SEMIDETACHED HOUSE : Advantage and Drawbacks...

Semi-detached homes are quite common in the city of Toronto, especially in the downtown core and surrounding neighbourhoods. This is largely due to the high density in these areas dating back to the late 19th and early 20th centuries.it was typical for downtown Toronto lots to be long and narrow in size making them a perfect fit for the Victorian “semis” we see throughout the city.

Their popularity boils down to price and availability. They are cheaper than detached homes.

According to the Toronto Real Estate Board’s figures for the month of November, the average sold price for a semi-detached home in the 416 area code was $640,208. The sold price for a detached home during that period was a whopping $855,188! Those figures could be argument enough for semis.

BENEFITS:

1. Compare to freehold Town Homes you have one attached
neighbour versus two.

2. you can take advantage of some economies of scale. Your roofs
are attached, you can both contribute for replacement and
negotiate a better deal.

3. Some Semi's is connected by Garage so you are sharing a
driveway : you can share snow clearing duties and if you have
very good relationship with your neighbour you can share
parking.

DRAWBACKS:

There are definitely some drawbacks to owning a semi versus detached, but I assure you that they do not outweigh the benefits of owning a freehold home in the city of Toronto.

1. Depending how your semi is built, noise transfer can be an issue.
Party walls - the common wall both sides share - can be thin and
sometimes don’t run the entire height of a home, leaving a gap in
the attic areas. In addition to noise transfer, the lack of a party
wall in the attic can also have an adverse effect in the event of a
fire.

2.Semi-detached homes can be limiting when it comes to structural
renovations as the party wall once again comes into play.
Extensions and additions have to be carefully considered to make
sure they don’t impact your attached neighbour’s home. Your
renovation plans can also put a strain on your relationship with
you neighbour, so an open line of communication can help
mitigate any potential issues. Make sure you have the proper
permits in place, as a complaint to the city can put your project in
jeopardy.

3.Parking can be tricky. You may be one of the lucky ones with your
own driveway or laneway parking. A good portion of homes in
Toronto have no parking or at best a “mutual” driveway ( a
narrow lane between homes widening out to parking spots in
back) or maybe a right- of-way to pass over to get to your
parking spot.

4. The biggest issue with Semi is that you are stuck with your
neighbour until either you or they move out. So if you’re thinking
of buying a semi, it might be wise to find out something about
the people who live next door.

If your budget allows for it, a detached home is the way to go. But, like I said, owning any freehold home in the city of Toronto can be a very rewarding experience both from a personal and financial perspective, so don’t be discouraged if a detached is out of your reach. You may find yourself quite satisfied with a semi as your final destination or as a stepping stone towards another home in the future.

source : The Globe and Mail.

CANADA's Housing Market - who is buying and where..?

Canada’s housing market took off in 2009, fueled by low interest rates. Housing became a main source of economic growth, with annual resale price increases of as much as 13% in May 2010. Price gains slowed to 3.1% as of October partly because of a new rule that shortened the maximum amortization period on mortgages the government insures to 25 years from 30 years. Bank of Canada Governor Stephen Poloz told lawmakers Nov. 20 he doesn’t see a housing bubble and there are signs of a soft landing as indebted Canadians pull back on spending.

International buyers are shoring up high-end housing in Canada after regulators tightened mortgage rules in 2012 to cool the nation’s booming market.In Vancouver and Toronto, price growth of luxury housing in some neighborhoods also outpaced less costly homes.

TORONTO :

Toronto, the condo boom has lured international buyers, transforming Canada’s largest city. Condo developers in the city led a record number of high-rise projects in North America last year, squeezing out everything from cookie factories to parking lots.

Toronto Housing market is fueled by foreign Investors and first time buyers.

Donald Trump’s 65-story luxury condo tower opened in Yorkville, the city’s high-end shopping district, one condo was listed for sale in late November for $15 million. It boasted five bathrooms, an indoor pool, six balconies, four underground parking spots and a monthly
maintenance fee of $8,224.

VANCOUVER :

In Vancouver, which boasts a rugged Pacific coastline and cultural ties to Asia, 40% of buyers of 1,239 such homes were from aboard.

In Vancouver, where 15% of the population speaks a Chinese dialect as a first language, people from China are the largest group of foreign buyers, according to Sotheby’s survey. They are often buying second homes or investment properties.

While the entry point for a Vancouver single-family luxury home is $2.8 million, the city in late November offered the most expensive home for sale in Canada by its main broker network: a $35 million duplex once inhabited by a Lieutenant Governor. The 12,216-square-foot home a few kilometers south of Stanley Park has nine bedrooms and 13 bathrooms.

High prices in Vancouver, Canada’s third-largest city, are driven more by a land shortage and population growth than foreign investors.

MONTREAL :

Montreal, whose downtown is stocked with cafes and clubs, attracts global buyers with its Old World charm.

Montreal, known for its crumbling water pipes and bridges as much as its cobblestone streets, now stands out for drawing the biggest share of foreign owners. They purchased 49% of the 206 homes worth at least $1 million in the first half of 2013.

International buyers have thrust Montreal, a city sometimes overshadowed by Toronto and Vancouver, into the national spotlight.

The majority of international buyers of large single-family homes in Montreal are from China, Syria, Mexico, Russia and the U.S., they
typically are married with children and buy a home worth at least $3.5 million with 5,000 square feet. About 80% of them earn more than $500,000 a year and work in finance, technology, law or are entrepreneurs.

In Montreal, prices of bungalows of around 1,200 square feet (111 square meters) rose as much as 5.4% in the third quarter from a year ago, Houses of at least 3,000 square feet worth about $2.47 million in the Westmount area gained 16.9% in the same period.

There is absolutely a clear distinction between Toronto and Montreal,” Brosseau said. “Montreal is known for more quaint areas, very European feel, like Old Montreal with the cobblestones, horse and carriages.”

This year, the brokerage was selling a $6 million house in Westmount owned by a Middle Eastern family and four out of the first six potential buyers were also non-Canadians. They appreciate the city’s more relaxed lifestyle. Montreal residents still buy alcohol at any shop — they don’t have to go to a government licensed store.

Montreal's boutiques and bilingual culture made the metropolis more international over Toronto and Vancouver.

source: National post

Five things to do if you are over-extended on your mortgage

Mortgage default may be rare in this country, but nearly 9% of indebted households need 40% or more of their gross income to pay their debt service charges, says the Bank of Canada Financial System Review.

If you can see problems coming, then you can take action to avoid foreclosure, which happens when lenders run out of other alternatives and borrowers can do no more to pay their debts. Here are five options to consider when you are being crushed by mortgage payments:

1. Extend amortization: If the mortgage has been paid down to 10 or 15 years, then extending it to 20 to 25 years or even to 30 years will decrease payments. In a lot of cases this will work, says Elena Jara, director of education for Credit Canada Solutions, a Toronto-based non-profit organization which offers free credit counselling.

2. Seek better terms: You can go for lower interest rates with the same or a different lender but with a potential penalty, says Bill Evans, a mortgage broker with Mortgage Architects in Winnipeg.“If you are having trouble with payments with one lender, another may not want to take you on. But if you can present a case for a new income, you can go to a so-called specialty lender such as Home Trust or Optimum Trust for a fresh look at your problem and potential solutions,” Evans says. “If you just want to alleviate the problem, timing is crucial.”

3. Renew at a floating rate: There is more risk but lower interest cost in floating rate mortgages. If you are on a fixed rate mortgage with relatively high rates and want to go to a lower floating rate, perhaps by taking the mortgage to another lender, then there may be relief when it is time for loan renewal. The present lender may add a penalty, but over time, floating rates and the often attractive rate on a one-year closed loan can offer relief, Mr. Evans says.

4. Sell it and rent: In markets with high home prices as a result of speculative building, absentee owners will often rent at relatively low cost. That makes for good deals for renters.

5. Discuss a consumer proposal: The homeowner can avoid outright bankruptcy and foreclosure of the home by talking to creditors, suggests Bruce Caplan, trustee in bankruptcy for BDO Canada Ltd. in Winnipeg. “The homeowner can make a consumer proposal in which a settlement plan is devised for the creditors. Secured creditors such as the banks or private mortgage lenders can work out new terms such as reduced payments or a payment bridge for a period of time with the homeowner,” he suggests.

courtesy National Post

HST ...

HST rebate rules don’t include all your relatives:

Property Law, by Bob Aaron: Third parties named on title could disqualify your tax break.

Many buyers of new homes and condominiums may be surprised to receive a demand from Canada Revenue Agency (CRA) to repay as much as $24,000 in HST new-home rebates that they received on closing their purchases.

The purchase price of a newly constructed home is subject to HST. Typically, the price in a builder offer assumes that the purchaser is eligible for a rebate of part of the HST, and assigns it back to the builder as required by the purchase agreement.

In order to qualify for the HST rebate, the house or condominium must be acquired for use as the primary place of residence of the titled purchaser or his or her relation.

The tax law defines a relation to mean a blood relationship, including a child and grandchild, a brother or sister, and relationships by marriage or common-law partnerships.

Cousins, aunts, uncles, nephews or nieces, friends and business associates are excluded from eligibility.

if just one of the buyers does not qualify, even as the owner of a one per cent interest in the property, none of the buyers can get the rebate. If they received it on closing, and assigned it back to the builder as is typical, CRA will ask for it to be paid back, with interest. In other words, all of the buyers must qualify, not just most of them. There is no percentage allocation.

The CRA claim arises when a third party, who is not a close relation, has been placed on title at the insistence of a mortgage lender. This often occurs when the buyers themselves do not qualify for a mortgage.

Changing Average size of new GTA homes

In an effort to give homebuyers affordable options within a rising-cost environment, GTA condominium developers have been building smaller units. The average size of a new highrise home at the end of October, 2013 was 818 square feet.

Single-family homes have plenty of space for bedrooms, kitchens, bathrooms, living rooms, dining rooms and laundry facilities. Today’s lowrise home has an average of 876 square feet per person to accommodate those basic functions.

By comparison, those living in highrise units have on average only 287 square feet per person in which to house those same functions. This means more efficiency in the use of space will be required — or perhaps some activities will simply have to occur outside the home, elsewhere in the community.

Why 2013 has been a good year for GTA housing

Last December, many pundits were predicting a big housing slowdown in the GTA as an oversupply of condos in particular, rising interest rates and slowing demand put a dent in sales and prices.

By the end of September, 68,909 new and resale homes had changed hands in the GTA, 1,000 units less than the same period last year. But the first half of October was strong — about 20 per cent higher than a year ago. So, it seems that sales for the year will exceed 2012’s 82,200 units.
Average prices are also almost 5 per cent higher than a year ago and there are still bidding wars in many areas, because there are more buyers than listings.

People have been predicting the real estate market crash in the GTA for the past 13 years. It hasn’t happened yet and won’t happen next year either.

Here’s why this is happening:

1. Low interest rates: Despite the global crisis, financial and civil instability Canada remains an island of stability. Canadian economy will further boost as  economies in the U.S. and European Union continue to improve. Interest rates may rise a little over the coming year, but the moves are unlikely to have a serious impact on the market.

2. Canada’s appeal to immigrants: We continue to be the envy of the world when it comes to quality of life and the fact that so many cultures and communities can live in harmony. That is why more than 150,000 people come to Ontario each year, with the majority to the GTA. They have to live somewhere.

3. Low rental vacancy rates: The Toronto condo market has slowed somewhat, but prices haven’t crashed. The reason is that the vacancy rate for rental condominium units in downtown Toronto is 1.7 per cent. As a result, the average rent for a two-bedroom condominium is about $2,500, which is also the amount an investor needs to carry an average two-bedroom condominium, even if it costs $500,000. If you can carry your condo, you are in no rush to sell or lower your asking price.

Mark Weisleder a Real Estate lawyer thinks making a few changes in Rules and Regulation not only increase the affordability but it will further boost the market.

CMHC should lower their Insurance  premiums. The tighter mortgage rules announced by Ottawa a year ago mean fewer people are qualifying for new homes. Those who do qualify are much less likely to default on their mortgages. This means the CMHC is making more money because it is paying out fewer claims.

Do you know the biggest cost of your new home?

Bryan Tuckey: One-fifth of price of new GTA home goes to government fees, charges.

So what are development charges? Ontario’s cities and towns pass bylaws to set development charges. They use these charges to collect money from new homes and businesses to pay for critical infrastructure: sewers and water pipes, roads, transit, parks and community centres. There is no doubting their importance.

The Development Charges Act are accompanied by a background study, which outlines the estimated amount and location of development within a municipality, and the related calculations of how the new services will accommodate the new population.

In 2012 alone, the industry estimates that more than $1 billion was paid in DCs by new-home owners across the GTA.

DCs and other taxes represent one-fifth of the cost of a home in the GTA, according to a study of six GTA municipalities.

The study involved Toronto, Markham, Oakville, Bradford West Gwillimbury, Ajax and Brampton.

Since 2004, those municipalities have increased DCs between 143 and 357 per cent.

Let’s look at the Town of Oakville, as one example: for a new single-detached home, Oakville charges $23,503 in DCs; Halton Region charges $36,778; Oakville’s school boards charge $4,175 in educational DCs to allow them to acquire land for schools. In total, that new-home owner is paying $64,456 in DCs.

Those DCs are added to new-home owners’ mortgages, and they must pay the interest on those charges for decades.

When DCs are the biggest charge on a home, they pose a threat to the affordability of homes and even the health of the home-building industry.

Owners of resale homes do not have to pay DCs, but owners of new homes and businesses do.

Development Charges are a disincentive to creating new neighbourhoods where new residents and businesses can flourish.