All roads lead to June -Our House Magazine

What do you do when you’re tired of the 9-5 daily grind and want to strike out
on your own? For gal pals April Brown and Sarah Sklash, it was obvious – buy an
aging motel in the country and renovate it. If it sounds like a business plan
that could never work, these two Millennials would prove you wrong.

“We were looking for a creative outlet and thought about doing something
entrepreneurial for five years, but the timing was never right,” Brown told Our
House Magazine. Welcome to the June Motel.

Brown and Sklash, who worked in public and relations and the government of
Ontario in Toronto respectively, had frequently visited Prince Edward County. A
day’s drive from Toronto or Ottawa, the pair started noticing the area was
quickly becoming a food and wine destination. They’d been looking for a creative
outlet for years but the timing was never right.

But at the start of 2016, the friends decided it would be the year they make
some changes and venture out on their own. They brainstormed a bunch of ideas
until an old 16-room motel called the Sportsman Motel came up for sale.

“We should buy that motel, it’s one of those lightbulb moments,” Brown recalled.

However, the two 33 year-olds had no interest in running the same motel. They
had much bigger plans.
Having spent time south of the border in places like Florida and Palm Springs,
they fell in love with the retro-looking motels they came across in their
travels. This would be their inspiration.

“Really our idea was we wanted to reinvent the motel experience. We travelled to
so many places that had done this so well,” Brown said.

The pair went all-in on the concept.

After running the 50-year-old motel as the Sportsman for a season, they spent
the winter getting their hands dirty on a total remodel. As Sklash explained,
they started with a tropical palm wallpaper design they liked, and the rest of
the renovation took off from there.

The women designed the guest rooms themselves, but worked with interior designer
Keri MacLellan of Four Walls Interior on the lobby. After months of sweat
equity, the motel was completely remade and had a new name to fit the retro
vibe. The June Motel.

Sklash noted the idea was to design the motel for “photo moments,” from the pink
doors greeting guests as they drive up to the neon signs in the lobby.

“We wanted the whole design to be a place that people would want to share with
social media,” she said, adding 90 per cent of guests discovered the motel
through Instagram.

And that bit of strategy paid off. As soon the June Motel opened its doors,
guests were sharing their experiences with the world. The motel got a ton of
buzz and attention from major publications like Vogue and the Toronto Star.

The first year as the June Motel was a smashing success. And as Brown and Sklash
get ready for their second full season, the motel is already booked full for
weekends.

With one success under their belts, the entrepreneurs now have their sights on
expanding their brand. They’re looking for property and new opportunities.
“There’s such and appetite for unique accommodations within that millennial
market, we figure why stop at one?”

Motel inspired? Before taking the leap, be sure to talk to a professional
April Brown and Sarah Sklash struck gold when they decided to buy an old motel
and convert it into the June Motel in Ontario.

But the pair didn’t jump into the idea without coming up with a solid business
plan. Besides doing their market research, they had to consider financing.

Brown and Sklash explained along with a bit of their own capital, they decided
to do a vendor takeback mortgage, in which the seller finances the remaining
amount owed on the property. They turned to local economic development agencies
to help with the costs of the renovation. While the pair note buying a motel in
the country costs less than an average home in Toronto, they recommend doing the
research and coming up with a strong business plan.

That’s where Dominion Lending Centres Commercial can help out. David Beckingham,
the president of DLC Commercial Capital Inc., noted commercial mortgages aren’t
easy and can be a long process. He pointed out commercial brokers can help the
buyer through the process, including the appraisal, environmental issues,
accounting and presenting a deal to the lender they understand.

He suggested in a situation like the June Motel, DLC Commercial would offer new
financing at more favourable terms that would repay the vendor takeback mortgage
and provide new money to repay the equity the new owners have already put in.

“You need a commercial guy to look at it in a business way that can isolate and
stabilize the issues,” he said, adding it’s important to have a professional who
understands the market place and the nuances of the lenders.

Jeremy Deutsch

Call Shoren Konstantin or text her directly at: 416-218-0512. You will be pleasantly surprised!

Good To Know: Tips for First-Time Real Estate Investors

Investing in real estate can be extremely beneficial to your financial portfolio. In fact, some people make a bonafide career of it. But there’s a first time for everything. So, if you’re a rookie, here are a few crucial tips (organized alphabetically) to keep in mind.

Be mindful of flipping. In other words, consider how quickly you buy and sell your investment properties. The Canada Revenue Agency (CRA) could view such activity as business income, which means you’ll be paying tax on ANY profit investment yields.

First-hand experience counts. Consider seeking out a realtor who personally invests in real estate on their own part. No better way to navigate what could otherwise be a potential minefield.

Know you can walk away. If the deal isn’t right, you aren’t bound to it… no matter how much you might have potentially invested in it, personally or financially.

Maintain proper income and expense records. For goodness sake, do NOT mix these in with your personal finances. Because you’ll have to file a year-end tax return and the CRA will be all over every cent, and the CRA is neither forgetful nor forgiving.

Pay the mortgage broker a visit. Whether the bank or an independent, they’ll advise a responsible amount to borrow.

Positive cash flow! Keep this top of mind, because if you’re investing in a rental property, then the rent you get from your tenants needs to cover your monthly mortgage payments, maintenance fees and utilities, annual property taxes, etc.

See an accountant—or lawyer. It’s always worth exploring options in regards to how you plan to take ownership of the investment property. After all, benefits exist in taking title in the name of a limited company. That being said, you’d be required to pony up about a thousand bucks a year in incorporation fees, plus need to file separate tax return.

Stay in it for the long-term. It is better you buy an investment property for an extended period, rent it out, then utilize your positive cash flow to scale back the amount of your owing mortgage, and therefore creating equity in your investment property.

Tagged with: Accountant , Ask A Realtor , Buyers , Buying , Cause vs. Effect , Commonly Asked Questions , Downtown , Economics , First Time Buyer , Flipping , History , Home ownership , House Flipping , Housing Market , Income Property , Investment Property , Investments , Lawyer , Market Bubble , Mortgage Broker , Mortgages , New In Town , Ontario Government , Preconstruction , Property , Property Flipping , PSR , PSR Brokerage , PSR Central West , Real Estate , Real Estate Agents , Real Estate Bubble , Real Estate Market , Realtor Life , Resale , Rules , Selling , Suppy vs. Demand , Taxation , Toronto , Toronto Condos , Toronto Homes , Toronto Life , Toronto Real Estate , Toronto Real Estate Board , Toronto Real Estate Market , TREB , Where to Live

The PSR Market Report | March 2018

The effects of the Fair Housing Plan, the new OSFI-mandated stress test and generally higher borrowing costs have prompted some buyers to put their purchasing decision on hold, and home sales are expected to be up relative to 2017 in the second half of this year.

While the change in market conditions certainly played a role, the dip in the average selling price was also compositional in nature. Detached home sales, which generally represent the highest price points in a given area, declined much more than other home types. In addition, the share of high-end detached homes selling for over $2 million in March 2018 was half of what was reported in March 2017, further impacting the average selling price.

“Right now, when we are comparing home prices, we are comparing two starkly different periods of time: last year, when we had less than a month of inventory versus this year with inventory levels ranging between two and three months. It makes sense that we haven’t seen prices climb back to last year’s peak. However, in the second half of the year, expect to see the annual rate of price growth improve compared to Q1, as sales increase relative to the below-average level of listings,” said Jason Mercer, TREB’s Director of Market Analysis.

Here is our March 2018 Market Report, a quick resale housing market analysis with key stats for Toronto + the GTA ?.

>> Don’t forget to check out the complete monthly Toronto + GTA Resale Housing Market Figures report released by TREB for a comprehensive breakdown of all statistics recapped in our monthly market review.

Tagged with: Average Home Price , For Sale , For Sale Toronto , Home ownership , Housing Market , Just Sold , Luxury Real Estate , March 2018 , March Housing Market , March Housing Report , Market Analysis , Market Figures , Market Report , Ontario Fair Housing Plan , PSR , PSR Agents , PSR Brokerage , PSR Central West , PSR Market Report , Real Estate , Real Estate Agents , Real Estate Blog , Real Estate Market , Realtor Life , Resale , Spring Market , Statistics , Toronto Condos , Toronto Homes , Toronto Housing Market , Toronto Listings , Toronto Real Estate Blog , Toronto Real Estate Board , Toronto Real Estate Market , Toronto Realtor , TREB , Winter Housing Market , Winter Market

Are mortgage terms more important than rate?

Why are the terms more important than rate when it comes to a mortgage?

Simple. Seven out of 10 Canadians break their mortgages prior to the renewal
date.
Taking the wrong mortgage when you could have qualified for a better one- is a
costly mistake.

The biggest mistake anyone can make is they don’t think they need to make a
change, or they’re the three-in 10 that won’t break a mortgage.

For those people I give you a short list of potential reasons why you might need
to get out of a mortgage early.

1. Sale and purchase – maybe you get an offer you can’t refuse, either work or
real estate related, maybe the zoning has changed, your neighbours or strata are
unmanageable or maybe you want to grow your family
2. Take Equity out – get renovations done, help family members or buy another
investment, pay CRA, or assessments on property
3. Pay off debt – maybe you are like the over 60% of Canadians living paycheque
to paycheque and paying over 5% on credit cards or lines of credit. There are
much more savings in interest and cash flow for you utilizing your equity.
4. Relationship changes – moving in together, divorce is at a 50% rate these
days, kids (needing more space or need to move in together).
5. Health or life challenges – huge illness, unemployment or death of someone
on title can be a burden enough.
6. Removing someone from title – a co-signer (3/10 homebuyers get help from a
family member) or an ex-spouse.
7. Save money with a lower rate – the market is always changing. It may make
sense to break early and go with a different term as the market changes.
8. Pay it off – maybe you won the lottery or got an inheritance.

Some of the above is not avoidable, but the one thing you totally can control is
who you align yourself with when shopping for a mortgage. A Dominion Lending
Centres mortgage broker will always be looking at all the factors involved in a
mortgage without bias to help you make an educated decision on what best suits
you.

Angela Calla

Call Shoren Konstantin directly at: 416-218-0512. You will be pleasantly surprised!

Subject to Financing- A Must!

With most people who are new to real estate and looking for their first home (or
possibly second), one of the most significant times is when your offer to buy is
accepted by a seller. Unfortunately, that moment is quickly followed by stress,
as not many people know what comes next- securing financing. 99% of the time a
realtor will ask you if you have been qualified by a bank or a mortgage broker
before they write an offer on your behalf. What should be told to you, the
client, by the realtor and your mortgage broker is that you need to have a
subject to financing condition in your offer.

In order for someone to receive a mortgage from a lender, they need to meet the
lender’s (and some times the insurer’s) conditions. Usually, these all revolve
around a borrower’s down payment money, their income as well as employment, and
the property they are making an offer on. If you make an offer on a home and it
is accepted, but for example the lender doesn’t like the property because the
strata board doesn’t have enough money in their contingency fund to fix the
leaking roof in the next 12 months, they could turn down your application and
not lend you money.

If you don’t have the money, you don’t get the home. That is why you have a
subject to financing condition, so if for any reason, you can’t meet the
lender’s requirements with your income, down payment, or if the property is
unacceptable to them or the insurer, you can cancel your offer without any
hassle or loss of deposit.

What happens if you make a subject free offer? If you make an offer on a home
and it doesn’t have a subject to financing condition in it, that house is now
yours once the offer is accepted. Your deposit is no longer yours, and you have
to come up with the remaining money. If you cannot and are unable to complete
the purchase, the seller may file a lawsuit against you for damages as they have
now taken their home off the market potentially losing out on the ability to
sell their home to someone else while they waited for you to get financing.

Always, always, always have a condition in your offer that states subject to
financing and allow yourself 3 to 5 business days. If you go in without that
fail safe and it turns out you really need it, you will potentially be on the
hook and if the seller wishes, he or she can sue you for any potential losses.

Ryan Oake

Subject to financing is a must! If you have any questions, contact Shoren Konstantin at 416-218-0080 directly.

GTA REALTORS® Release March Stats

The MLS Home Price Index Composite Benchmark was down by 1.5 percent on a year-over-year basis for the TREB market area as a whole. The overall average selling price was down by 14.3 per cent compared to March 2017.

While the change in market conditions certainly played a role, the dip in the average selling price was also compositional in nature. Detached home sales, which generally represent the highest price points in a given area, declined much more than other home types. In addition, the share of high-end detached homes selling for over $2 million in March 2018 was half of what was reported in March 2017, further impacting the average selling price.

“Right now, when we are comparing home prices, we are comparing two starkly different periods of time: last year, when we had less than a month of inventory versus this year with inventory levels ranging between two and three months. It makes sense that we haven’t seen prices climb back to last year’s peak. However, in the second half of the year, expect to see the annual rate of price growth improve compared to Q1, as sales increase relative to the below-average level of listings,” said Jason Mercer, TREB’s Director of Market Analysis.

8 Things You Can Do To Get The Best Renewal

With 47 per cent of homeowners scheduled to renew their mortgages this year,
2018 is a year of change for lots of Canadians.
Here are the top 8 things you can do to get the best renewal:

1. Pull out your mortgage renewal now, and start early. When you are proactive
instead of reactive you can see if there is anything on your credit score or
lifestyle that we can modify to ensure you are positioned for the best renewal.
You are only in a position to do this when you start early- in the last year of
your mortgage you will have the most amount of options available. For example,
there can be an inaccuracy in your credit report or you may be considering an
income/job change that would impact your options. We can look at timing
accordingly for you.

2. Do not just sign the renewal offered. Lenders can change the terms of your
mortgage, and the renewal you are signing can cost you up to four per cent of
your equity if you are with the wrong lender for your current life stage.

3. Most people think the best rate is the best renewal – WRONG. The terms are
most important and with all terms moving or selling is the only reason most
people think they would ever break a mortgage- THIS is simply not the case, a
change in the interest rate market, divorce, health, job change, investment
opportunity and many other reasons would contribute to a future modification
being beneficial for a consumer.

4. Take into consideration lender history. The lender can have a higher prime
then anyone because they know the cost to leave outweighs staying the course.
The lenders are very smart with their calculated risks- and this is not
something they have an obligation to disclose.

5. Remember your lender has a bias – their job is to handcuff you so they can
make as much profit off you as possible- don’t be a victim.

6. Do not shop each lender on your own, it takes points off of your credit
score. All lenders have different rates based on your score and you want to
position yourself to get the best. By using a mortgage professional, they can
shop multiple lenders protecting your credit using only one application, while
the rate variation can be on average a half a percent!

7. Don’t get sucked into the online rate shopping- any monkey can post a rate
online and you can drive yourself crazy looking at something that does not
exists. In today’s complex mortgage market there are significantly different
rates based on – insured mortgage vs uninsured mortgage, switch vs refinance,
purchase or renewal, principal residence vs rental, salary or self-employed, 600
credit score or 700 credit score, amortization of 20 years to 30 years, type of
property condo vs house, and leased land or freehold. The variations can mean a
difference in thousands of dollars. Like diagnosing a medical condition, you
can’t go online, you do have to put in the appropriate application and
supporting documents to verify which options are available to you that will
result in the lowest cost in borrowing.

8. Remember your mortgage is the largest debt and investment most of us have,
when you contact an independent mortgage professional, we are going to invest
all the work and expertise and advise you in your best interest regardless if we
get your business. We may after our review advise you to stick with your
existing lender, or make another recommendation for you. We are only here to
enhance your finances and save you money, and there is no cost for our service.

Angela Calla

Call Shoren at 416-218-0080. You will be surprisingly pleased!

Mortgage Broker Value

Not surprisingly, borrowers often default to their own Banker. And why not? It’s
an established and comfortable relationship. Perhaps it’s viewed as the path of
least resistance. But is it the right lender for the borrower’s current specific
needs? Perhaps not.

More sophisticated borrowers may be of a size or scale that they have their own
internal resources in finance, quite capable of securing the required financing.
They are likely only in the market infrequently however, and almost certainly
not fully knowledgeable as to all of the financing sources available.

Aren’t all Lenders pretty much the same?
Borrower’s may think that all institutional lenders are pretty much the same.
Offering comparable rates, and standardized borrowing terms. This is rarely the
case. Lender’s often prefer one asset class over another. They may have a
particular need for one type of loan. A specific length of loan term may be
desirable, for funds matching purposes. Real Estate risk is a fact for real
estate lenders. How they mitigate this risk differs however. It may be stress
testing interest rates during the approval process. Sophisticated risk pricing
models may be used, having regard to previous loss experiences. The lender may
rely significantly on collateral value, or guarantees. The conditions precedent
to funding will often differ from lender to lender.

A real world example
I had the pleasure last year in advising a client who had 3 sizable real estate
assets, in 3 quite distinct asset classes. The borrower’s loan amount
requirements were significant, however they were flexible on loan structure.
Accordingly, I sought out competitive, but differing deal structures. My goal
was to provide a competitive array of options. A number of “A” class lenders
were approached, several/most of whom this particular borrower had no previous
experience with. I shortened the list to 5 lenders, and received Term Sheets
from each.

Each Offer was competitive on a stand alone basis, but they differed quite
substantially, in the following ways:
Loans were either stand alone, or blanket loans, or some combination.
Length of terms offered, differed by asset class.
There was as much as a 75 bps rate difference, from highest to lowest Offer.
The amortization period depending upon asset class, ranged from 15 to 25
years.
Loan amounts on individual assets differed as much as 20%.
Third party reporting requirements differed between lenders.
There were a combination of fixed vs. floating rate loan structures.
Recourse was limited by some lenders, on select assets, or waived entirely,
upon a higher rate structure.

Leverage Your Knowledge
These variances are striking, yet each of the 5 lenders were considering the
precise same asset, at the same time, with common supporting information from
which to base their analysis. How was the borrower to know which Offer to
exercise? As a Broker, I can add value by helping the borrower to consider both
their immediate and longer term strategic requirements, in the context of their
overall real estate portfolio needs. This was precisely how this borrower landed
on the most appropriate Offer for their particular circumstances. In this
particular case we presented different, yet competitive, and uniquely structured
options for the borrower’s consideration.

Allan Jensen

Consider Shoren Konstantin – Mortgage Broker when next in the market for
financing. Leveraging a Broker’s knowledge is a tremendous value proposition.

Breaking a mortgage – can you do it?

Do you have a mortgage? So do I! Looks like we have something in common. Did you
know that 6 out of 10 consumers break their mortgage 38 months into a 5-year
term? That means that 60% of consumers break a 5-year term mortgage well before
it’s due…but do you also know what the implications are of this? Let’s take a
look!

People need to break a mortgage for a variety of reasons. Some of the most
common include:

· Sale and purchase of a new home *without a portable mortgage
· To take equity out/refinance
· Relationship changes (ex. Divorce)
· Health challenges or life circumstances are altered

And a whole other variety of reasons. So what happens if you have one of the
above reasons, or one of your own occur and you have to break your mortgage?
Here is an example of what would happen:

Jane and John Smith have lived in their home for 2 years now. When they bought
the home, they recognized that it would need some major renovations down the
road, but they loved the location and the layout of the home. They purchased it
for $300,000 and have 3 years left but would like to access some of the equity
in their home and refinance the mortgage to afford some of the bigger home
renovations. This refinancing would be with 3 years left on their current
mortgage. So, what are Jane and John looking at for cost? There are two methods
that are used to calculate the penalty:

POSTED RATE METHOD (used by major banks and some credit unions)
With this method, the Bank of Canada 5 year posted rate is used to calculate
the penalty for Jane and John. Under this method, let’s assume that they were
given a 2% discount at their bank thus giving us these numbers:

Bank of Canada Posted Rate for 5-year term: 5.14%
Bank Discount given: 2% (estimated amount given*)
Contract Rate: 3.14%

Exiting at the 2-year mark leaves 3 years left. For a 3-year term, the lenders
posted rate. 3 year posted rate=3.44% less your discount of 2% gives you 1.44%
From there, the interest rate differential is calculated.

Contract Rate: 3.14%
LESS 3-year term rate MINUS discount given: 1.45%
IRD Difference = 1.7%
MULTIPLE that by 3 years (term remaining)
5.07% of your mortgage balance remaining. = 5.1%

For the Smith’s $300,000 mortgage, that gives them a penalty of $15,300. YIKES!

Now, Jane and John were smart though and used their Dominion Lending Centres
broker to get their mortgage. Because of this, a different method is used.

PUBLISHED RATE METHOD (used by broker lenders and most credit unions)

This method uses the lender published rates, which are generally much more in
tune with what you will see on lender websites (and are generally much more
reasonable). Here is the breakdown using this method:

Rate when you initially signed: 3.24%
Published Rate: 3.54%
Time left on contract: 3 years

To calculate the IRD on the remaining term left in the mortgage, the broker
would do as follows:

Rate when you initially signed: 3.24%
LESS Published Rate: 3.54%
=0.30% IRD
MULTIPLE that by 3 years (term remaining)
0.90% of your mortgage balance

That would mean that the Smith’s would have a penalty of $2,700 on their
$300,000 mortgage

A much more favourable and workable outcome! Keep in mind that with the above
example is one that works only if the borrower has:
· Good credit
· Documented income
· Normal residential type property
· Fixed rate mortgage

For Variable rates mortgages, generally the penalty will be 3 months interest
(no IRD applies).

If you find yourself in one of the scenarios that we listed at the start of this
blog, or if you just need to get out of your mortgage early, be smart like Jane
and John—review your options with a DLC Broker! In the example above, it saved
them $12,600 to work with a broker! It really does pay to have a Mortgage Broker
working for you.

Geoff Lee

We know going through any financing approval process can be stressful. While it will never be stress free, there are some steps you and your mortgage broker can take to make it less of a nail-biter.

You should never assume you’re going to get financing because you make a lot of money, or if you’ve had numerous mortgages over the years.

A good broker will ask for all the necessary documents up front, like your T4s and recent pay stub. The reason why you want to provide your mortgage broker with all the necessary documents in the pre-approval stage is so there won’t be any surprises once your application hits the lender. This will also provide a game plan for what you’ll need to do if there are any speedbumps in the application, while also utilizing your time and the realtor’s and broker’s time so they know what they’re working with and are able to finance. Getting all the documents early also indicates to the broker and realtor you’re serious and makes the pre-approval more firm.

Where most brokers and lenders go wrong is they do a pre-approval but fail to collect documents. All of the sudden, a live offer comes in, but it doesn’t work.

If you get “pre-approved” without a request for documents, it’s basically worthless. It’s also good to note, no lender will give you a firm approval until you get an offer that is accepted.

So, you’ve now found the home you want and have an accepted offer. You’re moving from pre-approval to actual approval of financing but you’re not out of the clear yet. Any final approval is pending the lender confirming the details. Just because you’re pre-approved, doesn’t mean you’ll eventually be approved for any property you want. In some cases, you could have all the right income and credit on your side, but the property is a mess and you get declined. There’s a lot more that goes into to being approved than just income. Items like strata documents and property details are all part of the ingredients in your final approval sauce.

Even with all the documents, you’ll likely be advised by your mortgage broker, they’re only good for 30 days and you could be asked to update them for final approval when the time comes. But unless you’ve lost your job, bought a new expensive boat or run into some type of financial difficulty, updating should be a lot less stressful.

And it’s better to be stressed out about financing at the beginning of the home-buying process, rather then once you’ve got your heart set on a home you might not be approved to buy.

Angela Calla

DISCLAIMER: This post is written for buyers, in other words people who do not currently own a tenanted property.
This post is not suggesting in any way that the rights of an existing tenant be infringed upon

Purchasing a residential property?

Two words that matter this Spring; Vacant Possession

Your contract had best contain a ‘Vacant Possession’ clause.

Why?

Mortgage lenders will not concern themselves with your best intentions; it is not about what will be – it is purely about what is.

And if the property is tenanted at the time of possession, then you are effectively applying for a rental mortgage. This means a minimum 20% down payment, higher interest rates, and far more stringent qualifying criteria.

‘But wait, we only have 5% down and we plan to give notice and move in 60 days after we take possession’

There is virtually no lender that will approve this under any circumstances, and this has to do with the recent changes made by our federal government. The lenders want to trust you, the lender wants to help you, the lender wants to approve you, but the new government guidelines eliminate lenders’ ability to be flexible. Lenders must answer to Big Brother, and Big Brother is very rigid.

Vacant Possession – demand it.

‘But wait, we’re buying the property as a rental anyways, so it’s a good thing that it already has a tenant… right?’

No, an existing tenant is rarely a good thing.

How is their lease written?
Does it protect you?
Are rents reflective of current market rents?
Is there a provision for annual rent increases?
Your costs will be increasing every year, cover yourself.
What is your duty for notice to evict the tenant?
Why is the seller refusing to give simple notice?

Don’t risk inheriting the seller’s errors and/or headaches.

Whether your new purchase is meant to be owner occupied, or an investment property, demand vacant possession or walk away.

It’s been quite the year for the Canadian real estate market, with industry observers worrying about a housing bubble one day, and excess regulation the next.

But according to one poll, Canadians are getting optimistic about real estate heading into the new year.

The Bloomberg and Nanos Research Canadian Confidence Index has found that optimism in the national real estate market has surged in the last month.

The index — a weekly pool of Canadian consumer confidence — saw a jump of 59.46 from 58.83 this week, after a month of strong numbers well above the 2017 average of 58.41.

“Over the past four weeks positive views on the future value of real estate have increased,” Nanos Research Group Chairman Nik Nanos said in a statement.

The news doesn’t come as a surprise to Toronto-based real estate broker Roy Bhandari.

“When you look at the preconstruction condo market, in particular, it’s been a strong year,” Bhandari, who operates the site TalkCondo, tells BuzzBuzzNews. “Even after the introduction of Ontario’s Fair Housing Plan in April, there was still solid investment in that space.”

While the Canada Mortgage and Housing Corporation’s Fall 2017 Housing Market Outlook Report found that low-rise starts will decline in 2018 from 75,900 to between 66,200 to 68,400, condo starts are expected to surge to between 124,400 and 136,200 units.

Bhandari says that, when it comes to investment in the real estate market, Canadians are likely thinking long term, and that the fundamentals of markets like Toronto and Vancouver are strong.

“When you look at markets like Toronto, there’s still a shortage of supply relative to the demand,” Bhandari says. “So I think you’ll continue to see confidence in that market from Canadians heading into the new year.”

What about the impact of new mortgage rules? As of January 1, a stress test will require all uninsured mortgage borrowers to qualify against the Bank of Canada’s five-year benchmark rate, or at their contract mortgage rate plus an additional 2 per cent.

The revisions are intended to ensure that uninsured borrowers can withstand higher interest rates. The overnight rate — which influences mortgage and sat at a historically low 0.5 per cent earlier this year — has been raised 50 basis points by the Bank of Canada since July, with a third hike predicted in 2018.

Bhandari says that, in a market as in demand as Toronto, the new rules won’t slow sales. Instead, buyers will look at the more affordable options in the market.

Already, condo prices have spiked in the GTA. According to the Toronto Real Estate Board’s Q3 market figures, the average price of a Toronto condo sits at $510,206, up 22.7 per cent from $415,894 a year earlier.

“I think you’re going to be seeing a lot of condo sales in the new year,” says Bhandari. “As people are priced out of low rise, they’ll still be looking to buy. So confidence in the condo market should be very high heading into 2018.”