Toronto Real Estate - Articles - Zimbio

Tree Thieves

Sat, 16 Nov 2008 18:03:00 GMT

posted by BrianMadigan

By Brian Madigan LL.B.

Now,you might think that I'm talking about people who steal trees. I'm not. I'm talking about trees that steal property for you!

Obviously, these are good trees to have! What they do is this. They take property that belongs to your neighbour and give it to you. They don't do it overnight, it takes a decade, but it works.

It doesn't work with a dog or cat. If you have a pet that goes next door and brings something that your neighbour owns back to you, you're stuck. You have to give it back. Your neighbour still owns whatever it was.

So, tree thieves can come in handy!

It takes a little bit of time, but they go next door, and basically stay there. After 10 years, while your neighbour is enjoying the shade, provided sureptitiously by the tree thief as a "foil", you acquire ownership rights to a portion of property that formerly belonged to your neighbour.

Here are the rules:

1) open,
2) continuous, and
3) undisputed.

These rules relate to "possession" of the property. As the tree leans over into your neighbour's yard, it can't simply take up air space. It has to interfere in some way with the boundary of the property at ground level.

So, let's assume that it knocks over the fence, or pushes the fence back out of its way at ground level. What happens here? Most of the time, people like trees, so no one objects. No one moves the fence back to its proper original position. It is an issue that is simply ignored. It happens so gradually that no one really pays that much attention.

However, after 10 years, the rights of adverse possession (squatter's rights at common law) apply and you would be entitled to make an application to the Court to have the new property line as established by your tree thief, confirmed. All you have to do is prove that the possession of the land was open (in full view of your neighbour), continuous (uninterrupted for 10 years) and undisputed (no lawsuits).

In the Middle Ages, animals could be charged with criminal offences. So, if your dog stole someone's property, your dog might be charged with theft, and on conviction might be sentenced to some form of servitude or even executed.

But, according to the common law, a tree is a plant, and although it is indeed a living thing, it cannot be charged with a criminal offence. So, it really could never be punished in any way, unless you were to consider chopping it down and turning it into a hardwood floor "punishment".

Nevertheless, as society matured, it was determined that animals really should not be charged with criminal offences. Now, some people might say, particularly the animal rights activists that that was a step backward. After all, they are now being treated just like "plants".

I really don't want to get into a debate over whether plants and animals should both be charged with offences under the criminal code, or whether they should both be above the law, and completely exempt and immune from prosecution.

However, all I can really say is look at this picture. Here are some great tree thieves. It took them over thirty years to steal the property from the next door neighbour, but they did it. First they sought out some sunlight, then their limbs grew bigger, then their trunks grew bigger, then they knocked over the fence and moved the boundary line of the property over to the furthest point they could possibly toss the fence.

You know what would be neat? A tree thief that could throw things!

That would be a good project for a botanist. I'm sure that would qualify for a government grant.

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Coldwell Banker Innovators Realty
www.OntarioRealEstateSource.com

Making Sense of Toronto’s Real Estate Decline in October

Wed, 13 Nov 2008 16:42:24 GMT

posted by MoveSmartly

John Pasalis in Toronto Real Estate News

For those who missed the headlines last week, the Toronto Real Estate Board announced their bleak sales figures for October 2008. The number of houses sold in the greater Toronto area dropped by 35% over last year and prices declined by 13% in the city of Toronto and by 8% in the 905 region.

Earlier this week I posted a report that discussed how the city of Toronto land transfer tax inflated real estate prices during the fourth quarter of 2007 and how this is now exaggerating the price decline in Toronto. Many purchasers of high end homes rushed into the market towards the end of 2007 to beat the January 1, 2008 deadline to avoid the tax. This resulted in a significant increase in the number of high end homes selling during the final quarter which inflated average home prices during that period.

But the land transfer tax does not help us explain why prices in the 905 region declined by 8% and it also does not explain why more affordable MLS areas are seeing a significant decline in average prices. I decided to dig a little deeper into TREB’s most recent MarketWatch report so see what’s driving the slowdown in some of the worst performing MLS areas.

Here’s a summary of the MLS areas that recorded the biggest decline in prices for October 2008.

I decided to take a closer look at the five worst performing MLS areas in the city of Toronto and for the 905 region I decided to focus on N01, N02 and N03 which covers the Richmond Hill area. The N02 and N03 MLS areas are not listed above but they both posted double digit declines in average home prices. I focused on these 905 regions because of their proximity to Toronto and to each other.

I started by looking at the sales statistics across the different housing types (detached, semi, condo apt etc) to see which segment if any could explain the decline in prices for each MLS area. If we take a closer look at C11 for example we get the following change in average prices across the different housing types.

At first glance it appears as though the Condo Townhome segment is pulling down the average price for houses in C11. But when we look at the sales data for both years, we see a very different story.

Here we see that sales for higher priced detached homes declined by 89%. In October 2007 detached homes accounted for 38% of the sales in C11 and in 2008 detached homes accounted for just 11% of sales. Even if actual property values remained constant, the decline in sales of higher priced detached homes would push average prices down for the period.

The following chart shows the percentage decline in sales from 2007 to 2008 for homes priced under $400K and homes priced over $700K. Each of the MLS areas saw a bigger decline in sales of houses priced over $700K, including those in the 905 region. This suggests that at least part of the decline in sales can be attributed to the fact that sales of higher priced homes are slowing at a faster rate than lower priced homes.

I excluded W09 from the above chart because it did not have any sales above $700K. But if we look at the sales figures for W09, we get a very similar story to the one above. The average price for a house in the area was $260,155 in October 2008, a 23% drop over the previous year. But by looking at the sales figures we can see that the entire decline in sales was in either detached or semi-detached homes which are the two more expensive housing styles in the area. The decline in sales of higher priced semi’s and detached homes in that MLS area helped drive down average prices last month.

These are some good example of why average prices alone may not tell the entire story for a neighbourhood, MLS area or city. Average prices declined in all of the above areas but did they fall because every house in the area was suddenly worth 20%-30% less or did average prices drop because sales of higher priced homes declined faster than sales of lower priced homes?

In the case of the Greater Toronto Area, I suspect that we’re seeing some modest declines in property values but this is being exaggerated by the fact that sales of higher priced homes are declining faster than sales of lower priced homes.

John Pasalis is a sales associate at Prudential Properties Plus in Toronto and a founder of Realosophy. Email John

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The Foundry Lofts

Sun, 17 Nov 2008 21:49:25 GMT

posted by torontocondos
Conversion went from locomotives to loft living Atrium highlights warehouse loft conversion project in the Junction By Sydnia Yu - The Globe and Mail Can you picture yourself standing - in the dead of winter - among the trees, benches and walkways of a 16,000-square-foot enclosed green space at the centre of your ...

ORES Real Estate Index for October 2008

Mon, 11 Nov 2008 01:39:00 GMT

posted by BrianMadigan

By Brian Madigan LL.B.

I set up the ORES Real Estate Index last year. In many ways it is like the CPI (consumer price index) in the sense that it is designed to track values over a period of time.

The Index commenced 1 January 2004. All related prices were converted to 100, so everything to be compared would have a common starting point.

Single Family Housing in the GTA

When you are looking at house prices for single family homes in the GTA, you will find the following:

120.38…..31 October 2008
124.60…..30 September 2008
131.53….. 30 June 2008
132.11…...31 May 2008
132.24 …. 30 April 2008
127.42….. 31 March 2008
127.86..... 29 February 2008
125.63..... 31 January 2008
126.31..... 31 December 2007
130.76..... 30 November 2007
130.98..... 31 October 2007
100.00..... 1 January 2004

This means that the average price for single family homes in the Greater Toronto area has increased 20.38% in 58 months. So, this is 0.35% per month or 4.22% per year. You will also see that the height of the market was reached in April. Usually, it should be May. This year the peak was reached early and the numbers have settled back since that time.

There were several remarkable factors that occurred in the month of October:

• Worldwide stock market crash
• Worldwide liquidity crisis
• Commodity price declines in every sector
• Expectation of a worldwide recession
• expectation of numerous bank failures

These factors were very unusual, with media reports noting comparisons to the Great Depression in the early 1930’s. So, all of these numbers have to be viewed in the context of the world markets and the international media in the month of October.

Condominium Market in the GTA

Here are the comparable statistics for condominiums throughout the GTA:

114.97…..31 October 2008
120.63….30 September 2008
119.71…. 30 June 2008
119.66….31 May 2008
122.61…. 30 April 2008
118.79…. 31 March 2008
117.17..... 29 February 2008
114.39..... 31 January 2008
118.04..... 31 December 2007
120.82..... 30 November 2007
123.17..... 31 October 2007
100.00..... 1 January 2004

You will notice that the performance is less than the comparative single family home. The condo prices fell quicker during the month than single family homes. This may be due in part to the fact that a number of condominiums were owned by investors who are faster to liquidate in a declining market environment.

Central Condominiums

Let’s have a look at the parts of the condo market. The numbers for centrally located condos have stood up quite well. These are the ones in downtown Toronto:

142.88…..31 October 2008
149.60…..30 September 2008
151.75….. 30 June 2008
142.41…..31 May 2008
152.99…. 30 April 2008
147.20….. 31 March 2008
140.37..... 29 February 2008
141.90..... 31 January 2008
144.50..... 31 December 2007
151.04..... 30 November 2007
153.06..... 31 October 2007
100.00..... 1 January 2004

The trend to downtown centrally located condos is evident over the last four years. There was a substantial drop in May, but much of that loss was regained in June. Now, we are back to the May numbers. It is noteworthy that this particular market is so strong. This is also the location of the greatest number of new projects, so one might expect a decline in prices due to the increase in supply, but not so far.

East Condominiums

These are the condos in the eastern areas served by the Toronto Real Estate Board. Here’s the performance:

126.40…..31 October 2008
132.67…..30 September 2008
129.42…. 30 June 2008
130.76…..31 May 2008
130.07…. 30 April 2008
124.80…. 31 March 2008
124.45..... 29 February 2008
123.00..... 31 January 2008
129.11..... 31 December 2007
125.50..... 30 November 2007
121.04..... 31 October 2007
100.00..... 1 January 2004

This market generally has performed quite well. The performance is almost the same as that of single family homes. However, the market here reached its high in May. In fact, that’s the usual high water mark for real estate values.

North Condominiums

The numbers here continue to demonstrate poor performance:

103.65….31 October 2008
110.50….30 September 2008
111.85…. 30 June 2008
114.69….31 May 2008
111.09…. 30 April 2008
115.11….. 31 March 2008
114.14..... 29 February 2008
108.10..... 31 January 2008
112.33..... 31 December 2007
118.18..... 30 November 2007
125.36..... 31 October 2007
100.00..... 1 January 2004

There was a significant downward trend in the month, and the overall performance has been dismal over the last four years. You will note that there has been a rather substantial decline since last Fall.

West Condominiums

The west condominiums declined slightly over the month. The height of the market was reached in May and overall performance was approaching the east condos and exceeded the single family homes.

124.10…..31 October 2008
126.10…..30 September 2008
117.61…. 30 June 2008
127.64….31 May 2008
127.50…. 30 April 2008
119.25….. 31 March 2008
124.11..... 29 February 2008
116.24..... 31 January 2008
118.61..... 31 December 2007
116.57..... 30 November 2007
119.39..... 31 October 2007
123.42..... 30 September 2007
100.00..... 1 January 2004

Market indicators, factors and conclusionsThere are a few general conclusions that may be drawn:

• You were better to have a downtown Toronto condominium over the last 4 years (actually 58 months) than other property (142.88)

• Single family homes provided a reasonable benchmark rate of return (120.38)

• East condominiums performed reasonably (126.40)

• North condominiums continue to be the poor cousin in the market (103.65)

• west condos are now exceed the performance of single family homes (124.10)

The downtown Toronto Condominium market is the best performing residential real estate over the last four years in the GTA. By comparison, it rates particularly well in relationship to other financial and economic benchmarks.

Other Market Comparisons

Sometimes, it is wise to look at some other market factors. So, I have converted some popular indexes and commodity prices to the ORES format. Basically, that means that all other indexes (and commodity prices) are given a base level 100 starting point as of 1 January 2004. To illustrate the current trend, the September 2008 numbers follow in brackets. Here is the comparison:

197.02….. (227.70)….. oil (per barrel)
164.67….. (181.63)….. gold (per ounce)
120.38….. (124.60)….. ORES Real Estate Index
118.79….. (135.45)….. TSX
88.54….. (105.38)….. Nasdaq
88.34….. (104.91)….. S&P; 500
91.66….. (105.46)….. Dow Jones Industrial

Over that period of time, you were best to speculate in the price of oil, failing that gold was a good choice. However, there have been significant declines recently, and in particular throughout the month of October.

The real estate index is moving up. As an asset class, it is now third, whereas a month earlier, it would have been fourth. This fact reinforces that real estate is a good long term performer.

Our own stock market has fared pretty well compared to the substantial declines in the US. At the lower end of performance is the US stock market with all three indicies at the bottom of overall performance scale. Our market is up 18% but the US markets are down about 10% compared to a I January 2004 starting point.

Real estate seems to be about where it should be: not too high and not too low.

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Coldwell Banker Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com

CMHC Reports that Toronto Housing Starts Remain Strong in October

Sun, 10 Nov 2008 15:35:00 GMT

posted by MarkArgentino

CHMC (Canada Mortgage and Housing) reported that Toronto Housing Starts Remain Strong in October

TORONTO’S HOUSING STARTS REMAIN STRONG IN OCTOBER

TORONTO, NOVEMBER 10,

2008 –

The seasonally adjusted annual rate (SAAR) of total housing starts fell by 11 per cent to 46,200 in October from the previous month, according to preliminary housing starts data released today by the Canada Mortgage and Housing Corporation (CMHC) for the Toronto Census Metropolitan Area (CMA).

After edging lower, the annual rate of home starts still remained well above the average for the past three years.

Total housing construction on an unadjusted basis remains strong so far this year with starts up by 31per cent compared to the same time period a year earlier. Condominium apartment starts continue to drive new home construction.

"Condominium apartment starts continued to be much higher than last year’s levels through October," says Jason Mercer, CMHC’s Senior Market Analyst for the GTA.

"This strongest level of condominium apartment construction on record has resulted in a substantial jump in total new home construction this year.’’