Toronto condo prices soar 28%


Toronto’s home sales may have seen a big slump in June but the condo market has shown relative resilience in the second quarter of 2017.

Toronto Real Estate Board data shows that 8,223 condo apartments were sold between March and June, down 8% from the same period of 2016. The average selling price continued rising sharply though, up 28.1% to $532,032 for the TREB market area as a whole and to $566,513 for the city of Toronto.

New listings of condos were up 0.7% year-over-year to 13,682. 

I sold firm but my Buyer cannot sell. What to do?

A lot has changed in the red hot real estate market in the GTA since April. The market in the West GTA is still seeing very healthy number of sales but the inventory is increasing at a pace not seen in the last two years. This could be because of recent Govt housing policy announcement, tighter mortgage rules, fewer bidding wars, and seasonal growth in listings.

Some buyers have purchased homes without conditions and now cannot sell their existing homes. If they cannot close then it creates a chain reaction of damages because the seller may have also purchased that is in danger of not closing. If the deal doesn’t close it’s lose lose for everyone. The seller is allowed to immediately sell even if at a lower price than the original sale. The loss will become part of the lawsuit to be recovered from suing the buyer.

What can the buyer do?

The buyers are in a tough situation but here are some options:

  1. Ask the seller for an extension. If the seller has purchased another home this will be tough.

  2. Be really aggressive in your pricing when selling your property. A 10 to 15% reduction in price to sell now is a lot cheaper than facing damages from a lawsuit and not owning the new house.

  3. Find another buyer for the home, i.e. assignment to a new buyer. You don’t really need the seller’s permission to assign, but you need the seller’s permission to show the home. In theory this is an option but hard to execute in real life.

My advice: Leave nothing to the last minute.

Should you stress about the mortgage stress test?

Should you stress about the stress test?

What you should know about new mortgage rules.

In October, our Finance Minister announced that new mortgage rules will include more stringent “stress testing” for borrowers. The new rules are designed to lower debt levels, enforce some belt-tightening, and protect the housing market over the long term. Here’s how these new rules will affect us:



There has been a long-time rule that you must have “high-ratio mortgage insurance” if you have less than 20% down payment. This insurance is there to protect the lender, and the premium is almost always added to your mortgage amount.

What’s changed? If you require an insured mortgage, you must qualify for your mortgage using the Bank of Canada qualifying rate (currently 4.64%) regardless of what your actual mortgage rate will be.

That means that – although you may find a much better mortgage rate – you’d still need to show you can handle the mortgage using the qualifying rate. This financial “stress test” was already applicable for fixed and variable mortgages with terms of 1 to 4 years. Now, it also applies to fixed-rate mortgages of 5 years or longer.


Why the new rule?

The government wants to be sure that borrowers can withstand any increases in mortgage rates when their mortgages come up for renewal.


Will my payments be higher?

No. Your payments will still be based on your much lower actual mortgage contract rate. Keep in mind that mortgage rates are expected to stay at record lows into 2020. So this new rule isn’t costing you more. The potential change will be in how much mortgage you will qualify for: up to 20% less. You may need to plan on purchasing a less expensive home, or save up a larger down payment, or ensure you eliminate all or most of your other debts.


Please consult a qualified Mortgage Specialist at your Bank or a Mortgage Broker to see how to qualify for your real estate purchase.


Andy Sagu


New Land Transfer Tax Rules you need to know

The Provincial government just announced changes to the Provincial Land Transfer Tax rates effective January 1, 2017. Here are 4 things you need to know:

1. There is an increase in the first time buyer rebate from $2,000.00 to $4,000.00, effective January 1, 2017

This is the largest benefit to first time buyers. But your deal must CLOSE after January 1, 2017.

2. Who qualifies for the first time buyer rebate?

There is still confusion about this. To qualify for this Land Transfer Tax rebate, you cannot have owned a home previously, anywhere in the world. You must also be making your home your primary residence within 9 months of closing. So if you are planning your first home to be an investment property, you do not qualify for the first time buyer rebate.

3. Land Transfer Tax increases taking effect January 1, 2017

There were also increases announced to Provincial Land Transfer Tax rates taking effect January 1, 2017 as well. The biggest one is that now for every commercial, industrial, apartment building or vacant land that costs more than $400,000.00, the tax rate will increase from 1.5% to 2%. This means that for example, a plaza that costs 1 million dollars, the provincial Land Transfer Tax will increase from $13,475 to $16,475, effective January 1, 2017.

In addition, if you buy a house or duplex that costs more than Two million dollars, the tax will increase from 2% to 2.5% for every dollar over two million.

There is a transitional provision that says that if you signed your purchase agreement BEFORE November 14, 2016, then you can still pay the current Land Transfer Tax rate if you close in 2017.

4. Will these new rules also apply for Toronto’s Municipal Land Transfer Tax rates

If you buy a home in Toronto, you pay a second Municipal Land Transfer Tax at closing. While the City of Toronto has not yet announced whether they will also increase their rates according to the Province increases discussed above, I anticipate that these increases will also take effect in the New Year as well.

If you have a purchase closing in 2017 and wish to know more about Land Transfer Tax, please contact your lawyer for clarification. 

Andy Sagu

RE/MAX Performance Realty Inc., Brokerage
Mississauga, ON
Tel: 905-270-2000 (B)

Mississauga to get M City

A parcel of land bought in the 1960s by Ted Rogers in farm country at the western edge of what is now downtown Mississauga is to be transformed into a 10-tower condo development hailed as a fitting tribute to the telecom pioneer who passed away in 2008.

Rogers Real Estate Development Limited, a private holding company owned by the Rogers family, along with Mississauga Mayor Bonnie Crombie on Tuesday unveiled a $1.5-billion, 15-acre, 4.3-million-square-foot project at the southwest corner of Burnhamthorpe Rd. and Confederation Pkwy. that promises more than two acres of public parkland downtown.

“Rogers has an enduring history with the City of Mississauga,” Edward Rogers said, noting that his father originally planned a radio transmitter for the site he bought for just over $170,000 a generation ago.

“We believe in the city and in the vision that was set forward in Downtown21,” he said, citing Mississauga’s strategy embracing a more pedestrian-friendly core with community squares, outdoor markets and abundant green space.

Called M City, the Rogers project is on part of the tract that was coveted because it offered wide-ranging reception to transmit signals from broadcast stations being assembled by the progenitor of Rogers Communications Inc., including Toronto radio outlet CHFI, whose transmitter is now located atop the CN Tower.

In an interview Monday, Edward Rogers said much of the land had been sold off, but the family held a long-standing ambition to develop the remaining acreage. He called M City a first foray in real-estate development that could pave the way for further projects down the road.

The project will be anchored by an iconic design, will prioritize public spaces and parkland, and offer residents the best in wireless, high-speed Internet and cable-TV technology now and into the future, he said.

Plans call for 6,000 units to be available for rent or for sale at prices ranging from around $200,000 up to $750,000. Some 700 units are envisioned for the first phase, with construction to begin in late 2017 or early 2018 and to continue in stages as units are pre-sold or rented and as the Rogers family retains ownership of the land.

While his father did not live to see the development finally take shape, his son said “it feels as though he is a part of it.”

“It’s a wonderful project,” Edward Rogers said. “It will be built to specifications that would have made Ted proud.”

According to architectural renderings, M City features will include extending existing city streets on a unique, angular plane to create a fine-grained network of blocks, enabling a pedestrian-friendly environment. Typical residential blocks will provide two-way roads with on-street parking, generous sidewalks and residential frontages.

“Rogers has put forward a bold, exciting and forward-looking vision for Mississauga’s growing, thriving and promising downtown,” Crombie said in a statement.

“These new planned developments by Rogers are consistent with the City of Mississauga’s commitment to build a livable, walkable city, home to mixed-use residential and commercial developments that are connected to an extensive public transit network.”

New York-based urban design firm Cooper Robertson was brought on board to design the framework for M City while Cooper Robertson partner Donald Clinton was the lead designer on the project.

Architects delivered a winning design that will “redefine Mississauga’s skyline with a striking, undulating tower that rotates seven typical floor plates in repetition as it rises 51 storeys,” said a press release outlining the development.

“Rogers, because they’re not builders, they’re a renowned Canadian corporate entity that doesn’t have to squeeze every penny out of this, Rogers is creating a legacy here,” said the area’s councillor, Nando Iannicca.

Rogers will partner with a construction management company and a highrise builder on the project, which Iannicca said will be a defining feature of Canada’s sixth-largest city. The towers will house privately owned condos and rentals, with a wide variety of leased commercial properties on the lower floors.

The Toronto-based holding company’s plan describes a signature tower just west of city hall and right next to the downtown loop of a future $1.3-billion LRT to be fully funded by the province. The land has sat as a vacant field for decades, while vertical development has exploded around Mississauga’s city centre.

The project is being assembled by the Rogers family independent of Toronto-based Rogers Communications, the telecom and media giant founded by Ted Roger’s father, Edward S. Rogers.

Coutesy: Toronto Star Sep 2016


Toronto Market Numbers

Toronto continued its streak as one of Canada’s most active residential real estate markets, with local realtors reporting a total of 12,870 sales in May alone. Prices also swelled to new heights, with the average price of a home in the GTA growing by 18.6 per cent year-over-year to $734,924.
Other significant numbers in the city’s overheated housing sector were cited by analyst Nelson Smith in his June 28 contribution piece forThe Motley Fool Canada.
As of last month, this is the average price of a detached house in Toronto, having increased by 15.2 per cent on a year-over-year basis. The average price of all house types within the city now is now hovering at $782,051—and a combination of scarcity, low interest rates, and sustained interest from foreigners would only serve to further inflame this growth.
This is the approximate number of years of rent needed for a tenant to fully pay for an average home in downtown Toronto, according to metropolitan price comparison portal Numbeo.
This is the provincial government’s projected number of new residents in the Greater Toronto Area over the next quarter-century. Many of these inbound migrants are predicted to be foreigners, who are even now actively snapping up high-end properties in Canada’s most in-demand housing markets.
This is the number of homes currently being built for every 1,000 Toronto citizens, according to the Royal Bank—which added that any number above 4.5 indicates that a particular city is a “high-risk” zone.
This is the running total value of outstanding loans managed by Home Capital Group Inc., the country’s largest subprime mortgage lender. Fully 90 per cent of this amount is held by borrowers who reside in and around Toronto.

Article courtesy of

Sell your home and Lease it back

In a smoking hot real estate market wouldn't it be nice to exit at the top.

I'm sure many people have this thought of cashing out but at the same time the emotional attachment to a home prevents most people from selling.

You can sell and then ease it back from the new owner. Recently, Conrad Black and Hugh Hefner did exactly that. Conrad Black sold his $21M mansion on the Bridle Path and leased it back so he doesn't have to move out. Similarly, Hugh Hefner sold the Playboy Mansion and is living there as a tenant until he dies. I'll buy it if the bunnies are included:-)

The lease back deal has to be structured in the Agreement of Purchase and Sale and of course you'd have to offer a bargain price to the buyer. For both parties it's win win.

  • The Seller gets the cash and gets to stay in the same house.

  • The Buyer enjoys the capital gain and gets the seller to carry the financing.

Let me know if you would like to execute this strategy to buy or sell.

Should we ban foreign investors from buying our real estate?


The topic sounds like a statement only a moronic Presidential candidate would make :-) However, should we?

A family with a combined income of $90,000 would qualify for a $500,000 house. Today this kind of money buys either a decent condo or a condo townhome in a suburban sub-division. The math that most baby boomers were used to was that your house should cost 3 times your annual salary. So where has such affordability gone? Most people when asked this question point to foreign investors, particularly Rich Chinese Investors as the root cause of rising prices.

There are protests and lobbies in Vancouver to curb this inflow. Some economists claim that upwards of $9B per year flows into the Toronto real estate market from Rich Chinese Investors. That is $750M per month or $24.7M per day or $1M per hour. There is no real way to verify this data and I remember Stephen Harper during his campaign had pledged half a million dollars to implement a system for tracking this. Builders of new condos say that it is around 5% but I think they downplay the numbers.

There are reports of Investors using real estate in Canada as a vehicle for laundering their cash. According to one source, Chinese are allowed to move money to Hong Kong and from there one is allowed to invest $50,000 overseas. Anything in excess of the $50,000 would be considered smuggling. Mortgage rules for a foreign non-resident investor buying in Canada are pretty straightforward. You need 35% down and show a bank balance in your account to cover 6 months of principal and interest. If $50,000 is 35% it means that the asset value cannot exceed $143,000. That will buy two and half parking spots at a downtown condo building. Legal or illegal, the money is flowing in and it’s not going to stop.

It’s a pretty sweet deal for Canadian lenders to control a rising asset with a 65% loan to value, so don’t expect the Government to do anything about it. Prime Minister J.T. has said that any attempt to impose tough rules to curb such influx of capital will have an adverse effect on equity of homeowners. I don’t think so. In Britain a special capital gains tax was implemented for foreign investors and did nothing to control rising real estate prices. Australia has implemented stricter buying rules to combat rising prices, often attributed to Chinese investors driving up the market. Prices jumped up 10% from last year.

Count your blessings that we live in Canada since the World is beating down our door.

Our current demographic dictates that prices will continue their upward trajectory.

We have to treat foreign investors as one part of the supply demand effect.

If you’re an owner that bought 20 years ago you’re a millionaire, as a result of the same effect.

If you’re not in real estate by now, get on the bus - fast.

Andy Sagu


"Your home Guaranteed Sold... or I will buy it" - OMG REALLY?

Every morning on this Toronto talk radio station I hear this ad from a realtor - “Your home sold guaranteed… or he will buy it”. I'm sure you've seen ads on billboards with the same claim. What are these people trying to do? Give you a level of comfort to go ahead buy first or is it that they care about your financial well being ? The impression it creates is a that if your home does not sell as priced then the agent will buy it at market value. Absolutely, not true.


These guarantees always come with an asterisk - “Some conditions apply”. The conditions vary by the programs offered and here’s a sample of how to qualify:

1. The seller must buy one of the agent’s own listings

2. Seller must agree to paying for an appraisal and home inspection

3. The guarantee comes with a guarantee fee of 10% off the appraised value (or whatever it is).

4. Full commission is applicable in addition to the wholesale price.

5. Closing not less than 90 days, Not all properties qualify, etc.


Of course these agents don't see anything wrong or illegal with the practice. After all, this is akin to trading in a used vehicle at the dealer’s wholesale price in exchange for a new one. Is this what you have in mind when selling your home?

I doubt that most people fall for this. Agents are not in the business of buying your home but the sexy headline and sound bite did generate that call to the agent. Whenever I hear this ad on the radio or see a billboard I'm quite frankly, disgusted by such deceptive claims.

Words that need an asterisk do not deserve your call.

If I meet one of these guys the only “guarantee” I have is to take a long shower.

Andy Sagu