4 1

for more detailed GTA statistics: JAMESMETCALFE.INFO

416-931-4161James Metcalfe BROKER

www.OurHomeToronto.com | Service@OurHomeToronto.com

REAL ESTATE UPDATE

Royal LePage Real Estate Services Ltd.Johnston & Daniel Division, Brokerage

477 Mount Pleasant Rd., Toronto, ON M4S 2L9

APRIL 2013

The average price of a resale home in the GTA in March was $519,879 - which represented a 4% increase versus the March 2012 average price of $500,875. Price growth occurred across all key market segments, as per the following: single-detached homes (+4%), semi-detached homes (+5%), townhomes (+5%) and condo apartments (+2%). The average price over the entire fi rst quarter of 2013 was $508,066 - which is up by slightly over 3% versus the fi rst quarter of 2012. Price growth continues to be more robust in the low-rise market segments where a lack of supply remains an issue. The Toronto Real Estate Board’s full year price forecast remains at $515,000 - which represents a 3.5% annual rate of growth.

From a volume perspective, the month of March witnessed a 17% decline in sales (7,765 transactions versus 9,385 in March 2012). In the fi rst quarter of 2013, total sales were 17,678 - down by 14% as compared to the fi rst quarter of 2012. The major issues affecting volume continue to stricter lending guidelines for high-ratio borrowers, the additional upfront Land Transfer Tax in the City of Toronto and a shortage of listings in the low-rise market segments. Volume growth varied by market segment, as follows: single-detached homes (-18%), semi-detached homes (-14%), townhomes (-15%) and condo apartments (-18%). Having said this, home ownership remains affordable for a household earning the average income in the GTA.

GTA RESALE HOME SALES8 9 10 11 12

GTA Resale Home Sales

MARJAN MAY SEP NOVJUL

3,000

1,500

4,500

6,000

7,500

9,000

10,500

12,000201320122011

GTA AVERAGE RESALE PRICE8 9 10 11 12

GTA Resale Home Sales

MARJAN MAY SEP NOVJUL

201320122011

$400,000

$540,000

$420,000

$440,000

$460,000

$480,000

$500,000

$520,000

The federal budget  that was delivered on March 21st included few mortgage changes. However, one exception was a new proposal to restrict the use of  default insurance  on  low-ratio mortgages (i.e., those with 20% or more equity). Here are some of the more obvious reasons behind this move:

• The federal government wants to lower its exposure to “nonessential” mortgage insurance which the taxpayer is ultimately on the hook for.

• Ottawa also wants to encourage lenders to assume more risk themselves  when extending credit, instead of relying on government-backed mortgage insurance.

• The Department of Finance wants to free up CMHC insurance availability. CMHC has a legislatively-capped $600 billion insurance limit and it’s running close to that limit now. Bulk insurance eats into that available capacity and is deemed less essential to the housing market than

regular insurance.

• Finally, the feds also want to encourage banks to keep more capital on hand by restricting their ability to “portfolio insure” large numbers of mortgages.

The last point may put upward pressure on mortgage rates as the banks cost of funding mortgages will rise if they are required to raise additional capital to hold low-ratio mortgages on their balance sheets.

Having said this, the whole point of mortgage insurance is to encourage the housing industry by offering support primarily to fi rst-time buyers who are most likely to be high-ratio borrowers. Consequently, the Department of Finance’s proposals with regard to insuring low-ratio mortgages appear to be quite reasonable.

As usual, your client referrals are both highly valued and much appreciated. Until next time, take care!

“The 50-50-90 rule: Anytime you have a 50-50 chance of getting something right, there’s a 90% probability you’ll get it wrong.” – Andy Rooney

“Here’s something to think about: How come you never see a headline like ‘Psychic Wins Lottery’?” – Jay Leno

“The best argument against democracy is a fi ve-minute conversation with the average voter.” – Winston Churchill

“I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.” – Albert Einstein

t

ANSWERING YOUR ELECTRICAL QUESTIONS

3

Jack and Susan thought they found the condominium of their dreams at 5 Rowntree Road in the Kipling and Finch area of northwest Toronto. They loved the building, the view and the amenities. They could take their two dogs on long walks in the area.

So they bid on the unit, got involved in a bidding war and won the auction. The deal was conditional on their being satisfi ed with the building’s certifi cate of status.

The status certifi cate has all the condo rules along with other important information, such as who the management company is, the fi nancial statements, the amount of money in the reserve fund and when the last reserve fund study was completed.

It was at that point that Jack and Susan came to see me. It turned out the rules only allowed one pet and the pet could not be more than 25 pounds. Their dogs weighed closer to 50 pounds each and they wanted to know if this rule could be easily changed.

Since the rule was found in the condo declaration, it would require 80 per cent of owners to change it. I told them that in my experience, this was unlikely to happen. It is very hard to get condominium owners to agree on anything, and pets are a very sensitive subject. Many owners choose buildings precisely because there are pet restrictions.

They told me that they heard of some owners who had two dogs or heavier pets and no action was brought against them. Could they rely on this, buy the unit and hope no one would make a fuss? This is a diffi cult question because it raises the issue of what happens when a condo building is not enforcing its rules. Does it allow others who buy in to do the same thing?

In some legal decisions, when boards did not enforce their pet

rules, they could not take the position against new owners who brought pets with them. In other cases when buildings restrict pets, owners have made Human Rights arguments, claiming that they relied so much on their pet that to force them to remove the pet would leave them emotionally disabled. Still, I could not give them any guarantee that they would be able to keep their dogs if they moved in.

In the end, they decided to cancel the deal, as they did not want to take the chance that they would have to remove their dogs later. My question is: Why were they bidding on this unit in the fi rst place?

A key step in your research of resale condos is to fi nd out what the status certifi cate says fi rst, before you bid. Anyone can order it for $100. When you interview real estate agents, ask them if they have this information. The top agents know which buildings are well run and which aren’t. They also should know which buildings have unusual restrictions. You should too.

If you are renting a condo and the building has pet restrictions, make sure that the condo rules are attached to the lease and that your tenant understands that they are not permitted any pets.

Finally, if a pet is not supposed to be in your building or if it is bothering the other unit owners, you need to report this to your board as soon as possible.

Then the board or the management company needs to get involved quickly to work with the owner to solve the problem, or if necessary, declare the pet to be a nuisance and obtain an order to remove it from the building.

How do I determine the electrical capacity of my home? Will it handle my requirements?

The electrical service provided to a home is measured in amps, which is a measure of the “fl ow rate” of electricity through a wire. Today’s average home is constructed with electrical service of 100 amps, which means that the large main wires entering the home can safely handle 100 amps of current before there is a risk of overheating. Some homes, however, are built with 200 amp service while homes built prior to the late 1950s were built with 60 amp service. In order to determine the electrical capacity of the home, an inspector will check the size of the wires entering the home to verify that they are compatible with main electrical disconnect (breaker or fuse). Modern homes are equipped with breakers to detect if too much current is fl owing through the wires. The breaker will shut off to prevent the overheating of the wire, which is a potential safety hazard.

A home’s electrical capacity is dependent upon the demand within a home. The more electrical fi xtures and appliances there are, the larger the service requirement. Appliances with the highest demands include stoves/ovens, dryers and electrical water heaters. Saunas, spas and workshops also draw large quantities of electricity. If many of these appliances are operating at the same time, the electrical service may be inadequate causing the main breaker or fuse to trip if the fl ow of electricity exceeds the safe capacity.

My home has outlets that are not grounded. What are the risks and consequences?

Grounded electrical systems were implemented as a safety feature in homes after the 1950s. Copper grounding wires provide a path to redirect potentially harmful electricity to a safe location if an element of the electrical system malfunctions. A ‘hot’ wire that comes loose and contacts the metal casing of

an electrical fi xture or appliance can cause this ‘stray’ electricity.

For example, if a washing machine malfunctions, the stray electricity should be guided through the grounding wire of the appliance to the grounding wire of the homes electrical system. Ground wires should be connected to all areas of the electrical system (i.e., fuse panels, light fi xtures, outlets, junction boxes, etc.) providing electrically unobstructed paths to minimize the risk of shock.

Prior to the 1950s, electrical systems were constructed without ground wires as noted by two-pronged outlets. Older homes with three-pronged outlets have had a grounding system installed – or a two-pronged outlet replaced for aesthetic reasons – without upgrading the wire service. This latter situation can give a homeowner a false sense of security. If an appliance with a three-pronged plug is plugged into an ungrounded three-pronged outlet, a safety hazard might be created since this equipment is designed for a grounded outlet. A home inspector can identify the grounding properties of a home and make the appropriate recommendations for upgrades where potentially unsafe conditions exist.

This article was contributed by Mark Weisleder, a Toronto-based lawyer, author and speaker to the real estate industry. Please visit him at www.markweisleder.com

THIS COUPLE HAD A TWO-DOG CONDO PROBLEM

2This article was contributed by AmeriSpec Canada, a leading Canadian home inspection company. Please visit them at www.amerispec.ca

CONDO HOUSECORNER SMART

t

ANSWERING YOUR ELECTRICAL QUESTIONS

3

Jack and Susan thought they found the condominium of their dreams at 5 Rowntree Road in the Kipling and Finch area of northwest Toronto. They loved the building, the view and the amenities. They could take their two dogs on long walks in the area.

So they bid on the unit, got involved in a bidding war and won the auction. The deal was conditional on their being satisfi ed with the building’s certifi cate of status.

The status certifi cate has all the condo rules along with other important information, such as who the management company is, the fi nancial statements, the amount of money in the reserve fund and when the last reserve fund study was completed.

It was at that point that Jack and Susan came to see me. It turned out the rules only allowed one pet and the pet could not be more than 25 pounds. Their dogs weighed closer to 50 pounds each and they wanted to know if this rule could be easily changed.

Since the rule was found in the condo declaration, it would require 80 per cent of owners to change it. I told them that in my experience, this was unlikely to happen. It is very hard to get condominium owners to agree on anything, and pets are a very sensitive subject. Many owners choose buildings precisely because there are pet restrictions.

They told me that they heard of some owners who had two dogs or heavier pets and no action was brought against them. Could they rely on this, buy the unit and hope no one would make a fuss? This is a diffi cult question because it raises the issue of what happens when a condo building is not enforcing its rules. Does it allow others who buy in to do the same thing?

In some legal decisions, when boards did not enforce their pet

rules, they could not take the position against new owners who brought pets with them. In other cases when buildings restrict pets, owners have made Human Rights arguments, claiming that they relied so much on their pet that to force them to remove the pet would leave them emotionally disabled. Still, I could not give them any guarantee that they would be able to keep their dogs if they moved in.

In the end, they decided to cancel the deal, as they did not want to take the chance that they would have to remove their dogs later. My question is: Why were they bidding on this unit in the fi rst place?

A key step in your research of resale condos is to fi nd out what the status certifi cate says fi rst, before you bid. Anyone can order it for $100. When you interview real estate agents, ask them if they have this information. The top agents know which buildings are well run and which aren’t. They also should know which buildings have unusual restrictions. You should too.

If you are renting a condo and the building has pet restrictions, make sure that the condo rules are attached to the lease and that your tenant understands that they are not permitted any pets.

Finally, if a pet is not supposed to be in your building or if it is bothering the other unit owners, you need to report this to your board as soon as possible.

Then the board or the management company needs to get involved quickly to work with the owner to solve the problem, or if necessary, declare the pet to be a nuisance and obtain an order to remove it from the building.

How do I determine the electrical capacity of my home? Will it handle my requirements?

The electrical service provided to a home is measured in amps, which is a measure of the “fl ow rate” of electricity through a wire. Today’s average home is constructed with electrical service of 100 amps, which means that the large main wires entering the home can safely handle 100 amps of current before there is a risk of overheating. Some homes, however, are built with 200 amp service while homes built prior to the late 1950s were built with 60 amp service. In order to determine the electrical capacity of the home, an inspector will check the size of the wires entering the home to verify that they are compatible with main electrical disconnect (breaker or fuse). Modern homes are equipped with breakers to detect if too much current is fl owing through the wires. The breaker will shut off to prevent the overheating of the wire, which is a potential safety hazard.

A home’s electrical capacity is dependent upon the demand within a home. The more electrical fi xtures and appliances there are, the larger the service requirement. Appliances with the highest demands include stoves/ovens, dryers and electrical water heaters. Saunas, spas and workshops also draw large quantities of electricity. If many of these appliances are operating at the same time, the electrical service may be inadequate causing the main breaker or fuse to trip if the fl ow of electricity exceeds the safe capacity.

My home has outlets that are not grounded. What are the risks and consequences?

Grounded electrical systems were implemented as a safety feature in homes after the 1950s. Copper grounding wires provide a path to redirect potentially harmful electricity to a safe location if an element of the electrical system malfunctions. A ‘hot’ wire that comes loose and contacts the metal casing of

an electrical fi xture or appliance can cause this ‘stray’ electricity.

For example, if a washing machine malfunctions, the stray electricity should be guided through the grounding wire of the appliance to the grounding wire of the homes electrical system. Ground wires should be connected to all areas of the electrical system (i.e., fuse panels, light fi xtures, outlets, junction boxes, etc.) providing electrically unobstructed paths to minimize the risk of shock.

Prior to the 1950s, electrical systems were constructed without ground wires as noted by two-pronged outlets. Older homes with three-pronged outlets have had a grounding system installed – or a two-pronged outlet replaced for aesthetic reasons – without upgrading the wire service. This latter situation can give a homeowner a false sense of security. If an appliance with a three-pronged plug is plugged into an ungrounded three-pronged outlet, a safety hazard might be created since this equipment is designed for a grounded outlet. A home inspector can identify the grounding properties of a home and make the appropriate recommendations for upgrades where potentially unsafe conditions exist.

This article was contributed by Mark Weisleder, a Toronto-based lawyer, author and speaker to the real estate industry. Please visit him at www.markweisleder.com

THIS COUPLE HAD A TWO-DOG CONDO PROBLEM

2This article was contributed by AmeriSpec Canada, a leading Canadian home inspection company. Please visit them at www.amerispec.ca

CONDO HOUSECORNER SMART

4 1

James Metcalfe BROKER

416-931-4161 www.OurHomeToronto.com | Service@OurHomeToronto.com

In accordance with PIPEDA, to be removed from this mailing list please e-mail or phone this request to the REALTOR® Not intended to solicit buyers or sellers currently under contract with a broker. The information and opinions contained in this newsletter are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for damages resulting from using the published information. This newsletter is provided with the understanding that it does not render legal, accounting or other professional advice. Statistics are courtesy of the Toronto Real Estate Board. Copyright © 2013 Mission Response Inc. 416.236.0543 All Rights Reserved. K0191

“YOUR REFERRALS ARE SINCERELY APPRECIATED! THANK YOU!”

Royal LePage Real Estate Services Ltd.Johnston & Daniel Division, Brokerage

477 Mount Pleasant Rd., Toronto, ON M4S 2L9

APRIL 2013

The average price of a resale home in the GTA in March was $519,879 - which represented a 4% increase versus the March 2012 average price of $500,875. Price growth occurred across all key market segments, as per the following: single-detached homes (+4%), semi-detached homes (+5%), townhomes (+5%) and condo apartments (+2%). The average price over the entire fi rst quarter of 2013 was $508,066 - which is up by slightly over 3% versus the fi rst quarter of 2012. Price growth continues to be more robust in the low-rise market segments where a lack of supply remains an issue. The Toronto Real Estate Board’s full year price forecast remains at $515,000 - which represents a 3.5% annual rate of growth.

From a volume perspective, the month of March witnessed a 17% decline in sales (7,765 transactions versus 9,385 in March 2012). In the fi rst quarter of 2013, total sales were 17,678 - down by 14% as compared to the fi rst quarter of 2012. The major issues affecting volume continue to stricter lending guidelines for high-ratio borrowers, the additional upfront Land Transfer Tax in the City of Toronto and a shortage of listings in the low-rise market segments. Volume growth varied by market segment, as follows: single-detached homes (-18%), semi-detached homes (-14%), townhomes (-15%) and condo apartments (-18%). Having said this, home ownership remains affordable for a household earning the average income in the GTA.

GTA RESALE HOME SALES8 9 10 11 12

GTA Resale Home Sales

MARJAN MAY SEP NOVJUL

3,000

1,500

4,500

6,000

7,500

9,000

10,500

12,000201320122011

GTA AVERAGE RESALE PRICE8 9 10 11 12

GTA Resale Home Sales

MARJAN MAY SEP NOVJUL

201320122011

$400,000

$540,000

$420,000

$440,000

$460,000

$480,000

$500,000

$520,000

The federal budget  that was delivered on March 21st included few mortgage changes. However, one exception was a new proposal to restrict the use of  default insurance  on  low-ratio mortgages (i.e., those with 20% or more equity). Here are some of the more obvious reasons behind this move:

• The federal government wants to lower its exposure to “nonessential” mortgage insurance which the taxpayer is ultimately on the hook for.

• Ottawa also wants to encourage lenders to assume more risk themselves  when extending credit, instead of relying on government-backed mortgage insurance.

• The Department of Finance wants to free up CMHC insurance availability. CMHC has a legislatively-capped $600 billion insurance limit and it’s running close to that limit now. Bulk insurance eats into that available capacity and is deemed less essential to the housing market than

regular insurance.

• Finally, the feds also want to encourage banks to keep more capital on hand by restricting their ability to “portfolio insure” large numbers of mortgages.

The last point may put upward pressure on mortgage rates as the banks cost of funding mortgages will rise if they are required to raise additional capital to hold low-ratio mortgages on their balance sheets.

Having said this, the whole point of mortgage insurance is to encourage the housing industry by offering support primarily to fi rst-time buyers who are most likely to be high-ratio borrowers. Consequently, the Department of Finance’s proposals with regard to insuring low-ratio mortgages appear to be quite reasonable.

As usual, your client referrals are both highly valued and much appreciated. Until next time, take care!

“The 50-50-90 rule: Anytime you have a 50-50 chance of getting something right, there’s a 90% probability you’ll get it wrong.” – Andy Rooney

“Here’s something to think about: How come you never see a headline like ‘Psychic Wins Lottery’?” – Jay Leno

“The best argument against democracy is a fi ve-minute conversation with the average voter.” – Winston Churchill

“I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.” – Albert Einstein