The government announced the fair housing plan over a month ago. Wonder how its impacted the GTA Housing market?

In the last few weeks we have seen an increase in the number of listings in the GTA and a drop in number of sales.

One of the reasons that contributed to the increase in listings starting late in March, was that a lot of the investors (those who own homes as investment properties) along with those who were planning to sell their home and pushed up their plans to sell in advance of potential policy changes by the government which eventually came on April 20th. Many anticipated that any policy changes implemented by the government would cool GTA’s hot housing market.

Given the fact that only one of the 16-point plan policies have been implemented so far (the foreign buyer tax), the number of listings continue to increase.  I believe that there are two reasons contributing to the current trend. Part of the reason may be due to the fact that the buyers are choosing to take the “wait and see” approach. On the other hand, the investors think that the market has had its peaked and they are looking to cash out.

One thing that has NOT happened is a drop in price which is a good thing as many had anticipated a bubble burst. However, a decrease in the growth rate on housing prices was noticed.  According to TREB (Toronto Real Estate Board), this past March, home prices were up 33%, compared to the same month in 2016, which is the most competitive I have seen it in the GTA.   In April, average house prices increased 24% compared to the same month in 2016. Although 24% increase is still high, it is a good sign that the rate of increase is dropping.

It’s really hard to tell if this is a reaction to the 16 point plan, or if this would have happened anyways.  Never the less, it’s encouraging to see a growth in the number of listings this past few weeks. If this trend continues, we will hopefully see more balance market conditions sooner than later. But, let’s not jump to conclusion, since the measures announced by the government are only in planning stages, we will have to wait and see what it’s impact will be on the housing market, and that may take at least a year or longer.

In the meantime, the good news for the investor is that their investment property is still considered a sound investment and no one has to panic about a crash. At the same time, there is good news for the buyers, as the number of listings increase, you will have more options to choose from and won’t have to outbid anyone to buy your home.  I think this trend will continue for at least the short term.  Those of you interested in buying, the next few months maybe an opportune time to make your purchase.

Stay tuned as I will continue to monitor the housing market and the impact of the 16-pt plan on it on.

Return on your makeover

Harken_RS

It is no secret that Canadians, specially those in the Greater Toronto Area (GTA) are investing a lot of money in home improvements now a days. Without reading too much into it, one might credit the endless number of home improvement shows on TV as well as the home improvements stores that provide easy access to tools, materials and expertise, all of which one may need to take on a renovation project.  I agree! that is true to a point!, This has been the trend for the past few years but in my opinion there are a couple of factors other than the above mentioned influences that have contributed to why this trend has picked up speed.

One of the main reasons that a home owner decides to renovate is to make their home meet their changing needs, improve their quality of life and treat themselves to a bit of luxury. Now, hold on to that thought. I will explain why! To say that in the past few years the GTA housing market has been hot is an understatement! It has become a sellers market due to having more buyers and much fewer houses for sale. This hot real estate market has brought with it arguably some questionable practices such as bidding wars and bully offers which has become more common in the past couple of years. This of course makes it difficult for many to upgrade their homes or find and buy a home that they really like. Hence, that is why I think more and more people are choosing to renovate their existing home if at all possible instead upgrading their home through a real estate transaction.  In some cases they may choose a home that is not up to par, for a lot less money and renovate it to avoid competing for "ready to move in" homes.

Another reason that has contributed to this growing trend of home improvement is of course, to increase the value of the home or/and prep to sell. In a stable housing market, one would have to be careful where to spend those renovations dollars. As most experts tell you, NOT every reno-dollar spent will return a 100% or more in value. However, I have been witnessed to some crazy real estate transactions in the past couple of years in the Greater Toronto Area that contradict what most experts say. I have seen renovated homes or homes that have upgrades in them sell well over what I would have evaluated their value to be. And more so, such homes sell faster as buyers try to out bid their competition for these "ready to move in" stylish homes. Of course, assuming that the upgrade is done tastefully and done with reasonable quality.

Whatever the reason maybe for renovating your home, here are a few things to think about before you tackle any projects;

Choose projects that give you the biggest bang for your buck

As a realtor I have seen the impact the following improvements have on buyers. It is important to choose projects that give you the biggest bang for your buck and try to keep in mind that the amount spent in improvements should be relative to the value of the house (don't spent $100,000 in improvement if the avg price of the house on the street is $200,000). Below is a list of what I think today's buyers value the most in improvements.

  1. Open concept living
  2. Hardwood flooring
  3. Kitchen
  4. Bathroom
  5. curb appeal
  6. paint
  7. income suites

If you spent those reno dollars wisely, meaning choosing renovations that bring the most value and making sure that its done right and with good taste and good craftsmanship, then you have done well to get the biggest bang for your buck.