I don’t know if it’s a good sign, or a bad sign, that Monday’s post necessitated a follow-up.
If you like discussing real estate, then it’s great.
If the three items on Monday’s list were at all a “concern” to you, then perhaps you don’t want to see a second list, with seven more.
But you’re going to hear a lot about the following topics throughout 2017, so you may as well get started by reading…
Let me know if you think my “Top Three” from Monday were in the right spot.
As well, if I’m missing anything below as I round out the top-ten, let me know.
–
4) CMHC Policy Changes
Just because the CMHC enacted two major policy changes in 2016, doesn’t mean they’re going to stop there.
In fact, you might argue they now have a taste for blood, and will only continue to ramp up their initiatives.
As I’ve said on many occasions, I feel as though the CMHC has tried over, and over, and over, to slow the Vancouver and Toronto markets via their policy changes, and despite all the changes in the past 6-8 years, nothing has worked.
So when they jumped in and increased the minimum down payment from $500,000 – $999,999 from 5% to 10% in 2016, and then changed the mortgage qualification process so that borrowers have to qualify based on the benchmark rate instead of the actual rate, you had to figure that there was more change where this was coming from.
The Vancouver market may have slowed (sales have slowed, prices not so much), but that’s due to the municipal and provincial governments instituting the foreign buyer’s tax and vacancy tax. The CMHC can’t claim to have had any effect on the market.
But both 2016 policy changes produced a lot of talk, and equal amounts of skepticism, and buyer concern. If the CMHC’s goal is to force Canadians to take on less debt, then getting them talking, getting them concerned, and possibly causing them to get out of the market is a means to an end.
What else could we see the CMHC do in 2017?
A minimum 10% down payment from $0 onwards would be absolutely ridiculous – misplaced, misguided, unnecessary, and punitive. But it’s been bandied about before.
Higher down payments for investment properties, second properties, and/or multi-unit could be on the radar, although much of that is up to the individual lenders right now.
Personally, I think if the CMHC wants to try to slow the market via policy changes, they should focus on buyers outside Canada, and leave the hard-working Canadian residents alone. Many of their policy changes have already taken Canadian residents out of the market, while having zero effect on those overseas. Perhaps it’s time the CMHC re-examine what the “C” in CMHC stands for.
5) Active Listings
How many blogs did I write on this subject in 2016?
Every time I wrote about “Supply & Demand,” I talked about active listings.
In fact, one reader commented on my “Top 5 2016 Blog Posts” in December and asked if I could re-run the numbers from my August blog, “Toronto’s Real Estate Problem: Simple Supply & Demand.”
I will absolutely do so – probably next week, once we have the December numbers.
Now it doesn’t matter what you’re looking for – house or condo, low-end or high-end, 1-bed or 5-bed, for sale or for rent – there just isn’t enough of it, and that was made far more apparent than ever before in 2016.
Active listings were down between 30-35% each month from the summer through the end of the year.
And as I showed in my blog post above, and will continue to show you once I write the update next week, active listings are down fifty percent from five years ago.
Sales are up, and active listings are down.
Is it any wonder why prices are up?
A piece in the CBC showed the other day that in a city of over 3,000,000 people, there were only 537 detached homes listed for sale. As I’ll explain later in point #9, this makes for some incredible misconceptions among the buyer pool!
But as I said, and as is the theme throughout many of these points, and many of these blog posts, there just isn’t “enough” of what people want to buy, no matter what that is. Every property type in the city is lacking in supply, compared to the demand for that particular product.
Just imagine the effect this would have in any other industry, for any other product or service.
And then add in the facts that, a) this is a product that people need in order to sustain life, and b) this is a product that is often purchased with extreme emotion, and again, not to sound like a broken record, but it’s no wonder why prices are where they are.
I can’t imagine we’re going to see the same decrease in active listings as we saw last year, or anywhere close to it.
Take, say, June, for example. In 2013, there were over 22,000 active listings that month. Last year, there were only 12,327. If we saw the same 30-percent-ish drop in active listings as we saw in 2016, then that 12,327 is more like 8,600 and change. Imagine dropping from 22,000 to 8,600 in five years?
It can’t happen again.
The decline can’t continue – to the same extent.
The truth is, we have no idea how to forecast supply, but we’re just hoping and praying that inventory levels stay the same.
6) Vancouver
“Vancouver.”
The word alone in real estate circles has taken on every meaning.
It’s a noun in many senses other than just the city itself. For example, you might refer to “A Vancouver” as an experiment in policy, or “A Vancouver” in terms of a decline in market activity.
It can be a a verb now too. “All we need is for our government to Vancouver us all, and we’re screwed,” you might say.
It could be an adjective, I suppose. “If our government is gonna get all Vancouvery here, we could see the market change.”
What we saw last year out of Vancouver was unprecedented, at least to many of us who follow government policy, the real estate market, or both.
The policy changes didn’t simply make for local news, as the whole country took notice. But the whole world seemed to take notice, as the story eventually made global headlines.
A story titled “Vancouver Enacts 15pc Property Tax To Stave Off Chinese Investment Surge,” came out of Australia from the Financial Review. They’re a bit more……honest(?) with their headlines, it would seem.
England’s The Guardian called Vancouver’s market a “crisis” in their August story, “Vancouver Slaps 15% Tax On Foreign House Buyers In Effort To Cool Market.”
The world watched while Vancouver began to institute punitive taxes and laws for investors, while many countries strive to attract foreign investment within their own borders. The policies must be even more of interest to countries like Australia, who already have restrictions on foreign ownership of real estate, and the “fallout,” if any, will certainly be watched closely by any other countries contemplating similar measures.
At home, most of us just want to know: is this going to work?
I don’t think we’ll know for years, to be honest. If the number of sales drop, and/or average home price drop, we’re still not really answering whether or not fewer foreigners are buying real estate in Vancouver.
7) 2-Bedroom Condo Market
Five or six years ago, the semi-detached home became a substitute for all those folks with dreams of owning a detached home.
A couple of years back, condo townhouses became the hot commodity, as even semi-detached houses and many freehold townhouses became unaffordable to many buyers in the market.
Last year, we saw a massive increase in demand for large, 2-bedroom condos, which only seemed like a logical next step.
More and more buyers are looking to own, looking for more space, and looking to be in the central core. Combine those three things, throw in the lack of supply, and the increase in prices, and you’re seeing a lot more people “settle” for 2-bedroom, 2-bathroom condos.
“Settle” is their word, not mine.
And personally, I wouldn’t call it settling.
You can’t afford a house, so you buy a condo. You’re only “settling” if your expectations were lofty to begin with.
And you’re better off owning, paying down principal, riding the appreciation wave, and experiencing pride of ownership, than renting, or living with mom and dad.
There are a lot of really, really crummy 2-bed, 2-bath condos in new condos, but that’s not the type of product I’m talking about.
We’re not necessarily talking about that “funky, sexy, unique loft” either, since that’s always been hot.
But just an understated 2-bed, 2-bath, 960 square feet, in a 5-10 year old, well-established, well-managed building, in a popular neighbourhood, with great access to public transit and walkability, is going to be in exceptionally high demand in 2017.
8) Interest Rates
The market bears love to talk about interest rates, don’t they?
For years, the market bears have told us that the Toronto real estate market will eventually collapse, because, “it has to.”
That’s been their reasoning, in addition to some rough fundamentals that have since been proved baseless.
“Market cycles are only seven years,” says a bear, who has seen this cycle last three times that long.
“Incomes aren’t climbing in tandem with house prices,” says a bear, who still believes the two are tied together.
“Prices are at unsustainable levels,” said a bear……back in 2008.
I’m not mocking, I’m just making a point.
And the one fundamental that bears are still holding on to at this point, is interest rates.
“Once interest rates rise,” says a bear, “The market is going to crash.”
Crash? I don’t think so.
Level-off? Sure.
My first mortgage was over 5%, and it wasn’t a big deal to me. The payment was manageable, and the rate, historically, was absurdly low.
We’ve played this “rates will never be lower” game for years now.
When rates dropped below 4%, we all collectively shook our heads.
And 3-4 years ago, when banks went to “war” with their stripped-down, 2.99% rates, we figured that was a gimmick that wouldn’t last, only to see mortgages with full-features drop to 2.39% and the like.
Yes, the low interest rates have made it a lot easier to purchase real estate in this market.
But if and when rates return to 3%, 4%, or (gulp!), 5%, that means the average home owner will need to come up with couple, or a few, hundred dollars more per month. I’m sure there are some people who are on margins way tighter than that, but for the most part, it’s not going to force people to sell.
I know that last point will bring about a lot of naysayers, and folks who tell stories about the 1980’s.
But it would take rates doubling, and a couple of years for the market to adjust to the shift in supply and demand, for us to really feel the effects.
I think the 5-year, fixed-rate is going above 3% in 2017. Rates are sitting at about 2.79-2.89% right now, having already increased from 2.39% only 7-8 weeks ago.
The crazy thing is, the Bank of Canada didn’t raise rates; the Big-5 banks just decided to raise rates around the same time as the CMHC changed the mortgage qualification process, probably thinking the public couldn’t tell one thing from the other.
Now Donald Trump is president, bond yields have been rising, and the US economy looks like it’s going to grow faster than expected.
Is it possible the Bank of Canada raises the overnight lending rate this year?
Yes.
Is it probable, however?
Call it 50/50.
But either way, I see the 5-year rate going over 3.%.
9) Delusion
This is a fun one………if you’re a sadist…
I think that more, now than ever, there’s a certain level of cluelessness among society.
It’s a “learned ignorance,” if you will.
For a definition of the phrase, look no further than to our neighbours south of the border who just “don’t wanna know” what they don’t want to hear; they choose not to know what’s going on outside their heartland.
The learned ignorance is prevalent in all areas of society, and real estate is certainly no exception!
Personally, I find that the people I deal with – both those readers/commenters on my blog, and buyers that come to me for help, are far more astute than average. I’m not saying that to pad anybody’s ego, it’s just the truth.
But out “there,” in the buyer pool, delusion is oh-so-high.
Now and again, I’ll get an email from a buyer who wants a detached, 4-bedroom house with parking for $700,000. Not often, as I said, since I find that my blog educates buyers before they contact me, but it happens from time to time.
There was an article on the CBC’s website just before New Years, called “More Torontonians Want Detached Home, Study Says,”
In the article, amazingly, shockingly, a study showed that over 50% of buyers plan to buy a detached home in the next two years.
Now, unless the 1,003 people surveyed happened to all be at the AGO wearing tuxedo’s on a Friday night, then I have to believe it’s not the sample that’s flawed, nor the survey, but rather the perception of those surveyed.
Delusion is rampant in the buyer pool, folks.
And this goes beyond wishful thinking; this is almost a learned ignorance.
With the price of a detached home in the 416 area sitting at $1,345,962 in November of 2016, I wonder where these buyers think they’re getting the 20% down, plus land transfer tax.
But that’s just the thing, see: they don’t think about it.
Because they’re too busy dreaming, or thinking without doing research, or, my fave – just assuming they can get what they want for half of what it costs.
Delusion.
This will be a theme in 2017.
10) TREB vs. Competition Bureau
Seriously?
Is this still a topic?
How many years has this been going on now?
Do people still care?
Well, I think people care about the end game, but do they know what that end game is?
Folks, we could talk about this ad nauseum, but let me say that if you’re part of the camp that thinks, or hopes, that the Competition Bureau is here to blow up the real estate industry, and make listing services free, bring down home prices, and make everybody happy, then see #9 on my list.
This fight is now down to exactly one issue: sold data.
I’ve made my feelings known on the matter: I think that Virtual Office Websites (VOW’s) should be able to provide sold data, since the “user” on the site is signing up, or signing-in, and thus is not merely a stranger, but a relationship does exist between the agent and the user.
TREB is making this fight about privacy, and I do agree that many things need to be kept private, and that the Competition Bureau’s original fight from five, six, or maybe it was even seven years ago, was ridiculous – wanting the seller’s name and phone number available for all to see, just to give one example.
But I think we need to use technological advances to our benefit, and what’s the difference between me talking on the phone to one person, or sitting in a room with two people, or doing an online seminar with three-hundred people, or interacting with five-thousand users on my VOW?
I should be able to speak to my users, or clients, in the same manner online as I would in person.
I’ll be very interested to see how this battle ends.
–
And there you have my Top-10.
The best part is – some of the biggest stories to come in 2017 are regarding topics we never considered.
Just take Vancouver as an example. Nobody had any clue that was on the radar a year ago, and it ended up being one of the biggest topics in real estate.
We’re into the first week “back” in the market, but nothing has materialized.
I expect next week to be slow too, and the market won’t really ramp up until the week of the 16th.
But rest assured, when the market starts, it’s going to be crazy…
Kyle
at 9:13 am
Great summary! One other thing that i think will be discussed a lot in real estate circles this year is Air bnb. Air bnb opens up a lot of complex issues that Government isn’t equipped to deal with and has been slow to respond to. So far there has only been one change that i am aware of – I believe new rules recently came out that give condo boards more teeth in getting the professional Air bnb hosts of their building. Previously a tenant that sub-let their apartment on Air bnb would have the same rights as any other tenant under the LTA (i.e. previously it is near impossible to evict them or to collect rent in arrears in any sort of expedient fashion).
There are a lot of pros, cons and other implications to Air bnb, but right now in Toronto it goes largely unchecked, so mostly it is stories about the cons capturing the headlines. Other cities have put rules around Air bnb, and in 2017, Toronto needs to do likewise.
Mike
at 12:23 pm
Condo’s have always had the power to limit rentals.
Residential Tenancy Act only allows for sublets of 90-days or more ergo rentals for less than that would not be covered under the RTA. If anything, Airbnb rentals would probably fit under the Inkeeper Act (1990) which would allow for immediate eviction and deposits to be charged.
Single family dwelling owner charged in Toronto two-weeks ago with a zoning violation regarding his home being on Airbnb or a similar site another one was charged back in November.
http://www.cbc.ca/news/canada/toronto/owners-of-short-term-rental-homes-charged-with-zoning-violations-1.3911216
So the power to regulate is there but right now the will is lacking.
Kyle
at 1:17 pm
That’s not what i’m talking about. Condos can prohibit owners from doing all sorts of things, like not having pets or bbqs, etc. But when the condo is occupied by a tenant who disregards the condo rules, the condo board can only compel the owner into action. Unfortunately the owner in turn had no real way to compel the tenant, because the LTA didn’t let the owner evict for running a hotel out of his/her unit.
Mike
at 1:46 pm
Since you’ don’t know what you’re talking about I’m posting the part of the RTA that deals with subletting this might give you some kind of a base to see if what your saying holds any credibility.
Subletting rental unit
97. (1) A tenant may sublet a rental unit to another person with the consent of the landlord. 2006, c. 17, s. 97 (1).
Same
(2) A landlord shall not arbitrarily or unreasonably withhold consent to the sublet of a rental unit to a potential subtenant. 2006, c. 17, s. 97 (2).
Charges
(3) A landlord may charge a tenant only for the landlord’s reasonable out-of-pocket expenses incurred in giving consent to a subletting. 2006, c. 17, s. 97 (3).
Consequences of subletting
(4) If a tenant has sublet a rental unit to another person,
(a) the tenant remains entitled to the benefits, and is liable to the landlord for the breaches, of the tenant’s obligations under the tenancy agreement or this Act during the subtenancy; and
(b) the subtenant is entitled to the benefits, and is liable to the tenant for the breaches, of the subtenant’s obligations under the subletting agreement or this Act during the subtenancy. 2006, c. 17, s. 97 (4).
Overholding subtenant
(5) A subtenant has no right to occupy the rental unit after the end of the subtenancy. 2006, c. 17, s. 97 (5).
So as you can see as plain as day, in order for a tenant to rent out their unit to a sub-tenant they need the permission from the landlord. Failure to do so means they can be evicted because they’ve violated the Act. Since the sub-tenant is not actually a tenant under the Act the landlord could have the police remove the sub-tenant from the property
Kyle
at 2:31 pm
As usual, you are the one who has no clue. The RTA sets out grounds for eviction that could apply to Air bnb’ers…after a hearing by the board which a professional Air bnb tenant can delay and delay and delay or claim that all these guests are house-sitters, friends or family
I am talking about Bill 109:
“Expedited eviction order
84. Subject to clause 83 (1) (b), the Board shall, in an order made under section 69 based on a notice given under subsection 61 (1) that involves an illegal act, trade, business or occupation described in clause 61 (2) (a) or based on a notice given under section 63, 65 or 66, request that the sheriff expedite the enforcement of the order.
Termination for cause, act impairs safety
66. (1) A landlord may give a tenant notice of termination of the tenancy if,
(a) an act or omission of the tenant, another occupant of the rental unit or a person permitted in the residential complex by the tenant seriously impairs or has seriously impaired the safety of any person; and
(b) the act or omission occurs in the residential complex.
Mike
at 6:23 pm
Bill 109? What are you talking about, Bill 109 deals with Labour and Employment?
http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&BillID=3402
But please, tell me how I don’t know what I’m talking about and then bring up a law (it did get Royal Assent) about employment conditions.
What you quote is the RTA but it makes my point, if you illegally sublet the apartment you can be evicted. You’re saying that the “LTA” doesn’t allow you to evict tenants for renting out to Airbnb (” Unfortunately the owner in turn had no real way to compel the tenant, because the LTA didn’t let the owner evict for running a hotel out of his/her unit.”)
But then go on to post:
Section 84 deals with the expediting eviction for illegal activities, Unfortunately, Airbnb is not an illegal activity. It might be against condo rules but that’s not an actual law.
Section 66 deals with people on the premises that endanger others, in most cases that wouldn’t be an Airbnb renter. This would be someone who continually disconnects the fire alarm or blocks the stairway exit.
Not sure why you’d bring up those two random sections since anyone who didn’t want to have their tenant sub-let on airbnb could easily apply for eviction just based on that fact. It’s like you’ve switched tack and are now trying to argue why a tenant can be kicked out for using Airbnb against their landlords wishes. In all likelihood in addition to the eviction notice the Chair wold probably impose some kind of monetary penalty to dissuade the tenant from subletting prior to the eviction order being executed.
As for saying that it’s family, friends or house-sitters, I’m sure anyone with half a brain would check on Airbnb prior to heading to the hearing. It’s kind of how every other landlord had found out that their apartment was being sublet. And as previously mentioned, if the landlord has not given the tenant permission to sublet the sub-letter is not considered a tenant and therefore not covered under the RTA. If I were the landlord and thought that my place was being used on Airbnb against my consent I’d have the police evict the sub-letter and let the tenant take me to the tribunal. The onus would be on them to bring in their “friend, family member or house-sitter” to testify (or you can subpoena using the information from the crown disclosure from the trespass). How Airbnb renters are going to come to testify for the Airbng host after being arested?
Kramer
at 7:46 pm
I love you two.
Kyle
at 7:54 pm
Have you ever considered there might be more than one Bill 109? https://www.ontario.ca/laws/statute/S06017
Mike, even after an entire year of working your comprehension skills you are still unable togarsp what people are saying i see. Well it’s a new year maybe try working on that again. One of these years you might actually get somewhere. In the mean time i will dumb it down for you…yet again. The RTA you quoted says one has grounds for eviction. I’m talking about in the real world, where grounds for an eviction do not = getting an eviction. Read any story about landlords trying to evict for non-payment of rent from a professional tenant. Those landlords too had grounds for eviction. My point is, that in the real world, (you know the one beyond the sad superficial internet knowledge world of your mom’s basement) previously a tenant could not be evicted before the appropriate notice period and hearing, and the tenant could basically delay the hearing for months, then even after losing at the hearing he could appeal and receive a stay, and then delay the appeal for many more months all the while continuing to sublet.
My 2017 resolution is to stop arguing with you, because you are beyond help and beyond shame. No matter how many times (countless now) i expose you for being the a pitiful know-nothing know-it-all of-all-time, you persist on embarrassing yourself by arguing your special brand of nonsense. So good luck to you on working through your comprehension issues and whatever it is that makes you want to spew garbage like a fool. I won’t be wasting my time on you anymore.
Mike
at 9:30 pm
Hahaha and there we have it, you have no argument so you, switch your position, then when that doesn’t work you start talking about how the laws don’t work in the “real world” and then move on to personal insults.
Sad Kyle, sad.
McBloggert
at 12:32 pm
AirBnB – now that is a topic I would love Dave to post about. It is an non issue to many of us until it happens close to where you live. A house on my street recently sold this year – somehow it slipped through the cracks and sold for a song (relative – still low 7 figures but less than I was anticipating) .
I figured that a flipper got their hands on it and the continued gentrification was on its way! Alas strange things happened, the house sat for a bit, then some young kids moved in, college aged kids. Odd, but I figured it was just a stop gap while the permits came through – smart I thought – get a little income while you wait for the job to start.
Then bits the reno starts – slowly…very slowly and not what I was expecting. Day labourers, piece meal and not a full gut. Super odd but hey I guess they are making it into a rental property – I wasn’t pleased about that being in a residential area – but whatever – that happens and is the right of the owner – welcome to downtown life.
However, the end result is not duplex or tri-plex it is a purpose built AirBnB house. GREAT. I found it listed on AirBnB – the whole place looks like a youth hostel meets BnB. The owner has put in a “manager” in the house and does not live there – so this is against the current regs/laws. I am going to wait and see what the City does this year with their review of AirBnB.
I am not against capitalism – but having someone run a hotel out of a house in a purely residential area is disconcerting on a number of levels.
Mike
at 9:46 pm
Phone the city and talk to a by-law inspector. They’ve already laid two charges for zoning infraction for houses listed on Airbnb (see link above)
Any call on a by-law infraction has to be followed up on within a week, print out a copy of the Airbnb ad and you’re set.
Joel
at 12:55 pm
I hope that there is some clarification and discussion on 10). I find that a very interesting topic and hope that the data is allowed to be sent out to registered users.
I also think mortgage rates will be in 3’s within 2017, but that doesn’t have too much of an effect on most home owners.
Libertarian
at 2:57 pm
I definitely agree with # 9 – Delusion. I think it’s been a theme for years. People simply believe that real estate is the best thing ever and that they should be allowed to have it. Not only have it, but are entitled to it. And now it’s gone beyond primary residence, with everyone being an investor, putting every penny they have and then some, into real estate simply because McGivillary tells them to. Even some of the regular commenters on this blog push that idea. I have no problem with professional real estate investors, but the vast majority of them are average joes who don’t know how to crunch the numbers. It’s even referred to in this article,
http://www.cbc.ca/news/canada/toronto/foreign-buyers-tax-toronto-real-estate-investors-1.3824467
This article says the same: http://www.theglobeandmail.com/opinion/stop-blaming-the-greenbelt-for-housing-prices/article33450009/
David keeps referring to demand exceeding supply, but that’s because of all the investors (25% according to both articles). Maybe prices wouldn’t be accelerating so much in Toronto if there weren’t so many investors. Seems to me to be a self-fulfilling prophecy – investors think prices are going up, so they spend more to buy, which attracts more investors. Most of those average joes would be better off putting money in a TFSA and investing in the banks or REITs – the real professionals.
Kramer
at 4:04 pm
No doubt real estate should only be one possible asset class for an allocation of one’s investments… it’s been tidy leveraged returns for a while, but do those who get caught going ALL in at a BAD time, it’s years of pain and possibly retirement delaying… never go all in at once and always diversify… oldest rules in investing.
Joel
at 10:10 am
Without an ample supply of rental properties we would see rents sky rocket in the city. This would greatly hurt those that are not able or wanting to purchase. I think that the influx of purpose built rentals that are coming to market in the next couple of years are going to be great for the people of the city.
It gives stable housing and they don’t have to worry about a slumlord or getting kicked out because the investor wants to sell. Ultimately though if everyone decides to put their money in apple stock, the price of that will go up and everyone will complain that it’s not fair how all of these people are investing in stock that they want to own and now the price is too high.
Real estate millennial
at 6:16 pm
David you constantly talk about supply and I don’t think you’re wrong about there being a supply issue. I think that you need to distinguish between land supply and housing supply. Property prices within the GTA increase as the land supply decreases with that area. You talk about building in the green belt to increase supply but that doesn’t increase supply in the demanded areas of the GTA. A prof from Ryerson university spoke about this issue during a lecture her point was the green belt won’t solve our housing issue because the designated land in the places to grow act hasn’t been touched and almost 50% is still available for development. I know you love posting numbers David. I think you should post the percentage of land developed in the places to grow act v.s the undeveloped land. I think that you’ll help enlighten the delusional because you can’t buy what doesn’t exist.
Kramer
at 7:53 pm
“You talk about building in the green belt to increase supply but that doesn’t increase supply in the demanded areas of the GTA.”
I may be wrong, but building in the green belt would GRADUALLY expand things… eventually you have more jobs spread out farther… eventually they WOULD be high demand areas… it wouldn’t change things over night… would take a decade to feel a significant impact, but it would set up the area for success in the future.
Real estate millennial
at 1:24 pm
How about we build until we hit the green belt and talk about expanding into it once we get there. As of right now we have a long ways to go if 50% of the land prior to the green belt hasn’t even been serviced for development.
Ralph Cramdown
at 7:39 am
“With the price of a detached home in the 416 area sitting at $1,345,962 in November of 2016”
TREB’s December report says that the median price for a detached in the 416 was $997,000. Half sold for more, half sold for less.
Appraiser
at 8:01 am
THE TREB December report also states that the average price for a detached home in Toronto Central is $2,058,876 with a median price of $1,742,000.
The report further details that the listing inventory is down -48% year over year, yet new listings are only down -11%. This is a direct result of the days on market shrinking a whopping -31% in 2016.
It’s hard to build listing inventory when the product is flying off the shelves.
Appraiser
at 8:30 am
The average homeowner today is 38 times wealthier than a renter:
http://www.cnbc.com/2016/12/30/self-made-millionaire-buy-a-home.html
Real estate millennial
at 7:14 pm
I’ve been following the TREB vs Competition bureau loosely and I don’t understand why the public should have access to the mls that realtors have. I was under the impression that real estate sales are available to the public if you go through the right municipal channel. Hypothetically speaking if TREB didn’t run the mls and the system didn’t exisit would there be a fight over the information. The mls system is paid for and maintained by the fees of its members so shouldn’t the organization and its members determine its use, the mls is pretty much a p2p system. If you want sold data go to urbanation or geowarehouse they have just as much if not more information than the mls. I really don’t understand the fuss, I’m probably missing significant parts of this argument but to me it seems pretty ridiculous that TREB has to give up information they paid to collect amongst its members.
Mike
at 9:54 pm
What you’re saying is akin to the TSX only giving information to licensed representatives. You’d have no idea what BCE traded at yesterday unless you use a licensed broker.
Imagine buying a stock without knowing what it previously traded for? Currently the information is time delayed by 15-minutes but at least if you own a 1,000 shares of BNS you can get a reasonable idea of what it would be worth based on readily available information.
The TSX owns the exchange, owns the information, owns the trade and is carried out by licensed brokers who pay fees to belong to the TSX. All the information is paid for by those transacting with the TSX and licenced by the TSX.
Ralph Cramdown
at 7:20 am
TREB paints it as a case of “the public” getting its hands on the preciousss data. But actually, it’s about what individual TREB members can do with the data. For competition purposes, organized real estate likes to say that individual realtors are all competing against each other to provide customers with the best service. But when one realtor actually says “MLS sucks, I’m going to add to the data and present it in a way that’s more helpful to my clients,” the boards say “gosh, you can’t compete like THAT. All agents must use the same crappy MLS so that no tech-savvy ones may gain advantage over their luddite brethren.” Want proof? In an earlier phase of the case at instance, TREB suggested that, yes, agents could present data to the public through their own VOWs (“virtual office websites,” what we laymen call “websites”) as long as it was just a frame around the dowdy old MLS with no value added. You know that license agreement you have to agree to periodically using the public MLS? The one that says you can look but you can’t store, scrape, massage, perform statistics upon, or otherwise do anything useful with MLS info that’s more or less de rigeur these days when you have a source of interesting data? Agents have to agree to the same thing. So is it TREB v. public, or modern TREB agent v. old/lazy/fax-machine-bound TREB agent?
TREB is throwing up a lot of smokescreens, like “what your house sold for is TOTALLY personal, non-public information.” TREB knows that anyone can go to the local land office and find out what a property sold for, once the deal has been closed. But the general public is ignorant of this, so the obfuscation continues. Besides, who draws a distinction between “35 thousand nosy parkers can see what your house sold for” and “anyone can see what your house sold for?”
Hope this helps.
jeff316
at 2:32 pm
You don’t see a difference between 35 000 licensed members of a regulated profession able to see what you sold your house for versus anyone, anywhere with a computer are able to see what you sold your house for? Personally, I don’t really care much if it goes more public but I’d say that’s a pretty big distinction.
Condodweller
at 4:39 pm
@jeff316 I don’t know if the end goal is to make sold data available on MLS, for now the fight is to stop “rouge” agents making it available to their “clients”. I doubt the average person knew they could get sold data sent to them. How is private data private when it’s publicly available? It’s just a bit more convenient to get it this way.
Ralph Cramdown
at 5:19 pm
All TREB’s real estate agents can see sold prices, as can appraisers, every real estate lawyer in the province along with their law clerks and assistants, and anyone who cares to go the land office or pay a few bucks to a title search company, or who calls an agent and asks nicely. Sold prices are basically public information. And as to David’s saying that listing sellers’ names and phone numbers would be ridiculous, maybe he isn’t old enough to remember when every real estate office had a “reverse phone book” that listed every resident’s name and phone number, sorted by street address, so agents could make targeted calls by street or neighbourhood. Now you can look up the same info online. TREB’s focus on privacy issues is a smokescreen.
Condodweller
at 4:29 pm
I suspect the reason TREB wants to withhold sold prices from the public is to stem the tide of FSBO sales. Sold price is the last piece of the puzzle which a person needs to sell their home privately to determine a fair asking price. However in the current market where agents list homes for several hundreds of thousands of dollars below market value sold data is completely useless. All one has to do is look at comparable listing prices to determine what to list for. Who cares if it’s 10 or even 100k off the mark? The buyer’s agents will use their “proprietary” sold data to determine the actual value and make an offer accordingly. As soon as there are two offers the seller can be confident their house will sell for near fair market value.
The competition bureau is probably getting involved to somewhat mitigate TREB’s monopoly to attempt to protect the public. I don’t exactly know who determined the 5% commission half a century ago and who would have the power to change it to a more realistic number but it is clear that there is a movement by FSBO people as well as agents who think 5% is too high to bring down the costs. TREB probably believes they can protect their market share by trying to hide sold data.
If the real estate industry charged a fair amount for their services, there wouldn’t be any FSBOs or a need to protect sold data.
I also suspect the government isn’t going after the commission rate because they are exploiting the public the same way by using a fixed percentage amount which provides a creeping tax bracket as home values double, triple or even quadruple over the years. Except theirs is worse because land transfer taxes are extremely high as house prices have crept into the most expensive “luxury bracket” and most of us are paying way over fair amounts.
Condodweller
at 3:54 pm
I wish there was a “report abuse” button on this blog as there are on others to remove inappropriate posts such as the one by Kyle below. Perhaps this can be an important topic to discuss this year.
I don’t think readers/contributors should be subjected to these types of personal attacks. I have been on the receiving end of these in the past as have several others and my solution was to simply ignore his posts.
This time I noticed a long discussion and I was curious what it was all about and decided to read it despite the fact Kyle was involved. I don’t regret reading it as Mike has provided very interesting and eye opening information, the type of information because of which I continue to read this blog, however, I rarely see person with such lack of humility that they can’t, in the very least, agree to disagree when presented with a different point of view which is backed up by credible information.
Even though this time it wasn’t aimed at me, I can’t help but feel hurt by having read it. I’m sure David has no time to moderate the blog however it would also be in his interest to remove extreme cases of abuse such as this hateful post by Kyle. A simple “comment removed” would suffice.
In the meantime I will try to refrain myself from reading his posts and keep him on “mental ignore”
Kyle
at 9:15 am
This is funny and hypocritical (natch) coming from you. As you would say, are you Mike’s mother?
First please re-read and look at the time stamps of the comments, it is you who has gone out of your way to take a pot shot at me. In fact i haven’t responded to anything you’ve written in donkeys’ ages, because i know how fragile and petty you are. The only time i’ve responded to anything you’ve written in forever has been AFTER you’ve gone and taken one of your cheap pot shots at me (just like above). Similarly notice how it is Mike constantly trying to challenge me such as below in his claim that i “don’t know what i’m talking about”? Everyone here already knows he’s full of shit and he just shamelessly tries to pick arguments all day, because that is the closest thing to human interaction he gets in his sad life, so he has nothing to lose. I on the other hand have nothing to prove, which is why i’m going to let him argue with himself from now on and not waste my time anymore.
Perhaps instead of an abuse button, David should create a button, that sends a virtual Kleenex to people like you and Mike who instigates attacks, only to get all butthurt when the person you attack exposes what idiots you guys really are. Like i said before Condodweller, if you don’t want to be treated like a douche, quit being one.
Condodweller
at 4:52 pm
These two quotes from #4 seem contradictory to me:
“As I’ve said on many occasions, I feel as though the CMHC has tried over, and over, and over, to slow the Vancouver and Toronto markets via their policy changes, and despite all the changes in the past 6-8 years, nothing has worked.”
“Many of their policy changes have already taken Canadian residents out of the market,…”
No doubt CHMC rule changes will continue to be controversial in 2017 however despite people claiming that they had no effect on prices, it’s not something we can say without having a parallel universe where the rules didn’t change and comparing the two. I believe it has had at least some effect by shrinking the buyer pool and therefore demand. And even though prices have not stabilised, eventually they may with constant CMHC intervention. I just hope they (all the rules) will not reach critical mass at one point and crash the market.