Housing market red hot
Propelled by low interest rates
March came in like a lion in the GTA real estate market except that it didn’t go out like a lamb, as the proverb predicts. The lion stayed and it’sstill roaring. Salesin March 2021 hit 15,652,close to double that of March 2020. Throughout the region, the average selling pricewas $1,097,565,whichwas a 21.6 per cent increase over the previous March. “Confidence in economic recovery coupled with low borrowing costs supported a record pace of home sales last month.” says Lisa Patel, president of the Toronto Regional Real Estate Board (TRREB). In the 416 area, sales of detached homes jumped by 75.1 per cent in comparison to March 2020, with the average price hitting $1,750,518, up 19.2 per cent. Semi-detached home sales skyrocketed by 106.6 per cent, pushing the average price to $1,288,005, a hike of 11.5 per cent from March 2020. Sales of townhouses also shot up by 90.7 percent, and the average price rose by 15 percent, reaching $960,894. While the average price of a condo in Toronto decreased minimally, down 0.7 per cent to $707,835, sales soared, surpassing March 2020 by 87.9 per cent.
Following the recent trend, low-rise home sales in regions surrounding the City of Toronto drove price growth. Sales of detached homes exceeded March 2020 sales by eye-popping 111.6 percent,with the average price climbing to $1,320,570, a hike of 31.4 per cent from March 2020. Sales of semis, townhouses and condos almost doubled 2020 levels, rising by 95 percent, 90.5 percent and 99.2 percent respectively. The average price growth forsemis and townhouses was in the 20 per cent range, with values registering at $932,215 and $846,401 respectively. In contrast to the 416 area, the average condo price in the 905 areasrose by 13.5 percentversus March 2020, reaching $607,220. It has been a year since COVID-19 hit, prompting a dramatic real estate rebound after a brief dip. Consumer demand has been seen across multiple generations of homeowners and buyers. Many are flushwith unspentcash and motivated by low interest rates and the desire for bigger spaces. A recent poll by Nano Research indicated that 63 per cent of respondents believe the value of real estate in their neighbourhood will continue to rise. However, the Canada Housing and Mortgage Corporation has been concerned about the market overheating and the rise of speculation.
Changing demographics
Can impact school ranking
Buying a home in an area with a good school is often a priority for homebuyers with kids or those planning to have a family. A survey conducted by the market research firm Leger found that 84 per cent of Canadian parents check out neighbourhood schools when they’re searching for a home. Another survey of potential homebuyers found that one in five would give up an extra bedroom or a garage if it meant moving into the “right” school district. So, not surprisingly, how a school performs and ranks has an impact on home values in school catchment areas. But with home prices already steep and climbing, it might be a good idea to consider other aspects of a neighbourhood. For instance, is the area up and coming and gentrifying with lots of young parents and kids? Schools in these areas might not necessarily have the top ranking, but typically it only takes a few years for changing demographics to have an impact on schools.
Educators have seen an improvement in school ratings when young professionals start arriving. Generation Y and the older cohort of Generation Z have the reputation of paying extremely close attention to children's experiences and problems, particularly at educational institutions. Parentscan have a huge impact on a school ranking, highly educated moms and dads tend to be quite involved in their children’s schools, which often translates into better test scores and helps the school climb the ranking ladder. This means a greater demand for homes in the school’s catchment which in turn drives up property values.
Financing your renovation
Some options to consider
The pandemic-related “stay at home” mandate has turned many homeowners into renovators. Whether you plan to upgrade your home’s energy efficiency, replace worn-out components, add living space or just give your home a facelift, there are plenty of financing options available for your improvement plans. If your project is under $5,000 it’s likely you’ll pay either with cash or if you can pay off the full balance immediately, with a creditcard. Ifyou need a loan, a personal line ofcredit has lower interest rates than credit cards. This is a good option for renovations because you only accessthe funds when needed asthe work progresses. You only payinterest on the money used, and each time you make another payment you can do so without having to re-apply for a loan. A home equity line of credit can be considered for bigger home improvement projects.
This allows you to borrow up to 80 per cent of your home’s value. You’ll need to pay set-up and appraisal fees, but you can pay off your balance at any time without penalty. Another option is to finance your renovation using a mortgage, which offerslower interest ratesthan other types of loans and spreads the payments over a longer period. If you are buying a house that needs renovations, you may be able to include the home’s purchase price and the renovation costsin the same mortgage.For existing mortgages,you can refinance to borrow up to 80 per cent of the home’s value. Check with a financial advisor to see what works best for you.
The condo market see-saw
What’s behind it?
Condo sales in the GTA for March 2021 almost doubled in comparison to March 2020 (when the pandemic hit),skyrocketing by 91.3 percent,with an 87.9 percent jump in the City of Toronto and an eye-popping hike of 99.2 percent in the 905 areas. The average price saw an encouraging increase with a 2.6 per cent growth in value over last year. Although the City saw a nominal decrease in price, down by 0.7 per cent to $707,835, the 905 suburbs scored a double-digit price hike, up by 13.5 per cent to $607,220. It should also be noted that the average condo prices in both the City and the suburbswent up by 4.5 and 7.7 per cent respectively month-overmonth. Before the pandemic, the condo market in the GTAwasverycompetitive with Months of Inventory (MOI) at 1 month in the first quarter of 2020. The MOI statistic indicates the length of time it would take for every condo currently on the market to sell, and 1 month of inventory indicates a strong seller’s market. MOI levels of 4 to 6 signals a balanced market, and MOI of 6 or more months marks a buyer’s market.
As the COVID lockdowns started to take a toll, buyers shifted towards ground-level properties with more inside space and backyards. Travel restrictionsmeant Airbnb rentals suffered and rentersstarted tomove inwith family and friends during the lockdowns. Thisresulted in more rental units available and lower rents, and that in turn, prompted condo investors to sell. The flood of new listings pushed up the inventory of available condos(MOI) to 4 monthsin April 2020. In December 2020, anothershift in themarketstarted and condo sales rocketed 75.4 per cent over the previous year. Consequently, condo sales in January, February and March have continued to trend upwards to 85.5, 64.3 and 91.3 per cent year-over-year. This dramatic surge in demand has reduced condo inventory levels (MOI) to 0.73, which firmly puts the condo market back into seller’s territory. Many experts believe the current turnaround in the condo market is driven by a renewed demand from condo investors.
Air conditioner maintenance
Beat the heat
It’s important to consider the effects the summer heat will have on your cooling system. Like the majority of your home’s systems, proper maintenance can help to increase your air conditioner’s lifespan and ensure that it works properly. There are manytypes of airconditioning systems; however they all work on the same principle: moving heat from a relativelycoolspace to a relatively warm space. In the summer, airconditionerstake heat from the house air and transfer it to the exterior. Air-cooled air conditioning systems are the most common. They have two main components: The condenser – a large metal box outdoors. It’s an item you have to carefullyrake around in the fall and clearsnow off in the winter. Sometimes it even comes with its own special plastic cover. Inside the condenser is the compressor: a pump that moves the refrigerant through the system and compresses the refrigerant, raising its temperature significantly. The compressor is the heart of the system. The evaporator – is inside the home, it may be in the dSevere damage can occur to air conditioning compressors if they are turned on when the outside temperature is below 65º F (16º C). The life expectancy of a compressor is typically 10 to 15 years in moderate climates and as little as 8 to 10 years in hot climates.
It’s important to make sure the condenser is on level ground. You should also check to make sure that the condenser is positioned a safe distance awayfrom exhaust discharge vents. Hot air discharging from a water heater exhaust vent or a dryer vent can affect the operation of airconditioning systems. These should be keptseveral feet from the condenser. If your condenser is running loudly, the best course of action you can take is to contact a service specialist to diagnose and correct the issue. There are several causes for noisy condensers; a technician will be able to assess the problem and offer remediation advice. Many of the complications you can encounter with your air-cooling system will be hard for the majority of homeowners to identify. There are also some air conditioner maintenance tasks homeowners can assume themselves. Change the filter – dust and dirtcan build up on the filter, affecting the efficiency and performance of the unit. Keep yourcondenserclear of dirt and debris – dirt outside yourcondenser quickly becomes dirt inside your condenser as the fan draws air through the coilsuctwork immediately above the furnace or in a fan coil in the attic. It is used to turn the refrigerant, the medium which carries the heat, from a liquid into a gaseous state.
| Attachment | Size |
|---|---|
| MayJune21 nilifur.pdf | 772.74 KB |