1. JUNE 2012 REAL ESTATE UPDATE
The month of May witnessed another strong The average price of a resale home in the GTA in May
performance of the GTA resale housing market, from was $516,787 - which was up by a solid 6% versus
both a volume and price standpoint. May unit sales the May 2011 average price of $485,362 and which
were 10,850, representing an 11% increase versus was just under the all-time high price of $517,556
May 2011 sales of 9,766 single family homes. The sales established just one month previously in April 2012.
growth in the ‘905’ regions eclipsed that of the City of Once again, strong competition between buyers seeking
Toronto across all major housing types by a sizeable to purchase low-rise home types drove the strong
margin. The City of Toronto’s land transfer tax has price growth in May. Having said that, if the surge
clearly prompted many households to look outside of in both new and active listings witnessed during the
Toronto for their housing needs. In the detached home month of May (new listings were up 20% versus a year
segment, for example, annual volume growth in the ago and active listings were up 10% versus a year ago)
‘905’ regions was +13% as compared to just +6% in the continues for the balance of the year, further price growth
City of Toronto. In the semi-detached segment, the will almost certainly begin to moderate. Average days on
comparable numbers were +11% and +6% respectively. market for the month of May remained at a brisk 21 days.
GTA RESALE HOME SALES GTA AVERAGE RESALE PRICE
8 9 10 11 12 8 9 10 11 12
12,000 $540,000
2011 2011 2012
10,500 $520,000
2012
sale Home Sales GTA Resale Home Sales
9,000 $500,000
7,500 $480,000
6,000 $460,000
4,500 $440,000
3,000 $420,000
1,500 $400,000
JAN MAR MAY JUL SEP NOV JAN MAR MAY JUL SEP NOV
James Metcalfe BROKER
416-931-4161 Royal LePage Real Estate Services Ltd.
Johnston & Daniel Division, Brokerage
477 Mount Pleasant Rd., Toronto, ON M4S 2L9
www.OurHomeToronto.com | Service@OurHomeToronto.com
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2. CHATTLES VS. FIXTURES
When an object is deemed to be a fixture by a buyer and a degree or extent of the attachment.
chattel by a seller – and when the offer does not specifically
include the object – problems are bound to ensue. If a The bottom line is that buyers and sellers of land – and their
dispute arises regarding the item after closing, its ultimate agents – should always direct their minds to the question of
ownership will depend upon whether the courts consider chattels and fixtures before the agreement of purchase and
the item to be a chattel or a fixture. sale becomes firm.
Law students are taught in first-year property courses that If you as a buyer have any doubt at all about whether an item
chattels are items of moveable or transferable property, that you want is a chattel or a fixture, simply ensure that your
unlike land and buildings that are fixed and immoveable. agent clearly specifies it in the offer. And remember that
If the items are neither land, nor permanently attached to just because the item was not listed as an exclusion on the
land or a building, they are, by definition, chattels. (The word feature sheet (or even the listing), this does not mean that
chattel dates back to feudal times when cattle were the the seller needs to include it. The agreement of purchase
most valuable item of property – except for land). and sale supersedes everything and, beyond that, only a
court can decide if there is a dispute. And that decision is
Typically, if an item is attached to land only by its own made on the basis of a judge’s opinion on whether the item
weight, it is not usually considered part of the land unless in question is a chattel or a fixture.
the surrounding circumstances make it clear that they were
intended to be part of the land.
By the same token, a fixture 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 definitions, a mirror that is hanging on a hook is
a chattel and can be removed by the seller. The same mirror
becomes a fixture 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, floor, electrical and plumbing
systems, it becomes a fixture 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 fixture.
Judges will often examine the purpose of the attachment
or annexation of the item to the property, and the actual
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This article was contributed by Bob Aaron, a prominent Toronto-based real estate lawyer. Please visit him at www.aaron.ca.

3. CLOSED VS. OPEN MORTGAGES
Choosing the right mortgage can feel like a trip through a from closed mortgages), should interest rates decrease
labyrinth blindfolded. There are so many different types of drastically, the borrower fails to benefit.
mortgages available, it’s hard to know where to start and
what’s best for you. The advantages of both open fixed-rate and open
variable-rate mortgages is that the borrower can pay out the
One of the first things you should decide is whether you mortgage in full at any time without incurring penalties. A
want an open or a closed mortgage. Canadian study conducted in 2001 found that people who
chose short-term, variable-rate mortgages saved an average
An open mortgage is one in which the borrower can repay of $22,000 in interest costs per $100,000.
the loan, in full or in part, any time prior to maturity without
penalty. The terms are generally short and range between If you’ve calculated the risks and decided that an open
six months and one year. mortgage suits your needs, you should keep a close eye on
interest rates. This makes a decision on whether and when
A closed mortgage, on the other hand, can’t be paid out fully, to switch to a fixed-rate mortgage from a panic attack to an
renegotiated or refinanced before maturity without paying educated guess. It is possible to predict interest rates to a
the lender a compensation penalty. The term for a closed degree, but remember, it is an art, not a science, and you
mortgage can range anywhere from six months to 10 years. could be wrong.
Beware: The costs associated with closed mortgages can If you see signs that rates are about to go up, consider
be high. Know the payout penalties before you agree to locking into a mortgage and avoid the trap of no longer being
one. Generally speaking, the penalty depends on how far able to afford payments on your home.
along you are in the life of your mortgage. It is oftentimes a
three-month interest payment or the Interest Rate First-time buyers who plan to live in their home for a long
Differential (IRD), whichever is more. time probably benefit the most from closed mortgages.
Real estate investors who want guaranteed interest rates
The IRD is the difference between the contractual rate of and payments for a specified amount of time should also
the mortgage and the rate the lender can now get for its consider opting for closed.
money. For example, consider a mortgage with a three-year
term remaining at 6 percent when the market rate is only Open mortgages work for consumers who plan to sell
4 percent. The borrower must pay the difference in interest. their home in the near future because they won’t have to
pay a penalty when the home is sold. The same applies to
Of course, there are risks – either psychological or financial – consumers who believe interest rates are falling or who
associated with both types of mortgages. A closed mortgage expect to receive a large sum of money in the near future.
offers the borrower peace of mind. The rate is fixed over a
term that works within long-term goals. The borrower knows Ultimately, whether you choose an open or closed mortgage
exactly how much is going toward the principal and interest depends on which stage of life you’re at, your income, your
and does not have to worry about unexpected rate hikes goals and the amount of risk you are willing to take. There
that can lead to soaring monthly payments. are advantages and disadvantages to each, so use the
resources available to you to make the right choice.
Conversely (and here is why many people tend to shy away
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4. The Canadian Association of Accredited Mortgage Professionals mortgage): 625,000 (average HELOC size: $70,700)
(CAAMP) recently released its semi-annual report. This survey of • households with both mortgages and HELOCs: 2 million
2,000 individuals is easily the best source for of mortgage-related (average HELOC size: $58,600)
market statistics in Canada. It is excellent fodder for mortgage
• average equity for homeowners with mortgages but no
and real estate buffs alike. To read the full report, please go to
HELOC: 49%
the following web page: www.canadianmortgagetrends.com/
files/spring-report-2012_eng_caamp.pdf. • average equity for homeowners with both mortgages and
a HELOC: 41%
Here are a just few highlights from the report that you may find • average equity for homeowners with a HELOC but no
to be of interest: mortgage: 82%
• homeowner households without mortgages: 3.75 million • % of mortgagors with fixed rates: 65%
(39% of total homeowner households) • % of mortgagors with variable rates: 29%
• homeowner households with mortgages: 5.85 million (61% • % of mortgagors with “combination” or hybrid mortgages:
of total homeowner households) 7%
• average mortgage principal outstanding: $170,000
As usual, your client referrals are both highly valued and much
• average mortgage amount of new (2011) purchases: appreciated. Until next time, take care!
$224,000
• households with a home equity line of credit (but no
James Metcalfe BROKER
“YOUR REFERRALS ARE SINCERELY APPRECIATED! THANK YOU!”
416-931-4161
www.OurHomeToronto.com | Service@OurHomeToronto.com
GTA Res
Royal LePage Real Estate Services Ltd.
Johnston & Daniel Division, Brokerage
477 Mount Pleasant Rd., Toronto, ON M4S 2L9
“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
”
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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
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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
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