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Educating my clients about the real estate market is very important to me. I find that an educated and well informed client is always much more confident throughout the buying and selling process. Below you will find recent news articles, blogs and important information that will help you gain a better understanding of the market.Educating my clients about the real estate market is very important to me. I find that an educated and well informed client is always much more confident throughout the buying and selling process. Below you will find recent news articles, blogs and important information that will help you gain a better understanding of the market.

In a case a judge called a warning to prospective buyers in the GTA’s erratic housing market, a couple caught up in a bidding war will have to pay $470,000 after reneging on a multimillion-dollar deal to buy a Stouffville-area house.

David Lea and Yixing Hu submitted an offer of $2.25 million in April 2017 after being told there were multiple competing offers for the property, originally listed at $2 million, according to court documents. The bid was accepted, but not long after the market cooled and the Newmarket couple had second thoughts.

Feeling they’d overpaid for the property and having trouble making the down payment, the couple pulled their offer. In the summer of 2017, the market value of the home had dropped to about $1.8 million. The homeowners sued, and in a court decision this month, the judge ruled Lea and Hu had to pay the difference.

“When the residential real estate market is a rising market, most people — perhaps with the exception of first-time buyers, are happy homeowners and investors,” Ontario Superior Court Justice Mark Edwards said in the decision.

“When the market turns and drops, it is not for the faint of heart. The facts of this case tragically demonstrate how one family, presumably desperate for their dream home, became embroiled in a bidding war and overextended their ability to finance the purchase price of that dream home.”

Lea told the Star he and his wife hadn’t wanted to be involved in a bidding war. The couple is trying to sell their current house, and Lea said they may rent once they do.

“We’re probably going to have to rent somewhere. We’re trying to figure that out. I’m going to see what I can afford every month, and pack up the kids’ stuff,” Lea said, who is a father of four. “I have no choice. It’s the worst of the worst because you take the hit on their property and get these big damages, but at the same time (the value of) my house has dropped. I can barely sell it for $1 million.”

According to court documents, homeowners Douglas and Sheila Gamoff listed the Stouffville property for $2 million on March 29, 2017.

On April 1, Lea and Hu submitted an offer of $2.05 million. They were advised by a real estate agent that this figure was too low for an edge over other offers. They came back with an upgraded offer of $2.25 million, which the Gamoffs accepted.

Hu and Lea then had to pay two deposits, an initial payment of $30,000, and a second one of $90,000 to be paid on April 6, which was later amended to April 10. While the couple paid the first instalment, they withdrew from the second, citing financial complications, according to the court decision.

“Their concern,” which is tied to the belief they paid too much for the property, the decisions says,“was undoubtedly fuelled by the fact that they had learned that, a combination of their approved mortgage financing and assessed value of their home, would not permit them to obtain the necessary financing to close the (Agreement of Purchase and Sale).”

After Hu and Lea rescinded their offer, the Gamoffs relisted their home on May 1 for $2.25 million. It was around this time the market began to feel the effects of new provincial rules meant to cool the market. The price was lowered to $1.798 million in July.

On July 31, the Gamoffs received an offer of $1.7 million, the decision says, and the transaction closed that fall for $1.77 million.

The Gamoffs were not available for comment, but Doug Gamoff’s lawyer, Kevin MacDonald, said the defendants placed an offer without conditions that was accepted, then abandoned the transaction too late.

“I think the takeaway from this case is there’s a general misconception, I believe in a matter like this, that you forfeit your deposit and that’s the end of the day, and that certainly is not the case and this is an example of what can happen when you withdraw in the circumstances they did,” he said.

Lea said he could have paid the second deposit, but once he and his wife assessed the appraisal and their mortgage, they knew they had to pull out.

“The whole deal was going messy. We couldn’t get the point across that we (could not) close on this house. They weren’t taking us seriously,” he said.

“We didn’t know the market was going to crash like it did. We were not investors. We just wanted to buy our dream house.”

John Pasalis, president of Realosophy brokerage, said the $470,000 figure is among “extreme examples” of the drop in home values during that period.

A recent Realosophy report found the difference in sale price of 866 lowrise GTA homes re-listed after buyers backed out between March and July 2017 was $140,200 less on average.

“People get caught up in this emotional, ‘You have to buy now, or you’re never going to be able to afford it’ (attitude) and these are the side-effects of that type of thinking, unfortunately,” Pasalis said.

There is at least one other recent case that is markedly similar, though it did not occur during a time of equal market pressures.

In a decision released in March, also by the Ontario Superior Court, an interested homebuyer was ordered to pay about $144,000 in damages when she pulled out of a deal as she didn’t have the funds required to complete the purchase, it says.

In the Stouffville case, Justice Edwards said in the decision he has “every sympathy” for Hu and Lea, noting they are probably not alone in their predicament.

“With the changes in the real estate marketplace in the Greater Toronto Area, I have every expectation that there are many more cases where purchasers find that they have overextended themselves in a declining market.”

Lea said the Stouffville property would have been the last home he and his wife bought — a place to retire in.

“I’m trying to be as positive as possible. This stuff can just destroy your health,” he said.


A sold-out three-tower high-rise condominium project that promised to deliver units to the new Vaughan Metropolitan Centre is the latest in a string of cancelled condo projects, leaving more than 1,100 hopeful buyers in limbo.

Cosmos Condominiums was announced by Liberty Development Corporation in 2013, began pre-selling condo contracts in 2016 and was supposed to start delivering units in 2019. This week, buyers received letters from Liberty saying the project was “challenged” by “unsatisfactory financing terms” and cited early cancellation language in the contracts and said it would return buyer’s deposits.

At the time of its pre-sale offering period, Liberty sold 780 units in the first two towers in 25 days, according to real estate analysts at Altus Group. The project was later described as “sold out” of its 1,153 units on the company’s web pages, which have since been taken down.

It’s at least the ninth condo project to cancel in the last year in the Greater Toronto Area, well above the typical yearly average, according to condominium analysts at Urbanation. It’s also one of the largest developments in the region to vanish, compared with the 68-unit Kennedy Gardens in Scarborough (cancelled in January) or the 168-unit Museum Flats building (cancelled in October, 2017) in Toronto.

Still, it represents a tiny fraction of the total development plans in the region: at least 600 new residential projects are in various selling and planning stages across the GTA.

Developer pre-sale agreements are strong contracts that typically allow them to cancel projects with few penalties and no obligations to former buyers if a project restarts later.

“We have recently learned that because of circumstances beyond our control and Liberty’s best intention, our project, Cosmos Condominiums, has been challenged,” reads the letter, signed by Liberty director of sales and marketing Shawn Richardson. “At this time, financing for the project on terms satisfactory to the Vendor cannot be arranged … It will force the project vendor to now cancel all Agreements of Purchase and Sale.”

The “vendor” in this case is the owner of the land, which is a numbered company: 1945086 Ontario Inc. Liberty spokespeople would not confirm the owner of 1945086 Ontario Inc., but the company is registered at the same 1 Steelcase Rd. address as Liberty Development Corp. and lists Feyedoon (Fred) Darvish as its president. Mr. Darvish is also the president and founder of Liberty.

Mr. Richardson, Mr. Darvish and CEO Latif Fazel did not respond to interview requests. In a statement, the company repeated its explanation from buyer’s letters.

The company didn’t explain what went wrong with the financing, but conditions for builders have changed significantly in the last 24 months.

When Cosmos launched in 2016, it was selling units for about $540 per square foot, according to Urbanation. More recent projects launched in Vaughan were able to fetch more than $700 per square foot, close to a 30-per-cent increase.

Construction costs have also been rising rapidly in the last 18 months, particularly among critical concrete-forming and window suppliers in the region, who are charging 30 to 50 per cent more than they were asking in 2016.

“It would be nice if the builders had a little more consequence to their actions,” said Santino Paglia, 33, a teacher who purchased a one-bedroom unit for him and his partner when the project first went up for sale in 2016. He was projected to pay about $280,000 after providing Liberty with a 20-per-cent deposit and proof of pre-approved financing. “I signed the contract, I knew what it was, but at the end of the day it would be tough for me to trust them again for another purchase.”

The buildings were to be erected on the corner of Highway 7 and Maplecrete Road, and units were priced between the mid-$200,000s and just under a million dollars.


There’s been plenty of talk about Toronto’s booming real estate market over the past few months. But according to a new report, five other Ontario cities’ housing markets are going to explode in the next few years.

According to the real estate research organization Real Estate Investment Network (REIN), Ottawa, Kitchener-Waterloo, Hamilton, Barrie and Brampton all have the potential to become leading housing markets in the next five years.

REIN measured several economic factors including the GDP, employment and population growth of each market in order to make its selection.

“On January 25, an agreement was signed to redevelop LeBreton Flats, prime land close to the downtown core of Ottawa,” reads the report. “The plan includes a new LRT station and will move Ottawa’s hockey team to a new home. It is expected that the plan will have a strong positive effect on demand and values.”

Other factors driving the Ottawa housing market? Housing affordability, new transportation infrastructure, and a strong job market.

Kitchener-Waterloo is described as having “overall largely positive fundamentals,” as migration is set to increase to the area in coming years. It’s listed above Hamilton due to its “affordability factor.”

“Kitchener-Waterloo is also benefiting from the Toronto ripple effect by way of Hamilton,” reads the report. “As prices in Hamilton rise, some buyers are choosing Kitchener and Waterloo instead of other, less affordable cities…In terms of housing affordability, according to RBC the region is setting at 35 per cent, well under the Canadian average of 48.7”

Barrie is described as being poised for “inevitable growth,” as it is identified as a key area in Ontario’s growth plan. Finally, Brampton is noted as being “strategically located” close to Toronto, while embarking on several revitalization projects REIN believes will draw in home buyers and investors.

“Revitalization is a theme in Brampton, and a trend REIN expects to increase in coming years,” reads the report. “In January 2018, Brampton announced a downtown ‘reimagination’ project focusing on providing ‘places’ for its citizens to gather, meet and experience.”

While these are the top cities to watch, REIN notes that all markets in the Greater Golden Horseshoe area will continue to heat up in the coming years.

“Notably, Ontario’s Greater Golden Horseshoe is one of the fastest growing regions in North America, expecting to grow to 13.5 million people and 6.3 million jobs in the next 23 years,” reads the report.

As widely anticipated by economists, the Bank of Canada (BoC) has left its trendsetting policy rate at 1.25 per cent.

Canada’s central bank, however, expressed optimism about the economy picking up some speed in the April-to-June period after growth slowed down to 1.3 per cent in the first three months of the year. The impact of new federal mortgage rules and other housing policies cooled off the real estate market in the first three months of the year, while weak exports during the same period were at least in part caused by transportation bottlenecks. The bank had predicted the economy to expand by 2.5 per cent in the first three months of the year.

However, in the statement accompanying the interest rate announcement, “some of the weakness in housing and exports is expected to be unwound as 2018 progresses.”

And while that’s good news for the economy overall, it also means further interest hikes later this year continue to appear likely.

Inflation and wage growth trends mean “higher interest rates will be warranted over time,” the bank said.

The BoC statement “leaves us comfortable with expecting the next hike to come in July,” CIBC economist Andrew Grantham wrote in a note to clients shortly after the announcement.

The central bank is expecting the economy to rebound in the second quarter with 2.5 per cent growth, in part because of rising foreign demand, to help Canada expand by two per cent for all of 2018. The economy saw three per cent growth in 2017.

“Canada’s economic growth has moderated, and the economy is operating close to capacity,” the bank said in its latest monetary policy report, which was released alongside the rate announcement. ”

“While a moderation was anticipated, temporary factors … are resulting in sizable short-term fluctuations in growth.”

The bank reiterated it expects further interest-rate hikes to be necessary over time and that it will follow a cautious, data-dependent approach when weighing future decisions.

“Some progress has been made on the key issues being watched closely by governing council, particularly the dynamics of inflation and wage growth,” the bank’s statement said. “This progress reinforces governing council’s view that higher interest rates will be warranted over time, although some monetary policy accommodation will still be needed to keep inflation on target.”

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The GTA housing market has been seeing year-over-year sales drops every month since January, and the condo market is no exception. Yet despite the dip in sales, prices have continued to rise. The reason? According to one expert, it all has to do with a historically low level of listings.

“One of the big reasons we’re not seeing a cool down in the condo market in spite of falling sales is because the number of new listings…has also been on the way down,” writes Realosophy president John Pasalis, in a recent report. “Not only are the number of condo listings down over last year, they have been trending down since 2015, and are currently at their lowest level since at least 2010.”

Condo sales were down 26 per cent year-over-year in April, while listings fell from 21,571 in April 2017 to 16,273 last month.

According to Pasalis, the dip in listings can’t be attributed solely to a lack of supply, since new condo completions have been above the 10-year average since 2015. He instead points to a change in the mentality of sellers as a possible cause.

“While it’s difficult to say why new listings for condos are down, my instinct is that a larger number of people who are upsizing from their condo are deciding to hold on to their current unit to rent out as an income property rather than putting it up for sale,” he writes.

While such a trend would add supply to a tight rental market, it would make things more competitive for those looking to enter the condo market.

Toronto Real Estate Board President Tim Syrianos recently suggested a different reason for the dip in listings: buyers purchasing homes they plan to live in, not flip or rent.

“Recent polling by Ipsos tells us that the great majority of buyers are purchasing a home within which to live,” he writes, in a recent report. “This means these buyers are treating home ownership as a long-term investment. A strong and diverse labour market and continued population growth based on immigration should continue to underpin long-term home price appreciation.”

Regardless of why listings are down, Pasalis writes that if the trend continues, condo prices are only going to keep moving upwards.

“Since July 2017, condo prices have been trending up because of the number of condos available for sale, relative to demand, has been trending down,” he writes. “It’s this imbalance between supply and demand that has kept the market for condos very competitive and has pushed prices higher.” This is why the GTA condo market is still red hot, despite a dip in sales



Here are the main points from Benjamin Tal

Canada’s big real estate boom was in 2016, driven by demographics, low supply, big demand, and immigration policies.


The Fair Housing Plan in Ontario was a government policy to price out first-time buyers from the market.


The plan drove rental prices higher and lowered the number of first-time home owners.


Rent controls are the best way to destroy a city.


Condos have been a stabilizing force in the Toronto real estate market and we are not overbuilding. The lack of supply will get worse.


We are experiencing the demise of the middle class. Canada is one of the most educated countries yet many of the most educated live in conditions of poverty.


47% of condo sales are to investors yet 1/2 of those investments are in a negative cash flow


Look for interest rates to hold or go up minimally as employment goes up.


This is a demographic story. Aging population is working longer but working less hours. Wages are not increasing because older employees are happy to keep their jobs and work less.


American tax cuts will affect Canada. Trump is deregulating companies, lowering tax rates for corporations, increasing deductions on equipment, eliminating carbon taxes. The US will likely pay heavily for these initiatives down the road in terms of greater debt. For the time being, however, companies may move to the US.


With 170% debt to income ratios, the Bank of Canada may try to keep rates low so that people don’t get stretched too far.


The B.C. foreign buyer tax and Ontario’s NRST were just the cost of doing business, but the real slowdown came from domestic buyers waiting to see what happened next.


Don’t expect a typical crash. Lots of people are suffering bubble fatigue and with any bad news, gravity can sometimes take over.


Expect a small recession in 2020/21 with the caveat that when it happens you should buy more real estate because if you think it’s expensive now, just wait!


Every fix is temporary when you don’t tackle the main problem: supply