Building for Now and for the Long Term

It’s hard to miss the real estate boom that continues to characterize the housing market in Toronto and the GTA.  And the trends are for continued growth this year.  The Toronto Real Estate Board (TREB) is estimating 104,500 to 115,500 home sales this year and sales in the first three months are in line with that so far.  Just this week, a Financial Post article commented on new construction hitting its highest levels in almost a decade.

It all makes for an exciting time for real estate developers. But, it’s also not without its challenges.  In my view, inherent in the mindset of developers working in Toronto now – and indeed, those working in any major city that is experiencing rapid, extensive growth – is the question: how do I build for today and for tomorrow?  In other words, we have to grow intelligently and consider not just what is good for Toronto and the GTA today, but what is good for the city and its residents twenty or thirty years from now.  In many ways, that means looking ahead and truly envisioning how our city will look like and, more importantly, what we want our city to look like.

Sometimes that’s not the easiest of tasks.

Instances of buildings that were looked at less than favourably by future generations of city inhabitants certainly exist within the history of urban development.  It’s also suggested that aesthetically displeasing buildings can impact one’s mental health.

There’s a psychology behind buildings and, at their best, buildings should reflect how people want to live and why.  They should also be built with the simple consideration that city residents will be living among the buildings we construct for many years to come and that these buildings will make a significant impact on how they experience their own city. 

For Mizrahi Developments, looking ahead and considering the long-term impact of the residences we build has been key to three of our most important fundamentals as builders: one, always being on the upswing when it comes to incorporating the latest green technology into our buildings; two, making sure that our residential buildings don’t just fit in or complement the neighborhoods we build in, but aesthetically add to these neighborhoods and visually enhance these neighborhoods; and three, offering truly customized upscale condominiums where condo owners can author the personal details of their new condominiums and enjoy their home for years to come. 

The reality is that building booms like the one we’re currently experiencing in Toronto come and go. Responding takes more than just meeting the more immediate needs of buyers. It takes understanding the importance of building structures that honor our past and community’s traditions, while setting the standards for design for the future.

Debt and debt settlement services

The debt-to-income ratio has hit the headlines again. This time the ratio rose to 167.3 % in the fourth quarter of 2016 compared to 166.8% in the third quarter. That means for every dollar of disposable income, consumers owe $1.67. Approximately 63% of that debt is in mortgages.

While this increase worries some policy-makers, studies have shown that consumers have been able to pay their debt relatively easily. Low interest rates have allowed consumers to pay down more of their mortgage principal, with payments split almost evenly between interest and principal in the fourth quarter.

But for some, the debt load is unmanageable and they search for solutions. You are no doubt familiar with advertisements from debt settlement services that promise to settle a consumer’s outstanding debt, for a fee. The caveat is buyer beware. If you’re considering this option, make sure to do your research and find a reputable company to work with. Or, I may be able to refer you.

Before you pay upfront fees or service charges, I may be able to help. Much of what debt settlement services offer can overlap with the services of a licensed mortgage broker.

Here’s how it works. Mortgage brokers can arrange debt consolidation on a mortgage renewal or on a refinance. When arranging a consolidation mortgage loan on a refinance or renewal the amount of the mortgage principal may be increased to pay out the total debt amount. This becomes part of the mortgage commitment and a condition of the mortgage loan. On closing, your lawyer will disburse the funds to your creditors and register the new mortgage.

What you need to know
A refinance alters the terms and conditions of your mortgage; specifically you are increasing the amount of your mortgage to pay off debt. Your mortgage payment may or may not increase, depending on a number of factors, and you may incur a penalty to break your existing mortgage if you are refinancing midterm. Depending on your current mortgage you could be paying off the refinanced debt at a much lower interest rate, which could save you thousands of dollars in interest in the long run.

As with all renewals, it’s always a good idea to review your mortgage with a mortgage broker who can shop the rates for you and get you the best deal, tailored to your particular situation. And, if you decide to switch lenders, there are no penalties at renewal time.

One of these options may be the perfect solution if you’re struggling with debt. Call me today for more information.

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at www.guythemortgageguy.com

The Four Types of Creditor Insurance

Home is more than a place you live. It’s your family’s haven from the world. But what if something happened to you? What would happen to the home you’ve invested so much in? You wouldn’t think about owning a home without insuring it, yet the odds of your house burning down is more remote compared to the odds of experiencing a life-changing event such as a job lay-off or a disabling accident.

Mortgage payments don’t stop when you’re unable to work so many home owners opt-in for mortgage creditor insurance. This type of mortgage protection insurance preserves ownership of your family’s home by making sure the mortgage keeps getting paid – even during the most difficult times.

Here are four types of mortgage insurance available:

Life Coverage: Mortgage life insurance provides security to both you and your insured co-borrower. If your co-borrower does not qualify for life insurance, you can still apply. Also known as mortgage insurance or creditor insurance, it’s offered by lending institutions and us. It is a life insurance policy that pays the balance of your mortgage to the lending institution if an insured person listed on the mortgage passes away.

Disability Coverage: This insurance is designed to pay a portion or all a homeowner’s mortgage payment if they become disabled — up to 24 months per occurrence. Individuals who opt to take advantage of this type of insurance need to take care to understand the policy completely. Determine the length of time the policy will pay mortgage payments during an episode of short-term or long-term disability. What dollar amount of the mortgage does the policy pay? Is there a waiting period associated with payment from the policy?

Critical Illness Coverage: What if it happens to you? When you survive a critical illness, you may not be able to return to work and your expenses could increase dramatically. If you are diagnosed with one of the 15 covered critical illnesses, based on our service provider’s criteria, which includes certain types of cancer, your mortgage payments are covered for 24 months, whether you return to work or not. Key questions to ask: What critical Illnesses are covered? What happens if I have an acute heart attack, recover in a few weeks or months, and return to work? Does my disability insurance cover me for living benefits? What cancers are covered? Do I need to take a medical examination? Mortgage Critical Illness Insurance is a benefit you enjoy while you are alive. It builds on your Mortgage Life Insurance to complete your protection.

Accidental Job Loss Coverage: If you are injured or are unable to work or become involuntarily unemployed, your monthly mortgage payments will be covered up to six months per occurrence.

If you don’t have any of these coverages now on your mortgage, we may be able to add them on.

Call me for more information.

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at www.guythemortgageguy.com

Toronto Real Estate Shows No Signs of Slowing

It’s no secret that Toronto is arguably Canada’s hottest real estate market, and there appears to be few signs that the city’s market is going to soften anytime soon.

Spurred on by population growth and an influx of residents into the city’s downtown core and adjacent area, Toronto’s housing market has continued to make gains, even as similar markets across the country, most notably Vancouver, have begun to settle.

In the last year alone, the average cost of a home increased by 22 percent, according to the Toronto Real Estate Board’s (TREB) benchmark index. As of January 2017, the average selling price of a home in the GTA was roughly $770,745, an increase of approximately $140,552 from 2016.

In addition to the home sector experiencing double digit gains, low-rise housing (detached, semi-detached and townhomes) experienced large gains as well, with the year-over-year price growing by 26 to 28 percent between 2016 and 2017. 

The current and long standing sellers’ market and the high demand for housing in the GTA has also sparked heated bidding wars. Of the 17,862 homes sold in Toronto in 2016, 37 percent or 6,583 sold over asking.

In the last few weeks, there have been multiple stories in the local media of homes selling for hundreds of thousands above listing price; there was even a home in the Don Mills and Lawrence area that sold for a million over the asking price.

“It just gets back to the fact that while we’ve seen sellers’ market conditions over the last two or three years, they only grew stronger this year,” says Jason Mercer, director of market analysis for TREB. “And if we don’t see any sort of change on the supply side we should continue to see upward pressure on home prices.”

Ironically, as Mercer notes, there is a lack of available housing options, which is in part fueling price increases in the real estate market.  However, according to Statistics Canada there are roughly 99,000 unoccupied homes and units in the GTA.

While many speculate that the great number of empty homes is a result of foreign buyers purchasing Toronto real estate as a long-term investment, data from the most recent census proves otherwise.

Yes, foreign buyers do account for a small amount of the unhabituated units; however a large majority of the vacant homes are owned by  Canadians who have purchased a second home or condo as an investment property. These second homes are most often used for temporary or short term rentals like Airbnb.

Whether it is foreign buyers or local residents, Toronto city council is looking into imposing an empty home tax similar to the one that was established in Vancouver in the late 2016. The tax, which would be imposed on homes that remain empty over a long period of time, is meant to inspire those holding on to properties in hopes of maximizing their selling dollars to sell the surplus homes or find permanent tenants.

Whether city council will impose the new tax remains to be seen, however there is no disputing that Toronto’s real estate market is moving into another year of record prices.

3 Financial Tips To Remember When Searching For A New Home

If you’re considering jumping into the real estate market in search of your next home, be prepared for the ride of your life. Not only do you have to be able to find the perfect home for yourself or your family, but you also have to secure financing, prepare for your move, and finally settle into your new space and new routines. While some of these things will happen naturally and easily, the financial aspects of this endeavor likely won’t. For this reason, it’s good to be aware of ways in which you can make this adventure easier on yourself. To show you how, here are three financial tips to remember when searching for a new home.

Educate Yourself About The Market

The housing market has the great ability to change based on the city or even neighborhood in which you’re looking for a home. Prices can fluctuate drastically even for similar homes, making it difficult for buyers to know if they’re getting a good value or being ripped off. To help you feel confident in your ability to find a good potential home, Christine Ryan Jyoti, a contributor to LearnVest and Forbes, recommends for buyers to gain as much knowledge as they can about the exact market they’re shopping in so as to be informed about good prices, areas, rates and more. While this can be done by searching online, you can also get invaluable information from speaking with a real estate agent working in your specific area.

Be A Tough Customer

Once you think you’ve found a home you want, it’s time to make sure you’re not blinded by its beauty before you drop a huge amount of money on this purchase. To do this, Suze Orman tells Oprah.com that you should always do your own check of the home before you even consider making an offer. While you should also get a professional home inspection, the inspection you do personally should consist of things like checking for leaks or water damage, running the heater and air conditioner, checking all kitchen appliances, feeling the water pressure, scoping out the neighborhood, and making sure your cars will fit in the garage. After you buy the house, you’re stuck with it, so many sure there’s nothing bad hiding around to ruin your investment.

Come Bearing A Pre-Approval

When you’re in a seller’s market, it’s not unlikely to find yourself in a bidding war over a great property. However, this is often a nightmare situation for buyers. One thing you can do that may help you nail down the home you want and also avoid financing problems is to come to the open house or walk through with a bank pre-approval in hand. Ann Carrns, a contributor to the New York Times, reminds us that a pre-approval is much different than a pre-qualification because a pre-approval means that the bank is already ready to give you the loan, which can speed up the process of closing on the house. This can be a great way to avoid headaches for you and headaches for the seller when it comes to financing the home.

To ensure you’ve covered your bases financially when out on the hunt for your new home, consider using some of the tips mentioned above.

The Ongoing Value of Toronto’s Condo Market

Does Toronto’s condominium market still offer investment value, despite some speculation that last year’s strong run in appreciation values may point to a “pricing bubble set to burst”?

I personally believe that the idea of a bubble is unfounded, particularly in relation to the mid- to upper-condo segments.

One issue which has spurred uncertainty regarding future investment appreciation within the condo market has been the furor generated in the media about how foreign investors are pushing purchase values beyond the means of domestic buyers and investors. In August of last year, the B.C. government introduced a special 15 percent tax on residential purchases by foreigners – supposedly based on the premise that these investors had created an “artificial surge” in prices.

The question has been asked, is Toronto next?

But, like any ‘witch hunt”, perception seldom matches the real facts. A recent report  suggests that foreign investor influence on pricing within the condo market is negligible. According to the Urbanation data, foreign investors only accounted for 5 percent of the sales of new condo units in Toronto last year. Similarly, a report issued by the Canada Mortgage and Housing Corp. (CMHC) estimates that only 3.3 percent of condos in Toronto are owned by foreign investors, while the number in Vancouver is about 3.5 percent.

I would like to point out that the same Urbanation report indicates domestic condo investors (those not planning to live in the unit acquired) accounted for 52 percent of new sales last year. Urbanation VP Shaun Hildebrand notes in an article last year, “I don’t think that in either case [domestic or foreign investors] we are seeing speculative activity…” So, like any sizable investment, the data supports the fact that many condo investors are most likely in the market for the long-term.

Stepping away from the topic of foreign buyers, let’s look at other fundamental drivers that are likely to maintain investment growth in the Toronto condo market.

Firstly, both Urbanation and the Toronto Real Estate Board (TREB) concur that market statistics continue to show greater condo buyer demand than the development of new inventory.

TREB notes: “Gone are the days when we were concerned about a potential glut in inventory in the condominium apartment market…First-time buyers represent an important component of home ownership demand. Many households looking to purchase their first home will consider a condominium apartment.”

I believe this trend – particularly in the luxury end segment – will continue well through this year into 2018.

A second significant factor motivating demand in the luxury segment is a rapidly changing demographic of condo buyers.  Canada’s aging population is seeing more and more owners of high-end single-detached homes looking to sell as their family commitments decline. In turn, they are looking for downtown convenience without compromising the luxury of their lifestyles. I am confident that the mid to upper-end condo market segments will continue to attract buyer demand and present long-term investment value.

Alternative lenders go mainstream

For some, getting a mortgage from a bank has become a bit more challenging – even if your credit score is good If you don’t qualify using the benchmark rate, regardless ofwhat mortgage rate and term you opt for – this has been called the” stresstest” — then you may be out of luck. With the introduction of new mortgagerules last year, the Government tightened mortgage lending guidelines inresponse to concerns that some markets in Canada are overheated and thatCanadian debt levels continue to increase.

The new mortgage rules have also had an impact on those who want to refinance their mortgage loan. And at renewal time, if you want to increase your existing loan, change your amortization or shop for a better rate, the rules may have an impact as well.

Despite the challenges, there are solutions. A bank is not the only option for a mortgage. The new mortgage rules have created an opportunity for a variety of specialized lenders to enter the market who are flexible and open to reviewing a variety of situations and has led to a growing pool of mortgage funds.

In a nutshell – they’ve gone mainstream
These lenders are not limited to private individuals with money to lend, either individually or as part of an investment pool. Mortgage brokers still have access to those funds; however, the market is also seeing an increase in the number of Mortgage Investment Corporations (MICs) as well as smaller lenders with products to fill the gap.

Many alternative lenders put more weight on the equity in a property, rather than on the work you do or on the credit challenges you may have.

Smaller institutional lenders in some regions across Canada, like credit unions, however, may offer specialized lending with affordable interest rates, reasonable lending fees and flexible underwriting.

A few benefits of specialized lending:

Quick closings: The key to a quick close is having your financing set up quickly — specialized lending can make that happen.
Terms of the loan: These loans are for short periods of time, usually no more than two or three years.
Great for investors: Because specialized lenders have flexibility, they will look at those fixer-upper rental properties with a keen eye and may fund both the purchase and the home improvements.
Diverse repayment options: This is especially helpful for entrepreneurs. Payments can be structured more creatively and may include interest-only payments and balloon payments at the end of the term or on closing of a sale.
Construction financing: Bank construction financing can be riddled with red tape. Private lending may get the borrower more money, and quicker access to construction draws, which in the end, could save time and money when building a home.

For more information and to find a lender who will meet your needs, call me today!

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta) and can be contacted at www.guythemortgageguy.com

Smart Home Technology Continues to Be a Wise Investment

It’s hard not to be inspired by the exciting times we live in. Through the power of technology, we have done things that were once thought impossible and, knowing that, we keenly look forward to future technology. From autonomous vehicles to new developments in the area of artificial intelligence, I think we will continue to see broad technological trends that will make our lives easier and more comfortable.

While drones and smart phones seem to be the first innovations that come to mind when we think about recent advances, abundant strides have also been made in the area of smart home technology.  Innovations like smart monitoring and green technology not only introduce the latest technology to homeowners and condo owners, they also help residents reduce energy consumption, live more efficiently and reduce their carbon footprints (which also saves money).

From our experience at Mizrahi Developments, giving residents an opportunity to customize the physical design and style of their living spaces is a major win.  Beyond that, giving residents an easier ability to control their living environment is also highly important – and smart home technology makes that much easier.

Aside from comfort, the ability to remotely control a home’s temperature and lighting, and ultimately its energy consumption, falls in line with the growing movement toward global environmental responsibility. 

Keeping a focus on energy consumption and energy efficiency is also one reason why Mizrahi Developments is an Energy Star rated builder.  Being an Energy Star builder means more than providing Energy Star rated appliances and fixtures – an Energy Star home is specifically designed to be warmer in winter, cooler in summer, as well as significantly quieter and draft-free.  The addition of high-efficiency furnaces and air-conditioning units, top quality appliances and the latest lighting technology make Energy Star homes environmentally friendly, producing two-to-three tonnes less greenhouse emissions annually compared to a regular home.

From making a truly optimal interior environment to helping residents live less energy-consumptive lifestyles, in the coming years I expect new advances in smart home technology to continue to make building development both more efficient and more environmentally conscious. 

One area that I am particularly looking forward to in the near future is the merger of data analytics and energy management systems. While tenants control their individual environments through app technology, data analytics will provide building management better tools to monitor and control the conditions of communal spaces. This will allow for better control of lighting and heating systems, which are some of the most significant factors in maintenance fees. Better control over energy management can also contribute to reducing a building’s overall carbon footprint.

Tips to Help You Pick Your First Rental Property

Do you want to invest in real estate? The first thing you need to understand is that there’s a lot of work to be done – from browsing hundreds of new real estate listings in Montreal, to choosing an agent and eventually signing the contract. Owning a rental property is a tough business and there are challenges that await you in every step. Here are some helpful tips you can consider:

Search on your own.

Although you’re likely going to hire an agent, you should begin by searching for potential property investments on your own. In doing so, you can take an objective approach in evaluating all the neighborhoods and properties you’re interested in.

Choose a property that is close to where you live.

This is especially true if you plan on managing the property yourself. If you’re going to get a property management firm, then proximity to your home is not really a major requirement.

Select a neighborhood carefully.

Remember that the quality of your chosen neighborhood will have an influence on the type of tenants you will attract. It will also affect how often you will deal with vacancies.

For example, if you buy a rental property near a university, then your most likely tenants are students and you’re possibly going to have vacancies during summer.

Understand property taxes.

Property taxes can impact how much you’ll earn from your property, but high property taxes are not always a bad thing. If, for example, the property you’re eyeing is in a very good neighborhood, then it may be worth the risk.

Pick a property that is close to decent schools.

Most renters who are couples or families prefer living close to a school. Take note that the reputation of the school is just as important.

Compare crime rates.

Don’t pick a property in a neighborhood with a high crime rate. You may find a dirt-cheap property for sale but who wants to live close to a criminal activity hotspot? Checking with local authorities should give you an idea which areas to avoid.

Check if there is a growing employment opportunity in the area.

Naturally, buying a condo in downtown Montreal is going to be very expensive. So, if your budget is limited, then your best recourse would be to scout for areas close to the city with great potential for employment growth.

Amenities also matter.

Are there parks in the area? Is it easily accessible by public transportation? What about restaurants and theaters? Ask these questions during your hunt.

Look at other listings in the area.

Finally, check if there are a significantly high number of listings for the neighborhood. Although, at times, the reason for the surge in listings is that most developments are recent, it could also mean the neighborhood has “gone bad.”

Every city has good and bad neighborhoods, and every neighborhood has good and bad properties. Your job is to pick a good property in a good neighborhood, so that you can have a healthy start in real estate investing.

8 Montreal Neighborhoods to Discover

For Montreal, the past 17 years have seen a 19% growth in new residents, coupled by unprecedented development and urbanization. It looks like this trend will continue in the coming years, and this is why more and more people are moving to this dynamic city. If you want to discover new condos for sale, you can start by looking at the various neighborhoods that can welcome you in Montreal:

Ville-Marie

There’s nothing quite like owning a condo unit right in the middle of the city, and that’s what Ville-Marie can give you. This lively borough includes the historic downtown Montreal, as well as Old Montreal, the Old Port, and most of Mount Royal Park. If you’re looking for convenience and accessibility, it can’t get any better than this.

Plateau-Mont-Royal

One of Montreal’s trendiest areas, Plateau-Mont-Royal is where you’ll find vintage shops, unique cafes, colorful boutiques, underground theaters, and many other attractions that are guaranteed to give you a wonderful time.

Locals call this area The Plateau, and you can find this in the northeastern side of Montreal’s downtown. It’s also in the east side of the famous Mont Royal.

LaSalle

In the southwest area of Montreal, you can find the borough of LaSalle. This borough is known for its many high quality public schools that offer primary, secondary, and even post-secondary education.

LaSalle is a peaceful and solid community that you can definitely call your own, and it’s not lacking in cultural sites as well.

Villeray-Saint-Michel-Parc-Extension

Villeray has just the right amount of fun for everyone. If you crave festivals, music, and cultural happenings, you won’t find a shortage of activities in this area, located in north-central Montreal. Those looking for nightlife, artisan goods, and culture won’t be disappointed either.

Saint-Henri

A colorful neighborhood in southwestern Montreal, Saint-Henri has its own charms to captivate you. From scenic skylines to an eclectic blend of culture, history, and art, Saint-Henri is an area you won’t forget.

People here enjoy outdoor picnics, biking along the canal, and other activities that the whole family will surely enjoy.

Hochelaga-Maisonneuve

Once a busy industrial area, this neighborhood has transformed itself to an urban paradise that is perfect for new families. It’s an up-and-coming area that’s just a few stops away from downtown, so it definitely wins in terms of accessibility. Here, you won’t run out of entertainment and you will always feel the inclusive, collaborative vibe.

Rosemont-La Petite Patrie

At the heart of Montreal is a serene oasis that’s famous for its 55 parks, walking paths, outdoor pools, shady trees, and shared gardens.

The streets are bike-friendly, the delicacies mouthwatering, and the stores one-of-a-kind. If you want a mix of heritage, culture, nature, then this is the perfect neighborhood for you.

Notre-Dame-de-Grace

This community is ideal if you’re looking for an English-speaking area but still with that little French charm. Notre-Dame-de-Grace is where you’ll find Montreal’s biggest Anglophone community, and you’ll find yourself at a walking distance to Trenholme Park, Loyola Park, and other important attractions.

Montreal has dozens of adorable, lively neighborhoods to choose from, so finding the area to start the search for your dream home has never been easier.