Greater Toronto Area Resale Housing Moderate in September

September 17, 2008 -- The Greater Toronto Areaís autumn resale housing market began with moderate activity, Toronto Real Estate Board President Maureen OíNeill announced today.

With 2,726 sales during the first half of this month, activity has declined 16 per cent from the 3,236 recorded during same time period a year ago. Compared to the 2,913 transactions recorded during the first half of September 2006, activity has declined six per cent.

In the City of Toronto, 998 sales were recorded, which represents a 23 per cent decline from the 1,297 transactions recorded in the first half of September 2007 and an 11 per cent decline from the 1,118 homes that changed hands in 2006. However, activity increased 16 per cent in the first half of September 2007 from the same period in 2006.

In the 905 Region, there were 1,728 sales, down 11 per cent from the first half of September 2007, when 1,939 transactions were recorded and within four per cent of the 1,795 sales recorded during the same timeframe in 2006. However, activity increased eight per cent during the first two weeks of September 2007 as compared to 2006.

ìAlthough housing activity in the GTA remains moderate, weíre continuing to see a consistent pattern, and this stability is certainly positive news compared to markets in other sectors and in other world cities,î said Ms. OíNeill.

At $366,158 the average price of housing in the GTA has increased marginally from the $364,364 recorded a year ago and is up nine per cent from $335,208 recorded in September 2006.

In the City of Toronto, the average price is $386,524 up marginally from the $384,796 recorded in the first half of September 2007 and up 12 per cent from the $343,561 average from the same period in 2006.

In the 905 Region, the average price is $354,395; an increase of one per cent from $350,698 recorded a year ago and up seven per cent from $330,005 recorded in the first half of September 2006.

ìThe fact that prices have held firm despite moderate activity shows that consumers regard real estate as a sound investment,î said Ms. OíNeill.

The percentage of asking price that Sellers receive for their homes has also remained consistent. The list to sale price ratio is 98 per cent, as it was a year ago.

The 26,299 properties listed for sale on the TorontoMLS system have increased 26 per cent from a year ago when 20,841 homes were available. The time that homes remain on the market has increased as well, to an average of 37 days compared to 31 days a year ago.In a few areas though, activity heated up during the first two weeks of the month.

Transactions in Bowmanville (E17) increased 66 per cent from a year ago, as a result of strong detached home sales.

In Streetsville (W20) activity increased seven per cent compared to mid-September 2007 due mainly to semi-detached sales.

Vaughan (N02) saw a 20 per cent increased in transactions from a year ago due to strong sales of all housing types.

Greater Toronto REALTORS® are passionate about their work. They adhere to a strict Code of Ethics and share a state-of-the-art Multiple Listing Service. Serving over 28,000 Members in the Greater Toronto Area, the Toronto Real Estate Board is Canada’s largest real estate board. Greater Toronto Area open house listings are now available on www.TorontoRealEstateBoard.com.

A LOOK AT U.S. HOME PRICES FROM 2002 TO NOW –

The collapse of the U.S. housing market is now well into its third year and continues to hold U.S. economic growth hostage. Every month new housing statistics keep media attention focused on the most recent decline in U.S. home prices, reminding households that one of their most important assets continues to depreciate in value. Amidst all the attention to the recent fall in home prices, it is often forgotten that the drop in prices followed tremendous runups from 2002 until mid-2006 so that in nominal terms there is still a sizeable net gain in home values over this period.

Moreover, with all the focus on the national number, the headlines sometimes miss that there remains a significant regional element to recent house price declines. In this report we examine the performance of house prices in the 20 major cities covered by the S&P/Case-Shiller home price index over the period extending from 2002 to the present.

Doing so is useful for several reasons. First, it highlights that the current level of home prices is not particularly low – in aggregate we’ve just rewound prices to mid-2004 in nominal terms. Second, flowing from this first point, it raises the prospect for prices to fall further. Third, it sheds some light on the balance sheet implications for households depending upon when and where they purchased their home. Not surprisingly perhaps, cities that saw the highest increases in home prices earlier in the cycle are now those experiencing the biggest drops.

2002 – The beginning of the boom
As homeowners tend to stay in their homes significantly longer than one year it makes sense to take a longer-term perspective to the change in home prices.1 The current housing boom had its beginnings in the aftermath of the 2001 economic recession. By 2002, house prices were increasing at a healthy rate but had not yet reached the double- digit surge in prices that came in 2004 and 2005. 2002 is generally deemed to be the start of the housing boom and is a good point to begin our analysis. Mortgage rates were falling to historic lows and were held at a low level for another 2 years, sparking an influx of home demand and acceleration in home prices. The housing market was also relatively balanced. Single family home inventories averaged 4.7 month’s supply, slightly higher than the previou two years, which averaged 4.5 months. A balanced market looks to be in the 5.0 to 5.5 month range.

Nominal price gains are still solid
Looking at the change in home prices from 2002 to the present we find that homeowners in most major cities who bought early in the housing boom are still benefitting from an appreciation in real estate worth. Nominal prices in aggregate are up a cumulative 34% from May 2002 to
May 2008. Miami and Los Angeles stick out particularly
as cities which despite having seen striking falls in nominal
house prices over the last year are still up considerably on
a longer-term basis. In both cities nominal values are up
close to 50% since May 2002 despite declining by more
than 25% in the past year. This contrasts with cities like
Dallas and Denver, which although down less than 5%
from a year-ago are up by only 5% since 2002. By far the
best performers of the bunch are Seattle and Portland with
price gains of close to 60% since 2002. Unfortunately, there
is at least one exception to the rule that higher house price
gains earlier lead to worse drops in the current period. In
Detroit, year-over-year gains in nominal house prices never
topped 5%, yet prices over the last year are down close to
20%. Clearly, local economic conditions added to the impact
of the collapse in home values related to the fallout
from subprime mortgages, resulting in home prices that
are down 17% from their values in 2002.

But real price gains less so…
Unfortunately, the picture looks less favorable when
inflation is stripped away. The good news is that real home
prices are up a cumulative 10% since 2002, with substantial
gains in the range of 23-27% in the cities of Los Angeles,
Washington D.C, and Miami. These cities were among
those deemed most exposed to subprime mortgages and
over-building, and clearly some homeowners are still coming
out ahead in the midst of the current housing recession.
But, from a portfolio standpoint, a 10% real gain (nationally)
over 6 years averages to a 1.6% annual gain, which
isn’t a great return on assets, especially given that this rate
of return does not take into consideration a homeowner’s
expense of property taxes and maintenance. As a basis of
comparison, the average yield on 10-year TIPs issued in
2002 (10-Year Treasury Inflation Adjusted Note Due 7/
15/12) is 1.84%. The picture darkens further when you
consider that most homeowners who bought in 2004 or
later are out-of-the-money on their homes. From May
2004 to May 2008, real prices in 16 of the 20 major metro
markets are in the red, and two of the remaining cities are
barely positive. The exceptions are Seattle and Portland,
which have seen a cumulative real price gain of about 20%
each. Seattle and Portland were both late arrivals to the
house price booms taking place in the rest of the country.
Price growth peaked in these north-western cites almost
two years after the rest of the country in 2006 instead of
2004. Price growth has decelerated similarly to other cities
but their later arrival has made these markets better
performers over the later time period.

Bottom Line
Hind-sight being 20-20 it is now clear that the house
price gains that occurred late in the housing cycle overshot
fundamentals and are now in the process of correcting to
a more sustainable level. 2002 serves as a good benchmark
for the performance of the U.S. housing market under
more balanced conditions and is a likely candidate for
where prices might be expected to return to once the excess
returns of the late housing boom have worked themselves
off. Indeed, with an 11 month supply glut currently
sitting on the market alongside expectations of weak employment
and income growth over the next four quarters,
it is conceivable that there could be an overshoot on the
price adjustment. A further 5 percent nominal price decline
would take the overall retrenchment of prices since
the peak of 2006 from the 18.4 percent recorded in May
of this year to 22.5 percent. Expressed in this manner the
price adjustment appears staggering. However, assuming
consumer price inflation (excluding shelter) close to 5 percent
over the next year, this 5 percent further decline in
nominal home prices would bring the national home price
just 1% percent below the real level of 2002. In this longerterm
context an assumption of such a further price decline
does not appear heroic in the least.

From a regional perspective, it is interesting to note that
of the nine cities which have seen cumulative gains above
the 10% national average, five of them – Los Angeles,
Miami, Tampa, Las Vegas and Phoenix – are now experiencing
year-over-year declines in excess of the national
average. Given that these markets were the most inflated
before the crash in prices it should be expected that they
have the farthest to go before coming back into balance.
While the housing market may be close to a bottom in terms
of home sales, recent evidence suggests that significant
declines in house prices are necessary to drawdown the
supply of unsold homes in the most inflated markets. According
to data from the California Realtors Association,
the month’s supply of existing homes in Los Angeles fell to
9.1 in May from a peak of 20 months in October of last
year but this was accompanied by a downward move in
year-over-year prices from -4% to -24% over the same
period. While changes in existing home prices are not directly
comparable with the Case-Shiller data as they reflect
the current mix of homes for sale (and have thus
likely been brought down by forced sales of foreclosures),
this suggests that cities like Los Angeles, Las Vegas and
Miami where price growth was most excessive, will continue
to be those cities where price declines will be the
greatest.

5 Ways to Revive a Tired Bathroom

Give your bathroom a facelift with a few small changes without the cost of bathroom renovations.

From time to time, even the prettiest bathroom could use a facelift. We're not talking major bathroom renovations here, or even involved do-it-yourself stuff; just a few small changes designed to give maximum zing for minimum effort (and cash) and without the effort of bathroom renovations. Your local bath, home or building supply store has all kinds of products designed to lift the spirits of even the most depressing bathroom, and many of the ideas that follow require no more than a few tools and a free weekend. Think of it as a spa retreat for your bath.

1 Clear out everything -- everything! -- in your bathroom and give the room a good scrubbing, right down to the grout between tiles, any hidden build-up under the faucet escutcheons, and corners inside cabinets. Then throw out or give away anything you don't use regularly: half-filled shampoo bottles, makeup you'll never wear, expired medicines. Be ruthless.

2 Nothing updates a room more quickly and dramatically than a new coat of paint. The bathroom is often the easiest room in your house to paint, since there's little or no furniture to move and the wall area is fairly small. Pure white is a classic look that's very fashionable right now; or choose a shade that contrasts elegantly with coloured tile or fixtures. If you have cabinets, paint them (inside and out) as well.

3 Replace your chipped or too-small medicine cabinet with a handsome new one. Restoration Hardware and IKEA both have attractive options, as do many building centres. Or, if storage is not a concern, replace it with a large, beautifully framed mirror.

4 Contrary to popular belief, replacing your basin faucet is a fairly easy DIY job, and there are many beautiful styles available for $100 or less. And you'd be surprised how much it improves the overall look of the room.

5 If the floor is ugly or worn, you don't always need to rip it up and start over. Linoleum and wood floors can be painted out with special flooring paint; epoxy paint can be used to update yucky tile. Peel-and-stick vinyl tiles are another inexpensive option.

GTA Resale Housing Prices Up, Sales Down

July 17, 2008 -- Moderate activity and strong prices continued to characterize the Greater Toronto Area (GTA) resale housing market during the first half of July, Toronto Real Estate Board President Maureen O’Neill announced today.

“The average price in the GTA during the first half of July was $379,072, which is a one per cent increase from the $374,254 recorded in the first two weeks of July 2007 and a nine per cent increase from $346,267 recorded during the same period in July 2006,” said Ms. O’Neill.

In the 416 area, the average price was $419,199, up one per cent from the $414,321 recorded during first half of July 2007 and up 14 per cent from the $367,541 recorded during the same period two years ago.

At $353,257 the 905 region’s average price was up two per cent from $345,741 recorded in the first half of July 2007 and up six per cent from $332,733 recorded during the same period in July 2006.

“Continued strength in house prices throughout the GTA indicates that consumers continue to recognize the value of real estate as a long-term investment,” said Ms. O’Neill.

Sales activity remained moderate in the first half of July, with 3,497 homes changing hands in the GTA. This is a decrease of 11 per cent from the 3,947 properties sold in the same period in 2007 but an eight per cent increase from the 3,251 transactions recorded in the first two weeks of July 2006. Sales in the first two weeks of July 2007 saw a 21 per cent increase from mid-July 2006.

In the 416 area there were 1,369 sales, down 17 per cent from the 1,641 recorded during the first two weeks of July 2007 but up eight per cent from the 1,264 sales recorded in the same period in July 2006. Before the Land Transfer Tax went into effect, sales increased 30 per cent in the first half of July 2007 compared to the same period in July 2006.

Sales in the 905 region came in at 2,128 in the first half of the month, down eight per cent from the 2,306 recorded during the same period last year but up seven per cent from the 1,987 sales recorded during the first half of July 2006. Sales in the first two weeks of July 2007 saw a 16 per cent increase over mid-July 2006.

Activity in certain areas increased in the first half of this month.
Bowmanville (E17) saw a 12 per cent overall increase in sales due to an increase in detached home transactions.

Brampton (W24) sales increased 18 per cent, driven primarily by a significant increase in semi-detached home transactions.

The Annex (C02) experienced a 70 per cent increase in sales largely due to an increase in detached home transactions.“Although the number of available properties has increased 25 per cent compared to a year ago, from 21,777 to 27,317 listings, the number of days on market remains the same at 32, which is a positive sign,” said Ms. O’Neill.

New MLS Residential Listings Reach New Levels in First Half of 2008

OTTAWA – July 15, 2008 – New listings of homes for sale on the Multiple Listing Service® (MLS®) in Canada’s major markets reached record levels in the first half of 2008, while sales activity retreated from the record levels reported in 2007, according to MLS® statistics released by The Canadian Real Estate Association (CREA).

New MLS® residential listings in Canada’s major markets numbered 332,958 units in the first six months of 2008, up 8.1 per cent from the previous record set in the same period last year. For the third time in as many months, seasonally monthly adjusted new MLS® residential listings topped 50,000 units in June 2008.

More new properties were listed in April, May, and June this year than in any other month on record. This pushed seasonally adjusted new listings to new levels in the second quarter of 2008, up 7.5 per cent from levels the previous quarter. New listings reached record or near-record levels in Toronto, Vancouver, Ottawa, Regina, and Saskatoon. This more than offset a decline in new listings in Edmonton and Calgary, which continue retreating from peaks in March.

By contrast to rising new listings, sales activity in the first half of 2008 was down compared to the same period of 2007, which was a record-setting year. Transactions declined by 13.3 per cent year over year to 169,265 units in the first half of 2008. Seasonally adjusted transactions fell on a month-over-month basis in the first two months of the year, with the February decline being the largest in more than four years. Activity in 2008 subsequently posted four consecutive monthly increases, but remains below where it stood at the end of last year.

New year-to-date sales activity records were set in St. John’s and Thunder Bay in June. In the second quarter, seasonally adjusted activity reached the second highest level on record in Winnipeg, Quebec City, Gatineau, and Saint John. Quarterly transactions also posted their third highest levels in Ottawa, St. John’s, and Thunder Bay, and reached their fourth highest ever level in Montréal.
Over the past six months, easing sales activity and a surge in new listings caused the resale housing market to become considerably more balanced in many major housing markets. Vancouver, Regina, and Saskatoon were the most balanced major markets in June.

"The Canadian real estate market, while cooling, is still much different than the U.S. market with its record low number of foreclosures or defaults" says the President of The Canadian Real Estate Association, Calvin Lindberg. In the United States home prices dropped by 14.1 per cent in the first quarter of the year, according to the Case Shiller national home price index.

"Finance Canada has moved to clamp down on those buyers who may be heavily leveraged in their bid to become home owners" the CREA President added, "and this is not expected to have any major impact on the overall market before the changes go into effect in October."

The major market residential MLS® average price set new records for the first half of 2008, as well as for the second quarter of the year. In the first half of 2008, the MLS® residential average price rose 3.2 per cent year-over-year to $340,390. On a quarterly basis, the average price in Canada’s major markets was $343,235 in the second quarter, up 1.4 per cent from the second quarter of 2007.

However, in June the major market MLS® residential average price edged down 0.4 per cent year over year to $341,096. The slight decline in average price comparison reflects the impact the surge in average price in Calgary and Edmonton had last year. The average price in these markets retreated after rising dramatically last year, but has stabilized since March 2008 in line with a balanced market.

New monthly records for MLS® residential average price were set in a number of major markets in June, including Saskatoon, Kitchener-Waterloo, Thunder Bay, Ottawa, Gatineau, Montréal, Trois-Rivières, Saguenay, Saint John (NB), and St. John’s (NF).

"The resale housing market is more balanced than it was last year in all major urban centres," said CREA Chief Economist Gregory Klump. "The frenzied pace for sales activity last year has faded, with buyers now better able to shop around before making an offer. Price increases are expected to be modest in the second half of 2008, as sales continue easing and new listings remain high."

Changes to CMHC Mortgage Policies

By Craig Wong, The Canadian Press

OTTAWA - Ottawa is tightening the rules for government-guaranteed mortgages that will limit the maximum amortization period to 35 years and require a minimum down payment in a bid to prevent a meltdown like the one in the U.S. subprime mortgage market.

The Finance Department said Wednesday it will no longer guarantee 40-year mortgages and will require a minimum down payment of five per cent of the value of a home.

Government-backed insurance is currently available on mortgages where the loan-to-value ratio is up to 100 per cent - in other words the buyer has borrowed all the money to buy a home and then gets insurance coverage on the whole amount.

The changes announced Wednesday will cut this ratio to 95 per cent. Borrowers may still borrow the five per cent down payment, but it will not be insured under the new scheme.

Finance spokesman Jack Aubry said the moves will strengthen the Canadian housing market and reduce the risk of a housing bubble.

"Limiting the use of 40-year mortgages and requiring a minimum downpayment will help ensure that people build real equity in their home faster," Aubry said.

The new limits, which are set to take effect Oct. 15, will affect only new government-backed insured mortgages.

Canadians who already hold mortgages won't be affected by the changes.

In April, Bank of Canada governor Mark Carney raised his concerns about the loosening standards in the Canadian mortgage system, particularly the growing popularity of mortgages amortized over a 40-year period.

In other words, mortgages that are designed to take 40 years to fully repay if the borrower sticks to the regular schedule of instalment payments.

Carney told a Commons committee that the central bank was watching developments in the mortgage lending sector closely to ensure that the abuses seen in the U.S. subprime market do not occur in Canada.

In the United States, imprudent lending by banks and financial companies to high-risk borrowers at low rates created a housing bubble that eventually exploded when mortgages renewed at higher rates and borrowers couldn't pay and defaulted.

In Canada, defaults of bank-originated mortgages are extremely low - well below one per cent of the total, according to figures compiled by the Canadian Bankers Association.

The collapse in the U.S. housing market led to broader troubles in the U.S. economy, reducing demand for Canadian exports such as lumber and autos. It also led to a corporate and consumer credit crunch that is still being felt by ordinary Americans and companies.

In Canada, the government said Canadian banks and other lenders have not written many government-backed mortgages to borrowers with low credit scores, but to ensure this continues the changes will establish a credit score floor of 620.

Economists have noted a cooling in the Canadian housing in recent months after several years of strong growth. Higher loan-to-value ratios and longer amortization periods are believed to have prolonged the cycle by opening the market wider.

Scotiabank senior economist Adrienne Warren called it a "modest tightening in credit conditions" could exclude a few people at the margins from buying a house.

"We were already in a process of where we're seeing things cool off and I think this will just reinforce that," she said.

Warren added that most Canadian lenders have been more conservative than their counterparts in the United States.

"It's essentially a sort of cautious move and reaction to the difficulties we're seeing in the global housing market and particularly in the U.S.," she said.

Jason Scott, a mortgage associate with Urban Mortgage in Edmonton, said the changes will make it more difficult for younger buyers who are looking to get into the market.

"Reducing the maximum amortization is going to put people who are at the fringes of affordability out, 40-year amortization has been very popular with younger people who are purchasing their first home," he said.

The changes Wednesday also set a maximum of 45 per cent for the proportion of gross income that is spent on debt servicing and housing-related fixed or essential payments.

And mortgages that begin with "interest-only" payments and home equity lines of credit will also not be covered by the government guarantees.

Ottawa noted that reducing amortization from 40 years to 35 years on a $200,000 mortgage with a six per cent interest rate would increase the borrower's monthly payment by $41. The borrower would also save $49,000 in interest payments.

Canada Mortgage and Housing Corp., a Crown corporation, is the country's largest insurer of home mortgages. The government also backs private mortgage insurers through guarantee agreements that protect lenders in the event of default by the insurer.

GTA Resale Housing More Balanced in June

July 4, 2008 -- The trend toward more balanced market conditions continued in June with 8,600 properties changing hands, Toronto Real Estate Board President Maureen O’Neill announced today.

It is important to note that in this release you will also find market numbers specific to the resale housing activity in 2006 and 2007. This comparison is provided to help present a more accurate perspective of the resale housing market of 2008.

At $395,866, the Greater Toronto Area average price for last month increased by four per cent compared to June 2007 when it was $381,963. The City of Toronto’s average price of $433,082 last month increased three per cent from $421,139 in June 2007. In the 905 Region, last month’s average was $370,559, an increase of four per cent, from $355,240 in June 2007.
In the first two quarters of 2008, the average GTA price increased four per cent to $390,054 from $373,719 during the same time period in 2007, and up 9 per cent from the $356,977 recorded in the same period in 2006.

In the City of Toronto, the average price in 2008 increased four per cent to $427,198 from $411,530 in 2007, and up 10 per cent from $389,313 during the same period in 2006. In the 905 Region the increase was five per cent to $365,536 from $347,852 a year ago, up 9 per cent from$334,220 in 2006.

“Although June 2008 sales in the Greater Toronto Area (GTA) have declined 18 per cent to 8,600 from the June 2007 total of 10,451, June 2007 was the best performance ever for that month,” said Ms. O’Neill.

“This year we’re seeing a return to calmer conditions but the market remains healthy. When compared to the 8,730 transactions in June 2006, GTA sales activity in June 2008 decreased by only one per cent.” Record month June 2007 saw a 20 per cent increase over June 2006.
In the City of Toronto there were 3,481 transactions last month, a decline of 18 per cent from June 2007 with 4,238 sales but down 4 per cent over the 3,641 transactions in June 2006. When you compare record month June 2007 with June 2006, a period before the Toronto Land Transfer Tax went into effect, sales increased 16 per cent.

The 905 Region experienced an equivalent decline of 18 per cent, with 5,119 sales last month compared to 6,213 transactions in June 2007 but a one per cent increase over the 5089 properties sold in June 2006. When you compare record month June 2007 with June 2006, sales in the 905Region increased by 22 per cent.

In the first two quarters of 2008, GTA sales declined 14 per cent to 43,685 transactions from 50,648 during the same time a year ago and down five per cent from the 45,797 recorded in the same period in 2006. When you compare the first two quarters of 2007 with the same period in 2006, GTA sales increased by 11 per cent.

In the City of Toronto, sales for the first two quarters declined 15 per cent to 17,370 from 20,574 in 2007 and down 8 per cent from 18,917 in 2006. In the 905 Region sales declined 12 per cent to 26,315 from 30,074 in 2007 and down 2 per cent from 26,880 in 2006. However, when you compare the first two quarters of 2007 with the same period in 2006, sales increased by 9 per cent in the City of Toronto and by 12 per cent in the 905 Region.

“The increase in listings we have seen in recent months has resulted in a slightly longer period during which homes are on the market, from 29 days a year ago to 34 days currently,” said Ms. O’Neill. “This has given buyers and sellers a little more time to make well-considered decisions.”
In certain pockets however, the pace of sales remained brisk this June. Brooklin (E19) experienced a 35 per cent increase in overall sales based on strong detached home transactions.
Burlington (W25) saw a 65 per cent increase in activity, driven by detached home transactions and even more robust attached/row house sales.In Downtown East (C08), activity was up four per cent due to attached/row house and condominium apartment sales.

“We expect to see balanced market conditions continue in the coming months,” said Ms. O’Neill. “When you look at it from a long-term perspective real estate invariably provides stable returns.”

East Toronto Neighbourhoods

East York



Todmorden Village

Todmorden Village grew up around a complex of mills and a brewery that operated near the banks of the Don River beginning in 1795. Many of Todmorden's original families, including the Helliwells and Eastwoods came from Todmorden Village in Yorkshire England. It is this English Village that Todmorden is named after. The Todmorden Mills Heritage Museum situated at the foot of Pottery Road and a small number of workers houses east of Broadview Avenue are vivid reminders of this pioneer community. The history of the Todmorden area north of O'Connor is dominated by the Taylor family who came to the Don Valley in 1834. The Taylors owned all of the land north of O'Connor between Broadview and Woodbine Avenues. The Taylors' business empire in the Don Valley included paper mills, saw mills, grist mills, and the Don Valley Pressed Brick Works which supplied the bricks for many of Toronto's houses and commercial buildings.


The Taylor estates were subdivided in the 1920's, 1930's and 1940's, which led to the residential development of the north end of Todmorden Village.



East York


The Township of East York was incorporated on January 1, 1924. At that time East York was comprised mostly of market gardens, a handful of brick making yards and a race horse track that was located in the area bound by Oak Park, Lumsden, Chisholm and Danforth Avenues.



In its early years, East York's population consisted mostly of employees of the local market gardens and brick yards as well as returning World War One veterans and their families. East York's largest period of growth took place between 1946 and 1961 when the housing supply nearly doubled in size.


East York held the distinction of being Canada's only Borough until 1998 when it was amalgamated into the City of Toronto. The fact that East York chose to remain a Borough for so long rather than incorporate as a city speaks volumes for the neighbourliness and small town friendliness that has been an East York trademark ever since its formation in 1924.



Leaside

Leaside was first settled by John Lea a pioneer farmer who emigrated to Canada from Philadelphia in 1819. In the 1850's, Lea's oldest son William built an eight-sided octagonal shaped house - appropriately named 'Leaside' - near the present day site of Leaside Memorial Gardens. This neighbourhood has been called Leaside ever since.


The Canadian Northern Railway incorporated the Town of Leaside in 1913 on land formerly owned by the Lea family. Leaside's development was historically significant in that it was the first town in Ontario to be completely planned on paper before any homes were actually built.


Leaside's residential development was stalled due to the outbreak of World War I, however Leaside was an important contributor to the war effort. Heavy artillery was manufactured at the Leaside Munitions Company. Leaside was also the location of an airfield used for the training of Canadian pilots.


In 1918 the Leaside Airfield made Canadian aviation history as the terminus of the first airmail flight in Canada, travelling from Montreal to Toronto. Leaside's status as a Town came to an end in 1967 when it became part of the Borough of East York, which has since amalgamated with the City of Toronto.



Parkview Hills

Parkview Hills was once part of the vast Taylor family estate. The Taylors moved to the Don Valley in the 1820's and built up a business empire that included a complex of mills and the Don Valley Brick Works.


The Taylors never settled on this part of their estate however they were involved in the subdivision of land in Parkview Hills. The Taylor family are said to have named Hackberry, White Pine, Alder and Aspen streets after trees that once grew in this area. Presteign Avenue, Presteign United Church, and Presteign School are all named after the Welsh hometown of William Pugh who, along with the Taylor family, subdivided the present day neighbourhood.


When Parkview Hills first opened in 1947, three bedroom bungalows were sold for around $9,950. The foundations of these houses were dug using teams of horses and there were no paved roads until 1950. Local residents recall swimming and fishing in nearby Taylor Creek up until 1955 when it was deemed to be to polluted for recreational use.



Governor's Bridge

The Governor's Bridge neighbourhood was subdivided in 1912 by William Douglas and Wallace Nesbitt. Douglas and Nesbitt were distinguished lawyers at the Toronto law firm of McCarthy, Osler and Company and both men were elected president of the Osgoode Legal and Literary Society during their careers.


The actual building of homes in this neighbourhood did not take place until after 1923, when the Governor's Bridge was opened. This bridge spanned a section of the Moore Park Ravine and received its name due to the close proximity of the Lieutenant Governor's residence, which was located where Chorley Park is today.


The same year that the Governor's Bridge opened, Wallace Nesbitt and the estate of William Douglas altered their original plan of subdivision for this neighbourhood. All of the original street names were changed in the new plan. Southview Avenue became Nesbitt Drive, Oakdale Crescent became Douglas Crescent and Hawthorne Avenue was changed to Governor's Road.
In the early years this neighbourhood was affectionately referred to as "Little Hollywood" because many of the first houses built in Governor's Bridge featured Spanish architectural accents.



Bennington Heights

The Bennington Heights neighbourhood is situated on a flat plain of land, on the crest of an escarpment which thousands of years ago had been part of the shoreline of ancient Lake Iroquois - the forerunner to Lake Ontario.


This area was first settled in the 1870's by John Cudmore and Daniel Ryan, who operated successful market gardens on their respective properties. The Cudmore farm was subdivided for residential development in 1889 and later re-subdivided in 1912. Daniel Ryan's property, which was located just to the north of the Cudmore farm was subdivided in stages between 1891 and 1946.


The first resident of the present day neighbourhood was Thomas Weatherhead, a solicitor for the East York School Board. In 1925, when Weatherhead purchased number thirty Rosemount Avenue he had the Rosemount street name changed to Bennington, which was his wife's maiden name.


The Bennington name was also adopted by the Bennington Heights School when it opened in 1950. This neighbourhood has been referred to as Bennington Heights ever since.



Toronto

Danforth Village

Danforth Village, north of the Danforth, was land originally held by the Church of England. Local street names like Glebemount, and Glebeholme, are reminders that this was once Church land.



The land south of the Danforth was not held by the Church. This land was originally owned by families engaged in either farming or in the brick making business.


Danforth Avenue, this neighbourhood's main thoroughfare, is named after Asa Danforth, an American contractor who built Kingston road in 1799 but ironically he had nothing to do with the building of Danforth Avenue.


After being annexed to the City of Toronto in 1908 Danforth Village began to be subdivided. The two most significant events in the growth of this neighbourhood were the completion of the Prince Edward Viaduct in 1918, and the opening of the Bloor - Danforth subway in 1966.



Playter Estates

Playter Estates is named after the Playter family who held the original land grants on both sides of the Don River near Bloor Street. Captain George Playter, the patriarch of the family, was an United Empire Loyalist who emigrated to Canada from Pennsylvania in the 1790's. George's son James Playter, owned the land where Playter Estates is today. However, it was James' eldest brother John who actually settled on this land. John's grandson, John Lea Playter, erected the Playter Homestead at 28 Playter Crescent in the mid 1870's. This charming brick home is still owned by members of the Playter family. The property around the homestead was used for farmland up until 1912, when the current neighbourhood was developed



Riverdale

Riverdale was a small rural community until the Grand Trunk Railway began steaming through here in the 1850's. The railway brought industry and employment opportunities to Riverdale. It also attracted a pool of labourers who built the first homes in Riverdale, south of the railway tracks.North of Queen Street Riverdale remained largely undeveloped until 1884 when it was annexed by the City of Toronto. At that time Riverdale was called Riverside. The name was probably changed to Riverdale as a reference to the city park of the same name, that has long been a landmark in this area.


Riverdale's development was accelerated in 1918 with the building of Toronto's largest bridge, the Prince Edward Viaduct. The Viaduct provided Riverdale with an important link to the City of Toronto, west of the Don River, and marked a coming of age for this popular Toronto neighbourhood.



Leslieville

Leslieville began as a small village back in the 1850's. The village grew up around the Toronto Nurseries owned by George Leslie and sons, after whom this neighbourhood is named.


Most of Leslieville's residents were either market gardeners or were employed at one of several brick making companies that used to operate in the area.


One of the first buildings in the village was the Leslieville Public School, built in 1863. Leslieville's first principal was Alexander Muir who composed "The Maple Leaf Forever".


Muir's poetic verse was inspired when a brilliant autumn maple leaf fell from a Leslieville tree onto his jacket.


That maple tree is still standing today and has become Leslieville's most famous landmark. It is designated by an historic plaque at the intersection of Laing Street and Memory Lane.



The Beach

The Beach was first settled by the Ashbridge family who came to Canada from Philadelphia, in 1793. Ashbridge's Bay Park is named after these pioneers. The Ashbridges, and a handful of other families, farmed this district until the latter part of the 1800's, when many of The Beach properties were subdivided. At that time, large parcels of land were set aside for local parks.



Woodbine, Kew Gardens, Scarboro, Balmy Beach and Victoria Park collectively became Toronto's playgrounds by the lake. These amusement parks also attracted many summer cottagers to the area.


By the 1920's, the City of Toronto was expanding eastward and The Beach was subdivided for year round residential development. Over the years The Beach has emerged as one of Toronto's most popular neighbourhoods.

Balance returns to recreational property markets across Canada this year, says RE/MAX

After an extended period of extraordinary growth, more balanced market conditions have emerged in recreational property markets across the country, according to a report released today by RE/MAX.

The RE/MAX Recreational Property Report found that a substantial increase in the supply of recreational properties listed for sale, combined with fewer buyers overall, characterized most recreational markets this year. Of the 45 markets surveyed, 91 per cent (or 41 markets) were in the transition stage, moving from strong sellers into balanced market conditions. The only exceptions were Salt Spring Island, two markets in Saskatchewan - Last Mountain Lake and Qu'Appelle Lakes and Lakes Candle, Emma, and Waskesiu -- and Newfoundland's East Coast - where inventory levels were relatively low. Affordability was a primary factor in 35 per cent of markets surveyed, given serious upward pressure on recreational values in recent years.


“Market conditions have shifted, but don’t expect to see bargain basement prices or fire sales,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “The recreational market continues to experience solid demand -- a trend that is expected to continue throughout 2008. The influx of new listings has yet to translate into downward pressure on recreational property prices. Prime waterfront properties, while more plentiful than in year’s past, will still command top dollar.”


Adverse winter weather conditions during the first four months of the year hindered recreational activity. Sixty-seven per cent of markets reported softening in the number of sales year-to-date, while average prices remained stable or experienced moderate increases over 2007 levels for the same period. Economic concerns, fueled by negative GDP growth in the first quarter and soaring energy costs, have also played a role in the transitioning market.


“We’re coming off the longest period of economic expansion since World War II,” says Elton Ash,
Regional Executive Vice President, RE/MAX of Western Canada. “Recreational property values have appreciated beyond our wildest dreams across the country. More balanced market conditions are a welcome change for purchasers.”


For the first time in many years, in fact, a good selection of entry-level waterfront is available in markets across the country. Eighteen per cent of those surveyed offer properties under the $200,000 price point, including; Central South Cariboo in British Columbia; Parry Sound, East Kawarthas and Kingston in Ontario; Summerside, PEI; South Shore, Nova Scotia; Shediac, New Brunswick; and the East Coast of Newfoundland.

Recreational property buyers also found themselves divided between two borders this year. The housing market meltdown in the US combined with a Canadian dollar at par created serious investment opportunities for secondary properties in Florida, Arizona, Texas, and California. Some of those very same factors have spurred American recreational property owners in Canada to list their properties for sale, with many looking to take advantage of ideal market conditions here.

“Many Canadians are capitalizing on market conditions in major American centres,” says Polzler. “For some purchasers, the move is strictly a short-term investment strategy with a pay-off at the end of the day, while for others, retirement is the main objective.” The report also found that younger buyers were a factor in 40 per cent of recreational markets surveyed.

“Baby boomers are clearly not the only purchasers that appreciate the recreational lifestyle,” says Ash. “Generation X is quickly becoming a force in the marketplace, spurring demand for condominium product on ski hills, oceanfront properties in good surf locales, and water frontage on trendy lakes with celebrity residents.”

Canadian Home Ownership at Record Levels

Never before have so many Canadians owned homes. And never before have they owed so much for the privilege. Interest rates at or near historical lows combined with low unemployment and recent changes that allow people to buy houses with less money down and pay off mortgages over longer periods resulted in 68.4 per cent of Canadians in the housing market in 2006. That's up from 65.8 per cent in 2001 and 60 per cent in 1971, according to the latest Statistics Canada data.

The increase comes despite the fact that the cost of housing in many cities across the country has gone through the roof, outstripping inflation by far, while median incomes have essentially flatlined. "Low mortgage rates have helped offset much, but not all, of the impact of rising house prices in recent years on mortgage debt-service costs," said Bertrand Recher, a senior economist with Canada Housing and Mortgage Corp. The overall result has been a small increase in the percentage of Canadian homeowners who spend more than 30 per cent of their gross income on shelter costs, according to Statistics Canada census data. But latest CMHC figures show a sharper spike in mortgage-carrying costs in terms of after-tax income. In 2007, average household spending on monthly mortgage payments had reached 37 per cent of after-tax income, up from 32 per cent in 2006. "That's significant - mortgage carrying costs are increasing," said Recher. "This burden is heavier on the shoulders of first-time buyers because they don't have the equity."

Most analysts, however, see little comparison between the Canadian housing market and its American counterpart, where hundreds of thousands of homeowners suddenly found themselves in way over their heads, creating a financial meltdown. Canadian financial institutions jealously guard the number of mortgage defaults they endure. But among the country's big banks, only about 0.27 per cent of homeowners were three months or more in arrears on their payments. "Anecdotally, we are not seeing any rise in arrears or defaults across the country," said Jim Murphy, president of the Canadian Association of Accredited Mortgage Professionals, an organization that speaks for mortgage lenders. "Canadian underwriting standards by lenders and mortgage insurers are much more thorough than they are in the United States. Canadian lenders are much more conservative."

One key factor in the rise of home ownership is the relatively new option of mortgages amortized over 40 years. Paying off loans for homes over a longer period means much higher total interest costs, but lower ongoing monthly payments. The effect is increased affordability. Growth in such long-term mortgages has been nothing short of dramatic, figures show. Between the fall of 2006 and fall 2007, 37 per cent of all mortgages carried amortizations longer than 25 years, up from nine per cent in the preceding period. "Clearly they're very popular," said Murphy, adding that not only first-time buyers are opting for the new choice.

One real estate analyst who disagrees with the rosy assessment of the Canadian market is Liberal MP Garth Turner, who argues too many people, especially younger buyers, are taking on too much debt to buy into the housing game. Low interest rates coupled with 40-year amortizations and negligible downpayments might make it easier to buy higher priced homes, but it's also leaving buyers vulnerable, Turner says. "The inevitable conclusion is that the current Canadian real estate market is floating on a sea of unrepayable, and perhaps unserviceable, debt," Turner maintains in his book, "Greater Fool." Collectively, it is a lot of debt. It should be noted that few of Turner's predictions about the current market have yet been proven to be accurate and his greatest claim to fame, predicting the 1989 crash was off by years.

In total, Canadians owe an amount fast approaching $850 billion on their homes, more than double what it was a decade ago, with percentage growth in double digits in recent years. If trends continue as expected, the value of all outstanding mortgages will surpass the $1-trillion mark sometime toward the end of next year. The federal government is keeping a close eye on the developments, according to Finance Minister Jim Flaherty. "We have been monitoring the mortgage market, as we do, and we've seen a trend toward longer amortizations and smaller down payments, and that is a matter of some concern," Flaherty said recently. "We're continuing to watch that." Mortgage insurers, who take care of defaults, have also tightened their criteria. Still, any concerns over the situation appear, at least for the moment, to be outweighed by more positive views. Overall economic conditions remain healthy in Canada, with unemployment close to historical lows, Recher noted.

In addition, the forecast is for the rapid growth in house prices to moderate substantially while interest rates are expected to remain relatively stable, at least over the next year or two. Adrienne Warren, a senior economist and manager with Scotiabank, said easier access to mortgages certainly make the economy more vulnerable, but it would take a sharp spike in interest rates - she estimated five percentage points - coupled with a general economic downturn to see people in danger of losing their homes. "Given that the lending criteria has been relatively benign in terms of growth and inflation and interest rates, I'm not really overly concerned with this one segment of the market." One group blissfully unconcerned about rising carrying costs are those aging baby boomers who have paid off their mortgages, a group that has grown in recent years. More than 42 per cent of all homeowners hold no mortgage at all, according to Statistics Canada. Many longtime owners have taken their equity and downsized to condos, joining the flood of first-time buyers who have gained their first toe-hold in the world of home ownership by entering the relatively affordable condo market. About 10 per cent of households are now in condos, a tripling in 25 years. "There's been quite an increase . . . in the percentage of owner-households that are in condos," said Willa Rea, senior analyst with Statistics Canada. "There's a good deal of young people buying in and becoming homeowners. We've seen quite an increase there." While shelter costs for homeowners have risen, they remain higher than those for renters. Roughly 40 per cent of renters spend 30 per cent or more of their income on shelter. "That hasn't changed," said Rea. "It's pretty stable there." The analysis released Wednesday is based on census data collected more than two years ago. The next census will be taken in 2011.

New Information on the US Market from National Association of Realtors

This artcile was forwarded to me by my friend Ken Millar in Arizona. If you want more information on potential investment south of the border, we can connect you with professionals like Ken.

Home Sales, Prices Seen Rising in Late '08
First, the good news: home sales have stabilized over the last seven months and should increase slightly in the second half of 2008, NAR Chief Economist Lawrence Yun told a crowd of REALTORS® at NAR’s Midyear Legislative Meetings & Trade Expo Thursday. The other good news is that the subprime lending crisis is becoming a thing of the past. “I believe 2008 will be the year when we have to clean up and recover from the subprime mess,” said Yun.

The bad news is that the numbers are in, and 2007’s annual sales volume of about 5.30 million homes was the lowest in 10 years. Luckily, the economy is stronger overall than it was a decade ago. “The difference is that we have 25 million more people and 13 million more jobs than we did 10 years ago,” he said. And while sales should begin to grow later this year, real improvement in the housing market won’t happen until 2009, when sales should climb to 5.71 million units, Yun said.

Price Gains to Vary by Market
Prices also are expected to begin a turnaround later this year, although recovery will vary by market. Middle-America cities that performed evenly over the past few years – like Cincinnati, Milwaukee and the Kansas City, Mo., area – are likely to experience home price gains in the 20 to 30 percent range over the next five years, while markets like Miami, Las Vegas and Phoenix could see prices go up as much as 50 percent during that time period, Yun said.

Healthier Mortgage Market Makes a Difference
A brighter credit picture is a major contributor to this improvement, Yun said. If you look at where home prices fell the most, it’s the markets were subprime loans were prevalent,” Yun said. Cape Coral, Fla.; Detroit; Las Vegas; Miami; Orlando, Fla.; Phoenix and Riverside, Calif. were among the cities with a high percentage of subprime lending and where the markets suffered the biggest downturns, he explained.

These markets should get a boost from a more stable mortgage market. FHA lending doubled to 6 percent of all loans 2007 and should grow to 10 percent in 2008. It should reach near-historic norms of 15 percent in 2009, said Yun. The increase will be slow because many lenders will have to be certified by the U.S. Department of Housing and Urban Development before they can issue FHA mortgages. Higher conforming loan limits at Fannie Mae and Freddie Mac have also helped lower interest rates and unlock the lending log jam for jumbo loans. Even current borrowers with adjustable mortgages are in better shape, thanks to Fed rate cuts. In fact, some adjustable loan borrowers may actually see their resets produce lower payments. “The Fed has done its job on resets; now it’s up to Congress to encourage the home buying that will help stabilize prices,” Yun said.

Other Reasons to Be Optimistic
The home buyer tax credit currently being considered by Congress would also encourage uncertain buyers to act. Stabilized prices will not only encourage sales but could help reduce defaults, he added. The foreclosures aren’t all in the past, warned Yun, though he believes that many investors and speculators already have exited the market. He expects foreclosures to rise throughout 2008 and perhaps into 2009, primarily among subprime borrowers, where foreclosure rates were near 20 percent in the third quarter of 2007.

Still, Yun notes, it’s important to remember that only 9 percent of home owners have subprime loans. Foreclosure rates for all loan types are much lower — currently, around 2 percent.

GTA Resale Housing Market Moderate in May

Below is the text of a press release from the Toronto Real Estate Board. All 2008 figures are compared to 2007, a record year.

May 20, 2008 -- Moderate sales and healthy price increases continued to characterize the GreaterToronto Area resale housing market during the first half of May, Toronto Real Estate Board President Maureen O’Neill announced today.

“With 4,422 sales throughout the GTA in the first two weeks of this month, activity has declined 12 per cent compared to the 5,003 homes sold during the first half of May 2007,” said Ms. O’Neill. “Prices however, continue to be strong, averaging $400,817 in the GTA, up six per cent from the $377,612 reported a year ago.”

In the City of Toronto, there were 1,734 sales, representing a 15 per cent decline from the 2,053 homes sold during the first half of May 2007 and an 11 per cent decline from 006. The average price in the 416 is $437,205, up six per cent from $412,701 a year ago.

In the 905 Region, there were 2,688 sales, down nine per cent from 2,950 a year ago but up four per cent from the same period in 2006. At $377,688, the average price is up seven per cent from the $353,192 recorded during the same timeframe in May of 2007.

Despite moderate sales overall, some neighbourhoods experienced heightened activity during the first half of May. The GTA is showing signs for a healthy 2008 compared to the diminished activity during the first quarter of 2008.

The Danforth (E03) saw sales increase 29 per cent overall compared to the same timeframe a year ago due to strong detached home sales.

Interest in detached homes also led Streetsville (W20) to a five percent overall sales increase compared to a year ago.

In the Annex (C02) transactions rose 39 per cent compared to the same period a year ago, driven by strong condominium apartment and detached home sales.

Richmond Hill South (N03) saw strong sales in most property types resulting in a three per cent increase compared to a year ago.

“In recent years, homebuyers have faced a major challenge with respect to limited selection,” said Ms. O’Neill. “Now though, inventory is up 11 per cent compared to a year ago, which has resulted in more choice for home buyers and will a positive effect on the quality of available listings.”

A wider selection from which to choose has also resulted in increased Days on Market, which has risen to 35 from last year's 28.

“The Greater Toronto Area offers a wide array of housing stock to fit almost any budget; I encourage anyone thinking of making a move to contact their REALTOR® to learn more about all of their options.”

The important thing to note is that normalcy is returning to the market.

Looking South for Investment?

Below is the text of a letter I received from a colleague in Arizona regarding investment possibilities in that state.

Dear Frank,

I am a fellow RE/MAX Associate and I am contacting you regarding possible opportunities for referrals of your clients who would like to consider investments in the Phoenix, Arizona area, including Scottsdale, a favorite area for "snow birds". Historically, many Canadians have called Arizona home for the chillier seasons of the year and we welcome their seasonal migration. In recent months, we have also witnessed an increased interest to purchase properties within our city from north of the border due to the favorable currency exchange.

If you have any doubt that now may be the BEST time for your clients to consider purchasing a winter home in Arizona, let me share some interesting facts. According to the Department of Real Estate at the Arizona State University, the median price of a Scottsdale resale residential property for the 1st quarter 2007 was $595,000 USD, and for the 1st quarter 2008 it was $525,000 USD. When you consider the current "soft" real estate market, coupled with a shift of Canadian Dollar exchange rates, I think you will agree that purchase opportunities for US properties are near record discounted values for your clients. I estimate that the savings to Canadians in this example to be almost twenty percent in Canadian Dollars. How much longer will this situation last? Current exchange rate and trend line:

Yahoo Finance Currency Converter and Trend Line:

http://finance.yahoo.com/currency/convert?from=USD&to=CAD&amt=1&t=3m

We are now seeing evidence of a stabilizing, if not slowly improving, real estate situation in selective pockets of the Greater Phoenix Metro Area. Overall Maricopa County MLS unit sales (covering mostly Phoenix Metro) were up 27% from February '08, to March '08, and another 14% for the month of April topping our 6-month trend.

These links lead to examples of affordable "second" homes:
Scottsdale $850,000 example:
http://www.larkspurdrive.com
Phoenix Market $250,000 example:
http://www.estatequicksale.com

Why Hasn't Canada Been Affected By Pubprime Market?

Canadian homeowners have watched in horror as the subprime mortgage disaster unfolded down south - and many worry it still might happen here.


The fallout from the subprime mess south of the border has been filling business pages for months with stories of foreclosure epidemics, real-estate market meltdowns, lenders and investment banks going under and a global credit crunch. But what exactly is at the root of it all, and why has Canada not caught the subprime virus like we do most other economic ailments of our largest trading partner? Forthwith, an explanation.

First off, what the heck is a subprime mortgage?
No, it's not a mortgage offered at below-prime interest rate, though that's a common misconception. The term "subprime" instead describes the borrower -- a person who doesn't meet a financial institution's criteria for a loan and so wouldn't qualify for a standard mortgage. Perhaps the client has a lousy record for paying off debts, or lacks regular employment. Subprime borrowers are often low-income people, the elderly and new immigrants. Wags have coined an acronym for those who most benefited from the subprime craze -- NINJAs, or folks with No Income, No Jobs or Assets.

To account for the risk, subprime mortgages come with hefty interest rates. However, to persuade people that they can, in fact, afford them, those rates typically kick in only after a year or two at an introductory low (or teaser) rate. The mortgages dangle other lures, such as loan amounts that exceed the value of the home (you need some cash for the furniture, after all!). Some even work like reverse mortgages, meaning the homeowner gets monthly payments that are added to the principal. The sales pitch is that the surging housing prices would allow borrowers to refinance their loans at higher values, keeping their payments affordable indefinitely.

Why did everyone fall for this?
Well, up until 2005, the pitch worked beautifully. Real estate was on a tear, with home prices in cities like Phoenix, Las Vegas and Miami rising by up to 30% a year. When you're on a roll -- especially in Vegas -- it's easy to forget that your luck could run out. So homeowners, dazzled by their homes' values on paper, enthusiastically tapped into home-equity lines of credit, jacking up their principals to the sky. The fact that mortgage interest payments are tax-deductible in the U.S. only bolstered the subprime market's growth by spurring people to become homeowners while offering little incentive for paying off the loans.

The subprime industry was getting rich as well. For those selling them, subprime loans came with cushy commissions, creating fierce competition for the business. Those issuing them, meanwhile, bundled the mortgages into complex stock market securities peddled to others, and so no longer had to fear if the borrowers defaulted. Aggressively marketed, irresistibly priced, subprime mortgages comprised an incredible one-third of all mortgages in the United States by last year.

So what ended the party?
As the real estate market started to slow and then slump, the proverbial chickens came home to roost. With values of their homes reversing course, by early this year one-tenth of American homeowners found that what they owed on their mortgages exceeded what their homes were worth. Unable to afford the higher rates kicking in after the teasers expired, more and more people defaulted. Now, as many as two million U.S. homeowners may lose their homes. In a recent report, Benjamin Tal, senior economist with CIBC World Markets, concluded, "The price appreciation in the U.S. housing market over the past two years was, in many ways, artificial -- boosted by aggressive lending and irresponsible borrowing."

Do we have subprime mortgages in Canada?
Yes, we do. More and more, in fact. They're typically called "alternative" mortgages and tend to cater to the self-employed and immigrants without Canadian credit history to qualify for loans. From no-money-down to cash-back mortgages, the volume of such exotic products has more than doubled in the past five years.

So how come the same disaster hasn't unfolded in Canada?
Because our market has developed differently due to regulation, immaturity and plain old timidity. The reasons are manifold.

Lending practices:
In Canada, it's difficult, expensive and impractical to buy a home without any down payment. Anyone who puts less than 20% down on the home can't qualify for mortgage insurance by the Canada Mortgage and Housing Corp. or Genworth Financial, and such uninsured, high-ratio mortgages charge substantially higher rates. Banks and other mainstream financial institutions also won't provide a mortgage that exceeds a home's purchase price. Even alternative lenders have tended to eschew some of the worst American excesses, such as super-low teaser rates and loose income criteria for borrowers. Option adjustable rate mortgages (ARMs), which allow homeowners to change their monthly payments, sometimes not even covering the interest, haven't seen much uptake. According to Paul Grewal, head of the Canadian Association of Accredited Mortgage Professionals, "We have not seen the aggressive lending practices common south of the border." Backing his assertion is the fact that mortgage defaults are today near all-time lows, hovering around half a percent.

Subprime infancy:
The subprime mortgage industry in Canada is very young. Only five percent of mortgages fall into that category, compared to about one in five U.S. mortgages. (We're more risk-averse in general; only 22% of subprime borrowers in Canada use variable-rate mortgages that are susceptive to interest rate gyrations, half the ratio seen in the U.S.) In a report, CIBC's Tal also points out that there is little connection between Canada's real estate boom and subprime loans. "Granted, some of those exotic mortgages are now being offered in Canada, but their share in the market is too small to have any material impact," he writes.

Real estate market:
While most of Canada (Alberta excluded) didn't get the crazy price increases some U.S. cities saw, it's also not getting the same dramatic decline. Housing prices have been easing and most observers agree the boom is over, but continuing strong employment, a healthy stock market and low interest rates create little reason to expect the bottom to fall out any time soon. This is in part because our market has been largely driven by renters becoming owners rather than by investors looking to cash in on quick flips.

Still, could we catch the subprime bug?
According to Garth Turner, federal MP and author of a new book, "Greater Fool: the Troubled Future of Real Estate", "Absolutely, without a doubt, that contagion is spreading to the Canadian real estate market." Pointing to dropping home prices and sales volume, and tightening lending criteria among financial institutions, he suggests that signs of a real estate market meltdown are "all around us."

However, most economists and observers are more sanguine, believing a Canadian version of the subprime mess is possible but it'd take a much less severe form. Both federal Finance Minister Jim Flaherty and the Bank of Canada have recently worried aloud about the growth in long-amortization and no-down-payment mortgages. Forty-year mortgages now represent up to a third of new mortgage business at some institutions. And because such a large portion of our net worth tends to be locked in our homes, many Canadians certainly are exposed to risks if house prices plummet or interest rates soar.

Still, for once, we can take heart in the fact that our more boring, prudent ways will likely save us from the disaster down south.

Property Owners to get a Fairer Assessment Appeal System

A fairer property tax appeal system is expected with changes announced by the provincial government.

The changes mean the onus of proof on property assessment appeals is reversed so that, when a property owner appeals an assessment, the Municipal Property Assessment Corporation (MPAC) would be required to prove the accuracy of the new assessment. The government move follows the Ombudsman’s recommendation that this measure would enhance the fairness of the appeal process. The legislation would place the onus on MPAC to prove the accuracy of property assessments that are appealed to the Assessment Review Board (ARB).

The government also intends to introduce legislation to implement changes to the assessment appeal system announced in the 2007 Budget — changes designed to create a more streamlined and transparent appeal system. A key proposed change would make the Request for Reconsideration (RFR) program the first stage of the appeal process for property owners. The RFR, which is free of charge, encourages the sharing of information between MPAC and the property owner, and provides taxpayers with the opportunity to resolve their concerns directly with MPAC in an informal setting.

The Ministry of Finance is also working with MPAC and the ARB to disclose valuation information to taxpayers about their property assessment in a timely way. This will help property owners review the accuracy of their assessment, decide whether to engage in the RFR process, and prepare for their hearing if they decide to appeal to the ARB.

These measures are proposed to take effect for the 2009 taxation year. Details about the proposed new appeal procedures and deadlines will be communicated to property owners in the coming months, prior to the 2009 implementation date.

OREA, May, 2008

Making Your Home Office More Green

Often the most wasteful room in the house, follow these simple tips to make your workspace more eco-friendly and green.

From solar rooftops to kitchen composting to bamboo flooring, Canadian homes are rapidly changing to become more sustainable, more eco-friendly, energy-efficient and less toxic places. But step into the home office and you will see that's not the same case.
Computers and gadgets stay on day and night; toxic batteries, ink cartridges and old electronics get thrown into the garbage and pretty paper made from old growth forests lands itself in the printer. Chris Winter, executive director of the Conservation Council of Ontario, says while each home is different, we tend to fall off the green living and eco-friendly wagon when it comes to our home offices. "On the whole, the trend of home offices is good from an environmental perspective: it eases gridlock and brings balance and common sense back into our lives," he says.

But the power demands of home computers, internet, cellphones, printers, fax machines and myriad other home office materials still take their toll. "Multiplied by four million homes in a given community, this is a significant energy drain," says Winter.

What can we do?Winter says the top three home office problems are energy wastage, paper consumption and hazardous wastes i.e. batteries, ink cartridges and toner. Here are 5 solutions for a greener home office.

1 Purchase a power bar and turn everything off
"It's a bad rumour that you shouldn't turn your computer off at night," says Winter. "Yes, it peaks on startup, but the base operating load of the computer for 24 hours far exceeds the startup." Not to mention everything that connects to your computer continues to drain energy even when not in use: speakers, printers, scanners, PDAs, etc. Turning everything off with the single flick of a power bar makes it easy to save energy (and money!).

2 Think laptop, not desktop
Besides being sleeker, portable and far cooler, laptops consume one-eighth the power of a traditional desktop. If everyone in the house had laptops they could be downloading music and updating their blogs all at the same time and still not be using as much power as one clunky desktop!

3 Embrace the flatscreen
Flatscreen monitors, or LCD (Liquid Crystal Display) screens, use less than half the energy of traditional CRT (Cathode Ray Tube) monitors. LCD screens are lighter, more adjustable, and cause less eye strain as they don't flicker plus their sharp display makes it easier to read text.

4 Reuse materials as much as you can
Print documents and recipes using on the back of used paper; save paper clips, push-pins, elastics, sticky flags; make a point to buy rechargeable batteries and refillable toner cartridges.

5 Recycle! Recycle! Recycle!
Buy a handy basket to throw all your old inkjet and toner cartridges, dead cell phones, PDAs, and finished rechargeable batteries and bring them back to any STAPLES Business Depot location across Canada. Staples will now accept any of these items and will send them off to be refurbished and recycled. "You no longer feel you have to keep grocery bags full of cell phones and PDAs.

You can bring them to us and know they're not going into the landfill," says Leigh Pearson, Staples manager of facility services. Alternatively, your municipal recycling and waste disposal depot will also take these off your hands.Plus, no paper should ever find its way into the wastebasket. Have a couple of trays on hand for paper piles: one for re-use and one for recycle.

Extend your home outdoors

Create a cozy outdoor room where you can entertain or just relax.

Here's the buzz in the backyard: outdoor rooms. Rather than the yard being all about the lawn and the shrubs, it's now about comfortable, cozy areas designed to entertain or relax. Here are some of the outdoor choices that are creating buzz.

Elemental Elements
Water features have been popular for years now, but the latest ones tend to be less like ponds and more like waterfalls over stone – partly because lot sizes are generally smaller and a vertical feature takes up less space than a horizontal one. But it's also because the sound of softly flowing water gives an intimate sense closer to a room than to an expanse of wilderness.

Stone is also a fantastic natural element that's hot in outdoor design. Instead of the old cement patio stones, natural – or natural look –stone is the "flooring" of choice for patio space. A new option, highlighted outside of the model home at the National Home Show in Toronto this April, is cement imprinting. In this process, wet cement is infused with solid or patterned colors in the mix. As it sets, rubber matting with a patterned design is set on top of it. The cement hardens to a textured surface that looks like real stone.

Fire has really taken off lately, as outdoor kitchens come into vogue. As entertaining moves outdoors, the concept of the bonfire or hearth as the gathering place has come back into play. Barbeques have never gone out of style, but the trend now is towards more elaborate fire elements. Outdoor fireplaces range from the portable to the impressively built. Fire pits – the jazzed-up campfire, contained within copper or cast iron – are also available. Chimineas, or Mexican-style outdoor fireplaces, feature a chubby base where the fire burns, and a tall narrow chimney to vent the smoke. And patio heaters prolong the season by providing warmth at night early in spring and into the fall.

Overhead, wooden structures such as porticos, shaded areas like gazebos, or screened-in porches admit light and air while defining space – and in some cases, keeping out mosquitoes or filtering the sun's rays.

Furnish the Space
A couple of Muskoka chairs won't do it anymore. The new outdoor space contains elegant dining suites, bar-height tables and stools, and sofas to lounge about in. New synthetic materials marry traditional looks with easy-care furnishings – such as synthetic fibers over an aluminum frame that looks like rattan. The fibers are heat and cold resistant, UV resistant and colourfast (so they won't fade), and wash easily.

Accessories and lighting are just as important outdoors as indoors. A variety of lighting options offers the possibility of entertaining at night – and many lanterns and garden lights now operate on solar power, making them an environmentally friendlier choice. Waterproof art and outdoor sculpture – decidedly not of the garden-gnome variety – are hot choices in furnishing stores from coast to coast. The trend is towards a focal piece – larger than life, and statement- producing – rather than small, kitschy pieces in the flower bed.

Go Multicultural!
Another trend is to bring garden style from around the world into your own. Mediterranean or Middle Eastern type courtyards are leading the way in creating outdoor space that has a slightly exotic feel. And a more restrained, Asian-type landscaping style remains enormously popular, bringing a peaceful and Zen sense to even small outdoor plots. Furnishings and accessories can reflect this new global feel.

But no matter what the trends the key to designing your backyard remains decorating with your home's personal style in mind. Create an outdoor space that suits you, whether that's an impressive entertaining area complete with outdoor entertainment system or a luxurious nook designed as a personal reading retreat.

Toronto Real Estate

Ken McLachlan is the Broker of Record/ Owner of RE/MAX Hallmark. This is what he has to say about the present Toronto Real Estate Market.

There has been a great deal of discussion as of late to the state of our current real estate market in Toronto. The press is desperately trying to tie our market in with the situation in the United States real estate market.

In an attempt to give a clear indication of the state of our local real estate market, I believe it is important to look at historical factors which drive our market while taking a hard look at circumstances which could impact the future market in Toronto.

In the United States, the real estate plunge has been devastating for many and quite frankly most likely hasn't bottomed in most of the major markets. What fueled this meltdown? In the US, the plunge in the real estate market can be attributed to the inappropriate lending practices entertained by mortgage institutions. Twenty-five per cent of all new mortgages in the States were sub prime and questionable loans. This speculative involvement in the real estate market was caught off guard when the US Federal Reserve increased the prime rate from 1% to 5 1/4% in just under 24 months. This increase in prime led to a huge decline in house prices and exposure for the speculators and others. House prices in the States are down 9% (on average nationwide) from its peak. It is widely viewed that the decline in average house prices nationwide isn't over yet, and could reach a decline of 15%.

I agree with Craig Alexander, the Deputy Chief Economist for TD Bank Financial Group, who pointed out major differences when he recently met with us.

Here in Canada, we have more conservative lending practices and more conservative building practices. In the US, they typically build on speculation, while in Canada 80 - 90 per cent of all units have to be pre-sold before the shovel breaks the ground. A Canadian lesson learned from our experiences in the early 1990's.

So what is driving our Canadian real estate market? In Canada, we have a 33 year low in unemployment. In Ontario it's at a cyclical low of 6%, down from 7% at this time last year. Inflation is low at 2%, and there has been a 5.7% rise in wages and salaries. This has led to stronger economic conditions such as purchasing power rising by 3%. A major factor fueling our housing market is the 40 year amortization plan which 60 - 70% of first time buyers opt for. The introduction of the 40 year amortization plan created a whole new pool of buyers for our marketplace who would not have been in our market. In Hong Kong, 100 year amortization schedules are common.

Cheap entry points in our local market which include condos, townhouses and row houses will continue to be the trend.

In the long term, it is known that household or family formation ultimately drives demand. Immigration will continue to be a big factor. The big Canadian cities such as Toronto, Vancouver, Calgary and Edmonton will have the largest population growths because immigrants to Canada tend to flock to these big centers - particularly Toronto. This trend will continue to drive the housing market in these centers.

However there are cautions to be aware of which may strongly influence our market.
In my opinion, our market will suffer a downturn if these following situations occur:
Continual increase in prime lending rate over a short period of time by our Federal Government.

Sudden upward spike in house prices for Toronto in the next upcoming months.
If our Federal Government, in their wisdom does what the US Federal Reserve did by increasing the prime rate substantially over a short period, look for a strong influence in the negative sense on our housing market. But that shouldn't happen. Right now, the expectation is for interest rates to come down with a possible drop of 150 basis points or what equals to 1.5%. With this decrease, variable interest rates for mortgages will come down, but 5 year fixed will remain constant.

The key word for our Toronto real estate market is stability. No sudden price spikes and no drastic price falls. This spring, activity and appreciation has already moderated in many areas. Supply is increasing, and mortgage rates are low and will be declining. A sudden spike in market prices in the near future is not healthy and may cause problems. What is needed and has been happening is the slowdown of market activity or frenzy. Properties which accelerated by price in certain areas now have less hectic, more stable activity for the most part. Strong increases in house prices could lead to over heating and would cause problems for our local markets. Right now, the affordability factor is favorable. If prices are driven to higher levels which would increase the level of affordability, look for a roll back on house prices.

Certainly the US and Canadian economies are tied, but that doesn't mean our Canadian real estate market will follow the US trend.

Eco-kitchen renovations: Quick and easy tips make kitchens greener

How to look for appliances that will make your kitchen more eco-friendly while still performing at top level.

If you're renovating a kitchen, there are many easy things you can do to make it more environmentally friendly as well as more environmentally functional. There are also many choices today of new and greener products but some caution is required with the newest materials. Here are some things to consider for major or minor renovations and what to look out for.

Many new materials have recently been introduced for cabinetry and for floors but which to select? A good idea is to look for cabinets certified sustainable by a reputable organization such as the Forest Stewardship Council. However ensure that you know how the material performs before you buy. Many of the newest materials are worthy of praise for their efforts in the green movement but do not have the performance and are not tried and true.

Appliances, including refrigerators, dishwashers and water heaters, are big users of energy. Again, certification symbols are a good guide. Look for the Energy Star sign for greater energy efficiency and make simple changes in your day-to-day practices like leaving dishes to dry without selecting the dishwasher drying option. They will dry without it and you'll save energy.

Recycled materials are available for countertops including recycled glass, and major countertop manufacturers are introducing separate eco-friendly lines. New materials for counters including bamboo and even recycled paper countertops should be investigated for performance before purchasing.

While most stainless steel used for kitchen sinks is recycled, granite sinks are primarily a natural material. Silgranit sinks in particular, are manufactured by Blanco in Canada so they have the added benefit of local manufacturing, another environmental plus to look at for any product you purchase today. It may be a green material, but if it came a long way to get here you need to factor that in. Silgranit is also highly durable and scratch-resistant. While another sink material may have to be replaced at some time, Silgranit offers longevity.

Finally, remember to consider products that make waste management and environmental practices easy for your family so that they are encouraged to do them. The Blanco Solon is an organic waste collector that can be installed onto the countertop (topmount or undermount installation) close to the sink or wherever you need it. It's made up of a stainless steel bin, frame and lid to keep odours intact. The bin lifts out easily for emptying into outdoor recycling containers or composters and all parts are stainless steel and dishwasher safe.

Garden Retreats

An open-air gazebo, garden shed or pool house can give you just that - a little extra room outdoors to use as required. Perhaps you'd like a sheltered spot to lounge and read, an outdoor dining area, a garden shed to free up the garage, or a covered playhouse for kids. Maybe even an artist's retreat for painting or throwing clay.

Style & Continuity
When researching ready-to-assemble styles, think about what would be most consistent with the design of your home. Would a Victorian look suit it best? Or a more rustic structure with cedar shingles? You can customize a standard look by adding elements of your home's architecture, like a window shape, roofing detail, distinctive wrought-iron accent or moulding pattern on the door. It's best if the colour scheme is the same as your house or complements it. For a natural look, integrate the gazebo or shed and the landscape by planting flowers or shrubs around it.

It's all about location
As with anything relating to real estate, location is everything. Position your structure according to its purpose, and to create a focal point in your garden. If planning an outdoor dining area, keep it close to the kitchen or barbecue for efficiency. If you're building a tool or garden shed, place it away from the house and make it blend in with the garden and landscaping. A pool house would benefit from the addition of an adjacent outdoor shower.

Hints About Roofing

Today I was having a conversation at the gym with one of the guys and he mentioned that he was getting his roof done today. This made me think about the type of things people should do when it comes time to repair or replace your roofing.

There are many types of roofs and keeping them in good repair is one of the most important things you can do to protect your home and your investment. Sloped, ashphalt covered roofs are the most predominant in Toronto so I'm going to talk about them today. For information about other roof systems, feel free to contact me at your convenience.

The single most important factor in roofing is your choice of contractor. Pick companies that have been around for a while and that are reputable. You want to make sure that they will be around to honour their warranty should the need arise. Price is an important consideration but if you base your decision solely on this criterion don't be surprised if the contractor uses sub-standard materials and inexperienced labour.

Make sure the contractor explains what type of shingles they will use. Shingles vary greatly in quality and they should explain different options to you. Shingles are graded according to weight and normally 210s are used. This means that a 100 square foot area weighs 210 pounds. and will have a life expectancy of 12 to 15 years depending on UV exposure, pitch of the roof (the higher the pitch, the longer it will last) and many other factors. Higher weight lasts longer; 225s, 235s and even 320s are available.

Your roof protects the rest of your home. If you leave it too long, structural damage can occur. remember that evidence of water damage is often the first thing that prospective home buyers look for.

Personalize Your Kitchen and Make it More Efficient

At one time, an efficient kitchen was designed around a work triangle, formed by the location of the refrigerator, sink and range. Although distance between major appliances is still a valid consideration, today the focus is shifting toward work zones. These dedicated areas -- for food prep, baking, eating, entertaining, office tasks and even hobbies -- allow homeowners to create more industrious and personalized kitchens.

Preparation Zone
• DO plan to include a large sink, cutting surface, and sufficient storage for plates, bowls, utensils and hand towels. The dishwasher and main refrigerator are typically located in the preparation zone -- although these busy appliances also do duty in the cooking and baking zones.
• DON'T overlook pullout produce bins and refrigerator drawers, which keep staples close at hand.

Cooking Zone
• DO situate the oven and microwave -- as well as specialty appliances like a steam oven, pasta sink and deep fryer -- in this zone. Keep required utensils, spices, oils, roasting pans and heavy-duty cookware nearby.
• DON'T forget to choose a countertop that's stain and heat resistant, like Corian, Silestone or granite.

Baking Zone
• DO outfit the baking zone with convenient storage for staples like flour and sugar, as well as for serving trays and baking sheets. An auxiliary sink positioned on one side of the counter is handy, as is a marble surface for rolling out dough.
• DON'T take unnecessary steps across the kitchen; for easy access to eggs, butter and milk, plan the layout so the refrigerator is within arm's reach.

Eating Zone
• DO dedicate an area for eating. Locate tableware, cutlery and placemats nearby for convenience.
• DON'T overlook the potential of a banquette, not only as seating for family meals and after-school snacks, but also as storage for everything from toys to files.

Beverage Zone
• DO consider a beverage zone outside the main flow of traffic. If you entertain frequently, ideal inclusions are a wine refrigerator or an open wine rack, instant hot water dispenser, coffee or espresso machine, minifridge (for milk, cream), ice maker and, perhaps, small-capacity dishwasher.
• DON'T ignore the new trough sinks, which can be filled with crushed ice for chilling bottles and serving oysters.

Office Zone
• DO create a comfortable spot to tackle correspondence and household tasks. Include power for a desk lamp, computer and cellphone charger.
• DON'T get frustrated if space is tight; carve out room in an island or under a banquette for office supplies or filing drawers.

Specialty Zone
• DO give your kitchen new purpose by including a corner in which to read with a child or curl up and nap.
• DON'T limit yourself here. For one client, we set up an easel for painting and added a secondary sink for rinsing brushes. Another client asked for a dog centre with a play area for Fido, a sleeping pen and storage for food.

Canada Sees Real Estate Price Rises in 2007

Canada has seen the average price of residential real estate grow from around eight per cent in 2006 to 15 per cent in 2007.

The country's global rankings in the Knight Frank Global House Price Index climbed from 13th to 7th place.

Canada's economy has been buoyed by demand for raw materials from fast-growing economies like India and China, according to Knight Frank.

Global house price inflation stood at 8.2 per cent at the end of 2007, compared with 9.7 per cent in December 2006.

Liam Bailey, head of residential research at Knight Frank, pointed out that growth in the cost of property for sale in Canada came despite a downturn in economic conditions in the US and Europe.

According to a study by Royal Bank, a mortgage for a townhouse property for sale in Canada accounts for about 34.5 per cent of an individual's pre-tax income.

A detached bungalow and a standard two-storey home take up 42.5 and 48 per cent of earnings respectively.

Breaking news provided by Real Estate TV

The Perils of Pot Houses: How Unsuspecting Home Buyers Get Duped

Bal Brach, Canwest News ServicePublished: Saturday, March 15, 2008
OTTAWA -- An Ontario couple thought they had found the perfect place to raise their two young children. But, what was to be their dream home, in a safe, tight-knit community, soon turned into a nightmare. They had purchased a former marijuana grow-op.

Four years later, health concerns and legal bills are piling up.

The couple, who wish to remain anonymous, say there is evidence of mould in the home and they worry about the health of their two young children. Since moving in, the husband has suffered from sinus infections.

"Even if you get the air quality tests, you still have the worry in the back of your mind, 'Is there any mould in the house? Is there anything that's hidden? My children are coughing. Well, is it a cough or is it because of something that's hidden behind the walls?' I don't want to continue to live in a house that might have an effect on me or my children later."

These folks found out the hard way they had stumbled into a former drug den.

"In my case it was my neighbour coming out and saying, 'By the way did you know this house was used as a grow op?' and my mouth dropped," said the husband.

The family is now embroiled in a costly legal battle over the purchase of the house. The couple is suing the previous owner as well as the listing agent and realtor involved with the transaction.

They allege the realtor was fully aware of the previous use of the home and failed to disclose the information during negotiations. "You pay a lawyer for a reason, you pay a real estate agent for the same reason, to do their due diligence ... in my case it wasn't even put on the listing," said the husband.

"We purchased the house four years ago and we're still in litigation, it's totally ridiculous."

The couple is drained emotionally and financially. They owe lawyers more than $100,000, not to mention the stigma they say never goes away, from living in a former drug house.

"We went around to try and meet our neighbours and when they asked where we lived, they said, 'Oh, you live in the drug house.' That's not what I want to be known as. It causes a lot of hardship and pain moving into an area where people know your house was a grow-op."

After spending their life savings on the home, the couple feels helpless.
"Essentially they've been defrauded," said Toronto area lawyer Andrew Ruzza. "They've purchased something which is not what they expected."

Ruzza, who is representing the family, believes legislation needs to change to protect home buyers in Canada. When neighbours told Ruzza's clients their home was a former grow-op, a simple check with local police confirmed it. In some provinces, such as B.C. and Quebec, however, privacy issues restrict the free flow of this type of information.

"I'd really like a judge or a court to say there really is no right to privacy when it comes to this sort of thing," said Ruzza.

The resale price of a former drug house varies from province to province, but generally experts say the homes sell for 10 to 25 per cent less than market value.
For those thinking of making a quick buck by flipping these properties, the idea may be alluring, but be warned, it's costly.

"It's definitely not something I'd recommend to the average investor," said B.C.-based contractor Owen Brown, who rehabbed a drug lab in the northern B.C. town of Prince George last year. "There was toxic mould everywhere."

Brown said it usually takes his company a month to renovate a home, but this former drug house took six months and cost more than $150,000.

"We ripped out everything, downed fixtures, even some of the exterior studs. I own my own construction company; otherwise the costs would have been substantially higher."

Brown estimates that hiring a contractor would have cost nearly $230,000. "I would stay away from grow-ops unless you know the contractor very well."

Mould is linked to a wide range of symptoms and illnesses, including asthma. Health Canada says it can trigger asthmatic attacks, as well as a number of other respiratory problems such as coughing and wheezing. Mould exposure is also tied to headaches and an increase in allergic reactions. It can be especially dangerous for children and people with weakened immune systems.

Ruzza warns home buyers to be aware of their rights when signing contracts. He suggests asking the seller clear questions about what activities took place in the home, in the purchasing contract.

"Have the vendor sign off that they're swearing the house was never used as a grow house. It's a right you have as a party to a contract to include a term that's favourable for you. If they're unwilling to sign off on it, then ask why," he said.

Ruzza's clients are just one of many families across Canada devastated after learning their homes were former grow-ops. The case is still several months away from trial.
In an attempt to protect the public, many police forces across the country now publish the addresses of busted grow-ops on their websites.

Ottawa is the latest police force to target the multi-billion dollar marijuana industry.
"They come in and spend hundreds of thousands of dollars and if something illegal happened there and we have the information, I think we have a requirement to provide it to people," said Ottawa Police Chief Vern White.

Since the beginning of February, Ottawa police have been listing the addresses of dismantled grow-ops and meth labs on the police website.

There's not a lot of work to this. We develop our website and that's it," said White. At the end of three months, the published information migrates to the City of Ottawa website where it will stay.

"I think it has to be everywhere . . . I'm not convinced that there shouldn't be a national registry required."

According to an RCMP report, law enforcement agencies across the country seized nearly two million marijuana plants in 2006. The report estimates 90 per cent of Canada's marijuana is produced in B.C., Ontario and Quebec.

Canada's Public Safety Minister Stockwell Day said the idea is being considered. "While there is no national grow operations registry, we are working closely with our provincial and territorial partners to determine the feasibility and challenges of instituting such a registry on a broader scale," Day said in a statement.

Ottawa is among at least five cities in Ontario publishing addresses of dismantled illegal drug operations. Windsor, Guelph, Durham and London all have similar programs.

In Manitoba, when the Winnipeg police force found itself fielding countless calls about potential properties, the force started listing addresses on its website.
The Winnipeg program started three years ago and began as an information sharing tool to make the public more aware.

In Calgary, health services work with the Calgary police when shutting down a grow-op. Alberta is the only province in Canada where public health officers have the status of "executive officers," who can make specific remediation orders to properties.

"We disclose this information on a regular basis to the public so they can make an informed decision on whether they want to purchase a home that's been a grow-op," said Robert Bradbury, Director of Health Protection, Calgary Health Region.

Bradbury said the health service's website, which lists active and inactive grow-ops, is extremely popular among potential home buyers.

Surprisingly, in B.C., where marijuana is a $2 billion-a-year industry, there is currently no list of busted grow-op houses for the public to view.

Bill Sutherland, President of the Canadian Association of Home and Property Inspectors, said beyond the obvious loss in property value, it's public safety at issue. Sutherland has been inspecting homes for more than a decade and said the structural, electrical and moisture damage he has seen in homes with grow-ops requires extensive repair.

Although some provincial laws require property owners to disclose whether or not their home was once a grow-op, there is still no way of knowing for sure. The best insurance against buying a home that's been used as a grow-op is to hire a home inspector. A few hundred dollars upfront could save thousands in the long run.

FACT BOX:
Here are some tips:

-- Look for red tuck tape around walls, windows, floors (growers use it when putting plastic on the windows and enclosing spaces to keep the moisture in)
-- Look for staple marks typically at the ceiling level (where growers usually hang plastic to cover windows)
-- Look for any kind of change in ventilation (growers won't vent through the roof, they'll try the attic or closet)
-- Look for moisture stains in the attic or closet