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GTA Condos

GTA resale condo listings and sales dip to end 2018, but prices rise

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GTA resale condo listings and sales dip to end 2018, but prices rise

GTA Condos

GTA condominium sales declined 9.9 per cent to 5,191 in the fourth quarter of 2018, compared to the last quarter of 2017, according to the latest statistics from the Toronto Real Estate Board (TREB).

New condo listings entered into TREB’s MLS System were down by more than sales on a year-over-year basis – dropping 11.2 per cent to 7,272 in Q4 2018 from 8,186 in Q4 2017.  his points to tighter market conditions at the end of 2018 compared to late 2017.

Price growth leader

“The condominium apartment segment was the best-performing segment in terms of annual average rates of price growth in 2018,” says TREB President Garry Bhaura. “Condos represent a relatively affordable housing option. With a substantial decrease in listings in 2018, competition between intending buyers remained strong.  This supported average price growth well-above the rate of inflation and annual rates of price growth reported for other ground-oriented home types.”

The average price of a condo unit increased by 8.3 per cent to $558,728 in Q4 2018 from $516,086 in Q4 2017. Year-over-year price growth in the city of Toronto, which accounted for 72 per cent of transactions, was slightly higher at 8.9 per cent, resulting in an average price of $598,664.

Lack of supply

“The condominium apartment segment continued to be a key entry point into the GTA home ownership market in 2018,” says Jason Mercer, TREB’s director of market analysis. “Higher mortgage qualification standards meant that many first-time buyers were looking for more affordable housing options.  Moving forward, the concern is that a continued lack of listings supply, despite relatively strong new condo completions as of late, will hamper the ability of potential home buyers to meet their housing needs.”

 

Condo market summary

Fourth quarter 2018
2018 2017
Sales Average Price Sales Average Price
Total TREB 5,191 $558,728 5,760 $516,086
Halton Region 222 $510,946 202 $461,200
Peel Region 654 $424,860 767 $389,446
City of Toronto 3,728 $598,664 4,188 $549,927
York Region 453 $498,198 482 $481,307
Durham Region 117 $383,872 108 $381,893
Other Areas 17 $391,265 13 $343,069
Source: Toronto Real Estate Board

 

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New home market

GTA new home market back to typical sales and openings levels in November

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GTA new home market back to typical sales and openings levels in November

New home market

The GTA new home market saw more typical activity levels in November, both in new home sales and new project openings, after a relatively strong October, the Building Industry and Land Development Association (BILD) reports.

There were 2,823 new homes sold in November, according to Altus Group, BILD’s official source for new-home market intelligence. Condominium apartments in low-, medium- and highrise buildings, stacked townhouses and loft units accounted for 2,454 new home sales in November, down 24 per cent from November 2017, but only sixper cent less than the 10-year average. Single-family home sales, with 369 detached, linked and semi-detached houses and townhouses (excluding stacked townhouses) sold, were up eight per cent from last November but down 71 per cent from the 10-year average.

Remaining inventory increased month over month, to 16,797 units, comprised of 11,254 condo apartment units and 5,543 single-family units. Remaining inventory includes units in preconstruction projects, in projects currently under construction, and in completed buildings.

Strong finish

“The condominium apartment market in the GTA is finishing off the year on a stronger note than it started,” says Patricia Arsenault, Altus Group’s executive vice-president, Data Solutions. “Both builders and buyers have re-engaged in stronger numbers in recent months, signalling that the downturn that followed record activity last year may be coming to an end.”

The benchmark price for both condo apartments and single-family homes increased slightly in November compared to the previous month. The benchmark price for condo apartments was $786,602, which was up 11.9 per cent over the last 12 months. The benchmark price for single-family homes was $1,150,823, down 5.9 per cent over the last 12 months.

Although the housing market continued to show signs of recovery in November, it will continue to operate below capacity until fundamental issues that are restricting supply and demand are addressed through government policy, according to David Wilkes, BILD president and CEO.

No more talk

“The time for talk is done and our region needs action now to ensure we build the more than 50,000 new homes needed annually to support the GTA’s growing population,” says Wilkes. “Our industry is encouraged by the provincial government’s commitment to unlocking supply. We will continue to call on municipal governments to expedite approvals of new developments, and on the federal government to undo the negative effects of the outdated stress test on consumers’ ability to purchase homes.”

 

November new home sales by municipality

November 2018 Condominium Apartments Single-Family Total
Region 2018 2017 2016 2018 2017 2016 2018 2017 2016
Durham 404 16 57 54 75 171 458 91 228
Halton 101 204 114 107 88 415 208 292 529
Peel 736 181 231 52 61 132 788 242 363
Toronto 1,124 2,425 2,678 17 21 110 1,141 2,446 2,788
York 89 387 317 139 97 837 228 484 1,154
GTA 2,454 3,213 3,397 369 342 1,665 2,823 3,555 5,062

 Source: Altus Group

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Condos Oct web

GTA new home market gains further momentum in October

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GTA new home market gains further momentum in October

 Condos Oct web

The GTA new home market saw a relatively active month for new condominium apartment and single-family home sales and openings in October, according to the Building Industry and Land Development Association (BILD).

There were 2,805 condominium apartments in low, medium and highrise buildings, stacked townhouses and loft units sold in October, down 44 per cent from October 2017 but only one per cent less than the 10-year average, according to Altus Group, BILD’s official source for new home market intelligence. Single-family home sales, with 491 detached, linked and semi-detached houses and townhouses (excluding stacked townhouses) sold, were even with last October and down 64 per cent from the 10-year average.

With 21 condominium apartment projects and 14 single-family home projects opening in October, remaining inventory increased to 16,283 units, comprised of 10,982 condo apartment units and 5,301 single-family units. Remaining inventory includes units in preconstruction projects, in projects currently under construction and in completed buildings.

October best month

“The pickup in interest from builders and home buyers that started to emerge in the GTA new home market in September gained momentum in October,” says Patricia Arsenault, Altus Group’s executive vice-president, Data Solutions. “October was the best month we’ve seen this year not only in terms of sales – for both single-family homes and condominium apartments – but also new project openings. And for both sales and new openings, the increases from last month were stronger than the typical seasonal pattern.”

David Wilkes, BILD president and CEO, says the new home market’s gradual return to more typical activity levels was an encouraging sign. “It’s clear that when we are able to bring on more supply and give new home buyers more product to choose from, they get excited and motivated about making that choice. That’s why we are especially heartened by the new provincial government’s commitment to increasing housing supply through its Housing Supply Action Plan.”

Benchmark prices

The benchmark price for both condo apartments and single-family homes decreased slightly in October, compared to the previous month. The benchmark price for condo apartments was $775,537, which was still up 14.5 per cent over the last 12 months. The decrease in the benchmark price of condo apartments from September can be accounted for by the smaller benchmark size of units available to purchase. The benchmark price for single-family homes was $1.11 million, down 8.4 per cent over the last 12 months.

October new home sales by municipality

October 2018 Condominium Apartments Single-family Total
Region 2018 2017 2016 2018 2017 2016 2018 2017 2016
Durham 79 19 96 55 207 323 134 226 419
Halton 328 162 375 78 69 515 406 231 890
Peel 169 110 203 148 48 177 317 158 380
Toronto 2,133 4,085 1,478 74 28 14 2,207 4,113 1,492
York 96 613 336 136 139 621 232 752 957
GTA 2,805 4,989 2,488 491 491 1,650 3,296 5,480 4,138

 Source: Altus Group

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THE INDUSTRY INSIDER: Affordability is a challenge

Affordability is a challenge: The prices of condos have been rising

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Affordability is a challenge: The prices of condos have been rising

The prices of condos, which used to offer homebuyers a more affordable choice, have been rising, reducing the advantage of this option.

Every fall, BILD invites experts on economics and housing to join us for breakfast and speak to our members about what the GTA housing market will look like in the coming year. This fall was no exception and I was heartened by much of what I heard about current and future trends from Patricia Arsenault of Altus Group and Dana Senagama of the Canada Mortgage and Housing Corporation (CMHC). I also saw we have much left to do around housing supply and affordability in our region.

There’s no doubt we have a lot to look forward to in the GTA. Economic conditions are expected to be solid in the short term, with the employment growth rate projected to be 1.8 per cent in 2019, according to Arsenault, who is Altus Group’s executive vice president, data solutions. More GTA households than last year are planning renovations of over $5,000 in the next year, and the percentage of GTA households that currently rent but plan to buy a home in the next year has rebounded after softening last summer, according to Altus Group’s survey.

But these survey results only indicate what homeowners and potential new homebuyers intend to do, not what they are ultimately able to do, and Arsenault noted that households may take longer to save for that first home in the face of new mortgage hurdles and housing affordability challenges. The prices of condo apartments, which used to offer potential homebuyers a more affordable choice than single-family homes, have been rising, reducing the advantage of this option. In September, the benchmark price of new condo apartments was $789,643 and the benchmark price of new single-family homes at $1,119,533.

Despite rapid price gains in both ownership and rental markets, the supply response has been weak or inelastic, said Senagama, who is CMHC’s manager of market analysis. That means our housing supply is not rising in response to increased demand for housing and the corresponding increase in the prices of homes, as the law of supply and demand would lead us to expect. In fact, Senagama showed that Toronto is one of the markets in Canada that are not at the risk of overbuilding.

I was not surprised to hear this. BILD has consistently delivered the same message. We have said that we are not building enough housing to accommodate the 115,000 new residents who are arriving in our region every year. We should be building 50,000 homes every year, and last year we only built 38,000. A big reason for this supply shortfall is the lengthy development process that housing projects face in the GTA, slowed down by outdated regulation and red tape.

We should be updating zoning bylaws and official plans and streamlining the list of conditions for municipal approvals, so that we can build the housing our growing region needs. Only then will potential homebuyers be able to afford to make their dream of owning a home a reality.

David Wilkes is president and CEO of BILD.

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GTA New home market

GTA new home market quiet in August

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GTA new home market quiet in August

GTA New home market

August was a quiet month for the GTA new home market, as buyers waited on the sidelines, according to the Building Industry and Land Development Association (BILD).

There were 974 total new home sales in August, according to Altus Group, BILD’s official source for new home market intelligence. Single-family home sales, with 171 detached, linked and semi-detached houses and townhouses (excluding stacked townhouses) sold, were up 50 per cent from last August but down 80 per cent from the 10-year average. Condominiums in low, medium and highrise buildings, stacked townhouses and loft units accounted for 803 new home sales, down one per cent from August 2017 and down 28 per cent from the 10-year average.

August’s sales numbers should not be interpreted as a sign that there is a shortage of interested buyers in the GTA, according to Patricia Arsenault, Altus Group’s executive vice-president, Data Solutions. “Pent-up demand is forming, which suggests we should see sales start to firm up this fall.”

WAIT AND SEE

Many potential new-home buyers are taking a wait-and-see approach due to the effects of government interventions to cool the housing market and concerns about the future direction of the economy, says David Wilkes, BILD president and CEO. “Once the market adjusts and more people start looking for homes, our region’s short supply of housing will mean that affordability will continue to be a challenge for many new-home buyers.”

In August, the benchmark price of new condominiums rose to $784,512, up 21.8 per cent over the last 12 months. The benchmark price of new single-family homes was $1.12 million, down 12.4 per cent over the last year.

With only two projects opening in August, the remaining new home inventory decreased to 13,619 units, comprising 8,842 condo units and 4,777 single-family units. Remaining inventory includes units in preconstruction projects, in projects currently under construction, and in completed buildings.

SUPPLY ISSUE

To truly solve the challenges facing the GTA housing market, Wilkes says, governments need to address the supply side of the equation. “Municipal governments, in particular, can make a big difference. Ahead of the municipal elections in the GTA, BILD has been talking to municipal leaders and residents about straightforward steps that municipalities can take to increase housing supply, including making sure that government charges on new homes are fair, funding and building critical infrastructure, cutting red tape and speeding up building permits and inspections.

“Voters can find out more and send an email to their local candidates at buildforgrowth.ca.”

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Flats at Black Creek

Flats at Black Creek

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Flats at Black Creek

Where style and nature unite

Situated in a truly spectacular setting along Black Creek in Port Dover, is the premiere community by Black Creek Developments. Only 39 freehold condominium homes will make up the Flats at Black Creek. Rugged, craftsman-style exteriors are complemented with hand hewn oak timbers to fit in with the natural surroundings.

COMFORT-INSPIRED QUALITY

This newest development is cradled on 21 acres of old-growth Carolinian forest. The river is outside your back door, and provides access to the crystal clear waters of Lake Erie. Imagine quiet paddles through tranquil waters – there really isn’t a better way to unwind and enjoy the incredible beauty of the Black Creek Valley.

The exterior facades of the Flats at Black Creek are intended to blend in with the beauty of the surroundings, while the inside spaces offer up all the modern conveniences in well-designed, energy efficient layouts.

The homes at the Flats at Black Creek combine insulation techniques that far exceed the Ontario Building Code standards, and help to improve the comfort and efficiency during heating and cooling periods. Upgrades include spray foam-insulated basement floors, continuous air barriers, R-60 ceilings and more.

ONTARIO’S PLAYGROUND

There’s plenty of time to enjoy all that this area has to offer, as lawn maintenance and snow removal are included in the low monthly fees. Future planning includes a docking facility on the river, so that residents of the Flats at Black Creek can dock their boat right in the own backyard.

Port Dover is located in Norfolk County, which is often referred to as Ontario’s Garden due to its rich soil. Some of the province’s best produce is grown here. A budding winery business is attracting new attention, and is being recognized for their wide range of products. Residents and visitors come from all over to check out the farmers’ markets held in Simcoe and Port Dover.

Perched on the tranquil shores of Lake Erie, the town of Port Dover is one of the true gems of Southern Ontario. It’s located on the north shore of Long Pont Bay, which was named as one of Canada’s 18 UNESCO World Biosphere Reserves in 1986.

Port Dover has just the right blend of small-town relaxation and big-city bustle. The Lighthouse Festival Theatre draws thousands of attendees to a wide variety of plays and musical performances throughout the year. And when Friday falls on the 13th of the month, a wave of fun descends on the area when motorcycle enthusiasts converge on the town, along with street bands and vendors. Port Dover’s July 1st parade is one of the oldest, and biggest, in Canada. Events include the Calithumpian parade, the boat parade and the Tatoo marching band.

Black Creek Developments is committed to building extraordinary houses. Combined with inspiring designs and an unwavering dedication to quality, they work closely with their clients to ensure that all the details that go into making a house a home are included.

CONTACT INFORMATION

The Sales Centre is located at 55 Blue Nose Drive in Port Dover.

519.583.9009


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New house still out of reach for many buyers

New house still out of reach for many buyers

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New house still out of reach for many buyers

Fewer than one-in-five single-family homes available to purchase at the end of February were priced below $750,000.

In February, the prices of new homes in the GTA showed few signs of abating, the Building Industry and Land Development Association (BILD) announced March 22, 2018.

The benchmark price for condominium apartments in lowrise, midrise and highrise buildings, stacked townhouses and loft units rose again in February, to $729,735, which was 39.5 per cent above last February, according to Altus Group, BILD’s official source for new-home market intelligence. The benchmark price for available new single-family homes, including detached, linked and semi-detached houses and townhouses (excluding stacked townhouses), dropped slightly from $1,229,454 in January to $1,219,874, but was still 12.8 per cent above last February’s price.

“Tight supply continues to drive pricing levels,” said David Wilkes, BILD president and CEO. “This is especially true when it comes to the pricing of single-family homes.”

Although the new home market saw a modest increase in supply in February, to 12,896 units, comprised of 9,285 condominium apartments and 3,611 single family homes, supply is still well below what is considered a healthy level. Supply of new housing is typically measured by the number of new homes available for purchase in builders’ inventories at the end of the month and includes units in pre-construction, under construction and completed projects. A healthy new home market should have nine to 12 months of inventory, and right now inventory is at about four months, based on the pace of sales in the past 12 months.

“While single-family new home inventory is up from last year, it is still quite low in historical terms,” said Patricia Arsenault, Altus Group’s executive vice president, Research Consulting Services. “Moreover, there is a dearth of new single-family product that is affordable to a broader range of buyers – fewer than one-in-five single-family homes available to purchase at the end of February were priced below $750,000.”

Sales of new homes in the GTA rose in February from January, with 2,159 new homes sold, but remained soft relative to the very strong sales recorded last February. Sales of new single-family homes were down 82 per cent from last February and 79 per cent below the 10-year average, with 264 units sold in February. Sales of condominium apartments were down 50 per cent from last February but still 17 per cent above the 10-year average, with 1,895 units sold.

Wilkes said that government regulation is a significant factor influencing the industry’s ability to increase the supply of new housing in the GTA.

“We encounter excessive red tape, out-of-date zoning and lack of developable land serviced with critical infrastructure,” he said. “That is why, as the municipal elections approach, we’ll be initiating public conversations about ways policy makers, urban planners, our industry and residents can work together to address the GTA’s housing supply challenge.”

bildgta.ca


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The Urban and The Urbane

The Urban and The Urbane

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The Urban and The Urbane

by Rise Levy

Toronto is a rarity among large cities because it has been able to sustain rapid cosmopolitan progress while remaining a city of neighbourhoods. This unique balancing act explains the steady migration from the suburbs to the city that grows stronger with every passing year. There is a neighbourhood for every personality type, income level or stage of life.

Most large cities degenerate into urban jungles as they grow with a loss of green space, rising crime and a deteriorating school and transit system. Not Toronto. You will find the kinds of leafy neighbourhoods with great schools and playgrounds and parks that make parenting easier and life feel mellow in all four corners of the city. Life in the suburbs provides the same leafiness but it comes with some cultural sacrifices. In all four directions of Toronto you have unique boutique shopping, theatres and the arts and international dining.

There are wonderful condo developments in every area of the city that allow you to benefit from all the perks of the chosen area without the colossal price tag. Do you love areas like Forest Hill or Lawrence Park but you don’t have $5 million dollar rattling around in your pocket? No problem. There is an elegant condominium waiting for you. Do you love the arts and music and the theatre? The young and trendy will find happiness in Liberty Village or Harbourfront or on Queen Streets east and west. Maybe you are an affluent urbanite with a taste for designer fashion and designer food; if so, welcome to your sophisticated Yorkville area condo.

The condo boom has put city living within reach for people at every income level and lifestyle need. With a resale home market gone mad, you can find beautifully finished multilevel townhomes and two-level condos for a fraction of the cost of semis in the same neighbourhoods. At the other end of the scale, you will find studios and small one bedrooms for the young and ultra social who are rarely home but prefer to invest their money rather than pouring it down the renter’s hole.

For people who want it all there is no better place to live than right here in Toronto!

Suddenly Single

Your life was settled (or so you thought) and you had a spacious suburban home and good schools for the kids and an okay marriage. Sometimes you felt cut off from the lively social or cultural life of the city but you thought the trade off was worth it. But when the kids left for college the bottom fell out of the marriage and here you are suddenly single. The suburbs are designed for families but that isn’t you anymore, so it is time for a new beginning.

It is time for your fabulous new condominium in the city. This time around you have the confidence and the money to know where and how you want to live. This time it is all about you and your tastes and your interests. At last you get to decorate for you with no more kid-friendly concerns. No more man caves, either. Your new condo has a state-of-the-art gym and maybe a pool. Your new condo provides a variety of social functions to help you get your sea legs as you start off on this new voyage. You reconnect with old friends who never seemed to make it to your old suburban neighbourhood but are happy to meet you for dinner at that new restaurant down the street. You are seeing the plays you used to read about but never saw. You are going to art galleries and browsing the antique stores and shopping the design stores and one-of-a-kind boutiques. You are meeting new people. You are dating!

At the end of the day you return to your new condo where everything looks and feels like you. The concierge pampers you and there is no grass to cut or sidewalks to shovel — just a balcony, a view and a glass of wine. You tell yourself “this is the life I have been waiting for.”

The Battle Between the Kings and Queens of the East and the Kings and Queens of the West

Queen Street West is where bohemia began to give way to gentrification back in the 1980s and it just keeps moving ever westward. This move was followed in the ’90s by the transformation of the once grim and dowdy King Street West into condo heaven. Queen and King Street East languished for years and, in spite of their prime location, not much changed until the early 2000s. Real estate prices began to soar and Leslieville, Riverside and Corktown (as they are now designated) became the hottest areas of the city according to Toronto Life magazine (and the prices certainly bear that out.)

All along Queen Street lowrise buildings have been torn down and replaced with urban hipster-styled condos. Local greasy spoons have been replaced by dozens of restaurants and bars designed for the young and urban crowd. Design stores and unique clothing stores abound. Tired and drab old Queen East has been reborn and many of the Queen West bohemians driven out by high rents and chain stores have settled here for the married-with-kids part of their life. One ugly reminder remained until recently and that was the flop house strip club sleaziness of the Broadview Hotel. Well no more. The newly renovated Broadview Hotel is a fabulous addition to the neighbourhood with a rooftop restaurant bar that immediately became a destination requiring reservations well in advance. It was always a beautiful old building tragically fallen into disrepair but now it has been restored and modernized into a landmark Toronto can be proud to claim.

So, will there be a winner in the battle between the East and The West? Queen West still has a long head start but Queen East has a more family-friendly feel. Time will tell if there will be a winner or a draw.

The Empty Nesters Moving on Up

You got married and bought a house in the suburbs and then you had kids and you bought a bigger house and maybe you even sized up again. But now the kids have their own lives and you and your mate are living in a house that is too large and requires endless upkeep. You have had enough. Still you wonder, will you miss the space and the yard? What if one of the kids wants to move back? Do you want them to move back?

Wouldn’t it be nice to have your life back? Wouldn’t it be nice to travel without worrying about the garden and the upkeep and just turn the key and hop on a plane? Oh yeah. It’s time for a condo.

Depending on your income, you can get a huge sprawling house-sized condo, or you can downsize and spend the extra income on travel and restaurants and theatre and fun (yes you can!). The beauty of a condo is that it can be in any area you favour and any size and price range, but the maintenance is not your problem and you have great amenities that — once again — are not your problem to maintain. After decades where everything was your problem, this is true luxury.

You really need to get a condo. I mean who deserves it more than you?

Rise Levy is the Senior Editor of Condo Life magazine.


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The Condo Specialist: Why home prices will keep going up in the GTA.

The Condo Specialist: Why home prices will keep going up in the GTA.

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The Condo Specialist: Why home prices will keep going up in the GTA.

by Hunter Milborne

Don’t wait to buy real estate: buy real estate and wait

The biggest and most common mistake first-time homebuyers make is that they shop too long trying to find the “perfect home.” There is an old saying: “you can’t out-save real estate.”

First-time homebuyers often ask for my opinion and my advice is always “buy as much as you can afford, as soon as possible. You can always (and will) move up.” Many potential buyers are on the sidelines waiting for prices to come down.

One thing I have learned over the years is that it is virtually impossible, even for the most seasoned investor/buyer/repeat buyer, to time a market. In our modern economic cycle of expansion and recession, we have seen prices increase and then plateau or drop, before they resume their relentless climb again.

We are currently in one of the largest expansions in history. However, the cumulative increase in GDP has been somewhat muted by minimal wage growth. Immigration, on the other hand, continues to increase. Over the next three to five years, the federal government will increase immigration from 250,000-plus to 350,000 to 400,000 annually, with the lion’s share of newcomers choosing the GTA as their home.

On the housing demand side, we will see nothing but increases as a result of this growing buyer base. On the supply side, however, expect to see more delays as municipal approval times for new projects have doubled over the last few years. Municipal development charges are also about to double and land costs are increasing – today, land vendors are more knowledgeable and sophisticated as to “what can be done” on their land, not just what is “as of right.”

The uncertainty surrounding the environment and the new Local Planning Appeal Tribunal — designed to replace the Ontario Municipal Board (OMB) — is also creating some caution with potential land buyers.

All the above shows a relentless increase in demand and a sustained constriction of supply, and you know what this means for prices based on fundamental economic principals.

Foreign buyers are not the reason prices are going up and the recent measures in British Columbia and Ontario are temporary fixes at best. It is the fundamental demand and supply issues previously discussed. What the provinces and cities should do is figure out a way to streamline the approval process and keep development charges where they are.

When the Liberals took office in Ontario eight years ago, the provincial debt was about $100 billion; today it is over $300 billion and this is not a sustainable situation.

In the Ontario Fair Housing Plan, which introduced the foreign buyers tax of 15 per cent on the sale price, rent control was also re-introduced without any buffer or cost-plus ability to increase rents, which means that maintenance costs could outpace annual allowable rental increases.

Since this new act came into effect, several rental building applications have been abandoned and some under-construction rental buildings have switched to being sold as condominiums.

What will this do to the city’s rental stock? Further restrict supply. Thus, all roads lead to Rome and all things, once again, point to “a steady appreciation of real estate, which is great for those who already own it. The other way to say the same thing is “a steady erosion of affordability.”

Don’t wait to buy real estate: buy real estate and wait.

Hunter Milborne is the president and CEO of the Milborne Group.

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Some things to know before buying a new home or condo

Some things to know before buying a new home or condo

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Some things to know before buying a new home or condo

(NC) — There’s no doubt that condominiums are an increasingly popular choice for new homeowners. In 2016 alone, more than 22,600 new units became homes for Ontarians who are looking for the condo lifestyle and amenities. If you’re thinking of joining them, a good first step is to understand the difference in responsibility between what you own and what all the building’s unit owners share.

A benefit of purchasing a new condominium is the mandatory warranty that is provided by your builder and backed by Tarion, the warranty’s administrator. There’s a separate warranty for your individual unit and another for the building’s common elements. Your unit’s warranty provides coverage for deposit protection and delayed closing before you move in. After you take occupancy, it covers defective materials, building code violations and unauthorized substitutions of items agreed to in the purchase agreement.

Your builder is required to provide you with a homeowner information package, explaining what is and isn’t covered in your individual unit, how to make a claim and when to involve Tarion. As owner, you are responsible for understanding and managing the warranty that comes with your unit and to submit warranty claims on a timely basis.

All condos come with some common elements — like roofing, parking, exterior cladding and some mechanical systems. The homeowner package should clearly outline which are considered common elements.

The common element warranty is managed by your condo’s board of directors or delegated to a property manager. The board is made up of a group of unit owners who are elected to run the condominium corporation on behalf of all owners.

The board must arrange for a post-construction performance audit, which will determine if there are any major deficiencies in the common elements. If there are, the board should report them to the builder and to Tarion.

Any warranty claims relating to the condominium’s common elements must be dealt with by the board of directors, but as a unit owner you should report any common element issues to the board in writing.

If a warranty claim must be made, some boards will identify a designate who will act as the condo’s representative; others may choose to have a property management company fulfill this role. Once a claim is submitted, the builder has 18 months to complete the required repairs.

KNOW WHAT’S COVERED

While the builder provides the Tarion warranty, its cost is often passed on to the new homebuyer. But this one-time fee, ranging from $385 to $1,500 depending on the value of the home, gives you significant value for your money. You’ll receive as much as seven years of warranty protection to a maximum of $300,000 per home or condo unit.

The warranty program has milestones to address specific issues that can arise after you have moved in to your new home. Here is a simple breakdown of the main coverages:

One-year Warranty

This warranty applies for one full year beginning when you first take possession and even if the home is sold during this time. It requires that your home has been constructed in a workman-like manner and is free from any defects in materials used. It also requires that your home is free of Ontario Building Code violations and is fit for habitation. In addition, the warranty protects against unauthorized substitutions.

Two-year Warranty

This warranty begins on the date you take possession of your home, or occupancy of your condo unit. It provides protection against water penetration through the basement or foundation walls, or through windows, doors and caulking because of defects in materials or workmanship.

The warranty also covers defects in materials or workmanship in the electrical, plumbing and heating systems in your home, as well as defects in work or materials that cause detachment, displacement or deterioration of the exterior cladding, such as brickwork or siding.

Finally, the two-year warranty protects against violations of the Ontario Building Code that affect the health and safety of homeowners.

Seven-year Warranty

This warranty covers major structural defects and begins on the date you take possession of the home and ends on the day before the seventh anniversary of that date. It protects against defects in materials and workmanship that adversely affect a load-bearing part of your home’s structure, causing it to fail or significantly affect your ability to use the house as your home.

In most condominium projects, warranty coverage also includes the shared areas of the building, referred to as common elements. This coverage is addressed by the condominium corporation and provides up to $50,000 of protection per condo unit to a maximum of $2.5 million.

SOME TIPS BEFORE YOU BUY

You’ve found the newly built home you’ve been looking for and are ready to make one of the biggest purchases of your life. But do you know how to protect your new home?

Before you sign an Agreement of Purchase and Sale (APS), consider these tips. Review the APS with a real estate lawyer to ensure you understand exactly what is included in the price of the home. If you are buying a condominium, review the disclosure statement to understand which items are part of your unit and which are considered common elements. Make sure everything that is agreed upon is reflected in writing.

If construction has not started on the home or condominium, find out when the builder will begin and how you will be notified if there is a delay. Be sure that you and your lawyer document all details regarding deposits and delayed closings or occupancy. A standard Addendum is required to be included in the purchase agreement. It provides additional information, as well as your rights concerning delays in construction. It is important to review this document with your lawyer.

At the signing of the purchase agreement, you will likely be required to provide a deposit for your home. Understand that deposits on freehold homes are protected up to a maximum of $40,000 by Tarion. Condominium deposits are covered for up to $20,000 by Tarion and deposits over $20,000 are protected by the trust and excess deposit insurance provisions of the Condominium Act, 1998.

Ask when you will be contacted to make selections for interior and exterior finishes. Each builder has a different policy for finalizing selections.

Ask your builder who to contact about scheduling your pre-delivery inspection and when it will take place.

Ask about the builder’s after-sales service policy and who to contact should an issue arise. Ask who to contact in emergencies, too.

Read about the warranty that comes with your new home and understand what to do if you think you have a claim.

Sign up for MyHome, the portal where you can manage your warranty online, at

tarion.com/Pages/default.aspx

newscanada.com


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