“STAYCATION” TAKES ON A WHOLE NEW MEANING IN TORONTO

Those who have recently purchased a new home or condominium in Toronto may be avoiding spending money on a vacation this summer. Well, here is some great news – our city is one of the best in the world for a staycation! The number of summer activities, events, concerts, festivals and other get-togethers is incredible. I spent a few minutes on the Internet and found far too many to list here.

For example, take the long weekend in early August. You can choose from Caribana with its parades, parties and concerts; the Summerworks Festival of up-and-coming theatrical talent; the Toronto Food Truck Festival; and the Art & Music Ontario Festival – OR attend them all! The following weekend, Toronto will be home to the Kultura Filipino Arts Festival, Waterfront Night Market, Taste of the Danforth and Jerkfest, the celebration of Canada’s jerk food. And of course, we have our beloved Canadian National Exhibition to look forward to. This year’s CNE will take place from August 19 through September 5. This fabulous event is one of North America’s largest fairs, attracting 1.5 million visitors each year.

Those for whom the “dog days of summer” include taking along their dogs, Toronto features several parks with off-leash zones. Check out www.blogto.com/toronto/the_best_dog_parks_in_toronto/ And of course, being a waterfront city, Toronto has wonderful Harbourfront Centre with activities for all ages. Whatever you consider fun, explore our beautiful city for eclectic dining establishments from fast food to fine dining, live theatre, outdoor and indoor concerts, museums, art galleries and shopping, shopping, shopping. Visit Toronto.ca for festivals, events and things to do.

Staying in Toronto for the summer? Lucky you!

PLACE INTEREST RATE RISE IN CONTEXT

Well, we knew it had to happen eventually. For the first time in seven years, The Bank of Canada raised its key interest rate. The rise to 0.75 per cent prompted all five major Canadian banks to increase their prime rates to 2.95 per cent from 2.7 per cent. This quarter point will have an effect on variable rate mortgages and lines of credit, of course, but historically, this is a minor blip for most Canadians.

Those who have been in the homeownership market for decades remember all too well the double-digit mortgage interest rates of the 1980s, which peaked at just over 21 per cent. A quarter point over today’s historically low rate seems little enough to pay when you consider the value of an investment in housing.

Contrary to those who suggest this rise in rates will slow down the home-buying market, it may in fact spur fence-sitters to purchase now, before rates go up again. Remember, real estate is a cyclical business. In the long run, those who ride out the fluctuations are glad they did.

CONGRATULATIONS, REETU GUPTA!

At the end of June, the Canadian real estate industry and businesswomen everywhere took a step forward on the national stage, when Reetu Gupta BBA MBA was honoured by Canada’s Top 40 Under 40®. She is the only person named who is in the real estate sector, and is one of only nine women to receive this distinction. As Chief Operating Officer of The Easton’s Group and The Gupta Group, Reetu has certainly proven herself an outstanding young achiever in Canadian business. She has worked in the family business since her teens, and over the years, she has held jobs in everything from reception to sales and operations. Like most incredibly successful people, she came up through the ranks, which gives her a holistic approach to making decisions.
And I can attest to the fact that she has done a fine job. Baker Real Estate Incorporated has represented Gupta Group and Easton’s Group for several years, and I have watched Reetu grow and mature. She has worked tirelessly and with consummate professionalism to bring highly successful condominiums to life, including King Blue, Dundas Square Gardens, Icona Condos and The Rosedale on Bloor Condos.
In addition to her tremendous business acumen, Reetu continually shows the kindness and generosity that lie at the core of her inspiration. She has served on hospitality, tourism and charitable committees and boards. As co-chair for the University Health Network’s (UHN) Diawli Gala, Reetu raised nearly $2 million in the past two years. She also served as Co-Chair for the City of Toronto’s Sesquicentennial Celebration of Canada Advisory Committee. What a tribute to her humanity!
On behalf of everyone at Baker Real Estate Incorporated, I am extremely excited to congratulate Reetu on this great honour, and to offer kudos to her father, Steve Gupta, and their entire family. Reetu, you have done Canadians proud!

Reetu Gupta, CEO of The Easton’s Group and The Gupta Group

 

 

FOREIGN BUYERS MINOR IN THE GTA REAL ESTATE SCHEME OF THINGS

In April, I wrote a blog about the Foreign Buyers Tax our Provincial government announced as part of its Fair Housing Plan, with the intention of cooling the market and reducing home prices. In that blog, I mentioned that at Baker Real Estate Incorporated, we have tracked foreign buyer contact in all of our sites for several years, and it is consistently approximately 5 per cent – suggesting that the tax was not needed. This was in line with TREB’s fall 2016 survey of local realtors that showed 4.9 per cent of their transactions involved foreign buyers during the previous year.
Lo and behold, recently the Ontario government released the statistic that 4.7 per cent of properties that changed hands from April 24 to May 26, 2017 in the Golden Horseshoe area were bought by overseas buyers! Even if the percentage is slightly higher in Toronto and/or the GTA, we are still talking about an influence that is unworthy of the media hype it has received over the past few months. This is why we at Baker Real Estate have never panicked about foreign buyers. Many other factors are at work in determining both new and resale real estate prices.
BILD’s June 23rd news release on new home statistics for May 2017 indicates that the Fair Housing Plan is having little impact on the new homes market. Sales were strong, and prices increased. Although sales dropped during June, remember that is normal for this time of the year. Contrary to what you may have read, the market is still hot, especially for new construction condominiums. We are seeing brisk sales in locations outside of the downtown core, such as Yorkdale, North York and the 905 municipalities, where prices are more attainable for both investors and end-users. Overall, we have a more balanced market, which is beneficial to all involved.
I repeat that if the government really wants to bring down prices, it can increase the efficiency of approvals, speed up the process and flood the market with new homes and condos.

BARBARA LAWLOR A DESERVING RECIPIENT OF PINNACLE AWARD!

At Baker Real Estate Incorporated, we are thrilled that Barbara Lawlor, our president and CEO, received the prestigious Riley Brethour Award at the 2017 BILD Home Builder Awards presentation. The Building Industry and Land Development Association is the voice of the home building, land development and professional renovation industry in the GTA.

We can’t think of a better winner, especially as the Riley Brethour award celebrates outstanding and consistent achievement in residential sales and marketing, while exhibiting exemplary leadership and serving as a superb role model for other industry professionals. This coveted pinnacle award has been won by the most iconic professionals in the industry. Barbara is the epitome of everything the late Riley Brethour stood for, especially his approach to business with hard work, integrity and a positive attitude.

On a consistent basis, we see firsthand Barbara’s tremendous work ethic, and she inspires us to strive to excellence in every aspect of our careers. Competency, credibility, communication and caring define her professionalism. Barbara came up through the ranks in the real estate profession, and her leadership style includes respect for everyone on her team. She listens to us, and in turn, we appreciate and learn from her feedback.

Regardless of real estate cycles, Barbara is always positive and passionate about our industry. She truly cares about our clients, the Baker Real Estate employees and associates, and the home-buying public. Her popular blog and columns offer the voice of reason when the media are filled with negativity.

Congratulations, Barbara! You often say that you get out of any career what you put into it, and you have put in a lifetime of dedication, which is why this award is so well deserved. We look forward to many more years of learning from you and following your example.

The Baker Real Estate  Executive Team: Executive Vice Presidents Debbie Lafave, Jeff Clark, Harley Nakelsky

GOVERNMENT ACTIONS MAY NOT HAVE THE DESIRED EFFECT!

Recent announcements by the Wynne government regarding housing in Ontario is sending mixed messages to the housing industry. Our primary challenge is Demand exceeding Supply so mimicking BC’s approach to the Vancouver housing situation does not address what is happening here.
For example, introducing a 15 per cent tax on foreign buyers may have been effective out west where they have a large percentage of this kind of purchaser, but our situation in the GTA is different. At Baker Real Estate Incorporated, we have tracked foreign buyer contact in all of our sites for several years, and our percentage is consistently approximately 5 per cent. Where the new regulations could make a difference is in Toronto’s luxury market – people who have discretionary income in the millions. Toronto is just now coming into its own as an international city that is attracting wealthy purchasers who own several homes around the world. If they want to purchase high-end homes here, whether as investments or to live in when they visit, a 15 per cent surcharge added could be a deterrent from buying.
The recent provincial announcements include bringing all rental units under Ontario’s rent control, which will likely harm both large and small investors in the rental market, and may keep new investors from entering it. Again, our situation in Toronto is different from Vancouver, in that our condominium vacancy is hovering at approximately 1 per cent (the lowest in many years). People have been investing in condominiums and providing badly needed rental stock, which is a good thing. Rent control might deter potential developers from building new apartment residences, resulting in an even tighter rental market. It might also keep existing landlords from making repairs and upgrades, as they require more funds to do so. In addition to large investors, rent control discriminates against landlords who own just a few units, as well as those who already have their rental units on the market. In the future, we will likely see fewer of these smaller investors, and those who do enter the market will simply set their initial rents as high as they can and ride that wave for as long as they keep the investment.
The Premier says she will bring in measures to encourage the building of new rental stock, as well as streamline the building of new homes and free up more land for development. We will see if that happens. I and many other real estate professionals continue to stress that our current housing situation is the result of demand exceeding supply – in both market and rental housing. Increasing the efficiency of government approvals, speeding up the process and flooding the market with new homes and condos – now that will bring down prices!

TO COOL, OR NOT TO COOL? THAT IS THE QUESTION

There is so much conflicting media coverage about the causes of high housing prices in Toronto and the GTA that many people are likely confused as to what to believe. The main question is whether the government should step in to cool our housing market.

In Vancouver, we saw what can happen if government actions are hasty and not well thought out. Yes, the 15 per cent tax on foreign buyers cooled the market, but so dramatically that it was harmful to existing owners. At Baker Real Estate Incorporated, the number of condos we see sold to foreign buyers is in the 5 per cent range, and most of those are end-users. In addition, we have a lot of speculators who are not foreign.

Why place so much emphasis on this segment, when our lack of supply compared to demand is the real culprit? Ironically, all three levels of government contribute to the housing shortage with regulatory red tape that is, in fact, holding back construction and creating the supply vs. demand dilemma. If the Ontario government is determined to intercede, it could lighten up on proposed amendments to the Ontario Places to Grow Act and The Greenbelt Plan that would in fact, make the housing affordability crisis even worse. We need more land approved for development, not less.

Demographics account for another factor in our housing shortage. Baby boomers are not selling their principal residences as much as was predicted, and they are reluctant to sell investment properties because of the substantial capital gains tax – and there is talk that the government may raise that tax. Again, this is counterproductive. During all of this, Millennials are looking for low-rise homes.

We are also reading suggestions that the amount of down payment required to buy a home should be raised, which would price even more first-time buyers out of the market. Cooling our housing market would result in a gouge on our economy, as the number of jobs in the new home industry is directly affected by the number of new housing starts. There should be prudent forethought before the government steps in to make any of this happen. Real estate in Toronto has long been undervalued on the world stage. We’re just starting to catch up. I say leave the market alone, and it will right itself.

2016 CENSUS NUMBERS ARE IN; CANADA REMAINS THE FASTEST-GROWING COUNTRY IN THE G7

The 2016 Canadian Census results were just released, and our country was once again the fastest-growing in the G7. Last year, Canada was home to 35.15 million, and close to two in five Canadians lived in the 15 largest municipalities in the nation. Toronto, Vancouver and Montreal are home to over one-third of all Canadians, and of that total, nearly half live in Toronto and its surrounding municipalities.
None of this is a surprise to those of us in the new home-building industry, especially in the Greater Toronto Area. For many years, we have watched the influx of immigrants who continue to choose Canada as their home of choice because of the safety and quality of life they find here. According to the census statistics, 82 per cent of the population in Canada live in large- and medium-size cities, a trend fueled by immigration. Most people who relocate here from other countries gravitate toward urban areas.
The GTA is particularly appealing, as we are privileged to have superb, world-class schools, shopping, plus cultural and sporting venues. Our new homes and condominiums are continually in demand. The explosion of condo sales over the past few years is partially due as well to both young professionals and baby-boomers wanting the convenience of this type of lifestyle. At Baker Real Estate Incorporated, we see more families entering that category. No matter how you slice the statistics, the demand for new homes and condominiums in the GTA will continue to be strong for years to come.

TAKE CHARGE AND HELP TO RUN YOUR CONDOMINIUM

One of the best ways to feel part of the vertical community in your new condominium residence is to get involved with the running of the building. Consider joining the condominium board of directors for a number of good reasons. First, you have a say in the way things are done. Condo residents are expected to live according to guidelines that protect their comfort, safety and privacy. The board’s decisions directly affect the quality of life for all suite owners, their families and visitors.

As a board member, you will help to make decisions on a variety of elements, such as awarding contracts for building maintenance, hiring staff, setting up a code of conduct for residents, ensuring that the reserve fund remains ample for future repairs, determining amenity hours and use … the list goes on. To qualify, you must have great communication skills and be willing to act as a team player. Of course, there is a time commitment as well.

Board members often become friends, which is another super reason to get involved. Members usually hail from a variety of backgrounds including sales, law, administration, landscaping and the like. Duties are interesting, and everyone on the board is like minded in wanting things to run as smoothly as possible.

If you decide against running for the board, take an interest in others who are. Ask questions and research their qualifications. Remember, they will affect your everyday life and help to protect your building’s future. Keep in mind, too, that board members are also suite owners, and respect their decisions. After all, you’re in this together!

MORTGAGE INTEREST RATES A CONTINUING BRIGHT LIGHT

The new home marketplace in the GTA may seem daunting right now, with demand dwarfing supply and prices rising at unprecedented rates. The one financial bright light has been, and will continue to be, historically low mortgage interest rates. This fall, the Bank of Canada governor Stephen Poloz announced that our low rates will likely not change for some time to come. Single-digit rates are something we who lived through the spikes in the 1980s and 1990s thought were a thing of the past. Economic experts said we would never see these low rates again; yet here we are.
To young people who dream of owning a home but feel you cannot afford one, I say do your research, find out what help there is out there and talk it through with a mortgage expert. You have the remarkable opportunity to borrow money while interest rates hover around those your grandparents would envy. Exhaust every avenue available to you, and you just might find that you can afford a condominium. Even today’s compact condominiums are design wonders, maximizing every square foot by eliminating hallways and other unusable space.
Low mortgage interest rates are guiding our present, and hopefully our future. The important thing is to get into the real estate market sooner than later and start building equity for your lifestyle and financial futures.