My Agent Mike

Hi! I'm Mike Rapkoski.

Sales Representative, Keller Williams Referred Urban Realty Inc., Brokerage

I have spent the past 18 years assisting clients build their wealth through making wise choices with their real estate buying and selling. I am passionate, dedicated and committed to providing world class service to my real estate clients.

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BIG changes to the way we sell real estate in Ontario!

A lot has changed over the past 20 years, and finally after many past provincial government fails, they are finally modernizing the 2002 Real Estate Business Brokers Act that we agents are regulated under and it will now be called, The Trust in Real Estate Services Act.

The four major changes are as follows:

  1. Sellers will now have the option of disclosing the contents of competing offers in multiple buyer offer situations.
  2. The word Customer is being removed from the agency relationship between a consumer and real estate brokerage
  3. The Real Estate Council of Ontario will now be able to levy fines immediately to those who break the rules
  4. Realtors will now be able to Incorporate their earning

The first on the list is a huge one that for anyone who has either bought or sold property in Toronto over the past 20 years, you’re well aware of the anxiety that surround offer presentations.

Your looking to buy a home or condo, excited as can be, start the oft stressing task of searching for the next place to call home. You find it!! Then as your agent, I tell you, “great news, there are only 5 other buyers we are competing with to get your dream home”. Insert> deflating bubble sound here. Pop!

Sound familiar? Searching and then finding a home is challenging enough without having to actually go through the process multiple times. I’ve counselled many buyers at the start of our search that we might be putting in 2, 3 or more offers before we are successful in getting you your next home. It can become taxing and discouraging at the same time.

Will this new rule make it easier or more importantly, save a buyer money in the end? Me thinks not. The power still lies with the seller to decide if they want to disclose this information. I can see it happening if there are maybe two offers are the gap is very small, as the downside risk is minimized. But on properties where there are 10 or more offers, I can’t see it happening. And when it comes time to sell your house and as a seller we are looking at these 10 offers, I’ll explain further to you then.

So although this a big change from the old rules that prohibited agents (see, the agent is now removed from this decision and the backlash that accompanies it) from disclosing a competitors offer, I think the change will be strategic for the seller, and adds nothing for the buyer.

Also look for the return of escalation clauses in contracts. “the buyer agrees to pay $500 more than the next highest offer”. These clauses create a shit show and allow for massive abuse (think dummy offers, and yes, don’t put that past some agents). Buyers will also need to exercise caution going into an offer situation to avoid the world knowing how much they are willing to pay for a property. What if they lose out on an offer and then a neighbouring property is avail, and receives multiple offers?

Let’s move onto the next one. This is pretty much a simple one. The term customer is being removed and in it’s place, becomes self representation. This still allows for multiple representation (for now at least) but makes it much clearer on where obligations lie. Typical representation between a Realtor and client is of a Fiduciary relationship. This in it’s purest form is clean and straightforward.

Moving onto RECO being able to levy fines immediately on bad agents, misleading marketing and advertising, and other such items, is welcome by me. There are too many bad apples in real estate and dealing with them is not as easy as one might think. This will help, at least in a monetary way, in dealing with them. I think some further regulations should be added but this is a good start.

Finally, Realtors in Ontario can finally join most other professional organizations of the 20th century and now incorporate for tax and income purposes.

This fight has being going on since I first started in real estate in the dead-slow spring market of 1996 so I’m thrilled of it’s addition. Granted this has minimal impact on the Realtor membership (maybe beneficial for the top 15%?) dues to cost and regulations, but still, I’m happy it’s here. Secretively, Brokerage owners have been lobbying against this (once again, my opinion) for their own reasons, but other provinces across Canada have allowed for it for years so I’m happy the playing field has been levelled.


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airbnb takes a blow to the chin

As the calendar year winds down our real estate market typically goes into a slight slumber as the holiday season approaches and we all grapple with our stuffed bellies and potential New Year’s eve hangover. Fun times for sure.

But this past week saw two major announcements that should have a huge impact on Toronto’s hot housing market and the way real estate is transacted throughout the province.

The first would be the handing down of a judgement that’s been in front of the courts since mid 2018, relating to airbnb. And this one is huge!

The second one titled the Trust in Real Estate Services Bill, is even bigger! The new bill addresses much needed changes to the way real estate is transacted in Ontario. You can read my blog post on it here.

The city passed regulation in 2017 on regulating the airbnb market but it was challenged by a group of hosts (with some financial backing by the company airbnb itself!) Well, the judgement was handed down in favour of the city and the path to regulation has begun.

There still may be some tweaking but this much is for sure, you will now have to register and pay a one time $50 fee plus 4% tax on any stays less than 28 days. It also now only applies to ones permanent residence, which can be rented out up to a maximum of 180 days per calendar year.

The city projects this will effect about 5,000 properties which should make interesting on how they will regulate it. Of course, airbnb is not happy with the verdict and may choose to appeal.

Also not to be confused on the condominium side, but many buildings already ban airbnb type rentals which is their choice. Each building has it’s own set of by-laws, rules and regulations that apply to the building itself. So if you are considering buying a condo for this purpose, even as a principal residence, make sure it’s in a airbnb “friendly” building.

Nonetheless, this will have an impact on Toronto’s real estate market. This should see less houses and condos being bought and run as short term rentals freeing up property for owner occupied buyers.

The not so discussed side affect of this ruling is the impact it will have on Toronto’s rental market, which in my opinion is the real target of the city.

Rents in Toronto have increased upwards of 30% over the past two years in many parts of the city, and for some reason, renters tend to be much more vocal than homeowners.

The city believes affordability in the rental market will be had by limiting the number of allowable airbnb rentals, thus freeing up property to be made available for longer term tenants while completely ignoring that many (well at least some of my investor clients), moved their rental units into the airbnb market to avoid the provinces strict rental housing rules.

Not everybody is looking for more revenue, although that has become an offshoot of the short term rental market.

With the province restricting rental increases over the past 4 years between 1.5%-2.2%, if you are the owner of a condominium you are losing out every year as it’s guaranteed that your property taxes and monthly maintenance fees will both increase by at least 2%. Already many condo investors are experiencing hefty cash flow problems, so add in a tight rental market where tenants are staying put longer to preserve their rent controlled space, and it can become difficult to maintain your investment pretty quickly.

There are bigger issues at hand such as a major shortage of housing in the GTA while demand has spiked due to the large amounts of immigrants our city attracts. An imbalance in the rights of tenants verse landlords is another. So this recent ruling on airbnb to me is more a win for vocal advocacy groups of tenants, and the renters themselves.


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Toronto’s real estate market continues to be strong

The month of September brings the unofficial start to Toronto’s fall real estate market. Once labour day passes and the last of our summer long weekend plans are behind us, a new school year kicks off, and so often does our housing sales.

Depending on when the holiday Monday falls (this year it was early, September 2nd) our monthly home sales statistics can be varied.

This September continued to carry right on from an active summer and frenzied spring market.

Home sales were up 22% over the same month numbers from 2018, along with the other housing indicators we track. New listings were slightly off, but active listings which have been a problem throughout the year, were down 14.1% from September 2018. Now this is no where near the peak September sales year of 2016 where there was a drop from 2015’s number by 36.6% in active listings, thus, pushing house prices soaring and then leading up to a heightened spring of 2017 (and subsequent cooling in the second half of 2017).

Even at 14.1%, this is a concerning number. Housing shortages continue to be what is helping drive the price appreciation and values have risen 5.8% year over year from September 2018. This in itself is not bad, considering the rise year over year in 2016 from 2015 was an eye popping 20.1%!

Percentage gains in the 905 areas were higher than Toronto proper, which can be partially explained with the slower rebound the 905 had coming out of the drop in later 2017 and the escaping rise in values in the 416 since then. Affordability moves outward and finally the 905 is getting the overflow from buyers priced out of Toronto.

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Condo Investors Beware: CRA has a moving target on your back

Once again the Canadian government has found a way to penalize hard working small investors, who have purchased a condo pre construction.

This is the same government agency that over the past few years have aggressively been attacking both unsuspecting and savvy condo investors, who have opted to sell their purchase contract before the condos actual registration date (the time it’s transferred from the developer to the Buyer), and through the process collecting large amounts of revenue through unpaid taxes and fines.

For the record, I am a believer that you should always pay taxes due under the Canada Revenue Agency tax laws. My ire rests when the greed and bullying that gets carried out by the CRA extends to the unsuspecting person who actually didn’t do anything wrong (or so they thought?) and have become easy targets will very little recourse to fight back.

Once again they are in attack mode on investors of condos that unbeknownst (but doesn’t matter under CRA laws) to them, have committed tax fraud.

There was a period in time a few years back where some developers were offering rental guarantees on pre construction projects to drum up sales, offering purchasers a two year guarantee on rental income if they bought a unit. A recent article in the Financial Post can be found here explaining the issue.

Now you may fall into the camp of, ‘well, these investors should have know better’ and that’s an argument that is certainly subjective in nature. Being both an investor in real estate and one who has helped multiples of clients over the years in the purchase of condos for investment (although most have been through the resale market which have almost always offered better deals) I see another side.

Anyone who has paid attention to Toronto’s residential rental market for at least the past 25 years will agree, the bulk of housing made available to those looking to rent have come from the small condo investor. Purpose built rental housing has been (and still is in comparison) a mosquito on an elephants ass in comparison on units delivered.

Developers are well connected, savy investors often with politicians in their pockets at all levels of government. The individual investor who purchases a unit or two do not. Nor do they have extensive law and accounting firms on their payroll. This = easy targets.

The government has made it very clear that they are desperate for money, as all political parties have proven they are inept at managing our money (yes, it’s our money. Money we pay to keep this city/province/country operating.)

And it’s only going to get worse.

Select Realtors I’ve spoken with (along with myself) recently received a letter from the Federal Conservative party and one which was tweeted out by them about the Federal Liberals plan to tax homeowners 50% capital gains on the sale of their principle residences. You can see CTV news reporting of it here

I’m really not a fan personally of any politician or political party today and this has been well documented. But make no mistake one thing we know is that regardless of who is in power, once a tax is put in place, rarely if ever is it removed by another party who becomes the ruling party.

Government looks at us like their sheep and they are the shepherds. At their will, they arbitrarily decide what to do with us. This is becoming very clear when it comes to taxing on housing.

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Is it true: We like boring architecture when it comes to condo development?

I was having a conversation recently with a colleague of mine, as I am in the process of searching for a new home. She herself is about 12 months away from making a move from living in a house (a large one at that) to that of a condominium apartment.

We got to talking about the architecture of certain buildings scattered throughout the city, and which ones were our individual favourites. As we began to name building after building we quickly went from “oh, I love that buildings facade” to “yeah, that ones okay. I guess??”

With the explosion in condo development over the past 15 years in Toronto, is it surprising that many developers follow a traditional approach to their builds with the dominate use of glass, brick, and concrete design?

Probably not. But the exterior looks of many buildings are boring and drab and the push for better views and natural light in more units had architects going floor to ceiling glass crazy, to appease developers and consumers alike.

BILD President and CEO David Wilkes recently wrote an article in The Toronto Star titled ‘Denmark and Sweden are creative when it comes to urban design and architecture’

In it he gives hope by stating that “In Canada, we tend to have a rather conservative appetite for architecture. But this is starting to change in Toronto, with more developers commissioning international architects and some young local firms growing in confidence.”

This would be great and welcome news to many, including my colleague and I, as Toronto is poised to become an even more prominent world class city in the years to come.

Having more exciting architecture in our condo buildings that are stealing light and sky from passerbys below, will even possibly foster better goodwill for those so opposed to our rapid development. Not that I have any empirical evidence of such, but optimistically thinking, if we build towards an exciting downtown where pedestrians can take in multitudes of green space alongside architecturally creative and pleasing development, while on their way to work or play, would make for an exciting part of the city to live in.

It sounds like our developers want this, now our city needs to get behind it and be supportive. If not, development is going to happen anyway, and then we might become known as Glassville instead of Hogtown.


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It was a busy July for Toronto real estate sales

It wasn’t your typical month of July when it came to housing sales activity. Year-over-year activity was up a staggering 24.3% from July 2018, and even up 5% over June’s sales. Now that has happened in at least the past 10 years, probably even longer, as I got tired of looking and stopped at the 2009 numbers.

Prices also rose 3.2% which is no surprise since active listings were down -9.1%. With less supply to choose from, prices will rise.

The global markets seem to be fragile with all of this trade fighting between the United States and China. But it hasn’t affected our local real estate market yet.

With lower inventory, expect continued price gains and multiple offer situations come September when the real estate market typically picks back up from our summer slumber. Will the push into July be the same for August’s numbers? Well we’ll know in a few weeks time.

Until then, enjoy the remainder of our beautiful summer weather.

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Market conditions continue to favour sellers

Toronto’s housing has rebounded strongly in May 2019, with sales activity only marginally off from the month of May’s 10-year average. Prices on average are up 3.6%, which is much better than what you are seeing in the stock market.

In comparison to May 2018, with sales then at a 15-year low, sales activity is up a strong 18.9%.

This year is reminiscence of what Toronto real estate sales looked like ten plus years ago, when it seemed winters were much worse, and most home sellers waited until spring to list their homes for sale.

Yes, this winter (and spring) have not been super kind weather wise. More traditional at least winterwise, it’s not the only reason we see May and the early parts of June still tilted towards sellers.

Not enough property for sale! Are you getting tired of hearing this? I kind of am. There are qualified buyers out there anxious to secure a new home. But listing inventory continues to remain low, and we are not building enough new housing to meet the demand.

We all are aware of what happens with low supply, high demand and amazingly low interest rates. Higher prices will continue for now and unless our government either gets serious about correcting the supply issue or turns off the tap on immigration, look for more of the same ole same ole, sellers market conditions.

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Is the mortgage stress test making it worse for buyers in Toronto? Absolutely!

If you are someone considering entering the real estate market in Toronto as a first-time buyer, it’s completely understandable if you feel like you are being screwed over. You are, and let me explain why and how.

Toronto (and Vancouver) housing have much been talked about ad nauseam, both on how fragile and how expensive Canada’s two most popular cities are to own real estate in. You can now add renting in to the mix as well.

You sit idly by as decisions are being made that will drastically affect YOUR financial future, mostly by a generation of people who have benefited handsomely from the singular thing that has propelled their wealth and secured their financial futures. It sucks, and it’s completely misguided and unfair!

We all know that the city of Toronto is only going to become more expensive than it is today. Sure, there will be some bumps along the road, but without a doubt, in 10-15 years time, it will be way more expensive that it is today.

Benjamin Tal, Deputy Chief Economist of CIBC World Markets Inc. is an economist I’ve been following for years. At an speaking event I attended about 18 months ago he noted, ‘Toronto could become a city of renters’ in ten years time. His meaning behind it was that real estate would probably become too expensive for the average citizen.

Why I am so bothered by this it that our governments and organizations that provide housing policy seem to be either ignoring or missing the obvious. A generation of potential home owners are getting screwed.

Everyone is quick to point out that Toronto is attracting about 100,000 newcomers on annual basis. It’s easy to find this by googling it. But when you look into how much new housing we are actually delivering (note: very different from what we are selling), it’s about a third of what’s needed on an annual basis.

Where do these people go to live? You know what, and this may sound a little “un-Canadian” of me, right now, my concerns are for the children of my clients, friends and family who are already here, and have little hopes of owning real estate in the city they have contributed to and have set roots in.

Friendships forged, communities set up, and most are being held back from taking that next step, which is actually the foundation and biggest step for their futures.

B20 was hastily put together in a time where little understanding or any actual accountability is taking place. Accountability, when was the last time we heard anyone in a position of power own up to that?

Listening to the likes of CHMC and select University Professors paint what’s an obvious complex issue, as one that is working fine, is a criminal act in my opinion.

Builders, Lenders and Realtors have all come out in support for changes to the current rules. To have CMHC CEO Evan Siddall brush it aside by stating it’s “plain self interest” of the above groups. That’s simply not accurate.

I’m not advocating for the elimination of the stress test, although I do think they need to make changes to it in order to allow for first time buyers and select others, to have a chance of home ownership in the regions they live, work and play.

Follow this link for an article from MSN Money related to this topic

15 May 2019 ~ 0 Comments

Sales Transactions Jump 16.8% in April

Toronto’s real estate market was back on fire with a substantial year-over-year increase in home sales in April 2019. The number of residential transactions jumped by 16.8 per cent to 9,042 compared to 7,744 in April 2018.

After a slower start to the year, April’s activity is encouraging for those looking to move. New listings were up slightly but in comparison to overall sales, still more housing inventory is needed before we start to see an overall flattening in sale prices.

Condo sales prices continue to lead with prices going up 5.8% with the average condo price in Toronto now at $637,181.00. Encouraging news on the detached home sale front in that activity was up 20% although year-over-year prices remained the same with the average being $1,355,764.00

Combined overall average sales prices are up 1.9% which is a healthy and reasonable rate.

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How To Invest in Real Estate the Right Way.

It’s of no secret to anyone that knows me, that I am a huge fan and advocate for investing in real estate as a future wealth builder.

My very first investment property was a joint venture with four friends, all of us chipping in a modest amount equally to cover enough for a 10% down payment and closing costs on a semi-detached home on Spadina Road in Toronto.

I still remember the day we firmed up our purchase, it was December 24th, 1997. Merry Christmas to us! And what an amazing gift this start in investing in real estate turned out to be.

Our initial modest start has done us all, and although we no longer hold any shared investment properties together today, we all learned the true value and power of real estate as a wealth builder.

Over the years I have presented the benefits of investing in real estate to countless clients, friends, family and even other real estate agents. It’s really become a passion of mine and one in which I’m always happy to share my successes about.

And from what I have gathered, the most common stumbling block on getting started, is the simple point on “where do I start?”

For the high majority, I truly believe there are multiple ways to get started. The very first step is to assess “which type of investor” do you want to be? This may seem like a simple enough question, but when I walk my clients through this process, a deeper sense of self discovery often emerges.

For the sake of not making this a novel about investing, let’s just say that once we cover all of the potential areas regarding investing, and then the pros and cons of the narrowed few, a clearer picture presents itself and it is from there that we can craft a blueprint for their investing success.

Investing in real estate the “right way” is all about making sure your chosen investment path is not only financially sound, but one that also suits your personality, beliefs and lifestyle.

Today, we have vast amounts of information floating throughout internet clouds on how you should invest in real estate. My advice would be to make sure that where you gather your information is not only a valid and trustworthy source, but advice that relates to you as an individual and is both practical and applicable to you and where you want to invest.

I would be happy to discuss my thoughts and feelings on the topic, and to share my path on what’s contributed largely to my wealth. Investing in Real Estate has truly been an amazing gift to me, and one that continues to offer opportunity and wealth in times of uncertainty. It can do this for you as well.