Oh the weather outside is frightful… but the Toronto market is actually doing pretty well. Contrary to some media reports, the Toronto real estate market is actually fairly stable at the moment. Though a lack of inventory is making it harder for buyers, the average sale price for the month of January has stayed fairly steady. For a full read on what’s been happening in the last month, check out the market update from our Chestnut Park’s CEO Chris Kapches…

2019 started positively, surprising many who were anticipating the double-digit declines that the Toronto and area residential resale marketplace delivered in November and December of last year. Although moderate, January delivered increased sales volume and average sale prices compared to January 2018.

There were 4,009 sales reported in January, a less than 1 percent increase compared to 2018, but an increase nonetheless. Encouragingly, January’s positive results were due to an improvement in Toronto’s 905 region. The Greater Toronto Area was dramatically impacted by the provincial foreign buyers’ tax and has lagged behind the Toronto 416 market since the spring of 2017. In January, the 905 region’s sales were up by 2.5 percent compared to last year, while the City of Toronto’s sales declined by 3.5 percent. The decline in City of Toronto sales was not caused by a decline in demand. Rather the decline was driven by a chronic shortage of supply. At the end of January, the Greater Toronto Area had 2.7 months of inventory, whereas the City of Toronto found itself with only 1.9 months of inventory. The difference in inventory is also reflected by the fact that sales in the 905 region took place in 33 days (an average), yet it took only 29 days for all properties in the City of Toronto to sell.

 Another positive aspect of January’s performance is the supply of new properties that came to market. In January, 9,456 new properties became available to buyers. This is a favourable 10.5 percent increase compared to the 8,561 new listings that became available last year. Entering February, active listings were slightly higher than last year. February began with 11,962 active listings compared to the 11,894 available last year. The bulk of these listings are located in the 905 region. OF the 11,962 active listings, 8,387, or more than 70 percent, are located in the 905 region.


January’s average sale price came in at $748,328, an increase of almost 2 percent compared to last year’s average sale price of $735,874. This is exactly the kind of increase that reflects a stable and sound market, not the double-digit monthly increases that became commonplace in 2016 and early 2017. Double-digit increases in average sale prices become unsustainable and unfortunately can lead to painful corrections.


In this regard, Toronto’s high-end residential market continues to adjust. In January, 76 properties having a sale price of $2 million or more were reported sold. This compared to 90 reported sold during the same period last year. The adjustment is also evident in the sale price to listing ratio witnessed in January. Detached properties in Toronto’s central districts are the most expensive properties in the Greater Toronto Area. All detached properties in these districts sold for 95 percent of their asking price. This ratio was much lower than the detached properties in other trading districts. For example, all detached properties in Toronto’s eastern districts sold for 100 percent of their asking price. The fact that the average sale price in the eastern districts is half ($916,588) that of the central districts ($1,938,617) is no doubt responsible for this divergence. Higher-end properties accelerated more dramatically during the pre-2017 introduction of the Ontario Fair Housing Plan and are retracting proportionally, especially with the introduction of the 15 percent foreign buyers’ tax.

Condominium apartments continue to be the most affordable housing form, but again, because of supply, average prices continue to increase. In January, the average sale price in the City of Toronto increased by almost 9 percent to $591,444. In Toronto’s central districts, where most condominium apartment sales are located, the average sale price came in at $677,997, a 10 percent increase compared to last year’s prices. In January, there were only 1,738 condominium apartments for sale in the City of Toronto and only 1,093 in Toronto’s central districts where most sales take place. This shortage of supply will continue to put upward pressure on prices, constrained only by affordability.

Although it is a little early in the year to be forecasting for 2019, January’s results – sales volumes, price increases and increases in supply – all point to a healthy 2019. Last year only 77,375 residential properties were reported sold, the lowest number since the recession of 2008. Barring any unexpected economic events this year, we should see between 83,000 and 85,000 reported sales, with average sale prices increasing by about 2-3 percent. January’s average sale price came in at $748,328. Last year’s annual average sale price was $787,000. By year-end, Toronto and area’s average sale price should be approximately $800,000. From a long-term sustainability prospect, we should be thrilled with this number.


Chris Kapches, LLB, President and CEO, Broker


If you haven't been tracking the sales stats in Toronto over the past months - let's face it, stats are kinda boring so we expect you haven't - you can check out this slick infographic produced by the fine people in our marketing department; yet another perk of working with a Chestnut Park Realtor. 

Condos continue to increase in price as the most affordable product on the market up to their average in April of $601,211 (+3.5% from March!). But more shocking perhaps is the overall Average Sale Price for Toronto, which is approaching something similar to last April when the market saw it's highest highs of all time. What does this mean? That the correction was just that and that buyers still hold Toronto real estate in high regard. 

If you're wondering where you stand as a buyer or where your property stands as a seller, please get in touch today for a free consultation. We're always happy to help!

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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.

First off, our apologies for not putting up a post last week but we've got lots of good stuff to share this week, among them many an acronym and pun-filled headings...



Chris continues to collect his own stats for the 416 area code, or the City of Toronto proper. We continue to see a rise in the average sale price up to $785,000 for the 416. Inventory remaining low is likely the best indicator for this continuation of an upward trend. All reports from CP agents working in the 905 indicate that things there are worse there however, and in some areas stagnant. TREB's stats, which came out today, indicate a decrease in average sale price across the GTA of about 2% since last November; not surprising given the number of detached properties that sold then as opposed to this November. However, as we've noted in previous posts, this negative variance is one which is shrinking by the month. January's numbers will likely increase this year over year negative variance given prices from the beginning of 2017 but again, it's important to recognize how unsustainable that market was.

TREB board president Tim Syrianos seems to now be echoing what we've been reporting on for months now...

"We have seen an uptick in demand for ownership housing in the GTA this fall, over and above the regular seasonal trend. Similar to the Greater Vancouver experience, the impact of the Ontario Fair Housing Plan and particularly the foreign buyer tax may be starting to wane. On top of this, it is also possible that the upcoming changes to mortgage lending guidelines, which come into effect in January, have prompted some households to speed up their home buying decision."

Lastly, condominiums have continued to make the biggest strides in prices, averaging 16.4% across the GTA. So long as inventory continues to be low, we can expect prices to continue to rise going into 2018. 



Canada's unemployment stats came out last Friday and are staggeringly low at about 5.9%; the best numbers seen since February 2008. Over the past 12 months, Canada gained 390,000 full-time jobs, with men in the 25 to 54 core-aged group, youths aged 15 to 24 and women aged 55 and older receiving the lion's share of the jobs. Not surprisingly, Ontario led the provinces with 44,000 new jobs created in November, mostly in the wholesale and retail trades in addition to the manufacturing sector. Ontario’s unemployment rate is now at 5.5%, which is the lowest it’s been since 2000.

Will this help or hinder the real estate industry? Chris indicated that these numbers could mean a further interest rate hike by the Bank of Canada; something that was already posited in past meetings and many in the mortgage world feel is almost certain in 2018. Last Friday, after the rates were published, the Canadian dollar jump up a cent against the U.S. dollar. Given this information, along with the proposed wage increases scheduled for next year, many economists feel that we're looking at further rate hikes in January. “It certainly firms the idea that there are more near-term hikes than previously anticipated,” said Michael Dolega, senior economist at Toronto-Dominion Bank.



The Canadian Real Estate Association is asking the federal government to extends it's policy allowing RRSP contributions to be used as a tax-free downpayment to parents wanting to help their children make a purchase in real estate. Additionally, the association wants the limit for withdrawal to be bumped up to $35,000 from the $25,000 that is currently allowed. Most in the CP office felt this limit could be raised even further given the average selling price across Canada now being up to $550,000. Though that average price is likely more reflective of the high values being seen in Toronto and Vancover, even a $35,000 deposit is only negligible for the purposes of making a down payment.

Chris did bring up the fact that many first time home buyers may not have even that much in their RRSPs but that certainly allowing parents to add some of their own RRSP funds to the mix should help, given there is good evidence to show an existing "shadow economy" already at play in the real estate market; ie. parent's giving money to their kids for down-payments.

Thomas Davidoff, a professor at UBC's Saunder School of Business said there is no clear answer as whether this policy is good or bad. Davidoff feels this policy could undercut people's retirement savings, would push up housing prices further, and would enable only wealthier families to have greater buying power. Davidoff feels that the government would better serve the market by introducing more taxation on home owners.

Darlene Hanley - our resident mortgage expert - said that she's seen this shadow economy in action already. With some families contributing upwards of $200,000 in down payment gifts for their children. While that scenario is likely rare, I feel like it underscores the reality of what wealthier families are already able to do. This policy might better serve families who don't have as much. Whether it hurts their retirement savings is something each family would have to judge for itself.

We would love to know your thoughts on this matter. Leave a comment or get in touch directly!



Last Thursday, the City of Toronto announced their new annual budget and among the expected revenues, the municipal Land Transfer Tax is expected to make up almost 10% of the city's earnings for 2018. In total, city manager Peter Wallace is conservatively estimating about $800M to come from the LTT despite what many call a slow down in the housing market. If you've been keeping track with our weekly posts however, I think Mr. Wallace is likely correct. We've been experiencing steady price growth and it seems the same with be true in 2018. It is astonishing however to consider how much home buyers contribute to the infrastructure of this city. There have been more than enough articles being critical or down right angry about the upward trend in housing prices but in realizing how much of that money goes to essential services in the city, you'd expect any commuter or tourist to sing the praises of the Toronto home buyer.

For more information on how LTT has and will have an effect on the proposed budget, check out this article in the Globe and Mail



No matter how you want to argue it, the Federal Court of Appeal ruled against the Toronto Real Estate Board in deciding to uphold an April 2016 Competition Tribunal ruling that TREB's practices prohibiting sharing information online are anti-competitive. The general sentiment in the CP office was that TREB should have made this an argument about propriety; namely that for years, members of TREB have paid dues to develop a system whereby Realtors are better able to serve their clients through the use of sales data and other companies that have similar data (VISA for instance), would never be made to share that data. TREB however, didn't make an argument based on propriety but instead on consumer privacy. TREB CEO John DiMichele said that

TREB believes strongly that personal financial information of homebuyers and sellers must continue to be safely used and disclosed

The tribunal found that TREB's actions had been in line with anti-competitive practices and hopes that this ruling will open up competition in the digital space to companies like Realosophy or Zillow; based in Seattle. Proponents of the anti-competition viewpoint feel that this data would allow buyers to make a better informed decision prior to seeking the use of a Realtor and would allow realtors and brokerages the ability to publish better sales information; ie. which neighbourhoods are appreciating the fastest. 

In the U.S., where this data has been available for sometime, the real estate market continues to thrive but we're sure there will be more than a few realtors who aren't happy about the decision. TREB is appealing the ruling in the Supreme Court.

Chris' sentiments on the matter were that competition bureau outcomes have had effects on the real estate industry in the past and we still have a thriving marketplace. What he did find offensive is that the media seems to be painting Realtors as being dishonest in how we are using this information; that we would use it to our benefit in obtaining a higher sale price, regardless of the data. We would echo Chris' sentiments and also argue that sellers are just as interested in getting the highest price for their property. That being said, any realtor who uses deceptive practices to build their business will fail at some point. Perhaps we are more honest than most?

Again, we would value your feedback on any of the topics mentioned. We try to offer our clients and reader base, the most informed and accurate opinions of the market and of the real estate world in general. Please leave a comment below or get in touch directly. 



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.



We started this week's meeting as we do every week, reviewing the stats for the month. As we continue to wait for TREB to republish weekly stats, Chris continues to develop his own for the 416 area code. We're currently on track for about 3000 sales for the month of November, which would account for a negative variance yr/yr of about 12-15%. This negative variance is likely to dwindle as we close out the year, but will skyrocket as we head into 2018 given the intense market we experienced for the first half of 2017, so be prepared for some negative press at that point. 

The average sale price for the 416 this past week came in around $785,000 across all housing types; about a 1.5% increase from this week last year. Chris now feels we've reached "the perfect market", stating that this is “how the market should be behaving.” Sales are consistent with an active but not overheated market though some analysts remain pessimistic about the potential for a return to the high numbers we saw up to April of this year.  

Active listings are currently around 5800 in the 416 which is down significantly from the approximately 7500 when Chris began collecting stats in August/September. Though this isn't the case in the 905 where sales numbers stay high and average sale price continues to move at a slower pace, the 416 seems to be experiencing an inventory shortage consistent with what's happening in Toronto's rental market. If we stay in the 5800 range, we should have about 1.6 months of inventory which is quite a quick market. Furthermore days on market are remaining around the 16-18 day market, which is also very fast compared to "normal" market activity. Reports from Toronto CP agents indicate as much, as many open houses saw lots of visitors and many listings in the office are experiencing multiple or bully offers; particularly if the property is unique or move-in ready. We will have to wait for TREB's final numbers to get a read on whether the entire GTA is on track for similar results.



The media are finally being critical of the measures taken by the Ontario government putting controls on rental price increases. In a new segment from the Financial Post, Murtaza Haider and Stephen Moranis argue that rental controls have never been a good solution to rising rental rates. Since April’s introduction of the rental control, Urbanation reports that "no fewer than 1,000 planned purpose-built rentals have been converted to condominiums in the GTA." 

In what is perhaps the most concise analysis of the situation, the authors quote Nobel Laureate Paul Krugman from the New York Times, stating that the “analysis of rent control is among the best-understood issues in all of economics, and — among economists, anyway — one of the least controversial.” Krugman noted that 93 per cent of members of the American Economic Association believed that “a ceiling on rents reduces the quality and quantity of housing.” 

The article goes on to list the reasons why rent controls don't work beginning with the builder, who has less cash-flow incentive in building rental-specific housing given the capped rate increases. Secondly, those who investors who have purchased condominium units (for example) also see less upside and so might choose to sell their investment, rather than rent it, lowering the inventory for the 84% of Toronto renters who are already renting in the private market. Lastly, the article notes that "when rent restrictions limit landlords’ profits, they are less likely to keep rental stock in a state of good repair. As the profit margins squeeze periodic maintenance and upgrades become less frequent. This is also true for public landlords. All one needs is to look at the dilapidated housing units owned by municipal housing authorities in many cities."

There is good evidence to support the article's thesis in Massachusetts, where rent controls were eliminated 1995. The elimination increased condominium conversions and overall condo numbers by 32% from 1994 to 2004 in Cambridge. "Decontrol even benefitted the valuation of housing that had not been subject to controls: It appreciated on average by 12 per cent as a result."

So what was intended to help renters has actually hurt them. It appears there are more voters who rent than who own, too many of whom don't know a bad thing when they see it. 



A new company based in Vaughn called On The Block Realty are now selling properties by auction. Properties will appear on MLS and the brokerage's website for 6-7 days before any bids are taken. During that period, potential buyers can go to view property with an accompanying Realtor. After the 6-7 day period there can be up to 4 days (determined by the seller) for potential buyers to bid on the property; the seller sets the reserve price for the property. The brokerage is intent on providing an open and transparent offer process, as all bidders can see any new bids coming in and are notified when bidders "max out".

This practice is common in other countries such as Australia, where approximately 20% of all listings are done by live auction. Chris pointed out that this type of process has been attempted in Ontario before but wasn't ultimately successful. This could be due to a disadvantage to the seller as in typical "bidding war" scenarios, buyers can increase bids by any amount, easily overbidding their competition and winning the sale.

The process would likely be more successful in a strong buyers market, but clearly that's not something we're in currently; at least in Toronto. Perhaps the brokerage is targeting the 905 area where sales continue to be slower. The auction system has had great success in Sweden, where there are no buyer's representatives and buyers must do their own due diligence on any property they might but. Chris argues that our current system, bolstered by the MLS system works quite well. 

What are your thoughts? Should all properties be put up for auction or will this just lead to a lot of litigation? We'd love to hear from you. Leave a comment below or contact us directly



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.


As TREB has continued it's stoppage of weekly stats, Chris has continued to generate his own within the City of Toronto (the 416), and interesting things are happening. Up to October 28th, total properties sold for the month are at 2653; last years numbers for October were 3715. Projecting to the end of October for 2017, we expect just under 3000 sales, which means there will be a negative variance of 20% year over year. That may seem like bad news but that variance is up from the -29% we saw in September, so the gap is lessening. 

In addition to number of sales, the average sale price for each of last 3 weeks has been $833,000,  $826,000 and last weeks average of $825,000. The total for October should be about $828,000, an increase of 6%. 

Chris' opinion that is there is “essentially a stabilization of the market." So long as we can stay on this trajectory, we should be good going into 2018.

Open house reports from Toronto CP agents indicate a bit of a mixed bag, with many open houses in the central core garnering lots of visitors and the same buyers at various open houses listed in similar price ranges. Agents also reported seeing more buyers who had already sold their property; practically the opposite situation from months prior to April's downturn. This would seem to indicate buyers are being much more cautious about where and what they're buying.


TREB did publish it's 3rd quarter condo and rental report. Among the data, sales volume was down by 29% and new listings were down by more than 10%, from 11,000 to 9000. At this pace, condos will be in short supply in the 4th quarter and going into 2018; something we've already noted in previous week's posts. Active listings in the quarter are down a little over 1%

Despite sales being down, the average days on market for condos was 22. Last year that number was closer to 25. This would give credence to the market accelerating and as noted, there is still a supply issue. The average sale price increased by almost 25% from $415,000 in 2016 to $510,000 for the GTA. Of the 5684 sales in the GTA, almost 65% took place in the 416. Additionally, the average sale price in the 416 is higher at $542,000. The central district accounted for 66% of all condo sales in the 416 and had an even greater average sale price at $603,000. 


Toronto continues to be in a rental crisis, with the average rent in the city going up by 11% year over year. Renters can expect to pay $1,976 on average for a 1 bedroom apartment and $1,672 for a bachelor. We, as well as other continue to question the Liberal governments housing initiatives based on these numbers. There is clearly no product available and things appear as though they'll only get worse for renters going into 2018.



In more positive news, the Tarion Warranty Corporation announced that effective January 1st, 2018, it will be increasing it's coverage on deposits for new construction of free-hold properties from $40,000 to 10% of the purchase price. The insurance will go from a minimum of $60,000 to a maximum of $100,000. 

Unfortunately, deposits for condominium apartments will still only be insured up to the $40,000 mark. We guess this is because most new construction for condos will fall into the $400-500,000 range.


The CRA has announced that it will now force the disclosure of assignment sales from developers. In the past, there was no way for CRA to know an assignment took place as it was a privacy issue.

The CRA is now taking the position that the profit, or "lift" as it's commonly referred to, from the assignment sale will not be a capital gain but instead income. Additionally, anyone selling an assignment who doesn't declare the income and is subsequently found to have done so, will have to pay tax penalties. This means we'll likely see fewer assignments going forward, and more sales going to so-called "end-users"; where buyers intend to live in the unit. As investors are less likely to purchase units for the purposes of realizing gains prior or just after incorporation of the condo. This is potentially positive news given the inventory issues mentioned above.


The new New Zealand government has announced it will ban foreign buyers from buying property of any kind. No non-residents may purchase property. The rationale here is based on low interest rates, limited housing stock and immigration rising causing housing prices to have been pushed up. Sound familiar? This is a strikingly similar situation to what's happening in Toronto. This news comes after the latest election of a new government in NZ, who feels that overseas buyers are putting too much pressure on infrastructure and housing prices. Chinese buyers account for the largest percentage of foreign buyers. 

Average sale prices were up 10.4% in most cities and 18.1% in Wellington (the country's capital). The average sale price for in Auckland is now at $1,000,000, about $881,307 Canadian. Toronto's average as mentioned is now about $828,000. With all the same pressures going on here, is this what's next for Toronto?

What's your take? We'd love to hear from you! Contact us directly or leave a comment below...



NOTES FROM THE PRESIDENT: The Weekly Chestnut Park Meeting Recap

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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.


As mid-month stats are still unavailable from TREB (see our previous post regarding that), Chris has continued to prepare his own stats within the 416 districts. The average sale price has moved up to $862,000, for a 7% increase in average sale price since October 2016. We’ll have to wait until next month to see whether that number will be reflected throughout the GTA, but odds are good, it will be below that mark as the 905 properties will likely continue to be undervalued. The number of sales for the month are also down from last year by about 22% which is a shorter gap from the 35% we experienced in previous months. All of this would indicate a better and more balanced market moving into 2018. Anecdotal information from CP Toronto reps also indicates a lot of activity in central and eastern districts.


It’s now official that the newly proposed stress will be instituted come January 1st, 2018. What does this mean for potential buyers or those looking to trade-up on their existing property? Chris did a basic scenario to arrive at some numbers. Assume you’re looking to purchase a $900,000 property and have a $400,000 down payment; far past the 20% requirement. A typical 5 year fixed rate would likely amount to a monthly payment in the $2,500 area and require your yearly income to be around $95,000. Under the new rules that same buyer is required to qualify at their broker contracted rate + 2% or the Bank of Canada benchmark rate (around 4.89%), whichever is the greater of the two rates. That difference in rate would require their mortgage payment to go up $3,295/mo. and require their yearly income to be $112,000. That’s about a difference of 20%. 

Does that mean we should expect 20% of the market to simply disappear? Both Chris and Darlene Hanley (of The Hanley Mortgage Group) say no. They claim that the majority of buyers or re-financiers that can already afford 20% or more of their down payment can already cover that difference in cost. Who will be affected however? Most experts feel that it will be the buyers looking to move up to a larger, more expensive property. This new test will likely dissuade them from looking to buy or force them to buy something that is more within their means and will lower their potential debt load risk. We’ll have to wait until next year to see how much, if at all, this affects prices and activity the marketplace. 

CASE IN POINT: A Case Beyond the Pines... or Cedars

Chris brought to light a court case, which isn’t often discussed, as it rarely goes to litigation. This case relates to trees on or over property lines. In this case, the defendant, a neighbour to a property with cedar trees along the property line, trimmed and cut down some of the cedars to erect a fence, so no further trees would impact on his property. Under the law (excluding any towns’ particular by-laws) you are allowed to trim any portion of a tree that encroaches on your property but may not affect the roots of that tree. The case went as far as the court of appeals, who sided in favour of the prosecution, as the neighbour had no right to cut down any trees in erecting his fence and didn’t receive consent from the tree owner. A lesson learned for anybody with a neighbouring tree and a grudge.  

Have you got a grudge regarding the Toronto real estate market or a nasty neighbour? We'd love to hear from you. Either email us directly or use add a comment below.



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.


As our latest CP market report was just published, there isn't much to discuss related to market stats that was covered there or in last week's meeting. For more information on where the GTA markets are at, go to that post or subscribe to our neighbourhood house price reports. 



A poll of the agents in the CP Toronto office revealed that the type of property as well as it's price range has a significant impact on the market's interest in it. For example, listings over the $2M price point in central districts have had little interest in the past week, whereas condo apartment listings in both eastern and central districts under $1M have had intense, fetching multiple offers. Clearly the more affordable condo apartments continue to be the market's hottest prospect currently. Though volume is up in the 905 area code, the 416 continues to come in at 25% of those numbers, with condo apartment inventory all but gone. 



As agents in the Toronto office have found more foreign buyers coming back to the Toronto market, Chris felt it important to review who is affected by the recent foreign buyer's tax. Some of the most relevant points are listed below. For the full breakdown, click here

Doesn't apply to Canadian citizens or permanent residents, unless those parties are buying property with a foreign national. 

Who Does the Tax Apply To?

  • Foreign Entities: Foreign nationals and not Canadian Citizens or Permanent Residents. 
  • Foreign corporations: ie. corporations NOT incorporated in Canada or incorporated in Canada but controlled by foreign national or other foreign corporation (unless corporations shares are listed on the TSX.
  • Foreign corporation controlled directly or indirectly by a foreign national for the purposes of the associated corporation rules under Canada's Income Tax Act. 

What Types of Properties are Affected?

  • Single Family Detached, Semi-Detached, Condo Apartments, Duplexes, Triplexes and Multiplexes up to 6 units; over 6 units, no tax applies
  • Each condo unit is considered a single-family residence so the tax applies to each one

How is the Tax Calculated?

  • Any property is taxed at a rate of 15% including any Land Transfer Tax associated with the property, ie. if the property is located in Toronto, you would pay tax on both provincial and municipal land transfer tax. 
  • If ANY buyers are a foreign entity, 100% of the property will be taxed, ie. you can’t purchase a property with a Canadian citizen or permanent resident and avoid the tax. 

Who is Exempt from the Tax?

  • Anyone confirmed under the Ontario Immigrant Nominee Program. If you can establish you’re a bonafide immigrant in theprogram or a student or WILL be a permanent resident in the next 4 years
  • If you’re a refugee
  • If you're a foreign national with a spouse who is already a Canadian citizen, permanent resident or a Nominee or a Refugee. 



Going into 2018, it is expected that the government will introduce new mortgage stress test rules. Under the new rules, people seeking a new mortgage will have to qualify at the bank posted rate, which would currently amount to about 5.25% for a 5 year rate; that's about 2% more than most lenders would currently require and amounts to about 6 rate hikes from the BoC. David Smith, a mortgage broker with Hanley Mortgage Brokers thinks this policy will effectively take buyers with the greatest stake in entering the real estate market out of the game. It will also likely negative influence anybody looking to make their next jump up to a larger property if they are already close to their mortgage maximum. In Toronto, this means any first time home buyers, likely entering the condo market, which is already under heavy stress for inventory.

Is this good policy or just the governments attempt at chastising banks and lenders? We love to know your thoughts. Either get in touch directly or leave a comment below! 

NOTES FROM THE PRESIDENT: The Weekly Chestnut Park Meeting Recap


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.


The uptick in the average sale price continued through the month of September, giving further credence to what most feel is the end of the plateau and start of a rebounding market. Further support from Chris' stats (the TREB weekly stat filibuster continues) in the first week of October support this as well, as the average sale price in the 416 was around $831,000. The average sale price for the GTA for September was $775, 456, up 2.6% year over year, which would also support a rebound in the market. Average price breakdowns for the 416 based on housing type were as follows...

Detached Houses - $1,355,000 - 5.4% increase yr/yr - 
Semi-detached Houses - $935,000 - 5.2% increase yr/yr
Condo Apartments - $554,000 - 24% increase yr/yr

Prices in the 905 were much less dramatic however, with detached houses only going up by less than 1%. Sales volumes were down by 35% across the GTA, which seems like a high number but put into perspective, those numbers are coming from very high volumes seen in 2016. 61% of the sales that took place in September came from the 416 however, which also had less inventory than the 905, so it should be expected for prices to continue to climb going into 2018.



As we've mentioned, the psychology of the market may be just as important as the stats themselves, and media reports could go a long way to see this switch in the market's thinking. Chris cited this article from the Globe and Mail which, among some points already mentioned, discusses buyers coming back to the market now after having perceived the downturn to be over. Articles like this will likely cause buyers to promptly return to the market and could cause a dramatic uptick in prices yet again. Of further concern given all of these numbers and trends is that it's likely that OFSI will move forward with the new stress test rules. If you're considering buying in the 416, especially if a condo is the product you're after, we would urge you to get started today! 



Getting perspective on whether the market is balanced or not can be challenging. TREB using a 12 month moving average for month's of inventory -where balance is closer to 1.5 months- to determine whether the market is overheated or not. Chris prefers to use a standard average; where 3.9 months would be considered balanced or heathy. Despite how it's calculated, at the beginning of October, there were about 19,000 properties on the market, giving the 416 about 1.4 months of inventory and the 905 1.5 months. That's 17% more than last October's 11,000 but is still about 1000 listings off a healthier market in Chris' opinion. As we approach the end of year, we’ll be looking at overall sales be around 80-88,000. This is consistent with period b/w 2009-2013 before we saw numbers in the hundreds of thousands. 



Traditionally, Realtors and the public always felt there were better deals to be had in Toronto East end, but that seems to be less and less true, at least in the case of semi-detached properties. In the Eastern districts, all sales for the month of September came in at 104% of asking with an average of 10 days on the market. The average sale price for semi-detached properties in the East end was $872,326, vs. the Western districts which averaged $775,663. However, the average sale price for detached properties, which have great prevalence in the West, was $1,015,711 vs. $961,805 in the East. So clearly it's currently better to go West to buy a semi-detached property currently. Contrast that with condo apartments with sales prices on average being about $50,000 less on the East end than the West. For further contrast, the Central districts saw an average sale price of $615,654 for condo apartments. 



News regarding how the Ontario government will treat instances of multiple representation (where one Realtor represents both parties in a transaction) came back from OREA. The decision will keep in place the existing rules for how Realtors working with both sides to a real estate transaction are defined. Chris, OREA and most Realtors and brokerages see this as a win for both Realtors and the public. The alternative would have required that a second Realtor represent one side in the transaction so as to avoid potential conflicts of interest. However, that scenario could give way to Realtor alliances and potentially fewer buyers for those buying or selling in smaller, localized markets. The new legislation will allow one Realtor to represent both parties so long as informed consent is given on the part of the buyer and seller. It is expected that OREA will draft new forms to give consent in transactions requiring multiple representation. 

Do you feel like this was the right decision? We'd love to hear your comments! 



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.


Because TREB has continued it's weekly/mid-month stats fillabuster, Chris has created his own analysis method based on MLS data for the 416 only. As September progressed, there were more active sales and avgerage sale prices were up. As an example, b/w Sept. 22nd and 29th, the average sale price increased from about $782,000 to $809,000. Between August and September, sales volume also increased from 2480 to 2514 properties. That 2% increase coupled with an 11% increase in average sale price from August is the first time in 4 consecutive months that we've seen a positive variance in both categories.

Additionally, The Bank of Canada posted yet another increase in interest rates and though the press says that may be the last we'll see before 2018, Darlene Hanley of Hanley of Hanley Mortgage Group, says they're expecting at least one more before year's end. Couple that with the new proposed stress test which, will require those paying less than 20% down to qualify at a rate of 4.94% and one would expect that sale prices won't reach the bloated values seen in April; we're still about $160-170,000 off the pace from there.

So for the moment, we seem to be headed into a healthier market. However, CP Realtors working in the 416 are reporting high numbers at open houses and buyers feeling a need for more product, so at least in the 416, we're likely to continue to see market activity and sales numbers increase. Contrast that with the 905, where at least one Realtor representing a prime property had less than 4 showings in 4 weeks. The hope is that any increase in sales going into 2018 in both the 416 or 905 areas will be sustainable (in the 3-5% range) and not the 11-20% range that got us here.


In a report published by CIBC, economists are coroborating Chris' sentiments for a rebounding Toronto market, siting Toronto's sale prices increasing, economic growth rates of 4.5% and lower unemployment numbers. The report indicated that 90% of home buyers are earning between $58-108,000/yr. (classified "middle-class"), and about 75% of mortgage holders made downpayments of 10% or more. An analysis run by Chris from 2010 indicates that Toronto home owners have been prudent in their housing purchases given the relative increase in average sales prices since that time and the releatively consistent interest rates from that time to today. All of this would seem to corelate with the data coming from CIBC. 

RBC economists however, feel that Toronto will follow Vancouver's market recovery, which only recently posted year over year gains of 22%. However Chris was quick to point out that those gains were seen before further increases in bank rates. That kind of growth would be reminiscent of April's gains which Chris called "a terrible period and not something we want to experience again". 

Have a differing perspective on the market? We'd love to hear from you! Feel free to comment below or send us an email at


Chestnut Park Real Estate Weekly Meeting Recap September 19, 2017.jpg

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.


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. 



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!



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! or 416-925-9191.


5 Things TO DO BEFORE YOU BUY Real Estate in Toronto

5 Things TO DO BEFORE YOU BUY Real Estate in Toronto

If you live in the GTA, or Canada, or even the U.S., you've likely noticed how booming the real estate market in Toronto has been over the last 2 years. With figures like a 22% rise in housing prices year over year, it's hard to gain some sanity amongst all the headlines. But what if you're still renting and aren't sure if you can or want to get into the market? What's  a realistic downpayment? Does purchasing a property even make sense at this stage and what should you be aware of? If you do nothing else, start with these 5 steps...

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How First Time Home Buyers Can Buy Creatively.

Creativity is alive and well in Toronto. As house prices have continued to increase in Toronto and the GTA we've seen first time home buyers get more creative in finding ways to make it affordable to buy their first home. Often the down payment required and not the monthly payments are the stumbling block for first time buyers.

Many first time home buyers are getting cash gifts from their parents to put towards the down payment for their first house. Parents are giving their kids their inheritance now instead of waiting. This allows them to establish a foothold in the market and helps them begin to build up equity in a property that can later to be used to leverage a second home in the future.

Other first time buyers are purchasing a home with a basement apartment with the intent of renting it. This option could be used in addition to receiving a gift or as a way to create more income and help pay for the mortgage. This can also apply to rooms within the house, if you're a people person and don't mind sharing space. Any home buyers considering this option should be aware of fire codes and the legalities of such an undertaking. It also wise to read up on the responsibilities of a landlord as defined in the Residential Tenancies Act

Another creative idea is to look for duplexes or triplexes with friends in a similar financial position. If the house is set up properly, one person or family can live on the first floor and the others on the second floor and if available, third floor. Of course the basement is always an option depending on it's state and the apartment strategy could work in this case as well. This way, the residents can share the down payment in order to get into the market.

Finally, financial vehicles, such as RRSPs can be a good source of a down payment as a loan to yourself. Of course you have to pay this back in order to avoid paying income tax, but the idea is that your income will increase over time, so that you will be able to pay the loan back at a later date.

Necessity is the mother of invention and we're seeing plenty of inventive ideas. If you've got some ideas for getting creative in this tight Toronto Real Estate market, we'd love to hear yours.

Susan Glenn