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who we are Peng Hock Tan Senior Real Estate Broker & Real Estate Advsior
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table of
CONTENTS may-june 2018 volume 05 issue 09 APRIL REAL ESTATE INDEX
GTA DETACH AVG PRICES (2018 • $ 804,584 | 2017 • $ 918,184 | -14.11%) SALES (2018 • 7,792 | 2017 • 11,468 | -47.17%) 1 YR MORTGAGE (2018 • 3.34% | 2017 • 3.14% | +0.05%)
04 ................... Toronto Home Prices Tumble But Market Shows Signs of Stability 05 ................... Hiked Mortgage Rates Induce Dread, But Will Canadians Prevail? 06 ................... Bank of Canada Reveals Country's Staggering Debt Figure 07 ................... What Ontario Renters Need To Know About The Province's New Lease Agreements 08-09 ................... 2018 Spring - March-April TanTeam Listings 10-11 ................... February 2018 GTA REALTORS® Release Monthly Resale Housing Figures 11 ................... The TanTeam Seminar Series 14 - Which Way Is The Real Estate Market Heading? Up or Down? - Thursday, May 31, 2018 12-13 ................... Craft Wine For Every Occassion. Start Crafting Today! ................... ................... ...................
The secret of getting ahead is getting started. -Mark Twain
Toronto Home Prices Tumble But Market Shows Signs of Stability JANET MCFARLAND MAY 03, 2018
Toronto’s housing market continued to show signs of stabilizing in April, but sale prices remain significantly below the record levels hit last spring. New sales data from the Toronto Real Estate Board (TREB) shows the average home sold for $804,584 in the Greater Toronto Area in April, a 12-per-cent drop from $918,184 in April last year, when the market hit a record peak before beginning a steep slide in May. April’s average sales price was 0.2 per cent below the average sales price in March this year, based on preliminary seasonally adjusted numbers. TREB said the month-over-month sales trend “has flattened out” over the past two months after the market saw a steeper drop in January and February. The numbers suggest that recent
policy changes – including tougher new mortgage qualification rules that took effect Jan. 1 – have not sent the housing market into steep decline as some analysts had feared, and the impact may already be moderating. TREB also said part of the year-overyear decline in average sales prices is due to the changing composition of home sales, with far fewer detached houses over $2-million selling this year than last year, pulling the average sale price lower. The MLS Home Price Index, which adjusts for the changing mix of homes sold in each period, shows a 5.2-per-cent drop in average sale prices in April compared to a year earlier. Jason Mercer, TREB’s director of market analysis, said he believes the market should see a moderate increase in home prices in the second half of 2018, especially for the condominium sector and “higher density low-rise home
types.” “Once we are past the current policybased volatility, home owners should expect to see the resumption of a moderate and sustained pace of price growth in line with a strong local economy and steady population growth,” he said in a statement. Condominiums have remained the strongest market segment in Toronto as buyers continue to favour the lowest-price housing option. TREB said the average GTA condominium sold for $559,343 in April, up 3.2 per cent compared to the same month last year. The average condo sold for $601,211 in the City of Toronto, an increase of 3.8 per cent compared to a year ago. While prices are holding up, the pace of sales in the GTA has remained slow. A total of 7,792 homes sold in April, a 32-per-cent drop from 11,468 homes
sold in the same month last year. TREB said 16,273 homes were newly listed for sale in April, a drop of 25 per cent over the same month last year. On a seasonally adjusted basis, the number of homes sold in April fell 1.6 per cent over March, TREB said. But the month-over-month drop in sales volume was far less significant than it was earlier this year after the new mortgage stress test rules were first introduced. Sales in January, for example, were down 24 per cent compared to December on a seasonally adjusted basis. Total sales fell 9 per cent in February compared to January, and sales were down 1.4 per cent in March compared to February, based on seasonally adjusted numbers, TREB said.
Hiked Mortgage Rates Induce Dread, But Will Canadians Prevail? CHRIS FOURNIER MAY 2018
The indefatigable ability of Canadians to shoulder an ever increasing mountain of debt is being tested. The country’s biggest banks began raising key borrowing rates last week, just as the busy season for residential real estate gets underway. In addition, the mortgage market looks set for a particularly heavy year of renewals in an environment where debt-servicing costs are already rising at the fastest pace in a decade. How well Canadian households can weather the squeeze has become one of the biggest questions for policy makers and will determine whether the economy is headed for a mild, or sharp, slowdown. Bank of Canad Governor Stephen Poloz will address the topic in a speech on Tuesday. “The economy has never been as levered as it currently is, and the economy is far more interest sensitive than it has been in the past, to a degree that we don’t have certainty over how each interest rate hike is going to affect Canadian consumers,” Frances Donald, senior economist at Manulife Asset Management, said by phone from Toronto. “All we know is it’s going to be painful, but how painful isn’t quite clear.” The heavy debt burden is one of the
reasons the central bank has been reluctant to raise reluctant to raise borrowing costs further, after hiking interest rates three times between July and January. Given the nation’s debt load -- as of February, households had a record C$2.1 trillion ($1.6 trillion) of mortgage and non-mortgage debt -- Poloz estimates the economy is 50 percent more sensitive to rate hikes than in the past. Here’s what households are up against: Mortgage Season Canada is entering its busy season for real estate, with purchases concentrated in the April to July window. Some 47 percent of existing mortgages need to be refinanced this year versus 25 percent to 35 percent typically, according to Ian Pollick, head of North American rates strategy at Canadian Imperial Bank of Commerce in Toronto. At the same time, the country’s biggest banks are raising key mortgage rates. Toronto-Dominion kicked it off Thursday, hoisting its five-year fixed mortgage rate 45 basis points to 5.59 percent. Royal Bank followed with its own hikes Friday. New mortgage stress tests are pushing some borrowers from the big banks to alternative lenders charging higher rates. “That’s an unfortunate outcome of the stress test,” Will Dunning, an economic consultant who specializes in the housing market, said by phone from
Toronto. “In that sense, the stress test is not reducing risk. It’s increasing risk.” Cost of Debt The vise is tightening. According to Statistics Canada, total payments on debt made by Canadian households rose 6.7 percent in the fourth quarter from a year earlier, and the interestpaid component climbed 9.2 percent. Those were the biggest gains since the financial crisis. A moving average of quarter-over-quarter changes shows a similar pattern, with the 1.62 percent increase in the latest period the fastest since 2008. Debt payments now represent about 14 percent of household disposable income, the highest share in three years. Donald expects the debt-service ratio to continue moving higher over the coming quarters. “The world spends a lot of time talking about the level of Canadian debt being extremely elevated, but what matters most is not the level of debt that Canadians hold, but the cost of carrying that debt,” the Manulife economist said. “Canadians are going to start to feel the pinch.” Cracks Appearing There are already signs of strain. The roll rate -- the percentage of credit card users who “roll” from early stage delinquencies to 60-89 day delinquencies -- reached the highest since 2008 for one credit card program, while delinquencies for another were
above the 10-year average, according to Royal Bank of Canada credit analyst Vivek Selot. While the level of mortgage arrears is still low by historical standards, a rising debt service ratio could signal that’s about to change. Retail Sales Canada’s economy led the Group of Seven in growth last year, mostly because of the willingness of the country’s consumers to spend money. But growth is expected to slow this year. Gross domestic product unexpectedly shrank in January. Data for February is due Tuesday. The nation’s retailers have already had a tough few months. Retail sales in February were still 1.8 percent below 2017 peak levels. In volume terms, the input used to calculate gross domestic product data, first-quarter retail sales probably posted the biggest quarterly drop since the 2008-09 recession. The low unemployment rate and decent economic growth will help the economy withstand higher rates, though risks are increasing. “You have some capacity in the economy to absorb this, but the fact that rates are going up isn’t positive for consumers, because it’s making credit more expensive,” Bloomberg Intelligence analyst Paul Gulberg said Friday by phone. “That’s the but.”
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Bank of Canada Reveals Country's Staggering Debt Figure ANDY BLATCHFORD HOME BUSINESS NEWS MAY 02, 2018
interest rates continue their rise, as is widely expected over the coming months.
setting rate. He called it an important vulnerability for individuals and leaves the entire economy exposed to shocks.
issues the bank is examining as it considers the timing of its next rate increase.
Canadians have amassed a $2-trillion mountain of household debt that's casting a big shadow over the timing of the Bank of Canada's next interest rate hike, governor Stephen Poloz said in a speech Tuesday in Yellowknife.
``This debt has increasing implications for monetary policy,'' he said in his address to the Yellowknife Chamber of Commerce.
``This debt still poses risks to the economy and financial stability, and its sheer size means that its risks will be with us for some time,'' Poloz said.
Poloz has introduced three rate hikes since last July following an impressive economic run for Canada that began in late 2016. But the central bank stuck with its benchmark rate of 1.25 per cent last month as it continued its careful process of determining the best juncture for its next hike. The bank's next announcement is May 30, but many experts only expect Poloz's next increase to come at July's meeting.
``But there is good reason to think that we can continue to manage these risks successfully. The economic progress we have seen makes us more confident that higher interest rates will be warranted over time, although some monetary policy accommodation will still be needed.''
If it raises rates too quickly, the bank risks choking off economic growth, falling short of its ideal inflation target of two per cent and could lead to the type of financial stability risk it's trying to avoid, he said.
To Poloz, the ``sheer size'' of debt burden also means its associated risks to endure for a while, although he's optimistic the economy can navigate them. The debt pile, he said, has been growing for three decades in both absolute terms and when compared to the size of the economy _ and about $1.5 trillion of it currently consists of mortgage debt. The central bank has concerns about the ability of households to keep paying down their high levels of debt when
Poloz said Tuesday that the volume of what Canadians owe is one of the key reasons why the bank has been taking a cautious approach to raising its trend-
Nicholas R. Harrison,
Hon. B.A., B.Ed.
Freedom 55 Financial Security Advisor
Mississauga Financial Centre
Poloz said debt is a natural consequence of several factors, including the combination of a strong demand for housing and the prolonged period of low interest rates maintained in recent years to stimulate the economy. The governor also provided detail on
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But if the governing council lifts the rate too slowly, Poloz said it could intensify inflationary pressures to the point it overshoots the bank's bull's-eye. Poloz added that moving too gradually could also entice Canadians to add even more debt and further boost vulnerabilities. In his speech, he also noted several other areas of concern the bank is monitoring closely as it considers future hikes. They include the economic impacts of stricter mortgage rules, the ongoing uncertainty about U.S. trade policy, the renegotiation of the North American Free Trade Agreement and a number of competitiveness challenges faced by Canadian exporters. ``These forces will not last forever,'' Poloz said. ``As they fade, the need for continued monetary stimulus will also diminish and interest rates will naturally move higher.''
CONTACT THE TANTEAM IF YOU HAVE ANY QUESTIONS ABOUT THE REAL ESTATE MARKET! T: 905-821-3200 E: SUPPORT@TANTEAM.COM
What Ontario Renters Need To Know About The Province's New Lease Agreements ON APRIL 30, IT WILL BECOME MANDATORY FOR MOST RESIDENTIAL LANDLORDS TO USE A 13-PAGE STANDARDIZED LEASE AGREEMENT Ontario's new lease agreement is trying to level a very unbalanced playing field for tenants and landlords, and close a gap in negotiating power between the two parties
LAURA PEDERSEN FINANCIAL POST MARCH 1, 2018
Ontarians fed up with battling their landlord over contentious terms they didn’t realize were hidden in the fine print of their lease will soon be getting some reprieve. On April 30, it will become mandatory for most residential landlords to use a 13-page standardized lease agreement, recently unveiled by the provincial government in hopes of protecting tenants from being tricked by lengthy agreements rife with illegal clauses and language that is hard to understand and often winds up in litigation. Advocacy Centre for Tenants Ontario lawyer Dania Majid breaks down the basics of the new lease and what renters should be aware of: Why Has The Province Introduced A New Standardized Agreement?
Before the new agreement, a lease would look drastically different from one landlord to another. There was
a huge range of what was included and excluded. Even with corporate or professional landlords, their leases contained several illegal clauses that tenants were signing in these long, legalese-type documents. The hope was that by creating a standard form lease that excluded all of these illegal clauses and harmonized what a big landlord and a small landlord would put in front of a tenant, it would be simpler, clearer to read, easier to understand, and both parties would know what the rent was and what was being offered or included in that rent. Right now most major cities, including Toronto, have low vacancy rates, extremely high rent and an affordable housing crisis. The agreement is trying to level a very unbalanced playing field for tenants and landlords, and close a gap in negotiating power between the two parties. What Should I Look Out For If I'm A
Henry Vincent Tel: (416) 371-8650 Fax: (905 913-2212 E: Henry.vincent@rbc.com
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Advice you can bank on
There is a section at the end of the new lease that allows a landlord to attach a document with additional terms not already in the lease. The standard form lease is comprehensive enough, so a landlord should not need to add any terms. But what we might see creep in — which is what we were trying to get rid of — is things like regulating guests and how many you can have and how long they can stay, and clauses around maintenance like requiring a tenant to do work around the premises like mowing the lawn, shovelling the driveway and undertaking minor repairs inside the unit.
might be some exclusions under co-operative housing as well. If I Have Lease Signed Before April 30, Do I Need To Sign A New One? All old leases remain valid. The only thing that remains to be void is any illegal clause that might have been contained in them
ATTENTION ALL LANDLORDS AND TENANTS! IF YOU HAVE ANY QUESTIONS REGARDING THE NEW LEASE AGREEMENT AND THE IMPACT IT MAY HAVE CONTACT US RIGHT AWAY! T: 905-821-3200 E: SUPPORT@TANTEAM.COM
Other things that could slip in there are issues around privacy and when the landlord can have access to the unit, penalty fees, additional processing fees or application fees. A tenant shouldn’t be paying damage deposits, more than one month’s rent in advance, interest on arrears or penalties on missed rental payments, and they shouldn’t be expected to waive their liability or their landlord’s liability for maintenance and repair issues. What Enhanced Rights Do Tenantse Have With The Lease?
Mobile Mortgage Specialist
When it comes to your mortgage, it is important to make sure you get the home you really want, with flexible financing solutions that are right for you.
Tenant Signing The New Lease?
TM
There is a provision that if a tenant requests a copy of their lease and doesn’t get it within 21 days, they can withhold one month’s rent. If the landlord doesn’t produce it after that month, the tenant wouldn’t be required to repay it. It is a small enforcement method built into the agreement to ensure tenants get a copy of their leases and know what they sign. If they never get a copy of their lease, they get 60 days’ notice to terminate the tenancy early. What Does
Kinds Of The Lease
Properties Apply To?
This will apply to residential tenant properties, but not care homes, mobile home parks, land lease communities and most social housing. There
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April 2018 GTA REALTORS® Release Monthly Resale Housing Figures TORONTO REAL ESTATE BOARD MAY 03, 2018 Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 7,792 sales through TREB's MLS® System in April 2018. The average selling price was $804,584. On a year-over-year basis, sales were down by 32.1 per cent and the average selling price was down by 12.4 per cent. The year-over-year change in the overall average selling price has been impacted by both changes in market conditions as well as changes in the type and price point of homes being purchased. This is especially clear at the higher end of the market. Detached home sales for $2 million or more accounted for 5.5 per cent of total detached sales in April 2018, versus 10 per cent in April 2017. The MLS® Home Price Index strips out the impact of changes in the mix of home sales from one year to the next. This is why the MLS® HPI Composite Benchmark was down by only 5.2 per cent year-over-year versus 12.4 per cent for the average price. "While average selling prices have not climbed back to last year's record peak, April's price level represents a substantial gain over the past decade. Recent polling conducted for TREB by Ipsos tells us that the great majority of buyers are purchasing a home within which to live. This means these buyers are treating home ownership as a longterm investment. A strong and diverse labour market and continued population growth based on immigration should
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continue to underpin long-term home price appreciation," said Mr. Syrianos. After preliminary seasonal adjustment1, the month-over-month change (i.e. March 2018 to April 2018) in sales and the average selling price was minimal, with sales decreasing 1.6 per cent and the average selling price decreasing by 0.2 per cent. The month-over-month sales trend has flattened out over the past two months following a steeper drop-off in January and February. "The comparison of this year's sales and price figures to last year's record peak masks the fact that market conditions should support moderate increases in home prices as we move through the second half of the year, particularly for condominium apartments and higher density low-rise home types. Once we are past the current policy-based volatility, home owners should expect to see the resumption of a moderate and sustained pace of price growth in line with a strong local economy and steady population growth," said Jason Mercer, TREB's Director of Market Analysis. Provincial Election Candidates Should Make Housing Issues a Top Priority With a provincial election campaign about to begin, GTA REALTORS® hope that all of the provincial parties will make housing issues a priority. Home ownership is a worthwhile investment that benefits our economy, individual finances and quality of life," said Mr. Syrianos "In recent months and years, there has been significant intervention in housing markets by all levels of government,
through regulatory changes and taxation. We believe the next step should be tax relief, especially from Land Transfer Taxes, both provincial and the Toronto Land Transfer Tax, and efforts to facilitate an increase in the supply of missing middle housing that fills the gap between single family homes and high rises. Furthermore, we believe that any
attempt to increase the Toronto Land Transfer Tax should require approval from the provincial government, given the significance of Toronto's economy to the Province and the connections between the Toronto real estate market and that of the broader GTA," added Syrianos.
JOIN US ON THURSDAY, MAY 31ST, 2018 @ 7:00PM - 6948 FINANCIAL DRIVE, MISSISSAUGA (ROYAL LEPAGE MEADOWTOWNE OFFICE) THE TANTEAM EDITORIAL MAY 04, 2018 Which Way Is The Real Estate Market Heading? Up Or Down? Find out more by joining us for our 14th real estate seminar session on Thursday, May 31st, 2018 - we'll be discussing about the ever-changing real estate market and the conditions effecting home ownership, from economics to politics and current ongoing external forces. There will be music, refreshments and snacks served on the premise. Parking is plenty and we invite you to come out to chime in to discover and share great ideas with like minded people!
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