4 1

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

The month of May witnessed another strong performance of the GTA resale housing market, from both a volume and price standpoint. May unit sales were 10,850, representing an 11% increase versus May 2011 sales of 9,766 single family homes. The sales growth in the ‘905’ regions eclipsed that of the City of Toronto across all major housing types by a sizeable margin. The City of Toronto’s land transfer tax has clearly prompted many households to look outside of Toronto for their housing needs. In the detached home segment, for example, annual volume growth in the ‘905’ regions was +13% as compared to just +6% in the City of Toronto. In the semi-detached segment, the comparable numbers were +11% and +6% respectively.

The average price of a resale home in the GTA in May was $516,787 - which was up by a solid 6% versus the May 2011 average price of $485,362 and which was just under the all-time high price of $517,556 established just one month previously in April 2012. Once again, strong competition between buyers seeking to purchase low-rise home types drove the strong price growth in May. Having said that, if the surge in both new and active listings witnessed during the month of May (new listings were up 20% versus a year ago and active listings were up 10% versus a year ago) continues for the balance of the year, further price growth will almost certainly begin to moderate. Average days on market for the month of May remained at a brisk 21 days.

8 9 10 11 12

GTA Resale Home Sales

GTA AVERAGE RESALE PRICE

MARJAN MAY SEP NOVJUL$400,000

$540,000

$420,000

$440,000

$460,000

$480,000

$500,000

$520,00020122011

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

12,0002011

2012

JUNE 2012

The Canadian Association of Accredited Mortgage Professionals (CAAMP) recently released its semi-annual report. This survey of 2,000 individuals is easily the best source for of mortgage-related market statistics in Canada. It is excellent fodder for mortgage and real estate buffs alike. To read the full report, please go to the following web page: www.canadianmortgagetrends.com/fi les/spring-report-2012_eng_caamp.pdf.

Here are a just few highlights from the report that you may fi nd to be of interest:

• homeowner households without mortgages: 3.75 million (39% of total homeowner households)

• homeowner households with mortgages: 5.85 million (61% of total homeowner households)

• average mortgage principal outstanding: $170,000• average mortgage amount of new (2011) purchases:

$224,000• households with a home equity line of credit (but no

mortgage): 625,000 (average HELOC size: $70,700)• households with both mortgages and HELOCs: 2 million

(average HELOC size: $58,600) • average equity for homeowners with mortgages but no

HELOC: 49%• average equity for homeowners with both mortgages and

a HELOC: 41% • average equity for homeowners with a HELOC but no

mortgage: 82%• % of mortgagors with fi xed rates: 65%• % of mortgagors with variable rates: 29%• % of mortgagors with “combination” or hybrid mortgages:

7%

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

“I have a new philosophy. I’m only going to dread one day at a time.” – Charles M. Schulz

“I intend to live forever. So far, so good.” – Steven Wright

“I used to be Snow White, but I drifted.” – Mae West

“I’m an idealist. I don’t know where I’m going, but I’m on my way.” – Carl Sandburg

“If two wrongs don’t make a right, try three.” – Laurence J. Peter

Choosing the right mortgage can feel like a trip through a labyrinth blindfolded. There are so many different types of mortgages available, it’s hard to know where to start and what’s best for you.

One of the first things you should decide is whether you want an open or a closed mortgage.

An open mortgage is one in which the borrower can repay the loan, in full or in part, any time prior to maturity without penalty. The terms are generally short and range between six months and one year.

A closed mortgage, on the other hand, can’t be paid out fully, renegotiated or refinanced before maturity without paying the lender a compensation penalty. The term for a closed mortgage can range anywhere from six months to 10 years. Beware: The costs associated with closed mortgages can be high. Know the payout penalties before you agree to one. Generally speaking, the penalty depends on how far along you are in the life of your mortgage. It is oftentimes a three-month interest payment or the Interest Rate Differential (IRD), whichever is more.

The IRD is the difference between the contractual rate of the mortgage and the rate the lender can now get for its money. For example, consider a mortgage with a three-year term remaining at 6 percent when the market rate is only 4 percent. The borrower must pay the difference in interest.

Of course, there are risks – either psychological or financial – associated with both types of mortgages. A closed mortgage offers the borrower peace of mind. The rate is fixed over a term that works within long-term goals. The borrower knows exactly how much is going toward the principal and interest and does not have to worry about unexpected rate hikes that can lead to soaring monthly payments.

Conversely (and here is why many people tend to shy away

from closed mortgages), should interest rates decrease drastically, the borrower fails to benefit.

The advantages of both open fixed-rate and open variable-rate mortgages is that the borrower can pay out the mortgage in full at any time without incurring penalties. A Canadian study conducted in 2001 found that people who chose short-term, variable-rate mortgages saved an average of $22,000 in interest costs per $100,000.

If you’ve calculated the risks and decided that an open mortgage suits your needs, you should keep a close eye on interest rates. This makes a decision on whether and when to switch to a fixed-rate mortgage from a panic attack to an educated guess. It is possible to predict interest rates to a degree, but remember, it is an art, not a science, and you could be wrong.

If you see signs that rates are about to go up, consider locking into a mortgage and avoid the trap of no longer being able to afford payments on your home.

First-time buyers who plan to live in their home for a long time probably benefit the most from closed mortgages. Real estate investors who want guaranteed interest rates and payments for a specified amount of time should also consider opting for closed.

Open mortgages work for consumers who plan to sell their home in the near future because they won’t have to pay a penalty when the home is sold. The same applies to consumers who believe interest rates are falling or who expect to receive a large sum of money in the near future.

Ultimately, whether you choose an open or closed mortgage depends on which stage of life you’re at, your income, your goals and the amount of risk you are willing to take. There are advantages and disadvantages to each, so use the resources available to you to make the right choice.

CLOSED VS. OPEN MORTGAGES

3

When an object is deemed to be a fi xture by a buyer and a chattel by a seller – and when the offer does not specifi cally include the object – problems are bound to ensue. If a dispute arises regarding the item after closing, its ultimate ownership will depend upon whether the courts consider the item to be a chattel or a fi xture.

Law students are taught in fi rst-year property courses that chattels are items of moveable or transferable property, unlike land and buildings that are fi xed and immoveable. If the items are neither land, nor permanently attached to land or a building, they are, by defi nition, chattels. (The word chattel dates back to feudal times when cattle were the most valuable item of property – except for land).

Typically, if an item is attached to land only by its own weight, it is not usually considered part of the land unless the surrounding circumstances make it clear that they were intended to be part of the land.

By the same token, a fi xture is a piece of equipment which has been attached to real estate in such a way as to become part of the premises, and its removal would do harm to the building or land.

Using these defi nitions, a mirror that is hanging on a hook is a chattel and can be removed by the seller. The same mirror becomes a fi xture if it is permanently attached or mounted to a wall in the house.

A furnace delivered to a house, for example, is a chattel or item of moveable personal property when it leaves the store. When it is installed in the owner’s house, and permanently connected to the ductwork, fl oor, electrical and plumbing systems, it becomes a fi xture that remains with the building when the owner moves out.

Over the years, courts have attempted in many cases to determine whether an object is a chattel or fi xture. Judges will often examine the purpose of the attachment or annexation of the item to the property, and the actual

degree or extent of the attachment.

The bottom line is that buyers and sellers of land – and their agents – should always direct their minds to the question of chattels and fi xtures before the agreement of purchase and sale becomes fi rm.

If you as a buyer have any doubt at all about whether an item that you want is a chattel or a fi xture, simply ensure that your agent clearly specifi es it in the offer. And remember that just because the item was not listed as an exclusion on the feature sheet (or even the listing), this does not mean that the seller needs to include it. The agreement of purchase and sale supersedes everything and, beyond that, only a court can decide if there is a dispute. And that decision is made on the basis of a judge’s opinion on whether the item in question is a chattel or a fi xture.

This article was contributed by Bob Aaron, a prominent Toronto-based real estate lawyer. Please visit him at www.aaron.ca.

CHATTLES VS. FIXTURES

2

Choosing the right mortgage can feel like a trip through a labyrinth blindfolded. There are so many different types of mortgages available, it’s hard to know where to start and what’s best for you.

One of the first things you should decide is whether you want an open or a closed mortgage.

An open mortgage is one in which the borrower can repay the loan, in full or in part, any time prior to maturity without penalty. The terms are generally short and range between six months and one year.

A closed mortgage, on the other hand, can’t be paid out fully, renegotiated or refinanced before maturity without paying the lender a compensation penalty. The term for a closed mortgage can range anywhere from six months to 10 years. Beware: The costs associated with closed mortgages can be high. Know the payout penalties before you agree to one. Generally speaking, the penalty depends on how far along you are in the life of your mortgage. It is oftentimes a three-month interest payment or the Interest Rate Differential (IRD), whichever is more.

The IRD is the difference between the contractual rate of the mortgage and the rate the lender can now get for its money. For example, consider a mortgage with a three-year term remaining at 6 percent when the market rate is only 4 percent. The borrower must pay the difference in interest.

Of course, there are risks – either psychological or financial – associated with both types of mortgages. A closed mortgage offers the borrower peace of mind. The rate is fixed over a term that works within long-term goals. The borrower knows exactly how much is going toward the principal and interest and does not have to worry about unexpected rate hikes that can lead to soaring monthly payments.

Conversely (and here is why many people tend to shy away

from closed mortgages), should interest rates decrease drastically, the borrower fails to benefit.

The advantages of both open fixed-rate and open variable-rate mortgages is that the borrower can pay out the mortgage in full at any time without incurring penalties. A Canadian study conducted in 2001 found that people who chose short-term, variable-rate mortgages saved an average of $22,000 in interest costs per $100,000.

If you’ve calculated the risks and decided that an open mortgage suits your needs, you should keep a close eye on interest rates. This makes a decision on whether and when to switch to a fixed-rate mortgage from a panic attack to an educated guess. It is possible to predict interest rates to a degree, but remember, it is an art, not a science, and you could be wrong.

If you see signs that rates are about to go up, consider locking into a mortgage and avoid the trap of no longer being able to afford payments on your home.

First-time buyers who plan to live in their home for a long time probably benefit the most from closed mortgages. Real estate investors who want guaranteed interest rates and payments for a specified amount of time should also consider opting for closed.

Open mortgages work for consumers who plan to sell their home in the near future because they won’t have to pay a penalty when the home is sold. The same applies to consumers who believe interest rates are falling or who expect to receive a large sum of money in the near future.

Ultimately, whether you choose an open or closed mortgage depends on which stage of life you’re at, your income, your goals and the amount of risk you are willing to take. There are advantages and disadvantages to each, so use the resources available to you to make the right choice.

CLOSED VS. OPEN MORTGAGES

3

When an object is deemed to be a fi xture by a buyer and a chattel by a seller – and when the offer does not specifi cally include the object – problems are bound to ensue. If a dispute arises regarding the item after closing, its ultimate ownership will depend upon whether the courts consider the item to be a chattel or a fi xture.

Law students are taught in fi rst-year property courses that chattels are items of moveable or transferable property, unlike land and buildings that are fi xed and immoveable. If the items are neither land, nor permanently attached to land or a building, they are, by defi nition, chattels. (The word chattel dates back to feudal times when cattle were the most valuable item of property – except for land).

Typically, if an item is attached to land only by its own weight, it is not usually considered part of the land unless the surrounding circumstances make it clear that they were intended to be part of the land.

By the same token, a fi xture is a piece of equipment which has been attached to real estate in such a way as to become part of the premises, and its removal would do harm to the building or land.

Using these defi nitions, a mirror that is hanging on a hook is a chattel and can be removed by the seller. The same mirror becomes a fi xture if it is permanently attached or mounted to a wall in the house.

A furnace delivered to a house, for example, is a chattel or item of moveable personal property when it leaves the store. When it is installed in the owner’s house, and permanently connected to the ductwork, fl oor, electrical and plumbing systems, it becomes a fi xture that remains with the building when the owner moves out.

Over the years, courts have attempted in many cases to determine whether an object is a chattel or fi xture. Judges will often examine the purpose of the attachment or annexation of the item to the property, and the actual

degree or extent of the attachment.

The bottom line is that buyers and sellers of land – and their agents – should always direct their minds to the question of chattels and fi xtures before the agreement of purchase and sale becomes fi rm.

If you as a buyer have any doubt at all about whether an item that you want is a chattel or a fi xture, simply ensure that your agent clearly specifi es it in the offer. And remember that just because the item was not listed as an exclusion on the feature sheet (or even the listing), this does not mean that the seller needs to include it. The agreement of purchase and sale supersedes everything and, beyond that, only a court can decide if there is a dispute. And that decision is made on the basis of a judge’s opinion on whether the item in question is a chattel or a fi xture.

This article was contributed by Bob Aaron, a prominent Toronto-based real estate lawyer. Please visit him at www.aaron.ca.

CHATTLES VS. FIXTURES

2

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 © 2012 Mission Response Inc. 416.236.0543 All Rights Reserved. D191

“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

The month of May witnessed another strong performance of the GTA resale housing market, from both a volume and price standpoint. May unit sales were 10,850, representing an 11% increase versus May 2011 sales of 9,766 single family homes. The sales growth in the ‘905’ regions eclipsed that of the City of Toronto across all major housing types by a sizeable margin. The City of Toronto’s land transfer tax has clearly prompted many households to look outside of Toronto for their housing needs. In the detached home segment, for example, annual volume growth in the ‘905’ regions was +13% as compared to just +6% in the City of Toronto. In the semi-detached segment, the comparable numbers were +11% and +6% respectively.

The average price of a resale home in the GTA in May was $516,787 - which was up by a solid 6% versus the May 2011 average price of $485,362 and which was just under the all-time high price of $517,556 established just one month previously in April 2012. Once again, strong competition between buyers seeking to purchase low-rise home types drove the strong price growth in May. Having said that, if the surge in both new and active listings witnessed during the month of May (new listings were up 20% versus a year ago and active listings were up 10% versus a year ago) continues for the balance of the year, further price growth will almost certainly begin to moderate. Average days on market for the month of May remained at a brisk 21 days.

8 9 10 11 12

GTA Resale Home Sales

GTA AVERAGE RESALE PRICE

MARJAN MAY SEP NOVJUL$400,000

$540,000

$420,000

$440,000

$460,000

$480,000

$500,000

$520,00020122011

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

12,0002011

2012

JUNE 2012

The Canadian Association of Accredited Mortgage Professionals (CAAMP) recently released its semi-annual report. This survey of 2,000 individuals is easily the best source for of mortgage-related market statistics in Canada. It is excellent fodder for mortgage and real estate buffs alike. To read the full report, please go to the following web page: www.canadianmortgagetrends.com/fi les/spring-report-2012_eng_caamp.pdf.

Here are a just few highlights from the report that you may fi nd to be of interest:

• homeowner households without mortgages: 3.75 million (39% of total homeowner households)

• homeowner households with mortgages: 5.85 million (61% of total homeowner households)

• average mortgage principal outstanding: $170,000• average mortgage amount of new (2011) purchases:

$224,000• households with a home equity line of credit (but no

mortgage): 625,000 (average HELOC size: $70,700)• households with both mortgages and HELOCs: 2 million

(average HELOC size: $58,600) • average equity for homeowners with mortgages but no

HELOC: 49%• average equity for homeowners with both mortgages and

a HELOC: 41% • average equity for homeowners with a HELOC but no

mortgage: 82%• % of mortgagors with fi xed rates: 65%• % of mortgagors with variable rates: 29%• % of mortgagors with “combination” or hybrid mortgages:

7%

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

“I have a new philosophy. I’m only going to dread one day at a time.” – Charles M. Schulz

“I intend to live forever. So far, so good.” – Steven Wright

“I used to be Snow White, but I drifted.” – Mae West

“I’m an idealist. I don’t know where I’m going, but I’m on my way.” – Carl Sandburg

“If two wrongs don’t make a right, try three.” – Laurence J. Peter