What the heck?

April 10th, 2018

Ontario seems to be experiencing an affordable housing crisis. Over 50% of Ontario households between 25 and 34 are renting their home and it is a trend that expected to increase because of the rising cost of construction, some stagnation and limited subsidized housing availability. CMHC asserts that the supply of rental homes is exceptionally low and that is causing rents to climb.

Ontario is home to 8 out of 10 centres across Canada that have been identified as having unaffordable rents.

Since 1990, less than 10% of all new builds have been purposely built as rental units. 85% of renters in Ontario live in private rentals and 82% spend more than 30% of their income on shelter.
Housing costs have caused a lowe quality of life and well-being for an increasing number of low and moderate income earning renters. Households on fixed incomes or earning minimum wage are facing affordability challenges. Too many people are choosing to keep a roof over the heads and having to forgo a healthy diet or important medication.

Some advocate for a strategy that decrease financial incentives for landlords to push out long term tenants but this is difficult for landlords facing higher taxes and utility costs. None of this is new news.
The Ministry of Municipal Affairs and Housing is responsible for affordable housing programs in Ontario. The Social Housing Reform Act, 2000 guides social housing programs across the province which, for this area, operates out of the County of Hastings. In 2014, the province signed an agreement with the federal government to improve access to affordable, sustainable housing. In 2016 the federal budget included an increase in the funding commitment.

Cottage Time

March 17th, 2018

It's that time of year, again. In Ontario, even though some people have winterized cottages, the majority of traditional cottages are still enjoyed for about 5 months of the year.

Springtime brings on those romantic images of packing up the car and escaping to a quieter place. Sunny days on the deck, a leisurely swim, the sound of loons. Cottage owners know it isn't that simple.

Cottage ownership comes along with maintenance from lawn care to dangerous tree removal and mechanical issues. Even something as basic as having a good supply of clean water can pose a challenge. Cottage ownership comes along with all sorts of responsibilities.

Options like fractional ownership and renting offer a solution for people who just want the authentic cottage experience with family and friends, without the worry of cleaning and upkeep. There are many websites that offer rentals with choices from luxurious properties with extraordinary amenities to more modest rental cabins.

While renting is an option that eliminates many of these responsibilities, ownership gives you the opportunity to enjoy a property while building equity. The interesting thing is that there is a market for rentals so you may be able to produce an income to pay for all of the maintenance and improvements you wish to make, as well.

Affordable Housing in Rural Ontario

March 13th, 2018

I hate to say it, but there is a new reality in the housing market. First of all... people are moving from the GTA with a pocketful of cash, so we have a demand for housing that is outpacing the supply. What this mean is that, if a property is priced appropriately, it sells fairly quickly and prices have been pushed up because of the affluence of the relocating buyers. With ultra-high expectations and a lack of suitable inventory, many people are choosing to rent, temporarily.

The unfortunate victims are first time buyers, who are struggling to qualify for increasingly stringent borrowing regulations, brought in to cool the craziness in Toronto and Vancouver where housing prices have been at record highs. The cost of development and construction has jumped substantially and a simple 1000 sq foot bungalow is now reaching $300,000 to construct. Potential buyers may have the cash flow needed to cover the kind of payment that price commands, but have a more difficult time saving the 20% needed to put down on their purchase. More people are having to settle for renting- which has never been ideal... and the demand for rental housing is pushing prices up- higher than an average mortgage payment. This just makes it harder to save a down payment.

Here, in cottage country- small town Ontario- we have not got a lot of townhomes or semi-detached houses or triplexes. This is something we are going to have to consider- perhaps ahead of the tiny house movement that has had mixed success in other regions.

An Emotional Crisis: The Family Cottage

February 10th, 2018

Baby Boomers are possibly the largest generation of cottage owners and their children may not be able to afford the capital gains taxes of their inheritance or care to put the effort into maintaining the family cottage.

Cottages that have been in the family, in some cases for generations, develop and enjoy a huge amount of emotional value... but they have also become extremely valuable investments that may no longer be passed down because the transfer of ownership will trigger a large tax invoice.

Folks who bought their places in the 40s, 50s and 60s for really modest prices, are now looking at evaluations that have climbed into the million or millions range. As a general rule of thumb, roughly 50% of the increase in value of a cottage (a secondary residence) is considered capital gain and there's a pretty high tax rate attached to that evaluation. There are ways of handling this, ahead of time- such as purchasing estate life insurance or transferring the property during one's life time by way of a gift, or transferring the property to a trust. This is something to be discussed with professionals, like your lawyer and or accountant.

On the other hand, we are also seeing cases where kids think they want the cottage but they have never contributed to its upkeep and their parents have always paid for cottage expenses like repairs, maintenance, taxes, utilities etc. They may think they really want to hang onto the cottage but they really have no idea about how much work is involved or how much it costs to maintain a cottage.

It's never a simple decision to list a long-time family cottage for sale. It's almost always an emotional, gut-wrenching experience for everyone concerned.

Cottage-loving people in the industry are all too aware that there is a complete shift in the whole culture of cottaging as we knew it- back in the day.

My Prediction: The Recent Downward Trend Won't Continue

February 6th, 2018

My friends & colleagues in the Toronto Market have been complaining that business last month was the slowest they've seen in a long time.

It could be that the measures taken by the government and tougher mortgage rules are actually curbing prices that were spiraling out of control. It could also be that there was a rush in December, with Buyers trying to beat the changes in regulations. It seems to be the trend in a lot of markets.

Perhaps sales have tumbled, I'm not convinced that it's a trend that is going to continue. I think volumes are going to stay down, but prices seem to have stayed fairly stable... so I'm betting prices are actually going to rise.

We'll see what happens!