The fall real estate market is underway and now in full swing. I have been quite disappointed with the income property inventory over the past few weeks. Usually after Labour Day the number of listings increases from the previous summer months. While there have been more listings as expected, unfortunately very few of them have been income generating. I have seen only a handful of quality triplexes and in all cases the prices were too high to justify any sort of prudent fiscal return. Since I have an on-going demand for these kinds of properties, I fear that when a good one turns up there are going to be a lot of people trying to buy it. This will mean multiple offers on any investment property that even comes close to making sense. This will continue to drive cap rates and investment values down. I think the secret to success will be to stay on top of the market and to strike fast with any plexes that aren’t holding back offers.
Enjoy the turning of the leaves and to all my clients and friends out there, I’d like to wish you and your family a very Happy Thanksgiving.
One of our mayor’s campaign promises was to get rid of the second land transfer tax that we have to pay in Toronto. For those of you who don’t know, we have to pay an additional land transfer tax to the city as well as the province. This adds thousands of dollars to the cost of your real estate purchase. The Toronto Land Transfer Tax costs the average Toronto home buyer about $6,000, up front. When added to the provincial version of this tax, average Toronto home buyers face over $12,000 in land transfer taxes. We are the only city in North America to suffer this cash grab.
The Toronto Real Estate Board is calling for the mayor to rescind this very unfair tax. Unfortunately, this additional revenue to the city is now very much needed in light of all the cutbacks that are being contemplated by City Council.
“The time has come for City Council to make the tough decisions so that City Hall lives within its means. City Hall can’t continue to saddle future generations with insurmountable debt and unfair taxes, like the Toronto Land Transfer Tax. The status quo is not an option,” said Richard Silver, President of the Toronto Real Estate Board.
Toronto real estate agents will be making a deputation to the City’s Executive Committee and have been rallying the public, through www.NoHomeBuyingTax.com, to send in their comments to City Council. Please take a moment to visit this site and support the movement to repeal this tax.
As anticipated by most analysts, the Bank of Canada decided to not increase the prime rate this past month. It was predicted to rise in September as recently as a few months ago. However, the recent nasty economic news from almost all fronts helped convince the Bank of Canada to hold the Canada prime rate at the current level for the time being. Canadian mortgage rates have already increased slightly due to the economic outlook. RBC and other banks have recently raised variable rate mortgage rates. Barring any unforeseen global changes (political or climatical), the interest rates will stay relatively low. Many people believe that the current strong demand for houses has been largely fueled by low borrowing rates. Once rates start to seriously increase then the housing market may finally start to cool down. Given the low inventory of investment properties for sale I don’t see the demand for these properties to drop much at all.