Torontoism http://torontoism.com Toronto Real Estate with Torontoism Wed, 22 Feb 2017 17:44:39 +0000 en-US hourly 1 Richard for the Globe and Mail: Ontario’s lack of foreign-buyer data sparks concern about a Toronto housing crisis http://torontoism.com/toronto-news/2017/02/richard-ontarios-concern http://torontoism.com/toronto-news/2017/02/richard-ontarios-concern#comments Mon, 20 Feb 2017 13:14:43 +0000 http://torontoism.com/?p=18711  ‘Up! Up! Up!”

That’s where Toronto’s real estate market is heading, according to a Chinese-language promotional article posted last month on Fang.com, a Beijing-based web portal that lists thousands of homes for sale in countries around the world.

“You will really cry if you still don’t buy,” the same posting blares.

Toronto has become the “dark horse” of the Canadian real estate market, asserts Haifangbest.com, another site jammed with Canadian home listings. It contrasts Vancouver’s continuing drop in prices with a prediction that Toronto-area homes will rise 8 per cent in value this year.

In the months since British Columbia began taxing international buyers 15-per-cent extra on homes in and around Vancouver, those marketing Canadian real estate overseas have shifted their focus to Toronto. Last year, Toronto overtook Vancouver to become the most sought-after Canadian city for Chinese home buyers searching the property listing service Juwai.com, peaking in August just after British Columbia announced the tax aimed at curbing the public outrage over skyrocketing prices. Searches for properties in Toronto proper now surpass the total inquiries for Vancouver, Montreal, Calgary and Ottawa combined.

Richard Silver, a Sotheby’s realtor and past president of the Toronto Real Estate Board, estimates close to 20 per cent of his clients are international buyers – from China, India and the Middle East – interested in the luxury condos and houses he sells in and around the downtown core.

Prospective clients he talked to on his latest business trip to East Asia, just over a year ago, were curious to learn more about the city.

“When I’ve gone to China, people ask me the difference with Vancouver and I say, ‘Toronto’s where you make the money, Vancouver’s where you spend the money.’”

Anecdotes abound throughout the Greater Toronto Area, notably in places such as Markham, describing international buyers calling their realtors from overseas to bid tens of thousands of dollars over asking price to secure a new home.

Despite fears that foreign speculators are juicing the region’s already-booming real estate market, it is impossible to know what impact international capital is having because no official data are being collected.

Read the whole article here.

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Jim Burtnick for Mansion Global: How to Buy Property in Toronto http://torontoism.com/real-estate/2017/02/jim-burtnick-mansion-global http://torontoism.com/real-estate/2017/02/jim-burtnick-mansion-global#comments Mon, 20 Feb 2017 09:03:13 +0000 http://torontoism.com/?p=18705 MANSION GLOBAL QUOTED JIM BURTNICK IN ONE OF THEIR RECENT ARTICLES ABOUT BUYING A PROPERTY IN TORONTO.

Originally published on February 18, 2017. By Ariel Ramchandani

Toronto, a diverse and cosmopolitan city, is popular with buyers from all over the world.

“Toronto is known as the most multilingual and multicultural city [in Canada],” said Jim Burtnick, of the Torontoism team of Sotheby’s International Realty. “There are six Chinatowns and everybody and anybody coming here will feel pretty absorbed into the community.”

“Toronto is Canada’s largest city, with a well-deserved reputation for a high quality of living, low crime, generally favorable weather, vibrant arts and cultural institutions and a multitude of ethnically-diverse neighborhoods,” said Paul Johnston, a Toronto broker with Right at Home Realty.

The city has many perks to offer an international audience, according to Mr. Burnick.

A lot of people are coming here for the stability of the banking system and for the education. Luxury real estate is taking off here and international high-net-worth individuals have it on their radar as a safe, stable, welcoming country in a world that is much more volatile.

International interest in Canada as a whole is so high that the country’s other major international city, Vancouver, cracked down on foreign buyers by imposing a 15 per cent tax on them last year. But regulations like that don’t seem to be coming in Toronto, and the rules in Vancouver only seem to have strengthened the eastern city’s market, with buyers choosing Toronto instead, Mr. Burtnick said.

Here’s How to Buy

Mr. Burtnick describes the process of a foreigner buying in Toronto as being “pretty straightforward.”

You don’t have to be a citizen here but you have to have your money here, and it is easily transferable in today’s global economy,

Mr. Burtnick said. Funds should be available in North America for when you are ready to make a purchase. (Note: Many Canadian banks have branches in the U.S.)

Once you choose a home, you can expect to pay a 10% deposit. Deposits are generally staggered, usually over the course of 18 to 24 months (for example 5% on signing a deal, 5% in 60 days, 5% in 180 days, 5% in 365 days, and so on), Mr. Burtnick said.

These deposits are held "in trust” and are guaranteed 100% refundable should a project not proceed.

If you need financing, make sure you are already pre-approved by a bank that has branch locations in Canada. "For properties valued at over $1 million Canadian dollars, domestic purchasers are required to have at least 20% equity in the property,” said Mr. Johnston. “ A foreign purchaser will usually [need] 35% equity.”

He cautions that lenders are a bit more conservative in Canada. “Canadian banks have historically been much more cautious lenders than our American counterparts, and the federal government has maintained oversight and instituted minimum lending standards to reduce the risk of correction across Canada,” Mr. Johnston said.

Tax Talk

Although there is no foreign buyers’ tax, be prepared to pay other taxes, such as the land transfer tax, which ranges depending on the purchase price.

“Land transfer tax is punishing, as in Toronto we are taxed twice: provincially and municipally,” Mr. Johnston said.

In Toronto, the tax is paid to the city and to the province of Ontario, on closing. The Toronto Real Estate Board provides a calculator for assessing your land transfer tax.

There is also a 1% annual tax based on 1% of the value of the property. If you are selling, there is a withholding tax paid on closing, according to Mr. Burtnick.

If you are planning on renting your property out, there is a withholding tax on rental earnings. “That withholding is generally 25%, although it can be minimized or recouped depending on an individual’s specific tax position,” said Mr. Johnston.

Parting Advice

Mr. Burtnick stressed that unlike other countries, like England, where buyers are often leasing the land from the government, in Canada, “you own your property outright.” The agreement of purchase is a binding contract.

Both brokers stress the importance of working with a professional. “As with any transaction, surrounding yourself with the right team is essential when buying real estate in Toronto,” said Mr. Johnston. “In addition to tax advice, the expertise of a qualified real estate lawyer is very important, and engaging the services of an agent who is actively engaged in the market—and the type of property you are seeking out —will put you ahead of the game.”
 

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Richard for Mansion Global: Toronto’s Healthy Luxury Real Estate Market Predicted to Carry Over to 2017 http://torontoism.com/real-estate/2017/02/mansion-global-luxury-market http://torontoism.com/real-estate/2017/02/mansion-global-luxury-market#comments Fri, 17 Feb 2017 13:08:57 +0000 http://torontoism.com/?p=18695 Mansion Global quoted Richard Silver in one of their recent articles about Toronto's luxury housing market. Here are a few of the most important points from the article. And you can find the full version here. 

By Becky Strum. Originally posted on Mansion Global, February 15, 2017

Toronto's housing market has been experiencing a strong price growth over the last few years, thanks to tight inventory, population growth and low interest rate. According to TREB, Toronto saw the strongest sales increase of any other Canadian city in 2016. And while the average price was 20 per cent higher in December 2016 than the year before, the luxury market experienced a 32 per cent increase in prices. 

“We have a lack of inventory, and like a lot of cities, like New York and Chicago, there’s only so much space for new developments,” Richard said. “There are a lot more people coming into the market than there are people leaving the market.”

What neighbourhoods are considered to be Toronto's luxury market?  

Well, there C02, also known as Toronto's "posh" district, located north of Queen’s Park and the beautiful 19th-century building housing Toronto’s legislative assembly, and includes Yorkville. Then there is the Annex, Rosedale and Moore Park. And outside the city centre, you have

the C12 - the most expensive district in the Greater Toronto Area, with an average sales price of $2.5 million, according to TREB. It includes posh neighborhoods like Lawrence Park, Windfields and a collection of estate-lined blocks called the Bridle Path, residents of which have included late singer Prince and former newspaper mogul Conrad Black. The neighborhood was also used to film the home of “Mean Girls” queen bee Regina George. 

“In that area there are massive houses selling for huge prices. That seems to be very popular for those who want an acre or two-acre estates,” said Richard.

This is the district with the fastest growing prices. The average sale price has increased by 31 per cent since 2014, and the median sales price has jumped by 40 per cent, according to TREB.

Local buyers are fueling the growth 

Taimur Khan, a senior analyst at Knight Frank says that "local buyers have fueled most of the growth thus far, though foreign investors have played a role at the top of the market—particularly those taking advantage of the weaker Canadian dollar against the U.S. dollar and dollar-backed currencies."

In 2016, 55 per cent of sales to non-resident foreign buyers in the GTA, including suburbs, were sales of a primary residence for a family member. A lot of parents from China or Saudi Arabia for example, invested in properties for their kids who attend universities in the GTA, or bought them as second homes for themselves.

However, the Mansion Global writes that "the significance of foreign buyers in Toronto is much more limited than in fellow cosmopolitan, luxury hubs like New York or London, experts said. Foreigners accounted for only 5% of the city’s home buyers in 2016, with the average home costing them just under $1 million, according to TREB."

When Vancouver's Foreigners' Tax was implemented at the end of 2016, some suggested it will bring more foreign investors to Toronto. TREB says there is no evidence to support these suggestions, but it's actually local buyers who have driven Toronto's strong price growth, thank's to city's strong economy, low levels of unemployment and low interest rates.

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Update: 10 Best Cafés to Work From in Toronto http://torontoism.com/toronto-news/2017/02/update-cafes-toronto http://torontoism.com/toronto-news/2017/02/update-cafes-toronto#comments Wed, 15 Feb 2017 18:10:52 +0000 http://torontoism.com/?p=18683 We have decided to refresh one of our most popular articles with crisp new pictures! Plus, we added Reunion Island Coffee Bar to the list of locations where it is as enjoyable to work as drink coffee.

Head to the 10 best cafés to work from in Toronto article and let us know how you like the new visuals and Reunion Island Coffee Bar.

Did we miss your favourite café? Let us know in comments and we'll add it to the list!

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January 2017 Market Report: Do not try to chase the market http://torontoism.com/real-estate/2017/02/january-market-report-chase http://torontoism.com/real-estate/2017/02/january-market-report-chase#comments Wed, 08 Feb 2017 17:26:14 +0000 http://torontoism.com/?p=18605 January was a strong month for Toronto's real estate. TREB reports an 11.8 per cent increase in sales compared to last year. Condos lead with 26.7 per cent increase in sales over low-rise home types.

The inventory shortage is a serious problem and it just keeps pushing the prices further up. The number of active listings dropped by 49.5 per cent of what was reported last year. The average price for all major home types was up by 22.3 per cent, amounting to $770,745.

Greater Toronto Area Real Estate Market Report-january

Richard Silver, Sales Representative, SVP-Sales

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It's not surprising that sales are up again this month over last year, especially with the number of listings available being half of what it was last year. This lack of product will certainly keep the prices rising and activity sharp, but contrary to popular belief, it is not a market that REALTORS like. Nightly our team is out on multiple offers and when we are the listing agents, it is great for our sellers, but most of them are selling to buy.

One piece of advice that I give is: always try to buy and sell in the same market, high or low, just focus on the difference in price between the sell and buy, and you will be fine.

Rizwan Malik, Sales Representative, B.Comm

Rizwan

The basic laws of economics is kicking in, we have a lack of supply and an overwhelming amount of demand causing an upswing in price. Frustrated buyers have started giving up on freehold and are opting for larger 2 bedroom condominiums. This shift is pushing condominiums into multiple offers and record sale prices. Do not let this dishearten you, the best thing is not to wait but to enter the market and start swimming. If you decide to wait you will soon realize that you will always be chasing the market.

Sherille Layton, Sales Representative

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TREB reported that at the end of January there were only half the amount of active listings than this time last year. So, we are still experiencing a serious supply issue. We have noticed in the last couple of weeks that condominiums are selling in some cases 5-10 per cent over asking as buyers are realizing and being reminded that there is no point chasing this market. Canada will outpace most G7 economies through 2017. Therefore, not just foreign buyers but local buyers are investing in what is a strong market here in the GTA. However, it is a Catch 22 for most of our clients as they are unable to sell until they buy in most cases.

Jim Burtnick, Broker, SVP-Sales

JimBurtnick new headshot cropped BW

If you thought it was a tight market in 2016 (that is, a "sellers' market" with more buyers than sellers), watch out for 2017! So far this January I have been on two offer presentation dates for a buyer client of mine - the first one had 11 offers (there was going to be 12 but one of the buyers rescinded their offer when they learned how many offers there were) and the second one had 22 offers!! Well, they both sold way over asking as you can imagine.

With even less inventory so far in 2017, this appears to be an even more competitive year for buyers. But, on the flip side, this is going to be the BEST year ever if you are selling and an ideal time to profit from this sellers' marketplace (remember: selling your primary residence is capital gain exempt!).

Tracy An, Sales Representative

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I have been showing higher price properties to my clients. Even 3M+ market is moving fast. Two properties over 5M were listed last year and relisted last week, both sold in a week. The supply shortage is a serious problem in this market.

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Top 20 Real Estate Podcasts http://torontoism.com/technology/2017/02/real-estate-podcasts http://torontoism.com/technology/2017/02/real-estate-podcasts#comments Wed, 08 Feb 2017 12:05:53 +0000 http://torontoism.com/?p=17951 This selection of podcasts for Real Estate professionals and rookies covers marketing, commercial real estate, interviews with industry veterans and accomplished investors and investing in general. The great thing about podcasts is that you can listen to them anywhere at anytime. Couldn't find your favourite show on the list? Let everyone know in the comments about it.

BiggerPockets Podcast

1

The BiggerPockets show has a couple of hosts. Joshua Dorkin is the founder and the CEO of BiggerPockets.com, the famous social media network for real estate agents, investors, newbies and industry leaders. Brandon Turner, VP of Growth and Communications at BP, has been in real estate since he was 21 and aside from blogging and recording podcasts he is also a published author. Both are active investors and vivid personas whose web is visited by millions of people annually.

Listen to their highest ranking podcast here.


Old Dawg's REI Network

2

Phrases that would best describe the host of Old Dawg's podcast Bill Manassero are 'It's never too late' and 'the older the better'. Bill was 60 years old when he learned about passive income and real estate investing. In 2014 he purchased his first 3 properties and just last year acquired a 22-unit apartment building. Bill interviews real estate experts and hopes to help you create passive income regardless of your age.

Listen to his podcast here.


The Real Estate Guys

3

The first episode of Robert's and Russell's show was aired on radio in 1997! Robert Helms is a professional investor and Russell Gray works as a financial strategist. They are a couple of entertaining hosts who deliver hype-free real estate education in the form of a weekly podcast. If you are looking for an expert advice, guaranteed by longevity, this is it.

Find the podcast here.


Joe Fairless

4

Meet Joe Fairless, the real estate superman who, in addition to controlling $54,000,000 in property, was the youngest VP in a NYC Ad agency and raised $1,000,000 from private investors in his first multi-family deal (which "ain't typical" according to his web). Need more proof of his qualification to teach you about real estate?

Listen to an episode of his podcast here.


Breakthrough Real Estate Podcast

5

The podcast hosted by Rob and Sandy is aimed specifically at the Canadian real estate market. Rob Break is a passionate Salesperson with Re/Max in Durham Region. Sandy MacKay leads the MacKay Realty Advisors team in Hamilton, Ontario and is also active as an investor. The show has enjoyed a period of steady growth over the last few years and anyone who wishes to jump in on the train of real estate investment should do so right here and right now.

Click here to listen to an episode of the podcast.


The Lifetime Cashflow

6

Rod Khleif's resumé is so interesting that you will want to say "I'll have what he's having". He did not become one of the best real estate professionals in the US to keep to himself. So, when you meet a guy who has personally owned and managed over 2,000 apartments and homes, you listen to him. The Lifetime Cashflow Through Real Estate is not a fable, it is a true story.

Listen to Rod here.


 Epic Real Estate

7

Why Epic? Because Matt Theriault has 14 years worth of know-how. He built small real estate empire without spending his own money and discovered the knack for simplifying the complicated along the way. However, this is much more than just another real estate podcast. Matt provides step-by-step manual to acquiring and managing properties, generating profits and most importantly financial education.

Listen to the podcast here.


Super Agents Live

8 Agents Live

Tom Ferry, Mike Ferry, Gary Vaynerchuck and lots more of super successful people spoke to Toby Salgado, the host of Super Agents Live. Toby is an entrepreneur who first conducted business when he was only 9 and never went back. He became a millionaire by the age of 35 and nowadays ventures in technology, software and finance. If you are looking for inspiration and success stories then this is your show, but don't be surprised when you find much more.

Find the SuperAgents podcast here.


Just Start Real Estate

8

Do you know what is the best way to eat? Small portions, several times a day. Mike Simmons knows this very well. His podcast is divided into 5 portions throughout the week. Mondays are dedicated to interviews with a successful real estate investor and Tuesday to Friday are reserved for actionable advice and tips. Mike's experienceranges from flipping houses, being a landlord to conducting overseas deals. Considering he has only started a few years ago Mike does impressive job.

Listen to the podcast here.


The Real Estate Insider

The Real Estate Insider

The host of the show is a Canadian real estate veteran and the author of the all-time best-selling real estate book in Canadian history Don R. Campbell. Don is currently with Real Estate Investment Network as Senior Analyst. His podcast offers expert market analysis backed by research.

Hear it for yourself here.


Marketing

The Real Estate Marketing Show

10

If you think you don't need a professional photographer for your listings visit this site. Can we get back to proper marketing solutions now? Good, this audio/video podcast is the place to start. The host, George Cuevas focuses solely on real estate marketing. He has years of expertise to back him up and numerous satisfied clients' testimonials.

Listen to George's valuable tips on video marketing, building online presence, listings marketing and more here.


Real Estate Marketing Guide

11

Ever heard of Referral Marketing, Transactional Marketing, and Cold Marketing? No? Educate yourself now, before it's too late. If you are already familiar with these terms, you should listen to this podcast anyway because there is much more to it. Mike Cuveas runs a marketing training university and is the developer of Attracktor, a real estate marketing training center.

Listen to the Real Estate Marketing Dude here.


Marketing Genius

12

The hosts Matt Barba (Forbes 30 Under 30 Tech Entrepreneur, CEO Placester) and Seth Price (Marketing Strategist, Keynote Speaker) are interesting enough already to make you listen to their podcasts, but if you still in doubt here's a list of their guests: Lisa Archer (CEO of Live Love Homes), Tom Ferry, Eric Simon (Founder of The Broke Agent) and many more.

You can find the podcast here.


Real Estate Uncensored

13

Both tech savvy and inexperienced real estate agents will want to listen to this podcast. A couple of knowledgeable real estate agents from the Bay Area have a lot to say about today's high-tech solutions. Never ever should you think you already know everything, because if Greg and Matt can find valuable content for 3 episodes per week then you need to find 3 hours a week to listen to them. Greg is a 15-year real estate veteran and partner at McDaniel/Callahan Real Estate, his co-host Matt Johnson is also a real estate veteran and CEO at his own PR firm.

Listen to his insights here.


Small Business Big Marketing

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Let's be honest. Most real estate agents run small real estate operations and the marketing budget is nothing exceptional. But that doesn't mean you can't advertise your services. Quite the opposite! The smaller the resources, the bigger the creativity needs to be! Tim Reid's show subtitle reads 'Insanely Effective Marketing Ideas'. So, there you have it. Effective, not expensive. Tim is a marketing veteran, he spent 20 years at couple of Australia's most renowned ad agencies managing clients such as Gillette, Yellow Pages, or Diners Club.

You can listen to his podcast here.


Real Estate Uncut

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"Are you marketing yourself correctly?" asks one of the 'Real Estate Uncut' episodes. And there's no right answer to the question. Something always changes, so never take your strategy for granted and improve it constantly.

Start by listening to the right stuff here.


The Commercial Real Estate Show

15

The Commercial Real Estate Show™ is a weekly one hour show about business and commercial real estate related topics. The show is known for high-quality content delivered in a professional enlightening style. Catch one episode and you’re hooked. This is no infomercial.

 

This is current and actionable market and business intelligence and you can listen to it here.


Commercial Real Estate Podcast

16

100% Canadian. 100% Commercial. Aaron Cameron and Adam Powadiuk will be you your guides through the Canadian Commercial Real Estate. Aaron has 8 years of experience at the Commercial Real Estate department at First National Financial LP and Adam is a Business Development Manager with First National Financial LP, the largest non-bank lender in Canada.

Listen to their show here.


Apartment Building Investing with Michael Blank

17

Michael's commercial real estate podcast will teach you how to invest in apartment buildings and raise money from private individuals. If you are serious about real estate then this is the place to start. Apartment Building Investing is one of those podcasts suitable for those with zero experience. What is more, even for those without money or good credit.

Listen to his podcast here.


Bonus

 

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Richard for CBC News: Foreign home buyers love Toronto for the schools http://torontoism.com/real-estate/2017/02/richard-foreign-toronto http://torontoism.com/real-estate/2017/02/richard-foreign-toronto#comments Mon, 06 Feb 2017 18:37:03 +0000 http://torontoism.com/?p=18586 Richard Silver, a Sotheby's realtor and past Toronto Real Estate Board president who works with foreign buyers, told Metro Morning host Matt Galloway that most of his foreign clients are coming to Toronto for educational and business opportunities, not just to park their money offshore, and that a foreign buyer tax would be a bad idea.

TREB is making a concerted effort to lobby against a possible foreign buyer tax on homes in Ontario, arguing that such a tax would be 'misguided' when just 4.9 per cent of its member agents acted on behalf a foreign buyer in 2016.

But Silver also said TREB's figure significantly understates the proportion of foreign buyers in the GTA, as it only captures home resales — not sales of new construction.

Matt Galloway: Who are the foreign buyers that you're working with?

Richard Silver: You know, it changes. Right now we have been doing a lot of business with Asia, with people from mainland China. What we've done is, we work for a very international company, we've gone out and added people to our team who speak Mandarin. We've gone to Asia three times, I'm about go to Delhi again for a weekend conference in a couple of weeks. You have to go out, you have to meet people, you have to understand their sensitivities, what's driving them to buy.

A lot of it focuses on the education. So having great education in the city of Toronto, both in the post-secondary and secondary, I think is very, very important, because that's what they're looking for.

MG: Language skills are one thing. Going there is something different. What do you learn about who the potential buyers are when you're actually on the ground in those countries?

RS: It's really from the questions. A lot of people have the questions about … they know about Toronto, they know about Vancouver, they want to know which is the city that you should buy in. They want to know mostly about education. Seriously, you have to have an idea of the ratings of all of the private schools, the public schools, the universities. And you can know that those are the locations that people are going to be looking in. It has to be accessible to a university or a private school or a very well-rated public school.

MG: So the belief that you're seeing is that people actually want to live here.

RS: Oh, definitely.

MG: Because in Vancouver, one of the huge problems that people pointed to is that this was essentially money that's being parked offshore, that people were coming, buying properties, the properties are empty, it led to empty neighbourhoods, empty buildings, we've seen this happening all around the world. That's not what you are seeing?

RS: I think that that is probably part of the case, not in the case that we deal with, we deal with people who are really coming here … you know, sometimes we have to decide, what is a foreign buyer? Is a foreign buyer somebody who's already applied for and got their permanent residency? And, is it because they want their children educated in Canada?

We see a lot of husbands continuing to work in mainland China, they send their wife and their children to Toronto so their kids can go to university here. And after university, there's an automatic three-year work permit that goes with being a foreign student in Canada. So that is an option that you wouldn't get in other countries.

MG: So based on that, and the business that you're doing, how much of a presence do you think foreign buyers are in this city's market right now?

RS: Well, remember that the statistic from the Toronto Real Estate Board is about five per cent — they say 4.9 per cent. And I wouldn't disagree with that, in that that is what the agents are dealing with who deal mostly with resale. Toronto Real Estate Board figures are resale buyers. They're not people who are buying new construction.

So I would think that there's also a lot of investment in the new construction. And in that new construction, the buildings that are being built, Toronto Real Estate Board doesn't get that information very much from the builders, it's not reported on the Toronto Real Estate Board. So, I would say there's probably another five to ten per cent there that's definitely foreign buyers.

READ MORE: LOCAL BUYERS OUTNUMBER FOREIGN BUYERS IN NEW CONDO CONSTRUCTIONS

MG: Now this is interesting, because it's a point of dispute. The real estate board in Greater Vancouver said that foreign buyers made up something like four per cent of transactions in that city. Sales have slowed dramatically since the foreign buyers tax came in. So how do you explain that, if it's only four per cent in Vancouver?

RS: Well, I don't think it's dissimilar in Toronto as well, from the board viewpoint, because the board deals with resales, they don't deal with builder projects.

MG: And that's the discrepancy?

RS: And that's the discrepancy, I think. I think if you were to add the two, you'd come up with a higher figure. But the ones the Toronto Real Estate Board deals with, the ones we deal with in our market place, are people who have come basically for schooling. They've come because Toronto is the centre of arts and culture, and they can speak their own language.

MG: What has it done to affordability in this city? Because in Vancouver, people pointed — and this led to accusations of xenophobia and more, but people point the finger and say, 'the market is being torqued because of offshore money coming in.'

RS: Part of the problem is, when you travel around the world and you look at the other G8 countries and you go to the main cities that those countries are led by economically, our prices are very, very low in comparison …

MG: That's cold comfort, though, to people who can't afford to get into our market.

RS: It is, but there's always … I remember buying my first house, I lived in a house and there were seven or eight people living in the house with me, and I bought that house, and they were paying me rent, and it was just one of those things that we did. You need to get into the marketplace at any point, and these days people are getting into the marketplace in condominiums, smaller condominiums.

MG: There have been calls for Ontario to introduce a foreign buyers tax like the one in British Columbia. What would that do to the people that you're working with?

RS: You know, it wouldn't do much, and I think that's the same problem in Vancouver. I think what it will do is, and I think what is happening is, Vancouver and B.C. are going to start feeling the effects of the tax more in terms of building, in terms of construction, in terms of lumber, in terms of finishing, carpentry and everything. I think that is really going to hurt their economy, and it's already starting, they're already starting to see that. I would really not suggest it in Ontario as well.

MG: Are you seeing buyers who are looking at Toronto because of what's happening in B.C.?

RS: Not as much … to me, Vancouver is a completely different city. I always say, Toronto is the place where you come and make your money, Vancouver's where you go and spend your money. You know, it's absolutely beautiful, there's lots of recreation around it. Toronto's a place very focused on business. And I think for certain groups, that's going to be very prominent for them. They want to be where the business is.

ORIGINALLY PUBLISHED ON CBC NEWS

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Toronto Star Clarifies the Confusion Around Foreign Buyers http://torontoism.com/toronto-news/2017/02/clarifies-confusion-foreign http://torontoism.com/toronto-news/2017/02/clarifies-confusion-foreign#comments Fri, 03 Feb 2017 14:10:06 +0000 http://torontoism.com/?p=18577

The Toronto Real Estate Board says 4.9% of transactions involve foreign buyers. But some fear the number is low.

As Toronto area housing prices have soared, so too has conjecture about the role of foreign property buyers in driving up the market.

When the Toronto Real Estate Board (TREB) released data on Tuesday showing only 4.9 per cent of transactions in the region involved offshore buyers, it was presented as proof that a lack of housing supply — not foreign buyers — is behind the region's rocketing market.

But that hasn't stopped the sceptics from questioning the figure.

Those who doubt TREB's findings compare Toronto's situation to Vancouver where they say the real estate industry underestimated the level of foreign ownership until a crisis in housing affordability prompted the government to step in with a tax that appears to have had dramatic results.

Vancouver sales were down about 40 per cent in January, compared to the same month last year. They were 10 per cent below the region's 10-year January average.

Toronto's Realosophy president John Pasalis is among those who fear the Vancouver experience is happening here.

"Most agents' biggest concern is obviously not immigrants. It's the fact that when you have wealthy non-residents using homes as a safety deposit box it's not good,” he said. “It drives up house prices in Toronto and makes everything unaffordable."

If things don't settle down in another year, he fears that local buyers will feel completely cut out of the market because they can't afford to buy anything.

That could fuel the kind of emotional populist movement being seen in the U.S. with the election of President Donald Trump, said Pasalis.

He also doesn't set much store by TREB's Ipsos poll of about 3,500 member agents. That's fewer than 10 per cent of the 47,000 board members — 80 per cent of whom sell fewer than six properties a year, he said.

"What TREB sought to do was get the ball rolling in terms of getting actual information because to date we haven't had any actual empirical information," said Jason Mercer, the board's director of market analysis.

"If you look at the housing market in the GTA today and see the fact that active listings at the end of December 2016 were half of what they were at the end of December 2015, I think it's pretty difficult (not) to say that the real issue underlying price growth is the lack of inventory," Mercer said.

"Our hope is that the results of this survey can certainly provide a benchmark and we'd be happy to see other organizations undertake their own research," said Mercer.

But for now, TREB's 4.9 per cent is the only new number available. The federal government has budgeted $500,000 for Statistics Canada to develop methods for gathering data on foreign ownership. It has also convened a working group of government and the banking and housing sectors in Ontario and B.C.

But there's no word on when any hard numbers will be available. A government spokesperson would only say that the results of the work will be announced once it is finalized.

Property

Ipsos vice-president Sean Simpson isn't entirely surprised that his TREB poll findings are being questioned.

He cites an unrelated Ipsos study that tested the accuracy of Canadians' perceptions of their country. It showed Canadians believed 24 per cent of the population is Muslim. In reality, it is 3 per cent.

The finding that only 4.9 per cent of transactions involved foreign buyers "is in stark contrast to the conjecture and speculation that is out there," said Simpson.

"We build up in our mind that things are a certain way when, in reality, they simply aren't. I think that is the case here with the foreign buyers situation," he said.

He also doesn't believe that the respondents could have skewed their answers, even if they had an interest in keeping the number of foreign transactions low to ward off a potential Vancouver-style tax that might sideswipe the GTA housing market.

"Would they lowball it? I'm not necessarily sure they would know to what end we were asking the questions," he said.

The subject of foreign property investment has gained momentum for the same reason real estate discussions hijack dinner party conversation. It's the craziness of the market, said William Strange, professor of business economics at U of T's Rotman School of Management.

He is glad someone has finally started collecting numbers. But Strange says he has a lot of questions:

  • Would the realtors surveyed necessarily know whether the purchasers were actually overseas buyers, or people moving around the country or region? Would they know where a buyer is in the Canadian immigration process?
  • How many purchases don't involve agents? Many developers wouldn't necessarily use local realtors to market properties to foreign buyers.
  • How do you get a more accurate picture given privacy laws and the reality that many deals are cash, so even mortgage information wouldn't provide a full picture?

And Strange notes there's something contradictory in the real estate board's assertion that the 4.9 per cent is a relatively low number, at the same time it’s warning the number is high enough that a tax or policy intervention could distort the market by affecting communities outside the city or reducing the already scarce supply of Toronto rentals.

Pasalis says 4.9 per cent doesn't reflect what he sees and hears from busy Toronto agents.

One of those is Richard Silver, a Sotheby's agent, who has re-tooled his practice to go after the massive overseas market in China and India. He said that foreign transactions account for 20 to 30 per cent of his business.

His office has introduced Mandarin classes and he is preparing for a trip to India to attend an international real estate conference.

But Silver said the 4.9 per cent for foreign transactions sounds about right, given that most residential agents don't have the same kind of niche business. He stressed that he doesn't believe that foreign ownership will lead to streets of empty homes in the GTA.

"The people who normally come and buy, they're not people who flip. They come and reside in the property and hold it. They're not speculating," said Silver.

"Most of the people we deal with are coming here to live — they're coming here because they're putting their kids through school. It's all about education for the most part."

Originally published on TheStar.com - The Toronto Star website.

Written by Tess Kalinowski.

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Jim Burtnick: Toronto’s Real Estate Continues to be a Safe Investment http://torontoism.com/real-estate/2017/02/burtnick-continues-investment http://torontoism.com/real-estate/2017/02/burtnick-continues-investment#comments Thu, 02 Feb 2017 14:20:11 +0000 http://torontoism.com/?p=18560 For anyone expecting to see a downturn of Toronto’s housing market, the Canada Mortgage and Housing Corporation says 2017 won’t be the year.

At a recent condo seminar held by the CMHC, the group laid forth it’s predictions for the upcoming year. Jim Burtnick, a member of Torontoism, broker and senior vice president at Sotheby's International Realty Canada, was in attendance. He says CMHC is pointing at rising prices and a somewhat dwindling supply, but the health of the market is expected to remain strong.

CMHC sees sales coming in somewhere between 100,000 properties sold and the 113,000 we saw in 2016. Burtnick says that’s not enough to call it a retraction.

Not so much a slow as a maintain-where-it's-at. I mean, the difference between 110,000 and a 113,000 sales is not huge. That is three-thousand less than last year. So almost basically the same and it would be the third straight year where sales were above 100-thousand sales.

Shrinking Vacancy Rates And Condo Bidding Wars

One of the biggest impacts we’ll see in the coming months is on the rental market. CMHC says competition for condo rentals remains high.

"Literally there are people lining up," says Burtnick. "Like if you put a condo out for rent you're getting multiple people bidding on it."

About 80,000 people move to the GTA every year. They come from overseas – Toronto attracts the highest number of immigrants in Canada – or from other provinces like Alberta and Newfoundland & Labrador where the falling price of oil has impacted those economies. That creates a lower vacancy rate.

Currently, as Burtnick points out, the vacancy rate is below one percent. But that could drive more builders into the sector.

A healthy market is somewhere in the neighbourhood of 4 percent. So you're actually seeing some of these pension funds getting into the rental market and they're building new purpose-built rental properties because that's going to give them the kind of ROI on their fund that they need to finance their pensions.

Another of the CMHC’s predictions shows apartment resale inventory is dropping. That can lead to bidding wars, according to Burtnick, because there’s less condo inventory available.

He says that Toronto used to have around a 4-month supply of condos ready for new buyers, now that supply has dwindled to around 1.5. Because there are simply fewer options, people are willing to spend more.

READ MORE: WHO ARE THE CONDO BUYERS IN TORONTO?

Toronto


Affordability And Rising Prices

While prices may not rise as much as they have in the last couple years, they’re still expected to head higher. That creates a problem for many first time homebuyers whose income is outpaced by the price of a new home.

High prices are causing more people to look at the GTA’s suburbs as a viable option for home buying. CMHC shows prices rising in the areas surrounding the downtown core by more than 20 percent, while Toronto-proper–where prices are already high–is expected to see a hike of a little more than 14 percent.

"The city's become so expensive that the only options are outside the core so more people are looking out there and that's driving up the price outside the core," says Burtnick.

The CMHC also shows that high prices throughout the GTA are effectively pushing some would-be buyers out of the market. The downpayment for a home costs more than the average Torontonian makes.

Toronto's becoming a city like Manhattan in New York, where you've got to have a lot of money to be able to afford to live there. They're suggesting that, just based on fundamentals of people's actual income versus the purchase price, it's becoming problematic.

But what the CMHC’s numbers don’t show, according to Burtnick, is an increasing reliance on the Bank of Mom & Dad.

"A lot of parents are helping kids get into the marketplace," says Burtnick. "So even if their income isn't enough to justify the purchase price they're supplying typically a health deposit so they can get a foothold on the real estate market.

There was a period a few years ago when many believed too many buildings were being built. It fed into fears of a bubble in the real estate market. Even today Burtnick says it’s not uncommon for people to point to the number of construction cranes and say the sky is falling.

But if supplies are dwindling to the point that bidding wars are common, or that it’s causing prices to rise so much that the average person simply can’t afford it, shouldn’t that show that we’re not building enough? According to Burtnick, neither is true. When he looks at the CMHC numbers he sees the city growing to fit it needs.

Certainly if you look at the overbuilding aspect, we're not overbuilding in any stretch. We're basically maintaining our natural need based both on immigration and based upon natural birth and death rates.

The reason that prices continue to rise in the GTA, putting even more pressure on buyers, is a lack of supply according to Burtnick. Getting through the approval process for new buildings simply takes too long.

"It’s taking too long for developers to get projects approved and shovels in the ground so that they can provide new inventory."

Students from all over the world seek education in Ontario
Students from all over the world seek education in Ontario

Read more: top 6 universities for international students in ontario

Employment Growth vs. Shrinking Dollar

Looking at the broader picture, Canada’s unemployment rate continues to plummet, but the dollar has also stagnated around 76 cents to the US dollar. Burtnick sees that as a potential boon for Toronto’s housing market.

"What a lower dollar means is certainly Canada becomes more attractive from a point of view of an exchange rate," he said. "So from a foreign point of view it makes us look on sale and relatively inexpensive."

He points out that this could attract foreign buyers, but just as likely their may be Canadian expats looking to return to the market.

"They might see this as an opportunity to get a good bang for the buck, especially if they're getting paid in US dollars."

The tumult south of the border could have a further impact for the region as well. Canadian universities are reporting an influx of applications from the United States. A poll by the Globe and Mail reports a spike of between 20 and 80 percent for the 2017-18 academic year compared to the previous year.

But while it may be easier for students to come here, Burtnick doesn’t anticipate as many people coming looking for jobs.

It's not like they can just come here and start working right away if they need to work. Because you'd have to have a work visa if you're not a Canadian citizen. I think some people are looking for education coming up here. Certainly our education system is a lot more affordable than the US.

Toronto is experiencing influx of new residence not only from foreign countries, but also from other parts of Canada
Toronto is experiencing influx of new residence not only from foreign countries, but also from other parts of Canada

The Interest Rate Question

One of the big questions over the last few years, and one that will continue into 2017, is when will the Bank of Canada raise interest rates? BoC governor Stephen Poloz has intimated that he has no plans to move rates given the unpredictable times we’re living in. But as Burtnick points out, the U.S. Secretary of Treasury Janet Yellen has intimated she could see as many as three rate hikes throughout the year.

That would attract investors to the U.S. bond market and although the Bank of Canada hasn't raised their benchmark rate, for banks to raise money for mortgages they're going to have to offer a better bond rate for people who are putting up the money for these mortgages. So if the US raises their benchmark rate I can see our mortgage rate going up.

Regardless of what happens on the international stage, Toronto’s housing market still looks like a safe investment to many buyers. An equilibrium has been reached between supply and demand that creates opportunity for investors, but still leaves some room for new buyers to join in on the fun.

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International Real Estate: London Has a Tax Problem Too http://torontoism.com/travel/2017/02/international-london-problem http://torontoism.com/travel/2017/02/international-london-problem#comments Wed, 01 Feb 2017 10:29:19 +0000 http://torontoism.com/?p=18532 From the United States to Great Britain, there is a lot of anxiety about the future and that kind of instability can have a strong impact on housing prices around the globe. While the situation South of the border is still too fresh to fully assess the situation, there is much talk of what will happen to real estate in Britain following the country’s decision to leave the European Union.

One recent forecast found that housing prices in the UK will rise between 1 per cent and 4 per cent in 2017, a sharp drawback from 2016 gains. The same forecast also pointed to a possible drop of housing prices in London.

Uncertain Times

In times like this it’s not uncommon for homebuyers to look abroad for more stable options. Canada can often look like an attractive destination for people who want to park their money in a safe and secure economy. Brexit has created uncertainty in the UK, but whether it’s enough to draw people away from a city like London remains to be seen.

Simon Tollit doesn’t think it is.

Tollit, who is a Real Estate Professional in London, England with Sotheby’s International, says there’s more to the story.

It's creating uncertainty, but Brexit is not the reason why the UK and London is seeing a deteriorating property market. That's all down to down to Stamp Duty.


Stamp Duty Land Tax (SDLT) is a government tax home buyers must pay when buying a property. Tollit says if a person buys a property for 1.5 million pounds, they pay 12 per cent on the stamp value. So if the home sells for 10 million pounds–which isn’t unheard of in London–the buyer pays 12 per cent on the total between 1.5 million and 10 million pounds.

"So basically it's made it very, very expensive," said Tollit, who points out that in the last year the government also increased the Stamp tax on additional homes and investment properties a further 3 per cent. Tollit says that’s the main reason housing prices have fallen in London.

Sherille visited Sotheby's International Realty offices in London in December 2016. Simon Tollit is on the left.
Sherille visited Sotheby's International Realty offices in London in December 2016. Simon Tollit is on the left.

Looking Abroad

Sherille Layton was born in the UK but immigrated to Canada with her husband in 1999.

We came here on holiday and just fell in love with Toronto. We applied back then and got our visa within 3 months. In fact, we got our visa I think seven days before 9/11. Now it's taking people three years, so we were very lucky.


The newer visa restrictions may also make it harder for anyone thinking of moving to Canada. But Layton says she attended an immigration summit in December and saw some signs that people were moving here.

I was sitting next to an immigration lawyer and [they said] a lot of people are going through Quebec to get their visas because it's faster. So I think there's definitely a lot of eyes on Canada.

London Is Still London

Tollit has a hard time believing Brexit would be the impetus for anyone moving abroad.

I can't think of one person who said 'right, on the back of Brexit I'm selling. It might be one of many reasons why someone would sell, but it's not a defining reason.


Especially when it comes to international buyers, the appeal of living in London outweighs the potential drawbacks of a post-Brexit world. Some are [concerned about Brexit], but if you're looking for a long-term investment or you're looking for a home, you're going to spend time in London.

He says anyone with business in the city or country isn’t likely to be scared away by the changing political tide.

Guys who've got 5,10 million pounds to spend generally are pretty intelligent, switched-on people by the virtue of the fact they can spend 5, 10 million pounds on a property. So they're not stupid and they're guided by experts. So as long as properties are priced correctly there is still a market.


Sherille agrees, saying the rising cost of living will definitely have an impact on the housing market, but people will always want to live there. Just like the rising cost of living in Toronto is not driving away population, but attracting it.

I think probably the first part of the year people will just try and buy because they don't know what the future is going to be like. Although, anybody that I know still in the UK were quite shocked about the whole Brexit thing.


And while London may be seeing a bit of a dip, people are still buying throughout the country. In fact, another recent study from Halifax points out that the number of first time buyers in the UK reached an all-time high in 2016.

Richard and Sherille in London during The Torontoism Team international trip in December 2016.
Richard and Sherille in London during The Torontoism Team international trip in December 2016.

Still Some Movement

That said, there does appear to be some movement. Whether that’s related to housing prices is hard to say, but Sherille says Toronto remains an attractive market for buyers.

If you look at the Toronto real estate market 2016 was another record year. The average price of a home was 730-thousand dollars. The market increased by 17 percent. And she expects 2017 to be quite similar.

There's a lot of turmoil in terms of the G8 countries. Who knows what's going to happen in the US. England's all over the place. France, Italy. We might look boring but we're pretty steady.


The Torontoism team recently joined the UK-Canada Chamber of Commerce, the 94-year-old non-governmental body that serves as an authority on trade and investment between the two countries. Sherille says they’re reporting a lot of movement between the UK and Canada.

There's been a lot of immigration lawyers becoming members of the Canada Chamber of Commerce, so that would also suggest there's going to be quite a bit of movement this way.

Can you keep up with the fast paced market?
Can you keep up with the fast paced market?

The Road Ahead For The UK

So while you may start hearing a few more English accents over the next few months and years, don’t expect bangers and mash to be added to the top of every menu in the city.

"London is still London," said Tollit.

It's still very much an economic powerhouse and we've still got the time zone, we've still got a good legal system, a fundamentally strong economy, the service sector's good, schools are good. So all of those factors are always going to play into people wanting to live there.

Tollit says Brexit does not signal a doom and gloom scenario for London. The market is simply pausing for breath. After all, the city’s real estate market has grown steadily for the last few years.

You can't have 10, 12 per cent growth year-on-year forever. It's just unsustainable. So it's a cycle we're going through. We've been here before and we'll come out the other side.

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