1. MarketNews
JAMES METCALFE’S REAL ESTATE UPDATE MAY 2012
MARKET SURGE CONTINUES IN APRIL
Total unit volume through the TorontoMLS® system in The average price of a resale home in the GTA continued
April was 10,350 - which represented a whopping 18% to surge in April, establishing yet another new all-time
increase versus April 2011 sales of 8,778 single family high of $517,556. That represented a 9% increase versus
homes. Volume growth was highest in the detached home the April 2011 average price of $476,802. Price increases
segment (+22%), however all the key market segments occurred over all major housing types but were particularly
reported very sizeable increases: townhouses (+19%), pronounced for the detached home segment (+9%). Price
semi-detached homes (+14%) and condo apartments increases for the other key market segments were as
(+9%). Despite a slightly better supplied market (active follows: townhomes (+5%), semi-detached homes (+5%)
listings showing a 4% increase versus last year), the market and condo apartments (+4%). Prices are expected to remain
has continued its sizzling pace with the average days on robust during the months ahead as affordability continues
market remaining at an extremely low 21 days. to be positively impacted by extremely low interest rates.
GTA RESALE HOME SALES GTA AVERAGE RESALE PRICE
8 9 10 11 12 8 9 10 11 12
10,500 540,000
2011 2011 2012
9,500 520,000
2012
sale Home SalesGTA Resale Home Sales
8,500 500,000
7,500 480,000
6,500 460,000
5,500 440,000
4,500 420,000
3,500 400,000
FEB APR JUN AUG OCT DEC FEB APR JUN AUG OCT DEC
James Metcalfe BROKER
416-931-4161 Royal LePage Real Estate Services Ltd.
www.OurHomeToronto.com Johnston & Daniel Division, Brokerage
Service@OurHomeToronto.com 477 Mount Pleasant Rd., Toronto, ON M4S 2L9
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2. Curb appeal sells... so does colour
Trendy
Whether you want to put your home on the market, the
following 7 tips are things to keep in mind to make the most
Corner
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,
of the exterior look of your major investment… your home. they’ll just keep driving.
1) Start with taking a photo of the front of your house. It’s amazing Case study
how this gives an objective view of its façade. Glaring problem
Erin & Peter wanted to spruce up the exterior of their home to sell.
areas will become evident. Those are the issues to address first.
When we photographed their house as it was, they were shocked at
2) In terms of colour, all choices must take into consideration the the flaws that became evident. The brick siding was a dark brown
‘fixed’ elements of the house. For example, if you don’t like your (oxidized) and there were no plans to power wash it. Because
yellow brick, but aren’t going to paint or stain it, make sure all your the brick was so dark, it made the white garage door the most
choices (such as roof, paint, etc.) help that yellow brick look its best noticeable thing on the façade!
through your colour selections.
The top half of the front was very plain compared to the interesting
3) Maintain the character style of the house with every decision you detailing on the lower half. The front door was barely noticeable, and
make. Whether it’s roofing colour, paint colour or accessories, your the same colour as the trim around it .Altogether there was too much
choices should all fit into that style. brown… brown brick, lighter brown trim and front door… There was
actually nice architectural detailing around the front door that got
4) If more than one door faces the street, accent the most important
completely lost in this monochromatic palette.
one. The one you want visitors or prospective buyers to be drawn
toward and enter. Select a ‘statement’ colour for your front door. It We lightened the window and door trim to a rich cream colour
should be in contrast to your trim colour. (‘Natural Cream’) and brought out the architectural details around
the door by accenting with a mid tone grey-green (‘Heather Grey’).
5) If your garage door is visible from the street, blend it with your
The garage door is painted a darker version of the grey-green
siding colour. This may mean it’s the same tone value as the siding,
(‘Sharkskin’) , making it blend with the brick.
but not necessarily the same colour. Never leave a garage door white.
It draws too much attention away from your front door, and tends Luckily the roof was a classic black. To coordinate with the black
to look unfinished. wrought iron railings at the front entry, plus deal with the plain upper
half, we added shutters & painted them black. We also painted the
6) Painting your trim and siding the same colour may save you money
front door black.
in labour (the painters love that) but it is a missed opportunity to
create an impression. Use the contrast method to give your property The last thing we did was take another photograph….it didn’t look
presence and definition. like the same house!
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,
This article was contributed by Sylvia O’Brien of Colour Theory, a Toronto firm that helps
especially if the roof is a significant part of the façade. Choose the clients pick the perfect colour for their decorating needs. Please visit her online at www.
roof colour that works the best with your siding. colourtheory.net
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3. Why CRA wants $30,000 HST rebates back
Personal
Finance
Some investors who bought new homes or condos in the past
few years planning to flip them in a hot real estate market are
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
facing HST bills of up to $30,000. 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
That’s because they didn’t read the fine print on the purchase
applies to the Canada Revenue Agency for the refund on your
agreement and they now have a problem that relates to the
behalf. Before the builder will do that, you have to sign a
HST rebate that is available to buyers of new homes under
document saying that you will move in. If the builder suspects
certain conditions.
you will not be moving in, they have the right to ask you to
When you buy a new home or condominium, there are pay the rebate on closing.
rebates for the federal 5 per cent portion of the HST and
If you bought the house as an investment and plan to rent it
in Ontario, the provincial 8 per cent portion.
out, you can apply for the rebate immediately as well, but will
You can qualify for a rebate of 36 per cent of the federal have to send proof that you closed your deal and a copy of the
portion of the HST if the home costs $350,000 or less. If lease agreement. If you sell the investment property within a
the home costs between $350,000 and $450,000 there is a year, you have to pay the tax.
sliding scale. At $450,000 the rebate ends. For the provincial
Many investors who bought new homes or condominiums
portion, everyone can apply for up to 75 per cent of the HST
several years ago from plans are trying to take advantage
paid, to a maximum of $24,000. You can also apply for the
of the hot real estate market by selling without moving
rebates if you build your own home as well.
in. However, these same investors signed papers with the
It can add up to a sizeable sum. If a new home costs $300,000 builder promising that they would move in, so the builder
and there was no rebate, the HST would be 13 per cent of the applied for HST rebates on their behalf. Now CRA wants
price or $39,000. With the rebates, you’d pay $15,600 for a the HST rebate back with interest. That can be as much as
saving of $23,400. $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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4. TO MY VALUED FRIENDS AND CLIENTS
Despite the surge in home prices across Canada over the Today, the same condo fetches $500,000. However, the
past year, there is a very clear argument to support the fact interest rate for a five-year mortgage is 3 per cent and the
home ownership is still much more affordable today than maximum amortization period is now 30 years. With a
it was 20 years ago. The following Toronto-based example 20 percent down payment, the monthly cost to carry this
illustrates this point quite succinctly. condo are as follows:
Twenty years ago, in Toronto, the average two bedroom • Mortgage payment: $1,682
condominium sold for $250,000. Mortgage rates were 12 • Taxes: $300
per cent and the maximum amortization period was 25 • Maintenance fees: $500
years. With a 20 percent down payment, the monthly costs • Total: $2,482
to carry the unit were as follows: The average rent for a similar unit today is $2,300, so you
• Mortgage payment: $2,072 can clearly see that it is conceivable for renters to afford to
• Taxes: $150 buy even at these price ranges.
• Maintenance fees: $300
As usual, your client referrals are both highly valued and
• Total: $2,522
much appreciated. Until next time, take care!
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.
PEARLS OF WISDOM
“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
“YOUR REFERRALS ARE SINCERELY APPRECIATED! THANK YOU!”
James Metcalfe BROKER
416-931-4161
Royal LePage Real Estate Services Ltd.
www.OurHomeToronto.com Johnston & Daniel Division, Brokerage
Service@OurHomeToronto.com 477 Mount Pleasant Rd., Toronto, ON M4S 2L9
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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 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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