Friday, June 16, 2017

Ontario Fair Housing Plan – Takeaways For Windsor-Essex Real Estate Market

The Ontario Fair Housing Plan has now been around for almost 2 months.  The effects are starting to show in the GTA with month over month sales dropping 25%+.  In our last blog we reviewed the highlights of the plan and what you needed to know.  This post we are going to be discussing those highlights and specifically how they affect our home market of Windsor-Essex.

A 15% Foreign Buyers Tax In The GTA
This tax doesn’t apply to our market and only applies to the GTA area.  A large percentage of these foreign buyers were investors and this additional cost will make investing in the GTA less attractive.  With sales down since being introduced, it’s obvious these investors are pulling back.  This should lead to investors looking away from the GTA, naturally coming south where the tax doesn’t apply and their dollar goes much further.  These additional investors will only add fuel to the fire for local investment property demand and could push cap rates even lower.  Residential demand should also get an added boost.

Expanding Rent Controls
With a vacancy rate below 3% in the area, there has been upward pressure on market rents.  These rent controls will affect the functioning of this market and should ultimately lead to a lower supply of rental units pushing down the vacancy rate.  This effect will be seen in all markets in Ontario.

Changes To The Landlord Tenant Act
These tenant-friendly changes should also lead tenants to stay longer in their units when combined with the expanded rent controls.  Turnover should be lower for landlords.  This would tend to lower vacancy rates as well.  These effects will also be seen across Ontario.

Vacant Home Tax
We don’t see much evidence of vacant homes being bought by foreigners in our market.  This is more of a Toronto/Vancouver problem that shouldn’t have much effect in our area. We don’t see The City Of Windsor legislating something like this at the present time.

Levelling Property Tax Levels For New Multi-Residential Buildings
This should help the economics of building rental units, but combined with enhanced rent controls this might be nullified.  The low vacancy rate is supportive but further incentives from the City might be needed to encourage these new rental units.

Those are our local takeaways from the Ontario Fair Housing Plan.  What are yours?

Monday, May 29, 2017

REVIEW: Ontario Fair Housing Plan – What You Need To Know

Housing is all the rage in our province these days.  Everyone is talking about it.  Markets are at all-time highs and there seems to be no end in sight.  It has also become extremely unaffordable in markets like the Greater Toronto Area (GTA).  Naturally, the governing Liberal party has decided to do something about it.  Last month they introduced a comprehensive package of measures to stabilize the market called the Ontario Fair Housing Plan.  Today, we are going to review some these measures.

A 15% Foreign Buyers Tax In The GTA
This is the big one you probably saw in all the headlines.  Essentially, they are imposing a 15% non-resident speculation tax on the price of homes in the Greater Golden Horseshoe Area of Ontario.  The tax will apply to individuals who are not citizens or permanent residents of Canada and foreign corporations.  This will only apply to single family homes (or condominiums), and not to multifamily, agricultural land, or commercial/industrial property.  It will also not apply to the rest of Ontario (including our hometown of Windsor).

Expanding Rent Controls
Previously, rent control only applied to rental units built before 1991 in Ontario, but this will no longer be the case.  The allowable rent increases will be at the rate posted in annual provincial rent increase guidelines and run in-line with the Consumer Price Index (CPI) rate (also referred to as inflation).  These increases will also be capped at 2.5% per year.  For example, if you had a rental unit that was tenanted, when you come up to the 1 year anniversary date from your lease, you will only be allowed to increase the rent by this provincial guideline rate (say 2%).  So if you charged $1000/month, you could increase the rent to a maximum of $1020/month.

Changes To The Landlord Tenant Act
The Landlord Tenant Act is the legislation that governs the relationship between Landlords and Tenants in Ontario.  These changes to the Act will include developing a standard lease in multiple languages, tightening provisions for “Landlord’s own use” evictions, ensuring tenants are adequately compensated if asked to vacate under this rule, and technical changes at the Landlord-Tenant Board.  Landlords will no longer be able to use their own leases with their own clauses and will need to use this standard lease that is being introduced.  The tightening of "Landlord's own use" evictions will make it more difficult for Landlords to evict Tenants when they claim to need the unit for themselves or an immediate family member.  This has been used in the past in questionable manners at times to get around rent controls.

Vacant Home Tax
Introducing legislation that would empower municipalities to impose a tax on vacant homes to encourage property owners to sell or rent unoccupied units.  This is pretty self-explanatory with the hopes of stopping speculation and to increase supply of properties for sale and for rent.

Levelling Property Tax Levels For New Multi-Residential Buildings
Ensuring that property tax for new multi-residential apartment buildings is charged at a rate similar to residential properties.  High property taxes on apartment buildings lead to higher rents for tenants and also make it less economical for developers to build new rental supply.  This measure hopes to encourage more rental unit developments.

Those are the big measures to take away from the Ontario Fair Housing Plan.  Next week, we are going to talk about some of the takeaways from these measures as they affect our local market.  What are your thoughts on these measures?

Friday, May 12, 2017

GUEST BLOG: A Day in the Life of a Lawyer

Today we have a guest blogger! Continuing on with the theme of "a day in the life of", we have another professional that realtors often work with - a lawyer. Lyndsey Lalovich, an associate with the Willis Law Firm (and my Sister), is going to take us through a typical day.

Ever wondered what a day in the life of a corporate lawyer would look like?

I am a lawyer with Willis Business Law, a new, cutting edge business law firm, located in the heart of downtown Windsor at 1 Riverside Dr. W. Around here, they call me the “closer”. I am the lead associate lawyer on all our firm's transactional work, overseeing all aspects of a deal and going the extra mile to ensure timely completion of deliverables.

So what does a day in the life of a transactional lawyer look like? While no day looks quite the same in this field, below is a snapshot of my day!

7:00am – Rise & Shine! Hearty breakfast and morning news.

8:00am – En route to the office, Willis Business Law, to start another day.

8:30am – The calm before the storm. Catch up on emails and get organized for the day.

9:00am – Join Willis Business Law’s founding partner, William Willis, for a meeting with clients in the beautiful boardroom at Willis Business Law to discuss a proposed commercial real estate purchase. Complex factors related to the transaction made the face-to-face effective to strategize the best approach.

10:00am – Return calls and emails.

11:00am – Time to put my head down and do some work! Prepare closing agenda for an upcoming commercial acquisition and work with our corporate and real estate clerks to get the package of closing documents prepared.

12:00pm – Networking lunch! Relationship building is key in this career. One of the best parts of working downtown is our close vicinity to our referral sources and, of course, the great restaurants!

1:15pm – More emails.

2:00pm – Signing with client for a commercial financing transaction. Once the client leaves, the pressure is on! Our team needs to get the signed documents to the other lawyer as fast as we can to ensure there is no hold up in the closing of the transaction. With our experienced clerks, we have it down to a science!

3:00pm – Uh oh... Residential real estate closing gone sideways. Various phone calls (and emails of course) with the other lawyer and our client to get the issues resolved.

4:00pm – Wrap up work projects for the day. Have I mentioned responding to emails? Much like other fields, nowadays email is the primary mode of communication for lawyers. At Willis Business Law we try our best to maintain a 24 hour response time on emails, even if we are just responding to let the client know we will look into their inquiry and get back to them. This means a significant percentage of my day is spent sitting in front of this computer keeping up with my inbox!

6:30pm – Head home for some dinner with the hubby.

7:30pm – Gym time. After sitting at a computer for most of the day it’s especially important to stay active in the evenings!

9:00pm – Wind down. Watch some Big Brother Canada while treating ourselves to protein pancakes!

10:00pm – Get a head start on preparing for tomorrow’s work day and, you guessed it, respond to emails.

11:00pm – Lights out!

So there you have it folks. Thanks for participating Lyndsey. Contact her for all your business law needs. You can find more info about her and the firm at Thanks for reading!

Thursday, April 13, 2017

A Day in the Life of A Real Estate Agent

Have you ever wondered what a typical day looks like for a realtor?  Well I have bad news for you… no days in our industry are typical!  Depending on the day we could have a whole range of things going on.  You never know when your appointments could all cancel and you're left waiting around for a document to get signed or for a call back from another professional.  Sometimes you'll wake up thinking the day will be quiet, but by 10am it has completely flipped flopped and the rest of your day is totally booked.

A typical day just doesn't exist. But here is an example of a recent work day I (Russel) had so you can peer into the life of a real estate agent!

8am – Breakfast (most important meal of the day) and answer some emails.

9am – Out the door ready for the day.

9:30am – Inspection out at a waterfront property in the County.

12pm – Drive back into Town and return calls in the car (over Bluetooth of course).

12:30pm – Business lunch Downtown.

1:30pm – Meet photographer for photos for new industrial property that we listed this week.

2pm – Tenant comes to view same property that was just listed this week.

3pm – Back to the office to do some follow ups and work on an appraisal for a property we are being asked to submit a listing proposal on next week.  Return more phone calls and respond to emails. Set up appointments for tomorrow.  Eat a snack (Daryl's Bar).

5pm – Meet tenant to view office unit we have listed.

6pm – Head home.  Return some more calls.  Appointments finished for the day.

6:30pm – Dinner at home.

7pm – Gym time.  Need it to stay fit and healthy.  Productivity and sleep quality slip without it.

8:30pm – Return Home.  Protein shake while reviewing new listings that came up that day.

9pm – Finish up appraisal for next week.  Prepare for appointments tomorrow.  Answer more emails.

10:30pm – Netflix and Chill.

11:30pm – Read some non-fiction.  Recent recommendation is Thinking Fast and Slow by Daniel Kahneman.  Reading is very important to keep you mind sharp and it helps me wind down.

Midnight – Lights out!

I didn’t pick the most exciting day but it was pretty busy and varied in scope.  The important thing in this business is to be consistent and work hard everyday.  It is also important to have a good work-life balance so you can keep up your productivity.  We are lucky to have flexibility in our schedules that way.  Is this day in the life different than you would have expected?

Monday, March 27, 2017

2017 Real Estate Trends: Bidding Wars – Part 3

For the last two weeks we've discussed several factors which are leading to the constant bidding wars in our real estate market.  This week we will wrap up the discussion with some factors you might not have thought of.  So without further ado…

Low Vacancy Rates
The Windsor-Essex area’s vacancy rate on rental units dropped to 2.9%, with CMHC’s latest report in the fall.  That is an amazing turnaround from 2008-09 with 12-14% rates.  With this decrease in vacancy comes a decrease in available rental supply and an increase in rental prices.  People in the area considering whether to rent or buy might be disappointed to see the available options for rent on the market and what that rent gets them.  Combine this with low interest rates and it can in many cases make it cheaper to own than rent.  This low rental supply and high rent price dynamic has definitely added to the demand from buyers in our market.

Sticker Shock On New Construction Prices
The cost of new construction in the area has really taken off in the last few years.  Part of that is based on increased demand.  But part of it also comes from increased soft and hard costs including building permits, increased building code, increased import prices due to the low Canadian dollar, etc.  Many people are no longer able to afford a new home so they are forced to settle for finding a suitable resale home, increasing demand of existing homes.  There is also a consideration that resale homes will tend to keep pace with increases in new construction prices, so the relative values don’t get out of whack.

A Period Of Depressed New Construction Before This Cycle
Approximately between the 2007-2011 period, there was a rough patch in the demand for new housing.  The auto industry was teetering on the brink of bankruptcy, unemployment was high and people were leaving the area.  Naturally, there wasn’t much building going on.  Now that things have turned around, the new supply hasn’t been able to keep up with the pent up demand due to that period of under-building.  To give an example, the condo market is extremely tight now for supply.  Hardly any condos were built in the area over the last 10 years.  But during those 10 years the population aged, the millennial segment of the population grew (with their admiration for condos) and the demographics were there for condos to be built.  However due to economic reasons, none were built.  Now we are in a period of catch up where there is a lag of new condo supply to meet that pent up demand.  Let's build some condos!

Upcoming Infrastructure Projects
Smart infrastructure has great spin off for the local economy and people are positioning themselves ahead of what’s to come.  We have some big projects coming to the area.  The new bridge crossing, the accompanying recently completed Herb Gray Parkway, the new Mega Hospital (even if the site is undetermined), the University of Windsor is moving downtown, and a new City Hall, just to name a few.  These sorts of projects if done correctly, increase economic activity and efficiency, lead to increased investment in the area, and trickles down to increased housing demand.  The future looks bright for the foreseeable future on this front.

This exhausts our discussions on the factors leading to bidding wars in our local real estate market.  We hope you found it insightful.  Do you agree or disagree with any of these factors.  Any you feel we missed?

Thursday, March 16, 2017

2017 Real Estate Trends: Bidding Wars – Part 2

Last week we discussed a topic that everyone seems to be talking about: bidding wars.  Some of the cause and effect for these trends are hard to pinpoint.  Today we are going to expand on some of the factors leading to these bidding wars, with some that are less obvious.

Migration To The Area
As explained last week, part of the population growth that is occurring in the area comes from elevated levels of immigration.  The other part of the equation is the people migrating to the area from other parts of Ontario and Canada.  One large drag we had back during the economic downturn was people moving out west for Jobs after being laid off in the auto industry.  With the rebound in the auto industry and the downturn in the oil patch, this trend has reversed.  And not just out west, but from other population centres in Canada as well.

People Choosing Windsor-Essex As A Retirement Destination
As the population of Canada ages with the Baby Boomers, a large segment is hitting or will soon hit the traditional retirement age.  Some of these boomers are choosing to retire in lower cost areas such as ours to boost their retirement balance sheet.  Moving from high priced markets such as Toronto or Vancouver to ours provides a way for them to access the equity in their home and in many cases buy a similar home and put a very significant sum in the bank to fund their retirements.  To add to this, the area boasts some of the best weather, easy access to the US, wineries, and more – all perks to retiring in Windsor-Essex.

Increased Investment From Out-Of-Towners
A lot of real estate investors invest based on economic fundamentals, something our area didn’t have for a long period of time.  That has changed and so has the appetite to invest in our market.  Leading indicators such as economic growth, low unemployment, population growth, new construction, etc. have all been very supportive and investors have followed.  Traditional investor segments of the market, such as multifamily, might be the hottest markets of all.  In fact, the inventory of investment properties is so low its makes it extremely tough for buyers in this market.

Unseasonably Good Weather This Winter
The prognosticators were calling for a brutal winter in our area this year.  Didn’t end up playing out that way (fine by us ).  In fact, people were golfing in February this year in our area!  This balmy weather pulled up some of the traditional spring market activity and definitely added to demand.  This is a seasonal effect but no doubt helped the statistics to start the year.

Those are some additional factors that have resulted in the continued bidding wars.  Next week we will exhaust our analysis to wrap up our thoughts on the subject.  Have you seen any of these factors playing out too?

Thursday, March 9, 2017

2017 Real Estate Trends: Bidding Wars

As spring quickly approaches, the typical peak period housing market activity is almost here.  Only this year it seems to have come early.  The statistics for the first few months of 2017 have been off the charts.  Bidding wars are everywhere and people are asking when will it calm down.  Well today we are going to talk about some of the factors driving these bidding wars and buoyant market activity.

Low Levels of Inventory
It seems month after month the same story emerges.  Sales are up 10%+ and listings are flat to down on a monthly year over year basis.  As this trend continues, each month the increasing sales are eating up more and more inventory and driving down inventory.  We are now at the point where we have very low inventory… not enough houses to go around to meet demand.

Continued Low Interest Rates
Interest rates have been trending down for years and have pretty much held near record low levels for the past year to 18 months.  Today you would be looking at 5 year fixed rates in the 2.5% range and variable as low as 2%.  These low rates make it easier for the buying public to service more debt and afford to pay more for their homes.  This all leads to increased demand from buyers who are willing to pay more for what they want as it is still affordable to them on a monthly basis.

The population is growing and a big part of that influx is coming from immigrants.  The type of immigrants coming to Canada these days have much deeper pockets than previous generations and hold widely held beliefs in the concept of home ownership and hard assets (such as real estate).  This is a large and growing segment of the market, and they also seem to be buying up lots of new construction.

Low Unemployment
Not that many years ago our region had among the highest unemployment rates in Canada.  We have rebounded from 10%+ to as low as 5.2% recently, which is below the Federal and Provincial average.  Manufacturing is booming again, the economy has become more diversified since the downturn, and now when we talk to business owners their biggest complaints are about difficulties in staffing.  What a turnaround it has been and these workers have steady paycheques allowing them to buy larger homes and more of them. Demand increased!

Those are some of the straightforward factors leading to the strength in our local real estate market recently.  Next week, we will continue on with some lesser known factors.  What has your experience been out there this year?