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Toronto Real Estate Board suing listings website Mongohouse for $2M

Posted on 10 October 2018 by admin

 TORONTO – The Toronto Real Estate Board is suing Mongohouse for $2 million, alleging that the anonymously-run property listings website is illegally accessing, copying and distributing its proprietary data.

The board, which represents more than 50,000 realtors across the Greater Toronto Area, filed the lawsuit last month in Federal Court asking for an immediate and permanent injunction for the popular website to be taken down.

In the statement of claim, TREB alleges that Mongohouse participates in an “orchestrated strategy to avoid and elude” the board’s multiple attempts over the past two years to shut it down.

It claims the website is infringing on the board’s copyrights by “employing various techniques to illegally data scrape” TREB’s proprietary information that it provides to its fee-paying members through its internal multiple-listings service (MLS). This data includes new property listings, descriptions, sold prices and photography.

It goes on to allege that Mongohouse is profiting by its daily “unauthorized access” of this information, which it then displays on its website for free.

Attempts to contact the website operator and the Toronto Real Estate Board for comment about the legal action have been unsuccessful.

“The information and content taken from TREB is used by Mongohouse to solicit people to use the Mongohouse site and is intended to draw public users to the site to generate advertising revenue,” according to claim.

“All of the information on the Mongohouse website for this purpose is only available from the TREB MLS system. There is no other means available for Mongohouse to obtain the information that is available and made publicly accessible through the Mongohouse website.”

TREB says it doesn’t know how Mongohouse is accessing the information, but it has evidence that it is from them because it placed “unique information” in its system and saw it appear on the Mongohouse website within 24 to 48 hours.

The board argues that it has spent “tens of millions” of dollars to create and maintain its MLS system and that it has suffered “injury and irreparable harm” when Mongohouse “continues to pass itself off as offering the same services…”

In addition to naming and in its lawsuit, the claim also names the website’s unknown operators (John and Jane Doe); web server Digital Ocean Canada Inc. and its U.S. based subsidiaries as well as Sheng Lan Mai who is also known as Maxim Mai, of Richmond Hill, Ont.

The board claims that Mai is a software engineer at IBM and “appears to be the original author and creator of Mongohouse.” It is unclear whether he is currently the operator of the website.

The Mongohouse website has been down as of Oct. 1. In a message to its reported 50,000 users, the website apologized for the inconvenience.

“At the moment, Mongohouse is unable to comment and/or share more information until further instructions given,” said the message.

This lawsuit comes after the Supreme Court of Canada decided in August not to hear a case where TREB was fighting to prevent home sales data from being posted on realtors’ password-protected websites.

TREB had argued for seven years at three judicial bodies that allowing the data to be released would create privacy and copyright concerns, but the Competition Bureau insisted keeping the numbers under wraps was anti-competitive and stifled innovation.

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Toronto Real Estate Board threatens legal action against realtors in battle over home sales data

Posted on 07 September 2018 by admin

TORONTO – A lawyer representing the Toronto Real Estate Board says it is considering whether to fight for adjustments to a Competition Tribunal order that enabled the publication of Greater Toronto Area home sales data.

TREB lawyer Brian Facey says the board representing 50,000 GTA realtors has yet to decide if it will try to modify the order that came into effect when the Supreme Court refused to hear a case dealing with the data’s online publication last week.

The Supreme Court’s dismissal of the case forced TREB to allow the data’s publication, but only through password-protected webpages called virtual office websites (VOWs) that realtors allow clients to access.

In the wake of the dismissal, real estate companies rushed to post the data online under password protections, but a few posted the numbers outside of VOWs.

A statement from TREB says members who don’t comply with the order will see legal action taken against them, their TREB membership revoked and their access to the Multiple Listing Service database, where sales data is compiled when deals closed, removed.

Facey says TREB has already asked some non-complying websites to stop violating the ruling, but is refusing to say whether the board has taken legal action against any already.

Online listing site Zoocasa posted the information shortly after the ruling with no password protections, but later made the numbers accessible only through a VOW.

Rival listing site Bungol had the data on its webpage long before the Supreme Court ruling and has not put the numbers behind a password.

Facey, who insisted on answering questions by email, said TREB will continue to educate members on how to comply with the ruling and will review language in its realtor and listing agreements to ensure buyer and seller privacy concerns are addressed.

He says that review is not meant to limit data from VOWs, but is instead meant to ensure buyers and sellers know their rights and realtors have a clear understanding of the order.


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Home sales and prices rise in Toronto region for a second straight month

Posted on 15 August 2018 by admin

In a sign that the Toronto area real estate market is in recovery mode, year-over-year resale home prices and sales rose for a second consecutive month in July.

Selling prices climbed 4.8 per cent to $782,129 last month, up from $745,971 in the same period last year, for all types of homes in the region, according to the latest numbers from the Toronto Real Estate Board released Friday.

The number of home sales also rose 18.6 per cent year over year in July, while new listings declined 1.8 per cent.

“It appears that some people who initially moved to the sidelines due to the psychological impact of the (Ontario) Fair Housing Plan and changes to mortgage lending guidelines have re-entered the market,” said Jason Mercer, the board’s director of market analysis.

July was the fifth consecutive month-to-month rise in Toronto region housing prices: up 3.1 per cent from June, according to the real estate industry’s Multiple Listing Service Home Price Index.

Condominiums continued to outperform lowrise housing such as detached, semi-detached and town homes. Condo prices rose 8.9 per cent on average last month to $546,984. About three-quarters of the 2,002 condos sold last month were in the city of Toronto.

Of the 2,390 detached houses that sold in the region, three-quarters were outside the city. Regionwide, detached house prices rose only 0.5 per cent on average to $1 million, but the scarcity helped increase prices 3.6 per cent inside the city, while they remained flat in the surrounding 905 communities. A detached house in Toronto cost $1.35 million on average, compared to $907,347 in the surrounding regions.

The lift in resale home numbers so far this summer — June prices and sales both rose about 2 per cent above 2017 levels — appears to signal the stronger second half of this year that the real estate board and industry executives have been predicting.

The real estate industry’s MLS Home Price Index showed a slight 0.59 per cent decline in July, but the board’s release said, “The annual growth rate looks to be trending toward positive territory in the near future.”

Seasonally adjusted figures, nevertheless, also showed year-over-year growth of 3.1 per cent in prices and 6.6 per cent in the number of home transactions.

The MLS index shows that York Region continued to lag other parts of the Toronto area with a 9.06 per cent year-over-year drop in all types of housing, including condos. The city of Toronto saw a 3.85 per cent price gain, according to the same index.

The average indexed home price across the region this year to date is $788,822 compared to $856,677 in the first half of 2017 when the market peaked. The Ontario government introduced its housing plan April 20, 2017, to pour cold water on months of double-digit price gains.

That policy was followed by tighter lending restrictions that reduced the spending capacity of many consumers, and a series of interest rate hikes, although lending rates remain at historically low levels.

There have been 46,834 sales this year, 13,520 fewer than the same period last year. The number of new listings was also down to 98,456 — 16,655 fewer than the first seven months of 2017.

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Toronto-area home sales climb higher in July: TREB

Posted on 08 August 2018 by admin

TORONTO – Home sales in the Greater Toronto Area climbed significantly in July in a divergence from the latest numbers in Vancouver.

Residential home sales were up 18.6 per cent in the GTA for the month compared with last July, the Toronto Real Estate Board said Friday.

The average selling price of the 6,961 homes that changed hands during the month rose 4.8 per cent on an annual basis to $782,129.

July’s climb follows a 2.4 per cent increase in June sales compared with a year earlier after a steep sales drop of 22.2 per cent in May.

“The positive results over the last two months are encouraging,” said TREB president Garry Bhaura.

The results from Toronto show a trend towards stabilization and a more balanced market, said TD Economist Rishi Sondhi.

Results from Toronto are a contrast to Metro Vancouver, where the real estate board said Thursday that home sales tumbled to their lowest level in 18 years.

The Greater Vancouver Real Estate Board said 2,070 properties changed hands in July in a 30 per cent plunge compared to the same month last year.

The general divergence in markets comes after the B.C. government pushed forward with further measures to cool the housing market in February while Ontario has held off, said Sondhi.

 “The market’s still sort of contending with those measures as well, and that’s causing sort of a wedge, year to date.”

Toronto’s housing market is stabilizing following the shock from the federal government’s tighter mortgage rules that came into force in January, said Scotiabank Economics vice-president Derek Holt.

“This fits our broad narrative that the second half of 2018 would begin to witness stronger housing figures as the transitory shock from tightened macroprudential rules ebbs,” he said in a note.

Sondhi said TD also expects the market to improve later in the year, but said sales growth will be tempered by rising interest rates and the continued effects of the tighter mortgage rules.

The Toronto real estate board also reported 13,868 new listings during the month, including 4,511 in Toronto alone, but the overall GTA figure was down by 1.8 per cent year-over-year.

The city recorded 2,574 sales in July at an average price of $824,336, while in the rest of the GTA, the 4,387 properties sold last month fetched an average price of $757,365.

Detached homes sold in Toronto were the most expensive, with an average price of $1.35 million. The average detached home price in the rest of the GTA was $907,347.

TREB said while the MLS home price index composite benchmark during the month was down slightly compared to July 2017, the annual growth rate “looks to be trending toward positive territory in the near future.”

The Ottawa Real Estate Board said Friday that sales in the city were up 5.9 per cent for July compared to last year with 1,614 homes sold, above the five-year average of 1,501 sales for July.


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Toronto home prices reach highest average price since May of last year

Posted on 11 July 2018 by admin

TORONTO — Home sales in the Greater Toronto Area rose 2.4 per cent in June compared to the same month a year ago, and were 17.6 per cent higher compared to May, according to the latest data released Thursday by the Toronto Real Estate Board (TREB).

The slight year-over-year increase followed a steep sales drop of 22.2 per cent in May across the GTA compared to May 2017, reflecting what TREB says is a continuing trend of volatile buyer reaction to various policy changes impacting the market.

The board said 8,082 homes changed hands in the GTA in June, with the average selling price edging up by two per cent on a year-over-year basis to $807,871.

Sales of detached homes led the way, with the board reporting 3,589 sales at average price of $1,033,574. TREB said 2,234 condos were sold during the month for an average of $561,097.

Board president Garry Bhaura said market conditions appear to be tightening with new listings down compared to last year.

At the same time, said Bhaura, home buyers are starting to move back into the market, with sales trending up from last year’s lows.

Jason Mercer, TREB’s director of market analysis, says the board expects to see sales improve over the next year although issues surrounding the supply of listings will persist.

“This suggests that competition between buyers could increase, exerting increased upward pressure on home prices,” he said.

Bhaura said the board looks forward to working with the new Ontario government to ensure home ownership and affordability are a top priority.

“In this regard, one of the most important issues is ensuring that no new municipal land transfer taxes are imposed on home buyers.” he said.

In the City of Toronto in June, 3,096 homes were sold at average price of $870,559 while 4,986 homes were sold in the rest of the GTA at an average price of $768,945.

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Hot Toronto condo market weathering a cold snap

Posted on 27 June 2018 by admin

The chill that has crept over some segments of the Toronto housing market may soon extend to one of its persistent hot spots: condominiums.

Evidence of a slowdown is emerging as new rules make it tougher to get a mortgage and borrowing costs rise for the first time in almost a decade. That’s reducing the appeal of Toronto condos, whose average price now exceeds $560,000. Projects are taking longer to sell and, in some areas, developers are using incentives to move units.

 “There are cash incentives being offered, discount parking being offered,” said Robert Gidwani, a broker at REsource Realty. “We’ve seen a bit more incentives especially in the resale market, we are seeing fewer multiple offers coming in.”

Christopher Bibby, a broker at RE/MAX Hallmark Bibby Group Realty, said demand is still “extremely active” for condos with “wow factor,” such as a one-bedroom unit near Bloor St. with unobstructed views of the water that sold for the list price of $629,900 in less than 48 hours.

But more generic inventory is taking longer to sell. “You’re not seeing the same pace of growth or aggressiveness on the buyer side,” he said.

The question is whether condos will join the slump in the single-family home segment, signalling a broader correction in the Canadian housing market, a risk policymakers have flagged for several years but which has so far failed to materialize. Condos accounted for 30 per cent of total Toronto sales in May.

Some developers are starting to give buyers longer than the usual six months to come up with a down payment, which usually ranges from 15 to 25 per cent. “That really increases the affordability level for people who are saving and paying as they go,” Gidwani said.

Shaun Hildebrand, at condo data provider Urbanation Inc., said high prices and buyer fatigue, particularly from investors, are coming into play. “Relative to last year when new projects would sell out almost immediately after launching, absorptions have moderated to more historically normal levels this year,” he said.

Unlike prices for detached homes, which are down almost 10 per cent from the peak last year, condo prices have continued to climb, reaching a record in May. But the pace of appreciation has slowed. On a year-over-year basis, the 8.3-per-cent increase in May’s benchmark condo price was the smallest in almost two years while sales fell 16 per cent from the same month the year before.

At the same time, supply is rising. The federal housing agency said work began on 7,691 units in the first quarter, the most since at least 1990. Urbanation predicts starts could hit records for the next two or three years, as high-profile developments come online such as the development designed by Frank Gehry, which will include the country’s tallest residential tower at 92 storeys.

It’s a trend that could make condos less appealing to investors. “With the increase in completions that we’re expecting and the slowdown in price appreciation, it may not be as attractive to hold over the longer term,” Hildebrand said in a telephone interview. “In that regard, you can start to see investors selling.”

At the same time, carrying costs — mortgage payments, property taxes and maintenance fees — increasingly exceed rental income. That negative monthly cash flow reached $424 on average for resale condos in the first quarter of 2017, according to an April report by brokerage Realosophy, citing Urbanation data. Many investors buy pre-construction, wait five years for the project to get built and rents to appreciate to get positive cash flow.

Many investors will accept negative cash flow as long as they see price gains on the underlying asset. However, sustaining the recent pace of price gains over the longer term may be difficult, the Bank of Canada said in a report this month. “If expectations reverse and prices recede, speculators may quickly sell their assets, which could lead to large, rapid price declines.”

“When you look at it as an investor, the economics are not there to buy and hold a condo based on cash flow,” said Robert Kavcic, senior economist at Bank of Montreal. “Now you absolutely do need price gains to make the economics work.”

Prices are unlikely to drop anytime soon, said Hildebrand at Urbanation, citing the low inventory of unsold units so far. However, “investors should be expecting a lower rate of return than they have in the past.”

Builders may begin scaling back plans in the face of a slowdown. “Developers are being careful in introducing new projects as construction costs have been rising quickly, land is scarce and expensive, development charges are doubling, and there is heightened uncertainty regarding approvals under the new planning regime,” he said. “That will help keep inventory levels in check and price levels steady.”

Still, any weakness in condos would affect the larger housing market, which has seen a sales drop in the past few months and flat price gains on an annualized basis, the Teranet — National Bank House Price Index shows.

Eric Lascelles at RBC Global Asset Management, Canada’s biggest asset manager, says anecdotal evidence of slowing demand for condos is one reason he’s less optimistic about the housing market, which he says is in the middle of a “sea change.”

Lascelles, who helps manage $330 billion, sees a 30-per-cent chance of a “serious correction,” where prices nationally fall by a fifth, and more in the hottest markets. His base case, to which he assigns a 50-per-cent chance, is that the market just goes sideways. “We’re seeing an inflection here and we need to figure out if this is just a blip or something bigger,” he said.


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How can Doug Ford fix Toronto-area housing?

Posted on 20 June 2018 by admin

Premier-designate Doug Ford must make housing affordability a priority, say builders, realtors and urbanists.

“This really is a generational challenge. The challenge of the folks who are going to live in the GTA over the next 25 years is something that needs to be the central focus of the provincial government,” said David Wilkes, CEO of the Building Industry and Land Development Association (BILD).

He was among seven experts who told the Toronto Star how a new Ontario Progressive Conservative government could make housing more affordable and more available.

Also weighing in were: Cherise Burda, executive director of the Ryerson City Building Institute; Tim Hudak, CEO of the Ontario Real Estate Association; David Amborski, founding director of the Centre for Urban Research and Land Development at Ryerson; Ben Myers, president of Bullpen Research & Consulting; Jeff Parker, senior manager of policy for the Toronto Region Board of Trade, and Toronto councillor and housing advocate Ana Bailao.

Boost supply

Streamlining planning and zoning approvals would bring more housing on the market sooner, said Wilkes. Right now it can take up to 52 separate approvals to bring a home to market in this region, he said — layers of municipal and provincial regulation that “create a quagmire that dramatically slows down the pace of building new homes,” he said.

“Overregulation” can add up to six figures to the cost of a new home, said Hudak, citing a recent C.D. Howe Institute report.

He urged the new government to “focus on increasing the supply particularly for first-time homebuyers and people who want to downsize.”

Ontario should look at how other jurisdictions, such as British Columbia, consolidate their approval and planning documentation into a single form, said the Board of Trade’s Parker.

“They also allow registered (private) professionals — engineers and architects who already have responsibility for the planning act — to act as the authorities on signing off on these projects. There is still an important role for municipal planning departments: it’s double-checking this work. But it takes the burden off them and leaves them with the skilled professionals who are already licensed by the government to do their jobs,” he said.

The government has to get better at enforcing some of its existing rules and policies too, said Ryerson’s Amborski. Provincial policy requires municipalities maintain a three-year supply of builder-ready, serviced lots. They are supposed to report those numbers to Queen’s Park, but that requirement isn’t enforced, he said.

Cut the tax

Next to alcohol and tobacco, housing is probably the most taxed commodity in Ontario, said Hudak. The Ontario Real Estate Association is discouraging the province from allowing municipalities outside Toronto to levy their own land transfer tax. Toronto’s municipal land transfer doubles the provincial fee on home sales, adding $15,000 to the average cost of a home.

The government could also look at tax incentives to help seniors downsize, widening the supply of available homes for young families, said Hudak.

Eliminating the year-old foreign buyers’ tax, something Ford mused about on the campaign trail, probably wouldn’t have much effect, however, said market researcher Myers.

Taxes by all levels of government add 25 per cent to the cost of a new home, said Wilkes. “Within that 25 per cent there are taxes on tax.”

Rightsize housing

“Figure out how to build homes for people, not for investors,” Burda advised. “We’re building one-bedroom condos for investors and we’re building detached houses on the periphery. What we’re missing is midrise housing that is in our already urbanized suburban and urban neighbourhoods that are close to transit, schools, jobs and services. The reason we’re not building it is that it’s not as cost-competitive as building tall or building sprawl.”

“If we are going to speed up the approvals process, let’s target that type of development and make it easier, more cost-effective,” she said.

Go beyond downtown laneway housing and allow empty nesters to stratify their homes for rental or shared ownership, something British Columbia encourages, said Burda.

The region’s economic vitality depends on that “missing middle” housing, said Parker. The board of trade’s own survey of young professionals found that most want choice expanded beyond single-family homes and one-bedroom condos.

“We would like to see both the province and the city do more to make sure we’re enabling the townhouses, the duplexes, the larger condos, which will house the young families and really keep our young professionals — the talent and strength of our economy — in the GTA,” said Parker.

Updated zoning would assist in boosting that supply of missing middle homes, said Amborski. Zoning specifically for midrise and ensuring it can’t be amended to allow for higher densities would be especially useful. Re-zone excess industrial land for midrise and townhomes, he said.

Stick to your own backyard

There’s no reason to build on the Greenbelt, said Amborski. Even if the land wasn’t protected for agriculture and environmental reasons, it isn’t serviced for housing in the short-term, he said.

Instead, the province should dedicate more surplus public land for housing, said Bailao, Toronto’s Housing Advocate. She cited the West Don Lands, where the province has required developers to build affordable units and rentals. “It’s important to step up and create more rental on public land and give some incentives to the city to create more rental,” she said.

Connect the dots

Align housing with transit and highways, say the experts. Myers recommends the province invest in the downtown relief line — a win-win that would spur development and move people.

Denser zoning around subways and GO stations would avoid the scenario along the Bloor-Danforth subway, which is dominated by lowrise housing, said Hudak.

The province also needs to take off “the straight-jacket of the growth plan,” he said.

“(It) is imposing targets for intensification development that aren’t necessarily in keeping with the character of those communities (outside of Toronto). They would like more of a mix of single-family homes in those areas and certainly there is the space for that. This will give consumers more choices,” said Hudak.

Re-think rent control

Roll back rent control, said Myers and Amborski. It is discouraging developers from building purpose-built rentals that Toronto desperately needs.

But Bailao says it’s more complicated than that. “We just can’t roll back rent control,” she said. But some fine-tuning might be possible, including allowing some flexibility for builders of purpose-built rentals in the first couple of years until they understand their cash flow.

“Other cities do have that flexibility in the first few years. But it is important that we protect our tenants and we work with our partners to have that rental available,” she said.

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Toronto-area home prices were down again in May

Posted on 06 June 2018 by admin

The competition among homebuyers is increasing in the Toronto region even though year-over-year prices fell 6.6 per cent on average to $805,320 last month, from $862,149 in May 2017.

The number of resale home transactions declined 22.2 per cent in the same period.

Still, there are indications that the competition to buy a home is on the rise, supporting higher prices in the second half of the year and into early 2019, said Jason Mercer, director of market analysis for the Toronto Real Estate Board (TREB).

 “Average selling prices were at or above average listing prices for all major home types in May,” he said in a press release.

New listings of homes were down 26.2 per cent year over year in May, said TREB. There were 19,022 new listings of resale homes in May compared to 25,764 in May 2017.

Seasonally adjusted figures show the average selling price was actually up 1.1 per cent in May compared to April.

Detached and semi-detached houses continued to see the steepest decline in sales compared to condos and townhouses.

The average detached house price fell 8.2 per cent in the Toronto region to $1.05 million, with the biggest drop in the communities surrounding Toronto, where there was a 9 per cent price drop compared to the same month last year. In the city of Toronto, detached house prices fell only 5.6 per cent.

The condo market continued to register an increase in prices, with the average unit costing $562,892, 5.7 per cent more than May last year. The city of Toronto saw the biggest condo price increase of 6.5 per cent, to an average cost of $602,804.

York Region is still suffering disproportionate price declines compared to the rest of the GTA. While the benchmark Home Price Index was down 5.4 per cent overall, the same indicator showed a 15.6 per cent drop in York. Detached house prices were down 17.5 per cent on the index.

Twenty-five per cent of respondents to an online Ipsos poll last month put housing affordability among their top two concerns in the upcoming provincial election. The poll that included 500 city of Toronto residents and 700 from 905-area communities also found that 35 per cent of respondents said their vote would take into account parties’ stances on housing.

Seventy-seven per cent of respondents supported reducing the provincial land transfer tax and 68 per cent wanted to see the tax repealed.

TREB and the Ontario Real Estate Association are lobbying provincial candidates against allowing municipalities outside the city of Toronto to levy their own land transfer taxes. Toronto got the power to issue its tax in 2008, essentially doubling the provincial levy for homebuyers moving in the city.

This year to date, the home price index shows the average price of a detached home has fallen 13.8 per cent in the Toronto region, while the average condo price is up 7 per cent.

The average GTA home price in 2017 was $822,622, including houses and condos.

TREB is also pushing for the province to increase the supply of housing in the Toronto area, particularly the type known as the “missing middle” — stacked townhouses and midrise apartments that can accommodate families and are more affordable than detached houses.

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Higher interest rates add to home buyer struggles

Posted on 30 May 2018 by admin

First-time home buyers already struggling with more stringent mortgage rules have been dealt another blow by an increase this week in the Bank of Canada’s five-year mortgage rate.

The move is also one more reason why the Toronto region’s soft spring real estate market could linger longer, according to some.

On Wednesday the Bank of Canada followed the country’s big banks and announced it was raising its 5.14 per cent benchmark mortgage rate to 5.34 per cent.

The central bank rate is different from the rates that banks offer consumers, but it’s used to assess mortgage applications.

Since Jan. 1, home buyers with a 20 per cent downpayment have had to qualify at the central bank’s five-year rate or at 2 percentage points higher than the mortgage rate being offered by their bank.

That alone has diminished buying power by 16.5 per cent, according to a recent report by Royal LePage.

Higher fixed rate mortgages alone won’t be enough to cause a dramatic drop in activity, but it will reinforce the trend to longer commutes for more affordable homes and add demand to the already hot condo market, said Sotheby’s CEO Brad Henderson.

“We’re coming off a historic period where interest rates have been so low that homebuyers have enjoyed the ability to borrow vast amounts of money not only for home purchasers but their lifestyles,” he said.

“It’s just another small number of people who aren’t going to qualify for the mortgage they had hoped for and have to now explore some alternatives,” said Cynthia Holmes, chair of the real estate management department at the Ryerson’s Ted Rogers School of Management.

Those alternatives could include waiting longer to buy or turning to other lenders such as private companies or credit unions, which are provincially rather than federally regulated and therefore not bound to apply the stress test.

 “That has no broad impact on the housing market, but it has an impact on our financial system,” said Holmes.

If interest rates rise this year, she added, it makes the stress test qualification more onerous and so the amount people qualify for will get smaller.

It will also impact consumers looking to renew their mortgages. Those home owners don’t have to qualify under the new stress tests if they stay with the same bank. But if they decide to shop around for a lower rate with another institution, they could have to qualify again with the stress tests, as well as higher rates, Holmes said.

“That means some people are holding a mortgage and they wouldn’t actually qualify for the mortgage they already have,” said Holmes.

The rate hike comes in a year when 47 per cent of all existing mortgages will be renewed, according to CIBC Capital Markets.

According to online financial hub, Ratehub Inc., the rate hike, coupled with the stress test, would mean a $9,000 difference on what a buyer can afford if that consumer has a $90,000 income and a 10 per cent downpayment amortized over 25 years. That’s a $469,785 home at a rate of 3.09 per cent, versus a $460,852 home at the new qualifying rate of 5.34 per cent.

“It is hard to get people qualified,” said Sandra Barnes of Dominion Lending Centres.

“Qualifying at the benchmark rate and if you’ve got less than 20 per cent down, you have a 25-year amortization — that combination has really affected the first-time home buyer and their buying power,” said Barnes. If a home buyer has 20 per cent down and they qualify at the benchmark, lenders can use a 30-year amortization.

Mortgage broker Samantha Brookes of Mortgages of Canada says she’s already seeing clients struggling under new higher rates as they try to renew their loans.

“A lot of people are literally on the brink of losing their home or having to sell,” she said, adding that she has advised some to consider the latter option because they have re-financed their homes to the point where they have no equity remaining.

“People have been using their homes as ATMs over the last few years because the market has been going up so quickly,” she said.

He says the cooling effect of higher interest rates on housing sales is undeniable and further possible rate increases will add to the malaise. But this year’s dramatically reduced sales statistics look worse than they are on a year-over-year basis because sales and prices rose so high so fast in early 2017.

TD Bank was the first of the big five lenders to raise its five-year posted rate from 5.14 per cent to 5.59 per cent. It was followed by RBC, CIBC, national Bank of Canada, Bank of Montreal and Bank of Nova Scotia, which posted smaller rises.


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Real estate association says it won’t target individual candidates in pre-election campaign

Posted on 23 May 2018 by admin

The Ontario Real Estate Association (OREA) says it has no plans to back away from its campaign promoting home ownership to parties and candidates in the upcoming provincial election.

But OREA won’t be moving ahead with billboards supporting or criticizing individual political candidates, a spokesperson said Monday.

That clarification comes in the wake of reports of industry squabbling between OREA and the Toronto Real Estate Board (TREB). On Sunday, The Canadian Press reported that TREB president Tim Syrianos sent OREA a letter telling it to step back from a “misguided and ill-advised” campaign that could negatively affect Toronto-area realtors by highlighting the home affordability challenges in the region, which has had a slow start in some areas this year.

The campaign called “Keep the Dream Alive” urges politicians to help make home ownership affordable to millennials. “Rising home prices have pushed home ownership out of reach,” says the material on the association’s website.

Syrianos also suggested that endorsing or undermining certain politicians violated OREA’s mission to promote policies rather than people.

Targeted billboard advertising was only “one element of an election plan” OREA circulated to its board, of which Syrianos is a member, said Matthew Thornton, association vice-president of public affairs.

“Our board decided not to move forward with the program. It was a pilot initiative they were considering, and upon further review they decided not to move forward,” he said.

That decision was made before Syrianos’s letter leaked to the press, he said.

In it, the Toronto board president warned OREA against trying “to supplant TREB and overtake our expertise and well-respected voice.”

Syrianos also objected to OREA’s plan to use an “Ontario Realtor Party” as part of its campaign. The Ontario Realtor Party is the profession’s voice promoting the dream of home ownership and protecting the real estate profession, according to the association’s website.

TREB refused Monday to comment on the letter. It referred to a previous joint statement with OREA saying that “the letter is not reflective of the long-standing and positive relationship between OREA and TREB who jointly remain committed to helping create a new generation of homeowners.”

OREA represents 39 Ontario real estate boards, but about 50,000 of its 70,000 members belong to the Toronto board.

Thornton stressed that political campaigns aren’t new to OREA. He said the association successfully lobbied the province against allowing municipalities outside Toronto to levy their own land transfer tax.

The “Keep the Dream Live” campaign will move into a second phase in September through November, he said.

“It’s an opportunity for us to continue to promote this message that young people are struggling to afford a home, and policy-makers need to take this issue seriously,” said Thornton.

OREA CEO Tim Hudak is the former leader of the Ontario Progressive Conservative party. Last year, OREA lost its main function and key revenue source as the training provider for new realtors in the province, and it announced it would rebrand itself as the voice of the real estate industry and an advocate for home ownership.

The internal strife is typical of industry associations that have different tentacles or sometimes local, provincial and national arms, said James McKeller at the Brookfield Centre in Real Estate & Infrastructure at York University’s Schulich School of Business.

“It’s hard to figure out the motives of both of these organizations. They pretend they’re representing the public, but they’ve never given any evidence of that in the past,” he said.

Meantime, Bosley real estate agent David Fleming said he would be happier if TREB represented the interests of active agents, rather than the 50,000, who are licensed to practice, many of whom help transact one or fewer sales each year. But the board is dependent on its large membership for revenue.

Meantime, he said, OREA is “trying to figure out what is our purpose and they don’t even really know.”


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