Baby, we got a bubble!?

[klb86]

GTA REALTORS® Report Mid-Month Resale Housing Market Figures

TORONTO, February 16, 2012 – Greater Toronto REALTORS® reported 3,206 sales through the TorontoMLS® system through the first 14 days of February 2012 – up by more than nine per cent compared to the 2,933 sales reported during the same period in 2011. New listings were up by 13 per cent over the same period.

“The GTA resale home market became better supplied during the first 14 days of February. If growth in new listings continues to outstrip growth in sales this year, competition between home buyers will ease. More balanced market conditions on a sustained basis would result in a lower annual rates of price growth later in 2012,†said Toronto Real Estate Board (TREB) President Richard Silver.

The average selling price during the first 14 days of February was $491,493 – up by nine per cent compared to the first 14 days of February 2011. On average, sellers received 99 per cent of their asking price and their homes were on the market for an average of 25 days.

“Both buyers and sellers are aware of the substantial competition that exists for most listings in the GTA. There is not a mismatch in expectations, so homes sell quickly at close to the asking price,†said Jason Mercer, TREB’s Senior Manager of Market Analysis.


Toronto proper up 8.5% y/y to $543,068
Toronto proper condos up 8% y/y to $388,215

 

[interested]

Just an interesting little side bar. Anecdotal I know.

In the 3-4 blocks around where I live there is usually 1 house that may come up for sale, occasionally 2.

It may be that everyone is deciding to downsize now but suddenly in the past month we have had 5 houses come up for sale.

I wonder if this is co-incidence or the owners (most here for at least 5-10 years and at least 2 here for 15+years) are deciding that it is time to sell and that the market has definitely peaked or is close to it. It may be due to other factors. At least one is retiring and likely moving out West and a second one I know has grown adult children but their kids are in their early mid 20's and have been for a couple of years so the timing is interesting.

 

[daveto]

Rent increases only are capped for Condo/Apartments built before October 31st 1991. The landlord can increase the rent 100% if they want to.

Drew, I'm not sure I understand where you're getting that from. The 2006 Residential Tenants Act is quite clear that rent increases to an exisiting tenant in Ontario are limited to the anual CPI increase for Ontario.

See section 120 http://www.ontariotenants.ca/law/act07.phtml#RTA110

 

[interested]

daveto,
I believe Drew is correct.
I don't know the resource but I believe when the legislation was introduced it covered existing stock.
I believe the reason they did not include the 1991 and beyond was that many people bought condos/homes with high prices from the peak of 1989 and they did not want to further depress the market. If you recall, 1991 was a particularly bad time for real estate with prices falling and the idea was to protect the existing tenants, not to put a ceiling on new leases.

 

[drewp]

Drew, I'm not sure I understand where you're getting that from. The 2006 Residential Tenants Act is quite clear that rent increases to an exisiting tenant in Ontario are limited to the anual CPI increase for Ontario.

See section 120 http://www.ontariotenants.ca/law/act07.phtml#RTA110

I thought that as well initially, but I called the there office to verify that.

 

[drewp]

Found it. Here are the Rules relating to rent

(2) Sections 104, 111, 112, 120, 121, 122, 126 to 133, 165 and 167 do not apply with respect to a rental unit if,

(a) it was not occupied for any purpose before June 17, 1998;

(b) it is a rental unit no part of which has been previously rented since July 29, 1975; or

(c) no part of the building, mobile home park or land lease community was occupied for residential purposes before November 1, 1991. 2006, c. 17, s. 6 (2).

 

[daveto]

Whoops. Well, I stand corrected. Thx Andrew.

I checked back to the 1992 law, and there was similar wording, so it appears it is holdover from that legislation. I'm surprised it exists in the latest legislation.

Here are a couple of further, more clearly worded sources.

http://www.mah.gov.on.ca/Page6537.aspx
Q7. To what properties does the rent increase guideline apply?
A7. The guideline applies to most private residential rental accommodation covered by the Residential Tenancies Act, 2006. The guideline does not apply to residential dwellings first occupied on or after November 1, 1991; nor does it apply to social housing units and nursing homes. For these units, the RTA does not limit the amount by which a landlord can increase the rents.

http://www.ontariotenants.ca/law/law.phtml#Q12
Q12: What about Rent Controls?
A12: Regulation of the rent only applies while you are living in the apartment; This is not considered "Rent Control" by tenant advocates and housing experts though the government is claiming they have "brought back real Rent Controls".
Note, under Section 5, Exemptions from the Act, not all tenants are covered, and additionally under Section 6, Other Exemptions, that tenants such as those who are living in any part of any building, or mobile home park, or land lease community, where that space was never previously occupied for residential purposes before November 1, 1991, are not covered at all by rent controls.

 

[drewp]

Its clearly there is section 6 under law. You can also contact them at 416-645-8080 to verify this.

 

[daveto]

Its clearly there is section 6 under law. You can also contact them at 416-645-8080 to verify this.

Andrew, I was writing my 12:45 at the same time your wrote your 12:40 post which I had not yet read. For clarity for readers I've deleted/edited my 12:45 posts. My apologies for the unintended confusion.

 

[KA1]

Andrew, I was writing my 12:45 at the same time your wrote your 12:40 post which I had not yet read. For clarity for readers I've deleted/edited my 12:45 posts. My apologies for the unintended confusion.

Am I relieved now

 

[drewp]

Haha.....close call!

 

[interested]

Just by way of further clarification. If my recollection serves me well. In or about 1991 the real estate market was down. The government noted that rental housing in Toronto in particular had not been built and the condo industry successfully lobbied to get condos and other properties which would be the de facto new rental pool exempt. Therefore after 1991 newly constructed properties were freed up from rental controls. The government of the day did not have to worry because the economics made no sense. Rents were low; prices were still high from 1989 and falling. The concern was if they put on rent controls, even more property would flood the market.
At least that is how I remember it. Reality is that landlords don't increase by more than the allowance anyhow, pre or post 1991 since renters can't pay it and there is not such an imbalance that would allow the landlords to do this.

 

[KA1]

At least that is how I remember it. QUOTE]

For a man of your age, you really have an elephant's memory. Haven't you?

 

[interested]

Yes, like most old people, I remember what happened 20 years ago. I just can't remember what I had for breakfast this morning. LOL

 

[KA1]

Yes, like most old people, I remember what happened 20 years ago. I just can't remember what I had for breakfast this morning. LOL

Life, really, must be pretty good in those days -- that is, when you were young?