Monday, August 21, 2017

HST and its Impact on the Ontario Real Estate Market

One of the most common questions I get asked is about the New HST tax and its impact on the real estate market in Ontario. This law is very new and many people are still unsure of its ramifications on the industry. A lot of industry experts are unclear, on what the legislation actually entails. If lawyers and accountants have only a vague understanding of the new Tax, imagine how confused the average Ontario resident must be.

According to a recent survey by Royal Lepage, most home buyers believe that HST applies to the sale price of resale properties. The survey goes on to show that this misconception is impacting buyer behavior, which has been a driving force in the recent slowdown on the market place.

So Exactly how does the new HST impact the Ontario Real estate Market?
There is no HST on resale properties. HST is only levied on preconstruction homes. HST will not be applicable to new homes costing under 400,000. For New homes costing between 400,000 to 500,000 home buyers in Ontario will receive rebates up to $24,000 to lessen the impact of the HST. For homebuyers purchasing homes over $500,000, they will have to bare the full brunt of the HST Tax . It is estimated that this will increase the purchase price of homes over 500,000 by as much as $30,000- $50,000.

The ramifications for purchasers of preconstruction homes who are investors and not end users is a little more complicated. If you claim that you are an investor who will not reside on the premises, HST will be applicable, but credits may be offered for up to 75%. If you are considering buying a pre construction property as an investment it is best to consult with an expert as to how the tax can effect your purchase.
While resale purchases are HST exempt it is estimated that the new tax will will add an additional $2,000 in closing costs to consumers on resale properties .

While maintenance fees, energy cost and closing costs will inevitably rise, the increased costs are significant but not dramatic. It is estimated by the Minister of Finance for Ontario that only 7% of preconstruction homes bought in Ontario are over 500,000.

The jury is still out on HST and the damage that it may or may not have done to the Toronto Real Estate Market. I think the damage has been more psychological, as the tax has left many consumers confused and scared. In my opinion the impact will be short term, and things should flatten out this fall and begin to rise again by next spring. Canada and Toronto have still way too much going for it for the politicians to mess it up.

Decluttering Pays!

September 9, 2010 by  
Filed under Real Estate, Selling Real Estate

Getting ready to list your condo for sale? Here are some great space saving tips to help you de-clutter:

- Compact living calls for compact furniture. Proportion is the key; pieces should be proportional to the space and each other.
- Go vertical and keep it simple. Keep the floor clear of clutter (e.g. floating shelves that you can mount over doorways, stagger or stack to fit unique spaces).
- Cultivate flow. Visually enlarge your space by installing one type of flooring throughout. Stick to one or two complementary paint colours. Light cool colours tend to make a space feel larger. Warmer colours make a space feel cozy.
- Colour choices are personal; take both the amount of natural light and what you love into consideration.
- Function reigns! You multi-task, expect the same from your belongings. Wherever possible, make sure benches, coffee tables, mirrors, bed frames etc. include (and hide) built-in storage. Consider a sofa bed, a bed that folds or one that can be stored vertically against a wall.
- Use what you have. Maximize locker space and functionality. Add a storage bench/planter on your balcony.
- Sell or donate what you do not need. Someone somewhere will thank you.

Adrienne

If I only had a Crystal Ball

The most frequently asked question I get from clients/friends and just about anyone that has any interest in real estate is “what’s the market going to do next”? If only I had a crystal ball to look into the future and tell them exactly what was going to happen!

Without such magic I rely on my experience and wisdom. The market took off like gang busters in the beginning of 2010. There was a real sense of urgency amongst buyers, mostly fuelled by misconceptions about two things 1. HST 2. Rising interest rates. Buyers were scurrying around buying anything and everything and paying all the money for it. Sellers obviously reaped the benefit of this frenzy by taking in fantastic sale prices. As the year progressed, the urgency started to die down and buyers shifted from a “need to have it now” mentality to a “let’s sit back and get a deal” mentality. Sellers under pressure to sell therefore took less than their neighbours a few months earlier, but still achieved good selling prices year over year. Moving into the fall market, we are expecting a more “normalized” buy and sell trending, where there should be enough (or almost enough) product to satisfy the demand creating a more even playing field for buyers and sellers alike. Again, anything is possible, as Toronto is tops for real estate and quality of living, which continually attracts new buyers to the playing field. And the high demand neighbourhoods can only house so many people. Either way, staying on top of the market and knowing the values is the best way to get in or sell successfully.

A Slowing Market is a Healthy Market

September 9, 2010 by  
Filed under Buying Real Estate, Selling Real Estate

There has been a lot of talk in the market place lately about a slowing real estate market relative to year ago. This is based on a decline in the number of house sales which has given people the wrong impression. The general perception seems to that a slowing market is a bad thing, but is it?

On the contrary, a slowing market is a great thing for buyers!

In my opinion, this slowdown means that the real estate market is returning to a healthier state. It means that the potential for competition at the table when making offers should be less. Assuming that there is enough product on the market, this means that in most cases buyers won’t be faced with paying above asking price for the property.

As we move into the fall market, the number of new listings should increase also helping to reduce competition among buyers resulting in more palatable purchase prices relative to the first four months of 2010.

Buyers, if you are looking to get into the market September 2010 would be a great time!

Do I really need a stager?

Things have changed; the majority of buyers out there are looking for a home that is move-in ready. People these days are so busy they don’t want to spend their weekends fixing up a home. Plus, all of the decorating shows on TV are changing the market and Buyers expectations. You may not agree with it but there’s no point fighting it either.

Potential buyers appreciate an uncluttered home that allows them to visualize their possessions in place.

The goal of staging is to neutralize and showcase your home’s best features by adding and arranging key “props”, both furniture and accessories, so it appeals to more people…a larger market demographic ensures you will get the best price. Some things that you “never got around to” can often be fixed at a minimal cost. For example, a damaged base board or a dangling ceiling fan in the bathroom that you always meant to fix.

The second goal of staging is to create the image of a lifestyle that potential buyers wish they were living. You want an emotional connection between the buyer and your home.
Lastly, the beauty of staging is that you can achieve a dramatic result at a reasonable cost…an outlay of $3,000+ can make a significant difference in the sale price. As more homes come to market, buyers have more choice and it becomes increasingly important  to feature your home in the best possible light.
- Adrienne Farquhar