Crunching the Numbers: Why the Bank of Canada Must Lower Interest Rates by June

Steps to Move into a New home in Ontario as a Tenant

Steps to Move into a New Home in Ontario as a Tenant

Determine Your Budget:
- Use the income-to-rent ratio to ensure affordability. Typically, rent should not exceed 30-35% of your gross monthly income.
Search for a Rental Property: (Make sure to give your previous landlord a 60 day notice)
- Reach out to a real estate agent, as their services are typically free for tenants—the landlord covers the commission in the majority of cases (about 99% of the time). Provide the necessary information to your realtor so they can accurately assess your rental affordability.
- Visit potential properties to ensure they meet your needs.
Prepare Required Documents:
- Gather the necessary paperwork (see below).
Submit a Rental Application:
- Complete the landlord's application form with accurate details.
- Submit all required supporting documents.
Background and Credit Check:
- Landlords may request your consent for a background and credit check. Ensure your credit score is healthy (generally 650+ is preferred).
Negotiate Lease Terms:
- Discuss lease terms, rent amount, payment methods, and any additional conditions (e.g., parking or utilities).
Sign the Lease Agreement:
- Carefully review the Residential Tenancy Agreement (Standard Lease) to understand your rights and responsibilities.
- Pay the first and last month’s rent if required.
Prepare for Move-In:
- Arrange for moving services, utility setup, and address changes.
- Conduct a move-in inspection to document the property's condition.

Documents Required to Lease a Home in Ontario

Proof of Identity:
- Government-issued photo ID (e.g., driver’s license, passport, or PR card).
Proof of Income:
- Recent pay stubs (2-3 months).
- Employment letter or contract.
- Tax returns (e.g., T4 slips) or bank statements if self-employed.
Credit Report:
- A full credit report from Equifax, TransUnion, or Borrowell.
References:
- Contact information for previous landlords or employers.
Rental History:
- Information about previous rental experiences (if applicable).
Additional Documents:
- If applicable, guarantor details and their financial documents.

Income-to-Rent Ratio for Affordability

A common rule is to ensure rent does not exceed 30-35% of your gross monthly income. For example:
- If your gross monthly income is $8,000, your rent should ideally be $2,400 to $2,800.
Consider additional costs such as utilities, parking, and renter's insurance when assessing affordability.

RAV SARAI
(647) 637 0506
[email protected]
Search for your next home: www.mylocalrealtors.ca
Click here to find out when your neighbours are selling: https://mylocalrealtors.ca/Sellers/StreetMatch
Click here to find out how much your home is worth: https://mylocalrealtors.ca/Sellers/HomeWorth

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Current State of Canadian Economy Calls for More Cuts!

BOC Canada goes for another cut, we are now at 3 straight cuts after 10 increases. Do you think this will swing the market? Let us first take a long at some numbers before we look at what to look forward to in the coming months.

The current real estate market in the Greater Toronto Area (GTA) is experiencing a period of relative stability, with notable trends indicating a buyer's market. As of August 2024, the average selling price in the GTA was $1,097,300, reflecting a 5% decrease year-over-year. The market remains well-supplied, with new listings up by 18.5% compared to the same period last year, while sales have increased by 3.3% year-over-year. This increase in inventory has given buyers more choices and negotiating power, contributing to the overall decline in prices.

In the City of Toronto, the average home price was $1,087,436, which is up 2% year-over-year but down 7.4% compared to the previous month. This contrast highlights the variability within different parts of the GTA. For example, areas like Brampton and Mississauga have seen declines in average prices by 4% and 1.4% year-over-year, respectively. The condo market, in particular, continues to face challenges with a glut of inventory leading to price drops and slower sales.

Important Information for anyone looking to Buy or Sell:

Market conditions are expected to tighten later in 2024 as interest rates potentially decrease further, encouraging more buyers to enter the market. However, for now, the market offers considerable opportunities for buyers, particularly those looking to purchase at slightly lower price points due to the current oversupply.

Overall, while the GTA housing market remains sluggish, the anticipated reduction in borrowing costs could catalyze a more active market, potentially leading to modest price growth later in the year (WOWA, Zolo, TRREB ,nesto.ca).

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When Will Home Prices Be Affordable Again?

Market Report: When Will Home Prices Be Affordable Again?

(Picture source: Realtor.ca)

Current Market Overview

The real estate market is currently experiencing significant shifts, particularly in the condo market. An influx of inventory is hitting the market, creating unique opportunities for buyers and investors alike.

Freehold Homes Market

In contrast, the freehold home market, including detached, semi-detached, and townhouses, continues to show resilience. While there is also a notable increase in inventory in this segment, demand remains robust. Freehold homes are still selling relatively well, albeit with some price adjustments to reflect the increased supply. And generally freehold homes have traditionally been a more stable investment, and their appeal persists even in fluctuating market conditions.

Condo Market Trends

The condo market in the GTA is facing a downward slide. Increased inventory levels have led to a more competitive market, driving prices down. This surge in available condos is largely due to multiple new developments completing their construction phases, adding thousands of new units to the market.

With the market potentially at the bottom of the business cycle making condo prices lower than they've been in a long time. This is a great chance for buyers and investors to find good deals. Usually, when interest rates drop, the condo market picks up again. Those who buy now could see their investment grow and even earn some cash flow in the future. (See Business Cycle)

Future Projections

As the market stabilizes, it's expected that the demand will gradually pick up. The substantial inventory levels will start to decline as more buyers enter the market, enticed by lower prices and favorable financing conditions. This dynamic is anticipated to lead to gradual price increases, interspersed with minor dips, but overall trending upwards over time.

The combination of increased inventory and lower prices presents a unique window for buyers and investors. Those who act now may benefit from lower entry prices and the potential for significant appreciation as the market recovers with lower interest rates.

Conclusion

The current state of the real estate market presents both challenges and opportunities. While the condo market is experiencing a downturn, the increased inventory makes it an attractive time for buyers. On the other hand, freehold homes continue to sell, reflecting sustained demand. As the market moves through its cycles, savvy investors and buyers can find opportunities for both immediate and long-term gains.

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