Toronto Condo Sales & Marketing | N5R Blog

Brad Lamb walks Toronto residents through the real estate market they are living in.

We are not going to do a very good job creating semi or detached homes anywhere close to the city. In the 416 we will not be able to add to the existing stock of houses ever again as all the land is developed. The supply is fixed in the 416 and very limited in the 905. The demand for homes is going up every year. Population growth guarantees higher prices forever, with occasional moments of recession and panic. During a recession, prices will fall but only momentarily, creating an amazing buying opportunity. The condominium market is a bit of a different story. Some think that it is due for a fall. I believe that prices are set to soar. Land in central Toronto has become scarce and very expensive. Condominiums have remained very affordable. Most development land that remains consists of sites with under utilized buildings or assemblies of multiple properties. Both options are typically seen in fully developed expensive cities (like London, Hong Kong, New York, Paris etc). This is what Toronto is becoming; an expensive international city. Local, federal, and provincial levies and taxes continue to drive development costs higher. This combination of fees and taxes currently eats up approximately 25% of the cost of new high-rise new housing in Toronto. It is only going to rise. Green technologies and other new building code initiatives like fully sprinklered buildings and ground water taxes are adding additional costs to high rise housing. Currently, the cost of delivering a high rise in Toronto before profit is edging close to $600 per square foot. In some areas, it is closer to $800 per square foot. Keep in mind that this is the cost of creating high rise homes. New sales prices must now commonly be $700-900 per square foot (PSF) to allow for a reasonable development profit. The MLS condo resale market will see a 10-15% increase in sales volume this year. It will be a record year for sales. I believe prices will rise 5-10% this year in the resale condominium market. Over the last 5 years, we have seen a more stable 2-3% increase in prices, I believe that scenario is now over. Detached and semi-detached homes will appreciate 10-15% this year and sales will be up 10-15% in volume largely because so little will come up for sale. An interesting statistic that I follow is the number of condos for sale in C01, C02, C03, C08, C09, C10, C11 (an area bounded by DVP-Eglinton-Dufferin-Lakeshore). The volume of condos for sale in the region is down 14.5% this year and the volume for rent is down by 32.3%. This all points to significant increases for both sale prices and rental rates. Condo rental rates will rise 5-10% this year alone. There are not enough condos for sale or rent in central Toronto. It is currently particularly difficult to find a condo rental in any part of the GTA.

Now, some of you may believe that interest rates are going to rise and rain on the parade. That is not going to happen any time soon. Low rates are here for a long time. I believe at least 5 more years, perhaps 15 years. Even when rates start to rise we will stay in a low interest-low inflation environment for a long period of time. When interest rates rise it will be gradually. Governments are huge borrowers. All the municipal, state, provincial, and federal governments around the world are essentially bankrupt. Higher interest rates makes the situation worse. I cannot see any country intentionally bankrupting itself through a high interest rate policy.

2016 is going to be a very big year for Toronto real estate. Prices will be significantly higher in all areas and categories. Volumes for resale homes will smash last year’s record by 10%. Average prices will soar by 10%. New condo sales will stay robust with demand outstripping supply. Toronto will continue to be a hot spot for international money as it will continue to be considered a safe haven for money and investments.

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Toronto's blistering housing market has prompted a 30 per cent jump in residential property values over the last four years, according to the company that assesses real estate in the province.

City homeowners will receive assessment notices — their first since 2012 — from the Municipal Property Assessment Corp. (MPAC) beginning next week showing a 7.5 per cent annual increase in their property values.

That's well above the 4.5 per cent provincial average, but lower than the double-digit increases in some 905-area communities such as Richmond Hill and Markham.

The average assessed value for a single-family detached home in Toronto is $770,000, up about $200,000 on average from the last assessment in 2012. Toronto condo values increased 2.9 per cent on average to $363,000, about $35,000 higher than four years ago.

Although assessments are linked to property taxes, homeowners should not panic about a steep rise in taxes, says MPAC.

"Just because the assessment does increase doesn't necessarily mean that this is going to have an impact on their taxes," said Greg Martino, director of valuation and customer relations MPAC. Municipalities, not MPAC, determine property tax rates.

How much an individual owner pays depends on where their assessment ranks compared to the city average. Owners whose properties are assessed above the 7.5 per cent average will pay more. Those with below-average assessments pay less. In Toronto, virtually every property will be assessed at a higher rate than it was in 2012.

If two properties were assessed at $500,000 in 2012, each would share an equal portion of the city's tax burden. But if they are reassessed and one home remains at $500,000 but the other is now valued at $600,000, the higher valued property now carries a bigger tax responsibility.

"It all depends on how your assessment changed relative to every other property within the area. If you are similar to the average there should be no impact as a result of the reassessment," he said.

Townhouses and semi-detached homes had the highest average annual assessed increases at 9.5 per cent and 9.6 per cent respectively. The typical townhouse or row house in Toronto is valued at $666,000; a semi at $653,000.

The highest residential assessments in Toronto — 12 per cent annually on average — are in the wards of Davenport, Scarborough-Rouge River and Scarborough Centre.

But in Willowdale, Trinity-Spadina and Toronto Centre-Rosedale, overall annual residential assessments were lowest, rising only 2 to 2.5 per cent on average. That's because their assessments were higher relative to other areas of the city in 2012.

Condos are also a factor. Although some of the most expensive real estate in Toronto is downtown, some of the lowest valuations are in the core because the residential landscape is dominated by lower-valued condos rather than single-family homes.

The assessment also depends on what properties sold in a given time frame, said Martino.

"When we're quoting our numbers, we're talking about the entire population, whether it be single-family, detached, condominiums — the whole gamut. If you've got a month where you've got a lot of high-end, single-family detached selling it could be driving up average value,” he said. “This gives you a view of the entire population."

This year's valuations are based on the property's assessed value of Jan. 1, 2016.

"The key question a property owner should ask themselves is, 'If I were to sell my house on Jan. 1, 2016 is this assessed value something that I think I could have reasonably achieved?' If they can answer that question, 'yes,’ then that assessment is accurate," said Martino.

If not, the homeowner can call MPAC or do some research themselves at its website,aboutmyproperty.ca.

A first round of Toronto assessments will be mailed on Friday with the remainder going out on June 1 and 6.

The Toronto increases compare with a Mississauga annual average of 6.8 per cent and Brampton and Barrie averages of 6.6 per cent each. Those assessment notices have already been mailed.

Other 905-area assessments will go out mid- to late June. Preliminary MPAC data shows they range from 7 per cent in Milton and Oakville to 12 per cent in Whitchurch-Stouffville and Richmond Hill.

Although the increase of assesments are linked to property taxes, homeowners shouldn't panic about steep rises in taxes, says Municipal Property Assessment Corp. (MPAC). (CHRIS SO/TORONTO STAR)

Top 3 average assessed neighbourhoods:

Davenport

Average increase since 2012:

11% overall residential

12% single family homes – typical residential home assessed at $839,000

3% condominiums – typical condo assessed at $320,000

Scarborough-Rouge River

Average increase since 2012:

11% overall residential

12% single family homes – typical residential home assessed at $740,000

5% condominiums – typical condo assessed at $268,000

Scarborough Centre

Average increase since 2012:

11% overall residential

11% single family homes – typical residential home assessed at $576,000

4% condominiums – typical condo assessed at $211,000

Lowest 3 average assessed neighbourhoods

Willowdale

Average increase since 2012:

2% overall residential

1% Single family homes – typical residential home assessed at $1.19 million

1% condominiums – typical condo assessed at $398,000

Trinity-Spadina

Average increase since 2012:

2% overall residential

10% single family home – typical residential home assessed at $1.38 million

2% condos – typical condo assessed at $412,000

Toronto Centre – Rosedale

Average increase since 2012:

2.5% overall residential

10% single family home – typical residential home assessed at $1.2 million

2% condos – typical condo assessed at $424,000

Average for communities around GTA:

•Barrie 6.6%

•Mississauga 6.8%

•Brampton 6.6%

Do-it-yourself assessments

MPAC's website lets property owners compare their assessment to up to 100 other homes.

A redesigned MPAC website will allow owners to get a complete look on the information behind their property valuation and compare their home with up to 100 others in their neighbourhood.

To access the information, homeowners need to type in the roll number and access key clearly listed on their assessment notice.

That enables them to download a complete report with all the information the Municipal Property Assessment Corp. has on file about their home.

"The privacy commission has reviewed and awarded the site," said MPAC chief operating officer Rose McLean.

Those who want their assessment reconsidered by the Municipal Property Assessment Corp. can look at other homes in their neighbourhood to figure out how their own stacks up.

The new website allows users to build a list of "favourites" as they search so they can go back and exam those properties more closely.

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