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Toronto among the second-most transparent real estate markets in the world: Canada
Toronto is one of the largest real estate markets in Canada, and the biannual Global Real Estate Transparency Index study conducted by financial and professional services company Jones Lang LaSalle has found that Canada’s real estate market is the second best in the entire world with regards to transparency.
Canada is only behind Australia with regards to real estate transparency in the world.
The transparency of a real estate market is determined by how well real estate debt is monitored by banks and the amount of information that is freely available on real estate debt.
Canada came in second place out of 81 countries just under Australia, because according to the study Canada has “relatively low vacancy and rental volatility, stable property markets, well-developed commercial real estate lending standards and a sound banking system with strong deposit bases and high capital reserve ratios going into the global recession.”
Transparency is important because it shows the fair and consistent application of local law and the availability of free-flowing information. Key issues with real estate transparency include that transactions have been compromised by challenging market conditions and that the transparency of legal and regulatory environments in the real estate industry have slowed in countries that remain less transparent.
The studies have been conducted since 1999, and the most recent was in 2008 where Canada ranked number one. Canada is still considered to have an edge because of its soundness of banks and strength of investor protection, according to the World Economic Forum’s Global Competitiveness report. The United States came in 6th in the study, with one-third of the countries studied either declining or static.
Fewer Toronto Home Sales Meant Better Relationships With Builders in 2010
Consumer research firm J.D. Power and Associates announced last week that the recession may have led to fewer home sales in the Greater Toronto Area, but less sales meant one positive development for builders and their customers.
Consumer confidence in Greater Toronto Area home builders shot up this year.
Less sales meant fewer closings, and builders has more time to spend with their customers, allowing them to better concentrate on their product.
Satisfaction sharply declined in 2009 but rose 25 points to 699 on a 1,000-point scale this year because of home readiness and the level of warranty service after moving in.
Improvements in other areas were also apparent, such as responding to homeowner concerns and cleanliness of the home after service visits.
“Following up with a customer after move-in seems like such a simple gesture, but ultimately it reflects the conviction of the builder to deliver on the promises made to the customer at the time of sale,” said Adrian Chung, senior manager and Canadian real estate practice leader at J.D. Power and Associates in a press release.
The J.D. Power and Associates Canadian New Home Builder Customer Satisfaction Study follows the customer satisfaction levels of homeowners throughout the new home-purchasing process, including construction, service/warranty staff, quality, physical design and price.
The Greater Toronto Area Consumer Satisfaction Survey results.
Choosing an amortization period on a Toronto mortgage
The amortization period is the length of time it takes to pay off a mortgage. The average amortization period is 25 years, but some are longer and some are shorter. While recent Ontario mortgage rule changes suggested amortization rates would be reduced, it never ended up happening. Choosing an amortization period can be a difficult decision, because on one hand the longer the amortization period, the lower monthly mortgage payments will be. On the other hand, the shorter the amortization rate, the less interest you will pay.
How much will that Toronto home end up costing?
For example, on a $200,000 mortgage amortized over 10 years with a monthly payment of just over $2,200, the total interest paid at a rate of 6% would be $65,000. The highest amortization period available is 35 years, and the interest paid on the same mortgage would total $274,815, but with monthly payments of only $1,130. The payments on the shorter mortgage are twice as high, but the interest paid is over four times less than the longer amortization period. Still, it can be a difficult decision.
The Financial Consumer Agency of Canada has these pieces of advice for those looking to save money on their mortgages no matter which amortization period you choose:
Mortgages can be for different terms, ranging from six months to 10 years. Upon this deadline, the mortgage is up for renewal. The FCAC recommends that Canadians “shop around” to determine if their current mortgage is still the best one suited for them, or if there are better interest rates and payment privileges available elsewhere. Keep in mind that there could be costs involved when changing lenders.
Add an extra payment per year. Do this by making biweekly payments instead of monthly payments, which will grant you one additional payment per year while saving on interest because of more frequent payments.
Some mortgage lenders will allow their borrowers certain prepayment privileges, allowing them to make payments for a certain amount each year without incurring any penalties, but the terms of this allowance differs from lender to lender. Learn how much wiggle room you have with your particular lender, and take advantage of any prepayment privileges.
What is “Power of Sale” and What Does it Mean to Toronto Home Buyers?
The recent stormy financial atmosphere across Canada, including Ontario and Toronto, has led to an increase in homes sold by the bank, sold under what is called “Power of Sale”. Homes sold by the bank are typically ones in which the former homeowner unfortunately could not pay their mortgage.
"Power of Sale" homes require extra caution on the part of Toronto homeowners.
The agreement may have a lot more clauses included in a schedule to the agreement of purchase and sale than the average home buying transaction, such as:
The buyer is responsible for their own inspection and appraisal, as well as accepting the property as is with regards to the state of repair.
Any information provided by the seller/lender should be verified by the buyer or their representatives and it is the buyer’s responsibility alone.
If at anytime prior to closing the original owner can pay their mortgage back up to date, the transaction is voided.
It’s no secret that a lot of these homes have some heartache attached, but headaches can be abundant too. It’s very wise to have your lawyer look over the lengthy, complicated document to ensure that you’re okay with the many clauses involved in these power of sale homes. You are also within your rights to make the offer conditional on your obtaining a mortgage, being happy with the home inspection, checking up on what the seller has told you, and having your lawyer approve the lender’s schedule to the agreement.
The Greater Toronto Area 5-Day Build Project
Over 5 days, one Greater Toronto Area builder is going to attempt to build an entire 2,300 square-foot home, to be sold with proceeds going to support a new intensive care unit at the Bowmanville Memorial Hospital.
An artist's rendering of the Greater Toronto Area 5-Day Build Project home.
According to Halminen Homes, the home is expected to sell for over $400,000.
The home is being built in the town of Courtice (pronounced “Curtis”), Ontario, which is located only 70 kilometers east of Toronto, just past Oshawa. Building begins at 6 a.m. on Monday, August 9th and will last until Friday afternoon with the builders are working over time, 24 hours per day.
A team of over 100 people with Halminen Homes will build the home. Normally, a home of this size can take anywhere from 45 to 60 days to be built. The 5-day build also includes landscaping, furnishing, interior decor and a complete double-car attached garage.
If you’re interested in going to see the build, visit the builder’s blog.
