Connect with us

Real eState

Sweet-spot mortgage terms and 2025 predictions: This week's top real estate stories – The Globe and Mail



Open this photo in gallery:

Home of the Week – 77 Forest Hill Rd.Rob Holowka/Handout

Here are The Globe and Mail’s top housing and real estate stories this week, with the lowest mortgage rates available in Canada today, commentary from our mortgage expert and one home worth a look.

Take The Globe’s business and investing news quiz

Mortgage rates today range from bad to horrible, but there is a sweet spot

The cheapest mortgage rates today are for a fixed term of five years, but who wants to lock in for five years when rates are thought to be peaking, asks Rob Carrick. One-year mortgages make sense strategically because renewing in 12 months could let you tap into those lower rates, but the premium you’ll pay for having that opportunity is huge. Is there a sweet spot compromise between the two?


Why some mortgage renewal payments could rise into 2025 even with rates projected to drop

Desjardins’s models currently forecast an increase in variable-rate payments for people renewing in 2025-26, writes Robert McLister in his weekly column. That figure is based on the expectation that the Bank of Canada will drop interest rates by 2.75 percentage points by 2025.

But why are variable-rate payments set to increase so much if interest rates are projected to drop? The reason is that many payment hikes could be a result of borrowers paying off less principal to keep payments fixed in today’s high-interest climate.

This week’s lowest available mortgage rates

Canada’s leading nationally advertised rates barely moved in the last week. That’s a welcome development after the average Canadian mortgage rate surged 74 basis points in the past two months, writes McLister.

Is Canada’s approach to housing bad for our productivity?

Canada’s poor labour productivity is in the news these days, but there are few better places to start than with the country’s approach to housing, writes John Rapley in a column this week. When housing is a great investment, it can be a symptom of a sick economy, he writes. Additionally, everything from commute times to traffic or public transit has an impact on it.

Home of the week: A Toronto Forest Hill home

  • Home of the Week – 77 Forest Hill Rd.Ranjith kumar/Handout

    1 of 13

77 Forest Hill Rd., Toronto

Inside this 4,660-square-foot home, the living room has an oak floor, a wood-burning fireplace and a bay window overlooking the front garden. The formal dining room has a fireplace, oak floor and French doors leading to the conservatory.

On the second floor, a library has wall-to-wall bookshelves and cabinets, a recessed area for a desk and a fireplace with a surround of arts and crafts tiles. The house has four bedrooms, a recreation room, a sauna and a large laundry room.

What do you think is the asking price for this house?

a. $4,595,000

b. $7,295,000

c. $8,295,000

d. $10,295,000

a. The asking price is $7,295,000.

Adblock test (Why?)


Source link

Continue Reading

Real eState

Donald Trump's real estate fraud trial begins in New York: What you missed. – USA TODAY



We use cookies and data to

  • Deliver and maintain Google services
  • Track outages and protect against spam, fraud, and abuse
  • Measure audience engagement and site statistics to understand how our services are used and enhance the quality of those services

If you choose to “Accept all,” we will also use cookies and data to

  • Develop and improve new services
  • Deliver and measure the effectiveness of ads
  • Show personalized content, depending on your settings
  • Show personalized ads, depending on your settings

If you choose to “Reject all,” we will not use cookies for these additional purposes.


Non-personalized content is influenced by things like the content you’re currently viewing, activity in your active Search session, and your location. Non-personalized ads are influenced by the content you’re currently viewing and your general location. Personalized content and ads can also include more relevant results, recommendations, and tailored ads based on past activity from this browser, like previous Google searches. We also use cookies and data to tailor the experience to be age-appropriate, if relevant.

Select “More options” to see additional information, including details about managing your privacy settings. You can also visit at any time.

Adblock test (Why?)


Source link

Continue Reading

Real eState

Hong Kong shares drop 3%, dragged down by real estate and energy



Hong Kong’s Hang Seng Index dropped more than 3% Tuesday, dragged by its real estate and energy sectors.

The benchmark index’s loss of over 500 points is a significant decline, Everbright Securities’ Kenny Ng told CNBC via e-mail.

“On one hand, this was driven by profit-taking following a 400-point rise last Friday,” the securities strategist explained. “Additionally, the US dollar index has remained relatively strong, exerting downward pressure on the Hong Kong stock market.”

The index was last trading down 3.16% after coming back from a holiday on Monday.


Ng highlighted how property stocks were among the largest decliners Tuesday, given the high-interest environment.

hide content
Hang Seng Index
*Data is delayed | Exchange | HKD
17,305.40quote price arrow down-504.26 (-2.83%)

Hong Kong listed property stocks were firmly in the red. Country Garden Holdings plunged 7.67%, leading losses in the sector, while Longfor Group Holdings lost 4.82%. New World Development shed 6.69%, and Henderson Land Development traded 6.15% lower.

“Coupled with the relatively sluggish mainland Chinese real estate market, it is expected that this sector will continue to face downward pressure in the short term,” Ng added.

China’s property market has struggled with faltering consumer confidence, as property giants Evergrande and Country Garden were mired in debt problems.

Separately, beleaguered Chinese property giant Evergrande resumed trading in Hong Kong. Shares have been volatile since resuming trade in late August following a 17-month suspension. The stock rose 22% in early trade. The firm’s EV unit also halted trading Tuesday.

Energy stocks also posted losses, with PetroChina losing 5.93% and China Petroleum & Chemical Corp dipping 5.14%.


Source link

Continue Reading

Real eState

Toronto real estate class-action could affect billions of dollars in commissions



A Federal Court judge on Sept. 25 allowed a class-action lawsuit alleging home sellers in the Toronto area have been forced to pay artificially inflated commissions for years. The lawsuit alleges major brokers and real estate organizations in Toronto implemented rules that essentially stifled competition for buyer brokerage services, leading to higher prices. But what exactly is buyer brokerage and what is its role in the potentially landmark lawsuit? The Financial Post’s Shantaé Campbell explains.

What does ‘buyer brokerage’ mean?

Buyer brokerage refers to a real estate agreement where a broker represents the buyer in a property transaction, in contrast to the traditional setup in which brokers primarily represented sellers. The shift toward buyer representation began in the 1990s in Canada, leading to the development of buyer agency agreements, allowing buyers to have exclusive representation in the homebuying process.


This transformation prompted the creation of specific legislations and regulations by provincial governments and real estate regulatory bodies in Canada, such as the Real Estate Council of Ontario (RECO), the Canadian Real Estate Association (CREA) and the Toronto Regional Real Estate Board (TRREB).


These rules and protocols serve to formalize and oversee buyer brokerage relationships by instituting a framework governing duties, responsibilities, disclosure, consent and confidentiality.


Where do commissions come in?

Nationwide, commission structures for real estate agents and brokerages typically involve a percentage-based commission derived from a home’s sale price, but the rates vary.

In Toronto, the prevalent rate is five per cent on the entire sale amount and it is customary for the seller to pay the commission on a property sale, which is subsequently divided between the representatives of the seller and the buyer.

For example, if a home sells for $1 million with a commission of five per cent, the total commission amounts to $50,000. This sum, paid by the seller, is generally shared equally between the seller’s and buyer’s agents, each receiving $25,000. However, the precise division can fluctuate, being contingent on the agreement established between the seller and their agent.


Why are commissions split this way?

According to CREA, the organization does not mandate a specific commission split or dictate how commission should be allocated between the listing and buyers’ realtors.


Rule in CREA’s by-laws and rules states: “The listing realtor member agrees to pay to the co-operating (i.e. buyer’s) realtor member compensation for the cooperative selling of the property. An offer of compensation of zero is not acceptable.”


In an email, RECO said commission rates are not fixed. “Commission rates are not set or approved by the Real Estate Council of Ontario, government authorities, real estate associations or real estate boards,” it said.

While five per cent is considered the “standard” commission in Ontario, the origins of that figure are unclear.


The splitting of commission between the buyer’s and seller’s agents is nonetheless a well-established practice in real estate designed to promote cooperation, balance and fairness within the industry. The idea is that a shared commission incentivizes buyer agents to introduce more potential buyers to the home, leading to a faster and possibly more profitable sale.


Furthermore, the commission model serves to reduce potential conflicts of interest by eliminating the buyer’s direct financial obligation to their agent, preventing undue pressure on buyers and ensuring accessibility to agent services.


Why is this a problem?

The lawsuit lodged by plaintiff Mark Sunderland against defendants TRREB, CREA and various real estate brokerages contends that an arrangement known as the ‘buyer brokerage commission rule’ has been in effect since at least March 2010.

Sunderland’s lawsuit posits that this arrangement has impeded market competition, compelling sellers to incur costs they would not otherwise bear in the absence of such an agreement. Furthermore, it contends that this setup precludes the negotiation of price and quality of the service.

In a study sponsored by Kalloghlian Myers LLP — the legal firm that submitted Sunderland’s lawsuit — expert witness Dr. Panle Jia Barwick, a specialist in the economic structure of real estate commissions, argues that the “buyer brokerage commission rule” incentivizes buyer brokerages to direct buyers away from properties where sellers offer below-average commissions.


Barwick says that even without formal policies mandating uniform rates, brokers, reliant on peer co-operation to draw buyers to properties, can help uphold a standard commission rate locally, especially for buyers’ brokers.


Michael G. Osborne, an attorney who specializes in antitrust and competition law at Cozen O’Connor in Toronto, says that from a competition point of view, there is a potential issue pertaining to the mechanism wherein brokerages must become members of CREA and TRREB to operate. Essentially, though Broker A and Broker B have no direct written agreement between them, by aligning with an association’s rules they can be seen by the Competition Bureau to be operating under an indirect “hub and spoke” agreement.

However, this issue has not yet been litigated in Canada and isn’t addressed in the most-recent decision.


How much is at stake in the lawsuit?

Kalloghlian Myers LLP is seeking compensation for anyone who has sold a home since 2010, though they have not yet put an overall dollar value on what they are seeking.

If every transaction covered by TRREB is affected, the sums involved could be substantial.

According to annual sales and average price figures on TRREB’s website, more than $880 billion in residential real estate changed hands between 2010 and 2022. Five per cent commission on those sales would amount to $44 billion, with as much as half going to buyer brokerages.

Can home sellers participate in the lawsuit?

In a class-action lawsuit, individuals who are similarly affected are generally automatically included, meaning there’s usually no need to actively “get in on” the lawsuit. If the ruling is in favour of the class, affected individuals will be notified about their entitlements. The duration of such lawsuits can vary widely, depending on the complexities involved and the legal pathways taken.

The next step will likely involve an appeal from the defendants against the decision to proceed with the lawsuit, followed by a motion for class-action certification. The defendants have 30 days to appeal the verdict. Absent an appeal, the court will determine whether the case qualifies for class action certification. Succeeding here would lead to a trial to determine whether the brokerage agreement constituted an illicit conspiracy.


Should compensation be awarded, the distribution could take several years.



Source link

Continue Reading