The Huffington Post is giving their four predictions for the housing market in 2015 and Nathan Dautovich, owner of the PropertyGuys.com, drops some knowledge for realtors and investors to consider this year.

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2015 promises to be a year of transition for the Toronto real estate market. While 2014 resembled the previous years with house prices continuing to increase, and high demand in the condo and rental market, there are some factors that may change things in the upcoming year. Here are 4 predictions for real estate in Toronto in 2015:

1. House prices will finally peak

Many analysts have been calling for a price correction for several years, but this is the year prices will finally hit their peak. There are two key factors that will make this happen. First are rising interest rates. For a long time I have been advising home owners that the market in Toronto will stay on its current path until interest rates go up. We finally have some predictions that the historically low interest rates could rise later this year. This will start to cool the market even before rates actually go up. The second key factor is that we have hit a ceiling for what most people can afford. With an average sell price of over $1 million for a house in a desirable neighbourhood, we’ve hit the maximum of what the majority of people can afford. Salaries are not rising to match these sale prices, and the fact is vey few people can afford homes over $1 million. When fewer buyers can even get approved for a mortgage, there will be less competition to buy these homes and prices will stop increasing.

2. Sold prices may become public

Currently the Canadian Competition Bureau is in a lawsuit against the Toronto Real Estate Board in an effort to allow the public access to data that previously only agents had access to – in particular sold data. There is an argument that this data belongs to the public, and having it available will increase competition and benefit the consumer. Imagine if you could go to a website and automatically see every sold price in the neighbourhood before even setting up a showing. If this happens, we may see a situation similar to what has happened in the United States, where sold data is public, and the MLS is only the 5th most popular real estate website. Other technology based companies have stepped in offering a better solution. This is one more step in opening up competition in the real estate industry and making the 5% commission model obsolete.

3. Larger condo units will be in higher demand

Have you noticed more strollers patrolling the streets of downtown Toronto? Get used to this, as many families are deciding to raise their children in the city instead of moving to the suburbs. Toronto is a safe and vibrant city, and with house prices both in the city and in the suburbs unrealistic for many parents, condos are an attractive alternative. Right now, a typical semi-detached home in a desirable neighbourhood can sell for around $1 million. A condo that is the same size can sell for 30-50 per cent less. As parents look for houses and are scared away by the high prices, larger condo units will be an option many of them consider.

4. It will be a buyers market for homes above $1.5 million

When I look at properties that sell for around $1 million versus properties that sell for above $1.5 million, I find the difference amazing. Houses that sell for above $1.5 million are often mansions with large lots, amazing upgrades, and are in exclusive locations. Houses that sell for around $1 million often are not really special in any way at all. As I mentioned above, this is due to peoples’s salaries, and the fact that most buyers have to stretch themselves to afford prices of around $1 million, with no room to pay any more. There are very few buyers for properties above $1.5 million, and many of these luxury homes have been sitting on the market for months waiting for buyers to come. I know that for most people buying a house for over $1.5 million may not be realistic, but for the lucky few who can afford it, they may be able to get a good deal.

Copyright ©2015 TheHuffingtonPost.com, Inc.

Olivia D’Orazio
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Condo sales in Canada’s major cities – and the three metropolitans that CREA reports on – were way up in the full year 2014. And, despite sinking oil prices and uncertainty surrounding mortgage rates, analysts and agents alike say this year will hold more of the same..
 
Late last year, Re/Max suggested first-time homebuyers – the largest demographic buying into the condo market – would be less likely to buy real estate due to tighter lending rules and, now, potentially higher mortgage rates.
 
“Many first-time buyers continued to feel the impact of the Canada Mortgage and Housing Corporation’s tightened lending criteria, which were revised in 2012,” Re/Max said in its 2015 Housing Market Outlook Report. “The new mortgage lending regulations have delayed the entry of first-time buyers into the market in many regions.”
 
However, that impact certainly wasn’t felt in 2014. Calgary reported the strongest growth, with a 21.7 per cent increase in year-over-year condo sales. Annual sales in Vancouver and Toronto also rose, increasing 14.1 per cent and 10.2 per cent, respectively.
 
Prices were up, too, with Vancouver’s 3.8 per cent increase boosting the average sales price of a condo to $458,462, the highest in Canada. Prices in Calgary increased 7.7 per cent to $314,761, while Toronto condo prices rose 5.2 per cent to $361,836.
 
Still, those prices are pennies compared to those in the single-family detached market. That’s another reason why many agents don’t predict a decline in condos.
 
“I think this will be another solid year,” says Matt Elkind, an agent with The Condo Store in Toronto. “The demand is going to continue. That trend away from houses, just with the prices of housing going up dramatically, more people are happy being downtown and living the condo lifestyle.”
 
For the month of December, sales increased most in Toronto – up 10.4 per cent from the same month a year ago. Calgary sales increased 5.8 per cent over December 2013, while Vancouver sales were up 7.7 per cent year-over-year.

Copyright © 2015 Key Media Pty Ltd

Morgan Carey says decision based on exposure, not money

Ben Ingram
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Real Estate Webmasters president and Nanaimo entrepreneur Morgan Carey has spurned a $2-million deal he secured on the reality TV show Dragons’ Den for a richer investment involving one of the stars of American spinoff Shark Tank.

Carey will detail a new agreement that values his company at $50 million, $10 million more than the Dragons’ offer, at Real Estate Connect in New York later this month, where he has been tabbed as a keynote speaker.

The new agreement involves Barbara Corcoran, a real estate entrepreneur and star of Shark Tank, which airs in the U.S. The other players involved will be revealed when the deal is finalized, Carey says.

“I can say we’ve partnered with a multibillion-dollar software company,” the company president said in an interview. “It’s a much better deal that is due in part to our exposure on Dragons’ Den.”

Carey said he had every intention of going through with the Dragons’ deal, but that “there just wasn’t enough value there. They didn’t bring enough to the table.

“Like I said on the television show, I don’t need the money. We had $2.5 million in sales last month,” he said. “It was about the contacts and it was about the exposure. It always was.”

Carey appeared on the broadcast in November, where Dragons Jim Treliving and Mike Wekerle agreed to partner on a five-per-cent stake of REW, in exchange for $2 million, or a $40-million valuation of the growing company.

REW creates customized websites for real estate companies that are search engine-optimized to generate traffic. The Nanaimo-based company employs approximately 180 and Carey hopes REW will grow to 1,000 employees with multiple international offices over the next five years.

A crucial element of that push is expected to be announced by Carey at this month’s industry event in New York.

REW is looking at expansion opportunities in Victoria, Toronto and the eastern U.S.

In addition to the agreement with Corcoran, Carey says he is also involved in an effort to appear on Dragons’ Den again ­— this time as a Dragon.

“My net worth is somewhere between $60 million and $65 million after this deal,” he said. “That would be higher than most of the Dragons on Dragons’ Den and it would make a fantastic story, which I’ve already pitched to the CBC.

“I’m not like a typical contestant. I own real estate companies, I own restaurants, I own software companies,” he said. “I’m an entrepreneur through and through.”

Armed with a more lucrative agreement involving American investors, Carey said REW will target a five-year revenue goal of $100 million, which could push the company past the $1-billion valuation mark.

© Copyright (c) Nanaimo Daily News

Jamie Henry
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There was a slight drop in Canada’s house prices in December, according to the latest Teranet-National Bank Composite House Price Index. Repeat sales of single-family homes slipped by 0.2 per cent from the month earlier. Five of the 11 cities studied saw declining prices. Halifax had the largest drop (1.9 per cent), followed by Calgary (1.1 per cent), Quebec (1.0 per cent), Montreal (0.9 per cent) and Vancouver (0.4 per cent). There were increases for Toronto (0.3 per cent), Edmonton (0.2 per cent), Hamilton (0.1 per cent) and Ottawa (0.1 per cent). Prices in Winnipeg and Victoria were unchanged. Annually there were increases in all cities except Quebec and Halifax and the national increase was 4.9 per cent.

House prices declined for the second consecutive month in December, but is this just an indication of real estate’s slowest months of the year?

Teranet-National Bank’s House Price Index showed an overall 0.2 per cent decline, but also stated that, in the past five years, price drops in November and December have been frequent.

According to the report, house prices were down in five of the 11 metropolitan markets surveyed: Halifax (−1.9 per cent), Calgary (−1.1 per cent), Quebec City (−1.0 per cent), Montreal (−0.9 per cent) and Vancouver (−0.4 per cent).

The indexes for Victoria and Winnipeg were flat, while prices were up in Toronto (0.3 per cent), Edmonton (0.2 per cent), Ottawa-Gatineau (0.1 per cent) and Hamilton (0.1 per cent).

In fact, Hamilton house prices reached a new record in December, in line with national reports that Hamilton will be one of the country’s hottest property markets in 2015.

With a 12-month rise of 7.8 per cent, Hamilton was one of four markets that saw an increase in house prices well above the countrywide average in 2014.

Calgary house prices experienced a rise of 8.3 per cent, while Edmonton house prices increased 5.8 per cent and Toronto house prices increased 7.2 per cent.

The 12-month rise was closer to the average in Vancouver (five per cent) but lagged it in Victoria (3.2 per cent) and Winnipeg (1.5 per cent).

Montreal (0.3 per cent) and Ottawa-Gatineau (+0.1 per cent) showed minimal gains, while prices were down from a year earlier in Quebec City (−0.8 per cent) and Halifax (−2.5 per cent).

Copyright © 2015 Key Media Pty Ltd.

Alexandra Posadzki
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TORONTO – The mad scramble involved in putting down a deposit on a new home can be more than just a hassle – in some cases it can even be a deal breaker.

In an age where most purchases can be paid with a tap from a credit card or smartphone, the process of paying a deposit to secure a real estate deal is still tied to old-fashioned paper – bank drafts and cheques – and tight delivery deadlines.

But the process that often involves homeowners making multiple bank visits, skipping work and racing to the realtor’s office before closing time could soon be entering a new era. Starting in February, Royal LePage Atlantic will be one of several Halifax-area brokerages that will allow homebuyers to pay their deposits via mobile devices.

The new service is being offered by a startup called ExactDeposit. If the test run goes smoothly, it’s expected to be rolled out in brokerages across the country in the spring.

Halifax-based realtor Chris Ryan co-founded ExactDeposit with his friend Kevin Kline, who has worked in technology and telecommunications for more than two decades. The pair enlisted the help of computer science PhD candidates at Dalhousie University to develop a secure and mobile-friendly website that allows homebuyers to pay their deposits – around $5,000 on average – using their credit cards from a smartphone, tablet or computer.

No additional hardware is required. After the realtor prepares the transaction, the buyer simply logs in through a mobile browser and enters his or her credit card information and the money is deposited with the brokerage. The entire process takes roughly 10 minutes.

Homebuyers with an accepted offer often find themselves a with 24 or 48-hour time limit to obtain a certified cheque and deliver it to the brokerage, or risk losing the deal. The challenge is compounded for those buying a home in another city or province.

Matthew Honsberger, a Halifax-based realtor with Royal LePage Atlantic, recalls an incident where a couple failed to get their deposit cheque in on time.

“They were just kind of dragging their feet a little, and when we actually did get it from them and give it to the other brokerage, the other brokerage said `No we terminated the agreement because we had a backup offer in place’ … Our folks lost out simply because they didn’t get a cheque there in time.”

For the decade that he’s been a real estate agent, Ryan says clients have been asking him for alternative ways to pay their deposits.

Realtors will pay less than $10 a month for unlimited usage, while homebuyers will be charged 2.9 per cent of their transaction – a price that Kline admits may be too steep for some.

But recent homebuyer Christopher Beaton, a 27-year-old sales and service manager at TD Bank, says the rewards he earns on his credit card transactions would largely compensate for the fee.

Beaton says he would have “absolutely” used ExactDeposit if it was available when he was shopping for a house in Lower Sackville, N.S. last spring.

“We were living in Dartmouth and Sackville is about a 20-minute drive away,” says Beaton. “So it was a lot of driving around. Time is money.”

© The Canadian Press, 2015

ParkHouse developer planning another building for Squamish, after selling out condo development in a record 90 minutes

Jennifer Thuncher
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It went so well, they’ll likely do it again. Mario Gomes, the developer behind the ParkHouse Residential development that sold out last Saturday in a record 90 minutes, says there may be more to come.

“It is definitely not a one-off,” said Gomes. “We should be able to announce something, I would say within the next three to nine months.”

The 90-minute sell-out of the 65-unit condo ParkHouse development was a surprise to Gomes and fellow developer Michael Hensen, they told The Squamish Chief.

“We knew we were going to have a good day. I think the expectation was that half of the units had a potential to sell out and we would have the other half to sell out over the next few months,” Gomes said at the ParkHouse presentation centre Thursday.

“We didn’t expect at all to be sold out on the first day and especially it never even crossed our minds it would be 90 minutes.”

Dozens of people lined up before 11am Saturday at the presentation centre in downtown Squamish, waiting for the office to open at noon. The development includes one, two- and three-bedroom condos that were priced between $167,000 and $449,900.

Both Hensen and Gomes said the only disappointment of the quick sale was knowing people who had appointments later in the day didn’t get a chance to buy.

“We absolutely expected the people who were lined up… would have plenty of inventory to look at,” said Hensen. “Our expectations were wrong and that led to some disappointment for those people who were waiting.”

The vast majority of purchasers, between 65 and 75 per cent, were local residents, according to Hensen.

Buyers were locals from the Lower Mainland, and some were from the Surrey area, Hensen said.

Gomes said they deliberately didn’t advertise much outside of the corridor to keep the project available for Squamish and corridor residents. He made a commitment to council about a year ago, he said, to offer affordable housing to the local people looking to buy, so that was the focus of the entire project.

According to their unofficial records, about three families bought more than one unit, and the most sold to a single buyer was three units, Gomes said.

“That was very fulfilling to us,” Gomes said. “We would not like to have sold bulk sales of 10 or 20 units.”

About half the purchasers took the offer to buy in with five per cent down, paid in monthly installments over the year, Gomes said.

“We had a couple of local school teachers, we had a lady… that works at the cash registers in one of the local grocery stores, we had local hairdressers. It was exactly the type of people that we [wanted] to be able to serve,” he said, adding it was very satisfying to see who was able to purchase the units.

“There is the art of achieving, but there is also the art of fulfilling. And you can achieve a lot and still don’t feel fulfilled by it, and this project is something that I think for both Mike and I we are feeling a lot of personal reward, besides just the business side.”

Gomes has lived in Squamish for five years and watched the housing market in the region for a decade before that, he said. The excitement for the district is overdue, he said.

“Everybody that has been here for long has seen this day coming… of Squamish turning the corner,” he said. “If anything, it took a lot longer than it should have because we really are in a very unique location.”

ParkHouse is scheduled to be move-in ready in about 12 months.

© Copyright 2016

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