Friday, October 31, 2008

Investment Review - John Scholl

Tough financial times call for tough portfolio love
It’s tough out there. Markets are volatile. And inflation is once again rearing its ugly head. In these tough financial times, what’s an investor to do? The quick reaction is to be defensive, get out of the market. But the quick reaction is demonstrably the wrong reaction because it will end up costing ‘defensive’ investors much more money in the long run. Here’s why.

The strong historical case for staying invested
It pays to stay invested because, historically, markets have rebounded. Take a look at some of the worst periods experienced by the Toronto Stock Exchange (TSX):

  • In the recessionary year of 1974, the TSX’s annualized compound annual return was minus 25 per cent; the next year, 1975, the TSX had rebounded to deliver a plus 18.5 per cent annualized compound return – and in the five following years, to 1980, the annualized compound return was plus 22.3 per cent.
  • In the recessionary years from 1981 to 1990, the TSX hit a low annualized compound return of minus 14.8 per cent; in 1991, the exchange rebounded to a plus 12 per cent annualized compound return and delivered an annualized compound return of plus 10.8 per cent in the succeeding five years.
  • The tech bubble/bust of the early 2000’s caused even worse volatility. At its bottom in December 2002, the TSX’s cumulative return was minus 43 per cent. It took 34 months to totally recover from that low but by the third quarter 2005 the TSX began to experience significant growth that continued until recently.[*]

The strong case for not attempting to time the market
From January 1, 1990 to December 31, 2007, the Standard & Poor’s (S&P) Index grew by 8.2 per cent (annualized price-only performance) – in the face of market booms and busts, war, 9/11 and much more. If you had attempted to time the market during that period and missed out on just 10 of the strongest trading days, your total return would have dropped to 5.4 per cent.[**]
The answer in tough times – the same as in good times

Time in the market helps create wealth.
Have a plan that matches your tolerance for risk and stick to it. Diversify by asset class – cash, equities and fixed-income investments. Diversify within asset classes. And stay invested for the long-term.

No one, expert or amateur, knows exactly when or how the market will rebound. And right now is way past the optimal point for liquidating your market holdings. By clarifying your goals, you and your financial advisor can put together a diversified portfolio that offers a comfortable blend of risk and return, regardless of market volatility.

Guest Contribution from John Scholl. Contact a financial advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant John Scholl @ 905 450-2891 X529
John Scholl B. Mathematics, CGA,
Wealth Management & Financial Planning
Investors Group
200 - 24 Queen Street East,
Brampton, Ontario L6V 1A3
( Tel. : (905) 450-2891 X529

An interesting thing happened...

Today, I received a prospect telephone inquiry from my website. Great !

A prospect phone call! We engaged in a meaning full conversation about the First Time Buyers Grant of $10,000 that's available from the Federal government. This program is individually administered by the cities.

Toronto's application of the funds is available only for Buyers who choose Regent Park and may not be suitable to those in the west end of Toronto. The Region of Peel has left the choice open for any house in either Mississauga or Brampton resale or new, freehold or condo ownership.

There are funds available from the First Time Buyers rebate of Land Transfer Tax both from the Ontario and Toronto Governments based on declarations of being a first time buyer and some income / budget restrictions.

In addition, there are still First Time Buyers tax adjustments available from the Federal Government for the withdrawl of funds from your RRSP.

During the October election, as an economic stimulus package, the Progressive Conservative government pledged a $5,000 tax credit towards closing costs and inspection fees, to help the housing industry avoid a slump. Lets make sure this happens to benefit the construction industry and employment.

This person thanked me for the information and advised me that my website contained the most detailed and comprehensive information that they had found on the internet. THEIR CLIENTS sure could use the information.

I was stopped cold. I was educating another agent. If they had called and identified themselves, I would have dispatched the call with greater detail as to where the specific program details could have been found rather than a lengthy detailed explanation of the process and requirements of each program. I would have refered them directly to the source material for them to download or read.

New agents have mentors and managers to assist their learning curve. In a time where experience doesn't seem to matter in the eyes of the consuming public, I cannot emphasize enough the value an experienced agent brings to your home Buying and Selling event, with the briefcase of experience and toolbox of knowledge. They truly are your guide to buying and selling in Toronto.

Thursday, October 30, 2008

So this is your second home buying experience....

As a homeowner for a few years now, you have had the time to evaluate the choices that you made as a first time buyer. Now you’re looking at the market, you realize that you can get substantially more for your home and yet slip into something more comfortable for a few dollars more per month. What can you expect as a second time buyer?

Your biggest advantage is that you have a greater sense of confidence in sailing your way thru a home purchase. Having had the experience with the lawyers, agents, inspectors, bankers and movers, you know what to expect from most of the people involved. This must make your decision all the easier to make.

Many First Time Buyers made their choice in haste, or perhaps their family situation soon had additions just after the move, or the available space is just too large or too small for the original criteria. Has your job moved?

In the event of a market miss-step, I do offer a You will Love It Guarantee if you are unhappy with your choice.

As a Second time Buyer, you now have different concerns; Do you sell first and then scurry to buy anything that fits, or Do we buy first and the feel the pressure of needing to sell? Buying before selling may require you to carry two properties. If you sold first, you may be living with your in-laws yet again or seeking alternative accommodation.

With a softening market climate, it is more important than ever (in the last 14 years since the last slowdown) to find professional real estate representation that will protect your interests and point out the potential pitfalls to even the best made plans. There may be changes in disclosures and procedures since your last purchase; Passing your home inspection, FINTRACC, Will you provide a SPIS, or penalties on changed financing.

Internet Advertising is now critical to expose your property to the largest buyer pool via every method possible in addition to sites like IMPACT advertising will showcase your home in email capable presentations.

There are listings that are currently shown sold, displaying the phrase conditional upon the sale of the purchaser’s property. This is a tactic that was used for years in different markets that has fallen out of favour. Maybe you would like to start looking at homes with that option in your toolbox of available choices. Sellers may in this market consider holding your condition as a suitable offer on their home. Check the Market Watch report for your neighbourhood.

Take advantage of my 19 years of real estate experience and intimate knowledge of the west Toronto and Etobicoke home market to assure a smooth bump free and stress free purchase and sale.

Markland Wood Community Profile

Let’s take a closer look at Markland Wood in Etobicoke

This is a wonderful upscale mature neighbourhood that was built out in 1962 – ’63 containing prestigious homes and ravine properties bordering the Etobicoke / Toronto boundary approaching Mississauga.

With the total number of residences being 1,200, a normal balanced market should see an aggregate of 3.8 to 4.2 % of residences sold in any one year period. This should translate into a gross number of units for sale/sold at 45 to 60 units traded in any particular calendar year, for a mature neighbourhood of over 25 years in age.

The sales in Markland Wood over the last 12 month period are only showing 28 units having sold thru the Toronto MLS System. This leaves the remaining number of units sold on an average basis well below what would be considered the statistical norm, yet I see people discussing the fact that the asking prices of the homes need to adjust their asking prices based on value.

Smaller homes, on higher vehicular traffic streets are trading in the current market in the range of $540K to the soft $ 600K’s. Larger detached homes, both two storey, sidesplit and backsplits are ranging into the high $ 700 K range with ravine properties firmly in the million dollar plus range. Last Sales data is available with site sign in.

A further specific examination of the sales data within the last 30 day period reveals 6 homes currently available for sale and only two sold. The hesitation would seem to be directly related to the credit mortgage markets news that we are reveling in this month.

I see a direct relationship in the pricing of the homes relative to the neighbourhood demand and then a further examination of house to house to ascertain individual worth. Markland Wood is holding up better than most in these potentially uncertain times. This leads us to draw a few different conclusions. Pricing will not decrease as the supply is verifiably limited. Buyers continue to buy, albeit, currently hesitant.

There are tangible neighbourhood premiums that will continue to apply to a subdivision like Markland Wood.

Are you an Owner? If you own a home in this neighbourhood and you would like to sell your home, click here and get a free value analysis. If you are a Buyer, I would be pleased to emailyou the lastest posted available homes.

If you would like to comment on this post please feel free to do so. I am also seeking residents of the neighbourhood to kick start our own blogging forum about the benefits of living in Markland Wood.

Wednesday, October 29, 2008

Survey Says!!! homebuying intentions hold steady

A new RBC study conducted during the market turmoil in October finds overall intentions to purchase a home in the next two years remain steady at 22 per cent and have not changed since January 2008. As well, renovation intentions are slightly higher than last year - up four percentage points as 70 per cent of respondents are planning to renovate or make home improvements in the next two years.

"Despite recent economic events, we've noted that Canadians still believe a home is a good investment and many are continuing with their home improvement plans," remarked Catherine Adams, RBC Royal Bank's vice-president, Home Equity Financing.

According to RBC's 5th Annual Renovation Survey, given the choice, most Canadian homeowners would opt for hammers and paint brushes, rather than packing tape and cardboard boxes. Seventy five per cent of Canadian homeowners say that, if their home needed major renovations, they would rather renovate, than sell and move.

While the majority of Canadians (55 per cent) would definitely continue to renovate even if housing prices were to drop, they appear to be a little more hesitant than they were in 2007 (66 per cent). Many Canadians seem to be choosing to renovate rather than relocate, noted Adams.
Renovation Budgets. Most Canadians planning renovations will spend less than $50,000 and indicate they plan to spend $10,801 on average - up about 10 per cent from $9,850 in 2007.

The RBC survey also showed that 63 per cent of homeowners have renovated in the past two years and more are establishing a realistic reno budget. Seven-in-ten had a budget and half (53 per cent) stuck to it. Even those renovators that did go over budget have pulled back significantly. The average budget excess was 24 per cent in 2008 compared to 74 per cent overage in 2007 and 88 per cent in 2006.

To finance their reno expenditures, Canadians will be less likely to tap into cash or savings than they have in the past (47 per cent in 2008, 51 per cent in 2007 and 69 per cent in 2004). Only 28 per cent would consider using the equity in their home, down from 41 per cent who said they would consider it in 2007. More men (32 per cent) than women (24 per cent) would consider borrowing against home equity for their renovation - the lowest cost of all the borrowing options.
"When people are looking for a mortgage they're usually very cost sensitive, and they seek advice about the best possible rate and product combination. We don't always see those same savvy cost comparisons for home renovations, even though many involve sizable expenses," added Adams.

When it comes to top mistakes or renovation disasters, Canadians who have completed a renovation in the past two years, blame going over budget (26 per cent); using the wrong contractor or tradespeople (14 per cent); choosing the wrong products (12 per cent) and doing it myself (11 per cent).

Balance of Report and Tables

Royal Bank Report provided by Lindsay Doke Trusted Mortgage Advisor RBC

David Pylyp With the recent financial market turmoil there seems to be room for the Toronto Real estate market to stabilize. Although many are calling for a freefall in prices I have yet to see any tangible adjustments in sales and asking prices in executive townhouses or prestigious neighbourhoods like Markland Wood or Watercolours in Lorne Park.

Tuesday, October 28, 2008

Real Estate Cycles

Balanced Market? Buyers Market? Sellers Market?

The news reports says it will balance out.

While out with buyers this last week, they had determined that they wanted to be within walking distance of the Bloor Islington Subway station and have an Executive Townhouse rather than the additional perceived expense of maintenance fees associated with high rise living.

The additional criteria was that they were relocated and settled within the next sixty days.

Their solution was to buy a new construction high rise at Sheppard and Yonge. Occupancy proposed for 2012, hence they will continue renting.

Builders are offering excellent incentives to become engaged with their projects and all deposits are guaranteed. If you are considering a choice this year I would be pleased to meet with you.

Sunday, October 26, 2008

When it comes to property's paranormal history, it's buyer beware

In the real estate field, when the value of a house is, or could be, affected by a history of murder, suicide, ghosts, hauntings or other unexplained happenings, it is said to be stigmatized.

This may occur when the real estate becomes psychologically affected or tainted, even if the perception is based on non-physical, non-scientific or even irrational perceptions.
In the marketplace, the big issue has always been whether there is an obligation to disclose the nature and existence of the stigma to potential buyers.

In the early 1980s Dorris Reed purchased a house in California from Robert King. Neither King nor his real estate agents told Reed that a woman and her four children were murdered there 10 years earlier. Reed learned of the gruesome episode from a neighbour after she moved in. She discovered that no one wanted to buy the house because of the stigma, and sued to set aside the sale. The California Court of Appeals ruled in Reed's favour, declaring that there was a duty to disclose facts known or accessible only to the seller if the information has a significant, measurable effect on market value.

Quoting Shakespeare's The Merchant of Venice (Act 2, Scene 2), the judge said, "Truth will come to light; murder cannot be hid long."

Shortly afterward, California became the first state to pass a law defining the disclosure responsibility of an owner and real estate agent when selling stigmatized property. The law requires an agent to disclose the fact of a murder on the property for a period of three years after the event.

A similar case occurred in 1989 when bond trader Jeffrey Stambovsky put a deposit on a $650,000 house overlooking the Hudson River in Nyack, N.Y. Unknown to him, the vendor had published stories in Reader's Digest about the home's ghost, a cheerful little fellow in a revolutionary war uniform. The house had also been included in local walking tours and described as a "riverfront Victorian (with ghost)."

The court said the real estate broker, as agent for the seller, was "under no duty to disclose to a potential buyer the phantasmal reputation of the premises," and admitted that Stambovsky hadn't a "ghost of a chance" of proving fraud.

Nevertheless, Stambovsky got his deposit back because the house had a prominent reputation and the non-disclosure of its history struck at the very essence of the contract between buyer and seller due to the reduced value of the house.

The lesson to be learned from the Nyack case is that if the public believes it to be real, it is real – whether the ghost exists or not.

About half of all American states have laws requiring disclosure of property stigma, as does Quebec. Disclosure rules in the rest of Canada, including Ontario, are weak, and in general, the rule is caveat emptor, or buyer beware.

Barry Lebow is a Toronto land economist, arbitrator and educator who lectures on haunted and stigmatized houses. He believes Ontario law should be amended to protect buyers and require disclosure of paranormal happenings. Frequently, says Lebow, the realtor becomes the ``fall guy'' for failing to disclose the history of a house, even if the seller is not totally honest with the listing agent.

There is no shortage of haunted houses in Ontario. In his 1996 book, Haunted Toronto, and in his newly released The Big Book of Canadian Ghost Stories, John Robert Colombo details the locations of many haunted properties, inhabited by made-in-Canada ghosts. For the whereabouts of more haunted premises, I also recommend, the website of the Toronto and Ontario Ghosts and Hauntings Research Society.

Bob Aaron is a Toronto real estate lawyer. He can be reached by email at, phone 416-364-9366 or fax 416-364-3818. Visit the column archives at for articles on this and other topics.

Property Assessment Notices are in the Mail

City of Toronto property taxpayers will see an average assessment increase of approximately 5.4 per cent in 2009 as a resultof the four-year phase-in of assessment increases introduced by the ProvincialGovernment.

"Residential property values have increased by approximately 22 per cent in the City of Toronto since 2005, when the last assessment update was done. Because of the four-year phase-in introduced by the Provincial Government,property taxpayers here will see an average assessment increase ofapproximately 5.4 per cent next year," said Joe Regina, Account Manager, Municipal Relations, in the Toronto office of the Municipal PropertyAssessment Corporation (MPAC).

An increase in assessment does not necessarily mean an increase inproperty taxes. If the assessed value of a home has increased by the samepercentage as the average in the municipality, there might be no increase inthe property taxes paid by a property owner.

Property Assessment Notices in the mail to 668,000 property owners in the City of Toronto in first assessment update since 2005.

If you feel that the assessment is excessive, you can appeal this yourself. William Tatsiou, former member of the Assessment Review Board and solicitor posts; How to successfully appeal your assessment and reduce your taxes without a lawyer. For residential appeals.

The Toronto Times published a point by point summary of the steps and details required.

There is, it might seem a municipal conspiracy against real estate in Toronto. In 2008 we have seen the introduction of the Toronto Land Transfer Tax, proposed increases to developments charges ( lot Levy) of in the range of 122% effectively doubling the levy costs of each new unit brought to market, and the release of MPAC to increase property values that were previously frozen for 5 years.

With a softening market in Toronto, the additional fees and surcharges are a direct impediment to new buyers and move up buyers in the Toronto GTA. This creates and opportunity for buyers to consider municipalities like Mississauga and Oakville for their housing needs.

I invite you to contact me with a comment or a shopping list of your housing needs.

Thursday, October 23, 2008

Canada house price drop may be exaggerated, TD says

The drop in Canadian home prices in September may not be as severe as it seemed, TD Securities said on Wednesday, bolstering the case that the country is not headed for a U.S.-style housing meltdown.

TD, a unit of Toronto-Dominion Bank, argued in a report that home prices fell 1.3 percent in major Canadian markets in September, not the dramatic 6.2 percent drop that was reported by the Canadian Real Estate Association (CREA) last week.

CREA said the average house price fell to C$315,461 (about $252,000), dragged down by sales declines in Vancouver and Victoria, British Columbia, which offset rebounds in Calgary and Edmonton, Alberta. CREA said the fall came despite year-over-year gains in average home prices in 17 of 25 major Canadian markets.

TD crunched its own numbers and applied a weighting to each major city to fix "compositional shifts", which it said were behind the distorted CREA view. It said the association has acknowledged the problem.

For example, if Vancouver was the only city that reported sales in one month, and the next month Montreal was the only city that reported, then it might seem that prices had fallen in half because Montreal prices are much less expensive than those in Vancouver.

TD fixed the weight of each city to year-earlier sales levels as of September 2007.

"We wanted to get rid of the whole compositional issue. We really just controlled for the allocation. When we did that we ended up with a 1 percent drop instead of a 6 percent drop," said Eric Lascelles, chief economics and rates strategist at TD Securities.

"That's not catastrophically different, but to me that's a number that makes more sense. Yes the housing market is correcting moderately but it does not have the making of a U.S.-style correction."

He said Canadian housing starts may fall below the 200,000 mark, home prices will continue to correct in some inflated cities, but there is no need to brace for big delinquencies or a hard drop in prices.

The TD calculations aren't perfect, Lascelles acknowledged, because they do not eliminate some factors such as type and quality of home in each city.

Canadian housing data has shown signs of softness but nowhere near the slump that hit that United States, stemming from a crisis in the subprime mortgage sector.
Reporting by Ka Yan Ng; Editing by Peter Galloway Reuters Canada

David Pylyp; What an incredible range of opinions are out in the media, yet if you read the headlines only they say the sky is falling. People still need a place to live.

This TD report is a little reflective to specifics in the same fashion that I am, in that I study the sales reported on a daily basis and I have not perceived a viable drop in values. Offers seems to be off modestly by 1 or 2% from the prices of the spring market, so the conclusion could also be a seasonal adjustment. The number of active shoppers has declined and is reflected in the decline in the number of units sold ratios.

Wednesday, October 22, 2008

Welcome to Canada package RBC

Welcome to Canada Package provides financial advice and solutions TORONTO, October 21, 2008 — RBC announced that it has created a Welcome to Canada package focusing on the key financial decisions every newcomer faces in their first few months in Canada. The package includes introductory discounts on products and services to meet immediate banking needs while providing guidance and advice to achieve future financial goals.

"The RBC Welcome to Canada package helps newcomers start and build their financial life in Canada with confidence," said Mark Whitmell, director, Cultural Markets at RBC. "It includes introductory advice about Canadian banking products and services eliminating confusion about making the right financial choices."

According to RBC research, 41 per cent of newcomers open their first bank account within a couple of days of moving to Canada; 31 per cent sign up for a credit card within their first month; 38 per cent start an RESP savings plan for their children's education within their first year in Canada; 36 per cent take out a mortgage to buy a home between one to three years. RBC research also shows newcomers have more questions about Canadian products and services and value guidance that reflects their circumstances.

The new Welcome to Canada package developed for new immigrants who have been in Canada for less than three years, addresses these needs and includes:

  • Financial Advice
  • Quick how-to guides for newcomers looking to making decisions on opening their first bank account in Canada, buying a car or their first home, setting up a savings plan for their children's education, investing for the future, and protecting their family with insurance. Available in 14 languages including Farsi, Punjabi, Tagalog, Russian, Spanish, Mandarin and Cantonese.
  • A free copy of "Arrival Survival Canada: A Handbook for New Immigrants" by founders of Canadian Immigrant Magazine and newcomer advocates Nick and Sabrina Noorani. The handbook addresses the immediate needs facing immigrants moving to Canada, with tips and advice on everything from finding a job to financial services, providing a base of information for newcomers to build their new lives.
Products and Services
Monthly fees waived up to 6 months with RBC Signature No Limit Banking account, including features such as: unlimited banking transactions, monthly refunds for 3 non-RBC ATM transactions, 2 free monthly email money transfers, a $50 annual travel certificate and more.
Annual fee rebate for selected RBC Visa cards
One-year free rental of standard safety deposit box
Interest rate bonus on a non-redeemable GIC for one year
Online and Telephone banking, including basic service in 150+ languages when calling 1-800 ROYAL 1-1 or dedicated service in Mandarin and Cantonese at 1-888 ROYAL 9-8.
Information on the new RBC Welcome to Canada package and other financial advice and solutions can be found at RBC's comprehensive web site for new Canadians at or Newcomers can also locate branches with representatives who speak their language of choice by visiting

These are the findings of an RBC /Ipsos Reid survey conducted between March 15 and April 30, 2007. The poll was based on a randomly selected sample of 1,000 new immigrants who are 18 years of age or older and have been in Canada for 10 years or less. With this sample size, the overall results are considered ±3.1 percentage points, 19 time out of 20, of what they would have been if all new immigrants had been surveyed. The survey was conducted by telephone and the interviews were held in Mandarin, Cantonese, Hindi, Punjabi, Korean, English and French. The findings were weighted to reflect the actual regional distribution and ethnic composition of new Canadians immigrating to Canada within the past 10 years.

Report details provided by Lindsay Doke Royal Bank Trusted Mortgage Advisor.

Real Estate in the News

I received this email and I thought I would share the contents with you.

There’s been a lot of talk about real estate in the news in recent months. We’ve heard about declining housing starts, falling existing home sales, double-digit price depreciation, subprime fallout and foreclosures – in the United States. Fortunately, we live in Canada. And Canadian real estate markets are far-better positioned than their American counterparts for a good number of reasons.
  • Subprime mortgages represent less than five per cent of our market nationally.
    Foreclosures occur in about one quarter of one per cent of mortgage transactions in this country.
  • Canadians have more equity in their homes.
  • We have less debt than our neighbours south of the border.
  • Speculation has played little or no role in existing home sales in Ontario.
  • The fundamentals of our economy are relatively solid. Of the G8 countries, only Canada is expected to show growth in 2008 and 2009.
  • The Canadian banking system is one of the best in the world, relying more on old-fashioned lending than innovative financial products geared toward profit.
  • The Canadian job market is stronger than the US, adding more than 200,000 jobs so far this year.
  • Interest rates remain favourable.
  • Housing values in Ontario major centres did not experience serious, double-digit price appreciation year-after-year for an extended period. Our markets were characterized by stable, healthy growth.
  • Immigration continues to play a key role in housing markets. Between 2001 and 2006, more than 1.1 million immigrants came to this country, with about half settling in the province of Ontario. Immigrants tend to purchase a home within the first five years of living in Canada.
Real estate is cyclical. There will be peaks and valleys. The more restrained the peak, the more modest the valley.

There is no question that market conditions have moderated from 2007’s record pace. More listings, softer housing values, longer days on market – but most centres are relatively solid. While some buyers and sellers will adopt a wait-and-see attitude, there are those that will continue to venture forward.

They’ll need the services of a knowledgeable, experienced real estate professional to navigate the storm. They will look to you for information in today’s complex real estate environment. Understanding market conditions will be of paramount importance to today’s buyers and sellers, especially as conditions change in markets across the country.

That said, sellers will need to be realistic in setting a selling price. Listing a property at fair-market value will ensure that it will sell in a reasonable amount of time. This is not the time to test the market. Those that are truly interested in selling their properties know that over-priced homes risk stagnation. Buyers in today’s market will need to be careful not to overextend themselves. They should know exactly what they can afford. Pre-approval for a mortgage loan is ideal because it lets buyers know exactly how much they can spend on their new home.

Once educated, your clients will come to rely on your expertise. Make sure your follow-up skills are honed and your customer service is par excellence.

Looking forward, we anticipate a continuation of stable market activity, minus the urgency present in past. Gone are the multiple offers that left both buyers and sellers dissatisfied. The increase in the number of homes listed for sale are a definite advantage for purchasers who now have the luxury of time in making one of the most important decisions of a lifetime. For sellers, the time to trade-up has never been better.

Canadians are great believers in homeownership – a fact underscored by the close to 70 per cent who own homes in this country. History has proven time and time again that real estate is a solid, long-term investment that appreciates at a rate of about five per cent annually. You can’t live in your mutual fund, and after the last month in the financial markets, quite frankly, we’re not sure you’d want to.

New market realities may impact your business in the months ahead. That’s when the RE/MAX Brand and toolbox come into play. There are a wide variety of products and services that will give you an edge in today’s marketplace and a definite advantage when it comes to the competition. Ensuring you incorporate both a buyers and sellers presentation into your marketing materials is a great first step. Rather than focus on what you see or hear in the news, consider opportunities as they present themselves.
Michael Polzler
Executive Vice President and Regional Director
RE/MAX Ontario-Atlantic Canada Inc.

This email tailors very nicely into some tidbits I have been hearing from mortgage brokers I actively deal with. They have commented that the credit approval process is much more stringent and exacting on new purchasers. Verification of data, ie employment and earnings that previously passed are now being examined with pay stubs, letters of employment and REV Can's Statement of Assesment.

Appraisals in a declining market are growing more crucial in that a purchase at $300K with 20% down required a mortgage of $ 240K to close. If the property appraises at $290 the bank will only finance the 80% of the APPRAISED AMOUNT being $232k requiring you to come up with an additional $8,000 on closing.

This is why I perform a Market Evaluation on Purchase's to ensure that the buyer is making a sound financial decision.

Shopping for a used condo in west Toronto

While out showing properties this month, I have been focused on working with an investor; who is viewing the condo market with great opportunity.

Instead of evaluating the condo's on their sales literature and proposed amenities his evaluations are very pragmatic based on the square footage, maintenance costs and historic sales values as compared to square footage and the cash flow available from rentals.

In the process of our analysis we can across a wonderfully improved three bedroom condo unit in Mississauga. Although the maintenance costs were higher, (twenty year old building) the lack of amenities outweighed the fees associated with ownership when one compared the square footage of almost 1600 square feet compared to the new condo's averaging 760 to 880 square feet.

As a pure rental the 1600 square foot three bedroom unit would appeal to a greater tenant pool.

This particular unit was owned by a younger fellow who was an electrician by trade. During the course of his ownership he had altered (renovated) some walls to become knee walls (half height) making the unit more spacious and visually pleasing. The ceilings had their stipple finished removed and reapplied when he had improved the ceiling with a line of in ceiling POT LIGHTING. The work was very well done and first rate in its finish and appearance.

The issue that comes light (if you pardon the pun) is that this owner has improved his unit without permission of the condominium board of Directors. I am not suggesting that the Board would approve or decline the changes but the material fact in this circumstance is that the owner is changing features to the common elements of the building. His drilling and installing ceiling based pot lighting is in his ceiling but in someone else's in floor heating.

Although I am confidant that all the work was done to code; in strict adherence to safety issues and concerns about the in ceiling heating and wiring, once sold this benefit becomes someone else's liability.

Condominium Ownership has many advantages for the owners but also carries the responsibilty of following the Rules and Regulations of the Condo Board.

If you are considering a condo purchase I urge you to investige the existing condominium market along the Humber Bay Shore for some good values compared to shopping new.

Monday, October 20, 2008

Renewable Rooftops

"Tim Grant was the co-chair of the Downtown West Solar Energy Project, a neighbourhood association formed two years ago to educate people about solar energy and to arrange bulk-buying discounts from installers of solar thermal and PV systems. He said that while Toronto Hydro struggled, they eventually ironed out the wrinkles.

“Toronto Hydro had been mandated by the province to provide homeowners with access to the (Standard Offer) program, but were given no resources to do it and really scrambled. They had a really tough time creating monitoring and billing systems,” said Grant. “And it was the tenacious efforts of a couple of my neighbours that forced them to do that and they did it.”Grant said that while solar PV systems are not a great investment, they’re not bad either.

“With the tax deductions you get by selling electricity to the government - thereby turning your house into a business - you’ll actually do better than a 4 per cent return,” he said. But not everyone can do what Sue Dexter did. For people with less access to cash, a solar water-heating unit might be the way to go.

“Of all the renewables you can put on your rooftop - solar hot water, PV, wind - solar hot water gives the best bang for the buck. And it’s the cheapest to do,” said Aaron Goldwater, the president of a contracting company specializing in solar water heaters.

David Pylyp; This is worthwhile and profitable technology that should be mandated for all highrise condo buildings.Condominiums Buildings along the Humber Bay Shore should all adopt this technology as a money maker for the condo corporations to offset ongoing maintenance costs. Green Planning and construction would be better done at the concept phase to encompass eco friendly uses.

The hydro power provided could make the building hydro self sustaining and still feed power back into the grid.

Saturday, October 18, 2008

Build you own Custom Home in Etobicoke

Building a home of your own is always an exciting event for anyone, especially if the person is new in the venture. It is more likely, that you will be interested to live in such a home that can fulfill all your needs.

While buying an already designed home, you may not get what you want whereas, if you design the home prior to construction, you can make the place your own heaven. It is not always possible for the builders to make unique homes for everyone, as different people have different choices.

If you appoint any architect for designing your home, the professionals talk to you and realize your tastes and needs. Then they can design the plan accordingly, while taking care of your budget as well.

Customizing your home can be anything, starting from the simple addition of a few square feet in your kitchen to a whole new renovation. Changing the amenities you are using currently can also
be a part of customizing your home. Similarly, there can be several upgrades and additions as well. Either you can do it by yourself, or you can take professional help for these.

If you have moved to your new home and are thinking that there is no scope for customization any more, you are wrong. You can certainly go for in for further changes. If the process is long lasting, at the most you will be shifting to some other place temporarily and if you want a partly renovation, you can get it done even if you are living in your house.

Better still, lets plan from the ground up. We will help you select a lot, find a suitable builder with the same shared vision and plan your home start to finish.

Asking prices for these prestige homes in Etobicoke have already seen opportunity for some. Builders in the Burnhamthorpe and Shaver, Kipling to Rathburn have available existing inventory that is Build and ready to move in.

Remember when asked "If this is a time for opportunity" My answer is simply.... Yes, if it will improve your family’s finances and quality of life.”

Friday, October 17, 2008

Changing GTA Resale Housing Market Reflects Economic Times

Activity in the Greater Toronto Area resale housing market moderated considerably during the first half of October with 2,700 homes changing hands, Toronto Real Estate Board President Maureen O’Neill announced today.

Sales volumes in the GTA decreased 18 per cent compared to the first half of October 2007, when 3,297 transactions were recorded and are down 10 per cent compared to the same period in 2006 when 3,007 sales took place.

In the City of Toronto 1,140 sales took place in the first half of this month. This represents a 21 per cent decline from the 1,446 sales that took place in the same period a year ago and a 13 per cent decrease from the 1,312 transactions recorded in the first half of October 2006.

In the 905 Region there were 1,560 sales in the first two weeks of this month, a 16 per cent decrease from the 1,851 transactions that took place during the same timeframe in 2007 and down eight per cent from the 1,695 homes sold during the first half of October 2006.
House prices declined throughout the GTA during the first half of the month. The average priceof a GTA home is currently $353,772, down 11 per cent from $399,013 recorded the comparable period in 2007.

In the City of Toronto the current average price $375,804, a 15 per cent decrease from the $441,878 average recorded at mid-October 2007.

In the 905 Region the average price of a home is currently $337,671. This represents an eight per cent decline from the $365,527 average recorded during the first half of October 2007.
With 27,559 properties currently listed on the TorontoMLS system, there is now 30 per cent more available stock from which to choose as compared to a year ago when 21,182 homes were listed.

“More choice can mean slightly longer wait times for sellers whose homes are now on average, selling after 34 days on the market as compared to 29 days a year ago,” said Ms. O’Neill. “The list to sales ratio is 97 per cent of the list price.”

Increased sales activity was noted in specific pockets located throughout the GTA.
Sales in Oshawa (E16) increased 15 per cent compared to the first half of October 2007, based mainly on solid sales of detached homes.

Previous news releases have incorporated 2006 comparisons. This was necessary in order to place the market statistics in a broader context. We will be referencing 2006 in its entirety at the end of the month when it will be more relevant.

“While we continue to watch the economic picture globally, it is the local real estate climate that will determine our market place,” said Ms. O’Neill. “After the 2007 record highs, 2008 is an encouraging market for buyers.”

David Pylyp; The results speak for themselves, Sales activity in the 416 is down significantly more than the 905, and that in my humble opinion is directly related to the continuation of the Additional Toronto Land Transfer Tax imposed by Mayor Miller. Our election has passed and the Canadian people have voted for no change or slight change in political direction. TRH Prime Minister Steven Harper proposed a First Time Buyers Tax Credit. Lets press to make sure it passes quickly to help in this calendar year. Fear uncertainty and doubt is still playing out in the global and especially US/Canadian stock Markets. I hope they find their level.

For those on the fence about buying or selling who ask is this a good time? I have the following response.. " Yes, if it will improve your family’s finances and quality of life.”

Thursday, October 16, 2008

Canada’s MLS ® housing market balance stabilizes in third quarter

CREA- The number of properties listed via the MLS® systems of Canada’s major markets was down from its peak in the third quarter of 2008, according to statistics released by The Canadian Real Estate Association (CREA). This caused the balance of sales-to-new-listings in the market for resale homes to tighten on a quarter-over-quarter basis for the first time since the beginning of 2007.

New MLS® residential listings in Canada’s major markets numbered 146,637 units on a seasonally adjusted basis in the third quarter of 2008. This is 3.3 per cent below the highest level on record, set the previous quarter. New listings eased most in Edmonton and Calgary in the third quarter, followed by declines in Vancouver and Montreal.

The balance between sales and new listings has stabilized in many major resale housing markets in recent months. The trend stands out most in Edmonton and Calgary, where a sharp drop in new listings and rising sales activity has firmed up the resale housing market considerably since the beginning of the year.

"Informed buyers and informed sellers look at the facts. And the facts right now indicate the real estate resale market is stabilizing in many markets," says Calvin Lindberg, the President of The Canadian Real Estate Association.

"There have also been a number of initiatives that will have an impact going forward, including the government’s decision to invest $25 billion in insured mortgage pools, the recent drop in the Bank of Canada rate, and the new rules reducing the maximum amortization to 35 years instead of 40," the CREA President adds. Those new mortgage rules go into effect October 15th. "The third quarter MLS® statistics and these developments are more factors showing the Canadian market is not following U.S. housing trends."

Continue with balance of article

While the article talks about the national trending, doom and gloom from the stock market is creating visible hesitation in the financial market place. These figures translated into an adjusted value for average homes sold in Ontario as being slightly over the 2007 to 2008 figures, 289K V 291K.

Financial Insecurity may slow Toronto Condo Construction

Some condominium developers in Toronto are starting to feel the effects of the global credit crunch, and analysts say that could put some projects in jeopardy.

A condo market analyst says 30 per cent of the 120 projects currently being marketed in Toronto are teetering because they can't get financing.

Projects already being built don't appear to be in any danger of grinding to a halt, said Jane Renwick, executive vice president of Urbanation, a condo consulting firm.

But Renwick is concerned about smaller projects that haven't reached the construction phase.
The "A" locations — the ones downtown, or near subway lines and being built by proven developers — aren't affected. It's the "B" locations being presold by unproven developers that are causing concern.

"The Tridels, the Menkes of the world, they will have no problem. They've got good, established relationships with the banking community. It's the marginal players, the new kids on the block, those are the ones that we're worried about and that could represent up to 30 per cent of the projects that are not under construction," said Renwick.

Mike Labbé, who runs Options for Homes, a non-profit company that develops condos and townhouses for people on low incomes, has heard from other developers that it's taking longer than ever to line up financing.

"It's getting tighter. It's getting harder to find. People are having to be more creative. They're having to come up with more of their own equity to make it happen," says Labbé.
To raise equity, Labbé says, some developers are even selling off land they were holding for future projects.

For construction workers like electrician Tony Pacheco, it's a worrying scenario.
"It's scary," said Pacheco, "but at this site here, we have lots of work."

Renwick says that if the situation continues, "we're going to have disappointed buyers.
"They are going to get their money back, they will get their deposit plus one per cent according to their purchase agreement. They'll be protected, but disappointed."

David Pylyp; While I do agree that the new projects may be difficult to sell in a changing economic environment, A) the Buyers have many choices to pick from, B)Their deposits are protected, C) if the project does not achieve critical mass their deposits are refunded or they may choose to re-invest in the new revised projects. A simple example of this was the High Park Lofts in Roncesvalles Village that was sold 3 times, thru 3 different developers until it achieved critical mass and was finally constructed. (site drawings, ceiling heights and floorplans were redrawn and revised)

There will be many more that are sold and resold prior to construction. It cannot be stressed enough, the cranes that you see going up on different sites around the west end of Toronto and along Humber Bay Shores, are building that have sold at least 75 to 80% of the proposed units, and THEN commenced construction.

Wednesday, October 15, 2008

What's with the new

Recently while surfing the Real estate bulletin boards, I found this...

What's with the new MLS website?

I regularly search Toronto properties on the MLS at and have always used the simple interface to choose my region (W01,C01 etc), price, type of dwelling and the number of listings per page. Well, it seems I can't do that anymore.

The site has changed to '' and all of a sudden, there's this hard-to-use map interface that requires you to zoom in on an area (you can't really choose specifically - you have to vaguely zoom in and hope for the best; the map wobbles all over the place and zooms in and then way out's a mess.

Plus: viewing my selection, at my convenience, seems impossible now. Is this a deliberate attempt by realtors to make it hard for folks who want to search without a realtor, to do so online? If so, isn't this really unfair: after all, MLS listings are for everybody, not just realtors or those represented by realtors. Does anyone know what's going on?

Some responses; The new MLS site was an attempt to address concerns that the public had about the old site. Google Mapping was now available and was intergrated into the display to show what homes/condos are nearby. It is however, not as user friendly as the old site. is a much better name vs but there are some unresolved ownership issues about who has rights to the use of the trademark MLS.

There were public consultations and focus groups done before this site was launched. Unfortunately with any new technology there are some growing pains and there will have to be changes made. The MLS site is owned and run by the Canadian Real Estate Association on behalf of Realtors for the public's use. (via the cooperation of each real estate board in Canada.) It is no different than any other form of classified advertising.

The information available is only a portion of what is available on Realtors MLS version of the site. This is more about privacy issues than trying to hide information from the public. Realtor's pay for the overall MLS service and for the MLS "public" site. The idea of a conspiracy is absurd. Do we want to have people use Realtors? Of course we do, but we use the site as advertising, plain and simple. The MLS system is good for consumers and Agents. You just to compare other metropolitan areas that do not have an open MLS system and you will see that it is much more difficult to find information about available properties. Viewing available homes for sale does not discuss or evaluate the neighbourhoods or Home Buying Process. The site clearly indicates how many listing are mapped and how many are NOT included.

Many have talked about FSBO's posting onto the MLS system; This creates a variety of challenges. If ad revenue is earned from the posting of listings on the site then everyone should be able to advertise. Why not also Insurance Companies, Lawyers and Home Inspectors? How will these revenues be shared? Will the realtors only (as shareholders of the MLS system) share in this revenue stream? How will it be divided geographically?

If you would like to search for a home by MLS District numbers then you should consider registering at an agent's website portal that permits complete access to the MLS system. Registered clients will still receive a daily email quicker containing complete data with address'.

I welcome your questions and comments.

Tuesday, October 14, 2008

But It was real money

I recently read something with CBS News that talked about the values of the stocks dropping and that the relative drop was a cashless drop in value since the cash was not really withdrawn from the market to be actually lost in hard dollars.

Simply put, if you bought the stock at $10.00 and the value increased to $100.00 over whatever many years you held the stock, and it was in your portfolio last week, you had a 40% adjustment in value in 3 days. This has since bounced back about 5%.

This led me to ponder a few different points.

When Bre-x stock was trading at $ 40 to 60 dollars per share and then skyrocketted into the hundreds, one of my clients danced gleefully at the money he had made with his sound investment. When they stopped trading in Bre-x and tried to verify the gold deposits, then commencing trading again, [he] "invested" another $100,000.

This was their retirement nestegg. The proceeds of all their savings. They would/could have had a GIC at a Canadian Financial Institution that was Guaranteed and sound but paid a pitance in interest dividends. They could have invested in Bank Stocks and received a better return.

In hindsight. they lost not only the value of the shares when they collapsed but the entire seed capital for their retirement fund. This was not a stock mismanaged. This was fraud and this investor was defrauded.

Another thought comes to mind. Charity Organizations raise money on an annual basis but their commitments to finance projects are often planned over 5 or 10 years. Those funds sit in Investment funds, usually stock portfolios, to gain the highest interest possible, and funds are drawn based on the capital disbursements commited to in any given period. These Charities also work hard to fund their programs.

What is the point of all this? Simple. When you are young and your working career will span the next 40 or 45 years, investing in riskier high paying investments is a sound business choice. When you are nearing retirement the investments in your portfolio should be more of segregated funds or guaranteed annuities. Protecting at least the principal balance.

The gamble of buying a house needs to be viewed from a slightly different perspective. You need a place to live, Start your family, and to establish your nest egg in a neighbourhood. Markets will fluctuate from time to time and this is actually my third downturn.

If the market shifts even 10 % on the purchase price of a home; and you had stayed out of the real estate market in Toronto, you would paid an average rent of $ 1,500 per month times twelve months for $ 18,000 annually. On a year over year basis you are in exactly the same position. If you paid your mortgage for a year and the value remains constant ( NO CHANGE) you are in exactly the same place, except you own and owe less. Again No Change.

I remind people when asked, its impossible to time the markets perfectly. By the time we notice a historic trend in increased values, we have already missed the lowest point. I am referring to the values of homes that slid from 1992 thru to 1995. We did not notice the upswing for a period of 6 to 9 months into the 1996 calendar year. Those who bought in the slide of the early 90's have received a paper profit of almost 100% of the purchase price of their homes.

Not a bad return when you consider most home are purchased with 10 - 20 % as a downpayment.

Sunday, October 12, 2008

Health card acceptable for voting but not for mortgage

Why is an Ontario photo health card not a valid form of identification for purposes of a real estate transaction, but it's perfectly acceptable for the federal election next week?

Whenever clients sign mortgage documents with their real estate lawyers, virtually all lenders require the lawyer to confirm the client's identity by making a photocopy of the ID documents and signing a form certifying that the lawyer has personally examined those documents.

Most lenders even provide a list of eligible, and ineligible, documents. Lawyers can choose two documents from the list in column A (photo ID documents), or one document from column A and one from those in column B.

Eligible documents include a passport, citizenship card, credit card, driver's licence and identity cards from "well-known" employers.

Those mortgage lenders who provide lists of eligible documents uniformly exclude the Ontario health card, but never explain why it cannot be used.

In my practice, I have had a number of borrower clients who have no driver's licence, passport or photo ID other than the health card. This inevitably creates a problem complying with the bank's identification requirements, since the health card is unacceptable.

In light of the long-standing prohibition on using health cards, I was surprised when a brochure from Elections Canada arrived at the house recently advising voters that they must prove their identity and address before being allowed to vote next week.

The Ontario health card was listed right there on the Elections Canada form in the lists of acceptable identification documents. Thinking there must be some mistake, I resolved to find out why I cannot use a health card to identify myself when signing a mortgage, but it would be perfectly acceptable when voting for my Member of Parliament.

I had always thought that a health card was unacceptable since there were more of them in circulation than there are citizens of Ontario, but that may well be an urban (and suburban) legend.

After some research, I eventually discovered Section 34 of the Personal Health Information Protection Act, 2004 (online at

The stated purpose of the legislation, among other things, is to establish rules to protect the confidentiality and privacy of personal health information.

In Section 34, the legislation says that a health information custodian (in other words, a health-care practitioner) or his or her agent shall not collect or use another person's health number except for the purposes of providing provincially-funded health resources to that other person.
Otherwise, it's against the law to require a person to produce his or her health card. Even if they produce it voluntarily, however, it's illegal for a lawyer to "collect or use" the health card number for the purposes of proving the client's identity in a real estate transaction.

So, on Election Day, it seems that a voter may identity him or herself to an election officer by voluntarily producing an Ontario health card as long as the official does not write down the number.

For Ontario residents without driver's licences or passports, it's clearly easier to vote than it is to sign mortgage documents.

Also on the issue of identification, new Law Society rules come into force at the end of this month requiring lawyers to verify client identity in every matter, not just real estate purchases and mortgages.

The rules have been made at the urging of the federal government to deter money laundering and the financing of terrorist activities.

The Law Society of Upper Canada has issued a 28-page "guideline" to assist lawyers in complying with the new rules.

Similar identification requirements are already in place for clients of real estate agents.

Bob Aaron is a Toronto real estate lawyer. He can be reached by email at, phone 416-364-9366 or fax 416-364-3818. Visit the column archives at for articles on this and other topics.

Saturday, October 11, 2008

Housing beginning to feel global chill

It's going to get worst before it gets better. That's the message from industry leaders gathered on a conference call Thursday to discuss the state of Canada's housing market over the next year.

Canada's entire real-estate market - from home building to new and existing sales and, not least, home prices - is beginning to feel the downdraft of a global liquidity crisis between banks.

The good news is that they say the national market is in far better shape than its American counterpart and it's already moving to correct itself.

"The market is realigning and we don't see that there will be a housing market bust in Canada like we're seeing in the United States," said Gregory Klump, chief economist at the Canadian Real Estate Association.

"Rather, we're going from a rather strong seller's market to more balanced market conditions."
Calming words, but of little comfort to homeowners that witnessed national prices fall the fastest in 12 years in August and are in for a similar blow when Ottawa-based CREA delivers September's data next week, according to Mr. Klump.

Still, there's a point to be made of Canada's position vis-a-vis the United States, where there have been unprecedented foreclosure rates in some states stemming from subprime mortgages, still estimated to represent 18% of outstanding mortgages in the United States.

Here, Mr. Klump said that while torrid growth remains in a few markets in Western Canada, nationally prices will continue in a downward trend until the "second half of next year. With sales declining as well as listings declining, [prices] will stabilize."

Home building, too, is poised to decline, according to Derek Holt, vice-president of economics at Scotia Capital. Despite a robust showing of 217,000 annualized construction starts on new homes last month, the rate of permits is falling to well below that level for coming months and next year.

Mr. Holt contends the annualized rate for 2009 will slow to about 180,000 as home builders scale back.

Indeed, there was marked concern over the threat that the widening financial crisis poses.
Inter-bank lending is quickly seizing up, and no matter how strong Canadian lenders' balance sheets are, the drying up of international lending is anathema to domestic recovery.

"That worries us, to be frank," said Mr. Holt. "Bankers are worrying about the fragile state of the global financial system and that is absolutely for every consumer and business borrower across the world ... going to tighten access to credit on tighter terms."

Credit conditions for mortgage borrowers are already beginning to come under strain. Despite a cut of half a percentage point by the Bank of Canada on Tuesday, Canadian banks shed only a quarter of a point, citing their own elevated costs of borrowing in open markets.

Rates on variable mortgages have also been raised in recent weeks. Will it mean Canadians looking for a mortgage will be shut out?

"For the vast majority, no," said Jim Murphy, chief executive of the Canadian Association of Accredited Mortgage Professionals. "There's always issues for those who may not have the credit score or have debts ... [but] for people that qualify, no."

David Pylyp; No matter the source, or detail of the information of the reports that housing is safe in Canada, people will hesitate to make sure, for their own comfort and proceed with caution. Prices in Ontario and Toronto specifically has declined a very modest 3% over last years high.

The stock market has adjusted the value of many buyer's downpayment pool and they need to reevaluate the choices available. Steven Harper has already stated that the Banks in Canada are not in jeopardy, do not need a bail out and will not require one.

The issue of the US bailout looms on the horizion but is a larger issue as the policies implimented may not truly be felt until a new President is in office in January 2009.

There is a lot of blame to go around. What the market needs is confidence. Real reasons to sell and buy a home, the marriage, the extra family member and downsizing are coming to the fore.

Thursday, October 9, 2008

Global Markets Financial Crisis

While so many are studying and analyzing the situation; the British are rather philosophical in their observations of the current monetary crisis.

Life must be ok if we can laugh at things like this. As long as we have our health and our wits, any problem created by men can be resolved by men.

Toronto Life Names Crash Proof Neighbourhoods

With speculation about a slowing economy, everyone’s searching for a little security. Here are [Toronto Life's] picks for crash-resistant neighbourhoods

The most important consideration in buying crash-proof real estate is the overall vitality of a neighbourhood. Look for areas with thriving local businesses and well-maintained homes that are accessible by TTC. Districts with a diverse mix (detached, semis, towns, apartments and condos) at a variety of price points means you won’t run the risk of living in a bust area if, say, townhouses go out of fashion (ultra-high-end condos, which tend to attract foreign investment, are the exception). Flexibility is another key; properties that are easily converted between single-family and rental units will ensure against a property value–lowering fire sale if your neighbour is desperate to sell and can’t hold out for a decent price. Regions populated by those who work in IT, advertising, design and media will fare better through a downturn than nabes with high-flying financiers or auto workers. Areas with artsy professionals often have a high proportion of cafés, galleries, boutiques and other value-maintaining amenities. Having a permanent attraction such as a museum, park or waterfront, and residents with fixed incomes (such as students and seniors) provides a steady support system for local businesses. Emerging areas with undervalued properties are money-makers when gentrification hits.

They include; Annex, Guildwood, High Park - Swansea, Kingsway South, Kensington - Chinatown, Longbranch, Palmerston - Little Italy, Rosedale - Moore Park, Trinity Bellwoods, University.

The criteria for selection was; high percentage of students and seniors, high concentration of luxury condos, properties can be converted from single family to rental units, permanent attraction and populated by IT, AD, design & media types.

David Pylyp; While I agree with the selection process, concentrating in the west side of Toronto I am more familiar with High Park- Swansea. They have excluded a large up and comming neighbourhood of The Junction. This has a vibrant arts community and a revival of business thru the local BIA. The Longbranch neighbourhoods (Mimico and Alderwood) have long been undervalued compared with other Toronto locations. Another omitted and highly desireable pocket is the Markland Wood neighbourhood with what, I believe, is the highest concentration of inground pools per square mile.

In each neighbourhood evaluation one does need to examine, community involvement, investment in renovations and the turnover (stabililty of ownership) rates.

Wednesday, October 8, 2008

Help for first-time homebuyers

Modest, affordable help contrasts with opposition’s new tax

Prime Minister Stephen Harper Sept 16, 08 announced another step in the Conservative party’s economic plan to deliver practical help to hard-working families: if re-elected, a new Conservative Government will give first-time homebuyers a tax credit for up to $5,000 of the closing costs on the purchase of a new home.

Referring to the new tax credit, the Prime Minister remarked, “Our plan is simple, modest and practical. It’s a tax break for first-time homebuyers, and a boost to the construction industry. It will make home ownership more affordable, and it will help to create jobs.”

Many first-time homebuyers are surprised by the long list of closing costs, including land transfer taxes, inspection fees, appraisal fees, and legal fees. These can amount to between 1.5 per cent and 4 per cent of the purchase price. The tax credit will help first-time homebuyers to avoid stretching too far beyond their budget to meet these unexpected costs.

The Prime Minister noted that the tax credit on closing costs follows on previous measures to support Canadian families, including the cuts to the GST, the $100-per-month child-care benefit, the $2,000 tax credit for children under 18, and the newly-established Tax-Free Savings Account.

“In a time of rising-prices and global economic uncertainty, government should be doing what it can to protect our standard of living, for construction workers and their families, for first-time homebuyers, and for all Canadians,” said the Prime Minister.

“That’s our Conservative priority – not a new carbon tax.”

For young Canadian families and young adults, buying a home for the first time is a very significant milestone – it is a sign of success and financial stability and a means to increasing prosperity. But home prices are rising, and many first-time homebuyers do not anticipate the long list of closing costs. These added costs can force them to choose between stretching beyond their budget or postponing their dream of homeownership.

In 2007, nearly 300,000 Canadian individuals or families purchased a home for the first time.[1]
The average price of a home in Canada is expected to reach $337,000 by 2009, up more than 20 per cent since 2006.[2] Closing costs can amount to between 1.5 per cent and 4 per cent of the purchase price[3].

A new Conservative Government will phase in, over four years, a tax credit for first-time homebuyers for up to $5,000 of the closing costs on the purchase of a new home. This will reduce first-time homebuyers’ tax payable by 15 per cent of their eligible closing costs, up to $5,000.

A list of eligible closing costs will be drafted prior to implementation, following consultation with realtors, consumer groups, provinces and the Canada Mortgage and Housing Corporation (CMHC).

The list can be expected to include most, if not all, of the following[4]:
Estoppel certificate fee (for condominium/strata unit)
Home inspection fee
Land registration fee
Land transfer tax
Legal fees and disbursements
Mortgage broker's fee
Mortgage loan insurance premium
Prepaid property taxes
Utility bills adjustment
Property insurance
Survey or certificate of location cost
Title insurance

We estimate that when fully implemented this credit will save first-time homebuyers in Canada as much as $200-million per year.[5]

Certain provinces provide refunds on land transfer taxes to first-time homebuyers.[6] These refunded taxes will not count toward closing costs eligible for this credit. Only land transfer taxes paid above refundability limits will be eligible.

[1] Based on Canadian Real Estate Association / CMHC housing market statistics and a CMHC-estimated 42% housing market share for first-time homebuyers (from the 2007 Renovation and Homebuyers Survey)[2][3][4][5] Based on maximum tax reduction of $750 for 300,000 first-time homebuyers.[6] and

David Pylyp; Let's see if this gets passed into law.

Are we suffering from FUD?

FUD is a sales and marketing acronym which stands for; fear, uncertainty and doubt.
Are we currently suffering from FUD? With everyone taking a wait and see position, we will make every negative prediction a reality.

I received this today...

Over the last two weeks, I have never seen in my 22 years of lending, seen so much doubt and fear in our real estate market. Guest Contribution Lindsay Doke RBC

Houses sitting longer on the market, in some cases having to find solutions when the homes don’t sell, and we have approved a purchase mortgage for the client. Clients holding off buying as they don’t want to cash out their RRSP's or investments as they have dropped more than 20%.

The US in huge economic turmoil and on the brink of recession. Questions as to whether we, in Canada, could be victims of the same. When our variable pricing dropped to 0 - no discounting on new business, last Friday I too was shaken, until I took some time to gain perspective and reviewed our Economy and the marketplace .


Prudent lending and wise decisions have kept and will keep our economy running stable with some growth in the last quarter. This week, two of the banks, TD bank and Ing Bank both have increased their prime to 5.75%!!

These two banks were offering outrageous pricing on mortgages over the past 9 months and now it has caught up with them. Just as it did 2 years ago with Bank of Montreal. This past week some major individuals in lending with TDCT in particular, are now out on the street armed with resumes seeking new employment.

"Folks you cannot survive in our business and sustain a growing business if you market on price alone".

The increasing presence of smaller low commission real estate brokerage houses you see going after your business is proof of this!!

RBC has not changed their mandate on how we do our business, providing a competitive product and leading with expert advice VALUE vs. PRICE

In the past three days the rumors that world wide banks would start to decrease their interest rate reductions has become reality. Reductions in Australia, England , France , US and now today in Canada, have been to jump start the economy once again and encourage consumer spending and confidence in the real estate market. Our feds this afternoon announced a 1/2% drop in the bank prime not to be confused with bank the lending prime which is 4.75%.

The variable remains the best product for those with Good cash flow. Growing incomes due to growth in their industry motivate buyers who want to maximize interest cost savings.

It is not however, for everyone.

Rest assured I will always advise at least 2 options for your clients to consider. That helps them make the most informed decision about their mortgage.

As my client of the month said it best.
"Lindsay I was afraid of the variable mortgage because of what friends and family were telling me. When I actually looked at the trends for the past 7 years with you and read the third party article you gave me the fears turned to confidence. I did my own research and realized it has been and still continues to be the safest product in the marketplace. By safe guarding our variable rate by increasing the payments by 10% (what the RBC mortgage allows), we are limiting the potential to ever need to convert our variable into a fixed term."

We all know when we let our clients speak for us and we act in their best interests that’s the best for of advertising we can ever have! Deliver sound expert advise folks and win your client every time!

Always here to help you sell more homes!

Lindsay Doke Trusted Mortgage Advisor cell 416-464-6423 fax 905-785-2325 email:

David Pylyp; Lets get out there and snap up a few bargains!

Wo-Built Moves indoors

Tip 2: Assessment Worksheet - Deciding What You Want
Once you've made your decision to update your kitchen, there are a few things to think about. Using an assessment worksheet will help you organize your budget and insure that you have included everything that is important to your lifestyle. For example: maybe more counter space is important to you, or the need for the "work triangle" design needs to be incorporated. The worksheet will help you to identify your wants and needs. For more information and to view an assessment worksheet, please go to the Canada Mortgage and Housing Corporation website at

If you are considering a kitchen renovation, for a limited time Wo-Built is offering a free kitchen assessment.Depending on your lifestyle, most people will have a combination of different needs.

The best thing to do is to make a list and research how much the items on your list will cost and this will give you a realistic breakdown of what is needed for your budget in the kitchen renovation. Keep in mind, the cost of the renovation work will also depend on the condition of the existing structure. If you have any water damage or old pipes that will need replacing, this will be added to the cost. Look out for our next tip!Lonya is the staff writer for Wo-Built Inc.

Tuesday, October 7, 2008

Make sure you are splitting incomes from investments

In October 2006, retirees got a ‘Halloween Surprise’ tax treat from the federal government --- an enhancement to pension income splitting that can reduce taxes for a retired couple. Of course, when it comes to taxes, nothing is ever as simple as it looks – and that’s true of pension income splitting. There are several specific rules and conditions that define and govern the ways you can split income and the tax reductions available to a couple.
In the ‘spirit’ of this Halloween, here are some tips and tricks for getting the most from this newish tax-saving treat.
  • Pension income splitting is not new. CPP/QPP income splitting (or income sharing) has been allowed for several years.
  • Certain types of pension income qualifies for income splitting prior to age 65, while other types of income will only qualify for splitting at 65 years of age.
  • Pension income splitting could have an impact on several other tax calculations and credits including OAS benefits, medical expense credits, spousal credit, Age credit clawbacks, and quarterly tax instalments. For example, a spouse over age 65 can split income from a Registered Retirement Investment Fund (RRIF) with a spouse under 65 – BUT the spouse receiving the split will not be eligible for the pension income credit. In addition, while splitting income may help to reduce or eliminate your OAS and Age Credit clawbacks, your spouse may become subject to these clawbacks.
  • You don't have to split pension income 50 – 50. You can split any amount up to 50% of your eligible pension income (income that qualifies for the pension income credit) and the split amounts can change each year based on your personal tax situation that year.
  • Pension income splitting does not require the physical transfer of funds. To split income, you and your spouse/common-law partner must formally agree to do so by completing the Canada Revenue Agency form Joint Election to Split Income (Form T1032) and enter the elected split income amount on the appropriate line of your individual tax returns.
  • If you make quarterly tax instalment payments, pension income splitting could reduce or eliminate your instalments while requiring your spouse to increase or start making instalment payments.

Pension income splitting can be a very effective way to lower your household's overall tax bill if you ensure an optimal split. To be sure pension income splitting will work for you – and to take full advantage of all your other tax-saving opportunities, seek the advice of a professional advisor.

John Scholl B. Mathematics, CGA,

Wealth Management & Financial Planning

David Pylyp; Always a worthwhile point to be made to include professionals when planning your retirement portfolio. John can be reached or call (905) 450-2891 X529

Monday, October 6, 2008

Green Driveway with Ground Solutions

Founded as a landscaping enterprise at the beginning of the seventies, Ground Solutions has developed a range of technologies and products to improve the capabilities of grassed surfaces in the field of sporting grounds. With their background and knowledge, they have developed a new product range, Ground Solutions (GS), which replaces conventional grass paving systems and gravel grassed areas.

GS-ONTOP is intended to be used on top of existing or onto newly laid grassed surfaces and is ready to be used. It is almost invisible and protects the turf GS-ONTOP requires no substructure and is able to support light traffic on firm ground.

Ground Solutions is a grid system that is laid over grass and allows vehickles to park on top without causing damage. Primarily used fro commercial applications it can be applied to residential use wher you need an extra parking spot without repaving or widening your driveway.

Flexible Plastic frames made from recycled plastics and tires, that clip together in a gigantic mat.

RE/MAX Upper-End Report

Two-thirds of markets surveyed report upswing in the number of upper-end homes sold in 2008

Mississauga, ON (September 25, 2008) -- Luxury home sales have outperformed virtually all other residential price points this year, but activity in the top-end is expected to taper in most major Canadian centres in coming months, according to a report released today by RE/MAX. The RE/MAX Upper-End Report, which highlights trends and developments in 15 housing markets across the country for the first seven months of 2008 found Vancouver, Victoria, Regina, Saskatoon, Winnipeg, London, Kitchener-Waterloo, Ottawa, Halifax-Dartmouth, and St. John’s all experienced an upswing in sales activity, while declines were noted in Kelowna, Calgary, Edmonton, Hamilton-Burlington, and Toronto. Also significant is in all but two markets, percentage increases in sales were greatest in the upper-end when compared to the overall residential marketplace in 2008.

“Given the transition occurring in most residential real estate markets, upper-end sales remain exceptionally strong,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “The market for luxury homes is usually the first to show pressure cracks, but the reverse is actually true this year, with pent-up demand (due to trade-up activity), less speculation, and job transfers all factors contributing to stability in this segment. That being said, we feel uncertainty in financial markets both here and abroad will give purchasers cause for concern in the immediate future.”

Although the top-end of the market represents less than five per cent of total sales, activity is generally a gauge of overall market conditions. Leading the country in terms of percentage increase in luxury home sales are Regina (up 306 per cent); Winnipeg (up 89 per cent); St. John’s ( up 78 per cent); Saskatoon (up 72 per cent); Kitchener-Waterloo (up 47 per cent); Ottawa (up 36 per cent); Halifax-Dartmouth (up 20 per cent); London (up 14 per cent); Greater Vancouver (up five per cent); and Victoria (up four per cent). Solid performance is likely a result of consumer confidence, particularly in provinces like Saskatchewan, Manitoba, Newfoundland, Nova Scotia, and parts of Ontario where solid economic fundamentals helped to bolster the number of homes sold in the upper-end.

“In two-thirds of the markets we surveyed, demand for upscale homes surpassed peak levels reported last year,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “However, with supply edging higher in most major centres and few markets reporting tight inventory levels, we are seeing a return to more balanced conditions. This situation is expected to have an impact on high-end values in coming months, especially in areas that have experienced consistent double-digit growth.”

The RE/MAX Upper-End Report also notes serious appreciation in housing values in recent years has pushed upper-end price points to new levels. This is especially so in Western Canada where $2 million is now merely a starting price in Greater Vancouver, while in the tony Westside, that figure is closer to $4 million. Calgary is steady at $1 million this year, but is pushing closer to the $1.5 million benchmark. In Ottawa, where the upper-end price point is currently pegged at $750,000, sales are increasingly occurring over the $1 million mark.

Other highlights include:
  • The most expensive MLS sale in Canada in 2008 occurred in Greater Vancouver with a sticker price of $11.5 million. A property priced at $9 million in Greater Toronto sold in a multiple offer situation for more than $11 million as well.
  • The priciest condominium currently listed for sale on MLS is priced at $14.8 million in Greater Vancouver – reduced from $18 million earlier this year.
  • The Four Seasons Hotel, currently under construction in Greater Toronto’s Yorkville area, has the most expensive list price in the country -- $30 million for a penthouse suite on the 55th floor.

Complete Report Contained in Attachment
Attachment 1: REMAX_UpperEnd08_RPT.pdf

David Pylyp; The report contains a few great kurnels of wisdom. Toronto home activity is down 5% while Mississauga's Million dollar homes increased by more than 20 %. Neighbourhoods like Watercolours in Lorne Park continue to be in strong demand.

Sunday, October 5, 2008

Market Watch Report October 08

GTA Resale Housing Price and Sales Measured in September

October 3, 2008 -- TREB Members reported 6,424 sales of single family dwellings in September, down about six per cent from the 6,866 sales recorded during September of last year, Toronto Real Estate Board President Maureen O'Neill announced today.

However, the 6,424 sales reported for September 2008 is down just three per cent from the 6,622 figure recorded in September 2006. To keep in perspective, September 2007's 6,866 sales was the second best figure ever recorded for that month.

The overall transaction figure for September masks significant regional differences. Within the City of Toronto sales registered 2,546, down 11 per cent from the 2,854 figure recorded in September of 2007 but down five per cent from the 2,680 recorded during the same month in 2006. In the 905 suburbs, the 3,878 sales that went through TorontoMLS were down three per cent from last year's 4,012 sales, and down two per cent over the 2006 total of 3,942 sales.

Overall, GTA prices declined three per cent from their year-ago levels to an average of $368,549 from the September 2007 figure of $380,132. As with sales, the GTA's regions fared quite differently on average price during the month. The average within The City of Toronto, at $393,647, fell six per cent from September 2007's $420,182 but rose six per cent from the $371,682 recorded in the same month of 2006. Meanwhile prices in the 905 districts, at $352,071, rose marginally from the $351,641 recorded in 2007, and was up five per cent from 2006 September figure of $333,818.

Breaking down the total, 2,539 sales were reported in TREB’s 28 West districts and averaged $352,249; 1,067 sales were reported in the 14 Central districts and averaged $464,397; 1,220 sales were reported in the 23 North districts and averaged $407,424; and 1,598 sales were reported in TREB’s 21 East districts and averaged $300,772.

Complete Details Available here

The RE/MAX Sales Report also revealed a few interesting items, in that Mississauga has overtaken Toronto in the over Million Dollar sale of homes category. Email me to request a copy of this report.

Always review purchase agreements with a lawyer

A recent decision of the Superior Court of Justice highlights the risks of a buyer failing to close a transaction to buy a new home or condominium from a builder.

Back in March 2003, Siavash Valizadeh signed an agreement to buy a Bay St. condominium, which was to be built as part of the Residences of College Park project. The purchase price was $303,400 and deposits totalling $30,340 were paid.

The agreement set a tentative occupancy date of March 15, 2005, but allowed the developer an extension of up to two years. The document also provided that if the purchaser defaulted, the builder at its option could declare the agreement terminated and forfeit the deposit monies.

The final occupancy date was set for Dec. 8, 2006. By that time, Valizadeh and his wife had moved to Montreal, apparently for employment reasons. He came to Toronto to inspect and take possession of the condominium, but claimed numerous deficiencies made it unfit for occupancy.

By August 2007, the condominium was registered and the builder kept pressing for Valizadeh to complete the final closing.

Over the course of almost a year ending in November 2007, Valizadeh retained three separate real estate lawyers in succession and repeatedly requested extensions of the final closing date.

Eventually, the purchaser agreed to pay the builder a $20,000 "reinstatement fee" to keep the deal alive until closing.

When Valizadeh failed to close by Nov. 19, 2007, College Park terminated the transaction and brought legal action to order the agreement at an end, evict the purchaser's tenant, forfeit the deposit money, and to require Valizadeh to pay $150,000 in damages.

The builder's application came before Justice Darla A. Wilson in June.

By this time, Valizadeh had purchased a home in Montreal with a mortgage on it, and as a result was unable to secure a mortgage on the College Park condominium.

Valizadeh's position in court was that he was treated unfairly by the builder's representatives and the agreement was unfair to him.

The judge disagreed. "Valizadeh agreed to purchase a condominium that would not be ready for occupancy for a substantial period of time from the date of the agreement," she wrote. "He chose to enter into the purchase and sale agreement, knowing the occupancy date was not certain.

"He had ample time to review the contents of the agreement with a lawyer after he signed it to familiarize himself with the provisions of it. He must have been aware of his obligations to secure financing for the unit and the change in his personal circumstances is irrelevant. In any event, he was granted numerous extensions by the vendor yet at the end of the day, he was unable to close the transaction because he could not or did not secure the requisite financing."

In ruling against the buyer, the judge wrote that "the (builder's) imposition of an arbitrary `reinstatement fee' of $50,000 reduced to $40,000 then subsequently reduced to $20,000 on a purchaser who was in dire financial straits was inappropriate. It appears that this sum was added on at the whim of the vendor."

The judge ordered that the agreement be terminated, but because the builder could not show any losses, the deposit money (minus court costs) was to be returned to the buyer.

For buyers of new homes and condominiums, there are three lessons to be learned from the case of College Park v. Valizadeh.

The first lesson is that builder purchase agreements should always be reviewed with a real estate lawyer before they become binding.

The second and third lessons are the same as the first. They cannot be repeated often enough.

Bob Aaron is a Toronto real estate lawyer. He can be reached by email at, phone 416-364-9366 or fax 416-364-3818. Visit the column archives at for articles on this and other topics.