required after 60 days of being served an N12 (Notice of Termination) form; where the termination date can't precede the last day of a fixed term tenancy. However, the guideline states, After being given the notice, the tenant is allowed to terminate the tenancy at an earlier date by giving give the landlord ten days written notice. Effectively, this means that a propsective buyer may forfeit their last month's rent if provisions in the agreement of purchase and sale have not provided for it's payment on closing day. Fortunately, we've drafted such a clause at CP so clients can feel better about those situations. 

For more clarification on any of the above information, please get in touch! theglennteam@chestnutpark.com or 416-925-9191.

Each week, The Glenn Team provide highlights from the weekly CP office meeting to provide a blanced overview of the Toronto and GTA markets and relevant issues affecting real estate markets. Meetings are overseen by Chestnut Park's CEO and Broker of Record, Chris Kapches, LLB, who provides weekly analysis and commentary. Additional input is provided by the CP Toronto office Realtors who give a day to day, real life perspective of the local markets.

This week's analysis of the market parallels much of what was covered in last week's post. However, there is one central theme that Chris drew upon concerning the housing market in Canada as a whole, and how Toronto and it's various districts mirrors it.

LEVELLING OFF
As evidenced in the chart below, we are finally getting evidence of a plateau in the GTA market, and there is an expectation that sales numbers and values will begin to climb by the end of September. The year over year negative variance is beginning to decline indicating volume is stabilizing. 

DISTRICT DISTINCTIONS
There is a wide range of activity between various districts in both the 416 and the 905, with the average sale price down by about 1.2%. Chris feels this is due in large part to fewer detached properties in the $2M+ range. However, certain areas of the city, ie. E01, E02, and E03 have properties still selling over 100% of ask (ignoring any price discrepancies) with average days on market around the 14 day mark. The majority of sales in August were semi-detached (up 15.4% yr/yr) and condo apartments (up 21% yr/yr). Looking to the 905 districts, we see a decline in volume of almost 42% which also likely accounts for a drop in average price through the GTA. For both districts, the months of inventory (healthy around 3 months) is still quite low, being around 1.3 months. The sales to list ratio around 64.4% in the 416 as opposed to just under 59% in the 905 means that the 416 is moving faster and holding it's value better than in the 905. 

CONDOS ARE KING!
Another shocking stat to be aware of is the average sale price for condominium apartments, which just broke the $600,000 mark at $600,781 in August. Clearly the high demand for a more affordable product has made it less affordable overall. With supply levels being drastically low, we should expect this trend to continue unless some new inventory comes up soon. For some perspective, there are about half the number of condos currently listed as a year ago, down from around the 5000 mark. 

CANADIAN REAL ESTATE PERSPECTIVE
The big take away from all of this information is that Toronto appears to be on the rebound (though we'll have a clearer idea by the end of September), following suit to cities like Vancouver and Montreal. While Montreal hasn't seen the generous gains of the Toronto market, sales prices have been rising about 3% yr/yr and Vancouver is showing big gains in both volume and sales price (22.3% and 9.4% respectively). Economists point to the same factors for all 3 cities; job creation, consumer confidence and migration. All things being relatively equal, we should expect the Toronto market to be headed higher once the psychological effect of the new rental rules and tax legislation wears off. The bank of Canada's rate hike may play into that equation somewhat but should only affect most mortgages by about 2% on average. 

For more clarification on any of the above information, please get in touch! theglennteam@chestnutpark.com or 416-925-9191.