Canada’s housing markets are finally moving back towards balance

The chill that gripped Canada’s housing market after the Bank of Canada raised interest rates earlier in the year has turned several degrees cooler.

Many of Canada’s most expensive markets, including Toronto, Vancouver and Montreal, as well as Ottawa, Ottawa, Hamilton, saw their sales decline in May. This was the third month of decline for many.

Robert Hogue , assistant chief economist at RBC, stated that “Clearly the Bank of Canada has raised interest rates since March and there are prospects for more”. They’re raising the bar for buyers and lowering earlier (super-bullish) sentiment.

Since March, the central bank has increased its key rate three more times, from 0.25 to 1.5%. Economists expect that it will continue increasing until it reaches 2.5%.

major market highlights

Hogue stated tha Canada’s housing market is now undergoing rapid rebalancing.

The Toronto-area market has seen a dramatic change in the last three months. The demand-supply situation has changed from being the tightest in records to almost as loose as it was during the 2017 correction. Due to the high interest rate sensitivity of buyers due to the large mortgage sizes and the steep prices in the area, the Bank of Canada’s rate increase campaign has left them on guard. In the last three months, home resales fell by a third.

This includes a 9.3% m/m decrease in May (seasonally adjusted). After falling to historic lows during the pandemic in 2004, inventories are rising and have risen 26% over May 2012. The buyers’ urgency and willingness to participate in bidding wars has decreased significantly. In April and May, the MLS Home Price Index declined m/m. The strongest headwinds are being felt by single-detached homes in the 905 belt, which had seen their values rise the most over the past year. The City of Toronto condos have shown greater resilience. As buyers gain pricing power, we expect prices to continue falling.

This was particularly evident in Toronto where “demand-supply conditions swung close to the tightest records to nearly as loosely as during the 2017 correction,” he stated.

toronto area Source: Canadian Real Estate Association, Toronto Region Real Estate Board, RBC Economics | *Yellow dot indicates estimate for May 2022

According to RBC’s seasonally adjusted estimate and the MLS Home Price Index, Vancouver was Canada’s most expensive market. Home resales dropped more than 15% compared to the previous month. Although inventories are still lower than the previous year, they increased.

Hogue wrote that Vancouver buyers are the most rate-sensitive in the country. He believes they will be severely affected by the Bank of Canada increasing their interest rates by 100 basis points. RBC expects that buyers will negotiate better prices with sellers in the future.

Montreal, where sales fell below pre-pandemic levels one year ago, has been on the path to a soft landing longer than other markets. Hogue stated that the notable development in May was a significant increase in new listings. Prices have risen so far, but this could change if there is more supply.

Calgary’s lower prices have made it a busy market in recent years. Although three rate increases have slowed the pace of activity, Hogue said that it is still “incredibly bustling”.

The supply is tight and home resales are still well above the pre-pandemic peak levels. The cooling effect is most evident in the prices. They rose slightly in April, but were flat in May. This is a significant change from blockbuster gains earlier.

Brampton housing markets are finally moving back towards balance. The supply is finally catching up with demand so prices are stabilizing. Get a good deal on your next house, before prices go up again! Visit our blog for more information about Brampton housing market trends.

(Source)

The Need of Real Estate lawyer as a buyer and seller

Ever wonder why your favorite movie stars look so beautiful? You might also wonder why the coffee shop you frequent is always clean and well-decorated for each season. They have a team that is meticulously focused on every detail.

Think about the many professionals who are there to help you find your dream home. You have more than your Real Estate Agent. There are many people who can help you find the right home for you, including a Real Estate lawyer.

Role of a real estate lawyer as a buyer

    • Check out the Agreement of Purchase as well as all other legal documents
    • Verify that there aren’t any claims against the property
    • Arrange for Title Insurance
  • Check that you have a valid title at closing
  • Make sure your property taxes are current
  • Calculate the land tax due at closing
  • Prepare the mortgage documents
  • Close the transaction and make sure all financial and legal conditions are met
  • With the seller’s lawyer, exchange legal documents and keys

Role of a real-estate lawyer as a seller

  • Before you sign, make sure to read the Agreement of Sale.
  • Assist with negotiation of terms and conditions
  • Prepare the deed for your house
  • As soon as title problems arise, deal with them and resolve them
  • Close the transaction
  • Make sure all legal and financial requirements are met
  • With the buyer’s lawyer, exchange legal documents and keys

You now have a better idea of what a Real Estate Lawyer does. It’s time for you to find the one who will represent you during the entire transaction. Your RE/MAX Agent will be able to help you choose a Real Estate lawyer. They often work with trusted professionals. For more information, you can visit our Finding a Real Estate Lawyer post.

Real estate investors in Ontario: strategies to avoid capital gains tax

How to reduce taxes on the sale of Canadian real estate

In this article, we’ll cover everything you need to know about reducing taxes on the sale of real estate in Canada.

1. Capital gains treatment. 

First, you can reduce taxes by calling the capital gain from the sale of Canadian real property a capital gain. Capital gains mean that only half the profits from your Canadian real-estate sale will be taxable to you. 

Let’s say that a real property sale profit is $100,000. This means that only $50,000, or half of the gain, would be taxable at your marginal tax rate. This formula calculates the profit from real estate sales in Canada. Net sales minus cost equals profit or loss. The selling price is the net sales proceeds, while the cost is the original purchase. The original purchase price must be included on the purchase and sales agreement when you purchased the property. The property’s cost can include closing costs and land transfer tax legal fees for tax purposes. To arrive at net sales proceeds, you can also deduct commissions and selling costs.

2. Maximize capital improvements

Maximize capital expenditures in order to maximize capital improvements and lower property sale taxes. Also known as improvements, capital expenditures are also called capital expenditures. A lower price will result in a lower profit when you sell your property.

Let’s say you decide to replace all your windows. Window replacements can be expected to last between 10-20 years. This will increase the property’s tax-free life expectancy. These windows can be considered capital improvements and added to your property’s cost. Because repairs are not considered improvements, they won’t increase your property’s value for tax purposes.

Repairs are deductable as a current expense in your Canadian tax return. Repairs include painting, fixing leaky faucets, shampooing carpets and fixing holes.

3. Do not claim capital cost allowance.

You must consider depreciation and capital cost allowance when selling a Canadian property. Tax-deductible depreciation is the cost of physical wear and tear on your property. When you sell depreciable assets, such as Canadian real property, the capital cost allowance that you claimed in previous taxation years must be included within your taxable income for the year of sale. This is called recapture.

Let’s take, for example, $100,000 in capital cost allowance that you have claimed to date. This means that $100,000 of capital cost allowance you have previously claimed will be added to your taxable income for the year of sale. You will not be able to claim the capital cost allowance if you don’t. You should calculate the capital gain from your real estate sales. Maximize capital improvements and include capital cost allowance.

We are working real estate lawyers specialize in helping people with a variety of options when it comes to protecting their investments from capital gains tax. So let us show you our experts expertise by taking a look at your situation and advising on strategies that work for your needs.

Schedule your free consultation now!

GTA home prices up 28% from last year: TRREB

TORONTO — There was no relief for Greater Toronto Area homebuyers last month as the average home price increased up to nearly 28 per cent when compared with last year as a lack of supply continued to hamper the market.

The Toronto Regional Real Estate board said Thursday the average selling price for a home in the region surpassed $1.3 million last month, up from just above $1 million last February and more than $1.2 million in January of this year.

The average price of a detached home hit more than $1.7 million last month, with semi-detached properties at $1.3 million, townhouses at $1.1 million and condos nearing $800,000.

The Ontario board laid much of the blame for the soaring prices on demand greatly outpacing supply and thus, fueling a market where bidding wars, few sellers and a frenzied atmosphere have been the norm.

“I’ve had clients break down and cry for me because when they lose out on a bid, they’re just so frustrated,” said Despina Zanganas, a Toronto realtor with PSR Brokerage. “They put in what they think is really reasonable and it goes for like $100,000 more than they would have expected.”

Condo prices, she said, have been “crazy crazy crazy” in recent months because people are realizing that houses are increasingly expensive, so they are shifting to the most affordable homes “just to get their foot in the door.”

Many sellers also have high expectations. They’re listing homes at elevated prices and if they don’t get the amount they want, she has seen them relist again for a higher amount, driving more anxiety to buyers.

But over the last week, Zanganas has noticed a slight easing in the market and some homes she has kept tabs on have received far fewer showings than she would have predicted.

The board made similar observation after it detected in February that the region is making a “modest move” toward a “slightly more balanced” market.

Those traces of an easing came in the form of new listings, which are still down from a year ago, but by a marginally lesser annual rate than sales.

New listings for the month totalled 14,147, an almost seven per cent drop from 15,146 last February.

“People are just holding onto their houses because there’s no inventory,” Zanganas said.

“If you sell, how are you going to buy? And it’s probably not going to be a step up.”

Meanwhile, 9,097 homes changed hands last month compared with 10,929 last February and 5,622 in January of this year.

That means February home sales were down compared with the all-time record set in 2021, but still eked out the second highest sales rate for the month.

TRREB had forecast sales would be lower this year because many people rushed to purchase homes last year or in the early weeks of 2022 in a bid to get ahead of looming interest rate hikes.

On Wednesday, the Bank of Canada hiked its benchmark interest rate to 0.5 per cent from 0.25, where it has sat for the last two years of the COVID-19 pandemic and served as an incentive to cash-strapped buyers.

TRREB believes the rate hike will have a “moderating effect” on home sales, but will be countered by substantial immigration levels and a continued lack of supply.

It does not see home prices abating in the near-term.

“Because inventory remains exceptionally low, it will take some time for the pace of price growth to slow,” Jason Mercer, the board’s chief market analyst, said in a news release.

“Look for a more moderate pace of price growth in the second half of 2022 as higher borrowing costs result in some households putting their home purchase on hold temporarily as they resituate themselves in the market.”

This report by The Canadian Press was first published March 3, 2022.

By Tara Deschamps, The Canadian Press

A Look at Mississauga’s New Pre-Construction Condos

Mississauga is Canada’s one of the largest cities. It has become a vibrant economic and cultural hub, and It offers a variety of living experiences through its increasing stock of condos and homes.

About Mississauga

Mississauga is surrounded by beautiful Lake Ontario shorelines, home to many waterfront condos and homes. The old village of Port Credit was transformed into a pedestrian-friendly shopping district. The Square One Shopping Centre is located further north on Hurontario Street, the city’s main thoroughfare. It also houses a large number of corporate headquarters. A string of communities along the Credit River to the west provide a family-friendly, lush living environment. In the city’s northwest corner is the former village of Streetsville. There are also several shopping centers and recreational areas scattered throughout the community.

Mississauga Transportation

MiWay is the city’s transit agency and offers a wide range of bus routes. Many use the Mississauga Transitway, which provides increased frequency and reliability. The Transitway runs approximately from Pearson Airport to Winston Churchill Boulevard via Square One. It is served by both GO Transit or MiWay routes. GO offers rail service to the area. The Lakeshore West runs parallel to Lake Ontario and offers high-quality service seven days per week. The Milton Line runs through the city’s centre and western reaches and offers ten round trips on weekdays. As well, the opening of the Hurontario LRT in 2024 provides transit access for those commuting from north to south in Mississauga. There are four major highways – Highway 401, Highway 403, Highway 407 and Highway 410 – all crossing through the Mississauga city.

If you’re looking to buy your first home, but don’t have the money to get into the market right now, it may be worth your while to look into Mississauga’s many pre-construction condo developments. With the right pre-construction condo, you can get into the market early, take advantage of great savings on your monthly mortgage payment, and build equity as the building itself rises around you. Here are some things to keep in mind if you’re considering getting into the Mississauga pre-construction condo market.

1. Lakeview DXE Club Condos

Lakeview DXE Club Condos

Developer: Vandyk Properties
Address: 1345 Lakeshore Rd E, Mississauga
Nearest Intersection: Lakeshore Rd E & Dixie Rd
Pricing: TBA
Occupancy: TBA
Storeys / Suites: 2 Towers – 8 & 12 Storeys / TBA
Suite Types: One Bedroom – Three Bedroom Suites
Suite Sizes: TBA
Maintenance Fees: TBA
Deposit Structure: ​TBA
Incentives*: Platinum VIP Pricing & Floor Plans, First Access to the Best Availability, Capped Development Levies, Assignment, Property Management & Leasing Services Available, Free Lawyer Review of Your Purchase Agreement, Free Mortgage Arrangements

2. The Vic Condos

The Vic Condos

Introducing The Vic Condos, the newest mid-rise condominiums coming soon to your town. You’ll find everything you need around here in beautiful Downtown Streetsville; with great food, shops and sights all just a few minutes away by car or bus. And when it comes time for higher education – Its right next door to the University of Toronto – Mississauga Campus!

Developer: Forest Green Homes
Address: Tannery St & Queen St S, Mississauga
Pricing: TBA
Occupancy: TBA
Storeys / Suites: 4 Storeys / TBA
Suite Types: One Bedroom – Three Bedroom Suites
Suite Sizes: TBA
Maintenance Fees: TBA
Deposit Structure: TBA
Incentives*: Platinum VIP Pricing & Floor Plans, First Access to the Best Availability, Capped Development Levies, Assignment, Free Leasing & Property Management Services, Free Lawyer Review of Your Purchase Agreement, Free Mortgage Arrangements
Suite Finishes: Laminate Flooring, Stone Kitchen Countertops, Stainless Steel Kitchen Appliances and more
Building Amenities: TBA

3. Eleven 11 Clarkson Towns

Eleven 11 Clarkson Towns

Eleven 11 Clarkson Towns new townhomes are coming to Clarkson Village in Mississauga, Ontario. These homes will be right next door to the shops and restaurants of Lakeshore, making it easy for residents to do everything they need without having to leave home!

Developer: Saxon Developments
Address: 1111 Clarkson Rd N, Mississauga
Nearest Intersection: Clarkson Rd N & Lakeshore Rd W
Pricing: 
Starting From The Mid $500s
Occupancy:
 December 2020
Suite Types: One Bedroom – Three Bedroom Suites
Suite Sizes: 690 sq ft – 1,687 sq ft
Maintenance Fees: Approx. $0.30 / sq ft
Deposit Structure: $10,000 on Signing // 5% Minus $5,000 in 30 Days // 5% in 180 Days // 5% in 300 Days // 5% on Occupancy
Incentives: Platinum VIP Pricing & Floor Plans, First Access to the Best Availability, Capped Development Levies ($5,000 for 1 Bed // $7,500 for 2 Bed // $10,000 for 3 Bed), Free Assignment (Value of $10,000), Property Management & Leasing Services Available, Free Lawyer Review of Your Purchase Agreement, Free Mortgage Arrangements

4. 91 Eglinton Ave East Condos

91 EGLINTON AVE EAST CONDOS (1)

Introducing a new condo community in the heart of Mississauga- at 91 Eglinton Ave East! Nestled between Hurontario St. and Eglinton Ave., you will never want to leave this condominium townhome block which features 6 towers and 2 buildings all within walking distance from everything that Mississauga has to offer. From major highways, shops and schools- it’s all right around the corner for you at 91 Eglinton Ave East.

Developer: Liberty Developments
Address: 91 Eglinton Avenue East, Mississauga
Nearest Intersection: Eglinton Ave E & Hurontario St
Pricing: Anticipated To Start From The ​High $400’s
Occupancy: 
Anticipated For 2024
Storeys / Suites: Six Towers – 13, 19, 24, 25, 35, & 37 Storeys / Suites TBA
Suite Types: One Bedroom – Three Bedroom Suites + 3-Storey Townhomes
Suite Sizes: TBA
Deposit Structure: TBA
Incentives: Platinum VIP Pricing & Floor Plans, First Access to the Best Availability, Capped Development Levies, Assignment, Free Lawyer Review of Your Purchase Agreement, Free Mortgage Arrangements, Exclusive 1 Year Free Leasing Services & 1 Year Free Professional Property Management Services*

5.  Kindred Condos

Kindred Condos N

Introducing your next home- a beautiful new condo in Mississauga perfect for anyone who wants to be closer to everything. With Westwood Mall just around the corner, major highways and universities nearby, as well as being situated near other essential amenities; this is a great option for those looking for convenience.

Developer: The Daniels Corporation
Address: 2475 Eglinton Ave W, Mississauga
Nearest Intersection: Eglinton Ave W & Erin Mills Pkwy
Pricing: Starting From $485,900
Occupancy: February 2025
Storeys/Suites: 25-Storeys / TBA 
Suite Types: Studio – Two Bedroom + Den Suites
Suite Sizes: 433 sq ft – 953 sq ft
Maintenance Fees: $0.59/sq ft (Includes Bell Gigabit Fibe 1.5 Internet // Water & Hydro Separately Metered)
Deposit Structure: $7,000 on Signing // 5% Minus $7,000 in 30 Days // 1% in 90 Days // 1% in 120 Days // 1% in 150 Days // 1% in 180 Days // 1% in 210 Days // 5% in 400 Days // 5% on Occupancy
Incentives*: VIP Pricing & First Access to the Best Availability, Capped Development Levies, Free Assignment, Free Lawyer Review of Your Purchase Agreement, Free Mortgage Arrangements, One Parking Unit ($55,000 Value) + One Locker Unit ($3,000 Value for a half-height locker or $5,000 Value for a full-height locker) Available for ONLY $45,800!*, Capped Closing Costs (All One Bedroom + Den & Smaller – $10,000 + HST // All Two Bedroom & Larger – $12,500 + HST)
Suite Finishes: Laminate Flooring, Stone Kitchen Countertops, Stainless Steel Kitchen Appliances, Stacked Washer & Dryer
Building Amenities: 24/7 Concierge, Private Roundabout Driveway Entrance, Pet Wash, Co-Working Space, Bookable Boardroom, State-of-the-Art Fitness Centre, Yoga Studio, Party Room, Outdoor Playground with Firepit, Games Room, Outdoor Terrace, Gardening Plots

5 Tips for Buying an Investment Property

If you’re considering buying an investment property, there are several things to keep in mind before you commit to the purchase. The key to your success with the property will be researching and planning to know what factors will affect the house’s value and how much of your time and money you’ll need to put into it to maintain its value over time. Here are five essential things to consider before investing in a property. If any of these crucial things don’t make sense to you, or if you find them too complicated, be sure to talk with an expert who can help guide you through the process.

1. Risk in Real estate investing.

Real estate investing is a lower-risk option than other investments, such as stocks or cryptocurrencies. To assess the risks involved, it is essential to thoroughly research the property, the area, the appreciation over time, and future plans. You should also consider operating, mortgage, and maintenance costs when investing in property. 

2. Your Financial Situation

Before you consider investing in property, It is essential to assess your financial situation. These investments are not cheap, so be prepared to invest substantial money upfront and over time if you have to mortgage. When determining your financial situation, consider your income to debt ratio. This could make a difference in whether you can use your existing funds for the investment or not. Consider how much cash you have available after the acquisition. This can help with closing costs and emergency fund requirements.

3. Property Management

Depending on the type and size of your property, you might need management services to maintain it operational after you have bought it. It is wise to hire a property manager to manage your rental property. They can find tenants, handle legalities, and maintain the property. This will take the burden off your shoulders and allow you to concentrate on other investments and personal ventures.

4. Property location

The “where” is much more important than “what” when investing in property. Property prices heavily depend on the location of the property. The property price in urban areas will always be higher than those in rural and suburban locations. The high cost of living in urban areas will result in higher long-term profits. Because of the ease of access to transportation and social factors, urban lifestyles are often more appealing to the masses. Once you have purchased the property, the property’s location will be determined by who your target audience is. If you plan to rent your property out to families, you might consider buying a property in Brampton and Mississauga, the best places to purchase real estate in Ontario.

5. The One Percent Rule

The real estate’s one percent rule states that the monthly rent should not be less than 1% of the property’s price. Your property rent should cover your monthly mortgage payments. This ensures that you don’t invest your income in the mortgage but rent the property. This is what will make renting a rental property worth the investment.

Mississauga Location

268 Derry Rd W Unit 101, Mississauga, ON L5W 0H6

Brampton Location

2 County Court Blvd #150, Brampton, ON, L6W 3W8

Halton Hills Location

23 Mountainview Rd S, Georgetown, ON L7G 4J8