Canadian home sales jump in April as markets stabilize

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Canada’s housing sector continued to show signs of stabilization in April, with realtors in most markets recording increases in both transactions and prices.

The number of homes sold rose 3.6 per cent compared with March, on a seasonally adjusted basis, the Canadian Real Estate Association said Wednesday in a statement. From a year ago, sales are up 4.2 per cent. Benchmark prices for homes increased 0.7 per cent in April, adding to a 0.8 per cent gain in March. That’s the strongest back-to-back increase in prices in a year.

The report is in line with other recent data that suggests housing has begun to recover from a recent slump, easing concerns that some of the country’s more expensive markets like Toronto were poised for a major correction.

“Sales activity is stabilizing among Canada’s five most active urban housing markets,” Gregory Klump, the realtor group’s chief economist, said in the statement.

The rebound is most evident in Toronto, where transactions climbed 11 per cent and prices gained 1.3 per cent. Of 19 major markets tracked by the Ottawa-based real estate association, 16 recorded price gains last month.

Secrets of the Four Seasons

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The Four Seasons Private Residences Toronto is one of the most prestigious condo developments in the country. So why have one third of unit sales been for a loss?

A Toronto Star and Ryerson School of Journalism investigation

Nestled in the heart of Yorkville, two glass towers rise above a scarlet fountain that gently gurgles as residents pull into a parking lot with paving stones arranged in paisley patterns.

The Four Seasons Private Residences Toronto is one of the most prestigious condo developments in Canada, a place where the moneyed elite can live modern urban lifestyles akin to Manhattan, Paris, London or Hong Kong.

But the glitz and glitter at the Four Seasons hide secrets.

Amid Toronto’s condo boom — which has fuelled one of the strongest real-estate markets in the world — a striking number of condos in the Four Seasons have sold for a loss.

A Toronto Star and Ryerson School of Journalism investigation into real-estate transactions in the Four Seasons found nearly one-third of sales in the towers have been for a loss.

Since condo owners took possession of their units in 2013, there have been 101 sales. Thirty of them were for a loss. The average loss recorded is $253,909 or 8.1 per cent.

Six of the losses are greater than half a million dollars.

“It’s not normal for people to be selling at a loss,” said John Pasalis, the founder of the real-estate analytics website Realosophy. “In the past five or six years generally prices have gone up … What’s going on here?”

The average price for a condo in Toronto has risen 67 per cent during the last five years, according to the Toronto Real Estate Board. Many people in the Four Seasons have also made money, selling for an average profit of $704,856 or 23.9 per cent.

But a subset of owners are selling for less than they paid.

The losses are so out of whack with the wider condo market that an agent who buys and sells in the towers didn’t believe they exist.

“No one person that bought at the Four Seasons lost,” said Elise Kalles, 80, a real-estate agent who specializes in the luxury market and owns two units in the Four Seasons. “I was involved right from the beginning. I don’t know, honestly, of any that sold for less than they paid. None.”

Kalles is listed as the agent for a unit holder who lost over $1 million in 2016, when she sold her unit for $5.7 million. The owner had bought pre-construction for $6.5 million (plus at least $326,212 in tax). Kalles and her client did not respond to questions about this transaction.

Nineteen losses were evident in sales prices listed in the Ontario land registry. Because buyers of newly built condominiums pay sales tax — and this extra cost isn’t included in the registered sales price — we added 5 per cent GST as the minimum amount of tax first purchasers would have had to pay. (Since mid-2009, 13 per cent HST is applied to the purchase of new condos.) With tax factored in, 11 sales that appeared to be for a small gain went instead for a loss.

There have been 101 unit sales since the Four Seasons towers opened in March 2013.

One third of those sales have been for a loss.

During the same period, average condo prices in Toronto have risen 67%.

The losses have occurred in every year but 2018 and have affected lower-, middle- and high-end units in both towers. Some were flips, where the seller owned the unit for as few as 29 days. Others involved units that were held for up to four-and-a-half years. One unit sold for a loss twice. The loss sales do not include 26 transfers between family members for $2 or $0.

Losses peaked in 2015, when 13 of the 21 sales in the towers left sellers in the red. There were four losses in 2016, three in 2017 and none this year to date.

The Star dug into land registry documents, mortgage filings, court records and corporate registrations in an attempt to understand the loss transactions. This task was complicated by a lack of transparency in the public registers that made it impossible to determine exactly what went on in each deal.

But the records point to a bigger problem in the housing market: poor oversight and weak regulations have made Toronto real-estate vulnerable to abuse.

The Star found no evidence of illegal activity in the Four Seasons. But as cities around the world — from New York to London to Vancouver — make moves to clamp down on financial crime by ending anonymous ownership of property, experts say Toronto’s real-estate market is exposed.

“If a province like Ontario and a financial sector like Toronto thinks that the same kind of things aren’t happening here, it’s just naive,” said James Cohen, executive director of Transparency International Canada.

Here are the stories of some of those who sold for a loss in one of Canada’s most elite developments.

Ryan Yen-Hwung Fong — Unit 5301

A $4-million unit was purchased by a convicted insider trader from Hong Kong and sold two years later for a loss of more than half a million dollars.

In 2005, Ryan Yen-Hwung Fong, 45, received confidential information about a proposed business deal and used the information to turn a profit, according to the Securities and Futures Commission (SFC) of Hong Kong. Fong had exchanged emails with his tipster using a code that referred to the deal as the purchase of a French car. He made more than $687,000 for himself and the fund he managed, according to the SFC.

In 2009, Fong pleaded guilty to insider trading, was sentenced to 12 months in prison and fined $213,500. The next year, the SFC banned Fong from re-entering the investment industry for life.

After getting out of prison, Fong took possession of unit 5301 in the Four Seasons, which he had bought pre-construction. It was 2013 and land registry documents show that Fong didn’t need a mortgage. He bought the condo for $3,775,221 (plus at least $188,761 in tax) all in cash.

According to Fong’s LinkedIn profile, he currently resides in Hong Kong and works as the managing director for SLS Capital Ltd., an investment firm based in New York. When a reporter repeatedly called SLS Capital, no one answered the phone and no voicemail was available.

In response to a list of questions about the condo transaction emailed to Fong, the Star received a letter from Deacons law firm in Hong Kong.

“We have evidence to prove that the contents as set out in the email contain serious, untrue and highly defamatory comments about our Client,” the letter stated.

When asked to point out specifically what was untrue, the law firm sent a second letter stating “our Client does not wish to correct the inaccuracies.”

Fong sold his unit in 2015 for $664,000 less than he paid for it.

Sales of comparable units

UNIT 1903
55 SCOLLARD ST.

SOLD ON JULY 30, 2015

$294,948 Gain

UNIT 1801
55 SCOLLARD ST.

SOLD ON AUG 4, 2015

-$103,401 Loss

UNIT 3704
50 YORKVILLE AVE.

SOLD ON JUNE 27, 2014

$1,076,877 Gain

UNIT 3702
50 YORKVILLE AVE.

SOLD ON JULY 28, 2014

-$597,457 Loss

When the pre-construction sales for the Four Seasons began in 2007, units at 55 Scollard Street and 50 Yorkville Avenue were priced between $1,350 and $1,500 per square foot — the most expensive condos in Canada at the time.

“It redefined Toronto real estate,” said Jimmy Molloy, a Toronto real-estate agent specializing in the luxury market. “All of a sudden, it just dragged everybody up … It just kind of changed the whole landscape of the marketplace.”

The 210 exclusive condos are split between the lower-priced “East Tower,” where you can still buy a unit for under $1 million, and the more prestigious “West Tower,” where a unit hasn’t sold for less than $3 million in years.

The West Tower condos sit atop a five-star hotel and owners in both towers have access to a French bistro, private yoga classes, a spa that has a reflexologist and a masseuse on call, and a psychic named Cyndi who will “guide you through a highly personal psychic and spiritual exploration.” Condo owners can also book travel aboard the hotel’s private jet.

The list of Four Seasons owners reads like a who’s who of Toronto’s elite, including Leafs’ coach Mike Babcock, Postmedia president Paul Godfrey, Rogers executive Anthony Staffieri, department store heir John Craig Eaton and Seagram’s liquor fortune heir Paul Bronfman.

While all of them still own their units, others sold for a loss. These losses could have been prompted by personal situations including rushed sales, divorces or incomplete renovations. There are also tax reasons why someone might want to take a loss on a real-estate transaction. Capital gains tax are due on the sale of a rental property. But if the sale goes for a loss, there are no taxes to pay — instead, you get a tax credit.

One agent involved in the tower suggested the losses could be due to the delayed opening of the towers, or because some buyers had difficulty obtaining bank mortgages and turned to higher-cost alternative lenders. Both of these situations may have pushed some pre-construction to sell their units early.

“A number of foreign investors decided to sell at the same time,” said Nissan Michael, an agent who specializes in buying and selling in the Four Seasons and markets himself as Mr. Yorkville. “Too much inventory and you’ve got a buyer’s market.”

Toronto businessman David Holton Young, 66, inherited unit 205 from his father, who passed away after putting down a pre-construction deposit. Shortly after registering the condo in 2013 for $2.3 million (plus at least $116,283 in tax), Young put it up for sale, where it languished on the market for almost two years before selling at a loss of more than $685,000.

“It took a long time and many price reductions to sell,” Young told the Star in an email. “In the hottest property market in the history of the city — to lose about 35 per cent over almost a decade takes some doing!”

Frank Provenzano RON BULL/TORONTO STAR

Court records show that Frank Provenzano, 56, a former owner of ProGreen Demolition, was accused by two of his brothers of secretly withdrawing $8.5 million from the family company and using it to invest in real estate without their knowledge. One of those investments was unit 202 in the Four Seasons, which was purchased pre-construction for $1.2 million (plus at least $58,585 in tax). Two months after the lawsuit was filed last summer, Provenzano sold the unit for an $80,000 loss.

Provenzano did not file a statement of defence and did not respond to multiple requests for comment. His brothers dropped the case in May.

Toshio Masuda CHOKUGEN.COM

Japanese author Toshio Masuda, 80, bought unit 2503 for $4.1 million ($4.3 including tax) in March 2013 via a shell company called Frontier One Canada Investments Ltd. The same day, he and his wife, Mariko Ejiri, took out a $3.2 million mortgage from a Japanese meat packing company with an interest rate of 40 per cent. They sold the unit less than a year later for a loss of more than $375,000.

Masuda did not respond to emails or faxes sent requesting comment.

Oliver McGinley MEASUREDOUTCOME.ORG

Oliver McGinley, a 48-year-old greenhouse operator and consultant for non-profits, purchased units 602 and 2402 in pre-construction for a combined $11.3 million (plus at least $566,372 in tax). When he took possession of the units in 2013, he registered private mortgages from cable mogul and family friend David Graham for $16.5 million — nearly 50 per cent more than the units’ purchase price.

Reached by telephone, McGinley said the mortgages, which were not fully drawn upon, financed extensive renovations he had done on the units. Despite these enhancements, McGinley wasn’t able to recoup the purchase price he paid, let alone the additional money invested in renovations.

“At the end of the day, I paid top of the market price based on a spec in advance. I just paid too much,” he said. “I don’t like losing and losing in a market that’s going up and up, but it is what it is.”

McGinley sold the smaller unit last year for a $7,000 profit. He sold the more expensive unit in 2016 for a $680,000 loss.

“I didn’t do anything wrong,” said McGinley. “My name was on these things. I couldn’t have been more transparent.”

In response to questions about the losses, Four Seasons company president Paul White sent the Star a statement that read in part: “Four Seasons Hotels and Resorts is a management company and, as such, we are not responsible for the conduct of sales or resales of residential units.”

“We firmly believe that Four Seasons Private Residences Toronto is the best address in the city and we are very proud to serve the community of residents who have chosen Four Seasons as their home.”

Simion Kronenfeld – Unit 3401

Shortly after emerging from bankruptcy, Toronto entrepreneur Simion Kronenfeld, 47, registered more than $3 million in private mortgages to buy a unit in the Four Seasons. He then flipped the condo for hundreds of thousands of dollars less than its purchase price — but says he didn’t lose any money.

Born in Russia and raised in Israel, Kronenfeld immigrated to Canada as a teen in 1986. In 1993, he pleaded guilty to possession of counterfeit $100 bills and was fined $2,500. Because of the conviction, he was issued a deportation order in 1995.

He returned to Canada the next year and in 2001 founded Electronic Liquidators Inc., a company that made him millions by reselling used electronics. In 2008, he lost much of that money in casinos, becoming one of Las Vegas’ largest debtors ever, with gambling debts topping $18 million.

At the same time, his bank, RBC, filed a lawsuit claiming he had opened accounts and obtained credit cards with two different names and social insurance numbers and defrauded the bank by cashing more than $1 million in bad cheques.

In his statement of defence, Kronenfeld denied he defrauded RBC and denied using aliases, explaining that “various variations of his name result from the translations from Russian to Hebrew and then to English.” Kronenfeld stated he relinquished his social insurance number when he was deported to Israel and was issued a new one when he returned to Canada.

By the time Kronenfeld filed for bankruptcy in 2010, he was more than $26 million in debt. He received an absolute discharge from bankruptcy in November 2011, staying RBC’s lawsuit and erasing his Canadian debts, but leaving his American ones in place.

Fourteen months later, on February 7, 2013, Kronenfeld purchased unit 3401 in the Four Seasons, registering it for $2,997,084 (plus $179,773 in tax).

The same day, Kronenfeld took out two mortgages. Public records show Diana’s Management Inc. issued a $1.2 million mortgage. The corporation is registered to Diana Bahrin, Kronenfeld’s wife.

Tammy Herzog registered a second mortgage: $2 million with zero per cent interest. Herzog is the daughter of the late developer Sam Herzog, whose company, Lifetime Developments, was one of the two developers of the Four Seasons towers.

Bahrin and Herzog did not respond to repeated requests for comment.

Only five months after buying it, Kronenfeld sold the unit for $2.8 million, nearly $377,000 less than the purchase price.

Kronenfeld’s lawyer, Stanley Rosenfarb, told the Star that Kronenfeld did not lose money on the sale, and actually made $500,000 because he did not pay the deposits on the unit. The pre-construction buyer, Alexander Zeltser, who had paid $952,800 in deposits, could not get a mortgage, Rosenfeld said, and Kronenfeld stepped in.

“Mr. Kronenfeld agreed to pay the balance due on closing … in exchange for title to Suite 3401,” Rosenfarb wrote in an email.

According to Rosenfarb, Kronenfeld did not compensate Zeltser for his deposits, paying him a portion of the sales proceeds instead.

Rosenfarb also said the $2-million mortgage from Herzog did not have a 0 per cent interest rate because Kronenfeld had pre-paid her $217,000 in interest. In addition, Kronenfeld only borrowed $295,000 from his wife’s company, Rosenfarb said, and not the full $1.2 million that was registered.

“There was absolutely nothing inappropriate, improper, surprising or newsworthy about any aspect of Mr. Kronenfeld’s purchase and subsequent sale of the condo,” Rosenfarb wrote.

Eight months after the sale, Kronenfeld was indicted by a Nevada grand jury for his gambling debt and 12 separate felonies including theft, obtaining money under false pretenses, and the use of bad cheques. (Nine of the charges were dropped in 2015.) A bench warrant was issued for Kronenfeld’s arrest and remains active today.

Lawyer Julian Porter, who was retained by Kronenfeld after he was contacted by the Star, wrote: “There is no public benefit in your smearing Mr. Kronenfeld with his past bankruptcy and criminal charge emanating from Nevada.”

Porter sent the Star a report he commissioned from real-estate agent Jamie Erlick, which analyzed four similar sized units in the Four Seasons that had difficulty finding buyers and concluded “during the years 2013/2014 it would have been difficult to get much over $2,600,000 for the 1,956 sq ft unit.”

Not included in Erlick’s report was the unit next door to Kronenfeld’s, which sold for $3.2 million in September 2013 — a profit of nearly $150,000.

Sales of comparable units

UNIT 3401
50 YORKVILLE AVE.

SOLD ON JULY 5, 2013

-$376,857 Loss

UNIT 3402
50 YORKVILLE AVE.

SOLD ON SEPTEMBER 12, 2013

$141,222 Gain

Porter also provided the Star with a 2016 immigration decision in which a judge denied Citizenship and Immigration Canada’s attempt to deport Kronenfeld.

Immigration judge Iris Kohler ruled that Kronenfeld did not intend to defraud the Vegas casinos or write bad cheques, that the casinos knew of his financial situation and he kept them informed of his efforts to repay them.

“There is no evidence that Mr. (Kronenfeld) acted with intent,” the judge wrote, stating his actions could not be considered a crime in Nevada or in Canada.

Fifty-one units at the Four Seasons have been purchased or are currently held by private corporations. This makes it difficult or impossible to determine the condos’ ownership. RANDY RISLING/TORONTO STAR

A lack of transparency in Ontario’s land and corporate registries makes it difficult or even impossible to determine the ownership of 51 units in the Four Seasons, which have been or are currently held by private (that is, not publicly-traded) corporations.

Twelve of the 51 corporations are numbered companies, six of which were incorporated a couple of months or mere days before purchasing the unit.

Eight of the 30 loss transactions involve private corporations.

Anonymity in Canadian real estate can be further bolstered by offshore tax havens, making it doubly difficult for tax officials or law enforcement to trace the origin of funds. Six units are held by companies with addresses in offshore tax havens, such as Delaware, Bermuda, Malta and the Cayman Islands.

Unit 4603, for example, was purchased for $4.6 million in cash (plus at least $231,835 in tax) by Pramor Global Financial Corp., a company registered in the British Virgin Islands. Because the BVI allows companies to keep the names of its shareholders and directors private, the people behind Pramor are completely anonymous, unknowable to anyone without a warrant. The unit is still owned by Pramor.

Max Motel Cohen, the Toronto lawyer who filed real-estate documents on behalf of Pramor, declined to identify his client.

“The purchase of land by well-to-do individuals or holding companies, for cash, is not that unusual,” Cohen said in an email.

Unit 206 was purchased by 60 Degrees Group Canada Ltd., a company registered to a mailbox in the Cayman Islands. The only names associated with the company are Barry Cleaver, a London, ON, lawyer, and Mark Joseph Azzopardi, a Maltese banker. The real owner of the unit is unknowable.

A year after buying the unit for $875,000 in cash, the anonymous owner took out a $2-million mortgage from another offshore company registered at the same post office box in the Cayman Islands.

The Star was unable to reach Azzopardi. Cleaver said the unit was not the only piece of property pledged as security for the mortgage. The unit sold in October for a $115,000 profit.

Alexandre Ventura Nogueira and Alexander Altshoul — Unit 1902 and 1702

Two units in the towers were used to pay off a debt by a pair of businessmen charged with mortgage fraud, one of whom fled justice and remains a fugitive today.

Alexandre Ventura Nogueira, a 44-year-old Brazilian, and Alexander Altshoul, a 47-year-old Belorussian-Canadian, were business partners in the late 2000s selling condos in Panama City — including in the Trump Tower — according to a Reuters/NBC investigation published last year. They double sold pre-construction units and deposits disappeared, according to the report.

In 2009, Panamanian police charged Ventura Nogueira with fraud and forgery stemming from his work selling condos. Released on $1.4 million (U.S.) in bail, he fled the country and is still at large.

Ventura Nogueira did not respond to requests for comment from the Star.

In 2007, York Regional Police charged Altshoul with fraud and conspiracy to commit fraud. The charges were dropped a year later.

While the charge was still outstanding, Toronto lawyer Stanley Ehrlich testified at a hearing at the Law Society of Upper Canada that Altshoul had forced him to participate in fraudulent real-estate transactions between 2001 and 2005.

Ehrlich told the panel that when he participated in the frauds, he was “acting under life-threatening duress from which there was no safe avenue of escape.”

“His position is that he had fallen into the clutches of what he calls the ‘Russian mafia,’ that he was an innocent victim of their ruthless conduct, and that the same thing could have happened to any other honest Lawyer,” the Law Society’s panel wrote.

In 2008, the panel found Ehrlich guilty of participating in the mortgage fraud, writing that he “greatly exaggerated the threats.” Ehrlich was disbarred and had his licence revoked.

Altshoul did not respond to requests for comment from the Star.

At some point between 2007 and 2009, Ventura Nogueira and Altshoul each put pre-construction deposits down on a unit in the Four Seasons in Toronto.

Before the towers were completed, however, Altshoul and Ventura Nogueira were criminally charged in Panama with defrauding a business partner, Joseph Martin Rodin, according to court documents obtained by the Star.

In August 2009, they signed over their deposits to Rodin’s wife and daughter as repayment for the debt. But Maria Rodin says she and her step daughter Marcela were cheated by the men, because the deposits weren’t paid in full.

View the entire document on DocumentCloud

“(Ventura) told us he paid the deposit, but in the end, he only paid only half the deposit. He was in arrears,” Maria Rodin told the Star in an interview.

The Four Seasons asked the Rodins to pay an outstanding sum of $259,000, according to emails seen by the Star.

In 2013, the Rodins registered the units for $3.3 million (plus at least $165,888 in tax). Martin was not present at the closing because he was facing corruption charges in Panama and had been issued a travel ban. The charges were dropped and the travel ban was lifted in 2014.

The Rodins were unable to cover their mortgage and condo fees with the rent they received from the units. Less than two years after purchasing them, they sold the units for a combined $433,000 loss.

“(Ventura) was very nice to us. He pretended to be our friend. We trusted him,” Maria said. “And in the end, we lost twice.”

In 2016, the United States Treasury Department started tracking real-estate purchases by shell companies in the hot real-estate markets of Manhattan and Miami. It found that more than a quarter of cash purchases of property by shell companies were flagged as suspicious. The monitoring program has now been expanded to six other areas including San Francisco, Los Angeles, San Diego and San Antonio.

Earlier this year, British Columbia implemented reporting rules that will require anonymous companies that purchase real estate to identify their real owners to authorities.

After the U.K. House of Commons proposed a ban on real-estate ownership through shell companies in July, there will soon be few places left with as little transparency as Ontario.

“It’s still a bit of a Wild West that’s not policed,” said Realosophy’s Pasalis.

Mississauga asks province for independence from Region of Peel

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Mississauga wants independence.

At a general committee meeting Wednesday, Mississauga city council passed a motion “in principle” requesting that the Ontario government pass legislation to make Mississauga independent from the Region of Peel.

Mayor Bonnie Crombie, who said analysis shows the city sends $85 million to the region to fund growth of other cities, has called an independent Mississauga ‘our destiny.’
Mayor Bonnie Crombie, who said analysis shows the city sends $85 million to the region to fund growth of other cities, has called an independent Mississauga ‘our destiny.’  

The discussion of regional governance has taken much of council’s time as the province announced in January an official review of regional government of nine upper-tier municipalities.

Provincially appointed advisers will make recommendations to the Ministry of Municipal Affairs and Housing in June on what to do with Ontario’s regional municipalities which include Peel, Halton, York, Durham and more.

The options of Peel’s future can be seen in an extensive report by city staff on the three possibilities of the regional review: Mississauga becomes a single-tier municipality; Region of Peel is reformed; or the three municipalities of Caledon, Brampton and Mississauga amalgamate.

“Analysis shows we send $85 million to the region to fund growth of other cities,” Mayor Bonnie Crombie said. “This is not fair to residents and businesses.”

Crombie has already publicly stated her position of an independent Mississauga, calling it “our destiny.”

At the general committee meeting, city councillors agreed. And so did city staff, which caused some councillors to question why the report appeared to have a political lean.

“I don’t think it was appropriate for staff to make a recommendation in a report on governance,” Councillor Pat Saito said. “Governance is a government issue.”

Although the report details three options in regional review, city staff made it clear in its recommendation that Mississauga become a single-tier municipality — independent.

The report was received, and a motion was passed in principle telling the province what the city wants.

Another report, prepared by the mayor’s office, will be presented to council at its next meeting, on March 27, with an executive summary based on a political position and next steps for public input on regional review.

THE EXCHANGE DISTRICT WILL COMPLETELY TRANSFORM MISSISSAUGA

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The Exchange District Will Completely Transform Downtown Mississauga

Jumbo shrimp. Open Secret. Virtual reality. Downtown Mississauga.

Oxymorons, without a doubt. Or are they all?

No. In fact, Downtown Mississauga will soon be a reality when one luxury Toronto real estate developer embarks on its plans to establish a new downtown district in the heart of the city.

The Exchange District

Intended to include condominium towers, a new hotel, international retailers, casual and fine dining spaces, modern office accommodation, a public square and accessible green spaces; early and unreleased marketing materials suggest the new development from luxury real estate leaders Camrost Felcorp will be dubbed The Exchange District.

The company, which has filed applications with the City of Mississauga, is seeking approval to redevelop the nearly 3-acre site at 151 City Centre Drive.

The Exchange District
Camrost’s grand plans, according to sources with the development teams and publicly accessible documents, will see the current underutilized site — located adjacent to Square One — transformed into a high-density modern, mixed-use urban district.

Led by Henry Burstyn, architect and partner at the Toronto office of the IBI Group, and featuring interior designs by the city’s hottest new agency, JovenHuard, Camrost is envisioning more than 2,000 condominium residences among four tall towers (upwards of 72 storeys) of modern design.
The Exchange District

While details on the anticipated launch of the Exchange District remain unconfirmed, Elliott Taube of International Home Marketing Group confirmed to Toronto Storeys in an email that “International will be the exclusive brokerage on the project.” Early marketing collateral materials, created by Gladstone Media, show an urban and cosmopolitan brand, leveraging highly stylized lifestyle imagery, clearly influenced by haute couture and the global luxury market.

While Camrost wouldn’t confirm the launch date, pricing, or any other details condo purchasers may want to know, those who have been waiting for Mississauga to forsake urban sprawl for urban style likely won’t have to wait much longer.

Montreal’s real-estate market is about to eclipse Vancouver’s

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Vancouver is on pace to lose its status as Canada’s second largest housing market to Montreal.

While still Canada’s most expensive city for housing, a recent collapse in sales has led the value of real estate transactions substantially lower. That leaves Montreal’s soaring market poised to overtake the Pacific coast city’s.

In January, the total dollar value of real estate transactions in Vancouver fell to $1.7 billion (Canadian) on a seasonally adjusted basis, the weakest level since 2013 and down 42 per cent from a year earlier, according to data released Friday by the Canadian Real Estate Association. Meanwhile, the value of transactions in Montreal reached $1.63 billion to start the year, an increase of 18 per cent from last January. Montreal — which has much cheaper homes, but more transactions — hasn’t been this close to Vancouver since 2008.

Montreal is the business capital of the largely French-speaking province of Quebec and Canada’s second largest city by population. But it was left out of the boom that saw home prices in Toronto and Vancouver surge to levels that made those cities unaffordable and prompted a rush of regulations to slow down them down.

These measures have included new regional taxes on foreign buyers in Toronto and Vancouver that aren’t in place in Montreal. Higher interest rates and tougher rules for mortgage lending also seem to be having the biggest effect on the country’s priciest markets.

January saw home sales in Montreal climb the fastest in a decade as lower prices and a booming economy lured buyers. Sales in the city advanced 7.1 per cent from December, the fastest pace since May 2009, and the number of units sold reached a record. Montreal’s gains are well ahead of identical moves in Vancouver and Toronto where sales rose 1.2 per cent, and double the national increase of 3.6 per cent.

There’s far less concern Montreal will show the signs of overheating seen in Canada’s two other major cities, given price differentials.

“Much of the recent price appreciation and sales increases, that really reflects the strength of the economy,’’ Marc Desormeaux, an economist at Bank of Nova Scotia, said by phone from Toronto. “Montreal remains relatively affordable.’’

Montreal’s benchmark home price was $349,300 in January, up 6.3 per cent from a year earlier. That’s still far less than the Vancouver price of $1.02 million, which is down 4.5 per cent.

Canada’s largest city Toronto still has by far the most real estate transactions, reaching $5.4 billion to start the year, albeit greatly reduced from the $8.5 billion in activity seen at the beginning on of 2017.

Condo Renovations & Improvements: 3 Things to Know Before You Begin

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Condo improvement projects and renovations are exciting endeavors that can have a major positive impact for years to come. Whether you’re looking to upgrade your living space or you’re looking to add value to your condofor a potential sale, these projects shouldn’t be taken lightly or without proper planning. Before you begin any projects that require a substantial investment up front, consider these three things.

1. Know the Rules.

When you purchase a condo, you’re required to join your community’s condo association and pay annual or monthly fees for upkeep of shared spaces. With this nature of community in mind, you must also be aware of the rules in place for any remodels and home improvement projects. These requirements are in place to prevent condo owners from attempting DIY projects they are not capable of doing or hiring contractors who may cause long-term problems with subpar work either to the owner’s or neighbor’s property.

Before beginning any renovations, get in touch with your association to determine what steps are required of you before you begin. For example, some may require you to submit an architectural change form detailing the scope of work and the credentials of the contractor you plan to hire.

Condo associations can issue heavy fines or take legal action if you disregard their requirements. Follow the rules right from the start to save you a major headache down the road.

2. Consider the materials you’re using (or disrupting).

We like to think that our living spaces were built and designed with our safety in mind. But as many of us know, construction materials have a history of being detrimental to our health. Especially for residences built before 1978, lead-based paint remains a concern due to its link to developmental problems and kidney damage among other issues. As the only known cause of the aggressive cancer mesothelioma, asbestos is another prominent concern; its use in building and construction materials has even spurred on many legal claims for those exposed.

Before beginning your renovation project, consider the materials you may be using or that you may be disrupting in the space you’re tackling. Asbestos is considered a major health risk only if it is disturbed; construction on any existing condo infrastructure could lead to this disturbance.

Other material ingredients to be aware of before remodeling include but are not limited to:

  • Formaldehyde (found in adhesives, plywood, and certain insulation)
  • PVC (found in pipes, window fabrication, and flooring)
  • VOCs (found in solvents, paints, and protective coatings)

3. Know When to Hire a Professional 

Perhaps the most important thing to consider before beginning condo renovations is whether or not you should hire a professional. Since these projects often require a substantial amount of monetary investment, it’s wise to think twice before tackling something on your own. In addition to adhering to your condo association’s rules, make sure to keep the following in mind:

  • Do you have the knowledge and skills for the project?

    • It can be costly and a major inconvenience if you accidentally mess up on a home improvement project. Paying a professional is likely the safest route to take if you don’t have the skills or the knowledge.
  • Is it safe for you to tackle the project?

    • Major home improvement projects can also have dangerous consequences if the proper safety precautions aren’t taken. For example, if you’re not familiar with electrical work, don’t attempt any electrical projects since the job could put your life at risk.
  • Do you have the time to complete the project?

    • Home improvement projects aren’t just a financial undertaking; they can also take a lengthy amount of time to complete. Before you commit to doing anything yourself, make sure your schedule can accommodate the work.

 

Whether it’s a large or small project, home improvement work is always an exciting undertaking. By keeping the above three things in mind before you begin, you’ll have a solid idea of what’s involved in order to decide on the best course of action.

5 Upgrades That Add Big Value to Your Condo

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Whether you’re getting ready to put your condo on the market or just looking for ways to add value to your home investment, it’s important to consider upgrades. As you probably know by now, not all upgrades, renovations, and remodels are created equal — some will offer great returns (sometimes you can even recuperate more than 100% of what you spent) while others will ultimately cost you more money in the long run. So, which upgrades actually do add big value to your condo? We did a little digging, and the pros all say that these 5 are your best bet if you want to see your money well spent.Bathroom Renovation 

Couple looking sink in furniture shopNothing can turn away a potential buyer or lower the value of your condo faster than an out-of-date bathroom that needs some serious TLC. In fact, the professionals recommend (if you’re got the money to spend) focusing on the bathroom and kitchen and over-all house maintenance above all else.  (If the walls need painting, paint. If the floor is cracked, fix it, and so on.)  The return is usually rock solid, usually 100% in solid Real estate markets and more in competitive-buyer markets.

But, a note of caution: Don’t go over the top. The tendency for condo-owners who can afford to do a total overhaul is to go for luxury. But, professionals warn it’s a mistake. If you’re selling, keeping the design more neutral is preferable to installing finishes that a potential buyer may not personally like as much as you do. If you’re planning on staying, there’s some wiggle room, but think twice about your future selling risk if you end up going with those top-end fixtures and that custom, Tuscan-inspired tile. They could end up hurting your wallet more than helping it.

Hardwood Floors

Although often overlooked, floors are a major selling point for your condo. It’s a less costly investment, but the return is usually positive, typically falling between 80-100%, and realtors say that homes with hardwood floors not only sell faster, but for more money. If you’re looking for a small upgrade that’s beneficial whether you’re staying or going, you can’t go wrong with installing a classic hardwood throughout your condo! Hardwood floors are much easier to deal with than pesky carpet, and better for allergies, too.

The trend now is plank flooring, so if you already have hardwood floors but they are dated-looking, brown parquet kind, do you need replace the floors? Our experts say no. They recommend that you upgrade the look by refinishing the floor and staining it with a more modern dark ebony stain.

Kitchen Remodel 

Like we mentioned above, bathrooms and the kitchen are major considerations when you’re trying to sell or add a little value to your condo. If you’re kitchen needs some work and you’ve only got a little to spend, focus mainly on giving the room a facelift — paint the cabinets, install new fixtures, replace the faucet and sink, and update the appliances if you can. If you can afford a major renovation (and the kitchen needs it), again remember that it’s key to keep things simply and stylish, not tailored to your personal taste and your taste alone. If done right, it’s likely you’ll make up all that you’ve spent (sometimes more) if /when you sell in the future.

Be careful and don’t get carried away with the upgrades. If you improve beyond your location and the type of condo you have, the buyers are not going to reward you. That Wolf range in a small starter condo, probably will not pay off.

New Appliances

Since most people don’t want to have to buy new appliances when they move into their new condo, purchasing a place that has matching, modern appliances is a big deal in the buyer’s mind. If you have old, worn out appliances, replacing them will help add value and increase future sale potential. If they’re a decent age, but don’t all match or need sprucing up on the outside, contact the manufacturer about purchasing new, matching panels.  Keep in mind that with dishwashers, the panels are often white on one side and black on the other, so you may already have a matching panel to turn over.

Added Storage

Storage is an important part of your condo’s desirability in the eyes of buyers, and adding some definitely is a added bonus for you too, if you stay. So, whenever and wherever possible, the professionals in the buying and selling market suggest that you add storage where you can — expanding a closet, adding a closet where one is clearly needed, and remodeling a space that’s awkward (like a reading nook that’s too small for use) are all good ideas that bump up the value of your condo and make it more likely to sell.

Fellow condo owners, weigh in. What upgrades have proved to be great overall investments for you? Share in the comments below!

How Canada’s Mortgage Stress Tests Have Spiked Toronto Condo Prices

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The Canadian federal government introduced new mortgage rules in the fall of 2016 to combat rapidly increasing home prices – but have they driven up condo prices instead?

In October 2016, Canada’s Department of Finance introduced a significant change to the mortgage qualifying requirements for buyers with less than a 20% down payment (known as a ‘high ratio mortgage’). Under the new rules, banks would have to calculate the maximum mortgage payment a home buyer could afford based on a new stress test rate which was based on the bank’s posted rate which was typically 2% higher than the discount rate that most buyers actually receive.

For example, buyers in September 2016 were being approved for a mortgage based on an interest rate of roughly 3% and two months later their pre-approvals were based on an interest rate of 5%. This effectively slashed a home buyers budget by roughly 20% because it reduced the mortgage amount they qualified for by that much.

One of the intended goals of this policy was to help cool down the rapid increase in house prices, in particular in cities like Toronto and Vancouver but when we look at the data for Toronto, it actually had the opposite effect for the one house type that was still within reach of most first-time buyers – condominium apartments.

In January 2012, the average price for a condominium apartment was $321,475 and by the time the Department of Finance introduced this new mortgage stress test prices had climbed to $429,407 in October 2016.  A 34% increase in just under five years.

CondoPrices_StressTest

Since then, the average price for a condo climbed to $559,343 in April 2018, a 30% increase in just a year and a half since the stress test was introduced.

Rather than dampen demand and help cool prices the mortgage stress tests actually inflated demand in the condominium market and caused bubble like appreciation because the stress test pushed many first-time buyer’s budgets down making condominiums the only affordable option for them.

Some might argue that this is demonstrates why governments should not meddle with the housing market and should just let the market correct itself.  But I disagree.

The problem wasn’t that the government tried to cool the housing market, it’s that they tried to do too much, too late and likely targeted the wrong group of people.

Despite what finance ministers say publicly, the truth is that they are all addicted to the positive side effects that accrue when consumers take on more and more mortgage debt.  Mortgage debt fuels the entire economy. It fuels new housing construction, it drives home renovations and it drives consumer spending as people feel comfortable spending more than they make when they could just add their spending to their Home Equity Lines of Credit (HELOC) at minuscule interest rates.

The economic highs that come from rising mortgage debt make it hard for finance ministers to do the responsible thing and take action early to cool the debt binge. Instead, they wait till it’s too late, when the debt levels are so out of control that they need to take very drastic measures to cool things down – like increasing the qualifying rate for mortgages by 200 basis points (2%) overnight.

Dramatic policy changes are going to have dramatic effects on the housing market. It’s unfortunate that the federal government’s stress tests have made condo prices less affordable and more vulnerable than before.

Waiting For A Toronto House Price Crash? You’ll Be ‘Disappointed,’ RBC Says

Panorama of Toronto downtown and midtown in foggy morning

A recent poll found that half of Torontonians are hoping for house prices to fall, but a new report from Royal Bank of Canada basically says “don’t hold your breath.”

The modest price gains seen in Toronto and Vancouver in August are a “sign of things to come,” RBC senior economist Robert Hogue wrote in a client note.

After year-on-year declines for much of 2018, home sales in Toronto started rising again this summer. They were up 8.5 per cent in August, compared to the same month a year earlier, according to statistics released last week by the Toronto Real Estate Board.

After some downward pressure, prices appear to have stabilized. The average selling price for all housing types in Greater Toronto sat at $765,270 in August, up 4.7 per cent in a year.

“Area buyers hoping that last year’s Fair Housing Plan and this year’s stress test would bring about big price breaks will be disappointed,” Hogue wrote.

“In fact, several of them came to that realization earlier this summer (in light of steady month-to-month increases over the spring) and jumped back into the market.”

While that may be welcome news to homeowners worrying that the growth in the value of their homes has come to a standstill, it’s a disappointment to the half of Toronto residents who — in a recent Angus Reid poll— said they’d like to see house prices fall.

More than a quarter said they’d like to see an outright price crash, of 30 per cent or more. A majority of renters said they are considering leaving the citybecause of housing costs. That’s a sign of the frustration potential homebuyers are feeling in a market where house prices have long grown faster than incomes.

But though they hope for a correction, few poll respondents hold out hope it will actually happen. Sixty-two per cent agreed that government policy will not be able to make Toronto housing affordable “no matter what.”

Construction slowdown

Canada Mortgage and Housing Corp. reported a surprise decline in the number of new homes starting construction in August. The annualized rate of construction fell to just under 201,000 housing units, down from nearly 206,000 in July, according to data released Tuesday. Economists had been predicting a pick-up to around 210,000.

The largest pull-back was in Ontario, while British Columbia has seen a mild rebound, though construction is still below the frenzied pace of 2016 or 2017.

Economists expressed mixed views on the construction slowdown, with some saying the pace of construction is just returning to more sustainable levels from excessive heights.

“Despite two monthly declines, robust levels of residential construction continue in Canada, with a 27-year high for population growth supporting the strength,” Bank of Montreal senior economist Robert Kavcic wrote in a client note.

“While not all regions of the country have experienced the same price pressures as Toronto and Vancouver, many are seeing heightened building activity.”

But CIBC economist Royce Mendes suggested we can expect to see a somewhat slower housing market ahead.

“A more sluggish pace to homebuilding is in line with our expectation that higher interest rates and tighter lending standards turn this former stalwart of growth into a drag on the economy,” Mendes wrote in a client note Tuesday.

Cost of condo rentals continues to rise in Mississauga

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Rental rates for condos in Mississauga continued their ever-upward trend in the third quarter of 2018.

According to the Toronto Real Estate Board’s latest quarterly tracking report, the average monthly cost to lease a one-bedroom condo in Canada’s sixth largest city rose to $1,962 between July and September.

The Toronto Real Estate Board doesn’t expect the upward trend in Mississauga’s rental rates to stop anytime soon without government intervention.
The Toronto Real Estate Board doesn’t expect the upward trend in Mississauga’s rental rates to stop anytime soon without government intervention.  (ROB BEINTEMA/METROLAND / ROB BEINTEMA/METROLAND)

That represented a 3.8 per cent increase over the second quarter of this year and a year-to-date spike of 9.4 per cent from the $1,794 average monthly rate recorded in the first quarter of 2018.

The data is based off a total of 701 leases recorded by TREB member realtors in Mississauga over the past three months.

Rent for an average one-bedroom condo in Mississauga has spiked 21.6 per cent in just two years since the same quarter in 2016, when a unit fitting that description could be had for $1,614 per month.

All types of apartments saw quarter-over-quarter increases. The monthly rent for a bachelor grew 8.5 per cent between the second and third quarters from $1,500 to $1,628. The cost of a two-bedroom unit grew from $2,290 in Q2 to $2,429 in Q3, while three-bedroom condo units jumped from $2,741 to $2,807 over the same period.

“Average rents are continuing to increase at annual rates far beyond the rate of inflation in the GTA as rental demand remains very strong relative to the supply of units available. We will need to see a sustained period of time within which growth in the number of rental units listed outstrips growth in the number of units leased before we see the rental market return to balance,” said TREB’s director of market analysis Jason Mercer in the organization’s quarterly report.

TREB doesn’t expect the upward trend in rental rates to stop anytime soon without government intervention.

“Policy-makers, including those running for election at the municipal level, need to identify and fix existing policies that are hampering the ability to bring more rental supply on line. These same policy-makers also have to develop new policies that could promote the development of more rental units moving forward,” said TREB president Garry Bhaura in the report.