The Bank of Canada left the overnight rate at 1.00% at its meeting yesterday, as was universally expected. This is great news for anyone with a variable rate mortgage, or any product tied to prime like a line of credit or student loan.
More notable was the Bank’s assessment of the global outlook, which was deemed as having deteriorated relative to April. The weakening in the global environment was cited as a factor restraining growth in Canada; however, the Bank views the domestic economy as continuing to grow at a moderate pace. These factors resulted in the Bank downgrading its 2012 growth forecast to 2.1% from 2.4%. The Bank forecasted that the economy will grow at a faster 2.3% in 2013 (albeit a tad slower than April’s 2.4% forecast) and 2.5% in 2014 (higher than April’s forecast of 2.2%).
The tone indicated that there may be need to reduce stimulus in order for the Bank of Canada to maintain the 2% target rate for inflation, but most economists don’t expect that to happen till 2013. More great news for variable rate mortgages, and anyone with debt tied to prime. Yields are trending down so there may be some room for some short term decreases to fixed rates. Sit tight and we’ll see!
Much of this is due to the slowing economic growth in Canada, the U.S. and China, and the unrelenting economic problems in Europe. These helped to handcuff our central bank. It has been looking to raise rates in an effort to slowdown the growth of household debt in Canada. But the Bank of Canada did get some relief with Ottawa’s imposition of new lending rules for high-ratio mortgages and new mortgage qualification limits. The regulatory moves amount to a de facto interest rate increase in the housing sector and, anecdotally at least, appear to be having the desired, cooling effect.
1 Yr – 2.39%
3 Yr. – 2.69%
5 Yr. – 2.94%
VRM – 2.79%
Lee Welbanks is a Mortgage Broker with Welbanks Financial Group, Lee will be posting these informative “Market Minutes” each week for you to enjoy. Please remember to the Spring Realty Insider Club list to receive new blog post notifications, featured properties and insider access to Toronto’s hottest new developments right to your inbox. Find us on Facebook and Twitter too!
In a hot housing market it’s been difficult to find ideal candidates with a solid return on investment (ROI) in flips recently. Investors (contractors, renovators) are competing with end users (those buying to live rather than flip) driving prices up and creating narrow profit margins. Flips must be done on time, on budget by experienced builders in order to mitigate the investment risk.
We’ve found the perfect home for a flip. It isn’t desirable for immediate occupancy so it is highly likely that the potential purchaser will be a builder or experienced renovator. If done well I believe there is a large profit margin available for this project.
Ladies and Gentlemen allow me to introduce: 42 Allen Ave. This bank owned, foreclosure sale in prime Riverside (just west of Leslieville and east of Downtown) has just been put on the market at a very attractive $270,000! Now this isn’t some low price to attract a bidding war. This is a bank owned property in terrible condition requiring a full ‘gut-job’ renovation. From what I understand the foundation is strong and there hasn’t been any water penetration but it hasn’t been treated well by the previous owner/resident(s).
Here are the property details:
Victorian Style Rowhouse
We see massive potential here. I studied the local comparables using very specific parameters. I chose 15 recent sales using the following boundaries: DVP to Degrassi and Garrard to Queen. After reviewing the data I’ve determined that a row-house without parking, tastefully renovated with 3 bedrooms and 3 baths should achieve a sale price of between $550-750K. Now applying this information to 42 Allen St specifically. The data shows that it would likely sell for as high at $635K when complete!
It’s important to remember that this community is quite segmented; some streets sell more than others and vice versa. Allen St is a cute street with very little traffic. Close to transit (Streetcar) and a short ride to the subway. 42 Allen Ave offers access to Queen St East and all the best the Riverside and Leslieville has to offer. And an added bonus of being just a quick street car ride to the Downtown Core or a nice long walk if you’re up for it. All of this plus the added charm of the existing Victorian features make 42 Allen Ave the best buy with the most profit potential I’ve seen in a very long time.
With a potential purchase price of $270,000 and anticipated renovation costs of up to $200,000 it’s virtually a no-brainer for the experienced builder/renovator.
For more information or for a private tour of the property please contact us today.
Broker of Record
email@example.com or 416-628-1088
The Carlaw by Streetcar Developments
VVVVIP Access Alert: Oct 20th Spring Realty will have priority access to the floorplans and prices. Please contact us for front of the line access to the hottest project Leslieville has seen since the launch of Worklofts and Flatiron. Include you phone #, email address and price range. We will contact you the moment we have details re: next steps. To learn more about the South Riverdale Community visit our Neighbourhood Page here.
Leslieville was buzzing with excitement back in March 2011 when Streetcar Developments put up their sign on their newly acquired 345 Carlaw Ave. They purchased this building as well as the white ones to the North and East for just over $12 Million at the end of 2010. It was such a refreshing sight as we were all so disappointed with the release of Showcase Living Lofts in the empty lot at Colgate and Carlaw. We won’t get in to how terrible Showcase is or how it belongs somewhere in the 905 and how I will never set foot in to that sales centre again. That’s a story for another post. I’ll outline some points below about the development, oh, it’s going to be called “The Carlaw Lofts” with the tag line “your stage”. Very nice, very very nice!
- 12 Story glass and aluminum structure (similar to the Flatiron across the street) on the NW corner of Dundas and Carlaw
- Stacked Townhomes to the East (about 3 stories high) main level will be live/work
- Maintaining part of the original building!
- The ground level of the main building will feature a glass enclosed public event space for farmers markets, art shows, music events. Will be available for all sorts of events. Sort of a way to give back to the community (as every building should)
- Total of 340 units making it the most dense development in the Leslieville Area (Showcase to have 230 if it ever sells enough to build)
On October 17th I had a conversation with the sales team and they confirmed that some units will be priced at under $500/sqft! This came as a huge surprise to us; we assumed it would be in line with other developments at $600/sqft. The Carlaw is sure to sell out very quickly as resale lofts and condos in the area are currently achieving up to $650/sqft every day! The stacked townhomes may be slightly less while the PH’s could be more. One thing we know is that Streetcar Developments has yet to disappoint us, we love their product and will do out best to support it. Below are the latest renderings.
On September 28th, 2011; the Spring Realty Team had a conversation with the Sales Team of The Carlaw which confirmed our front of the line access. We will have floor plans and prices very soon and will be able to start selling before other Brokers and the general public by the end of October. It’s best if you contact us with the Subject Line: The Carlaw and we will get right back to you with details.
Ara Mamourian – Broker of Record/Owner – Spring Realty Inc.