james metcalfe's toronto real estate market update may 2012
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MAY 2012
MARKET SURGE CONTINUES IN APRIL
Total unit volume through the TorontoMLS® system in April was 10,350 - which represented a whopping 18% increase versus April 2011 sales of 8,778 single family homes. Volume growth was highest in the detached home segment (+22%), however all the key market segments reported very sizeable increases: townhouses (+19%), semi-detached homes (+14%) and condo apartments (+9%). Despite a slightly better supplied market (active listings showing a 4% increase versus last year), the market has continued its sizzling pace with the average days on market remaining at an extremely low 21 days.
The average price of a resale home in the GTA continued to surge in April, establishing yet another new all-time high of $517,556. That represented a 9% increase versus the April 2011 average price of $476,802. Price increases occurred over all major housing types but were particularly pronounced for the detached home segment (+9%). Price increases for the other key market segments were as follows: townhomes (+5%), semi-detached homes (+5%) and condo apartments (+4%). Prices are expected to remain robust during the months ahead as affordability continues to be positively impacted by extremely low interest rates.
8 9 10 11 12
GTA Resale Home Sales
GTA AVERAGE RESALE PRICE
APRFEB JUN OCT DECAUG400,000
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
APRFEB JUN OCT DECAUG
4,500
3,500
5,500
6,500
7,500
8,500
9,500
10,5002011
2012
James Metcalfe BROKER
416-931-4161
JAMES METCALFE’S REAL ESTATE UPDATE
PAGE 1
MarketNews
Royal LePage Real Estate Services Ltd.Johnston & Daniel Division, Brokerage
477 Mount Pleasant Rd., Toronto, ON M4S 2L9
Whether you want to put your home on the market, the following 7 tips are things to keep in mind to make the most of the exterior look of your major investment… your home.
1) Start with taking a photo of the front of your house. It’s amazing how this gives an objective view of its façade. Glaring problem areas will become evident. Those are the issues to address first.
2) In terms of colour, all choices must take into consideration the ‘fixed’ elements of the house. For example, if you don’t like your yellow brick, but aren’t going to paint or stain it, make sure all your choices (such as roof, paint, etc.) help that yellow brick look its best through your colour selections.
3) Maintain the character style of the house with every decision you make. Whether it’s roofing colour, paint colour or accessories, your choices should all fit into that style.
4) If more than one door faces the street, accent the most important one. The one you want visitors or prospective buyers to be drawn toward and enter. Select a ‘statement’ colour for your front door. It should be in contrast to your trim colour.
5) If your garage door is visible from the street, blend it with your siding colour. This may mean it’s the same tone value as the siding, but not necessarily the same colour. Never leave a garage door white. It draws too much attention away from your front door, and tends to look unfinished.
6) Painting your trim and siding the same colour may save you money in labour (the painters love that) but it is a missed opportunity to create an impression. Use the contrast method to give your property presence and definition.
7) If you’re replacing your roof, don’t err on the side of ugly and choose a pale roofing colour to save on air conditioning costs, especially if the roof is a significant part of the façade. Choose the roof colour that works the best with your siding.
These 7 tips will help you make the most of marketing your home. If a buyer doesn’t like what they see from the curb, they’ll just keep driving.
Case study
Erin & Peter wanted to spruce up the exterior of their home to sell. When we photographed their house as it was, they were shocked at the flaws that became evident. The brick siding was a dark brown (oxidized) and there were no plans to power wash it. Because the brick was so dark, it made the white garage door the most noticeable thing on the façade!
The top half of the front was very plain compared to the interesting detailing on the lower half. The front door was barely noticeable, and the same colour as the trim around it .Altogether there was too much brown… brown brick, lighter brown trim and front door… There was actually nice architectural detailing around the front door that got completely lost in this monochromatic palette.
We lightened the window and door trim to a rich cream colour (‘Natural Cream’) and brought out the architectural details around the door by accenting with a mid tone grey-green (‘Heather Grey’). The garage door is painted a darker version of the grey-green (‘Sharkskin’) , making it blend with the brick.
Luckily the roof was a classic black. To coordinate with the black wrought iron railings at the front entry, plus deal with the plain upper half, we added shutters & painted them black. We also painted the front door black.
The last thing we did was take another photograph….it didn’t look like the same house!
This article was contributed by Sylvia O’Brien of Colour Theory, a Toronto firm that helps clients pick the perfect colour for their decorating needs. Please visit her online at www.colourtheory.net
Trendy Corner
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Curb appeal sells... so does colour
PersonalFinance
Why CRA wants $30,000 HST rebates back
Some investors who bought new homes or condos in the past few years planning to flip them in a hot real estate market are facing HST bills of up to $30,000.
That’s because they didn’t read the fine print on the purchase agreement and they now have a problem that relates to the HST rebate that is available to buyers of new homes under certain conditions.
When you buy a new home or condominium, there are rebates for the federal 5 per cent portion of the HST and in Ontario, the provincial 8 per cent portion.
You can qualify for a rebate of 36 per cent of the federal portion of the HST if the home costs $350,000 or less. If the home costs between $350,000 and $450,000 there is a sliding scale. At $450,000 the rebate ends. For the provincial portion, everyone can apply for up to 75 per cent of the HST paid, to a maximum of $24,000. You can also apply for the rebates if you build your own home as well.
It can add up to a sizeable sum. If a new home costs $300,000 and there was no rebate, the HST would be 13 per cent of the price or $39,000. With the rebates, you’d pay $15,600 for a saving of $23,400.
The catch is that in order to qualify, the new home or condo has to be your primary residence, or you must prove that you have rented it out for at least a year. If you move in on closing, the builder often builds the rebate into the sale price and then applies to the Canada Revenue Agency for the refund on your behalf. Before the builder will do that, you have to sign a document saying that you will move in. If the builder suspects you will not be moving in, they have the right to ask you to pay the rebate on closing.
If you bought the house as an investment and plan to rent it out, you can apply for the rebate immediately as well, but will have to send proof that you closed your deal and a copy of the lease agreement. If you sell the investment property within a year, you have to pay the tax.
Many investors who bought new homes or condominiums several years ago from plans are trying to take advantage of the hot real estate market by selling without moving in. However, these same investors signed papers with the builder promising that they would move in, so the builder applied for HST rebates on their behalf. Now CRA wants the HST rebate back with interest. That can be as much as $30,000.
The lesson is that buyers must understand their obligations if they intend to apply for any HST rebate on a new home or condominium. Either you must move into the home as your primary residence on closing, in which event you can immediately apply for the full rebate, or you must rent it out for at least one year and then apply for the rebate. If you are intending to immediately re-sell your home without moving in, then just pay the full HST amount when you buy the home from the builder, and don’t apply for any rebate.
This article was contributed by Mark Weisleder, a Toronto-based lawyer, author and speaker to the real estate industry. Please visit him at www.markweisleder.com.
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PEARLS OF WISDOM
Despite the surge in home prices across Canada over the past year, there is a very clear argument to support the fact home ownership is still much more affordable today than it was 20 years ago. The following Toronto-based example illustrates this point quite succinctly.
Twenty years ago, in Toronto, the average two bedroom condominium sold for $250,000. Mortgage rates were 12 per cent and the maximum amortization period was 25 years. With a 20 percent down payment, the monthly costs to carry the unit were as follows:
• Mortgage payment: $2,072 • Taxes: $150 • Maintenance fees: $300 • Total: $2,522
The average rental rate in 1990 for a similar two bedroom condominium in Toronto was $1,200. It thus made little sense at that time for renters to enter the housing market at that time.
Today, the same condo fetches $500,000. However, the interest rate for a five-year mortgage is 3 per cent and the maximum amortization period is now 30 years. With a 20 percent down payment, the monthly cost to carry this condo are as follows:
• Mortgage payment: $1,682 • Taxes: $300 • Maintenance fees: $500 • Total: $2,482
The average rent for a similar unit today is $2,300, so you can clearly see that it is conceivable for renters to afford to buy even at these price ranges.
As usual, your client referrals are both highly valued and much appreciated. Until next time, take care!
“The horse is here to stay but the automobile is only a novelty - a fad.” – The president of the Michigan Savings Bank advising Henry Ford’s lawyer, Horace Rackham, not to invest in the Ford Motor Co., 1903
“The world potential market for copying machines is 5,000 at most.” – IBM, to the eventual founders of Xerox, saying the photocopier had no market large enough to justify production, 1959
“There is not the slightest indication that nuclear energy will ever be obtainable. It would mean that the atom would have to be shattered at will.” – Albert Einstein, 1932
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
James Metcalfe BROKER
416-931-4161 [email protected]
Royal LePage Real Estate Services Ltd.Johnston & Daniel Division, Brokerage
477 Mount Pleasant Rd., Toronto, ON M4S 2L9
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TO MY VALUED FRIENDS AND CLIENTS
PEARLS OF WISDOM
“YOUR REFERRALS ARE SINCERELY APPRECIATED! THANK YOU!”