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December 2012 Volume 02 Issue 12


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CONTENTS December 2012 Volume 02 Issue 12 FEATURED CONTENT pg 4-6


pg 6

11 Reasons To List During the Holidays

Our Debt Isn’t Like Their Debt

pg 8

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7DQĂ•JD]LQH1(:6 pg 10-11 pg 14-17

Canada’s Home Prices Seen Falling, Not Crashing Market Watch Back-to-back double issue


pg 18

When Can You Walk Away From A House Deal?

pg 20 pg 21

Real Estate Webinar Series Coming Soon!

pg 26-27

Why We Won’t Crash Like The USA







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Just sit back and do nothing. It doesn’t sound like the most proactive advice when it comes to the housing market, but it might just be what everybody needs to hear. Panic is the worst thing that could happen because when that mentality sets in and people become irrational, it’s hard to forecast how low prices will go, says Benjamin Tal, deputy chief economist at Canadian Imperial Bank of Commerce. He is among the many who predict that prices will fall but by a moderate level that does not resemble the U.S. crash. “Considering where the house fits into our personal balance sheet, Canadians have good reason to fear a decline in prices and the impact on their wealth” “There is nothing to fear but fear itself,” says Mr. Tal, paraphrasing the famous quote from U.S. president Franklin D. Roosevelt before his election. The economist’s worry, and that of others, is that we are now talking ourselves into a housing crash by creating a scenario in which every new statistic is interpreted in the most negative way with an eye on trying to constantly compare the Canadian housing market with what our neighbours to the south experienced just before their housing prices plummeted by as much as 50% in some markets. A study this summer by Environics Analytics WealthScapes found the average net worth of a Canadian was $363,519, with $269,024 of that figure the net equity in real estate. When you see headlines screaming that Canadian household debt has reached a record level, an eerily similar spot to where Americans were before the market crashed there, it adds to concern. But the similarity ends with the headline-grabbing number, Mr. Tal says.

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“The distraction of [hearing about these debt levels] is more of a concern than the debt” In the second quarter of this year, the debt-to-income ratio rose to 163.4% from 161.8% in the previous quarter. The previous quarter had been revised from 152% using a new measurement. “The quality of the debt is much different here,” says Mr. Tal, who is the process of writing a report that will put that thesis to the test. He maintains the people who have taken on more debt have a much higher credit score than the Americans who did the same prior to their market crash. “Collapse is too strong a word when it comes to housing prices. You can’t talk yourself into that but you can talk yourself into a slowdown or a delay” Another key factor that is ignored in the discussion is how much of that debt is locked in for longer terms and not subject to the vagaries of rising rates. Mr. Tal says 70% to 80% of Americans were in variable products at the peak while the Canadian figure is 29%, according to the latest survey from the Canadian Association of Mortgage Professionals.

Tan.gazine NEWS

ES INTO A HOUSING CRASH? Still, he worries the wrong message is getting out. “The distraction of [hearing about these debt levels] is more of a concern than the debt,” he says. But could people actually talk themselves into a housing correction? Moshe Milevsky, a finance professor at the Schulich School of Business at York University, doesn’t rule out that scenario. “Collapse is too strong a word when it comes to housing prices. You can’t talk yourself into that but you can talk yourself into a slowdown or a delay. It is one of the things behavioural economists are starting to appreciate that classical folks didn’t,” Prof. Milevsky says. “Attitudes matter. It used to be that just facts matter, but sentiment is going to be just as important. If people start to believe real estate prices are slowing down, they’ll slow down their purchases.” It doesn’t help with confidence when the federal minister of finance says he has his own worries about the housing market and then imposes a set of new rules to make it more difficult to borrow. “I remain concerned about parts of the Canadian residential real estate market, particularly in Toronto but not only in Toronto. So that is why we are intervening once again,” Finance Minister Jim Flaherty said before imposing his latest changes on consumers, which included a lowering of amortization lengths to 25 years from 30 years. Prof. Milevsky says the government calling the market overheated could be having as big an effect as the rule changes themselves. “It’s almost as if you have to sit back and watch this unfold”

“The rule changes only affect people actually going out and getting a house but Flaherty saying prices [might be] inflated affects anybody who hears it,” he says. So what can you really do about to deal with your worries? Not much. “It’s almost as if you have to sit back and watch this unfold and say, ‘Gee, I wish I could capitalize on it,’ ” says Prof. Milevsky, adding you could potentially short some real estate stocks and indexes. “But they are so broadly based and illiquid. The bid and ask on them is wide.” The issue might be a little more simple for people who don’t have a house and are waiting and contemplating whether it’s time to buy one, or considering whether to buy a big or small house. “The conventional wisdom was to buy the biggest house you can afford because you are going to make a lot of money. But maybe this is telling us you shouldn’t buy the biggest house,” Prof. Milvesky says. “Everybody believes something might be happening but so far it has not affected their conduct” But Gerald Soloway, chief executive of Home Capital Group Inc., says the rules really haven’t changed much for buying a house: Don’t time the market and buy what you can afford, he says. But he acknowledges there seems to be an insatiable appetite for all information about the sector. Mr. Soloway says he’s become the most popular guy at cocktail parties. “Constantly, I’m always asked,” he says about people wanting to know his opinion about where the market will go next. “This has been going on the last four or five years, everybody believes something might be happening but so far it has not affected their conduct.” | 5

Tan.gazine NEWS His own data show the fears appear overblown and he agrees with CIBC’s Mr. Tal that the credit quality of Canadians is better than Americans. “You look at our portfolio, half is insured [and backed by the government] and half is uninsured and people are paying their bills. Year over year, our arrears are down slightly and not dramatically,” Mr. Soloway says. “They were not very big to begin with.” Mr. Soloway just doesn’t believe negative talk is enough to derail the housing market, just as negative sentiment is enough to drive us into recession. “It can move the market but it’s not enough to change the fundamentals,” he says. Like others, he thinks we might see a 5% to 10% easing in prices across the market but he believes builders can still make strong profits at that level. It’s also no reason to sell, especially when you factor in transaction costs that can be as much as 10% in some cities. Besides, are you really going to pack up your home, move your kids and start renting as you try to

11 Reasons to List During the Holidays Author: Mike Ferry

1. People who look for a home during the Holidays are more serious buyers! 2. Serious buyers have fewer houses to choose from during the Holidays and less competition means more money for you! 3. Since the supply of listings will dramatically increase in January, there will be less demand for your particular home! Less demand means less money for you! 4. Houses show better when decorated for the Holidays! 5. Buyers are more emotional during the Holidays, so they are more likely to pay your price! 6. Buyers have more time to look for a home during the Holidays than they do during a working week! 6 |

ride out a potential downturn in the market? Phil Soper, chief executive of Royal LePage Real Estate Services, says there is little benefit to timing the market. “Potentially in some markets you could save a few bucks moving into a rental situation but it’s not as easy as you think,” he says. “If you live in a single-family home, the inventory of properties can be limited if you want your kids to stay in the same school or area. If you live in a condo in a large city, sure you can move into renting that same condo.” Mr. Soper sticks by the notion that, over the long run, house prices rise and he thinks the consumer will stick it out and ignore the negative news. “People pay more attention to the reality of low interest rates than the hyperbole that finds its way into the discourse about housing,” he says. “There has been so much see-sawing in the economy that people are immune to whipsaw reactions now.”

7. Some people must buy before the end of the year for tax reasons! 8. January is traditionally the month for employees to begin new jobs. Since transferees cannot wait until Spring to buy, you must be on the market now to capture that market! 9. You can still be on the market, but you have the option to restrict showings during the six or seven days during the Holidays! 10. You can sell now for more money and we will provide for a delayed closing or extended occupancy until early next year! 11. By selling now, you may have an opportunity to be a non-contingent buyer during the Spring, when many more houses are on the market for less money! This will allow you to sell high and buy low!

Tan.gazine NEWS



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Telephone: (416) 705-3239 Fax: (905) 824-2174 | 7

Tan.gazine NEWS

Our Debt Isn’t Like Their Debt *DUU\0DUU)LQDQFLDO3RVW October 30, 2012

CIBC Deputy Chief Economist Benjamin Tal sounds like he’s getting tired of the comparisons linking the Canadian housing market to a U.S. style crash. Canada is just not going to have a severe crash, he says in a report dubbed “Should we worry about a U.S. style housing meltdown?” “To be sure houses prices in Canada will probably fall in the coming year or two but any comparison to the American market of 2006 reflects a deep misunderstanding of the credit landscapes of the pre-crash environment in the U.S. and today’s Canadian market,” says the economist. For starters the low rate of mortgage arrears means nothing and it was just as low before the U.S. crash. Canada is a recourse country where borrowers in every province but Alberta can go after a homeowner’s other assets but that’s not much different than America where only 12 states are non-recourse states. Mortgage industry deductibility has long been seen as a contributor to the U.S. hosing crash but only about 15% of Americans use that tax break, says Mr Tal. But the economist doesn’t need those excuses. He says the debt-income ratio is high in Canada but look at the quality of debt which rose quickly in the U.S. with almost 22% of the market considered risky --- some of those people with a negative equity position even before prices crashed. In Canada, you must have a minimum of a 5% down payment. While the 30-year fixed rate mortgage has long been the U.S. standard, 80% of new mortgages in the U.S. went for an adjusted rate mortgage leading up to the crash. Those mortgages had teaser rates for two to three years that were almost 4.25 percentage points below prevailing rates.

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“[That teaser] expires and overnight you’ve got two years worth of [Federal Reserve] increases in one day, that’s a shock,” says Mr Tal. He says the Canadian market has room for a soft landing which is what Australia experienced recently. “They demonstrated there is such a thing as a soft landing, interest rates went up and prices went down by 7% to 8%.”

CIBC says the U.S. market bubble was partially fuelled by speculative buying — something that has been less of an issue in Canada.

So why are we so obsessed with comparing ourselves to the U.S.? Mr Tal says it’s normal. “It makes sense because it happened in the U.S. and everybody was talking about it and we are going through significant increases in house prices. I can understand why people do it but it should be based on fact.”

Tan.gazine NEWS

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Tan.gazine NEWS


“I would emphasize that while a 10% correction sounds scary, in actual fact, this would be a healthy outcome”

Canadian housing prices will fall 10% over the next several years and homebuilding will slow sharply in 2013, but the country’s recent property boom is not expected to end in a U.S.-style collapse, according to a Reuters poll. The survey of 20 forecasters published on Friday showed the majority believe the Canadian government has done enough to rein in runaway prices, preventing the type of crash that has devastated the U.S. market for years. “This isn’t a sharp correction, this isn’t a U.S.-style correction, it’s just simply an unwinding of the excess valuation that was created by artificially low interest rates for a long period of time,” said Craig Alexander, chief economist at Toronto-Dominion Bank. “I would emphasize that while a 10% correction sounds scary, in actual fact, this would be a healthy outcome.” U.S. house prices crashed as a mortgage crisis unraveled in 2008, triggering a financial crisis and leaving a trail of foreclosures, negative equity and financial hardship for millions of people. Housing prices in the U.S. have only begun to rise again this year. On a national basis, Canadian house prices are expected to drop 10% over the next several years, and housing starts will fall more than 17% to 184,000 units by mid-2013, according to median results of the poll, which was conducted over the last week.

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House prices have already begun to cool in some areas but nationally remain 23% higher than their trough in March 2009, according to a Canadian Real Estate Association index. Respondents in the Reuters poll said house prices will rise 2.0% in 2012 and fall 0.1% in 2013, according to the median of 18 forecasts, putting most of the losses at least two years away. Median forecasts had Toronto prices rising 5.1% in 2012 and falling 1.3% in 2013. But respondents saw an eventual 5% fall from current levels. Vancouver prices were forecast to fall 2.7% in 2012 and 3.8% in 2013, with an eventual decline of 12.5%. As sales decline and prices fall, homebuilders will ratchet back on construction starts, the poll showed. Housing starts, which notched a seasonallyadjusted annual rate of 222,945 units in the third quarter, will decline to 200,500 in the fourth quarter, 186,900 in the first quarter of 2013, and 184,000 in the second quarter of next year. “Canadian house prices are expected to drop 10% over the next several years, and housing starts will fall more than 17% to 184,000 units by mid-2013, according to a new survey.”

BITE OUT OF GROWTH That 17.5% drop in new homebuilding will take a bite out of Canada’s economic growth, fuelled by the housing sector, consumer spending and government stimulus since growth slowed in 2009. But a strengthening global economy should help pick up the slack, Alexander said.

Tan.gazine NEWS

government has done enough to slow the housing market and prevent a U.S.-style crash, as Finance Minister Jim Flaherty has argued. RULE CHANGES HURT

Not everyone is as sanguine. While economists at Canada’s major banks have consistently predicted a softening in prices and a slowing in housing starts, some independent analysts see a very hard landing ahead. “The housing market is something to be very worried about,” said David Madani, Canada economist at consultancy Capital Economics in Toronto. Madani, whose forecasts are included in the Reuters poll, has consistently predicted a 25% drop in prices and a plunge in housing starts to just 150,000 next year as builders grapple with too many homes and falling demand. “The one symptom that housing bubbles always have in common is the over building, and I feel the banks play this down a bit,” said Madani, pointing to recent housing starts well above the 175,000 to 185,000 pace economists say is needed to keep up with population growth. “We’ve been building above 200,0000 for several years. And we know we’ve been building above demographic requirements because the evidence is in the inventory data – it’s high, it’s not low,” said Madani. “The excesses are there, it’s plain and clear to see.” Still, all 15 respondents who answered an additional question said they believe the Canadian

Mindful of the U.S. boom and bust, the federal government tightened mortgage lending rules four times in the last four years to make it harder for home buyers to take on too much debt in their quest for a home. The rule changes gradually shorted the maximum mortgage length from 40 years to 25 and also put limits on how much homeowners could borrow against their house, among other measures. While interest rates are not expected to rise until mid-2013, the stiffer lending rules and government warnings about the high debt loads of Canadian households have helped cool the ardor of home buyers, with the hottest markets, including Vancouver and Toronto, already feeling a chill. Sales of existing homes were down 15.1% in September from a year earlier, and were 6.5% lower in the third quarter from the previous three months, according to data from the Canadian Real Estate Association. Prices, which lag sales, have started to come down as well. Prices for existing homes dipped 0.4% in September from August, according the Teranet-National Bank Composite House Price Index, but remain 3.6% higher than a year earlier. Prices of new homes rose 0.2% in the month, the 18th straight monthly gain, and were up 2.4% on the year, according to Statistics Canada. | 11

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Tan.gazine NEWS Greater Toronto REALTORS® Report December Mid-Month Resale Market Figures December 18, 2012 – Greater Toronto Area REALTORS® reported 2,169 transactions through the TorontoMLS system during the first 14 days of December 2012. This number of sales was down by 16 per cent in comparison to the same period in December 2011. “Stricter mortgage lending guidelines, including a reduced maximum amortization period and a one million dollar purchase price ceiling for government-backed insured mortgages, appear to have had the effect desired by Finance Minister Jim Flaherty. Some home buyers have put their home purchase decision on hold,” said Toronto Real Estate Board (TREB) President Ann Hannah. “In the City of Toronto, sales declines have been more pronounced as the effect of stricter mortgage lending guidelines has been compounded by the City’s additional upfront Land Transfer Tax,” added Hannah. The average selling price in the first two weeks of December was $471,862, representing a three per cent annual rate of price growth. “Even with the dip in sales since the spring, tight market conditions in the low-rise segment of the market have driven year-over-year average price growth,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “While the average price for detached homes in the City of Toronto was down for the first two weeks of December compared to last year, this dip was due to a different mix of homes sold this year compared to last. There were fewer high-end detached homes sold compared to last year,” continued Mercer.

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Tan.gazine NEWS Sales Dip in November while Selling Prices Increase In November, the median price was $485,328 from the $477,582 recorded during November of 2011 Toronto, December 05, 2012

Greater Toronto Area REALTORS® reported 5,793 sales in November 2012 – down by 16 per cent compared to November 2011. “Transactions have been down on a year-over-year basis since June, after being up substantially in the last half of 2011 and the first half of 2012. Some buyers pulled forward their decision to purchase, which has impacted sales levels in the second half of 2012,” said Toronto Real Estate Board (TREB) President Ann Hannah. “Stricter mortgage lending guidelines, including a reduced maximum amortization period and a purchase price ceiling of one-million dollars for government insured mortgages, have prompted some buyers to move to the sidelines. This situation has been exacerbated in the City of Toronto because the additional upfront Land Transfer Tax takes money away from buyers that otherwise could be used for a larger down payment,” continued Hannah.

The average selling price was up by 1.6 per cent annually to $485,328. The MLS® Home Price Index (MLS® HPI) Composite Benchmark was up by 4.6 per cent compared to last year. “The moderate annual rate of price growth compared to previous months was largely due to a different mix in detached home sales this year compared to last, particularly in the City of Toronto. The share of detached homes that sold for over one-million dollars was down substantially, which influenced the overall average price,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “The MLS® HPI detached benchmark price, which tracks the price for a home with the same attributes over time, was up by almost six per cent in Toronto, suggesting that market conditions for low-rise homes remain quite tight despite a changing mix of sales,” added Mercer. | 15

Tan.gazine NEWS Greater Toronto REALTORS® Report November Mid-Month Resale Market Figures November 19, 2012 -- Greater Toronto Area REALTORS® reported 2,687 transactions through the TorontoMLS system during the first two weeks of November. This result represented a 17.5 per cent decline compared to the same period in 2011. “The reduction of the maximum amortization period to 25 years translated into higher mortgage payments. Some households will have to save more money for a down payment before purchasing a home, in order to offset these higher mortgage costs. This is more difficult in the City of Toronto, where households must pay an additional land transfer tax up front. The abolishment of this tax would allow buyers to have a larger down payment,” said Toronto Real Estate Board (TREB) President Ann Hannah. The average selling price during the first 14 days of November was $488,647 – up by 1.7 per cent in comparison to the first 14 days of November 2011. The median selling price over the same period was up by a greater rate of four per cent to $416,000. The stronger rate of growth for the median selling price suggests that fewer high-end homes sold this year compared to last. “During the first half of November, there were fewer luxury detached homes sold as a percentage of total transactions compared to last year. The year-over-year change in the mix of detached homes sold in the GTA, rather than a change in market conditions, was responsible for a lower than normal increase in the average detached home price,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

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Tan.gazine NEWS Average Price Up in October, Despite Fewer Sales In October, the median price was $503,479 from the $474,241 recorded during October 2011 Toronto, November 3, 2012

Greater Toronto Area REALTORS® reported 6,896 transactions through the TorontoMLS system in October 2012 – a decrease of 7.1 per cent compared to October 2011. There were two more business days in October 2012 versus October 2011. On a per business day basis, transactions were down by 15.6 per cent. “Sales have decreased in the second half of this year compared to 2011, especially since the onset of stricter mortgage lending guidelines at the beginning of July. The prospect of higher monthly mortgage payments due to the reduced maximum amortization period has prompted some households to delay their home purchase,” said Toronto Real Estate Board (TREB) President Ann Hannah. The average selling price for October

transactions was $503,479 – up 6.2 per cent compared to October 2011. The MLS® Home Price Index composite benchmark price, which allows for an apples-to-apples comparison in terms of home attributes, was up by 5.1 per cent. “We continue to see price increases well above the rate of inflation. Active listings have remained low from a historic perspective, so substantial competition between buyers still exists, especially for low-rise homes,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “It should be noted, however, that the annual rate of price increase has been edging lower over the past few months as the market has gradually become better supplied,” continued Mercer. | 17

Tan.gazine NEWS



7RURQWR5HDO(VWDWH%RDUG75(% December 04, 2012

In light of new polling results that show strong opposition, specifically among Mississauga and other “905â€? region residents, to municipal land transfer taxes, REALTORSÂŽ are calling on the City of Mississauga to shelve its current consideration of a municipal land transfer tax. “This poll shows that the public understands that land transfer taxes are the wrong way for municipalities to solve their financial challenges. This type of tax creates more problems than it solves. â€? said Ann Hannah, President of the Toronto Real Estate Board, which represents 35,000 REALTORSÂŽ across the Greater Toronto Area, including more than 5,000 in Mississauga. The poll was conducted by Ipsos Reid in November 2012 and found: ‡SHUFHQWRI 0LVVLVVDXJDUHVLGHQWVDQGSHUFHQW of all 905 residents combined, are opposed to the imposition of a municipal land transfer, in their municipality, to offset municipal deficits or to put towards increased spending on infrastructure and other city programs; ‡SHUFHQWRI DOOUHJLRQUHVLGHQWVSODQQLQJWR purchase a home in the next two years are more likely to purchase outside Toronto specifically to avoid paying the Toronto Land Transfer Tax. ‡SHUFHQWRI 7RURQWRUHVLGHQWVSODQQLQJWR purchase a home in the next two years are more likely to purchase outside Toronto specifically to avoid paying the Toronto Land Transfer Tax.

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“If levied at the same rate as the Province and the City of Toronto, a Mississauga Land Transfer Tax would cost the buyer of an average Mississauga detached home about $10,000, payable upfront. It is unfair to expect people like down-sizing seniors, or young growing families who need more space, to pay so much more than their fair share�, said Hannah. The C.D. Howe Institute recently released an analysis of the Toronto Land Transfer Tax, which shows that this tax has hurt Toronto’s economy by dampening home sales by 16 per cent. In addition, the Ipsos Reid poll found that 25 per cent of the people who recently purchased a home in Toronto would have spent their land transfer tax money on furnishings or appliances, if they had not had to give it to the City, and 21 per cent would have spent it on renovations. “Housing sales create jobs because when people move they spend money on things like renovations, movers, appliances, and furnishings. The research has proven that municipal land transfer taxes dampen home sales. Every housing sale that would be lost as a result of a municipal land transfer tax would risk Mississauga jobs,� added Hannah. Note: These are some of the findings of an Ipsos Reid poll conducted between November 24th and 29th, 2012, on behalf of the Toronto Real Estate Board. For this survey a sample of 1,112 residents of the GTA from Ipsos’ Canadian online panel was interviewed online. Weighting was then employed to balance demographics to ensure that the sample’s composition reflects that of the adult population according to Census data and to provide results approximate the sample universe. The precision of Ipsos online polls are measured using a credibility interval. In this case, the poll is accurate to within +/- 3.4 percentage points of all residents in the GTA region. The credibility interval will be larger for sub-groupings of this population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

Tan.gazine NEWS


Tan.gazine NEWS

When Can You Walk Away From A House Deal? Mark Weisleder

November 09, 2012

Putting your home up for sale can be a tough decision, but once made and the ball is rolling, you may not be able to change your mind. Last week’s column about a $3.3 million home sale that went wrong for the seller prompted several related questions from readers. Is there a buyer’s remorse period in Ontario? If you are buying a new condominium from a builder, you have 10 days to change your mind. You do not need a reason. This does not apply if you buy a new house from a builder and does not apply if you are buying a resale home or condominium. Why condos only? The clause is included in the Condominium Act. Can a buyer sign an offer and then walk away? The Ontario real estate contract gives a buyer 24 hours to pay the deposit, once the offer is accepted by the seller. The buyer cannot just change their mind or they can be sued. For example, the buyer offers $300,000 for a house which is accepted. The buyer changes his mind and doesn’t pay the deposit and walks away from the deal. The seller resells the property for $275,000. They can still sue the first buyer for the difference, or $25,000. Can buyers use conditional clauses as escape hatches? Most real estate contracts are conditional on the buyer being able to get a mortgage and being satisfied with a home inspection. Other conditions include being satisfied with a condominium status certificate when buying a resale condo. Many buyers think these conditions give them the right to just change their minds. It is not that easy. The case law has demonstrated that buyers must try

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and satisfy any condition in good faith. This means that you need a legitimate reason why you found the home inspection report or condominium status certificate unsatisfactory. Who gets the deposit when buyers change their mind? In most cases, the deposit is held by the seller’s real estate brokerage, in trust. Under the law, when a deal breaks down, the brokerage cannot pay the deposit to anyone without either a mutual release or direction signed by both the buyer and the seller, or an order of the court. As such, when deals do not close, if there is no agreement, the deposit can be locked up for a long time, and the buyer will not have access to it to make an offer on another property. Is there a “legal” way for a buyer to get out of a deal? It depends. If for example, there was a right on your title for the City to access 20 per cent of your property for any reason, known as an easement, and that was not disclosed to the buyer, they can usually cancel the agreement without penalty. However, there have been other cases that indicate if there is a problem with a city work order or title problem for which the seller can obtain title insurance to protect the buyer, then the buyer cannot refuse to close. A buyer can also cancel if there has been substantial damage to the property before closing, such as a flood that was not repaired. You can’t refuse to close if the oven is not working. The better answer in all of these situations is to be very careful and serious before you make any decision to buy a home. Changing your mind later can be very expensive.

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Check out for more cool recipes

October 16, 2012

BUCHE DE Traditional Yule Log

If you’ve ever contemplated making the traditional dessert, Buche de Noel (Yule Log), but have been int name and seemingly involved process, then I have good news: if you’ve made a cake with frosting, or ev have all the skills required to make this.

To prove this, I made one this past weekend, and it was a huge success! Along the way I noted some use (in other words I made all the mistakes for you) so yours can be perfect. I pulled elements from classic C and ganaches to create one great Buche de Noel. I’m not going to lie, there were a few bumps along the steps involved – but I hope to have ironed out all the bumps, and individually the steps involved are not the Buche can be done days – if not a week ahead. So, if you are interested in giving this a try, I highly re impressive dessert – and a once-a-year treat that will get lots of oohs and ahhs.

Some things to note before you get started:

Pre-plan. Seeing as there are several components – such as significant baking and cooling times – make a waiting an hour or two for your mousse to set.

Choose a “bendy” cake – Sponge cakes and genoise are best for Buche de Noels. The fine texture of bu and will crack and break when you try to roll them. Make your cake from scratch. Store-bought cake mix enough and tend to crack when rolled.

Make the meringue mushrooms. Don’t let anyone tell you they’re cheesy – you’ll be glad you didn’t skip t

Choose a cake flavour, a mousse filling and a separate frosting. I recommend a golden cake, a dark mous frosting (ganache). The golden cake layer makes the roll appear most impressive when sliced.

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timidated by its sophisticated ven a jelly roll, then you already

eful tips to simplify the Buche Chatelaine recipes for mousses way – and there are several difficult. Even better, most of ecommend it. It truly is an

a plan so you don’t get stuck

utter cakes are slightly too brittle xes are difficult to get thin


sse filling and a chocolate

Yule Log


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October 16, 2012

Let’s Start Bakin’ Step 1: Make the meringue mushrooms

Step 2: Make your frosting

Do these a few days in advance to get them out of the way. They are easy, but take some time to bake, so it’s a good idea to do them when you don’t need the oven for something else. Follow our recipe for peppermint meringue kisses with the following changes:

You can make this up to one week in advance (yay!). Make a triple batch of Chatelaine’s super easy dark chocolate ganache. Cool to room temperature and then keep refrigerated until you need it.

‡2PLWWKHôWVSSHSSHUPLQW extract, you also won’t need the skewers and the food colouring. After beating in all the sugar, and stiff peaks have formed, beat in 1 tbsp cocoa powder, to give the mushrooms a slightly off-white colour. Pipe onto prepared sheets in varying sizes of small circles – think mushroom caps (see image below‌they don’t need to be perfect!). For each circle, also pipe directly upward forming a stem. Bake as per recipe instructions.

Make a batch of the mousse portion only from our chocolate hazelnut mousse cake recipe.

‡7RDVVHPEOHPXVKURRPV brush a small dab of melted chocolate onto the centre of the underside of a mushroom cap and attach base. Voila.

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Step 3: Make your filling

225g bittersweet or semi-sweet chocolate, coarsely chopped 1/4 cup coffee 4 eggs, separated, at room temperature 1 tbsp brandy 2 tbsp granulated sugar Place chocolate and coffee in a large bowl. Microwave on medium until chocolate is melted, 1 to 2 min, stirring halfway through. Let cool. Using a wooden spoon, beat egg yolks into cooled chocolate mixture one at a time, beating well after each addition. Stir in brandy. Using an electric mixer, beat

whites just until soft peaks begin to form when beaters are lifted, 2 to 3 min. Gradually beat in sugar until stiff peaks form when beaters are lifted, 1 min. Stir 1/4 egg white mixture into chocolate mixture. Then, gently fold in remaining mixture until no white streaks remain. Cover and refrigerate until mousse is firm, 1 to 2 hours. Step 4: Bake your cake Bake your cake the day you want to assemble the Buche. I found a fresh cake worked the best. The key is to have a very thin, moist, and pliable sheet of cake to roll. Don’t over bake – the drier it is, the more likely it is to crack when rolled. A classic sponge cake is all you need for a Buche de Noel, as there are so many other components of flavour. A Genoise is also a perfect fit – if you are feeling especially skillful in the kitchen. Use any sponge or genoise recipe you have that is suited to a 12×15 in sheet pan. Here is a basic cake recipe, if needed 2 eggs at room temperature 2 eggs separated, at room temperature


Yule Log

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Recipe Edition

½ cup + 2 tbsp granulated sugar 1 tsp vanilla ½ cup all-purpose flour, sifted 326,7,21UDFNLQORZHUWKLUG of oven. Preheat to 425F. Lightly grease a 12×15 inch baking sheet and then top with a layer of parchment (the oil keeps the parchment in place). Set aside. PLACE 2 eggs and 2 yolks in the bowl of a stand-up mixer, or a large mixing bowl. Mix on low until eggs and yolks are combined. Increase speed to medium-high and add ½ cup of sugar, one tbsp at a time, mixing continuously until the sugar has been incorporated, and the eggs are pale and thickened, but still thin enough to run off the beaters when lifted, 3 to 4 min. Beat in vanilla. Set aside. BEAT egg whites in a separate large bowl on medium speed until frothy. Increase speed to medium high and add remaining 2 tbsp sugar in small additions, beating continuously until whites form firm, glossy peaks, about 2 min. STIR 1/2 cup of egg whites into yolk mixture. Working quickly, sprinkle mixture with half the four and fold in. Fold in half of the remaining whites,

then remaining flour. Fold in the rest of the whites. 3285WKHEDWWHURQWRSUHSDUHG sheet and carefully spread the cake into the corners. The less you touch the cake the better, as this will deflate it. BAKE until the cake is just golden and the centre springs back when touched, about 6 to 8 min. Remove from oven to a cooling rack. Using a sharp knife release any areas where the cake is stuck to the side of the pan. Let rest in the pan for about 5 minutes to settle, then invert onto a second baking sheet lined with kitchen towel and peel away parchment. Let cool fully. Step 5: Assemble LAY your fully-cooled sheet cake (still on kitchen towel), on a large counter. Spread the layer of chilled mousse evenly over the cake, leaving a 1 inch border around the edges. Grasp the edges of the kitchen towel and use it to help you gently roll up the cake. You want to roll starting from the two wide FRUQHUV2QFHUROOHGWUDQVIHUWR a platter or pan that can fit in your fridge. Let chill for 2 hours. 5(029(\RXUJDQDFKHIURP the fridge 20 minutes before you

SODQWRXVHLW2QFHVOLJKWO\ softened, transfer to a large mixing bowl and mix on medium speed until the ganache has lightened in colour and is spreadable, about 1 or 2 min. *For a fun twist, beat in 1/2 cup of chocolate-hazelnut spread‌yum. 5(029(FKLOOHG%XFKHIURP fridge. Decide on the shape you want. If you want one single log, then frost with ganache as is. If you want the look of stacked logs (see my picture below), then cut into a few portions on the diagonal. Choose the platter you wish to serve the Buche on. Frost the centre portion first (ends as well) and lift with a spatula onto your platter making any corrections needed after transferring it! Repeat with remaining portions. When frosting, you want to create the look of wood grain, so don’t try and make it too pretty, leave some texture. If you wish, you can also drag a fork over the iced cake to create lines and texture. TUCK mushrooms into corners of the Buche. Sprinkle with cocoa powder, if desired. Chocolate shavings add a nice touch as well. Chill until ready to serve. Enjoy! | 25

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Why We Won’t Crash Like The USA 'DYLG/DURFN

November 21, 2012

Statistics Canada recently changed the way it calculates key economic data to bring its methods into line with agreed upon international accounting standards. As a result, the debt-to-income ratio for the average Canadian household shot up 11 per cent, literally overnight, to 163 per cent (a record high). This has inspired lots of foreboding talk about how our “soaring” household debt-to-income levels are now higher than U.S. debt-to-income ratios were at the peak of their housing bubble. That may be technically true, but it is also totally misleading. That’s because the standard method for calculating this ratio uses after-tax income, which isn’t a fair comparison because Canadian personal income taxes cover health care costs and American personal income taxes don’t. (To put this difference in perspective, according to my initial research the average American spends anywhere from 10 per cent to 20 per cent of their after-tax income on health-care related costs.) While it has become fashionable to predict that Canada is headed for a U.S.-style housing crash, most economists still think that is unlikely and they use plenty of data to support their position. To be clear, I readily agree that our household debt levels are too high and that’s why I have consistently supported the federal government’s attempts to reign in borrowing by changing the lending policies and regulations used by CMHC and OSFI. But that’s a far cry from believing that our debt levels are about to cause our houses to start spontaneously combusting. (Did I just give Maclean’s an idea for their next apocalyptic magazine cover … or have they used that one already?) Before you start loading up on canned soup and fire extinguishers, consider this sampling of recent comments from the experts I read:

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* A report by BMO economists in January 2012 first pointed out the flaw in using after-tax income to compare Canadian and U.S. debt-to-income ratio levels. Instead, they argued that using a debt-to-gross income ratio would provide a better apples-to-apples comparison. Using this revised methodology, BMO economist Sal Guatieri reported recently that Canada’s debt-to-gross income ratio (121 per cent) is still well below both the current (146 per cent) and peak (166 per cent) U.S. levels. That presents a very different comparison from the popular one being bandied about in much of the mainstream media. * David Rosenberg, a well-known Canadian economist, wrote recently that our ratio of housing starts to the civilian population is “not far off the average of the last 10 years, whereas as in the U.S. back in the 2006-07 peak, that ratio was 25 per cent above the long-run norm.” In other words, Canada has not seen the kind of short-term spike in speculative real-estate investing/borrowing that we saw in the U.S. during the latter stages of their housing bubble. * Mr. Rosenberg also notes that Canadian policy makers and regulators have been pro-active in responding to our rising household debt levels while their U.S counterparts were basically asleep at the switch until it was too late (hyperbole mine). * Further to that last point, Benjamin Tal, an economist with CIBC, recently noted in an interview with Rob Carrick that overall Canadian household debt is now rising at its slowest pace in 10 years, while consumer debt levels are actually falling for the first time in 20 years. That kind of momentum makes for a trend in the right direction.

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* In a separate report, Tal notes that the crash in U.S. house prices was far more extreme in cities with above-average levels of sub-prime lending, where prices corrected by an average of 40 per cent. This is more than double the average decline seen in U.S. cities with below-average levels of subprime loans. “Eradicate subprime from the U.S. housing market and, instead of the most severe house price meltdown since the Great Depression, you get a soft landing.” By comparison, Canadian subprime loans account for about seven per cent of our total

mortgage debt outstanding while U.S. subprime loans peaked at a little under 25 per cent of their total mortgage debt outstanding before their housing crash. The bottom line: Like any informed observer who can see beyond his own short-term self interest to what is best for the whole economy over the long term; I am concerned about how ultra-low interest rates have pushed our household debt levels to record highs. But I reject the implication that we have driven over the debt cliff to financial ruin and are now in free fall just waiting to hit the ground.

1929 – Stock Market Crash

Maria Tse, AMP

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Tan•gazine December 2012 Vol 2 Issue 12  

Tan•gazine December 2012 Vol 2 Issue 12

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