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David Pylyp

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Toronto Vacancy Factor is at 1%

02-09-12
David Pylyp

With all the talk about Toronto Condo Bubbles, Housing Bubbles and all the informed conversations online about HOW the Real Estate and condo market in TO will collapse this year; I offer this simple answer.

Toronto has a vacancy factor of less than 1% Yes 1%
This article from Forbes magazine posts in very graphic fashion the vacancy factors in major US cities that have exceeded 14% and actually have broken the figures down separately for homes for sale. This is further impacted by the homes repossessed under foreclosure but not yet released for sale by the bank.
It was during my conversation with Tamara Dorris, a Sacramento Real Estate personality, a guest appearance on her BLOG TALK radio show that some misconceptions came to light.
Power of Sale properties in Toronto are actually far and few between; any new construction crane that you see is prepaid by 15% on each unit and a sales rate of 75 to 80% before they even start digging the foundation. Investors, business and First time buyers are buying because they can rent with a (1% vacancy factor) market rent averaging $1,500 for a one bed $2,000 for a two bedroom.
Toronto is in a Sellers market with a 32 day supply of homes. There is a lack of homes available for sale in the under 750 thousand range where most heeled couples are purchasing their first or second home. Toronto sold 90K homes in one year at an annual increase of about 5% in value.
This increase in value has continued unabated since 1995.
Could it stop Tomorrow - Sure.... Do I think it will... No. Why?
Toronto's average price increases have been 2 - 3% over the rate of inflation.
Toronto has and is becoming a Service Information Technology based business Center. Universities in Toronto are rated world class. Markham is the new home for many companies. Mississauga's growth and success has been the attracting Fortune 500 companies. Kitchener Waterloo is undergoing a revival in the inner city with the addition of Google and RIM Blackberry.
Come join us in Toronto!
You'll like it here!
Feel free to add your comments
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Lets compare Condo Maintenance Fees Toronto

02-07-12
David Pylyp
Lets have a look at and compare what makes the maintenance fees in your building.
First Lets establish a few things,
Your furnace unit consumes electricity; usually through a heat exchange unit in a central part of the condo or maybe you are blessed with two. The heat exchange units take warmth (hot water heated from a boiler) from the coil and disperse it into your unit. The cost of operating the fan blower is yours, the costs of heating the water as to your maintenance fees. The unit is inside your unit and operates from the Common Expenses. The liability for maintenance and annual inspections is yours although most buildings have annual maintenance inspections.
Having a building schedule an annual inspection, cleaning and filter replacement is much cheaper than you going out and contracting someone yourself. (IE $50 per unit includes filter or $285 per visit to book your own HVAC technician) There are savings in mass purchasing power.
What factors will effect the Maintenence Costs in a building?
Vertical Height ( How many floors are occupied)
Number of Units per floor
Services Offered
Number of Elevators
Staffing on Hand for both Security Concierge and Cleaning,
Staff monitoring the Rec Center as Social Recreation Guides.
Two Towers Sharing a Recreation Center
How much technology is in place for Cameras and Security.
Avoidable Additional Costs
We could scrimp on Window Washing, Landscaping, and Garage Sweeping. We could wait till 9 - 5 for the elevator technician ( They charge a premium for after hours to release you. Toronto Fire also charges if it is not an Emergency.) We could turn down the thermostat in the winter to 65 like my Dad did to save money. Turn down the Hot water temp and take shorter showers. These are all municipal services that are billed directly from the City to the building. Has Hydro Electric raised their fees in the last 5 years? By what percentage? Will they continue to do so? Have water rates increased.. Absolutely.
Can we save on garbage removal; Yes, actually most building pay a separate garbage pick up fee both for recycle and garbage. (Tipping Rates) If we dispose of less we would pay less. SO do we want magazines and Yellow Pages delivered to the building? What about Canada Post and Bulk mail advertisers? Is everything online now? Can you opt out?
It may sound great to have a 70,000 square foot indoor gym and social club, A full time Social Co ordinator, Outside Running Track, A Disco on the Top Floor and the Sky deck. All these marvelous upgrades need maintenance that will add to your fees in future years. If your gym is part of two or three individual condo (towers) buildings that are tied by a common Recreation Center It can be very challenging to set rules or make changes unless you have a mandate from all three towers.
Average... Whats Average?
We have been doing an Annual Common Charge Survey of the properties we manage. As you would expect, there is quite a variation in fees. The 2011 survey was done on 248 hi-rise condominiums comprising 52,406 units. The average common charge per unit per month was $606.47, the average suite size in the survey was 1,057 square feet and the average cost per square foot per month was 57.4 cents.
John Oakes President Brookfield
Conclusions
So in reality the tallest most crowded monolithe structure that is stand alone will be the most cost efficient. The buildings with 30 + floors and 18 suites per floor will always surpass the lower (high rize) building that have 6 to 12 floors. The more residents that share your rec center also make this more efficient. Having 12 people in the elevator every time is more efficient.
Lets Examine individual Line Items/ as a percentage of Gross Revenues.
Assuming you are a high rise with a 300 unit population with modern glass and concrete slab construction. (vs Brick Exteriors) and underground parking.
Hydro 9.6 %
Gas 12.5 %
Water 4.8 %
Security 18.7%
Cleaning Main/ 7.5%
Assessment Repairs 21.2%*
Condo Mgmt Fee 6.3%
Total as % Income 80.6%
Contribution to reserve is now recommended at a minimum 15%*
NB* Toronto has in the last few years had the mildest winters in recent history. All of these assumptions (savings) change if the weather turns colder. There was no snow removal expense as there was no snow.
How is life in your building? Tell me about it....
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Who is getting the leads from your listings? Trulia and Zillow

01-28-12
David Pylyp

How are you handling your MLS Data? Are you sharing your listings to Zillow and Trulia?

Do they run ads beside your listings with another agents contact details?

Welcome to the new world of aggregators on the internet.

What will you do?

What will you ask your Broker of Record to do?

Is this what will happen for us in Toronto Real Estate as more people IDX and VOW?

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Will Lending Restrictions Save us from Housing Bubble in Toronto?

01-24-12
David Pylyp

New and updated Mortgage Qualification tools may have some buyers pushed out of the Toronto condo and housing market regardless of the interest rates. You could be affected if you are;

a) Self employed
b) Condo Purchasers need to include 100% of Maintenence Fee.

Stated-income products have become very popular during this housing boom, allowing more banks to get involved in loaning to the selfemployed.

"These are individuals that are self-employed, have great credit and won't be able to validate their ability to pay if they are not showing their income on their notice of assessment," said one source.

He says those people with stated income could have to make an even higher down payment than the normal 20% that exempts consumers from buying expensive mortgage default insurance.

The suggestion the government might crack down on condo buyers is not new, having been scrapped last year in favour of tougher new rules on amortization lengths and refinancings. Most people in the real estate sector now believe amortizations will be reduced to 25 years after having been as long as 40 just three years ago.

Are you going to active this spring? Lets get you started on your next place sooner than later if these changes come into effect. Call me now for an appointment to pre qualify at 2.99%
This truly may be a limited time offer!
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Embrace the Apple experience

01-19-12
David Pylyp

dropboxGo, RUN! Get an iPAD

If you are able to use the GPS in your car; surf the MLS, check realtor.com, review the TOUR of home you have planned by looking at the listings and their interior pictures while enroute, hand the iPad to your buyers to make notes ( EverNote ) and send themselves the pictures they took during the home tour by email when they are done/

You discussed and showed them the Buyers Agency agreement prior to the HOUSE shopping tour.

You have already prepared and have all the contracts to sign online.

Signatures are instantaneous; forward all the documents by email to the Listing agent!

If you need more inspiration the Goodlife Team in Austin Texas were blessed to be selected as the poster child for ipad and Real Estate.

http://www.apple.com/ipad/business/profiles/goodlife-team/

I now have a contract directory of forms in the iBook library available for viewing and explanation.

Although DOCU- Sign is growing in popularity, Ontario Law is very specific about electronic commerce and the sale of property. Everything else could conceivably be signed electronically.

Are you joining the video and technology revolution?

When will you start with Video?

If you have someone coming to or leaving Toronto Canada I would like to hear from you.

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