A year ago we wrote about New Story Charity and what they’re doing to help families in need and their fight to introduce transparency into existing charity models. They built a crowdfunding platform to construct homes for families in the most vulnerable communities around the world.

In 2017, our team donated 6,500 USD for a home to be built for one of the families in the program. Today we got to see who we’re helping!

Our donation is now being transferred to purchase materials and hire workers to build a home for the Madrigal Sanchez family from Totolapan, Mexico. In September 2017, their house was destroyed after an earthquake of 7.1 magnitude hit the entire state of Morelos, Mexico. Thousands of other homes were destroyed and many people lost their lives and loved ones. Since then, Gabriel and her mother Juana Madrigal Sanchez have been living in temporary housing, but soon they will be getting a new home and a fresh start.

New Story Charity is doing an amazing job, so please consider donating to this great cause. You can donate here and help someone to start writing their new story.

Condominiums continue to be hot sellers in Toronto. While the market for single family homes show signs of cooling, the condo market continues to be relatively strong – particular when it comes to luxury condos. In Toronto, condo units priced between $2 million and $4 million saw a 12% gain in the number of sales in 2018, according to the latest data from the Toronto Real Estate Board (TREB). This means that condos continue to be a good investment – either as a primary residence or rental property.

And the condo market promises to remain red hot in 2019 with a number of new and exciting developments coming online throughout the city. Whether you want to live downtown among the hustle and bustle or further out close to green spaces, there is a new condo development to suit your needs and tastes, as well as your budget. Price ranges for condos vary, making them affordable on any salary. Here are five upcoming developments you should know about:

875 Queen East Condos

Address: 875 Queen Street East
Price: from $700,000
Website: 875queeneast.com

If you’re looking for a trendy downtown condo, then be sure to check out the development at 875 Queen Street. Not only is this seven storey residence situated in the heart of the city, it overlooks vibrant Queen Street East which is always bustling with activity and in the centre of the action. The development features urban, loft-inspired boutique condominiums available with either one or two bedrooms. The sizes of the condos range from 715 square feet to more than 1,100 square feet. And each unit comes with one parking space. Penthouse level suites feature terraces with plenty of space for entertaining. Terraces also come with barbecue gas bibs. Priced in the high $700,000 range.

346 Davenport Road

Address: 346 Davenport Road
Price: over $1 million
Website: www.346davenport.com

For truly high-end luxury, look no further than the condo development at 346 Davenport Road, which opened in January of this year. Located just west of the prestigious Yorkville and of Forest Hill neighbourhoods, this is an elite set of luxury suites. Tennants will enjoy 10-foot high floor to ceiling windows that provide panoramic views of Toronto. Balconies are huge at as much as 3,061 square feet and overlook Yorkville and the Toronto skyline. Two and three bedroom units are available and range from 1,500 – 2,700 square feet of open concept living space. Spa bathrooms are outfitted with natural stone countertops and ceiling mounted rain shower-heads. Note though that this condo development is not for price-conscious consumers. Prices per unit are over $1 million.

7 On The Park Condos

Address: Keele Street and Lawrence Avenue West
Price: $400,000+
Website: 7onthepark.com

Further north in the city is the 7 On The Park Condos, a pre-construction development located at the intersection of Keele Street and Lawrence Avenue West in the North York region. With easy access to transit and only steps from grocery stores, shops and services, including Walmart, this could be an ideal location for a family. Overlooking Amesbury Park, which has 30 acres of greenspace, this development will also have a fully-equipped fitness centre and a multipurpose entertaining facility. Bordering the park is the Amesbury Community Centre and a large sports complex, making 7 on the Park an attractive option for recreation. Two and three bedroom units are available to purchase ranging in size from 672 to 950 square feet. Priced starting in the low $400,000 range.

The Logan Residences

Address: 899 Queen Street East
Price: $500,000+
Website: loganresidence.ca

If high-rises are not your thing, then you may want to consider the low rise luxury condos at the Logan Residences at 899 Queen Street East. Set for occupancy later this year, the Logan Residences is only six storeys high and has just 73 units. The building blends in with the streetscape, which is full of shops and restaurants. Retail space on the ground floor is an added plus. Inside, residents enjoy a gym, meeting rooms and even a dog wash station. There is also 2,000 square feet of outdoor space on the roof that is available to all occupants. One, two and three bedroom units are available in sizes ranging from 611 to 1,161 square feet. Priced in the high $500,000 range.

Avenue 151 Yorkville Condos

Address: 151 Avenue Road
Price: from $800,000
Website: avenue151yorkville.com

For exclusivity, there is the Avenue 151 Yorkville Condos, which are situated in the heart of the luxurious Yorkville neighbourhood and features boutique units. Set at the corner of Avenue and Davenport Roads in the centre of Toronto, this development contains 72 luxury condominium suites with square footage ranging from 651 to 2,666 sq. ft. High-end details in the building include an airy white and glass façade with gold-hued trim and wrap-around terraces. The entrance features a marble lobby with a fireplace and 24-hour concierge service to welcome residents and guests. High-end kitchens add to the glamourous feeling. Priced in the low $800,000 range.

To learn more about these condominium developments, or any other real estate in the Greater Toronto Area, please contact our office. We’re always happy to meet new clients and provide helpful advice.

 Congratulations to our own Jim Burtnick who was the recipient of the BNI Leadership Award on February 20th, 2019. Business Network International has 233,000 members around the World.

If you’re looking to buy your first property or possibly to invest in one, you’ll likely look into buying a condo. There are many major decisions to make in the condo-buying process. One is whether to purchase a pre-construction or a resale. Either option comes with its own pros and cons, and the pre-construction vs resale condos debate remains a hot topic among realtors and home buyers.

This article breaks down both the benefits and cons of purchasing either a pre-construction or a resale unit. It also articulates some other factors to look for when buying a condo.

The benefits and cons of a pre-construction

Pre-construction buildings have many benefits versus their older counterparts. The first involves the beauty of a new building. The newness provides buyers with the opportunity to customize the cabinetry and appliances of the apartment at the sales office before the building is even built. Also owing to the building’s newness, appliances are more energy efficient and the aesthetics of the building are modern. Everything, from the toilets to the countertops, should last 15-20 years simply because it’s brand new. However, if you move in before the condo is completely done, you’ll have to endure noisy living environments filled with the sound of drilling and hammering. Furthermore, for those looking to move in fast, developments are frequently plagued with delays that can go on for months or years.

There are financial benefits to buying a pre-construction. Pre-constructions are usually cheaper than resale properties. This is due to numerous factors such as the need to secure early buyers to help the builder secure financing from lenders and to compensate for potential delays or cancellations.

However, this isn’t currently the case with Toronto. Jim Burtnick, Senior Vice-President of Sales at Sotheby International Realty Canada, notes that pre-construction properties in Toronto over the past few years have gotten more expensive than resale units due to increased costs of land, construction material, and for acquiring building permits from the city. Burtnick also factors in increased competition for the high cost of pre-construction units:

In new constructions, you’re competing against a lot of foreign buyers, specifically Chinese buyers, who aren’t necessarily looking for the best sort of value in a place to live. They’re looking to land bank some money. [These buyers] have different reasons for only looking at pre-constructions, as compared to people who are local or are planning to live here.

Garden District Development

One of the reasons that foreign buyers gravitate towards pre-constructions is because of their payment structure, which is made in installments (as opposed to a lump sum with the help of a mortgage).

Because a pre-construction property is paid in installments, foreign buyers are able to pay their deposit and installments to get money out of the country.

So for, specifically Chinese buyers, who can only take out a certain amount of money every year from China, pre-construction properties are a convenient way to bank money outside of their home country.

The benefits of this payment structure also extend to Canadians. You’re only required to pay the deposit and the installments (typically equivalent to 20% of the price) to secure the purchase price and the unit while the building is under construction. You typically won’t even need a mortgage until you move in.

An example deposit structure can be:

• $2000 with the offer
• 5% of purchase price in the first 30 days
• Another 5% of purchase price in 90 days
• Another 5% of purchase price in 180 days
• Another 5% of purchase price upon occupancy.

To those who cannot afford a 20% down payment immediately, a pre-construction’s payment structure can be tempting.

The glitz and glamour of building models and floor plans can sweep most buyers off their feet, but what you see in the sales office aren’t always what you get as an end product.

If you read the fine print of your document, a lot of the things [in the model units] are upgrades or the builder has the prerogative to change how the finishings will be. The agreement is written totally in the builder’s favour, as opposed to a resale, where you get full disclosure on what you’re buying.

The One Bloor Street

The benefits and cons of a resale

Despite some downsides, it’s hard to resist buying into a pre-construction building, but Burtnick feels that resale condos are the way to go:

[Resale condos] is where the best value is. Because pre-construction units now cost more than existing resale units do, you’re banking on the idea that prices will continue to rise. If you buy a resale, however, you’re paying less and you’re paying today’s market value—not some future and hoped-for value.

Beyond price, resale buildings owe plenty of their benefits to not being new. They’ve been up and running for a while and have developed a reliable staff, property manager, and Board of Directors. There’s also a reserve fund that has been contributed to, and the occupants of the building are known. In a resale property, you’re provided with a status certificate that states how many units are renters and how many are owners. This information is something unknown to those buying a pre-construction unit.

The fact that resale condos are already built also means that you can move in immediately. And it’s a lot easier to see what the apartment looks like when you can visit it in person instead of looking at 3D-rendered models and floor plans. But because you’re buying from another person, there’s a potential for bidding wars—something you won’t see when going to a builder’s sales office.

Even despite the pretty and new amenities promised by the pre-construction condos, Burtnick argues that resale units are still the more livable of the two:

If you’re buying into an older building, you’re getting good sized rooms, as compared to new buildings which are much smaller. Some [new buildings] are fitting three rooms into less than 900 sq ft. I compare it to buying a brand new car, where you lose 30% of its value because you bought it new. You’re paying a premium for that new condo smell.

2181 Yonge St #1411 Balcony

The other factors

Whether you decide on a pre-construction or resale, remember that there are other factors to consider:

Location is everything. And as the city gets more congested, the walkability to various amenities, be it schools, subways, shopping, and green space, are always going to be more relevant to what unit you buy.

Additionally, developers are important too. With the booming condo market, new players are constantly jumping in. Burtnick advises that:

It’s better to go with an established player who knows what they’re doing than to pay for someone else’s mistakes.

We are currently in the midst of the greatest generational wealth transfer in the history of the world. Economists and financial observers estimate that the Baby Boomer generation has a collective net worth of US$30 trillion – more than any previous generation. And much of that money will be transferred to children and grandchildren. Economists are calling this shift of financial assets the “great wealth transfer.” And it will likely impact people younger people who are now entering the workforce, getting married and settling down.

Many Baby Boomers may look for creative ways to transfer their wealth to their children and grandchildren. They may consider factors such as return on investment, interest rates and time horizons when figuring out the best way to enrich their heirs. And one of the best investments continues to be real estate.

Few assets build equity and appreciate as well as real estate – particularly in the Greater Toronto Area (GTA). Even in slow times, house prices in the GTA continue to appreciate by more than 3 per cent a year, according to the Toronto Real Estate Board. A 2018 report by one of the largest brokerages in Canada (RE/MAX) found that Toronto-area home prices increased 119% between 2007 and 2017. The average price of a home in the GTA in 2007 was $376,236. Today, the average home price in the GTA is $822,681, according to the report.

Add to this more stringent requirements for securing a mortgage from a bank, and, for many people, getting money from their parents or grandparents for a downpayment on a house is the best chance they have for entering today’s residential real estate market. New federal guidelines require all federally regulated financial institutions, including Canada’s big six banks, to vet borrowers’ applications using a minimum qualifying rate equal to the greater of the Bank of Canada’s five-year benchmark rate (currently 5.34%) or their contractual rate, plus two additional percentage points.

2 Pine Ridge Drive

“Young people today are finding it extremely difficult to become homeowners,” says Jim Burtnick, Senior Vice President of Sales at Sotheby’s Realty in Toronto:

Not only are prices out of reach for many young adults, but the stress tests today are more difficult than ever before. Help from parents can go a long way.

But while helping your kids get into the real estate market with a financial gift is a wonderful gesture, withdrawing money from the bank of mom and dad is not without risks. There are many things to consider before placing a bet on your children and the housing market. Here are five important tips for purchasing real estate through the bank of mom and dad.

1. Make a long-term investment

For any real estate transaction to yield a solid financial return, it needs to be a long-term investment. It is therefore important that your children not place the money you give them on a short-term residence. Buying a property and then selling it in two or three years is not a smart move. Make sure that if you give your children money to buy a house or condominium that they plan to live there for a minimum of five to 10 years. That will be sufficient time for equity to build up as they pay down a mortgage, and for the value of the property to appreciate substantially.

2. Consider the location

It is a cliché, but location continues to be one of the most important factors when purchasing real estate. In many cases, it remains the most important factor. Not only does the location of a property dictate how much it will appreciate, but it can also determine how long it will take to sell in the event that your children decide to move. As a rule, properties in Toronto proper, or within the 416 area code, tend to sell easier and quicker than real estate in the 905 suburban regions. Give consideration to the location of a house or condo that your children are considering buying and that you may be helping to pay for, and, if needed, steer them towards a more established and desirable neighbourhood.

434 Sackville Street

3. Buy a condo in an established building

If your children or grandchildren are considering purchasing a condo, it is best to choose one that is located in an established building rather than buying a condo “on spec” that has yet to be built. Condos in established buildings already have a track record and have settled many of the issues that tend to arise with brand new condos, such as repairs and finishes that often need to be completed with the builder; creating a condo board; setting condo fees and so on.

These headaches are often out of the way in condo buildings that have been around for three to five years. Also, purchasing a condo that’s a few years old means you can be sure it has been built and is move-in ready. With condos that have not been built yet, you run the risk of the builder going belly-up before the building is completed. This unfortunate situation continues to happen more often than it should.

4. Treat the financial gift as a business transaction

Many parents worry about the complications that can arise when family and business become entangled. Parents may also worry about what could happen if they help a child purchase a property with their spouse and they later divorce. One way to alleviate such concerns is to treat any financial gift given for the purchase of a house or condo as a business transaction between yourself and your child. For example, you could give money for a house down payment as a loan rather than a gift. You could make arrangements for that loan to be paid back within a certain time frame and with interest.

You could also jointly purchase a property with your child and their spouse, placing your name on the mortgage documents as well. Or, you and your child could purchase a house together as a rental property – with your child living in the house while renting out part of it and sharing the rental income with you. There are many ways to structure a house purchase as a business transaction, and some favourable tax implications for doing so. Eligible home buyers in Canada may receive a tax credit of up to $750, and may also qualify for a rebate for some of the taxes paid on a home purchase.

5. Take out a second mortgage

In the right situation, it might be advisable to use a second mortgage to secure the money to give a child or grandchild for a house down payment. A second mortgage is when you borrow against the equity in your house to fund other projects or expenditures. The advantage of a second mortgage is that you would be on the title and have control over the property purchased by your child.

Home equity loans also tend to have more favourable interest rates and more flexible repayment plans that loans taken out on credit cards or with unsecured lines of credits. Keep in mind that there are costs associated with second mortgages, including appraisal fees, costs to run a credit check and origination fees. Taken together, these fees can cost as much as $1,000 or more. However, you can negotiate with a bank and may be able to have some, or all, of these fees waived.

Samuel Chinniah, Senior Vice President of Family Office Services, at T.E. Wealth in Toronto says:

A second mortgage is a simple and easy way to give money to a child while retaining some oversight of the transaction.

Using your wealth to help your children and grandchildren is one of the best things you can do. And real estate remains one of the very best investments. Giving your heirs a down payment to purchase a house, condo or property can be a solid financial decision. But be sure to give consideration to the risks involved and think of the best way to structure such a wealth transfer.

JB00KV

In the past few years, Automated Valuation Modelling has become very popular within the Real Estate Industry. Appraisers started using AVM’s to assess the value of a residential property rather than going out and doing a full inspection of the property as happened in earlier years.

Zillow, which has come to the Canadian market, has been providing “Zestimate’s” for years as did Zoocasa. Sometimes value is understated and sometimes overstated causing some Real Estate firms wanting the data directly from the Real Estate Boards released so that they have another source with up-to-date information that could be added to the mix in the AVM.

A Realtor does have access to Land Registry information and Municipal Data through payment to companies like MPAC (Municipal Property Assessment Corporation) and Teranet, but more and more you will see more public options for a seller who is interested in knowing the value of their home and be able to access that information electronically without speaking to a Realtor.

See the form below, just enter your address and the AVM will give you a range of value that your house will fall into. If you are interested, please try it and let us know if the valuation is close to what your thoughts about your property would be…

FREE HOME EVALUATION FORM

If you want a more accurate assessment we would be happy to research and inspect your property and give you a Comparative Market Analysis that would also give you our thoughts on the kind of pricing you could expect in Today’s marketplace. Remember always that either an AVM or a CMA is very time specific as the market changes and fluctuates.

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