Welcome to Properties Ontario’s weekly update. Our team goes through numerous articles and create summaries for you! Please do not hesitate to contact me if there are any topics you would like to discuss further or if you have a general question about buying, selling, or leasing residential or commercial space. For current listings in the marketplace, check out our website www.propertiesontario.com
Canada’s Most Expensive Rental City
According to a Rentals.ca report, Toronto has now surpassed Vancouver as the most expensive city to rent. The average rent for a one bedroom in Toronto is $1,862 for the month of June. This is up 1% when you compare the figures with May 2018. As for Vancouver, the lease rate for a one bedroom is $1,833, a 5.4% reduction compared to May 2018. Not surprisingly, the third to sixth most expensive rents were other cities within the GTA. Richmond Hill was third, with rent being $1,721, then Etobicoke ($1,471), then Mississauga ($1,435) and finally at sixth place, Oakville ($1,373).
North American Crane Report
Rider Levett Bucknell (RLB) produces a report every quarter for the number of cranes visible in the city skyline. Toronto is at 97 construction cranes for high-rise buildings which include residential, commercial, or mixed-use at the end of quarter two. There is more supply coming but it is tough to see it keeping up with the demand in the GTA. The second ranked city is Seattle which has a remarkable 40% less cranes than Toronto. Key new construction projects are launching this fall and the demand is picking it up very quickly. Please do not hesitate to reach out to us if you’d like an update regarding new construction projects.
HELOC and Mortgage Default Relationship
HELOC (Home Equity Line of Credit) can increase the chances of mortgage holder defaulting. To give you a relative comparison, 40% of mortgage defaults that occurred in the US between 2006 and 2008 were homes with outstanding HELOC balances. In addition, 35% of buyers in Toronto (40% in Vancouver) receive help from their parents when putting a down payment for a home. In many cases, these funds provided by parents are taken from HELOCs. We are currently at $286.81 billion of HELOC debt at the end of quarter 2 of 2018. When compared to GDP, HELOC is 12.89% of total GDP. This is a very high figure that will likely reduce as interest rates continue to climb. It is very important that client’s consult with their realtors, accountants, or financial advisors to ensure they do not over leverage themselves. Using HELOC for down payments is not a new thing but it is easy to get lost in the home equity, especially with prices increasing. Never over leverage yourself and have reserve fu