Money in Your Pockets – Top 3 Reasons to Sell in the Fall!

Published on 5th September 2019

Looking to sell your home but you missed this year’s Spring season? There is actually no need to panic because Spring is not the only prime selling time. Fall is another great opportunity to sell your home. All it takes is a little bit of prep work, some smart planning and the right tools to pull off an even bigger sale than in the Springtime. You can maximize your real-estate gains this fall and ultimately get more money in your pockets without waiting for the next Spring season to roll in. Here are our Top 3 reasons why selling your home in the Fall actually means more money in your pockets!

1) Less Competition

Most people list their homes come Spring, and that’s a given. However, it’s not always the best decision to list your home during the most popular selling seasons. By the time Autumn rolls around, most sellers have either sold their place or taken it off the market. The reduced inventory (lower supply) also means fewer options for buyers, and that in and of itself can potentially lead to a more competitive price for your home since there is less supply.

Below are a couple of charts that will help illustrate how the market performs. Pay attention to the numbers in orange.

The charts above clearly demonstrate that October yields some of the highest average selling prices in real estate over the last few years.

Year after year, homes have always sold for more money in October. After the busy Spring and early Summer market, prices will usually start to dip, will stay low throughout July, August, and September. It will spike once again in October during our Fall market. The month of December is usually one of the slowest months of the year (everybody is in vacation mode!). The market will stay very quiet during the Winter months (December, January, and February), as most people do not want to look at homes when temperatures are in the negatives, with snow sometimes as high as their waists.

Keep in mind that September is a critical time to properly prepare your home to be listed on the market in order to capitalize on the higher attainable price points in October. If you miss this boat, you’ll have to wait until the following Spring.

2) More Serious Buyer Pool

Buyers are in decision-making mode. The best thing about selling your house in the Fall is that you’re dealing with a more serious pool of buyers. By the time September comes around, serious buyers will be feeling the pressure to make their move before the holiday season or before the harsh winter weather hits. Knowing how to attract these buyers is very key to you selling your property for top dollar!

3) Stronger Buyer Demographics

Families are likely not going to be your potential buyers during this time of the year. Autumn is when both empty-nesters and Millennials begin looking for new properties. Many homes that work for a family can work just as well for empty-nesters, young professionals or couples who don’t have children.

Stage your house to appeal to this Fall buyer demographic. If you don’t know where to start, that’s where we step in – contact us to find out how our team of professional stagers can help you achieve the right look and to attract the right buyers. You get FREE professional home staging when you list with us – taking the stress out of your selling process!

The Wrap – Evidently, there are a lot of important things to consider when preparing your home for sale, and we’ve done this an abundance of times. If you want to know the secret sauce to getting top dollar for your home, give Amy on the PPTO Team a call at 416-670-7780 or email to schedule a quick yet highly insightful 10-minute chat. Cheers!

Amy Vu
Broker and Vice Chair of TREB Arbitration

Is the 905 Detached Market Still Alive?

Published on 29th August 2019

In last week’s Insight Article, I provided a breakdown of the somewhat shocking numbers of the 416 detached market and the neighbourhoods that are surprisingly more active than expected. In case you missed it, you can check out last week’s Insight Article here:


READ: Detached Prices DOWN, Sales UP… WEIRD STUFF!!

In this week’s Insight, and as promised from last week, I’ll break down those exact numbers for the 905 region.

Coverage Area – In case you weren’t aware, the 905 Region is actually larger than just the York Region (Markham, Vaughan & Richmond Hill) and Peel Region (Mississauga, Brampton & Caledon). The 905 Region extends as far out west as the Halton Region (Milton, Burlington, Halton Hills & Oakville), as far east as the Durham Region (Pickering, Oshawa, Ajax and many more), and as far north as the Simcoe Region (basically everything south of Highway 90, just before Barrie and cottage country). In a nutshell, the 905 Region covers a lot more ground than what most people think.

A Picture is Worth a Thousand Words – Here are is an infographic showing you the numbers year-to-date for detached homes in the 905 area.

Again, you can that see the volume of sales activity is basically through the roof. Red means an increase of over 10% in year-over-year sales, while blue means a decrease in the volume of sales. The fact that there are absolutely no blue areas means that last year, all across the board, the amount of sales was fantastic. However, similar to the 416, this doesn’t depict the full picture of what is exactly going on.

Although the sales activity has been up for all areas of the 905, the sales prices are down in more than half of the regions!

Looking at the infographic below, you can see that there are a lot more blue areas (which indicates a decrease in year-over-year sales price).

Again, this is because the confidence of the buyers are back and we’re stabilizing, but this doesn’t mean that the prices are going up. Many of the areas where we see a drop in prices are all of the areas that were deemed to be “unaffordable”. Unlike the 416, where we had pockets of sales volume surge despite “unaffordable” prices, the 905 Region simply doesn’t have the same demand and supply dynamics.

The 416 is closer to the core and has less detached homes, meaning more demand and less supply (i.e., people want to generally live close to the city, but there isn’t enough supply). The 905, on the other hand, has larger homes, but is further away from the downtown core. Ultimately, this means more supply and less demand in the 905 Region. As you can imagine now, the 416 and 905 Regions have the opposite supply and demand dynamics.

Across the 905, the City that is the most expensive saw the lowest amount of sales volume increases. This is no coincidence. This is because detached homes in these areas are the most expensive and affordability is the name of the game now. In the York Region, this would be the City of King, with average prices of $1.5 million (down 10%). In the Halton Region, this is the City of Oakville with average prices of $1.3 million (down 0.5%), and lastly in the Durham Region, this is the City of Pickering with average prices of $840K (up 0.3%).

Overall, the detached prices in the 905 haven’t really increased, with 60% of the cities still experiencing a decrease in prices despite the sales increasing. Simply put, the prices in the 905 are still not within reach for the “average” Torontonian. Until we see more credit (removal or reduction of the stress test), I expect the detached market in the 905 to continue behaving like this for the near future.

The Wrap – If you are in a detached home and are alarmed by this insight, do not worry – it is not the end of the world. There are many strategies that you can implement to take advantage of the fact that you STILL OWN a detached home in the GTA. To learn more about these strategies, reach out to me at or give me a quick call at 416-436-9436.

Until Next time, Happy Real Estate-ing,

Detached Prices DOWN, Sales UP… WEIRD STUFF!!

Published on 22nd August 2019

If you’ve followed my Insight Articles for a while now, you’ll know that whenever a very popular media headline catches my attention, I’ll always read the whole article (can’t say that for most people). However, 95% of the time, I’ll give the article a thumbs down for not providing the full picture of what is happening. Instead, the article is often just a catchy headline and nothing more. Once again, I’m seeing this headlining trend with the numbers that came in for the month of August. I reviewed what the numbers REALLY looked like when they came out in August and although sales are up, the picture painted isn’t as pretty as what the media outlets are writing about.

In case you missed it, here is my review of the August 2019 Market Watch.

Fall Fuel – Regardless, these headlines are going to add fuel to the upcoming Fall Market. Overall, sales are still below the 10-year average despite increasing over 20%. Yes, it sounds like an oxymoron, but it is true. Take a look at the Market Watch video above if that sounds weird to you.

Neighbourhood Numbers – However, here are some even weirder things that I wanted to show you about the detached market that you really ought to know. Remember how I was saying that every micro market (condos vs towns vs semis vs detached) has been operating at a different level in 2019, and that you should call us for expert advise (rather than just any random Realtor)? Well when it comes to detached homes, it gets even weirder because you must seek neighbourhood specific Realtors. Every neighbourhood is behaving differently this year. Even I was surprised with a few neighbourhoods when I saw the charts below.

The map on the top indicates the number of sales. Red is good (sales increasing), while the blue indicates areas that are seeing a decline in sales.

You can see that most neighbourhoods are red, which means that there has been over 10% increase in sales in most areas. However, that is compared to last year, which lines up with the 24% increase in sales from 2018 that everyone has been reporting on.

However, if you look at the map on the bottom, the price change year to date has been depicted. You can see that most are blue, which represents negative growth.

WEIRD RIGHT!? Sales are up, but prices are down in the detached market. Here’s the kicker – most areas are in the negative in the 416, but the houses south of Bloor from the downtown core to Dufferin and east to Coxwell are up 15%. These houses all have bidding wars due to the lack of supply. In addition, these houses are not what I would call “affordable” starting from the $1.5M+ price tag. Here’s a visual depiction of the areas that I’m talking about.

The other strong neighbourhood is C11, which is the area between the DVP and Sunnybrook Hospital between Bayview & Don Mills (as seen below).

There are many “affluent” neighbourhoods in this area and they all experienced over 11% increase (coming up to the $2M average price tag). Again, this is not what I would deem as the “affordable” part of the market.

Buy, Buy, Buy – I truly believe that most people, who are able to purchase these properties, are seeing the value in buying them now when the prices are just at that inflection point of going up. If you want to be in a good neighbourhood close to downtown, this is your chance now. The buyer psychology is getting stronger. If you’re looking for a home in these neighbourhoods, reach out to me at because you’ll need a Realtor who can speak today’s real estate market language.

The other areas that are not nearly as weird are the yellow areas on the map (see below):

The Others – These are your northwest Toronto properties and a region of Scarborough. Prices haven’t gone down in these neighbourhoods because you can still get a detached home in Toronto for around $1M. These areas will slowly undergo a gentrification process, especially the northwest area of Toronto as builders have all picked up land in these areas to build condos. Expect to see many projects coming out in this area in the next year or two.

The Wrap – As you can see the detached market is very different in each neighbourhood. In next week’s Insight Article, I’ll break down the 905 in this exact manner.

Until Next Time, Happy Real Estate-ing,

Baby Boomers: Is It Their Fault?

Published on 15th August 2019

Baby Boomers (a.k.a., those born between 1946 and 1964) generally don’t like Millennials (1991 – 1996), and Millennials generally don’t like Baby Boomers… unless of course you’re related. I’ve heard so many conversations about how these generations ruined one another. Millennials are often thought to be lazy and ungrateful, while many think Baby Boomers had it much easier. Thankfully, that’s not actually what I intend to talk about in this Insight Article, but Internet memes on this subject always seem to provide a chuckle or two.




Sorry, Scapegoat – The conversations that are going around right now is that Baby Boomers are staying put with their housing in Toronto, thereby causing detached housing to be more unaffordable for Millennials. So the question then becomes – are baby boomers at fault for the lack of supply?

I wouldn’t necessarily put all pf the blame all on the Baby Boomers, but obviously it undeniably does contribute to the lack of supply. One generation shouldn’t expect another generation to pave the way for another. The lack of supply is ultimately a result of many factors. If a scapegoat were to be identified for this issue, then I would blame the City for making it difficult to build detached homes. Simply put, there is way too much red tape over the construction of new homes right now.

No Reason to Sell – I have many Baby Boomer clients who own real estate, and realistically, it makes no sense for them to sell their $1 million+ (fully paid off) detached home. Yes, it is true that they may have bought it for a third or half of today’s market price (Millennials could be jealous of that fact alone), and have made a lot of money from the market appreciation alone. However, that doesn’t necessarily mean that they should sell unless they absolutely need to.

Allow me to illustrate 2 real life examples of why Baby Boomers do not need to sell.

Example #1 – A Baby Boomer couple bought a 3,000 square foot detached Oakville home for $500K. It’s now worth about $1.5 million. They are looking to smart-size (i.e., downsize) to a condo with no stairs. They’re accustomed to 3,000 square feet worth of living space with a backyard. A similar 3,000 square foot condo is not within their price range. To buy an 800 square foot 2-bedroom condo in North York, it would cost them about $800K with only 1 parking spot. Plus, there isn’t even an option to get a second parking spot. In their mind, that tiny $800K condo is more expensive than the house that they bought many years ago… at ⅓ the size! Why would they sell their house in Oakville only to downgrade their lifestyle… all just because of stairs? They ended up not selling nor buying. They stayed put in their Oakville home because it just made sense to stay put.

Example #2 – A Baby Boomer couple owns a home in Brampton and are looking to downsize into a condo because the kids have left the nest. Both of them are still working but liked the idea of smart-sizing. Instead of selling their current Brampton home, they were open to the idea of buying another property and turning their primary home into a rental property. As the mortgage on the Brampton home was very low, renting the property at market rent essentially covered the cost of the new condo. If you’re okay with tenants and can qualify for another mortgage (for Baby Boomers, this is fairly easy with the massive equity already in your home), then why not. Now they have a new tenant (which was leased only in 1 day) and a new condo for essentially just getting another mortgage (of which mortgage costs are essentially covered by the tenants – what a great deal!). Ultimately, their Brampton home was never sold, just leased.

In most of the circumstances that I consult on, very rarely does it make sense to sell any home that a Baby Boomer would have bought many years ago. Oftentimes, the better option is to stay put and/or buy another property. However, reader beware, this strategy would be advantageous for the Baby Boomer, but for the rest of us, these options don’t end up resulting in any supply to the market at all.

The Wrap – So are it the Baby Boomers in fact at fault for the supply issue? To put it in simple terms, no it’s not their fault. Their choice to not sell their current homes is unfortunately the best solution for them financially, and nobody should blame them for not selling. It is undeniably hard for Millennials to get into the detached market. Will it get easier? Probably not. I honestly think most Millennials will be renting for life and so will all subsequent generations. Prime real estate doesn’t exchange hands much in very established cities around the world. Toronto is for sure getting there.

If you’re a Baby Boomer who is consider the idea of smart-sizing but unsure of your options, then reach out to us at PPTO and we can have a quick chat to discuss a strategy that works for you.

Until Next Time, Happy Real Estate-ing

Bubble, Bubble, Bubble

Published on 7th August 2019

Bubble, Bubble, Bubble. Don’t you just love it when Toronto is perceived to be in a bubble? People tend to overreact to news like this, panic and proceed to selling their properties. Well, this just means more opportunity for you and I as investors to pick up smart investments while these UN-savvy investors take news headlines to heart and act on impulse.

Toronto: Accused – Last time, there was a study that accused Toronto of being in a real estate bubble. Typically, we get one bubble headline like this per year (see article below for the last time this happened in 2018 and my explanation at the time; my clients were able to pick up some great cash flowing properties because of this).

READ: Zhen’s 2018 Bubble Decryption (2018)

Is Toronto Really Unaffordable? In 2018, this bubble phenomenon was based on an index created by some company. This year, the headline is accusing Toronto and Vancouver of being “unaffordable” using the metric of how much income you need to be able to buy your home (i.e., the income to average price ratio). Below is a nice chart indicating the type of money you need. Yup – you’re reading that right, the approximate incomes listed are all over 6 figures!

Truth in the Numbers? We all know that it’s tough to be able to buy in these cities now, as most people that can qualify for the mortgages to buy properties are either couples or have family money. That is not surprising by any means, and has been the basis of my Insight Articles a number of times already

When you break it down for Toronto, 2 young professionals making a decent income of $80K per person will suffice. That’s actually quite reasonable, because a lot my clients well exceed that $80K amount.

However, there is undeniable truth in calling Toronto unaffordable when you compare the pricing stats to the average income of $45K in Toronto. This was previously talked about in one of my earlier Insight Articles last year:

READ: MORE Unaffordable times ahead (2018)

Price to Income Ratio – Here is a chart that I used last year showing the housing price to income ratio. Back in 2018, Toronto had prices that were almost 12 times that of the average income, and even then, we only ranked 99th globally (as per the table below). Toronto has definitely risen higher on this table now because real estate prices always outgrow the average income.

So to that end, it’s kind of pointless to say that Toronto is in a bubble based purely on the housing price to income ratio. There is no real urgency for homeowners in Toronto to sell, while on the other hand, more affluent people keep immigrating to Toronto and buying up property. That’s why I keep telling my clients to NOT sell!

Here is another interesting chart courtesy of Rock Star Real Estate with some indicators that I put for you to show why using the price to income ratio to call for a bubble is irrelevant.

The Gap is Too Big – You can evidently see that incomes will never catch up to the cost of buying in Toronto. Just take a look at the price multiplier since 2016 – the housing price is now at over 12 times the income, and trust me it’s only getting worse. It’s been like this for 3 years now, even with the big drop off in the market in 2017 when the foreign buyer tax kicked in.

The Wrap – In any case, this Insight Article is meant to serve as a reminder to you that headlines should not be dictating whether you should buy or sell. Most of the time, headlines are non-sense and are “click bait” material to grab your eyeballs and sell ads.

If you saw the bubble headlines and thought about selling your property in Toronto, I hope this Insight Article offered you a different perspective. As a matter of fact, rather than selling, you should be buying more investment properties now since there will be a population boom coming our way over the course of the next 10 years. If you’re in this boat and want to seize the buying opportunity now, then send us an email and we’ll help you do just that!

Until Next Time, Happy Real Estate-ing,

Toronto Has the Most Active Cranes in North America

Published on 1st August 2019

Toronto has the most number of active cranes, and apparently by a large margin according to the RLB Crane Index. Yes… there is actually such a thing as a crane index! According to the RLB Crane index, Toronto currently operates 120 active cranes out of the 428 used in North America. That’s a solid 28% of all cranes in North America, which likely explains all of the traffic going on downtown in the summer time. If you are a connoisseur of data, here is the Crane Index Report from RLB.

This is probably not a surprise to most, as we know that Toronto is now the fastest growing city in all of North America. So, Toronto having the most number of active cranes makes total sense.

READ: Toronto Population Boom – The Obvious Truth is More Obvious Now

Big Surge! What is interesting is that, a little less than 1 year ago, Toronto only had 95 active cranes (August 2018).

Within 1 year, Toronto increased its active crane count by 30, or in other words, a 33% increase – WOWza!

So the question on your mind may be: “Is Toronto OVER Building?” Well, the answer is No.

Numbers Tell the Story – A simple math problem of 150,000 people immigrating to Toronto with only 20,000 homes finishing per year means that 7.5 people must fit into a home in the upcoming few years. There is no way that 7.5 people are fitting into a condo unit in Toronto. Just imagine that – 7 people confined into a 500 square feet unit. That thought may seem crazy now, but that’s actually how Hong Kong and Tokyo are right now.

To highlight what this actually means, allow me to illustrate a simplified version of the development process of a high-rise condo right now.

Delayed Effect – You can see from the chat that I created above that it takes roughly 4 years into the development process before cranes are installed. This means that all of the cranes being installed right now are from the sales of pre-construction condo units sold in 2017. Yes, I know where the new cranes are and yes, we sold those sites 2 years ago.

2017 saw a major boom in pre-construction condo sales. However, 2018 experienced the biggest dip in the last 10 years, a 42% drop to be exact.

READ: Pre-Construction Condo Sales DROP by 42%!

This means that in the next 2-3 years, there will be a slow down in cranes going up in our skyline, and then ultimately a slowdown in occupancy. There is always a 5-7 year delay with supply and demand in condos solely because of the time that it takes to build one of these tall skyscrapers.

The Wrap – Our demand is so high right now and the sales have just dropped. With the population expected to double in 20 years and cranes to slow down in the next 4 years, you know what that spells. My 2 most spoken words in the past 6 months is NO SUPPLY. Furthermore, you know what no supply combined with high demand translates to… you guessed it – increased prices! That’s why the largest home grab is going to be happening in the next few years. Whether you know it or not, Toronto has a very good chance of seeing another 10 years of boom. Obviously, not every pre-construction project is worth the investment. If you want to profit from the condo market, here is a free course that I put together for you. You can get the FREE videos by signing up here:

Free Online Course Teaching You The Proven Strategy To Profit From the Condo Market

If you want more specific answers to your personalized questions, please reach out to me, Zhen, at

Until Next time, Happy Real Estate-ing

Should I Buy or Should I Rent?

Published on 25th July 2019

During the summertime when the lease market is in full swing and lease listings get snatched up in 1 to 3 days, I often find myself getting asked this question a lot: Should I buy or should I rent?

Herein Lies Your Answer! It’s an age-old debate and this time around, I promise I won’t give you the cop-out answer of “it depends on your situation” (honestly, it still does depend but I’ll give you some more details!). I’ve done the analysis for you using an entry-level condo unit as an example.

We’re going to look at 25 Lower Simcoe, Infinity Condos, right by Scotiabank Arena. I literally found the perfect example for you! A purchaser just bought this unit and immediately leased it out, very recently. Here are the listings for the purchase and for the lease.

This is a 1-bedroom unit with a full-sized kitchen in the highly sought after area of South Core. So what’s the answer to the age-old question, should I buy or should I rent? Well, as of right now, you should definitely BUY.

From a financial perspective, it only makes sense. Take a look at the numbers below.

Numbers Speak for Themselves – To own the unit, you’re only paying an extra $273.47 per month. That difference is shockingly low right now! Don’t forget, if you went with the purchase option, you’re now in the market and you will benefit from appreciation and mortgage paydown on the property. Remember – Rental rates are going UP but interest rates are going DOWN right now!

Further, this unit is actually worth $2,200 on the rental market right now, based on other similar units – $100 more than what it was listed for. I think the landlord under-priced this unit and that’s why it was leased in less than 1 day. So the difference is actually even less, $173.47.

Of course, if the $125K upfront investment is not at all challenging for you, then the answer to this question is obviously yes, you should definitely buy. Reach out to me now at make the move happen!

The Alternative Approach – On the other hand, if saving up for that 20% upfront down payment presents some challenges to you at the moment, then you still have the option of buying with 5% down payment. I went over the benefits and numbers of that strategy in last week’s Insight Article post. If you are in this situation, then you definitely don’t want to miss out on that insight. You can read it here:

READ: The Quickest Way to Get into the Market 

So, now let’s compare that 5% down payment to renting. This is what the numbers look like.

With 5% down, the numbers are looking a bit tougher to justify buying the property. The difference is $887.50 per month, which is quite substantial over time.

However, referencing back to the chart that I put up last week (below for your reference), if you cannot save fast enough, then you’re better off getting into the market now even if it means that you’ll have a higher monthly cost (that is, assuming you have the upfront down payment of $43K and can carry almost $900 per month more in costs).

With the average annual income of $60,000 and 10% savings before tax (represented by the yellow line), you simply cannot save for a 20% down payment fast enough (i.e., red line never meets the yellow line) even if the market appreciates at a measly 4% (it’s actually been averaging 7% the last 10 years). However, with a 5% down payment, the purple line does meet the yellow line in 5 years time.

The Wrap – If this is you deliberating between renting and buying, the answer is obvious. Get into the market as quick as you can. Your future self will thank you in 10 years. I definitely thank my former self for getting into the market. To navigate this scenario more personally for you, make sure you reach out to me at 416-436-9436 plan out how we can get you into the market!

Until Next Time, Happy Real estate-ing!
(416) 436 9436

The Quickest Way to Get into the Market

Published on 17th July 2019

Trying to get into the market? Having a hard time? Let me tell you my secret to the quickest way to get in!

Running Rampant – This is a common issue that is running rampant in Toronto. Owning real estate has become a luxury at this point. Currently, the average cost of real estate is about 14 times that of the average gross income earned in Toronto. Yes, you heard me right, 14 times!! It has dramatically increased in the last 10 years. Back in 2009, the average price of real estate was just a bit shy of 6 times that of your gross income. Crazy how times have changed, not to mention the increased difficulty of getting a mortgage these days.

So if you’re on the outside looking in, then how do you get into this so-called “cool club” of owning Toronto real estate?

Part Unknown, Part Stigma – Well the answer is actually quite simple and I don’t understand why more people don’t use it. It could be a combination of people not knowing or maybe there is some sort of stigma with it. Nonetheless, the answer is buying with 5% down.

Yes, you heard me right – you can still buy with 5% down payment right now. Here are the requirements:

  • You must purchase this property for personal use;
  • 5% down payment is valid for up to $500,000; and
  • All amounts over $500,000 will require 10% down

Slow Savings – So why is this the quickest way to get into the market? Well, it’s simply because it requires the least amount of upfront cash that you need to save up for. The biggest challenge for those wanting to buy, in my opinion, is being able to save enough for that initial upfront down payment. The cost of living in Toronto has dramatically skyrocketed in the past few years so saving up for a down payment actually becomes incredibly difficult. I’ve seen many young professionals with high incomes renting because they simply can’t save up for the down payment quick enough. It’s just unfortunate.

Furthermore, you simply cannot save quick enough for how quickly the cost of real estate appreciates. I put the 2 charts below together to help illustrate this very point. I took the average income in Toronto of $60,000 and the price of a $500,000 purchase (entry level home in the GTA) and mapped it against how fast you can save for the down payment. I built in a measly 3% appreciation rate in the price, but let’s be real, properties in the $500,000 price range actually appreciates much faster than that.

Chart 1 below illustrates saving 10% of your money per year (yellow line). For fun, I mapped this out for 45 years because that’s how long you’re “supposed to” work for.

You can see from the chart that Year 5 is where you will save enough money for a purchase at 5% down (i.e., where the yellow line meets the purple line). However, at 20% down (red line), it’s clear that you will never save fast enough for a purchase – the yellow savings line never intersects with the red 20% down line. Yikes!

Now let’s look at saving at a rate of 20% per year.

You can see that the numbers are a bit better. At 5% down, you’ll arrive at your goal quickly in 2 years time while at 20% down payment, you’ll get there in 9 years. That’s not bad and sounds reasonable.

As a caveat, both of these illustrative charts are based on pre-tax money for simplicity. Given that we live in Canada, you’ll likely forfeit at least 18% of your gross income to our tax system before it even hits your bank account.

Getting Past the Stigma – So if people already know about being able to buy with 5% down, then why don’t more people do it? This is mainly because of the attached stigma relating to the carrying cost of a 5% down payment mortgage. You must get mortgage insurance with a down payment of only 5% down, and as a result, your monthly mortgage cost increases.

The following chart shows the difference in total monthly mortgage payment between 5% down and 20% down on a $500,000 property.

The difference, as shown above, is about $445 per month. If you’re making $60,000 per year in Ontario, your monthly after-tax income is approximately $4K, which means that you can carry the $2,338 per month mortgage (5% down scenario). So regardless of the mortgage insurance or not, the monthly mortgage amount shouldn’t be an issue if you’re in this income range.

The Wrap – The biggest difference between these two scenarios above is that you are IN the market quicker with a 5% down payment, and the cost of owning real estate won’t sneak up on you as you try to keep saving up for that 20% down payment.

This strategy makes complete sense to us, and we hope it makes more sense for you now. Hopefully this has also helped to demystify and pull the stigma out of the mortgage insurance component. If you want to get a more specific breakdown of costs, then make sure you reach out to me, Zhen, at 416-436-9436.

Until next time happy real estate-ing,

How to BEAT the Banks

Published on 11th July 2019

Money is an interesting topic to bring up; it’s like politics – sometimes it’s better to not bring it up. However, I wanted to use this week’s Insight Article to briefly talk about how money is practically free at this point if you’re buying a property, and quite frankly, how to use the banks to your advantage (instead of the other way around!).

Ridin’ Low – We’ve been in a low interest rate economy for over 10 years now. My definition of “low interest rate” is a rate that is less than 5%, but I know it’s all relative. 20 years ago, it was closer to 20%. Less than 9 months ago when I wrote about interest rates, there was a lot of noise around rapidly increasing interest rates which caused everyone to freak out.

READ: New Mayor and Interest Rate Increase – What Does This All Mean

Below is chart of the history of the Bank of Canada’s overnight rate since 2007: Fairly LOW. Despite what the graph looks like, you’ll notice the highest point is 4.5% – that sounds like a low interest rate economy to me.

Accepting Change – As it stands now, the Bank of Canada is done raising rates until 2020 and there is a 40% chance of a rate cut. It’s kind of crazy how things changed so quickly, in the matter of only 9 months.

Regardless of how you may react emotionally to these announcements, things will carry on and there is really nothing you can do. As an example, when I closed my last property in December 2018, the rates were projected to go up another 1% in 2019. As hard as it was at the time, I took my own advice and went with a variable interest rate. Look at where we are now!

Free Money, How Do I Get IN on It? So how is money basically “free”? Of course, this is my perspective, my opinion. In our economy, if the money you have isn’t earning a return over what the projected inflation rate is, then your money will be worth less and less over time.

For example, if you left $100 dollars under your mattress 10 years ago, you likely can buy less with that $100 now than you would have 10 years ago. Simply put, that’s the factor of inflation.

The projected inflation rate in Canada is about 2%. This means that if you are not making 2% return on your money, then you’re essentially losing money. So that means if you have money in a GIC (Guaranteed Investment Certificate) account making 1%, then you’re actually losing money. Products like GIC’s are often marketed by the banks to you as a way for you to make a “return” on your money. But what they have intentionally NOT disclosed to you is that you won’t win with GIC’s in the long run if you factor in the concepts of time value money and inflation.

With mortgage interest rates as low as they are now at 2.5%, you’re really only paying the spread (i.e., the difference) between the rate of inflation at 2% and the posted rate of 0.5%. Just take a look at all of the promotions that are being marketed by the banks right now (see below).

So this means that for every $100 dollars you borrow, it’s only costing you $0.50. Do you think you can make more than 0.5% return in real estate each year?

The answer is 100% yes. If you are looking to see how you can profit from this (basically) free money, reach out to us here at PPTO to chat about how to potentially put this free money in YOUR pockets!

So why is this happening? Well, there are a myriad of reasons as the economy and the interest rate usually isn’t only driven by 1 reason, but rather, it is a combination of the following:

  1. The banks are starving for mortgage business. They can drop their rates to increase business – this is the fundamental Demand Curve in economics: lower price leads to higher quantity for product demand.
  2. The bond market, which is correlated to the fixed mortgage, is also decreasing thereby forcing rates down. We’re also in a weird situation right now where the fixed rate is lower than the variable. This is not normal, so you should 100% take advantage of this.
  3. Donald Trump is against interest rate hikes right now and Canada usually follows the US interest rate changes.
  4. The Canadian dollar is performing a bit too well right now and in order to maintain the cost for our exporting partners, mainly the US, we need to keep the interest rates low.

The Wrap – Is this current trend going to continue? I think so. However, like I said earlier, things can change quite rapidly. However, you could always take the route of having peace of mind by locking in your next investment property with a low fixed rate of 2.5% right now!

Even MORE Money Invested into Toronto

Published on 4th July 2019

Another major announcement was just made this week. Oxford properties will be building a mega-development right in the heart of downtown Toronto. This is going to be a 3.5 billion dollar project (that’s billion with B!), with over 4.3 million square feet of space being created. For some context of how large this project really is, The Well by Tridel was going to have 3.1 million square feet of space – that’s almost 40% MORE space for the new Oxford Properties mega-development!

Here is a rendering of the proposed project below:

This project is going to consist of half office space and half residential rental located just north of the Rogers Centre. Here is an aerial view of what the proposed site will look like from up top:

The existing buildings below with the yellow overlay will have to be demolished in order to make way for the project:

There are 4 critical things that I noticed with this announcement that I want to point out to you

1) Residential Rental Confidence
50% of this project is intended to be residential, but not your standard condo building with units for sale. The residential offering will consist of rentals. Yes, you read that correctly – there will be more purpose-built rentals coming to the market now that rent control has been lifted. Rent control was never going to be a good thing and with the removal of it, we are slowly starting to see institutional money get into the market.

2) Office Tower Intensification
I’ve talked about this in another Insight Article before.


We’re basically seeing a huge movement of global companies coming to Toronto to have easier access to the amazing talent pool that our local universities are producing year in and year out (plus many other perks such as lower costs of labour). Many office towers have been pre-leased even before construction, and I’m expecting no less for Oxford’s latest development.

3) Pension Plan Money
It has become increasingly more and more common for pension fund money (Oxford Properties is owned by OMER – Ontario Municipal Employees Retirement Systems) to be invested in the residential rental market. Pension funds have all migrated into the rental market in order to fund the expected monies that are owed when the largest population of workers, the baby boomers, retire in the next 10 years. It is reported that Oxford has seen 35% capital growth in the last 5 years resulting in $7.5 billion dollars (i.e., 7% per year increase) in their real estate portfolio. If institutions such as OMERS is confident in the Toronto real estate market, specifically downtown, you can understand why I am so bullish as well.

4) Tear Down & Rebuild Phase
We’re in the phase of Toronto’s growth where we are out of prime corner parking lots to turn into tall towers. We’re resorting to tear downs and rebuilds now. The existing building north of the Rogers Centre, as you can see in the last photo above, is roughly 5 stories high, at a prime intersection. Builders are now having to resort to finding land by rebuilding existing buildings. Ultimately, this means higher downstream cost because it’s no longer a vacant land on which to build. Higher cost means a higher price to you and I (i.e., builders will factor into their prices the cost of demolition and rebuilding). In any case, if builders are still tearing down and redeveloping, then you know they have a massive amount of confidence in the city as a whole.

The Wrap – I hope this project gives you some excitement as to why I am so bullish on the downtown condo market right now. The best time to plant a tree was 20 years ago and the next best time is now. This is the same for investing. If the fundamentals make sense, which they do according to Oxford Properties, then it is worth the investment.

Until Next Time, Happy Real Estate-ing,