James Metcalfe's Real Estate Update August 2012


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In the August 2012 Real Estate Update July home prices were on the rise and basement apartment legalities were in question. Mold can be a major issue in homes, so we have provided some helpful tips on how to identify it, how it's growth is affected and what exactly it is.

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James Metcalfe's Real Estate Update August 2012

  1. 1. AUGUST 2012 REAL ESTATE UPDATE The average price of a resale home in the GTA in July was From a volume perspective, the month of July produced $476,947 - which was up by a respectable 4% versus the a 1% decline in sales (7,570 transactions versus 7,683 July 2011 average price of $458,646. It is interesting to in July 2011). The sales decline was led by the condo note that the MLS® Home Price Index (MLS® HPI), which apartment segment (-10%) while, at the opposite end provides an apples-to-apples comparison of benchmark of the spectrum, the townhome segment posted a very home prices from one year to the next, was up by 7.1% robust volume increase of 15%. The very strong annual on a year-over-year basis. The variance between these sales growth in the first half of 2012 and an earlier peak two price growth rates is accounted for the fact that the in sales this spring compared to 2011 help explain more mix of homes sold in July 2012 versus July 2011 was moderate sales this summer. The new more stringent substantively different. As a result, the MLS® HPI likely CMHC mortgage lending guidelines (which became offers a more accurate reading on actual price growth for effective on July 9th) and the continued weight of the this particular period. However, price growth has definitely additional upfront cost of the City of Toronto land transfer moderated versus recent months due to a much better tax have also likely prompted some households to put supplied market. their buying decisions on hold. GTA AVERAGE RESALE PRICE GTA RESALE HOME SALES 8 9 10 11 12 8 9 10 11 12 $540,000 12,000 2011 2012 2011 $520,000 10,500 2012sale Home SalesGTA Resale Home Sales $500,000 9,000 $480,000 7,500 $460,000 6,000 $440,000 4,500 $420,000 3,000 $400,000 1,500 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 1
  2. 2. BASEMENT APARTMENT LEGALITIESBasement apartments also play an important role in meeting Fire containment refers to a building’s ability to contain a fire indemand for housing throughout the Greater Toronto Area and if the unit where it started. Walls, floors, ceilings and doors areyou have ever listed a property with one, you may be familiar rated based on how long they will survive a direct fire beforewith the “Seller does not warrant retrofit” clause. Second suites burning through. The typical requirement is a rating that affordscan cause confusion for homebuyers and REALTORS® alike, but a 30-minute separation between the units. Drywall and plasterthis doesn’t have to be the case. ceilings for example are acceptable, but they must be continuous so that joists are not exposed in any room. By contrast,According to noted home inspectors Carson Dunlop, achieving a suspended ceilings are not acceptable. “legal” basement apartment involves five areas of consideration:bylaw permissibility; compliance with the building, fire, and Means of egress refers to the occupants’ ability to exit theelectrical safety codes; and registration. In short, if a listing house. Ideally, units should have their own exits. Units that shareindicates that a property has a retrofit basement apartment, it a common exit are allowed if the common exit is ‘fire separated’must meet municipal bylaw requirements, have a Certificate from both of the units with a 30-minute rating. If it not rated asof Compliance to verify that it has passed fire and electrical such, it can still be used provided that there is a second exit frominspections, and be registered with Municipal Property each unit and the fire alarms are interconnected. To be consideredStandards. Additionally, if it is newly constructed, it must meet an acceptable second exit, a window must have an opening of atBuilding Code requirements. least 600 square inches, with the smallest dimension being 18 inches; the windowsill must be within three feet of grade; andIdentifying whether a municipality’s bylaws permit basement basement window wells must extend three feet out from theapartments and if any special conditions apply is the first step house wall, to allow room to crawl out.in the process. Since 1995, municipalities have had the authorityto enforce their bylaws with respect to basement apartments; The fire detection area of compliance requires that all units havehowever, units that existed prior to November 1995 are exempt smoke alarms. Smoke alarms do not have to be interconnectedfrom meeting local bylaw requirements. unless the fire separation to the common exit area does not have a 30-minute rating. Some municipalities may also require carbonThe Building and Fire Codes are related in that the Fire Code is monoxide detectors.a subset of the Building Code. There is, however, an importantdistinction between them. The Building Code, which prescribes Electrical safety refers to the required inspection by the Electricalminimum requirements for the construction of buildings, for Safety Authority. As with the fire department’s inspection,the most part applies only to the day the house was built, not deficiencies that the Electrical Safety Authority identifies mustretroactively. The Fire Code, which prescribes construction and be addressed. In general, an apartment’s minimum ceiling heightsafety issues related to how a building is required to perform must be 6 feet 5 inches; its entrance door must be at leastshould it catch fire, does apply retroactively. In 1994, the provincial 32 inches by 78 inches; bathrooms require either a window orgovernment set new Fire Code rules with which all basement an exhaust fan; and if there is a parking spot for one of the units,apartments, new and existing, must comply. A unit upgraded to there must also be a parking spot for the other unit.comply with the Fire Code is called a “basement retrofit” The fire .department must inspect all basement apartments and when Once bylaw and code requirements have been met and certified,any deficiencies have been corrected, as is required, it will issue homeowners can register the basement apartment witha certificate to verify compliance. Municipal Property Standards.The Fire Code involves four key areas of compliance: fire Bear in mind that if you are planning to construct a basementcontainment, means of egress, fire detection and alarms, and apartment, you must also apply for a building permit and complyelectrical safety. with today’s Building Code. 2 This article was sourced from the Toronto Real Estate Board.
  3. 3. WHAT YOU NEED TO KNOW ABOUT MOULDMoulds are forms of fungus (mildew, yeast and mushrooms are What is an “amplification site”?other forms of fungus) that grow indoors and outdoors. People As mentioned above, buildings are not sterile; the presence ofare exposed to mould spores (i.e. airborne “seeds”) daily in the mould spores is very common in most buildings. It is interestingair they breathe; however, sometimes moulds grow excessively to note that the mere presence of mould spores in a building isin certain areas called “amplification sites” (see below for further not a concern; the concern arises when mould areas have growninformation) and can cause different types of illnesses. Some in a building. When areas in a building have suitable nutrient andmoulds are more hazardous than other moulds and different moisture content that fosters mould growth, the area is called anpeople have different responses to mould exposure. In particular, amplification site.those with allergies, existing respiratory conditions or suppressedimmune systems are especially susceptible to health problems Can mould be easily identified in homes by a visualfrom mould exposure. Additionally, infants and children, pregnant inspection?women and the elderly can be sensitive to the effects of mouldexposure. Some people that are exposed to mould experience No. Past studies have indicated that up to 90% of mould growthallergic reactions, with symptoms similar to hay fever and the is not visible at the surface. Certain school boards have foundcommon cold but that last for longer periods, while others can a very poor correlation between the results of visual (surface)experience aggravation to asthma. Researchers have identified inspections and subsequent invasive inspections in portablesthat some fungi in indoor environments can induce allergic in Ontario. Certain guidelines state that invasive inspection isand irritant response, infectious disease, respiratory problems, necessary to make a complete assessment of the extent ofhypersensitivity reactions and organ toxicity. In addition, some mould contamination in a building.moulds produce chemicals called mycotoxins, which can causeflu-like symptoms. It should be noted that the causes and effects HELPFUL TIPof mould exposure on people are not very well understood. In Moisture is one of the key factors that affect mould growth.some cases, health problems that are attributable to mould are There is very little time after a flood to prevent development of antemporary and can be controlled by limiting exposure to moulds. amplification site. Buildings are not sterile and pre-existing mouldWhat factors affect mould growth? spores will begin to develop rapidly with the proper nutrient, moisture and temperature combinations. It is considered goodSeveral factors affect mould growth, including: practice to remove water very quickly (within 24 to 48 hours) • Nutrient availability - nutrients absorb moisture to maintain after flooding. Surface moisture should be reduced to below 70% a favourable environment for mould growth, and include relative humidity as soon as possible to reduce the potential for many surfaces such as soil, dirt, wood, cellulose (paper, mould growth. ceiling tile, jute carpet backing, cork, pipe wrap), some forms of insulation, fabric, oil, etc. • Moisture content - the amount of moisture in a material influences how an organism can support growth. Moisture sources include condensation in humid rooms, on windows, walls, unheated closets, dampness under carpets and on shower curtains, and periodic wet sections in duct work of air conditioned ventilation. • Temperature - Temperature is also a factor that affects mould growth; moulds typically require temperatures between 5°C and 38ºC to grow. 3 This article was contributed by AmeriSpec Canada, a leading home inspection company. Please visit them online at www.en.amerispec.ca.
  4. 4. Home renovations undertaken by Ontario’s 3.2 million homebuilders believe that the best way to mitigate the growthhomeowners produced over $20.3 billion in economic activity of the underground home renovation economy is to give homelast year. Unfortunately, a large amount of home renovation work owners a financial incentive to use professional contractors.in this province is conducted via the “cash deal” or through the Professional contractors have HST numbers, maintain insuranceunderground economy. Unlicensed workers hurt the reputations and pay taxes.and competitiveness of legitimate renovation contractors andcheat governments out of billions of dollars. The Ontario Home Specifically, Realtors are urging all provincial politicians toBuilders’ Association estimates that the underground home support the creation of a permanent Ontario Home Renovationrenovation economy causes the loss of up to $298 million in HST Tax Rebate. If the provincial government were to institute arevenue annually, $1.6 billion in income tax revenue annually and renovation rebate, payable to the homeowner, homeowners$767 million in other revenues like CPP WSIB, Employer Health , would be far more likely to insist on a receipt creating a paper trailTax and Employment Insurance Premiums. that would deter underground economic activity. The payment to the homeowner provides the incentive for written contractsIn addition, the underground home renovation industry poses which is good for everybody, particularly governments losinga number of serious risks to homeowners. Underground billions of dollars in tax revenue to the underground economycontractors often do not meet health and safety standards, and at the same time it can go a long way to stimulating thecarry no liability insurance and do not offer warranties. Moreover, provincial economy.homeowners have little to no recourse in the event of shoddyor unsafe workmanship. If a worker falls on your property, you, As usual, your client referrals are both highly valued and muchas the property owner, may be held liable. Realtors and appreciated. Until next time, take care! 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 “A government that robs Peter to pay Paul can always depend upon the support of Paul. – ” George Bernard Shaw “A sure cure for seasickness is to sit under a tree. – Spike Milligan ” “A vegetarian is a person who won’t eat anything that can have children. – David Brenner ” “Happiness is having a large, loving, caring, close-knit family in another city. – George Burns ” In accordance with PIPEDA, to be removed from this mailing list please e-mail or phone this request to the REALTOR ® Not intended to solicit buyers or sellers currently under contract with a broker. The 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 4 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 Mission Response Inc. 416.236.0543 All Rights Reserved. D191