Monthly Archives: July 2015

Drone real estate

Selling Homes With The Use of Drones

Real estate agents and brokerages are having to go the extra mile to boost sales. The advent of drone technology has presented realtors with a new and interesting sales tool. Helicopter and quadcopter drones equipped with high resolution cameras have begun flooding the commercial and recreational real estate markets, with the media citing both benefits and potential issues associated with its use.

The true advantage of utilizing drones, based on the testimonies of early adopters of the tech in the news, is that you stand to benefit from the large audience your drone’s camera footage will receive online, which will broaden your customer base by making your properties more appealing to potential out-of-town buyers who can’t immediately view the home in person.

Paul Rouillard is a realtor from Windsor, Ont., who recently adopted the use of drone technology for his brokerage. Rouillard’s utilization of this technology takes two primary forms. The first involves filming video of the interior of the home to create virtual walkthroughs, ones that offer a somewhat unique perspective from the traditional walkthroughs you’ll already find on real estate brokerage websites. And second, as a means of capturing aerial videos of the properties his firm has for sale. In an interview with CTV News, Rouillard stated that customers appreciate being able to see the “the lay of the land,” or a better sense of where and how the property is situated within a neighbourhood context.

B9316588057Z.1_20150312232708_000_GO9A7456V.1-0“They can see the complete area, and they can see the entire property all around in a 360-degree view….We want to feature it. We want to highlight it. We want to make sure that when somebody does see it, their first instinct is, ‘Wow! I want to come take a look at it. We get that ‘wow factor’ all the time.”

Jim Williams is a commercial real estate agent, also based out of Windsor, whose interview with CBC.ca shed light on another potential use for drones, that of a “development scout.” To Williams, drones can be helpful to identify future development opportunities, and hopes his firm will have a few devices by early next year.

“To be able to fly downtown Windsor and look for vacant sites, potential buildings that could be repositioned, redeveloped, to do it from the air gives you a whole different perspective.”

According to CBC.ca, Canadian commercial drones have an ‘endless’ number uses under Canada’s current regulations. Transport Canada, the federal regulatory committee responsible for the oversight of drone-use nationwide, has reported struggled with the task thus far, receiving numerous reports of drones flying dangerously close to restricted aircraft flight paths, and cases of people being recorded in compromising situations without their knowledge. The existing laws require amateur drone operators to fly their devices only during the day, and the device is never allowed to leave the operator’s field of vision. Transport Canada has also established restricted air space for drones, which includes  nine kilometres of any aircraft flight paths, and at all times must be within 90 metres of the ground. Larger drones intended for commercial purposes require a permit from TC before they can be flown.

Toronto Condos

Why Are Condo Prices Continuing to Rise in Toronto?

Condo prices in Toronto somewhat defy conventional economic logic and wisdom. Normally, based on the laws of supply and demand (the forces that drive a capitalist economy), when you have a lot of something, the price of that something tends to go down. An abundance of something typically leads to price drops, in order to encourage purchase of the item, particularly by those who weren’t originally considering it. But the condominium market in Toronto is presenting economists with an interesting case study. Regardless of how many condo units are being constructed and sold in the GTA, prices appear to be going up. According to the Motley Fool, there were more than 56,000 condos under construction in Toronto at the end of 2014, which far outweighs the number of units being built in other much larger municipalities like Chicago, Los Angeles, or New York.

So what’s actually causing condo prices in Toronto to skyrocket?

John Pasalis of Move Smartly wrote an interesting article recently regarding factors that contribute to the appreciation of condo resale prices over time. He argues that the two primary factors you need to consider is “the balance between the supply of condos in the resale market today and the demand for those condos in that neighbourhood.” Pasalis uses the following explanation to make his point clear:

“For example, imagine you’re considering buying a condo in two different neighbourhoods and in both neighbourhoods roughly ten condos per month are available for sale. Now suppose in neighbourhood A only one condo actually sells each month and in neighbourhood B five condos sell each month. Clearly the market for condos in neighbourhood B is far more competitive than in neighbourhood A… It makes sense then that condo prices over time will appreciate at a faster rate in neighbourhood B where 50% of available condos are selling every month compared to just 10% in neighbourhood A.”

Toronto CondosBased on the calculation of “SI Ratio” (sales-to-inventory ratio), one can easily predict which neighbourhoods in the city of Toronto will have the fastest price appreciation for condos. Based on his calculations, the demand for condos in Davisville, the Bay Street Corridor and Agincourt is very high relative to the number of condos available for sale in those neighbourhoods, versus condos in Humber Bay and Bayview Village, which are relatively balanced for June.

Another explanation for condo price growth was presented by the President of the Toronto Real Estate Board. TREB recently released a quarterly sales report for Q2 2015, which stated that there were 7,656 condo transactions from April to June of this year, representing a growth rate of 17% when compared to the second quarter of 2014. Mark McLean, President of the Toronto Real Estate Board, had this to say in a news release:

“Much of the new condominium apartment inventory that has been brought to bear on the market in the recent past has been absorbed.”

So has the issue of overstocked condo inventory actually been solved as McLean claims it has? According to the same TREB report, condo sales made up 70% of all home sales in the GTA in the first half of this year, with average sales prices rising by about 6% since this point last year, now sitting at $416,728.

Toronto skyline

Sales and Prices Reach Record Highs in the GTA in June

In keeping with the trend of the past several months, home sales and prices in the Greater Toronto Area continues to reach record highs. Recent figures released by the Toronto Real Estate Board for the month of June sheds some light on the crazy demand for housing and condos, and the high prices people are willing to pay.

CBC News, argues that there is little indication that the Toronto real estate market is cooling. According to TREB and the CBC, sales growth in Toronto is outpacing the rate of listings growth by a wide margin. In terms of home sales, townhomes and condos in the GTA reached 11,992 in June, up more than 18% from a year ago, setting a record for the month of June. The average selling price for all homes last month was $639,184, up 12.3% from a year ago. Here is a breakdown of some of the other important figures released by TREB.

TREB statistics - June 2015Toronto:

  • The average selling price of a detached house reached $1,051,912, an increase of 14.2% over last year.
  • The average selling price of a semi-detached home reached $761,819, an increase of 13.2% over last year.
  • The average selling price of a condo reached $418,599, an increase of 6.3% over last year.
    The average selling price of a townhouse reached $539,259, an increase of 10.8% over last year.
  • The sale of semi-detached homes was up 1.8% year-over-year in the GTA.
  • The sale of condos was up 22.4% year-over-year in the GTA.
  • The sale of townhouses was up 21.2% year-over-year in the GTA.

905 Region:

  • The average selling price of a suburban semi-detached home reached $496,740., an increase of 10.7% over last year.
  • The average sales price of a suburban condo reached $324,388, up 4.6% compared to last year.
  • The average sales price of a suburban townhouse reached $459,004, up 14% compared to last year.
  • The sale of suburban semi-detached homes was up 10.6% year-over-year in the GTA.
  • The sale of suburban townhouses was up 18.4% year-over-year in the GTA.

The MLS Home Price Index composite benchmark is another metric that illustrates the dramatic increase in home prices in the country, measuring the rate at which housing prices change over time by tracking price changes in “typical” homes in each market. The typical selling price of all homes went up by 8.9%. The difference in price growth between the MLS figures and the TREB research, according to some, can be accounted for by the cost of million-dollar homes being sold. Factoring those sales out, which tends to skew the average, the figure should look closer to the 8.9% estimated by MLS.

The big question is whether or not this continued price growth will lead to changes in the national interest rate. The Bank of Canada is set to decide whether to leave the interest rate as is (at 0.75 per cent), or change it. Some analysts are predicting that the interest rate might get cut down to 0.5%, which is causing some concerns about whether this will stimulate the market even more so and causes an even bigger frenzy.

Toronto Real Estate Market Update – Detached Homes Up 14% From 2014!

Toronto Real Estate Board President Mark McLean announced that Greater Toronto Area REALTORS® reported 11,992 sales through TREB’s MLS® System in June 2015. This result represented a new record for the month of June and an 18.4 per cent increase over the June 2014 result of 10,132.
“As I begin my term as TREB President, I think it is important to point out that our region continues to grow in response to our diverse economic, ethnic and cultural bases. The GTA consistently receives international accolades as one of the best places in the world to live and do business. As the number of households grow, many of them will take advantage of the diversity of affordable home ownership opportunities that exist in Toronto and the surrounding areas,” said Mr. McLean.
INFOGRAPHIC.JUNE2015
Selling prices were up markedly on a year-over-year basis in June, for all major home types. The MLS® Home Price Index (HPI) Composite Benchmark was up by 8.9 per cent in comparison to June 2014. The average selling price was up by 12.3 per cent over the same period to $639,184.
High-end homes have accounted for a greater share of overall transactions this year compared to last year. This is the key reason why the average selling price has increased at a greater annual rate than the MLS® HPI Composite Benchmark.
“It is encouraging to see that new listings have edged upward so far this year, as homeowners have reacted to strong home price growth and have looked to take advantage of increased equity in their homes. However, the annual rate of sales growth continues to far outstrip listings growth, which means that there remains a lot of willing buyers in the marketplace who haven’t found a home that meets their needs. As long as this situation persists, expect home prices to trend strongly upward,” said Jason Mercer, TREB’s Director of Market Analysis.