The Bank of Canada interest increase has put the real estate market and some sellers on their toes, worried that they missed an insane chance to get 10-15% above the true value of their home. We're seeing that a lot of these sellers aren't as active, giving the GTA a little bit of a supply issue but the interest rate hike has taken some buyers out of the market as well, really balancing out the dynamic of the Toronto Real Estate Market.
Buyers who previously had a shot at buying a $700-800k condo may have been priced out with the new rates as it would drop their approval down to $550-600k and those that were prancing above the million mark can comfortably put 20% down on a condo now worth less than that. Buyers are now seeing that many sellers are going dry on their offer date strategy and coming back with a higher list price and openly showing what they're hoping for their property, giving the buyer pool more comfort and also more options.
Though the prices are dropping, it is coming back to the true value of the current time, instead of having to pay next year's inflated price. With property values becoming a little more manageable, and the market not being as aggressive, this is the perfect time for any buyer with an adequate downpayment to get their feet wet and land their dream property!
Want to start searching? Let us help!
Now that the Bank of Canada has decided to take matters into their own hands, they've begun to raise interest rates - this translates to money being harder to get and thus, booting out some of the competition. The last year has been wild when it came to the selling price of real estate because there was so much competition. Literally, banks weren't even appraising a lot of the properties they were funding until the news of a potential increase broke. We were seeing properties go as high as $300k over the asking price.
Now that there isn't that much competition, the price of some real estate is actually coming down (MONTH TO MONTH). This isn't to be confused with a year-to-year comparison because prices in the spring of 2021 were much lower than the prices in spring of 2022.
This is an amazing opportunity for buyers to consider aggressively getting into the market to be able to present their offer in a 1-on-1 situation where there is room to have a conversation, a conditional offer, and even in some cases, a discount.
As far as the upcoming season is concerned, once the interest rates settle in, we're anticipating a 10% overall growth in the price of real estate by the end of the year.
We've got you covered! A lot of people get in touch with us when their lease is coming to an end, or if they're just starting a new chapter of their life. When you need a rental, in this market, it's best to be over prepared than not because the one that you want, may not last.
1. GET IN TOUCH WITH US SOONER THAN LATER!!
This one is super important. Be sure to give yourself adequate time to weigh out your options and also to make sure that you're on schedule with your lease coming to an end so you have a minor overlap (or none at all) with your new lease.
2. Secure a job letter
Landlords are looking for job security from their tenants - an employer willing to sign off on the length of time you've been there, your income and also your role is an imperative part of the document checklist. **ENSURE THIS IS DATED WITHIN 30 DAYS OF YOUR LEASE OFFER**
3. Download your credit report!
***THE REPORT THAT IS GENERATED FROM YOUR ONLINE BANKING SELDOM WORKS!!*** We recommend getting either a Credit Karma or Borrowell credit report (Borrowell is preferred). Some landlords may ask for an Equifax or a TransUnion report as well to ensure that they are able to assess all of your open and closed accounts and any public records you may have
4. Come on some showings, and let's finalize a unit!
When you like a unit, we start up the paperwork and wait for the landlord to give us an answer. Sounds simple enough right?
5. Deposit Cheque!
The first and last months rent is due 24 hours after your offer is accepted in the form of a CERTIFIED CHEQUE. This must be dropped off to the landlords representatives office to ensure it's placed in TRUST until the keys are exchanged.
6. Move in! 🍾
Things to keep in mind:
1. Have a cheque book (you'll most likely need 10 post dated cheques for the landlord)
2. You'll need tenants insurance before moving in
3. You'll need to book the elevator for the move, so coordinate with movers (or friends that are going to help you 😅) after you confirm the elevator
4. Depending on the building, there will be a mandatory key deposit (minimum of $200) on key exchange
The iconic, staple of Mississauga, Absolute World towers came to the Square One area in 2012, changing the Mississauga skyline forever. These towers boast a unique round shape, 360 degree views, state of the art amenities and luxury finishes. Starting in the low to mid $200k range, this was the pride and joy of buyers and investors. Today, this building holds multi million dollar penthouse units, has a built a community within the complex and has some of the hottest cars in it’s underground parking garage!
Other Common Names
Marylin Monroe Towers
Security is top notch
State of the art amenities
Located a rock throw from Square One shopping mall
Close to highways
Wrap around balconies in every unit
2 Sets of elevators servicing the buildings; 1 for the bottom half and the other for the top half of the building
Circular shape left some wasted space
High tenant - owner ratio
Paying an “iconic” premium price tag
The million dollar question is: "How much money do I really need to buy real estate" and the answer, well that depends. When you're buying your first home, you need to factor in a few price tags that you'll be facing (thankfully, we're the free service) but let's start with listing them out.
Everyone is saving one of these since their high school days working a part time job at McDonald's, sadly the value of those savings have gone down when they're leveraged against the rise of real estate prices, but it's a great foundation. In order to avoid the crash of 2008 and with some of the wisdom we gained from the mistakes of our neighbours down south, banks and lenders have tightened the rules - this means that down payments are grouped into brackets of maximum approvals.
Up to a purchase price of $500'000, buyers need a 5% down payment
Up to a purchase price of $1'000'000, buyers need a 10% down payment
Above a purchase price of $1'000'000, buyers need a 20% down payment
These are structured to ensure that given the worst case scenario, banks can still sustain payments and have most likely built up enough equity within these properties to avoid an economic collapse.
Whether you buy with us, or you find a stellar private deal, you'll need a lawyer to complete the transaction for you. Lawyers will help you with the legality of the paperwork, transfer title from the seller to the buyer, and also make sure that the title is clean for the new buyer to avoid any surprises. There is a wealth of other procedural things that your legal team will do as well which they would be better suited to explain. In our role though, we coordinate with the lawyers to make sure that status certificates are clear, the funds will be transferred correctly and that the deal closes smoothly. There is typically a charge for this service which can range from $850-$1500 depending on the complexity of the deal.
LAND TRANSFER TAX:
The government charges a land transfer tax when you purchase a property which is typically based on the purchase price of the home. (The amount and how it's calculated will be discussed in another post, promise!) First time home buyers are eligible for a rebate on this tax, so you may get a break on this bill! Buyers should also beware that the city of Toronto charges a Municipal Land Transfer Tax as well!
MOVERS, CLEANERS, HANDYMAN:
This one is completely optional, but we always recommend having them on speed dial because in the midst of a move, you want to keep your stress as low as possible. In many events, we've personally seen units that have been left in a condition that needs to be cleaned and on top of that, small things may need the attention of a tool box as well, this is why we recommend having cleaners and handyman around after you move. These are completely optional thought!
So all in all, it is important to remember that your purchase price will be mostly determined on how much cash you have on hand; and as a rule of thumb, it is best to keep and additional 1.5-2% in the bank to cover "closing costs".
Curious about local real estate? So are we! Every month we review trends in our real estate market and consider the number of homes on the market in each price tier, the amount of time particular homes have been listed for sale, specific neighborhood trends, the median price and square footage of each home sold and so much more. We’d love to invite you to do the same!
You can sign up here to receive your own market report, delivered as often as you like! It contains current information on pending, active and just sold properties so you can see actual homes in your neighborhood. You can review your area on a larger scale, as well, by refining your search to include properties across the city or county. As you notice price and size trends, please contact us for clarification or to have any questions answered.
We can definitely fill you in on details that are not listed on the report and help you determine the best home for you. If you are wondering if now is the time to sell, please try out our INSTANT home value tool. You’ll get an estimate on the value of your property in today’s market. Either way, we hope to hear from you soon as you get to know our neighborhoods and local real estate market better.