Now Creative Group August 15, 2017 No Comments

An ever-healthy housing market

Despite a fall in sales and a slowdown in prices, the fundamentals underpinning the Toronto housing market remain strong. The impact of a recent rate hike and a slew of measures at the provincial level, largely a 15% foreign buyer tax, have cooled what was once the most dynamic seller’s market in GTA and Southern Ontario history. New data released shows two important trends that underpin the stability and long term strength of the GTA housing market.

The first is that mortgage delinquencies are now at a record low and continue to fall. Data released by Equifax Canada shows that mortgage delinquencies have been falling in Canada, and large banks, like TD, report extremely low rates of default and delinquency. Another important and positive statistic has been the fact that home building has now been found to exceed demand in Toronto. For many years, industry groups, real estate professionals, and some politicians and economists have complained that not even housing stock was being built and that the government should be providing more incentives for builders to develop.

Recent data shows that between 2011 and 2016 there were 146,200 new households in Toronto, compared to the 175,825 homes that were built. This shows that housing supply exceeded established demand by over 30,000 units. While the supply of single detached homes in Toronto remains largely fixed due to space constraints, the latest census data shows that home supply has kept pace with home demand for many years. This proves that the GTA real estate market is adept at responding to the signals of demand and supply.

While having decreased month over month marginally, prices in Toronto are still significantly higher today than they were a year ago. The condominium market is on fire in Toronto, with double digit price and sale increases recorded in the last few weeks. Many realtors are predicting that the double whammy impact of a 15% foreign buyer tax and a small interest rate hike will temporarily cool the market before it heats up again, as was the case in Vancouver. Overall, the Toronto housing market remains rock solid.

Now Creative Group August 10, 2017 No Comments

Tembo Tips: How to Save on Moving Costs

How to save on moving costs

Purchasing a new home in the current housing market already takes quite a toll on your finances. Considering all that is involved in moving from one place to the next, these costs can add up quickly. However, there are steps that can be taken to reduce moving costs and allow you to set aside a little something extra to go towards your mortgage payments each month.

Do Your Research & Ask For Multiple Quotes

Research moving companies in your area to find out what services they offer, and how much they charge for these services. Make sure that you provide these companies with ample information regarding where you are moving to, and what you require from them. Different companies will offer different packages and rates depending on your needs. Consider the costs associated with the size and weight of your items, the amount of mileage and gas included in the quoted price, as well as the various moving supplies and number of movers that may be included in each quote. Don’t be afraid to ask questions and request a price match or discount if you come across a deal that you may not have been offered.

Consider Doing It Yourself

Depending on the number of belongings you have and the distance that you are moving, it may be more beneficial to complete the move without hiring professionals. Keep in mind, that costs do add up quickly and this may not always be the most cost-effective method. Consider the cost of a moving van, boxes, and other supplies that you will need to complete your move. Reach out to friends and family who may be willing to assist with loading and unloading; saving you from the cost of hiring professional movers. Make a list of everything that you will need as well as items that you may already have, and compare the total cost to the quotes you have received from moving companies to determine the best option for you.

Get Rid of What You Can

Reducing the amount of items you are taking with you will ultimately cut down costs by decreasing the weight of your load, as well as the number of boxes needed. Does your old furniture fit in your new space? Make sure you take measurements and are sure that everything you are moving has a space in your new home. If it doesn’t fit – get rid of it! Selling gently used items that you no longer need will also make you some money that you can use towards your moving supplies. Is the item worth less than the cost to move it? The cost to move an item should be a fraction of the cost to replace it. Don’t be afraid to sell it and purchase a new one for less than the cost of moving it.

Now Creative Group August 3, 2017 No Comments

Predicting The Future Canadian Housing Market

The Canada Mortgage and Housing Corporation is predicting that the fall in sales and property prices for the Greater Toronto Area will soon come to an end. CMHC pointed to the recent history of the Vancouver market, where a foreign buyer tax had a strong impact in reducing prices and sales volume but where the market quickly recovered. Prices and sales in Vancouver are now higher than before the foreign buyer tax was implemented. The CMHC believes Toronto prices and sales will also rebound in the medium term.

Interest rate increases have exacerbated the slight slowdown in the GTA market but were expected and anticipated. Further interest rate increases before the end of the year and next year are also being factored in by consumers and real estate professionals, and have been hinted at repeatedly by the business press. Canadian banks already have very high standards for issuing mortgages, and so interest rate increases should not come as a shock and are unlikely to dissuade the best prospective home buyers from being approved. Canadian banks’ strict regulations and tight monitoring see them enjoy exceedingly low default rates on multi-billion dollar mortgage portfolios.

In terms of prices, the average condominium cost in Toronto has now hit $500,000.00. While overall prices have declined slightly, the picture is not uniform throughout the city, with some neighbourhoods recording slight price drops and others recording price increases. Realtors are still reporting a tough environment in which to sell but also continue to remain optimistic for the long term. The factors which saw the Vancouver market recover so strongly were its strong, underlying fundamentals. A strong economy, limited space for building, a robust international reputation and great weather all propelled the real estate market back. Toronto enjoys many of the same strengths; limited supply, a strong economy, and a solid international reputation.

If the Vancouver story unfolds in Toronto, prices and sales will recover and potentially exceed pre-foreign buyer tax levels.

Now Creative Group July 28, 2017 No Comments

Tembo Tips: Save on your Remodel

Tembo Financial offers equity advances so you can receive the proceeds of your sale before your closing date. This service helps homeowners purchase a new home faster, assist with moving costs, or even help pay for a vacation or new car. But did you know that you can use advance financing services to help with renovations? Renovating can help increase the value of your property, or can help turn your new fixer-upper into your dream home. Here are a few tips that can help you save when you’re renovating your home!

Increase Efficiency, not size:

Re-organizing and equipping your kitchen or bathroom can help you avoid blowing walls to gain additional square footage. Consider which type of storage is most efficient for space, from lazy susans to vanity mirrors, you don’t need to compromise storage for aesthetic. The best of both worlds is attainable if you maximize your space and research thoroughly!

Donate your trash:

Invite your local Habitat for Humanity chapter to your home before renovating. They can help you remove fixtures and materials for later resale. You will save money on Junk Removal services, you will receive a charitable tax credit, and you are engaging in a good cause! Additionally, this is a much more eco-friendly way of renovating, as you are avoiding sending your junk to a landfill.

Long Term Savings vs Short Term Gains:

Even when it comes down to the type of paint you’re purchasing, consider the long term savings vs the short term savings. Will you need to replace it in the next couple years? If the long term costs exceed the current savings, consider splurging a little bit. You will save in the long run.


You can often find building supplies at a local auction for half the price of the retail cost. If you’re planning on building cabinets, this would be a great place to search for supplies. Home centers will increase prices to cover some of the overhead costs. These extra costs can easily be avoided.

Whether you’re planning on a full home renovation or a small project, Tembo Financial has various financing options to meet all of your home improvement and lifestyle needs. 

Now Creative Group July 25, 2017 No Comments

A New Market Emerges

Several forces have recently emerged to re-shape what was the most dynamic seller’s market in the history of southern Ontario. The first was the arrival of the summer season and a vast torrent of new government rules, initiatives, intervention and the famous 15% foreign buyer’s tax. The tax has succeeded in dissuading new foreign entrants into the housing market and has helped to reduce demand.

The second force is a surge of new listings that have increased the supply of homes. This increase is helping alleviate one of the great historical shortages of supply in our market but is also contributing to the cooling of prices. The listings surge will continuum for the short to medium term as new construction units and houses reach the market.

The third force has been the recent increase in interest rates announced on July 12th by the Bank of Canada, with another interest rate hike likely in October of this year. The hike will increase borrowing costs for businesses and consumers and will immediately make mortgages more expensive. The real, full impact of higher rates will be felt in the coming years as mortgages are renewed.

Individually, these forces would have had important but not necessarily market shifting impacts. But as they have been combined and implemented in quick succession, the market has balanced itself away from sellers in favour of buyers who for years, had been squeezed out of securing a home by relentless bids, low supply, and very high prices and price growth.

Realtors across the GTA and southern Ontario are reporting lower demand, falling prices, a marked reduction in open house attendance, fewer bidding wars, and fewer foreign buyers. Attractive houses can still be found selling for above listed prices and overall demand and market health remains robust. The new vibe is one of balance between sellers and buyers.

Now Creative Group July 20, 2017 No Comments

The end of an interest rate era

On July 12th, the Bank of Canada confirmed what many had suspected for weeks; a 25 basis point increase in interest rates was confirmed, pulling the rate up to 0.75%. Weeks of pro-hike language and hinting gave the market plenty of time to anticipate and psychologically prepare for the increase. The immediate effect of the increase saw the Canadian dollar rise slightly, and the prime rates of Canada’s five major banks increase by 0.25 points as well. Tembo previously outlined that one of the reasons for a potential increase would be to ensure the value of the Canadian dollar remains stable as other central banks tighten their rates as well. (Higher rates at the Federal Reserve increase the value of the American dollar, putting downward pressure on the Canadian dollar and thus requiring our Central Bank to increase rates as well).

The increase was the first in over 7 years and brought an unprecedented period of rock bottom rates to an end. Throughout the early to mid 90s interest rates were in the double digits and averaged 3-5% in the early to mid 2000’s. Never in Canadian history had interest rates been so low for so long. With the increase, the Bank of Canada has followed its international counterparts in beginning the unwinding of easy money, reducing economic dependence on cheap debt, and preparing breathing space for lower rates in the future when the next economic headwinds arrive. The effect of the five big banks increasing their prime rates mean that variable rate mortgages will now be more expensive, making it slightly harder for first-time homebuyers to access credit.

Lines of credit, whether business or personal, will also be more expensive. Car lease rates will likely go up, and facility lines of credit will also go up. Commercial and business borrowing will be more expensive and this will have an impact on business bottom lines, hiring, long term spending plans, and investment strategies. Housing is just one piece of the borrowing picture. The positive aspect of the increase is that since the Bank began discussing the possibility of higher rates and now with the official announcement, the value of the Canadian dollar has recovered substantially. From a low point of 73 cents on the dollar in May, the dollar has risen to 78 cents recently. This will reduce pressure on prices, make imports cheaper, but will make exports more expensive for foreigners. Overall, it now appears that rates will likely return to more historical normal in the long term, the age of ultra low is now over.

Now Creative Group July 17, 2017 No Comments

Tips on Finding Affordable Housing for Millennials

According to the Globe and Mail, housing sales in the Greater Toronto Area plummeted by 50 per cent for the first two weeks of June compared to the same period last year. It has been difficult for students and recent graduates to find affordable housing within the downtown core. Here are a few tips on searching for a new home in the city.

Research: Try to analyze the housing markets and the price range of specific neighborhoods. Consider the type of housing you’ll be able to afford whether it is an apartment, townhouse, or condo. Move-in fees, pet policy, and insurance are other costs to consider when moving in.

Budget: Make sure expectations match your financial reality. Find a housing unit you’ll be able to afford throughout the years by creating a budget plan. Creating a breakdown of every monthly costs will help you set an ideal price for your rent.

Negotiate: If you’ve found affordable rent, there’s a possibility that you’ll be able to bargain the costs with the landlord.

Find a roommate: Especially if you’re a post-secondary student, you’ll be able to save more money by having someone to support the cost of rent. Finding someone trustworthy will help you budget the costs throughout the year.

Seek Advice: Whether it’s from a close family or friend, ask for help to find when shopping around. They might have good advice to give on where to look, and advice on things to consider when searching.  


Now Creative Group July 11, 2017 No Comments

Positive Trends For Buyers Continue

In a previous blog post, Tembo outlined current real estate trends which are benefitting buyers and shifting the market into a more balanced position. Whereas previously very high prices and price growth, massive demand, and low inventory assisted sellers, market trends are continuing to move in favour of buyers. According to recent data from the Canada Mortgage and Housing Corporation, the housing supply is increasing and will continue to increase because of large-scale construction projects which will come on the market shortly.

The latest Toronto Real Estate Board data shows that house sales in June plummeted by over 37%, the largest fall in sales since the 2009 recession. Sales of single-family homes fell 45%. Although sales have been falling for three straight months largely due to government regulatory and legislative changes, prices continue to rise with a 6.3% increase recorded since January 2015. New listings also increased supply, with the number up to 19,614 units. With the number of foreign buyers declining, supply continues to increase, and price growth cooling, market trends continue to favour buyers.

Projections should keep sellers optimistic

The Toronto Real Estate Board remains optimistic that prices will continue to increase over the long term, albeit not as dynamically as in previous months. Detached home prices increased 7.8% to 1.06 million in June, and composite prices are still increasing. TREB believes overall annual sales will hit 89-100,000 units in 2017, down from roughly 115,000 last, year. The Board is also projecting an increase in listings of roughly 23%.

Confluence of factors impacting the market

Troubles with large mortgage lenders, a new foreign buyer tax and increasing speculation that the Bank of Canada will soon increase interest rates are all forces which are cooling the market. Underlying market fundamentals remain strong, however, and even as supply and demand cool, prices continue to increase, especially for detached homes. Overall, the real estate market is responding to the needs of consumers and adjustments offer both positives and negatives to both buyers and sellers.

Now Creative Group July 5, 2017 No Comments

Canada’s real estate reliance

As our nation celebrates 150 years of straddling the world’s stage, Tembo has decided to prepare a blog outlining how important the real estate sector has become to our national economy and prosperity.

Historically, the bedrock of the Canadian economy has been primary resources. The cycle has been simple. A resource is discovered or harvesting begins, within a short period of time extraction then begins to boom. The boom provides wealth and opportunity and attracts migration, and then the process matures, the resource declines in value or is depleted or made obsolete by market changes: thus paving the way for a new staple to be collected. The first of these resources was Atlantic cod in the 15th century, then fur and pelts, then lumber, and eventually, minerals and oil by the end of the 19th and early 20th centuries.

By the end of the Second World War, the Canadian economy began to aggressively industrialize and the service sector began to grow expansively. Suburbia sprouted and real estate began to boom and grow as a major sector. From the late 1970s to the present, the post-war industrial components of the economy have gradually withered away. Manufacturing has especially declined in southern Ontario, due to higher costs, relentless foreign competition, and a decline of productivity and innovation.

High oil prices from 2003-2015 helped the economy boom, but as those prices collapsed real estate has taken oil and manufacturing’s place as the main economic engine for the country. Statistics show that most of the strong economic growth the country is currently experiencing comes from four major sources: finance/insurance, real estate/rental/leasing, construction, and professional/scientific, three of these four are real estate related. Manufacturing, farming, fishing, and forestry were sources of economic contraction. Without real estate, Canada would be in a recession.

Businesses are pouring money into real estate and new construction is soaring, while renovation activity is also growing strongly. Increases in housing wealth and home equity are also prompting consumers to borrow more money, spend more, and even leverage the purchase of vacation homes or homes for rental income and investing. Real estate has become so robust that recently, the national housing agency, the CMHC (Canada Mortgage and Housing Corporation) declared it would transfer a special $4 billion dividend to the Federal Government over two years. Soaring property transfer and land taxes are one of the main reasons the deficit prone Ontario Liberal government recently tabled a balance budget for the first time in over a decade.

Overall, the importance of construction, housing, and its financially related business has never been more fundamental to Canadian governments, consumers, and households.

Now Creative Group June 28, 2017 No Comments

Why the Bank of Canada may raise rates

Last week the Bank of Canada hinted that the time may have come for an increase in interest rates. Low inflation and strong GDP figures were cited by the Bank of signs that economic growth was accelerating and that a variety of economic sectors were doing better than was the case previously. In Quebec, the unemployment rate has reached record lows at 6% and in Ontario, the unemployment rate has reached 5.6% with the government finally managing a balanced budget. The Bank clearly feels that the economy is now strong enough to absorb any of the increased pressure and costs from higher interest rates.

The second reason the Bank may raise rates on July 12th is that the United States Federal Reserve has begun a slow but steady process of gradually returning interest rates to a more historical normal following almost 10 years of record low rates. If rates continue to increase in the United States without a similar change in Canada, our dollar will devalue and inflation and prices will increase as the U.S. dollar increases in value. Tembo has previously outlined a blog showing the broad history of interest rates in Canada, emphasising that the last 10 years have seen some of the lowest interest rates in our history, similar to what has occurred in America. Record low rates were implemented to stimulate the economy from the recession of 2008.

Bank of Canada Governor Stephen Poloz has repeatedly warned Canadians that their debt levels, particularly mortgage debt, has reached unsustainable levels. The Bank understands that while record low rates have helped consumers, corporations, and governments manage the fiscal and economic challenges of the last recession, they have also encouraged Canadians to borrow tremendous sums of money. It is possible that the strong economic figures mentioned earlier have convinced the Bank that now is the time to send a stronger signal to consumers that the costs of borrowing can not and will not remain at record lows forever.

Higher interest rates will result in higher mortgage costs in the short term for variable mortgage holders and in the long term for those homeowners with fixed mortgages. Tembo has anticipated the possibility of higher rates and has written a blog outlining several tips to help individuals and families save money by preparing for higher debt servicing costs. After almost 10 years of record low rates, it now appears that the Bank of Canada has decided to return rates to historical averages.