Real Estate Insider: April 2019 News Report

Happy Easter Weekend! Before you put all of your eggs in one basket, read some of these reports we found useful for making real estate decisions.

If you aren’t debt free going into retirement, you may have considered using your investments to pay off your mortgage. But is that the best retirement strategy? This isn’t simply a “Yes or No” question, there may be more things to consider than you thought. This article is a good place to start if you’ve been contemplating which route to take to retirement. >>

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Solar is the energy of the future without question, yet is buying a house with solar panels worth it today? It all depends on the company and the contract they have! Read here how solar panels on the roof ended up costing this couple more! Would helping the environment be worth a few extra dollars each month? We will let you decide! >>

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Ever heard of smart wood? This BC company is tired of the damage concrete is doing to our environment, and has developed wood that is stronger, lighter, and more soundproof than concrete. Read here more of the benefits of this timber over concrete.  >>

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Living mortgage free is a dream most have, but is pre-paying on your mortgage payments a good way to accomplish this? This article breaks down why pre-paying may not be all it’s cracked up to be! >>

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Buying your dream home might not be the best idea if you want to live your dream life! Don’t just take our word for it, read here why if this couple could go back in time, their “Dream Home” might have been crossed off their list of priorities. >>

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If you are selling your house and you want top dollar, the first thing you should do is call Team Lalovich! The second thing you should do is read this article for 5 tips on staging your home to attract the most buyers! >>

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Housing shortages is a major problem that Ontario is facing; this group has an easy solution! Your move Doug Ford. >>

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What was your reason for your last move? Do you fit in with the majority? The answer might surprise you, find out here! >>

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“2 Years of Home Ownership – The Good, The Bad, and The Ugly” >>

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If you’re contemplating ways to make passive income, this article is for you! Especially if AIRBNB is one of those contemplated ways. >>

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?

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?