Market Watch - March 2019

TORONTO, ONTARIO, April 3, 2019 – Toronto Real Estate Board President Garry Bhaura announced that Greater Toronto Area REALTORS® reported 7,187 residential sales through TREB’s MLS® System in March 2019. This result was inline with 7,188 sales reported in March 2018. For the first quarter of 2019, sales were down by one per cent compared to Q1 2018.

While March and Q1 sales remained relatively flat compared to last year, new listings have declined more so than sales. March new listings were down by 5.1 per cent year-over-year and Q1 new listings were down by 1.5 per cent.

“The OSFI stress test continues to impact home buyers’ ability to qualify for a mortgage. TREB is still arguing that the stress test provisions and mortgage lending guidelines generally, including allowable amortization periods for insured mortgages, should be reviewed. The supply of listings in the GTA also remains a problem. Bringing a greater diversity of ownership and rental housing online, including ‘missing middle’ home types, should be a priority of all levels of government. TREB is happy to be taking part in the City of Toronto’s consultations for the Housing TO – 2020-2030 Action Plan, and will certainly be raising the supply issue during these discussions,” said Mr. Bhaura.

“While the City of Toronto’s recently announced Housing TO – 2020-2030 Action Plan is exciting and commendable and TREB looks forward to contributing solutions as a Member of the External Advisory Committee, the recently proposed increase to the Municipal Land Transfer Tax on higher priced properties is problematic. As the recent City budget process showed, the MLTT is not a sustainable revenue source from which to fund municipal programs. On top of this, additional MLTT on higher priced homes could have a trickle-down effect on the supply of homes throughout the housing price continuum,” said TREB CEO John Di Michele.

The MLS® Home Price Index Composite Benchmark was up by 2.6 per cent year-over-year in March, while the average price for March sales was up by a lesser annual rate of 0.5 per cent to $788,335. The average selling price for Q1 2019 was up by 1.1 per cent year-over-year.

“Market conditions have remained tight enough to support a moderate pace of price growth. Despite sales being markedly lower than the record levels of 2016 and early 2017, the supply of listings has also receded. This means that in many neighbourhoods throughout the GTA, we continue to see competition between buyers for available listings, which provides a level of support for home prices,” said Jason Mercer, TREB’s Chief Market Analyst.

What is a Status Certificate?

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If you know anyone who has purchased a condo or if you have done so, then you have heard the term Status Certificate. It’s just as it sounds: a document that covers the current status of the condo and the condominium corporation. It is time sensitive and usually has an expiration date of 30 days from the date that it is ordered.

The status certificate is prepared either by the condo corporation or the property management company if there is one.

A status certificate consists of important information about the individual condominium unit for which it is being requested. The certificate also indicates whether the current unit owner is in default of paying the monthly common expenses, if there is an increase in the monthly expense and also the amount in the condo’s reserve fund.

There are certain things that the Condominium Act requires to be covered in the status certificate, they are:

  • current reserve fund amount

  • special assessments that may have been imposed by the condominium board

  • the names and addresses of directors and officers of the corporation

  • information regarding common expenses for the unit

  • Property management contract

  • insurance

  • minutes of the last general meeting

  • copies of the condominium declaration, by-laws and rules

  • a current budget for the condominium corporation

The Status Certificate will also reveal if there are any current or past lawsuits against the condo corp. Typically, buyers of a resale condo in Toronto will submit an offer with a condition to have their lawyer review the Status Certificate. Once received, your lawyer will typically have 48 to 72 hours to look over the documents and come to a decision. This is negotiable as well.

How do I get a Status Certificate?

Anyone can order a Status Certificate of any condo in the GTA. A buyer or their representative can visit portals like www.condocafe.com and request a certificate. A written request and $100 fee is required to have the status certificate emailed to them. This fee was determined by the Condo Act.

Why is a Status Certificate Important?

The status certificate is like the home inspection of the condo market. It will tell you how healthy your purchase is. If the reserve fund is low and there is any major damage to be done, that cost is the owner's responsibility.  The corporation will either raise monthly expense to offset the cost or charge a special assessment fee. So knowing how much is in the reserve fund is very important. You also want to know all the bylaws and rules of the building. For instance, the status certificate will tell a potential owner if pets or smoking is allowed.

If you are thinking about buying a condo in Toronto, it is important to talk to your realtor about how and when you can have your lawyer review the status certificate.

Get in touch to learn more.

Who’s Responsible for Repairs in a Condo?

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So you’ve purchased your new condo, or you are thinking about it. You're probably feeling really excited and a little overwhelmed. One of the main reasons you might be purchasing a condo is the lack of maintenance that you have to do. No snow to clear, no lawn to cut. You can basically lock the door and be on your way. But what if something happens inside your new condo? Or what if the window starts to leak? Who fixes that? Is that something that you have to pay for?

Some upkeep is done by the condo owners, and some is done by the condo corporation. To make matters more complicated, no two condos are alike. You will be required to do some research on the building you are interested in.

Condo owners are responsible for paying for the ongoing maintenance and repair of their units. The condominium declaration will define the unit’s boundaries. It may or may not include what is behind the walls, so it is advised to have your legal representative look over the declaration.

The Corporation is responsible for covering the costs of ongoing maintenance of common elements of the condo such as the parking lots and main lobby. Normally, some of your monthly condo fees will be put towards paying for these items.

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Some things to consider:

Timing

The Condominium Act requires that unit owners make sure repairs are done within a reasonable timeframe.

Damage

The Act requires that the corporation fix the condos and common elements immediately after damage, however, this obligation is typically altered by the corporation’s declaration. That is why it is important to read the document.    

Costs

The corporation uses funds from your condo fees to repair any damages. They cannot refuse to fix damages because of a financial shortage. They can, within some rules, raise your fees, or do a special assessment, or take a loan to top of the reserve fund.

Reserve fund

The Act requires the corporation to go through reserve fund studies from time to time to determine whether the corporation has enough funds for any upcoming repairs.

Delayed work

Condo corporations may decide to defer certain recommended repairs or maintenance if it is not urgent or if there are financial constraints. However, there are always risks, such as the failure of equipment or structures, secondary damage, or minor repairs that can develop into major issues.

You want to have a look at all of the condo corporation documents before you enter into a deal to purchase a condo. Not taking the time to research could be costly.

Get in touch to learn more.