James Metcalfe's Real Estate Update January 2013

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This month we look at house prices in 2012, how to test for Radon gas, whether it is your responsibility to disclose noisy neighbours and of course the ever popular pearls of wisdom.

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James Metcalfe's Real Estate Update January 2013

  1. 1. 1 for more detailed GTA statistics: REALTYSTATS.CA/5A2X 416-931-4161 James Metcalfe BROKER www.OurHomeToronto.com | Service@OurHomeToronto.com REAL ESTATE UPDATE Royal LePage Real Estate Services Ltd. Johnston & Daniel Division, Brokerage 477 Mount Pleasant Rd., Toronto, ON M4S 2L9 JANUARY 2013 The average selling price of a resale home in the GTA during 2012 increased by another 7% to $497,298 and resulted in an increase of about $32,000 in equity for the average homeowner. Using 2007 as a base year, the average price of a resale home in the GTA has increased by 5.7% per year during the past five years and has provided homeowners with a gain of over $121,000 in equity. Considering that primary residences are capital gains tax exempt, in order to get an equivalent rate of return, another investment would have had to average 8.8% per year during the same time frame (assuming a 35% income tax rate). The month of December also saw the average price increase by 6% versus December 2011. A total of 85,731 homes were sold in the GTA during 2012, which represented a 4% decrease versus 2011’s volume of 89,096. The first half of the year was characterized by very strong year-over-year growth but this increase was more than offset by across-the-board sales declines in the second half. Stricter mortgage lending guidelines for government insured mortgages (implemented in July) resulted in some households postponing their home purchase. In the City of Toronto, the dip in sales was compounded by the additional Land Transfer Tax which buyers must pay upfront. Notwithstanding the weak second half of the year, annual volume was actually quite strong from a historic perspective. GTA RESALE HOME SALES 8 9 10 11 12 GTA Resale Home Sales 70,000 65,000 75,000 80,000 85,000 90,000 95,000 100,000 20052003 2007 2011 2012200920062004 2008 2010 8 9 10 11 12 sale Home Sales GTA AVERAGE RESALE PRICE 20052003 2007 2011 2012200920062004 2008 2010 $200,000 $550,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000
  2. 2. A teenager playing basketball on his family driveway in Peterborough made national news  when the neighbour complained about the noise. A backyard hockey rink can create the same amount of noise. Should a seller be required to disclose these types of situations when they sell a home? A British study found that one of the  top 10 reasons people move  is because they want to get away from problem neighbours, either those who are aggressive, or those who are noisy or messy. REALTORS® say the top reasons people move in Ontario has more to do with upsizing, downsizing, getting closer to good schools, jobs or their families. It has been demonstrated that in some cases, the nuisance caused by noise or smell can affect real estate values. In a 1983 Vancouver case, Sharon Kenney bought a condo that was above two restaurants. Before buying, she made sure that these restaurants only served light meals and no foods were cooked or deep fried. In 1987, one of the restaurants installed an exhaust fan directly below her patio. The noise from the fan and the smell were a constant nuisance and she sold her condo as a result. It took seven months to sell and though she listed it for $119,000, she eventually dropped the price and sold it for $105,000. An appraiser gave evidence that the nuisance caused at least a $10,000 reduction in the value of her unit. In 1990, B.C. judge Bruce Cohen ruled that the fan interfered with Kenney’s enjoyment of her condo and reduced her resale value. The judge said the test was whether the use of the land by the neighbour interfered substantially with the enjoyment of the other unit and was the interference unreasonable. He also said that “Not every smell, whiff of smoke, sound of machinery or music will entitle the affected person to recover. It is impossible to lay down precise standards, but the invasion must be substantial and serious.” In this case, he awarded Kenney $25,557 based on $10,000 for the loss of value of her unit, $7,500 for the gross interference with her comfort and enjoyment of her condominium and repayment of the real estate commission of $8,057 that she had to pay. Most lawyers will tell you that neighbourhood conditions do not need to be disclosed to potential buyers. However, sellers do have to respond truthfully if you ask them direct questions. Sellers should first try and settle things amicably. Taking the time to get to know them could lead to an effective resolution.You may also suggest a mediator to try and reach a reasonable solution. If all else fails, you can report the noise to the local bylaw enforcement department at city hall or if more serious, to the police. Suing for damages should be a last resort, but then again, no one should be forced to move because of a problem neighbour. Buyers should walk around any neighbourhood that interests them and talk to the neighbours. Come around at different times of the day or night and see and listen for yourself. Also ask the sellers point blank if they know of any neighbourhood conditions that could affect the market value. Being prepared in advance is the best way to avoid a problem later. This article was contributed by Mark Weisleder, a Toronto-based real estate lawyer. Please visit him at markweisleder.com. MUSTYOU DISCLOSE NOISY NEIGHBOURS? 2 LEGALLY SPEAKING
  3. 3. HOWTOTEST FOR RADON GAS 3 HOUSE SMART Radon gas is a radioactive gas that is colourless, odourless and tasteless. It is formed by the breakdown of uranium, a natural radioactive material found in soil, rock and ground water. When radon escapes from the ground into the outdoor air, it gets diluted and is not a concern. But when it seeps from the ground into an enclosed, unventilated space like a house, it can sometimes accumulate to high levels and contaminate the inside air. Back in the 1970s, Health Canada surveyed the radon levels of 14,000 homes in 18 cities across Canada. A small but significant minority of homes in some locations were found to have high levels of radon gas. In Canada, the Radiation Safety Institute says that long-term exposure to radon causes about 2,000 deaths per year and is the leading cause of lung cancer among non-smokers. In addition, it can greatly increase the chances that a smoker living in a contaminated house will acquire lung cancer. All homes contain some radon gas. The question is whether your home’s radon level presents a danger that can be avoided? The amount of radon gas present in your home will depend on various factors such as soil characteristics, geographic location, a home’s construction type, foundation condition and weather. It’s almost impossible to predict your home’s radon level based on these factors, but the good news is that a simple test can tell you if you’re in the safe zone or not.There are a number or testing kits available to the Canadian public. Health Canada recommends that the radon test performed in a home or public building be a long- term measurement for a minimum of 3 months. These detectors use a small piece of special plastic or film inside a container with a filter-covered opening. Air being tested diffuses (passive detector) or is pumped (active detector) through a filter covering a hole in the container. At the end of the test period the container is sealed and returned to a laboratory for analysis. The testing period of an alpha track detector is usually 1 to 12 months. Two versions of this detector exist: one for short-term tests of a few days or weeks and another for tests of several weeks or months.The detector is exposed during the measurement period, allowing radon to diffuse through a filter-covered opening into the chamber. Results can be read in the home using a special analysis device, or mailed for laboratory analysis.This type of detector can be deployed for 1 to 12 months. This detector plugs into a standard wall outlet much like a consumer carbon monoxide detector, and continuously monitors for radon. It allows the homeowner to make radon measurements in different areas of the home. After being plugged in for an initial period of 48 hours, the device displays the average radon concentration continuously. This convenience comes at a price though: continuous monitors are generally more expensive than other radon-testing devices. Like most testing kits, charcoal detectors need to be exposed to home air for a specified time period. Charcoal detectors consisting of a charcoal-filled container covered with a screen and filter are exposed to a home’s air for two to seven days. They are then sealed and sent to a lab for analysis. You can find Canadian radon testing service providers via a simple web search or by going directly to the Canadian Radiation Protection Association (CRPA) website at: www.crpa-acrp.com/ biz_directory/radon. You can also find out more about radon at Health Canada’s website, www.healthcanada.gc.ca/radon. Finally, you can also download “Radon - A Guide for Canadian Homeowners” from CMHC’s website at www.cmhc-schl.gc.ca/ odpub/pdf/61945.pdf. This 47-page guide is loaded with useful information about radon gas. This article was contributed by Calum Ross, a leadingToronto-based mortgage consultant. Please visit him at calumross.com.
  4. 4. 4 James Metcalfe BROKER 416-931-4161 www.OurHomeToronto.com | Service@OurHomeToronto.com 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 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 © 2013 Mission Response Inc. 416.236.0543 All Rights Reserved. K0191 “YOUR REFERRALS ARE SINCERELY APPRECIATED! THANK YOU!” Royal LePage Real Estate Services Ltd. Johnston & Daniel Division, Brokerage 477 Mount Pleasant Rd., Toronto, ON M4S 2L9 GTA Res Skiing, skating, snowmobiling, snowshoeing, tobogganing are just some of the many winter activities that we Canadians enjoy. But winter all too often also brings us preventable tragedies that are caused by gas, fire and smoke. Here are some winter safety precautions to take heed of: Fireplaces: Do not use your gas fireplace if the glass panel is removed, cracked or broken. Glass panels and frame assemblies should only be replaced by a qualified service professional. Remember to keep pets and children away from fireplaces (and other hot surfaces). Carbon-monoxide alarms: Install at least one carbon- monoxide (CO) alarm near bedrooms. Use more than one CO alarm if sleeping areas are located on different levels of your home. Follow the manufacturer’s instructions for installing and maintaining your CO alarms. Smoke alarms: Test your smoke alarms monthly. One smoke alarm is not enough; install them on every level of your home and outside all sleeping areas. Only working smoke alarms can give you the precious seconds you may need to escape a fire. Combustible materials: Do not store combustible materials such as gasoline, propane, paper, chemicals, paint, rags and cleaning products near your gas furnace. Gasoline or propane cylinders must be stored outside the home. Never use gasoline or other flammable liquids anywhere near your gas furnace or water heater. Have a qualified heating contractor perform a yearly maintenance check of your furnace and venting system. Let’s have a safe, fun winter! As usual, your client referrals are both highly valued and much appreciated, during the winter months or any time of year! Until next time, take care! “It is such a pity that youth is wasted on the young.” – George Bernard Shaw “Don’t keep a man guessing too long - he’s sure to find the answer somewhere else.” – Mae West “I had the right to remain silent...but I didn’t have the ability.” – Ron White “Those are my principles, and if you don’t like them...well, I have others.” – Groucho Marx

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