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Curb Appeal Tips

Whether you are an avid gardener or just a homeowner who wants to spruce up their property, summer is the time to get outdoors and get active. This is a great opportunity to plan, plant and clean. Beautiful gardens create curb appeals and sell homes. And if you are selling your home, it helps to step across the street and check if your home makes a statement. First impressions are lasting and the exterior appearance of your home is just as importance as the interior. Here are a few tips on how to freshen up your home’s exterior:

1. Power-wash the front door, windows, porch, siding, driveway and walkway

2. Clean up garden beds and planters by pulling out dead plants and weeding

3. Introduce hardy plants such as hostas, begonias, pansies and sedums

4. Place fresh mulch on all garden beds

5. Regularly Weed and mow the lawn

6. Fix and clean interlocking stones

7. Add a fresh coat of paint to the porch and stair railings

8. Repair cracks in the driveway, reseal and make sure no weeds come out at the edges

First Time Buyer Incentive Ontario

If you are a first-time homebuyer, you are probably wondering how the First-Time Home Buyers’ (FTHB) incentive announced in last month’s Federal budget can benefit you. At first blush, it sounds pretty good. But, like any new government program, the devil is always in the details.

First, the good news. If you have less than a 20% down payment, you can get a 10% interest-free CMHC loan to top-up your down payment. For example, let’s say you have a 5% down payment for a $400,000 property — add on the 10% top-up loan and like magic you have a 15% down payment. Your mortgage is now 85% of $400,000, or $340,000, with just 5% down it would have been 95% of $400,000, or $380,000. That brings down your mortgage debt load by $40,000, not bad at all. Now, given a mortgage rate of 3.5 %, that roughly translates into a monthly mortgage payment that is more than $200 lower, which is more than $2,400 a year in savings.

Now there is a catch, you will have to pay the 10% interest-free loan back, most likely after the home is sold. However, it is not clear yet if you have to pay the original value or the appreciated value of that loan, those details are still to be worked out.

Now, the bad news. While this program will work great for first-time homebuyers in most places in Ontario. It is basically a dud in high-priced markets like Toronto. Why? Well, an applicant must have a household income of less than $120,000 per year to qualify. Also, the program caps out at four times the applicant’s annual income. So, that means that $120,000 income qualifies you for a property that is around $500,000. As we all know, that pretty much excludes most downtown Toronto detached and semi-detached homes.

Toronto Real Estate Market Outlook for 2019

2018 was a tough year for the Toronto Real Estate Market with a weaker demand due to buyer affordability issues caused by changes to the mortgage lending guidelines and increasing mortgage rates. 

The new mortgage stress test introduced by the the Office of the Superintendent of Financial Institutions (OSFI) had the biggest impact on the national real estate market. It mandated borrowers with less than 20% downpayment to be qualified at the higher rate than their  mortgage contract (plus two percentage points or the five-year posted fixed rate as reported by the Bank of Canada). On average, the OSFI qualification standard meant would-be home buyers in 2018 had to qualify for a monthly mortgage payment $700 higher than what they would actually have to pay. Hence, many buyers simply couldn’t qualify for a purchase they had in mind. 

According to TREB in 2018 the number of new listings was down by 12.1 per cent year over year – back to a level that has been the norm since the recessionary dip in 2009. The CMHC Q2 report announced the number of new mortgages in 2018 fell by 11.9% year-over-year. A slowdown in new mortgages is predicted to continue in 2019.

For this year CREA forecasts a moderate rebound in sales activity in Ontario. A better year is expected for some TREB markets such as Toronto, Oakville, Mississauga, Brampton and Dhuram Region. The condominium apartment segment will continue to be the driver of price growth, with the annual rate of increase in the high single digits. 

Strong condo apartment sales will be mitigated by detached home price growth in the very low single digits, possibly below the rate of inflation in some GTA regions. Homes under $1 million will remain in strong demand while properties over $1.5 million face a much weaker forecast. Here are some GTA stats from 2018 and market predictions for this year from TREB:

Short Term Rental Toronto New Rules

In December 2018 Toronto city council approved new short term rental regulations. These rules will apply to Airbnb rentals. Here is what a short-term rental host needs to know:

1. You would have to register with the city as an operator, and you’ll be given a municipal number to use for advertising your rental.

2. The registration fee is $50 and the bylaw fine for non-compliance could be up to $100,000.

3. Your rental has to be your PRINCIPAL RESIDENCE only, which means your investment properties will not qualify for a registration. Also, secondary suites (i.e., basement units or upstairs units with a fridge and a stove) are not allowed to become a legal short-term rental.

4. Your entire home rental can’t exceed 180 days and must be less than 28 consecutive days at a time.

5. Short term rental websites will be able to connect their platforms to the city registry system. This way the city can track their registrants by the name, address and ID.

6. Companies connecting operators and renters will have to get a municipal business license for $5000 and also pay $1 per each night by an operator.

7. The new regulations will be enforced by bylaw officers. In addition to registration non-compliance, primary residence contravention and number of nights the property is rented out, the bylaw enforcement could be triggered by complaints about noise, maintenance standards, fire code and building code.

The new rues are set to take effect sometime in July. Beforehand, the city will clarify the process and announce what kind of proofs will be acceptable for the operators to present as their IDs and the number of the nights their property was rented during this and the previous year.

Changes In Rent Control

This November the Ontario PC government scrapped rent controls for newly-built or newly-converted rental units. Starting November 15th, such units are no longer under rent control. This does not effect existing tenants already occupying rental premises. “Everybody who’s an existing tenant today is protected… but the challenge for the future is, there is no supply,” said Finance Minister Vic Fedeli at Queen’s Park.

Here is an extract from the new legislation:
“1. Rental units located in a building, mobile home park or land lease community, or located in an addition to a building, mobile home park or land lease community, if no part of the building, mobile home park or land lease community, or no part of the addition, was occupied for rental purposes on or before November 15, 2018.

2. Rental units located in a detached house, semi-detached house or row house, if the rental units and the house meet specified requirements. To qualify, the unit must have been created as a rental unit with its own kitchen, bathroom and lockable doors on or after November 15, 2018. Other requirements set out in proposed subsection 6.1(3) must also be met.

Rental units that are subject to tenancy in respect of which a tenancy agreement was entered into on or before November 15, 2018 would continue to be subject to the existing rent-related rules. However, the exemptions would apply with respect to any subsequent tenancy of a unit described in section 6.1.”

These new rules introduce a new loophole for landlords to charge more after they evict existing tenants and legally reclaim their units. Affordable housing advocates are warning it can deepen affordability issues in the already strained Toronto rental market.

Please feel free to contact me if you have any questions regarding your rental property or tenancy.

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