Welcome friends, today were will try to unravel the financial implications of condo vs freehold ownership. There is always confusion when we meet clients,  which is better and what it takes for owning these two diverse style of assets. Lets begin.

Condo Ownership: Long-Term Financial Implications

Maintenance Fees:

Condo owners pay monthly maintenance fees to cover shared amenities, building upkeep, and contributions to the reserve fund. These fees can increase over time due to inflation or unexpected repairs, as seen in the GTA where fees rose by 5.51% in 2023. Special assessments may also arise, requiring additional payments for major repairs or budget shortfalls.

Lower Upfront Costs:

Condos are often more affordable upfront compared to freehold properties, making them attractive for first-time buyers 14.

Predictable Expenses:

Maintenance fees provide predictability for shared expenses like utilities, landscaping, and building repairs, reducing the need for individual planning. However, these fees can offset the lower property taxes typically associated with condos.

Appreciation Potential:

While condos appreciate over time, their growth may be slower than freehold properties due to additional costs like maintenance fees and potential buyer hesitations about rising fees. This filters the buyers when we decide to dispense a condo, and it finally reflects in the appreciation. 

Freehold Ownership: Long-Term Financial Implications

No Maintenance Fees:

Freehold owners avoid monthly maintenance fees but are fully responsible for all property upkeep, including repairs and landscaping. This can lead to higher out-of-pocket costs over time. Maintenance costs for freehold homes can average $6,500–$10,000 annually for major repairs spread across decades (e.g., roof, windows, heating and cooling equipment etc).

Higher Upfront Costs:

Freehold properties generally require a larger initial investment but offer greater long-term value due to full ownership of both the land and the property.

Greater Appreciation Potential:

Freehold properties tend to appreciate more significantly over time because land value typically increases faster than building value. This makes freehold ownership a stronger option for long-term wealth accumulation.

Flexibility and Control:

Freehold owners have full control over their property without restrictions from condo boards or shared governance. This autonomy allows for renovations or upgrades that can further enhance property value.

Key Takeaways

Condos: Offer lower upfront costs and predictable shared expenses but come with rising maintenance fees and occasional special assessments that can impact long-term affordability.

Freeholds: Require higher initial investment and ongoing maintenance costs but provide greater appreciation potential, flexibility, and financial independence.

Which Is Right for You?

The choice between condo and freehold ownership depends on your financial goals, lifestyle preferences, and ability to manage ongoing costs. If you value convenience and shared amenities, a condo might suit you better. If long-term growth and full control are priorities, you have budget, a freehold property is likely the better option.

For personalized advice tailored to your situation, feel free to reach out and we will be happy to help. 

Wish you all the very best! Reach out to our dedicated team at Elixir with any queries you have about real estate, and we will do our best to help.

Mudit Mehta 

Broker of Record

ELIXIR REAL ESTATE INC.

Welcome, today we will discuss information that simplifies Real Estate and enables you to achieve your goals better. Today, we're diving into a topic that's reshaping the Greater Toronto Area's real estate landscape: the impact of remote work on real estate trends. The shift to remote work, accelerated by recent global events, has significantly altered how we view our living spaces and where we choose to call home. Let's explore the key ways this change is influencing real estate in the GTA.

Remote work has redefined what many people look for in a home:

Home Office Space: There's an increased demand for properties with dedicated office spaces or extra rooms that can be converted into workstations. Homes with this feature are seeing higher interest and potentially commanding premium prices. A working couple who 5 years back was happy with a 1 bed plus den setup, now looks for a larger condo footprint to ensure two work desks can be set up without conflict.

Larger Living Areas: With more time spent at home, buyers are prioritizing spacious living areas. Open-concept layouts and larger square footage have become more desirable. Condos or homes with a cozy living room is not that preferred with the changing trend.

Outdoor Spaces: Access to private outdoor areas like balconies, patios, or backyards has become a must-have for many buyers, as people seek spaces for relaxation and a change of scenery during work breaks. The young first time home buyers get more attracted towards condo townhomes where they get that additional backyard open space to spend some time in open nature. The high-rise condos due to absence of a private backyard, are less preferred.

Suburban and Rural Migration

The GTA is experiencing a notable trend of people moving away from the downtown core. With daily commutes no longer a concern for many, suburbs are seeing increased interest. Areas like Brantford, Woodstock, Courtice, Barrie and Hamilton etc are benefiting from this shift. Even areas further from GTA, such as Caledonia, Georgina, Collingwood, Grimsby, Welland, St Catherines are seeing increased demand as buyers seek more space at a lesser price point and a connection to nature.

Impact on Downtown Condos

The condo market, particularly in Toronto core, has faced some challenges. With less need to be close to offices, some buyers are opting out of the downtown condo lifestyle. Rental Market is shifting with many condos available to lease and this increased supply and reduced demand is putting downward pressure on the rental prices. Currently we are in Sep 2024, and we have 5,000 plus active lease listings available across City of Toronto, and from these 1,800 plus are just from downtown Toronto.

Long-Term Implications

While some of these trends may moderate as we move forward, it's likely that the impact of remote work on real estate will have lasting effects. Many companies are adopting hybrid work models, which may sustain the demand for homes that can accommodate both in-office and remote work. Cities and developers may need to rethink urban planning, potentially leading to more mixed-use developments and decentralized business districts.

As we wrap up, it's clear that remote work has become a significant factor in shaping real estate trends in the GTA. Whether you're a buyer, seller, or investor, understanding these shifts is crucial for making informed decisions in today's market.

Thanks for tuning in to this episode of Elixir Talks. If you found this information helpful, please like, share, and subscribe for more insights into the GTA real estate market. Until next time, stay informed and make your real estate decisions with confidence!

Wish you all the very best! Reach out to our dedicated team at Elixir with any queries you have about real estate, and we will do our best to help.

Mudit Mehta 

Broker of Record

ELIXIR REAL ESTATE INC.

Welcome back, Elixir Family! Today, we’re going to look into some ground-breaking changes in Canadian mortgage rules that are set to reshape the home-buying landscape. These updates are not just minor tweaks; they're the most significant reforms we've seen in over a decade. So, let's break it down and see what this means for you, especially if you're a first-time homebuyer.

Historical Context

Before we jump into the exciting changes, let’s rewind back to understand the impact of these new regulations. Back in 2006, you could get an insured mortgage with a 40-year amortization period. Imagine that! But things changed and in 2008 we saw it drop to 35 years. 2011 brought it down to 30 years. And in July 2012, we hit the 25-year mark, which has been the standard until now, i.e. 2024.

Also in 2012, the government capped insured mortgages at $1 million. Despite skyrocketing home prices specially since 2015, this cap hasn’t changed... until now.

Now, let's talk about what are the new big changes and when it's happening:

Extended Amortization Periods

As of August 1, 2024, first-time homebuyers can already access 30-year amortizations for newly built homes. This is huge for those eyeing fresh developments!
Mark your calendars for December 15, 2024. That's when 30-year amortizations expand to all first-time buyers, whether you're looking at a new build or a amazing resale opportunity.

Let us try to understand with an example: if you take a mortgage for principal of $800,000 from financial institution, say with a fixed term of 3 years at 4% rate and amortization of 25 years, the mortgage amount will come at $4,208 per month. With the new rules and for same figures, if we just alter the amortization to 30 years, the mortgage commitment per month would reduce to $3,804.

Increased Insured Mortgage Cap

Effective December 15, 2024, the insured mortgage cap jumps from $1 million to $1.5 million. Or in other words we have reduced minimum down payment requirement for homes priced between $1M and $1.5M. This is a significant change, especially in our pricier markets. Buyers can now look at homes between $1 million and $1.5 million with less than a 20% down payment. This opens up a whole new segment of the market for many buyers. Significantly reduces the upfront cost of buying a home in these price ranges. Right now the buyers were just limited to sub-million purchases due to this restriction on insured mortgages.

Overall, these changes are expected to benefit first-time homebuyers in several ways:

Lower monthly payments: The extended amortization periods can reduce monthly mortgage payments, making it easier to afford a home.  

Increased affordability: The increased insured mortgage cap and reduced minimum down payment requirements can make homeownership more accessible in high-cost housing markets.  

Greater flexibility: The changes provide more flexibility for first-time homebuyers in terms of the size of the home they can afford and the down payment they need to save.

Potential Market Impact

    1    Increase Competition While these changes are exciting, they could have broader effects on the market: Increased Demand: We might see more buyers entering the market, potentially increasing competition. 

    2    Price Pressure: This could put upward pressure on home prices, especially for in-demand metro markets like Toronto, Vancouver, Montreal, Calgary, Ottawa etc. 

    3    Market Stimulation: These changes could energize the market which was developing lot of fatigue in terms of buyers sentiments for good 2 years plus now, possibly leading to more construction and development. 

It's important to approach these changes with a balanced perspective: Longer amortization periods mean more interest paid over time. The potential for increased demand could offset some affordability gains as it might lead to increase in property prices.

As we wrap up, I want to say that these reforms represent the most significant changes to Canadian mortgage rules in over a decade. They're designed to make homeownership more accessible, but they also come with considerations that need careful thought. At Elixir Real Estate, we're here to help you navigate these changes. Whether you're ready to jump into the market or just starting to consider homeownership, we can guide you through the process and help you make informed decisions.

Wish you all the very best! Reach out to our dedicated team at Elixir with any queries you have about real estate, and we will do our best to help.

Mudit Mehta 

Broker of Record

ELIXIR REAL ESTATE INC.

 Today, we'll focus on the second type of appreciation in real estate: Forced Appreciation. Let’s go into the basics and see how this influences asset prices. 

In our last blog, we covered how natural growth in regions and economies, coupled with regular inflation, translates to price increases, known as 'Market Appreciation'. Conversely, 'Forced Appreciation' occurs when growth is driven by the owner's efforts to enhance its use and appeal. Let's explore the various ways an asset owner can induce Forced Appreciation, which I will clarify through several examples in addition to the property 

Increase the number of Baths

This is a typical case where a property gets functionally better when we enhance its specifications. Let us consider an example of a 2-storey 3-bedroom single garage home, which has 3 bedrooms at the upper level and has only 1 full bath. For such properties, if our upper floor plan allows us to add another full bath with a permit and if we implement that. This immediately does two things, firstly it enhances the usage of the property and pushes its market value upwards. With changes, the property is a 3-bedroom/2.5 Bath home. It is much more usable to a wide variety of buyer families/investors. They are willing to pay more for the same property, and this immediately increases its value. The second impact is that the change increases the property to attract more rent as now the tenant is willing to pay more for the same property. Due to the increase in rent potential now the investor community is better attracted to the property. 

Increase number of Bedrooms

This is a scenario where there is a potential to carve out an additional bedroom in the property. One of our clients purchased a detached 1,150 sq ft bungalow above grade which had only 2 bedrooms at the upper level, the owners had changed the original 3 bedrooms to a 2-bedroom setup to make them bigger. Our clients bought this specifically for this upside potential in an otherwise bigger home. They applied for building permits with the town and changed it back to a 3-bedroom layout and made it contemporary open concept plan. As you can see here, the old plan had a kitchen and that was changed to a bedroom and the huge living area in the newer plan now had an open-concept kitchen. This enhancement of one bedroom increased the appeal of the property and it impacted the market value positively as usability was enhanced.

Increase the Footprint of the property 

There are cases where the lot of a property is substantial enough that it allows you to increase the built area of the property. We recently had a similar instance where one of our excellent clients purchased a bungalow detached with had 3-bedroom 1 full bath at the upper level. They modified the plans to create a spacious ensuite for the primary bedroom with a complete walk-in closet, this addition of almost ~350 sq ft above grade, gave them an additional 350 sq ft of space in the basement as well. And it enhanced the usability of the property by leaps and bounds, for their living and also for future saleability. Almost, 700 plus sq. ft. of extra livable space was created. When lot is big and it allows as per zoning the ability to expand the current home, the new size increases its livability and appeal. These things are mostly possible in older bungalow-type dwellings where the lots are spacious both in terms of width and depth. This allows such lots to extend the current footprint of the dwelling and force appreciation. 

Kitchen Remodelling

A kitchen is another awesome way to increase the appeal of a property, as soon as you remodel and change the cabinetry, back splash and countertops of a kitchen, it immediately enhances the overall appeal and attraction. The kitchen is a sure centrepiece of any property and having an attractive Kitchen increases usability and gives an instant appreciation to the property. In my experience if the kitchen is updated in a home, it makes the sale process smoother and attracts best dollar for you as per the relevant market. 

The second Unit in the Basement

For major municipalities in the Greater Toronto Area, where the population is huge and there is a lot of rental demand. In such locations and in compliance with local zoning by-laws, if they allow for the creation of a second unit dwelling in the basement. It could be a very solid way to engage the upside potential of the dwelling. Here you can see the before/after plans for a typical basement and its evolution into a second-unit dwelling. This gives a possibility of an additional income stream from the lower unit and it serves as a mortgage helper for families buying the property for their own living. For investors, it gives them the benefit of dual cash-flows from upper and lower levels. Due to this increase in potential, the market price gets an immediate push with the creation of second units in the property.  There are also ADUs or additional unit dwellings which if permitted by the local municipality – planning and building departments, can add an upside potential. The discussion on ADUs would require a completed dedicated talk and we will create it in one of our upcoming episodes.

Curb Appeal Updates

This is a technique where you update the landscaping elements in the front/rear of the property and make them look more appealing. Or update the front façade of the home with stucco or stone chips and make it look more contemporary. Replace or paint the front door/garage doors to make them look appealing. These changes even though sound minor but they go a long way to help increase the value of a property when put on market. 

Here you got a glimpse of how the appreciation can be forced on a Real Estate asset and now let us discuss the requirements of such an endeavour, its something which is not made for everyone.

Capital Requirement

This form of appreciation is capital intensive, anything updates/additions you do to an asset require money to make it happen. This is the reason mostly you would see people not going for this route and just waiting for organic ‘market appreciation’  and building equity.

Under-Renting

During the time you do the updates/renovations to enhance the property, and specially when it is an investment property. It might mean that the property is vacant during the time of renovation. This is another financial loss due to the vacancy time. 

To round up our discussions on ‘Natural Appreciation’ and ‘Forced Appreciation’ I want to say that the ideal combination is a mix of both. If as a homeowner, you do some remodelling to enhance the appeal of assets and then also be in the market for the foreseeable future. It would reap the compound benefits of both forms of appreciation. And this is coming straight from my experience in dealing on ground and assisting our clients during the journey. 

Wish you all the very best! Reach out to our dedicated team at Elixir for any queries you have in Real Estate, and we will do our best to help.

Mudit Mehta 

Broker of Record

ELIXIR REAL ESTATE INC.

Hello friends, In the bustling world of real estate, where first impressions are not just important but everything, the role of professional photography in listing a property on the MLS cannot be overstated. Let's find out why it is like that.

First Impressions are the Key

First impressions are very important in Real Estate Selling and a lot of time I see amateur photos taken by smartphones with bad camera angles and inferior composition. The lighting is way off and gives a neutral to negative impression of the property. 

When you list a property for sale on the MLS system, our responsibility as a Seller is to get maximum traction on the listing in terms of showings. This is to make it a point that we have a decent count of broker showings who are working with sincere buyers. Because, unless a showing happens, there is no probability of them getting an offer on the table for purchase. 

The photos, videos and marketing content come at the front end of this cycle, where the photos result in credible buyers being excited about the property. As a result, they ask their brokers to reserve an appointment and arrange for a showing. The photoshoot plays a very important part in the scheme of things and is the first step to a successful sale.

Another reason I want to bring to your notice and it would resonate with you. Suppose the photo shoot for a listing is not done professionally. In this case, it would not attract quality and sincere buyers, at best it would attract less motivated buyers who are looking to buy with low-balling offers.

Good quality and professionally done photography would have a three-fold result. It would help you achieve the fair market value of your property, which you deserve. Secondly, it would help in smooth selling and the listing would not stay on the market and get stale. Lastly, it would help the listing to stand out from the competition, the higher the quality, the more attraction it will generate. Rest would totally depend on the prevailing market conditions, things which are in our control when listing a home should be taken care. 

Photography - The Right Way

The photography should be done by a professional photographer who would bring in their skills to do justice to the property and its fair representation. The ideal times for such shoots are during the morning or early evening hours, avoiding the harsh, overexposed light of midday. Prior to the shoot, staging and decluttering are essential steps to ensuring your home looks its absolute best.

Ensure to feature the highlights of the property in the photography, it could be the high-ceiling foyer feature, the skylight illuminating the upper landing space, or the expansive primary ensuite, or it could be the recent stone interlocking which you did in the driveway and backyard. The unique features like the in-ground pool in the backyard, spacious upper floor hallway with a character, premium tray ceilings or crown moulding works in the living room, landscaped backyard, the list goes endless. Take stock of the highlights of your property and ensure they are captured during the photo shoot. It would enhance the marketability of the property. 

In closing, photography in real estate is not merely an optional selling tool; it is a fundamental component that elevates the professionalism of your listing and enhances the overall selling experience. By ensuring your property is represented in the best possible light, you not only attract the right buyers but also set the stage for achieving the value your property truly deserves. Should you require assistance in navigating the complexities of real estate, our team is here to offer the unparalleled "Elixir" experience. Take care, and we look forward to connecting with you soon.

Wish you all the very best! Reach out to our dedicated team at Elixir for any queries you have in Real Estate, and we will do our best to help.

Mudit Mehta 

Broker of Record

ELIXIR REAL ESTATE INC.

Welcome back to Elixir Talks! Today, we're debunking myths about the optimal timing for real estate transactions. The perennial question remains: when is the best time to buy or sell? Let’s go into detail about this with some perspective.

As general consumers, we aim to maximize gains and minimize losses, and real estate is no exception. Many hope to pinpoint the ideal time for their transaction to prosper.

‘Waiting for the bottom’

For buyers, the goal is often to 'wait for the bottom,' a mythical perfect moment when prices hit their lowest. However, pinpointing the market's bottom is challenging, influenced by numerous factors like borrowing rates, government policies, and global events. Real estate is fundamentally a long-term investment, not suited for those seeking quick exits.

Take the Greater Toronto Area, for example. After the interest rate hike at the start of March 2022, the market began to decline, hitting a low by fall 2022. Despite attractive pricing, buyers hesitated due to the high-interest rates and negative market sentiments. This trend persisted throughout 2023, only for the market to surge unexpectedly by early 2024. We saw credible traction and the market demonstrated a 7.9% month-over-month price increase in February 2024 in the Greater Toronto Area.

Over these past two years, we've secured excellent investments, yet a significant number of consumers awaited the elusive market bottom. In the later half of 2022 and the majority of 2023, there were a lot of good deals which we were able to get for our clients. We are now in the Spring of 2024, and the market's sudden movement and the return of competing offers illustrate that market timing is unpredictable. There have been no rate cuts announced so far, it's just the anticipation of that which has changed the market, this unpredictable behaviour of the market makes the case prudent that Real Estate should be a long-term investment. 

When is the Ideal Time to Buy?

The ideal time to purchase should align with your personal goals, financial readiness, and investment quality, focusing on a long-term horizon. Real estate typically appreciates over time, offering a shield against short-term market fluctuations.

Analysis paralysis can sideline potential buyers, fearing incorrect decisions and ultimately making none. This fear prevents taking timely action.

‘Sell at the peak’

Sellers often aim to 'sell at the peak,' hoping to pinpoint the market's highest point. Identifying this peak is as elusive as predicting the bottom, and missing the peak can lead to steep declines and "chasing the market," resulting in incremental price reductions insufficient to match market expectations.

I recall the peak of the last wave in late 2021 and early 2022 when many could have sold at a premium but waited for more, only to see the market crash, leading to missed opportunities and the burden of carrying costs due to higher borrowing costs.

Real estate cycles are normal. Focusing on your long-term goals rather than trying to time the market is key. Sudden policy or interest rate shifts can impact prices in short order, but with sound advice from a knowledgeable Realtor, you can navigate these waters successfully.

Wish you all the very best! Reach out to our dedicated team at Elixir for any queries you have in Real Estate, and we will do our best to help.

Mudit Mehta 

Broker of Record

ELIXIR REAL ESTATE INC.

Welcome friends today, we're tackling a bit of an unconventional topic as we discuss the real estate market over the last decade. This analysis will provide us with valuable insights into how things have transpired in real estate, aiding us in making better decisions for both the near and long term.

Being in real estate, one must stay on top of market trends, and at Elixir, we do this on a month-to-month basis to better understand the market and inform our clients accordingly. Today, I thought it would be beneficial to do a special session to overview the entire last decade, offering a holistic and different perspective on the real estate market.

In this infographic, we see the TRREB MLS Sales that have occurred since 2011 up until 2023 in the Greater Toronto Area. From this data, we can infer and understand that the GTA average since 2011 is 90,000-95,000 transactions or sales in a given year. The last two years, 2022 and 2023, were outliers, and as you can see here, 2023 is by far the slowest year in terms of sheer sales and movement in the market. We will come back to these recent years shortly.

For now, let's step back and go to the start of 2011. The market continued consistently till 2015. However, 2016 was an outlier year when the market saw huge demand, and supply was not able to cope. There were 113,040 home sales in 2016. This surge was due to low borrowing costs, a strong economy, and low unemployment rates. 

In October 2016, the Mortgage Stress Tests were introduced by OSFI for insured mortgages, with OSFI being the governing body of financial institutions. This introduction was to ensure that purchasers are comfortable with their payments in case the borrowing rates increase. However, this didn't dampen the market, and it surged crazily in the first quarter of 2017.

On April 20th, 2017, the Ontario government introduced a 16-point Fair Housing Plan to assist people in buying homes, increase supply, and protect buyers and renters.

The major point was the introduction of a 15% NRST (Non-Resident Speculation Tax) in the Greater Golden Horseshoe Area for any purchases made by individuals who are not citizens or permanent residents of Canada. Other points were also introduced to protect renters with rent control, action to boost the housing supply, etc. The market changed dramatically after this announcement in April 2016, and we saw those effects in the balance of 2017 and 2018.

Effective January 1st, 2018, the Stress Test was mandated even on uninsured mortgages. So, if you are contributing 20% or more towards the purchase of the property, a stress test is required. In 2018, irrespective of whether it was an insured or uninsured mortgage, everyone needed a stress test. The year 2018 saw only 78,017 sales, and the market remained buyer-driven, as we can see here in 2017, 2018, and 2019.

Then came 2020, and with it, the start of the pandemic. Restrictions were put in place, and pretty much everything came to a standstill. There was nothing called 'Business As Usual.' The heavy restrictions on movement and the shutting of businesses hampered consumer sentiments. From late-February to March 2020, the entire system, including Real Estate, was at a standstill. Unsure of what would happen next, there were a lot of properties sold by panicking sellers in April 2020, as consumers were scared and wary that global lockdowns would hit prices hard.

Meanwhile, in March 2020 itself, the Bank of Canada reduced the overnight rates three times, totaling a reduction of 150 basis points. From May 2020 onwards, the real estate market started to open with restrictions. The allure of incredibly low-interest rates attracted consumers to purchase. And despite all restrictions still in place globally, there were 95,056 homes sold in the year 2020 in the Greater Toronto Area.

With 2021, the low borrowing costs and easing of pandemic restrictions simultaneously drove up the demand for housing. In fact, the concept of remote working for certain job profiles also increased the demand for housing. People, looking to lower their mortgages, started to move to places outside the GTA, to places like Woodstock, London, Brantford in the West, and Clarington, Barrie, etc., in the East and North, with a lot of migration from the GTA outwards. Their job profiles allowed them to work from anywhere. As we see here, the market in the GTA alone saw a massive 121,712 sales in the region.

With this came the tightening of mortgage rates, and on March 3rd, 2022, the first 25 basis point increase was introduced, with 7 increases in 2022, totaling 400 basis points in the overnight rates. With the stress test already in place, this completely and directly impacts the eligibility and affordability of consumers. This ultimately translated to the market, and we saw that in a total buyer's inclined market in 2022 with only 75,047 sales in the GTA region. Effective October 25th 2022, the NRST (Non-resident Speculation Tax) was increased to 25% for all properties located anywhere in Ontario, and purchased by non-residents. 

There were three more rate increases made in January, June, and July 2023 at 25 basis points each, which resulted in further reducing buyers' eligibility and the sentiments overall. The GTA TRREB MLS saw only 65,982 transactions in this past year of 2023.

If we see that in 2011 we had close to 90,000 sales in the Greater Toronto Area and the average in forthcoming years was similar. Consider how many new subdivisions have been built in the last 13 years across the GTA. Countless subdivisions were built in Brampton, Whitby, Oshawa, Milton, Oakville, Burlington, Caledon, and so on. With the sheer new volume of homes, still, in the last two years, we had remarkably low sales.

This tells us that there is a lot of latent demand that has now built up in the last two years, both on the selling and buying side. As and when we hear some correction in the rates, or with the reduction in fixed interest rates from major banks, it would result in an impetus to the sales.

Now, consider the humongous number of newer subdivisions that have been built across the Greater Toronto Area, and the sheer number of new homes that are available on the market as of today. In comparison to 2011, now we have a way more volume of dwellings available in the GTA region. There is a definite gap and spillover of transactions that will happen from the past couple of years to 2024 and 2025. This tells me that it is a good time for first-time homebuyers and move-up buyers to capitalize on the bottomed-out market.

The argument could be that the market could go even lower. However, that is difficult to predict, and the best guess based on the data I see is that it will gradually rise from here month to month.

Hope you find this insightful. Please share it with your colleagues and friends who might benefit from this analysis. For the best in class Real Estate services, reach out to our sincere team here at Elixir, and experience the difference.

Wish you all the very best! Reach out to our dedicated team at Elixir for any queries you have in Real Estate, and we will do our best to help.

Mudit Mehta 

Broker of Record

ELIXIR REAL ESTATE INC.

Today we will understand how co-buying works in real estate. There are situations where unrelated individuals team up to purchase real estate assets. Let's dive deep and enhance our understanding of this topic.

The property market in the Greater Toronto Area has appreciated significantly, especially in the last 12–15 years. With the continuous influx of immigrants and new permanent residents, real estate is likely to become more valuable and continue to hold interest and become prime. With these rising prices, you might wonder what it takes for friends, or non-spousal family members, to come together to purchase a property. This is essentially co-buying, where a single individual's income is not sufficient to afford ownership, and they resort to combining forces to co-buy.

Co-buying is where two or more individuals pool their resources to purchase a property. When looking at such ownership, it predominantly falls into two types:

Joint Tenancy

Joint tenancy is a type of ownership where all owners on the title have equal rights and obligations regarding the property. It includes the right of survivorship, meaning if one owner passes away, their interest in the property is directly passed to the surviving members of the title, bypassing the probate process. This arrangement can include married or unmarried couples, friends, relatives, or business partners, etc. They are equally responsible for any revenues generated through the property, like rental income, and also liable for mortgage payments, property taxes, maintenance, etc.

It's important to note that all co-owners in a joint tenancy arrangement have a similar percentage of entitlement. So, if there are two joint tenants, both will have a 50% share. A 50-40 arrangement is not possible. And if a joint tenancy involves four individuals, each will have a 25% share. I hope this is clear. All of them have equal rights to possess and use the entire property.

Tenants in Common

Tenancy in Common is a property-sharing arrangement where each party can potentially control a different percentage of the asset. For example,  a father and son can buy real estate property with a 70-30 share between them, with 70% belonging to the father and 30% to the son. Tenancy in common offers flexibility in deciding the percentage share between various parties involved. These agreements can be created at any time, even for the addition of a new member. Conversely, one member of the tenancy in common can potentially buy out the other party, if they agree to do so. The ownership applies to the whole property, similar to joint tenancy, meaning no partner can claim exclusive rights to any portion of the property.

In tenancy in common, the tenants can designate their heir in their will. In the event a person passes away, the other partners will have to deal with the heirs. This might result in a situation where they might need to sell or divide the property.

Now that we have discussed how co-ownership can be materialized via Tenants in Common legal arrangement, let's discuss the benefits of co-buying:

Mortgage Qualification

Co-buying ensures that financial institutions are now able to qualify for higher lending due to the combined income of the purchasers. The credit score of the purchasers plays a pivotal role in earning this qualification.

Holding Capacity

It helps to carry the costs like property tax, mortgage payments, regular maintenance, major repairs, etc., with the co-owners. This shields them well from carrying the property. In real estate, the time horizon for which a property is kept has a direct relation to how much your equity will grow. In the case of a co-buying arrangement, since the pressure of liabilities is less on each party involved, they are more likely to sustain it for a longer duration.

Better Asset

Multiple buyers joining forces directly impacts their budget and the quality of the asset. Since they are joining hands, they can opt for a better location for the asset. This will directly help in more equity build-up and future growth opportunities, as the asset was bought in a more promising location, with a better property type.

Natural Market Hedge

Since the mortgage commitments and liabilities are shared between the co-buyers, it becomes an organic hedge against market downturns. An individual who is a single owner is more likely to feel distress if the market takes a downturn. A group of like-minded people jointly sharing would have an edge and are more likely to survive the downturn. Since real estate markets are cyclical, they would be able to brave time, and when the market is back up again, they would be able to dispense and avoid any losses.

Let's discuss a couple of challenges as well as when you want to team up for co-buying and how you can make it a smooth experience:

Complete Trust & Ownership

When you want to get into co-buying, the most important thing you want to ensure is that all partners involved confide completely in each other and share common goals and aspirations. There should not be any difference in their approach and mindset towards the asset. As long as they are similar in their vision and clear about their goals, it will be a mutually beneficial undertaking. They should have a common vision for the exit strategy and the time horizon they are looking for in the investment.

Constant Communication

During co-ownership, they should have constant communication and dialogue with each other for any decision-making, new lease takeovers, and maintenance work. They should be responsible and equally proactive in coming forward and doing what it takes to maintain the asset.

Borrowing Challenges

In the case of co-ownership, when you are shopping for a good borrowing rate, it generally depends on the credit scores of the applicant and their liabilities. In the case of co-ownership, if one of the partners doesn't have a great credit score, it affects the other partners negatively as the financial institution generally would try to average the credit score of all applicants. So, if two have good scores and the third one is below average, it will be blended. 

I hope this was helpful, and do share with your friends and colleagues who might benefit from this. Our team here at Elixir is available to answer any of your questions about real estate. For the best real estate experiences in the Greater Toronto Area, reach out, and we will be happy to assist.

Wish you all the very best! Reach out to our dedicated team at Elixir for any queries you have in Real Estate, and we will do our best to help.

Mudit Mehta 

Broker of Record

ELIXIR REAL ESTATE INC.

In our previous discussions, we emphasized the paramount importance of understanding market trends when making sound real estate decisions. Building upon that foundation, we now venture deeper into the realm of real estate wisdom by delving into the specific indicators that can illuminate the path ahead.

House Prices - The most straightforward indicator is house prices. A consistent month-over-month decrease signals a declining market, whereas a consistent increase signifies a robust seller's market. If prices are relatively steady with conventional gradual increases, it suggests we're in a balanced market. In this infographic here where we can see the plotting of prices in the last 1.5 years you can see all three kinds of markets.


Inventory Levels - A buyer-dominated market typically has surplus inventory, providing plentiful opportunities for buyers to choose from. Due to the large inventory, the buyers are in the driving seat and generally in a better position to negotiate. On the other hand, in a seller-driven market, inventory is usually limited, leading to competing offers and giving sellers the upper hand.

Sales Volume - Sales volume can also be a significant market trend indicator. In a buyer's market where the supply of homes exceeds demand, sales volumes may decrease or remain stagnant. Buyers have numerous options, allowing them to negotiate lower prices, hence they take longer to decide, leading to fewer transactions. Conversely, in a seller's market where demand outweighs supply, sales volumes generally increase. With limited choices and high competition, potential buyers must act quickly, resulting in more transactions.

Days on Market - In a buyer's market, surplus supply over demand often leads to homes staying on the market for longer periods. However, in a seller's market where demand outstrips supply, homes typically sell faster, resulting in fewer days on the market.

Rent Prices - In a buyer's market, an abundance of supply can result in lower home prices, making homeownership more affordable. This could potentially decrease demand for rental properties and slow down rent price growth. Conversely, in a seller's market, the scarcity of available homes can inflate prices, making it more challenging for people to buy. Consequently, more people might resort to renting, increasing demand for rental properties and driving rent prices up.

Apart from these, larger economic factors like interest rates, economic growth, unemployment rates, and population growth also influence market trends.
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For instance, the dramatic shifts in the real estate market over the past few years can be attributed in part to economic factors such as the Bank of Canada's multiple rate hikes in 2022, which brought the market down until it bottomed out in July 2022. However, after rate hikes were paused on January 25th, 2023, the market responded positively with a sharp increase in the first half of 2023. Increased immigration intake, which kept housing demand high, was another contributing factor.

Wish you all the very best! Reach out to our dedicated team at Elixir for any queries you have in Real Estate and we will do our best to help.

Mudit Mehta 
Broker of Record
ELIXIR REAL ESTATE INC.
Off: 416-816-6001 | [email protected]

A topic that influences all of us in the real estate market, whether we're sellers, buyers, or investors. We're talking about market trends and their significant impact on our real estate endeavours. So, without further ado, let's jump right in.

Your position as a buyer, determining how much to pay for a property, or as a seller, deciding the potential selling price and time frame for a property sale, depends largely on the prevailing market trend. There are three main types of market trends:

 Buyers Market - These are the markets where Real Estate Inventory is in abundant supply, the buyers community can choose from wide variety of choices and when something fits the aspirations, its price can be negotiated and deal made. There is generally nil to minimal competition in the Buyer's driven market. Real estate is all about demand and supply, just like any other market. The more the inventory is in the system, the lesser the demand is and the prices will be appealing for the buyers giving a lot of options to choose from. In such markets the properties tend to sit longer on the market before exchanging hands. 

 Balanced Market - Here's where buyers and sellers meet on equal ground. The supply and demand are relatively balanced. This ensures that parties on either side of the transaction are in level playing field, the property in a balanced market will sell on its merit and will not stay for long on the market. For a credible and well presented property the sale would be relatively smooth and fast, for an averagely presented or deficient property, it will stay longer in the market even in the balanced market. 

 Sellers Market - This is when the tables turn, and the sellers hold the aces. With a short supply of inventory and a high demand from buyers. These are the markets where the supply is too short and due to the absence of healthy inventory level, there is a lot of competition between the buyers. This results in multiple or competing offer situations for the Sellers, they can choose from the offer they like best in terms of price, deposit and conditions. The Seller as an entity is driver in such markets, the properties, even the averagely presented ones would sell briskly in such market. In this Seller's market the only properties which sit on the market are the ones which are highly deficient in their curb appeal or interior elements. 

To illustrate these trends, let's take a look at the fluctuation of average home prices in the Greater Toronto Area from February 2022 to July 2023. We are right now in August of 2023, and here you can see the mapping of average prices from Feb 2022 to July 2023. As you are able to see here the market from March 2022 until July 2022, is a buyer's driven market, and the reason you see here the prices were negotiated and there were huge month on month drops in the prices. The interest rates were increased 9 times between March 2nd 2022 and January 25th 2023. During these successive increases the market as you can see here came dramatically down in first five months and then adjusted itself by July 2022. 


From July 2022 onwards to January 2023 the market behaved as a balanced market, the inventory was getting released gradually, the buyers were also limited and it was a very balanced market all these six months here from July 2022 - January 2023. 

From Feb 2023 onwards the market again tilted and trended to became a Sellers market, the small inventory was quickly consumed by the buyer community in these months and that resulted in increased competition amongst the buyers. 

Recognizing these trends is pivotal in shaping our approach as real estate professionals. For instance, in a declining market, it's often better to sell before buying. Conversely, in a rising market, it may be wise to secure a purchase before selling. This understanding is key to maneuvering the market effectively and achieving your real estate goals.

This would become reverse in the inclining market which you see here from February onwards, for buy/sale scenario the purchase can be inked first to lock the best price, followed by the sale to ensure the best price our Sale can bear in the market. 
In a balanced market it the timing of sell and buy can be either way, however, I would recommend to ink the Sale first and then move forward to the purchase. This will provide you the peace of mind in executing both sides of the move, and you can move-up or move-down in a stress free way.

Wish you all the very best! Reach out to our dedicated team at Elixir for any queries you have in Real Estate and we will do our best to help.

Mudit Mehta 
Broker of Record
ELIXIR REAL ESTATE INC.
Off: 416-816-6001 | [email protected]

In some provinces like ours here in Ontario, it is legal to have the same agent represent both buyer and Seller in a Real Estate transaction. This is called ‘dual agency’ or multiple representation. One should try to have their independent representation as much as possible, and here are the principal reasons:

Motivations should be safeguarded – Real Estate is a high dollar value transaction if I as a buyer reach directly to the listing agent advising that I don’t have any agent and I want to purchase this property. Now, my interests and motivations are exposed to the listing agent. Namely, what is my financial eligibility, how much I like the property, and how much I am willing to pay for the home.  I have no one on my side to independently value, assess and review the property to advise whether it is worth the price I am agreeing upon and other physical aspects of the lot, layout, location, current condition etc. of the property. 

The agent here is representing the Sellers, and by design, we cannot expect them  for critical advice on the property as it’s a direct conflict of interest. They would need to be neutral to both, and moreover, they are already in a client relationship with the Sellers. It is as if we are in a court case and we have the same lawyer representing both plaintiff and defendant, and in a word, it would be a mess and would by design tilt in one direction. 

On the other hand, if for us as a Buyer our interests are represented by our Broker. Our motivations would always remain with our Broker, they will not reach the Sellers or Sellers agent, and that is where the scope of negotiation is formed. How much I am in love with the property or how critically it fulfills my needs, that feeling or motivation doesn’t reach the other side, and our buyers representative can objectively negotiate the deal. As I mentioned earlier, since Real Estate is a high-dollar-value transaction, we should check our emotions during the process, both on the Seller Side and the Buyer Side, to reach a win-win outcome. 


Compensation is part of Fair Market Value – Since the majority of the properties are sold with brokers involved, the fair market value of the property which is evaluated by your buying broker based on neighborhood sales has already the compensation component built in. The learning is that for me as a buyer, having my own representation doesn’t impact me negatively, in fact, it only works to my benefit. Now, I can take benefit of unbiased advice from a person who looks at hundreds of properties every year and has a breadth of knowledge in evaluating properties. And my agent can objectively review and provide feedback on the subject property and negotiate on my behalf for the best price. 

Since I am not directly involved in the negotiation, my emotions are in control, and more objectively, the deal can be negotiated by my agent. I have assisted my clients in multiple transactions where we could secure the property at a favourable and objective price determined by the as-of-market and certainly not by emotions. 

When we talk from the Seller’s perspective, also the dual agency should be discouraged, as would not want my agent to put special emphasis on only direct buyer clients and not the buyer prospects across the broker community. The reason is that it is in our best interest as a seller to ensure we can expose the property to the widest array of buyers, and it sells at the credible price market can bear for my property. If I try to expose my property to a wider cross-section of buyers, the property would attract the right buyer willing to pay a credible price for the property. 

If I only limit it to the consumers put forth by my agent, I am missing out on the wide selection of consumers and not allowing my property to bear the right price. Generally, the dual agency relationship exists if the same agent is representing both buyers and the sellers, they will be double ending the compensation for both sides. And this is the reason, the only party that benefited in such transactions is the agent who is representing both. 


However, in remote and rural areas where the broker community is not that much in volume, the dual agency still works if done ethically, as it is needed to ensure the Sellers sell the property in a smooth and agreeable timeframe. 

Wish you all the very best! Reach out to our dedicated team at Elixir for any queries you have in Real Estate and we will do our best to help.


Mudit Mehta 
Broker of Record
ELIXIR REAL ESTATE INC.
Off: 416-816-6001 | [email protected]

Market value is what a buyer is willing to pay for Real Estate, and the Seller is willing to accept in exchange of the title of the property without any undue pressure. The last point is that there should be no stress or pre-condition with either of Seller or Buyer, and that is the market value of a property.

The market value is always as-of-date, and it keeps changing with the market; it is seldom constant. However, saturated real estate markets might continue at the same level for a broader duration. Therefore, market value might give an impression that it is constant for a given period.

Market value is determined by carefully examining the subject and then finding similar comparable sales which have been sold in the last 60-90 days with similar type/style/age in the same community. If the market is dynamic and changing rapidly, it might call for selecting an even shorter duration and recent sales to arrive at market value accurately. After finding the comparable sales, the next step is to perform positive and negative adjustments for additional or missing features in the comparable in relation to the subject. The final aggregation of such adjustments for the comparables will provide us with fair market value.

Another essential point to remember is that the more comparable sales we can find, the more accurate and reliable fair market value would become.
Let us try to understand this with an example. Let us regard we want to arrive at fair market value for a 2-storey 3-Bedroom Detached home in 1,500-2,000 sq ft bracket above grade of space. And we are able to find 6 2-storey 3-bedroom detached homes of similar square footage and age in the immediate neighbourhood of the subject, all of which have sold in the last two months. The median sold price of these properties is coming at $780k. And there is one 3-bedroom detached which has sold in previous two months in the same area at $850k; that doesn't mean that fair value of the subject becomes around $850k, the reason is that majority of the houses are sold sub $800k and that we have to ensure as a buyer.

Why is Fair Market Value important?

1) As a buyer, determining the fair market value helps us retain our immunity in the market where we do not overpay for a property, and when the market saturates, we do not come into stress. On the other hand, if, as a purchaser, we get emotional about the purchase and overpay for a property, it will take away our immunity. If suppose market turns other way we might be forced to execute a distress sale. To avoid this situation, your realtor has a critical role to play in evaluating the as-of-date fair market value and ensuring that your purchase is within reason and you are safeguarded.

2) As a Seller, it is equally critical to arrive at the fair market value correctly for the property we are trying to dispose and pitch it fairly to the market. The reason is that when we list a property on a Multiple Listing Service, we should make every effort to present it well, market it comprehensively, and price it fairly. These three things will ensure that buyer prospects exposed to the property are seeing value in the property. The ideal situation in a Real Estate transaction is where both buyers and sellers are happy and willing to make the purchase. Both see value in what they are giving and what they are receiving. This will be possible when the Seller evaluates the property without getting emotional. If we don't list it rationally, the buyer prospects don't see enough value in the property, and the listing becomes stale with inactivity. At this time, the new buyers coming to the market don't reciprocate positively for the property. Instead, the buyers feel there might be an issue with the layout/location of the property due to which it is standing on the market. Eventually, what ends up happening is that the property sells for even less than the fair value, and we lose money on the table that the property deserved.

Wish you all the very best! Reach out to our dedicated team at Elixir for any queries you have in Real Estate and we will do our best to help.


Mudit Mehta
Broker of Record
ELIXIR REAL ESTATE INC.
Off: 416-816-6001 | [email protected]