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TRREB Applauds Ontario's New Measures for Fair Property Taxation and Housing Supply

On October 30, 2024, the Toronto Regional Real Estate Board (TRREB) expressed strong support for the Ontario government's recent initiatives aimed at creating a fairer property tax system and increasing housing supply across the province. Announced in the 2024 Fall Economic Statement, these measures are a significant step towards addressing the pressing housing needs in Ontario.

Fairness in Property Taxation

TRREB has long championed the cause of tax fairness for homeowners in Ontario. The government’s ongoing review of the property assessment and taxation system promises to prioritize fairness, affordability, and competitiveness for businesses. This aligns perfectly with TRREB’s mission to advocate for a more equitable tax environment for residents. To contribute further to this dialogue, TRREB is currently developing new research to support the government's consultations.

Focusing on Housing Supply

The issue of housing supply remains a top priority for TRREB, and the board is eager for the province to continue its focus in this area. A diverse range of residential units—including student housing, long-term care facilities, and retirement homes—is essential to meet the needs of Ontario’s expanding population. TRREB is committed to public policy solutions that not only boost housing supply but also enhance affordability for home buyers. The ambitious target of 1.5 million new homes by 2031 is one that TRREB is excited to help achieve in collaboration with Minister Calandra and Premier Ford.

Combating Financial Crimes in Real Estate

Another significant measure welcomed by TRREB is the government's consideration of a beneficial ownership registry. This registry would require private corporations to disclose information about their beneficial owners, acting as a crucial tool in the fight against financial crimes such as money laundering and tax evasion in the real estate sector. By empowering law enforcement with the information needed to detect and prevent illegal activities, this initiative aims to protect Ontario’s real estate market and safeguard consumers.

Conclusion

As Canada’s largest real estate board, with over 75,000 residential and commercial professionals, TRREB is committed to connecting people, property, and communities. The recent measures from the Ontario government represent a positive step towards achieving a fairer and more sustainable housing market in the province. TRREB looks forward to collaborating with government officials to ensure these initiatives lead to meaningful improvements for all Ontarians.

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Modernizing Real Estate in Ontario: OREA's Vision for a Stronger Market

The Ontario Real Estate Association (OREA) is taking significant steps to modernize real estate regulations in the province. In a recent whitepaper, titled Continuing to Raise the Bar for Real Estate in Ontario, OREA has outlined nine key policy recommendations aimed at enhancing consumer protections, improving professional standards, and closing loopholes in the current legislation. As Ontario’s real estate landscape evolves, these proposed changes are crucial for fostering a more transparent and trustworthy market.

Addressing the Auctioneer Exemption Loophole

One of the most pressing issues highlighted by OREA is the so-called "auctioneer exemption loophole." Currently, auctioneers can facilitate real estate sales without adhering to the same regulations that govern licensed agents, creating a disparity in consumer protection. OREA is advocating for these auctioneers to fall under the oversight of the Real Estate Council of Ontario (RECO), ensuring that all real estate transactions are held to the same ethical standards. Rick Kedzior, OREA's 2024 president, emphasized the need to eliminate this two-tiered system, stating, “We need to ensure all real estate transactions adhere to the same standards and oversight.”

Mandatory Disclosure for Hidden Defects

Another pivotal recommendation involves mandatory disclosure of latent defects—hidden issues like foundation cracks that can lead to costly repairs for unsuspecting buyers. By requiring sellers to disclose these details, OREA aims to promote transparency and help buyers make informed decisions, similar to practices already in place in New York and Quebec.

Clarity in Guaranteed Sales Programs

To further protect consumers, OREA is proposing clearer disclosure rules for guaranteed sales programs. These programs can be beneficial, but they often come with complex terms that may catch sellers off guard. Enhanced transparency would ensure that sellers fully understand the implications of these agreements, safeguarding them from unexpected fees or conditions.

Strengthening Agent Training and Specialization

OREA is also focused on enhancing the quality of real estate education. The association suggests implementing a two-year mentorship and articling requirement for new agents, allowing them to gain hands-on experience and better prepare for the challenges of the industry. A recent survey revealed that two-thirds of Ontario REALTORS® feel that existing training lacks practical components, making this recommendation vital for the future of the profession.

Additionally, OREA is pushing for specialty certifications, allowing agents to market themselves as experts in niche areas such as commercial or agricultural properties. This initiative would align Ontario with other provinces that recognize specialization, fostering consumer confidence in the expertise of agents.

Enforcing Stronger Penalties for Ethical Breaches

To reinforce ethical practices within the industry, OREA is advocating for a system of administrative penalties for minor infractions. This approach would enable RECO to allocate more resources to serious cases by streamlining the disciplinary process for less severe violations. Furthermore, OREA proposes a “disgorgement” policy, requiring agents found guilty of unethical practices to return profits gained from such activities to affected consumers.

A Call for Change

The proposed measures reflect a comprehensive strategy to elevate professional standards and protect consumers in Ontario’s real estate market. OREA's call for an extended cooling-off period for agents whose registrations have been revoked due to serious breaches highlights the commitment to accountability within the industry.

As Ontario navigates the complexities of its real estate landscape, implementing OREA's recommendations could pave the way for a more transparent, ethical, and consumer-friendly market. By embracing these changes, the Ontario government has a unique opportunity to strengthen real estate for generations to come.

For those interested in staying informed on these developments and the latest in Canada's mortgage and housing markets, signing up for a daily newsletter could be invaluable. Together, we can foster a real estate environment that prioritizes integrity and transparency, ensuring a brighter future for buyers, sellers, and agents alike.

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Young Canadians and the Housing Market: A Shift in Ownership Trends

In recent years, the Canadian housing landscape has undergone significant changes, particularly for younger generations. A new report from Scotiabank reveals that while the percentage of young Canadians owning homes has sharply declined, there remains a strong desire among them to enter the housing market in the near future.

According to the poll, the rate of home ownership among Canadians aged 18 to 34 has fallen dramatically from 47% in 2021 to just 26% today. This shift reflects the growing challenges faced by millennials and Gen Z in securing their own homes, with many finding it increasingly difficult to navigate a competitive and costly real estate environment.

Interestingly, the survey also highlights a notable increase in the number of young adults living with their parents or family. Currently, around 29% of those aged 18 to 34 are in this situation, up from roughly 20% three years ago. This trend underscores the financial pressures that many young Canadians are facing, prompting a reconsideration of traditional milestones like home ownership.

Despite these hurdles, the desire to buy remains strong. The report indicates that 58% of non-homeowners aged 18 to 43 are planning to purchase a home within the next five years. This determination suggests that while the path to home ownership may be fraught with challenges, many young Canadians are still optimistic about their prospects.

One significant finding from the survey is the “confidence gap” in the homebuying process. Many young Canadians express a need for clearer information and support from financial institutions. Specifically, 63% of Gen Z respondents and 54% of millennials indicated that they would benefit from more guidance when it comes to understanding the complexities of buying a home.

As the housing market continues to evolve, it is crucial for financial institutions and policymakers to recognize these concerns. By providing accessible information and tailored support, they can help bridge the confidence gap and empower young Canadians to achieve their homeownership dreams.

In conclusion, while fewer young Canadians currently own homes, their aspirations remain strong. As we move forward, it will be vital to address the barriers they face and equip them with the tools needed to navigate the challenging housing market. With the right support, the dream of home ownership can still become a reality for many young Canadians in the years to come.

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The Toronto Condo Market: Navigating an Unprecedented Slump

The Greater Toronto and Hamilton Area (GTHA) is witnessing a significant downturn in its condo market, with new sales hitting a near-30-year low. A recent report by Urbanation Inc. reveals that only 567 new condos were sold in the third quarter of 2024, reflecting an astonishing 81% decline compared to the same period last year. This trend marks a dramatic shift for a sector that has long been a cornerstone of Toronto's real estate landscape.

A Deepening Decline

The numbers speak volumes: in the first nine months of 2024, condo sales plummeted by 63% from the previous year and are 84% lower than in 2021. This downturn is not just a temporary dip; it suggests that 2024 could be the slowest year for condo sales since 1996. The driving force behind this decline is primarily the exit of investors from the market, which traditionally has fueled condo sales in the region.

High Costs and Investor Retreat

Davelle Morrison, a broker at Bosley Real Estate Ltd., highlights high interest rates as a major barrier for builders trying to finance new projects. Currently, there are nearly 89,000 condos under construction, but this number is the lowest in over three years. Coupled with soaring costs for new constructions—where preconstruction condos are priced between $1,300 to $1,600 per square foot—many buyers are opting for more affordable resale options priced between $900 to $1,100 per square foot.

Morrison poses a critical question: why pay more for a preconstruction unit when you can purchase a resale condo and see exactly what you're getting? This consumer mindset is further fueling the slowdown in new condo sales.

Inventory Challenges

The recent market shift saw a slight decrease in unsold new condos, dropping from a record high of 25,018 units to 23,918 units—a decline of 4.4%. However, the overall inventory remains concerning, with unsold units up by 16% compared to last year. This oversupply not only diminishes demand but may also prompt potential buyers to postpone their purchases, creating a vicious cycle of stagnation.

The limited new project launches further exacerbate this situation. Only one new project with 177 units was introduced in the third quarter, leaving buyers with fewer options. Moreover, many unsold condos require significant deposits (often at least 20%), which can deter interested buyers.

Economic Pressures and Project Delays

The current economic climate poses additional challenges. High interest rates, rising construction costs, and sluggish sales have created a perfect storm for builders and investors alike. Some developers have even shifted previously planned projects to rental properties or have paused developments entirely. In the third quarter, three projects with a total of 1,111 units were converted to rentals, and another 2,231 units faced delays or cancellations.

Looking Ahead

Despite the bleak outlook, there are signs that conditions may gradually improve. Analysts anticipate that as developers reduce supply and interest rates begin to decline, the market could stabilize. However, the path to recovery will depend heavily on broader economic factors and the willingness of buyers to re-enter the market.

In summary, the Toronto condo sector is navigating a challenging landscape characterized by high costs, dwindling investor interest, and an oversupply of unsold units. While the future remains uncertain, stakeholders will be watching closely for any signs of recovery in this vital segment of the real estate market.

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What the Bank of Canada’s Rate Cut Means for Real Estate

On October 23, 2024, the Bank of Canada made headlines by cutting its key policy rate by 50 basis points to 3.75%. This significant move is the fourth consecutive cut since June and reflects a shift in focus from reducing inflation to maintaining a target inflation rate of 2%. But what does this mean for the real estate market?

A Potential Boost for Homebuyers

Experts believe that this rate cut could ignite activity in the sluggish Canadian housing market. Phil Soper, president and CEO of Royal LePage, noted that elevated borrowing costs have kept many potential buyers on the sidelines. However, this aggressive cut could change that quickly. “With every cut to the overnight lending rate, more homebuyers are expected to come off of the sidelines,” he said, predicting a rise in demand that could drive home prices up.

Timing Is Everything

Victor Tran from RATESDOTCA highlighted a key concern: many buyers may wait for the final rate decision of the year before making a move. Buyers are hesitant to jump in until they feel the market has stabilized. “While this will likely encourage some buyers to enter the market, it’s likely that many will wait,” he explained, underscoring the uncertainty surrounding market timing.

Favorable Conditions for Buyers

Leah Zlatkin, a licensed mortgage broker, expressed optimism about the current market conditions. She pointed out that the combination of a rate cut and upcoming mortgage rule changes in December presents an excellent opportunity for buyers. “With an abundance of properties available, the current market conditions are exceptionally favorable for potential homebuyers,” she said. However, she cautioned that those waiting for further rate cuts may find themselves facing a hotter market soon.

Gradual Recovery Expected

While the recent cut is a step in the right direction, some experts, like Clay Jarvis from NerdWallet Canada, suggest that we may not see a dramatic resurgence in home sales right away. Many buyers still face challenges due to stress tests and may need more time before they can qualify for mortgages. If buyers in larger markets delay their purchases until the new insured mortgage rules take effect, the market may not see a significant uptick until later this year.

Looking Ahead

As we look forward, Alana Riley from IG Wealth Management anticipates further cuts in 2024 and 2025, which could help ease the burden of higher renewal rates for homeowners. She pointed out that shelter price inflation, largely driven by rent and mortgage costs, continues to be a significant factor in personal budgets.

A Shift in Buyer Psychology

The overall sentiment in the market could shift quickly if there’s a noticeable uptick in sales or prices. Tran suggests that such a shift may lead to a bustling winter and spring season. “Once the market begins to move, it’s likely to heat up quickly,” he warned.

Positive News for Homeowners

For homeowners facing mortgage renewals in the near future, the rate cut is welcome news. While renewal rates may still be higher than current rates, they’re expected to be more manageable than they would have been at the beginning of the easing cycle. This reduction in borrowing costs means that homeowners with variable-rate mortgages will see either lower monthly payments or a larger portion of their payments going toward the principal.

Conclusion

The Bank of Canada’s recent rate cut signals a potential turning point for the real estate market. While some buyers may hesitate, the combination of favorable conditions and upcoming rule changes could create an exciting opportunity for those ready to enter the market. As always, staying informed and understanding market dynamics will be key for prospective buyers in the months ahead.

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Bank of Canada Lowers Policy Rate: What You Need to Know

Date: October 23, 2024

In a significant move to support the Canadian economy, the Bank of Canada has announced a reduction in its target overnight rate by 50 basis points, bringing it down to 3¾%. This decision aims to bolster economic growth while keeping inflation in check, with the current Bank Rate now set at 4% and the deposit rate also at 3¾%.

Economic Context

The global economic outlook remains cautiously optimistic, with expectations of a 3% growth rate over the next two years. Notably, the U.S. economy is projected to perform better than earlier predictions, while growth in China appears subdued. The euro area has shown signs of weakness but is expected to recover modestly in the coming year.

In Canada, the economy has shown a growth rate of around 2% in the first half of 2024, with a forecasted slowdown to 1¾% in the second half. Despite a rise in consumption, it’s worth noting that consumption per person has been declining. Positive factors, such as the opening of the Trans Mountain Expansion pipeline, have helped boost exports. However, the labour market continues to face challenges, with the unemployment rate sitting at 6.5% as of September.

Inflation Trends

One of the most noteworthy developments is the significant decline in the consumer price index (CPI) inflation, which fell from 2.7% in June to 1.6% in September. While shelter costs remain high, they are beginning to ease, and the overall excess supply in the economy has contributed to lower prices for many goods and services. A decrease in global oil prices has further helped reduce gasoline prices, aiding in the overall decline of inflation.

The Bank's core inflation measures are now below 2½%, indicating that inflationary pressures are no longer as widespread. With the current inflation rate approaching the 2% target, the Governing Council believes that this rate cut will foster economic growth while stabilizing prices.

Looking Ahead

The Bank of Canada forecasts GDP growth of 1.2% in 2024, rising to 2.1% in 2025 and 2.3% in 2026, as the economy gradually strengthens and excess supply is absorbed. Key drivers for this growth include a gradual increase in consumer spending, rising residential investment, and a rebound in business investment as demand picks up.

Moving forward, the Bank has indicated that further reductions in the policy rate may occur, contingent upon economic conditions and inflation trends. The next scheduled announcement regarding the overnight rate target is set for December 11, 2024, with a comprehensive economic outlook to be released on January 29, 2025.

Conclusion

This recent rate cut is a strategic move by the Bank of Canada aimed at stimulating economic growth while keeping inflation within target levels. As we navigate these changing economic waters, it will be essential for businesses and consumers to stay informed about potential implications for borrowing, spending, and overall economic health.

Stay tuned for more updates and insights as the situation evolves!

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Canadian Home Sales Show Signs of Recovery Following Rate Cuts

The Canadian housing market is experiencing a subtle yet promising rebound following the Bank of Canada's third interest rate cut of 2024. According to the latest monthly housing market report, home sales across Canada rose by 1.9% in September compared to August, marking the highest sales level since July 2023. This increase continues a trend observed after the previous rate cuts, indicating that lower borrowing costs may be enticing more buyers into the market.

Key Highlights from September 2024

  • Sales Activity: National home sales climbed 1.9% month-over-month, reflecting a 6.9% increase compared to September 2023.

  • New Listings: The number of new listings surged by 4.9% from August, suggesting a greater supply for potential buyers.

  • Home Prices: The MLS® Home Price Index (HPI) saw a slight uptick of 0.1% month-over-month, though it remains 3.3% lower than last year. The national average sale price rose to $669,630, a 2.1% increase year-over-year.

The upward momentum in sales is primarily driven by key regions, including the Greater Toronto Area, Montreal, and Greater Vancouver, which have shown significant activity. Shaun Cathcart, CREA’s Senior Economist, noted that while these sales gains might not dominate headlines, they reflect a consistent pattern of recovery following the interest rate cuts.

Inventory and Market Dynamics

While sales increased, new listings outpaced them, leading to a slight dip in the national sales-to-new listings ratio, which fell to 51.3%. This ratio indicates a balanced market, but it also suggests that many buyers may be waiting for more favorable conditions before making a purchase.

As of the end of September, there were 185,427 properties listed for sale, an increase of 16.8% year-over-year, although this figure remains below historical averages. The inventory level stood at 4.1 months, still within a range that leans towards a balanced market.

Looking Ahead

The market appears poised for further adjustments as the Bank of Canada is expected to implement additional rate cuts in the near future. This could motivate more buyers to act quickly, especially with predictions of a robust spring market in 2025. James Mabey, CREA Chair, emphasizes the importance of connecting with a local REALTOR® whether you're looking to buy or sell, especially as the market dynamics evolve.

As we move into the colder months, potential buyers may find themselves in a position to negotiate better deals, while sellers could benefit from the increased inventory as they prepare for the spring surge.

The next CREA statistics package is scheduled for release on November 15, 2024, which will provide further insights into the evolving landscape of the Canadian housing market.

Conclusion

In summary, while the Canadian housing market is showing signs of life post-rate cuts, the coming months will be critical. Buyers and sellers alike should stay informed and consider their strategies carefully as we approach what is anticipated to be a lively market in 2025.

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New property listed in Burlington

I have listed a new property at 360 NORTH SHORE Boulevard East in Burlington. See details here

This exquisite 4+2 bedroom, 3+1 bathroom bungalow in Burlington's Aldershot neighborhood is a true masterpiece, boasting over 3,300 sq ft of refined living space. Enjoy a gourmet kitchen, beautifully updated bathrooms with heated floors, rich hardwood throughout, a cozy gas fireplace, and elegant wainscoting. The bright, fully finished basement offers even more versatility. Set on a generous 143x145 ft lot, this outdoor oasis is perfect for nature lovers—unwind in the hot tub, take in stunning bay views, or indulge in private lake access ideal for canoeing and other watersports. Located right next to the esteemed Burlington Golf and Country Club, you’ll find yourself just minutes away from local shops, highways, La Salle Park, and a quick 5-minute drive to Downtown Burlington. Don’t miss this rare opportunity to make this exceptional property your own! (id:2493)

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New property listed in Burlington

I have listed a new property at 370 MARTHA Street in Burlington. See details here

Brand new and bright 1 bed, 1 bath condo west facing with Lake Ontario views, with a private balcony, and oversized windows. Enjoy an upgraded kitchen with Whirlpool appliances, kitchen island and in-suite laundry. Bright bedroom and 4 piece bath. This unit also includes one underground parking spot and one locker. Building amenities include gym, party room, rooftop patio, outdoor pool, and 24-hour concierge. Walk to lake, restaurants, and shops. Move in and enjoy! (id:2493)

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New property listed in Burlington

I have listed a new property at 370 MARTHA Street in Burlington. See details here

Brand new and bright 1bed, 1 bath condo west facing with Lake Ontario views, with a private balcony, and oversized windows. Enjoy an upgraded kitchen with Whirlpool appliances, kitchen island and in-suite laundry. Bright bedroom and 4 piece bath. This unit also includes one underground parking spot and one locker. Building amenities include gym, party room, rooftop patio, outdoor pool, and 24-hour concierge. Walk to lake, restaurants, and shops. Move in and enjoy! (id:2493)

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Open House. Open House on Sunday, October 6, 2024 2:00PM - 4:00PM

Please visit our Open House at 2880 HEADON FOREST Drive in Burlington. See details here

Open House on Sunday, October 6, 2024 2:00PM - 4:00PM

Charming townhouse in Headon Forest! This brick two-storey home features quality upgrades throughout. The eat-in Thomasville kitchen includes subway tiles, quartz countertops, and stainless steel appliances. Enjoy the warmth of engineered hand-scraped wood floors on the main level and upper level. The inviting living room has a gas fireplace, while the dining area opens to an upper deck—perfect for entertaining. With three spacious bedrooms, including a master with a walk-in closet and a stylish ensuite with double sinks and a walk-in glass shower, this home offers comfort and practicality. Additional features include two 4-piece and two 2-piece bathrooms with high-efficiency toilets, abundant natural light, and a finished recreation room with vinyl plank flooring and built in shelving. Updates include windows (2015) furnace and central air (2014), upper level main bath (2018), basement (2019), patio doors (2023). The single-car garage with remote and driveway add convenience, while the lower back yard deck provides extra outdoor space. This well-maintained townhouse is ready for you to call it home! (id:2493)

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The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are member’s of CREA. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by CREA and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.