Keep Safe and Warm this last day of 2017. A happy, healthy and prosperous 2018 to all! pic.twitter.com/QQMcOrL35x
— The Rose Macchiusi Sales Team (@rmacchiusi) December 31, 2017|
These were the 7 most shocking Toronto housing market stats of 2017. 1. In January, the average price of a detached home in the GTA reached an all-time high of $1,316,325 — a decade before it was only $444,368. 2. In February, there were a mere 534 new detached homes in builder inventories the GTA, a record-low level of supply that had industry watchers worried about where prices might head next. 3. In February, GTA listings were down 50 per cent year-over-year, as demand surged to record levels. “The upshot is that the largest housing markets that have been responsible for the biggest house price gains over the past two years are now approaching a potentially dangerous tipping point,” wrote Capital Economics senior economist for Canada David Madani at the time. 4. Sales jumped 15.2 per cent year-over-year in March to 12,077, while the average price of a home shot up a dizzying 33.2 per cent to $916,567. 5. As the buying frenzy reached a peak in March, GTA homebuyers bought a whopping $11,069,381,891 worth of property. 6. That same month, an average GTA home stayed on the market for only 10 days. 7. After a summer that saw the market cool dramatically, in August eight GTA municipalities saw detached home prices collapse by 20 per cent from April, when the Fair Housing Plan was announced. Marijuana Grow Houses – Municipal Inspections
A grow house is a home that has been leased or bought by persons in the drug trade and used as an indoor nursery or hydroponics operation to grow marijuana plants. These operations often involve significant alteration to the dwelling structure and electrical system, which can compromise structural integrity and pose safety and fire hazards. Rent increase guidelineFor 2017: the rent increase guideline is 1.5% for increases between January 1 and December 31, 2017.
For 2018: the rent increase guideline is 1.8 % for increases between January 1 and December 31, 2018. Who it applies toThe guideline applies to most private residential rental units covered by the Residential Tenancies Act. The guideline does not apply to:
How the guideline is calculatedIt is calculated using the Ontario Consumer Price Index, a Statistics Canada tool that measures inflation and economic conditions over a year. Data from June to May is used to determine the 2017 guideline for the following year. A sample calculationYour monthly rent was increased to $1,000 on June 1, 2017. The guideline for 2018 is 1.8%. Therefore:
Your landlord would need to provide you written notice at least 90 days before June 1, 2018. Additional information For more information on the rent increase guideline, contact the Landlord and Tenant Board:
According to the Office of the Superintendent of Financial Institutions (OSFI), tougher mortgage qualifying rules will take effect as soon as January 2018.
Why is this so important? If you barely qualify for a mortgage now, you won’t in 2 months. The new OSFI minimum qualifying rate, also known as the “stress test”, will be a requirement for all home buyers, including pre-construction condos, resale, freehold, and others requiring a mortgage. Presently, prospective home buyers with down payments of 20% or greater are not required to purchase mortgage insurance, and therefore forgo any preliminary testing. Come January, new home buyers who fall under the uninsured borrower umbrella will submit to the same assessment as insured borrowers, with the qualifying rate ensuring that new mortgages, regardless of the down payment size, will be able to pay the loan if interest rates become higher than they are today. Meaning that, borrowers will be tested at either greater than the five-year benchmark rate, or two percent higher than their actual mortgage rate- whichever one is higher. This equivalent of a 2% rate hike will equate to a drop of approximately 15-20% in purchasing power. By the new year, some potential mortgagees may no longer be able to afford buying real estate. With the help of Ratehub.ca’s Mortgage Affordability Calculator, here is an example of how the numbers tally up now, versus just about two months from now. OCTOBER 2017 Vs. JANUARY 2018 Example: Buyer’s mortgage rate is lower than the bank of Canada’s five-year benchmark rate Current Bank of Canada Benchmark: 4.89% Annual Income: $100,000 Down Payment: 20% 5 Year Fixed Mortgage Rate of 3.09% Amortized over 25 Years Results: October 2017 maximum affordability: $706,692 January 2017 maximum affordability: $559,896 *Noteworthy: The new stress test rules will not apply to mortgage renewals as long as you remain a client of your existing lender. December 18, 2017 -- On December 13, the Federal Government took steps to clarify new rules around tax planning using private corporations. The Minister of Finance proposed explicit rules for business owners that suggests the following individuals will be exempt from new income sprinkling rules:
CREA announced it will review the changes closely with its tax experts and continue to work with the government to ensure further changes are fair and adequate for real estate business owners across the country. Read the full release from CREA here. Since October, subtle changes to the Principal Residence Tax Exemption (PRE) have meant that Canadian sellers and buyers must disclose transactions on their principal residences to the government. Somehow I missed until recently that the administration changes also affect those who work from home. Instead of capital gains made on the sale of a principal residence being entirely tax exempt, only the portion of the home used for residency is exempt; i.e. the portion used as a deductible business expense, whether by room or by footage, will be taxed if a profit is made on the sale of a home.
It’s a change that doesn’t affect CEOs or brain surgeons, but primarily sole proprietors who run daycares, freelance bookkeepers, landscapers, and other middle-class people with an entrepreneurial bent — exactly the kind of people whom I’ve often said could lead the way to less urban sprawl, more community engagement and less clogged traffic for those who still commute. These are people who don’t have paid vacations and IT departments. They don’t have supply closets or company pensions. They pay their income tax and their property taxes just like six-figure employees of corporations, but they don’t get company cars or expense accounts. It’s disheartening. We’ve created a system that clearly favours the wealthy as it is. Although the administrative changes were purported to address a loophole through which foreign buyers might slip, wealthy foreign buyers with competent accountants can still avoid taxes on capital gains made on real estate by hiding behind a bare trust. The person who sets up the trust makes a property an asset of the trust, and then designates a beneficiary, usually family. Or they create a company that owns the property, then buy and sell the company so a change in ownership of the property never triggers the taxes. So here I am wondering why, when we tax just about everything, we aren’t taxing capital gains on principal residences. Ours is a real estate-based economy. Homes in the GTA and Vancouver particularly are as much about the frenzy to make as much as possible as they are about spending decades raising families and building communities. Ugly bidding wars aren’t about making memories. Why don’t we treat it like the profit centre it is? Instead of going after home-workers for a percentage of the profit, why not make every buyer chip in? With a market like this, a tiny portion of such profits could go a long way towards new and improved infrastructure. I’m sure the hue and cry would be long and loud, but if we’re really being community-minded, should we begrudge donating a pittance on potentially enormous profits made by simply living in a construct? I’m generally conservative-minded, fiscally speaking, but I’m finding myself of two minds on this. I’m not for having government hands in my pockets, and I can see how the exemption further stimulates growth in an industry on which we’ve come to depend, perhaps too much. It incentivizes homeowners to keep their properties sound and attractive. It creates work for the building trades. But on the other hand, we’ve been subject to much less justifiable tax grabs, and a change to tax code could include provisions for tax exemption after living in a home for, say, five years, or tax higher-priced homes at a different rate than lower priced ones. Perhaps lower the development fees that are making it increasingly prohibitive for buyers to purchase newly constructed homes and take a pinch from the more mercenary sellers instead. On the hunt for your first home? Getting pre-approved is crucial so you are aware of how much you can afford. That way you don’t fall in love with something out of your budget. But what determines your qualifying amount? Your credit score is a major factor.
But what affects your credit score? If you’re still living at home and have never made a large purchase before, then you likely don’t understand credit scores at all. Those who have applied for rental housing have likely had to deal with credit scores; landlords ask for them to ensure they are leasing to a tenant that will actually pay rent in full and on time. The first thing you should know is that credit scores are a three-digit number, usually ranging from 200 to 900. If you’re up in the 800-900, you’re the best, keep it up. A more realistic target is in the 700 range. Most banks and lenders want you to be somewhere around 750. As soon as your credit score dips below 700, you’re running the risk of not getting approved for whatever you happen to be applying for. We’ve outlined five factors that affect your credit score so you can get a better grasp on it for when it comes time to get approved for your first mortgage. 1) Payment history Late payments affect your credit score negatively. It proves that you can’t pay what you owe on time. It’s also frowned upon to constantly make the minimum payment. Your balance will increase quickly due to the interest and you’ll find yourself in trouble. For a good credit score, always make payments on time – set reminders in your phone if you have to. 2) Current debt Banks and lenders will look at your current debt relative to your credit limit. If your balance accounts for 90% of your limit, that’s not good. Depending on the institution, 60% to 70% of your limit is the max balance you should carry. This is the reason it makes sense to have credit cards with higher limits. The higher the limit, the better your ratio can be. The catch is you need good credit to qualify for a higher limit. Also, some people can’t handle having a higher limit – if they have access to more money, they’ll spend it. 3) Credit applications Here’s the crazy thing about credit: Requiring credit is bad for your credit score. Whenever you apply for a credit increase or new form of credit, your credit score is negatively impacted because it’s a sign of you needing money. Even checking your credit score can lower your credit score; banks and lenders see this as suspect activity…if you were good with your money, why would you need to check your credit score so much? 4) Types of credit Now things get confusing. Remember how we just said that applying for credit can be bad for your credit score? Well, having a mix of different types of credit is better than having only one form. For example, making on time payments for your vehicle, phone, mortgage, and credit cards looks better than your only credit being in the form of a credit card. We’re not saying to run out and apply for a loan, it’s just something to keep in mind. Good credit is something built up over time. 5) Sent to collections This is very bad for your credit score. If you owe money and you’re not paying it, it’s possible that your debt could be sold to a collection agency. The collection agency then chases you down much more aggressively and your debt is increasing thanks to interest. This torpedos your credit score, so make sure you’re making all your payments! |
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