Family Formation & Housing

For young couples starting families, buying their first home and/or other real estate. Covers mortgages, credit cards, interest rates, children’s education savings plans, joint accounts for couples and the like.

Court decision on sold data access means more transparency for home buyers and sellers

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By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

A seven-year legal battle between the Toronto Real Estate Board (TREB) and Canada’s Competition Tribunal has come to an end, ushering in a new era for Toronto real estate data access.

On August 23rd the Supreme Court of Canada stated it would not hear an appeal from TREB to keep past sold real estate data private, following rulings from both the Tribunal and the Federal Court of Appeal that required it be made available online.

This means TREB’s online brokerage members, such as Zoocasa, are now allowed to display the historical data for individual real estate listings to site users with password-protected accounts. This information includes a home’s original listing price and sale price, its 10-year sales history, and whether it has ever had a terminated listing. Previously, clients could only receive this information once they were under contract with a real estate agent, who could provide it to them over the phone, by fax, or in person.

The move is being widely hailed as a victory, both for those who work in the real estate industry and for prospective buyers and sellers’; but how will it change today’s real estate market?

A boon for Buyers

Perhaps the biggest benefit for buyers will be the improved transparency around home prices. While having access to the data is unlikely to prevent bidding wars, it will mean shoppers will have a better idea of what condos and houses for sale are truly worth before they put in an offer.

It will also decrease price lowballing, a strategy in which sellers list their homes for a much lower amount than they expect to receive. This piques the interest of buyers looking for a great deal, often leading to multiple-offer situations and hyper-inflated prices. It’s an especially common tactic in hot markets, such as on the Toronto or Vancouver MLS, and a constant source of frustration for buyers trying to find homes that are actually within their budgets.

Now, buyers will be able to see what comparable homes are selling for in the same neighbourhood, and whether their desired listing has been priced accurately.

Greater strategy for Sellers

This doesn’t mean sellers will receive the short end of the stick: they’ll now have more information than ever to inform their decision to list. Continue Reading…

Want an affordable neighbourhood with top Schools? Head for the ‘Burbs

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By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

The mantra for real estate shoppers is typically “location, location, location” – but for those with kids in tow, it might as well be “schools, schools, schools.”

For parents, whether or not a home is close to a highly-ranked educational institution is a top consideration, alongside affordability, number of bedrooms, and parking.

In fact, living within a certain school catchment can significantly impact one’s home value: even homes located across the street from one another that are in different school zones may see that difference reflected on their home listing prices.

EQAO school ranking and home price are especially correlated in high-demand urban centres, such as the City of Toronto, where home buyers pay a premium of hundreds of thousands of dollars to live within their coveted catchment.

For example, in Etobicoke, where the top EQAO-ranked school of Lambton Kingsway Junior Middle School boasts a score of 3.2 (out of 4), home buyers would pay a premium of $821,580 to dwell nearby. In York, that premium is $689,178 to live near Humbercrest Public School (3.1), and $444,183 to be close to CD Farquharson Junior Public School in Scarborough (3.3).

Exploring affordability in the Greater Golden Horseshoe

However, those who wish to live close to a top-ranked school at a more affordable price are wise to head to the suburbs: according to recent data compiled by Zoocasa, the correlation between school ranking and average home price isn’t as strong in surrounding Greater Golden Horseshoe markets.

Consider the city of Hamilton, located just west of Toronto along the shores of Lake Ontario. Also known as “Steeltown” or the “Hammer” for its roots as a steel manufacturing centre, it’s now highly sought for its growing “eds and meds” industry; and the fact that detached Hamilton houses with large lots are relatively inexpensive.

Those looking to live close to the best schools have many options in Hamilton; for example, one of the top-ranked schools, Sacred Heart Separate School (2.9) is located in East Hamilton, where the average home price clocks in at $396,964. In upscale Ancaster, where the average home sells for $838,337, is the similarly-ranked Immaculate Conception Elementary School, illustrating similar education standards are available for buyers regardless of home budget.

Mississauga schools among the best

The City of Mississauga is also a great example of a municipality where good schools and real estate affordability go hand in hand. Continue Reading…

How to pay off your mortgage in 10 years

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By Karren Smith

Special to the Financial Independence Hub

Owning a home without a mortgage is something of a dream for many, and an important step in financial independence. Paying off a mortgage in 10 years can seem like a massive task, but with some simple financial strategies and planning, it’s possible.

While you will need to make some sacrifices, the benefits of owning your home as soon as possible is worth it for many people. By paying off your loan more quickly, you and your family will save thousands of dollars in interest and have more money to put towards the things you love, such as overseas travel, or perhaps a second home for holidays. Owning your house can help your life become freer and more flexible. So how can you escape the shackles of your mortgage and pay off your home in 10 years?

Create a simple plan

Assuming you’re debt free, aside from your mortgage, you can make a simple plan that will help you pay off your home within 10 years. For example, let’s say you have a $300,000 loan at a 5% interest rate. If you have a single income of $95,000, you can pay off your loan in 6-7 years with $2,000 fortnightly payments.

If you’re a couple, with an income of $140,000, you can pay your mortgage off in 5-6 years with $2,600 fortnightly payments.

Of course, these numbers are just a starting point to illustrate what’s possible if you focus on paying your home off. Bigger loans will require more time or bigger repayments. Obviously, the higher your fortnightly payments are, the more quickly you’ll pay off your loan; however, at the same time, it’s important that you have enough money to cover your expenses and live comfortably. Continue Reading…

Affordable Housing: Which Toronto neighbourhoods are friendliest for Condo buyers?

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By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

There’s no denying Toronto real estate prices have tumbled since the Fair Housing Plan was introduced by the Ontario government last April, to address the searing 33-per-cent year-over-year price growth that alarmed buyers and policymakers alike. Detached house prices – the hardest hit segment following the Plan – have since declined 14.8 per cent, representing a dollar loss of $180,878, while the average aggregate home price is down 11.8 per cent, a loss of $108,696.

However, affordability continues to be a keenly-felt issue in the city, especially among what is supposed to be the affordable entry point for new home buyers: condos.

While the priciest home segments posted deep declines in the volatile months following the Plan, condos consistently posted year-over-year gains in value; now, just over a 15 months later, they’re sitting at an average of $561,097, an increase of 8.1 per cent.

FHP did little for first-time buyers

That means that, while those in the move-up markets have enjoyed improved buyer conditions, the most vulnerable and cash-strapped have faced only worsening affordability following the new policies. Rather than find an affordable entry-hold in the 416, first-timers are increasingly drawn to further-flung communities, such as homes for sale in London, Ontario, or even Ottawa real estate, where detached living can be had at the fraction of the cost for a city condo.

However, these are aggregate data, reflecting home prices collected from the entire region monitored by the Toronto Real Estate Board. As real estate is extremely local, and can differ from neighbourhood to neighbourhood, savvy condo buyers seeking a deal may still have options within the City of Toronto proper.

Toronto’s most affordable Condo communities

To identify where this is possible, Zoocasa crunched the affordability numbers per neighbourhood, factoring in the average price in each as well as the median income earned in Toronto households.

The findings revealed that, for households earning two or more incomes at the median of $96,294, 18 of the 35 examined markets remained within the realm of affordability.  They are:

Continue Reading…

How do Canadians feel about the new Real Estate regulations?

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By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

The anniversary of the implementation of the Ontario Fair Housing Plan has come and gone, and the playing field is just starting to even in the province’s housing market. Designed to cool demand and price growth in the Greater Golden Horseshoe, the 16-part package of housing regulations has effectively done just that, with sales down double-digit percentages throughout the region, and prices softening for the most expensive housing types.

Housing analysts argue that this result is mainly due to psychological factors, rather than the new regulations – which include a foreign buyer’s tax, and overarching rent controls – themselves.

But what do Ontarians really think about the new regulations? To find out, Zoocasa conducted a survey of 1,400 respondents on their sentiments around the highlights of the plan, and whether they support the government’s intervention in the free housing market.

Following BC’s footsteps

If Ontario’s attempt to tax foreign purchasers of real estate seems familiar, that’s because it closely resembles what occurred in British Columbia; the province initially implemented a 15-per-cent levy on foreign buyers within the Metro Vancouver area in August 2016, before upping the tax to a full 20 per cent, and extending the affected geographical area, in February of this year.

While Ontario’s version, called the Non-Resident Speculation Tax (NRST) still taxes just 15 per cent of a home’s purchase price, it will apply to anyone buying a home within the GGH – including homes for sale in Hamilton, or condos for sale in Mississauga, who is not a Canadian citizen or permanent resident (those who obtain such status, or who are enrolled in a minimum two-year full-time post-secondary program within a year of their home purchase are eligible for a full rebate on the NRST).

At the time of its implementation, former Ontario premier Kathleen Wynne was adamant that the tax was not intended to discourage newcomers to Canada from settling in Ontario.

“The Non-Resident Speculation Tax has nothing to do with new Canadians or people who want to make Ontario their home,” she stated to a media scrum on April 20, 2017. “This is targeting people who are not looking to raise a family, who are just looking for quick profit or a place to park their money.”

The measure appears to have resonated well with all Canadians; according to survey results, 69 per cent of respondents from all provinces indicated they support the tax, while 61 per cent felt foreign ownership directly impacts prices in the local housing market.

Perhaps not surprisingly, respondents from provinces with the most competitive real estate marketplaces were most likely to support the tax: 77 per cent of British Columbians and 70 per cent of Ontarians indicated they were pro-tax.

Support extends beyond affected Housing markets

However, even respondents from provinces where foreign investment and homeownership is not considered a stressor on the market, indicated support for the tax; 65 per cent of Albertans indicated support, even though only 40 per cent feel out-of-country buyers impact housing prices in their region. Continue Reading…