By: Afshar Reza

Canadians Using Record High Rates for Approval

When the pandemic began, extremely low borrowing costs raised concerns that mortgage payments could not be maintained by Canadians if interest rates were to increase higher than the qualifying rates. As of June 1, 2021, the Office of the Superintendent of Financial Institutions (OFSI) implemented a stress test for Canadians to apply for a mortgage. Simply put, the mortgage stress test was to determine if you would still be able to afford the mortgage payments should interest rates rise. This meant that borrowers needed to qualify with a much higher interest rate. 

The minimum qualifying rate that OFSI established was either 200 basis points (2 percent) higher than offered rate or 5.25% which ever resulted in a higher rate.

The problem homebuyers now face is that the bank of Canada’s prime interest rate as of November 17th, 2022 has risen to levels not seen in more than a decade to 5.95%. Depending on the timeframe and terms, the average 30 year fixed mortgage rate in Canada sits at 7.3%. 

Even though we are no longer at record lows, the OFSI rule still applies meaning that you would need to qualify for your mortgage using a rate that is 2 percent higher at 9.3%. The purchasing power of the homebuyer is drastically decreased with higher interests rate to begin with and having the stress test still in place, qualifying now has become very difficult for many homebuyers.

Given that the current economic environment has changed since the start of the pandemic, OFSI should revisit the stress test rules to reflect the current conditions. Affordability in large cities such as Toronto and Vancouver have been a concern for years and high interest rates compound this problem further.  

I recently sold the perfect downtown Toronto condo for a first time home buyer. Located at 22 leader Lane at the King Edward Residences, this one bedroom condo for sale offered high end finishes,  full service building amenities and a superb location in downtown Toronto being steps to the financial district and the King Street Station on the Yonge Subway line. The unit was 555 square feet and sold for $549,800, just under $1000 per square foot.  

In order to avoid CMHC insurance for mortgage default protection, a down payment of 20% is required for an amount of $109,000. The monthly mortgage amount would then equate to $2600 per month. With the higher interest rate, this amount is $600 more than what the mortgage amount would have been at the beginning of the year when mortgage rates 3 percent lower.  A homebuyer also needs to factor in property taxes and monthly maintenance fees, which raises the monthly commitment to almost $4000 per month in order to afford this Toronto condo unit. Now this is definitely not pocket change for many people but if you are able to put money towards owning your own home instead of renting, it is a great way to create wealth by forced savings. 

As always, I recommend doing your homework first by getting a mortgage pre-approval to know your maximum borrowing amount and what monthly payments you are comfortable with making before making a purchase in Toronto’s real estate market. Finding the right Toronto condo for sale or Toronto Home for sale that fits in your budget is key to real estate in the long run. There are many different variables that affect prices of Toronto condos and by balancing criteria like size, location, age, finishes, I am sure we can find the right Toronto Condo for sale that is just perfect for you.

By: Reza Afshar

An up and coming community is finally transforming the east end of Toronto’s waterfront. With a long history of working factories and the sugar mill, the 55-acre seaside master-planned neighbourhood is a welcome change to this previously underdeveloped and abandoned parcel of land. Known as East Bayfront, located along Queens Quay east of Yonge Street, Toronto’s east side includes everything from new residential and commercial complexes to award-winning urban parks and public spaces.

The neighbourhood expects to have 6,000 additional residential units, 3 million square feet of commercial space that includes businesses, stores, public spaces and a number of contemporary condominium buildings with beautiful lake views. The region is connected to downtown Toronto by a waterfront promenade that provides a sunny path popular for rollerbladers, dog walkers, and joggers.

This centrally located neighbourhood is ideal for living, working, and playing.

Condos Designed to Enhance Views of the Toronto Lake and Cityscape.

Aqualina is a 13-acre mixed-use development. This 13-storey built by Tridel contains 363 condominium suites ranging from one-bedroom to three-bedroom residences designed with families in mind. Many amenities come with this beautifully designed condominium, such as a bar, Concierge service, Fitness Center, Yoga Studio, Spin Bike Studio, Games Room, Aqua Lounge, Indoor Lounge, Movie Theatre, Sun Deck, Party Room, Infinity Swimming Pool, Sauna, Whirlpool, and Spa.

The Monde development, built by great Gulf Homes located north of Queens Quay and east of Sherbourne Common, is East Bayfront's first private development. Monde is a mixed-use development with views of Lake Ontario that includes 553 energy-efficient residences, large terraces and balconies, gardens, an 850-square-metre green roof and ground-floor retail space. In addition, the property will be connected to Canada's first open-access, ultra-high-speed internet network.

Menkes and Daniels have also built or in the process of completing both residential and commercial towers and Pinnacle developers have ambitious plans for One Yonge World at Yonge St and Lake Shore that will be made up of 3 buildings 65, 80 and 95 stories tall. There are many great choices to choose from in this up and coming neighbourhood that is becoming a Toronto waterfront favourite. While blending the waters of Lake Ontario with an urban parkscape, these Toronto condominiums’ design promotes sustainable and community living.

Leisure, Recreation, and Lifestyle.

A quarter of the 55-acre neighbourhood is dedicated to parkland and public areas. Along the Water’s Edge Promenade and Boardwalk, residents can take a leisurely stroll or enjoy some peaceful time. Canada's Sugar Beach with brightly coloured pink beach umbrellas is a nice area to unwind, with close views of the lake.

The Harbourfront Centre, just a few minutes west of East Bayfront, hosts a variety of year-round events, and with a short walk to the north lies Toronto's historic Distillery District, which is home to fantastic restaurants and art galleries. When living so close to the heart of the city, travelling to a Toronto’s sport event or theatre facility, along with everything else Toronto has to offer has never been so effortless.

Getting Around Here is Simple, Thanks to a Multitude of Public Transportation Alternatives.

This neighbourhood is bordered by the Gardiner Expressway and Don Valley Parkway on-ramps for cars. Bus service runs along Sherbourne and Parliament, connecting you to line 2 of the subway, while the Queen Quay streetcar, which was recently enlarged, takes you right into Union Station.

Many Employment Opportunities

This community is a large art and culture-focused development with office space for arts groups and teaching facilities for both OCAD University and George Brown College. To attract new employers and corporate investors, there will be 3 million square feet of commercial space alongside, resulting in the creation of 8000 new employment opportunities.

Young professionals and executives who work in the city centre and enjoy the concept of returning home to a bustling waterfront culture will appreciate this location. It's a vibrant community built for living, working, and lots of fun. Contact me for condo units for sale in Toronto's east Waterfront community.

If you are looking for assistance to find the perfect Toronto Neighbourhood or condo to live in Contact Reza Afshar today to make your search stress free!

By: Reza Afshar

Toronto is getting a new island! The Villiers Island Precinct will be one of the most prominent waterfront redevelopment areas, expected to be completed by 2024. The area lies on the Port Lands, near Cherry Street in Toronto’s east end. Previously known as Cousins Quay, the new island will be a gorgeous new waterfront community that celebrates its distinct industrial functions as well as, outstanding new parks, public spaces, and ecological diversity that will follow from the naturalization of the Don River’s mouth. The city intends to locate retail and office spaces, affordable housing and transportation routes and Villiers Island will bring vitality to the area that honours a specific culture associated with waterfront neighbourhoods.

This new redevelopment will be Toronto’s first climate-positive community, showcasing real-world climate change solutions and demonstrating expertise in carbon reduction and sustainable neighbourhood design. The plan involves structures consuming up to 90% less heating and cooling energy than the average building. Solar panels will be installed on residential buildings which could generate enough electricity to heat the residences throughout the winter. The neighbourhood will not only be environmentally friendly but will also have an exquisite look with plenty of skyline vistas and natural areas for everyone to enjoy.

Flood Plan Protection

To avoid any flood risks, they're transforming the mouth of the Don River from its current artificial channel into a new river valley, which will result in the creation of a new Toronto Island. Parks and wetlands will be built around the new river to safely handle any water overflow. It should come as no surprise that this is one of the city's most significant infrastructural projects, costing about $1.25 billion to secure the land from floods so that the project can succeed.

Affordable Housing Options

The goal is to build fully inclusive communities that support a diverse range of incomes for home buyers and allow residents to age in place. To achieve these goals, a variety of housing units will be made appropriate for  first-time homebuyers and families with children. This will also offer opportunities for the elderly, such as senior housing and appropriate support services.

Community Services and Facilities

The proposed condo developments will be arranged in a way from tallest to shortest condo buildings. This will be done to maximize the number of residents with epic lake and skyline views of Toronto’s waterfront without being obstructed by taller structures.

Villiers Island will offer a variety of services and amenities to fulfill the needs of the surrounding community. Elementary schools, a sports field, multi-purpose community centres with a pool, childcare services, and emergency services will all be located within. This will approximately take up about 11,000 square miles.

Transportation and Parking

A public street network will be used to structure the development; promoting cycling, transit, and pedestrian activity. With several linkages to the city and the Port Lands, the fine-grain street and block plan will offer access and circulation through Villiers Island. Multiple dedicated bike lanes and multi-use pathways will be included to provide safe year-round transportation for both commuters and recreational users. New Cherry Street and Commissioners Street will have dedicated rights-of-way for streetcar transit. Water-based transportation, such as ferries, water taxis and small-craft boating will also be possible.

As this is a new development, detailed planning will ensure that parking, servicing, and loading will be carefully incorporated to minimize any detrimental influence on the public space and to prioritize active mobility. On-street, above grade and underground parking will also be accommodated throughout the Island.

Activities and Job Opportunities

In order to support the new neighbourhood while providing more jobs, the Precinct Plan assures that it includes retail stores, bars and restaurants, offices, and other commercial areas. Some of these businesses will be located along Villiers Street's main thoroughfare, creating an outdoor living room where stores and restaurants will serve as the community's heart.

The ultimate purpose of this new community is to enhance the quality of life, bringing nature back to an under-utilized industrial site, and to better protect our neighbourhoods from adverse weather situations. This is an exciting new development for Toronto and creates much needed beautiful waterfront communities! 

If you are interested in making Villiers Island your home and purchasing a pre-construction condo, please contact Reza Afshar to get added to the list for first picks of condo releases!

By: Reza Afshar

For more than 20 years, I have been selling Toronto condos and over the years I have seen many different market conditions in Toronto’s hot housing market. Although in the past two decades we have seen mostly a seller’s market, strategies for selling have not and should not always be the same.

When selling your condo, knowing what pricing strategy to use that will deliver the best results is important. Because the downtown Toronto Market has been high in demand and a really hot market for years, most agents and sellers are in favour of underpricing and then selling high in multiple offers. However this strategy has its limits and like we are also seeing in the cottage and housing market, it may be coming to a pause or an end.

Sellers often confuse a hot market in which they can set any asking price and always get a higher sale price. This is never the case as it is important to know that the market really determines the selling price and everything has a limit of what it will sell for. The biggest mistake is when a seller prices themselves out of the market.

In the past we have heard and witnessed that extremely underpricing a property draws more attention and attracts more offers, sometimes well in excess of 20 bids. In reality, of those 20 offers, there are really 2-3 offers that are close in price and are competing to buy the unit while the other 17 are hopeful buyers or uneducated buyers of the true market value. This strategy has had a negative effect on buyers and agents and causes something that I call “Buyer Fatigue”. When you have 20 offers, there is only one winner and the remaining 19 others have to continue their property search.

Buying real estate can be emotional and very exhausting. There is a lot of time invested into looking at properties and when a buyer likes a property, the uncertainty of actually being able to purchase the property is draining. A first time buyer can also find it especially difficult to understand the true market value of a unit when looking at undervalued listing prices.

After experiencing a few unsuccessful bids, buyers start to avoid multiple offers altogether as “Buyer Fatigue” sets in. This is something that I am seeing in the market today.  Buyers and agents are shying away from low priced condo units as they do not want to waste time to go through the process of multiple offers, blind bidding and competition. In turn, condo units are not selling on offer dates because sellers are not getting the prices they expected and sellers are re-listing at higher prices that are more in line with market values. This then causes confusion for buyers as they cannot understand why the condo unit did not sell at the lower price and do not want to pay the re-listed higher price. 

Even if a buyer finds themselves in a multiple offer situation, it is important to know that they do not have to pay more than asking to be able to purchase the property. This is where having an experienced, knowledgeable agent becomes key. Before ever making an offer, knowing the numbers of comparable sales, average price per square foot in the area and building will help to determine an approximate fair market value. This will ensure that a buyer does not overpay for any unit regardless of the number of offers there are on the table or asking price.

Just recently I represented buyers on a fabulous King West Condo where there were 3 offers registered. My buyers were successful in securing the condo unit and still paid $25,000 below the asking price. Again, knowing the fair market value, carefully reading the negotiation situation and factoring in strategies other than price like conditions to an offer, helped my buyers secure the unit of their dreams and not overpaying.

Having a front row seat and on both sides to more than 2000 real estate transactions, I can tell you the most favourable situation is where a buyer and a seller both feel like they have won by achieving a fair market price through a process of true negotiation. I always want to make sure to protect my buyers and sellers and advise the best strategy to use in order to be successful in downtown Toronto’s condo market regardless of what side of the transaction they are on.

For assistance in buying or selling a condo in downtown Toronto, contact Reza Afshar today. Benefit by his experience and track record of delivering optimal results with guaranteed satisfaction.