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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 2012sale 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 PAGE 1
Curb appeal sells... so does colour TrendyWhether you want to put your home on the market, thefollowing 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 studyhow 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 at2) 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. Becauseyellow 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 mostchoices (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 interesting3) Maintain the character style of the house with every decision you detailing on the lower half. The front door was barely noticeable, andmake. Whether it’s roofing colour, paint colour or accessories, your the same colour as the trim around it .Altogether there was too muchchoices 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 got4) 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 drawntoward and enter. Select a ‘statement’ colour for your front door. It We lightened the window and door trim to a rich cream colourshould 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-greensiding 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 blackto 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 the6) 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 tocreate an impression. Use the contrast method to give your property The last thing we did was take another photograph….it didn’t lookpresence and definition. like the same house!7) If you’re replacing your roof, don’t err on the side of ugly andchoose 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 helpsespecially 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 PAGE 2
Why CRA wants $30,000 HST rebates backPersonalFinanceSome investors who bought new homes or condos in the pastfew 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 youfacing 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 thenThat’s because they didn’t read the fine print on the purchase applies to the Canada Revenue Agency for the refund on youragreement and they now have a problem that relates to the behalf. Before the builder will do that, you have to sign aHST rebate that is available to buyers of new homes under document saying that you will move in. If the builder suspectscertain conditions. you will not be moving in, they have the right to ask you toWhen 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 itin Ontario, the provincial 8 per cent portion. out, you can apply for the rebate immediately as well, but willYou 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 theportion of the HST if the home costs $350,000 or less. If lease agreement. If you sell the investment property within athe 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 condominiumsportion, everyone can apply for up to 75 per cent of the HST several years ago from plans are trying to take advantagepaid, to a maximum of $24,000. You can also apply for the of the hot real estate market by selling without movingrebates if you build your own home as well. in. However, these same investors signed papers with theIt can add up to a sizeable sum. If a new home costs $300,000 builder promising that they would move in, so the builderand there was no rebate, the HST would be 13 per cent of the applied for HST rebates on their behalf. Now CRA wantsprice or $39,000. With the rebates, you’d pay $15,600 for a the HST rebate back with interest. That can be as much assaving 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. PAGE 3
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 2L9In 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. Theinformation 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 resultingfrom 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 © 2012Mission Response Inc. 416.236.0543 All Rights Reserved. D191 PAGE 4