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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In 10 Years Toronto Could Be a City of Renters

I recently attended a housing market forecast on the Toronto Real Estate Market put on by the Welbanks mortgage group in conjunction with Genworth Canada.

Now I typically attend 2-3 of these type of information sessions annually but this was the first where I could recall the statement being said that, “Toronto could become a housing market of renters” in ten years’ time!

My ears perked up, and for a moment I was asking myself, did I hear that correctly?

Yes!! It was correct. Real estate would be so expensive only the rich could buy and most would be renting!

Based on recent comments by two housing economists (Will Dunning and Benjamin Tal) it seems a comment was made along the lines of, “if you think house prices are expensive now, wait and see what it will be like in 5-10 years’ time.”

Now to be fair, I did not hear this quote directly from the source, or, what it’s intended context was. It was repeated by the presenter from Genworth from a presentation she had recently  attended. But the sheer thought of this had my heart palpitating. I mean, already it is incredibly expensive and difficult to purchase and own a property in Toronto. We keep hearing about over leveraged consumers, a housing bubble, a lot of high risk in our housing markets.

And it’s going to get worse?

Well, I’ve heard a lot of over the past 10 years on unstainable housing values that have proven to be untrue. And I also once recall Craig Alexander who was an economist at TD Bank at the time, say, about Toronto’s unexplainable increasing house values…”that even in the story of Little Red Riding Hood. Eventually the Wolf does show up.” This was said in context that “for the past few years he stood before us saying house prices would correct by at least 10% and then he would show up the next year and they were higher.” This would have been about 5-6 years ago.

So it seems no one really knows what will happen? But if this statement holds true about a city of renters, all of the current problems we have experienced over the past many years is about to become a lot worse. For the sake of many, I hope this too turns out to be false.




Really…the real estate market is slowing down?

A few days ago the Toronto Real Estate Board posted it’s January sales numbers and surprise surprise, sales volume was down drastically year over year in comparison to January 2017. This came as no shock to me.

For those who remember last January (and February and March) sales prices were defying logic and it didn’t come back down to earth until April, which then cooled right through late fall in most neighbourhoods.

Also important to note, this January was the second lowest sales activity over the past ten years, only to be bested by the recession sales of 2009.

If you are thinking the housing market has corrected…it hasn’t, well at least not yet. and it doesn’t look to be doing so anytime soon.

Prices for the most part are still rising, which can be confirmed by speaking with any Buyer who has bought over the past 30 days.

With the exception of the uber-expensivce detached home market which saw a small price decline of 3.9%, the rest of the housing types continue to increase in price. Semi-detached homes were 3.7% more expensive, Town Homes 8.2% and the sizzling hot condo market is up 15.1%!!

As the gap narrows between detached home values and the rest of the market don’t be surprised if there’s a turnaround in average prices for detached homes in a few months time. Below are end of January 2018 housing type prices.

  • Detached sales average $1,283,981
  • Semi detached average $936,623
  • Town houses average $712,186
  • Condo average $543,279

Supply is STILL the issue and there are many financially well armed buyers out there snapping up the limited amount of good listings to hit the market. This past week I sold two listings and both deposits were for a minimum of $100,000! These Buyers aren’t messing around!

Will this pace keep up? It’s really become difficult to tell.  Well funded Buyers and those benefiting from being in the market with property to sell are very confident for the time being. But it will be interesting to see what’s next from the government as they’ve pretty much thrown multiple grenades over the past few years which look to be not working (although side note: it is pricing an entire class out of owning real estate in Toronto, which sucks!) much in cooling the demand.

My advice is to proceed with caution while having a trusted (and I emphasize trusted) real estate agent by your side who is dialled into the market who can help guide you through this incredibly tricky market. The downside it too risky, and too expensive to misstep.



What’s in store for Toronto’s Housing market in 2018

Well for starters, it must be said that we are living through interesting times in that with all of the changes brought into play over the past three years to cool the GTA’s hot housing market, changes which many forecasted would knock the sails out of sales (I couldn’t resist), we are still witnessing an overall strong resale market in Toronto! This can’t be ignored and we should actually take caution in this.

We always have to keep in mind that real estate is uber local with secondary factors that contribute to the overall makeup of Toronto’s diverse housing market. Why is it that condos for instance, in Toronto’s east end neighbourhood such as Leslieville, are selling like hot cakes and for more money per square foot than traditional established condominium neighbourhoods, such as mid town?

Or that a semi-detached home deemed a complete fixer upper in the central neighbourhood of Seaton Village, will sell for a similar price of a brand new detached home in East York? Oh yeah, that semi detached in Seaton Village only has street parking as well.

These are real life examples of how local real estate and their values must be understood and then applied to the neighbourhood you will want to buy, sell or invest in. So here we go with what to expect in 2018.

Throughout Toronto proper, supply of good properties that are well priced for their condition are still in relative short supply. All of the changes over the past few years have been aimed at the demand side – buyers, and the supply side continues to be in short supply. The same can be said and apply to larger sized condominiums (850 sq.ft.+). The demand for both of these will remain strong in the first half of the year, as pent up demand is still in play.

Interest rates have been forecast to rise and if we see rate hikes over the course of the year of 50 to 75 basis points as have been predicted, this could help balance demand even more.

Over the past few years the “selling seasons” throughout the course of the year seem to be shrinking. Remember, this may not be the case in your neighbourhood, but needs to be considered of you are buying and selling in different neighbourhoods. Remember what the second half of 2017 looked like…

Demand for entry level condos will continue to be very strong and this price point coupled with a strong and increasingly expensive rental market will continue put upward pressure on prices. I’ve been saying for at least the past eight years that the first time buyer home is a condo. Well, it’s here, embrace it, and starting building equity so that you can compete when it comes to wanting to move into that semi or detached house that has 10 offers on it. Put the benefits of a rising markets money to use and you will be ahead of the game financially and thankful that you did.

Overall I think a modest drop in overall annual sales volume will happen as the combination of government changes to the housing market, rising interest rates, affordability and buyer fatigue all come together.

Prices will continue to rise in Toronto albeit at rate closer to inflation than the double digit rate growth that has been the norm over the past decade.  As more buyers come back into the market this could push values even higher in the most desirable Toronto neighbourhoods.





Brief recap of Toronto’s Real Estate Market in 2017

In brief, 2017 saw an impressive 92,394 sales across the Toronto Real Estate Board which clocks in as the 4th best year ever re: sales volume. Average prices across the board rose as a whole to $822,681 (almost a 13% increase over 2016). Almost all of the growth was seen over the first 4 months of the year. Things to note: in the second half of the year sales volume was the lowest over the past 5 years by a longshot, as well as average prices declined during this time frame. Affordability in the very expensive detached market is declining with sales in the more affordable semi detached and condo market pushed up 11.5% and 14.1% respectively. As the price gap narrows between a detached house and a semi-detached house, and between semi-detached and a condo, this will be an area to keep an eye on in 2018.


Two Big Changes Geared Towards Real Estate

The Ontario government recently passed changes to the Ontario Consumers Act which strengthens consumers with regard to large purchases made. Two of the changes have affect on the real estate industry, and are long overdue and more than welcomed in my opinion.

One change is to how “multiple representation” is handled in a real estate transaction. For anyone who has bought or sold real estate in Ontario over the past 20 years, you would know that your chosen real estate agent could represent both the seller and buyer in the same sales transaction, with certain disclosures being needed.

In theory, this can work and keeping in mind that working under rules that govern all of Ontario, some regions this scenario not only works out well, but is actually necessary. But in a city the size of Toronto (and across the GTA), I still don’t think the changes go far enough.

It’s too complex of a topic to cover here completely but why the changes don’t go far enough in my opinion is that there is enough abuse throughout the GTA with multiple representation that it warrants stricter rules and changes. Yes, fines have risen dramatically for offenders convicted (now up to $50,000 for an agent and $100,000 for a brokerage) but getting someone convicted is always the challenge.

The stakes are high and competition is rampant throughout the GTA. It’s still fairly easy to obtain a real estate license and there is little to no accountability from most brokerages. Of course there are many ethical brokers (agents) and I have dealt with many of them. But poll most experienced agents (who’ve been in the industry 12+ years) and almost all I’m sure will tell you this is a huge problem. I don’t see this problem going away based on the recent changes, but only time will tell.

The second change has to do with the Tarion Home Warranty program. Anyone who has been involved with actually dealing with Tarion, knows how frustrating and stupid this organization is in it’s current setup.

The concept is one of value and importance, but it almost seems more like a rubber stamp in the new home buying process, rather than a consumer protection agency. The board of directors is better balanced these days (it used to be heavily made up of developers) but going through the claim process is expensive and the onus still falls mostly onto the consumer, who pays a very large fee for the insurance in the beginning.

Better transparency and consumer protection is better for all of us, especially those of us who work in relation to the real estate industry. Let’s hope 2018 brings better coverage for all.


Market Update: Good, Bad and some Ugly

With annual average price gains up 8.25% in October 2017 over the same month last year, the 416 area of Toronto continues to be on fire with healthy increases in value. But if we dig down and take a closer look into the numbers, a different story starts to appear.

Detached values are actually off a very nominal -1.1% year over year. Semi-detached prices are up a healthy 5.2%, Townhouses are up 8% and the condo market in Toronto is on fire, up a whopping 20.9% year-over-year!

Number of Sales are down about -21%, new listings are up almost 12%, active listings are up 78.5% and the days on market has increased upwards of about 38%. These statistics take into account the entire TREB coverage area (416+905) and there certainly is a bigger slowdown happening in most of the 905 area which skews the 416 a bit.

For the first time since I can recall, monthly transactions of resale condo units out totalled those of detached, semi-detached houses and townhouses, combined!

Total sales are down, inventory is up and days on market have increased, albeit with more condo sales this could add to the total as many condos take more time to firm up a sale. But this is a more accurate reflection of the overall market pulse.

The market is more balanced (Buyers, this is what you’ve been whining about for years, where are you?!) and in some neighbourhoods and streets, demand still trumps supply. This means that multiple offers for some are still extremely commonplace. But for most, plan your strategy on both the sale side and the buy side carefully, because the times are a changing.

I still think we have a supply issue more pronounced than the demand side. The Federal government has increased their target for immigrants from 2017’s 300,000 and we all know that a strong majority end up in Vancouver and the GTA. These people need places to live. As long as the supply isn’t adequately addressed, then it will continue to put pressure on rising values and rental rates in the housing market.

Conflicting information it seems and I should add that some analysts think the drop in activity (down 19,000 YTD) from last years record pace is mostly due to caution around the numerous government changes of late. Could be? But it’s crucial to know what is going on when you are in the market to buy or sell.


OSFI Unveils New Stress-Test Rules

The much talked about “Stress-Test” rules talked about over the summer by OSFI have been made official, and will take effect January 1st, 2018.

Many suspect this will have an almost immediate impact in the Toronto housing market which Government’s of all levels have been trying to cool with limited effect on fast increasing house prices.

In case you aren’t interested in reading this entire blog, I would suggest anybody even considering buying a piece of real estate (and this includes new construction condos as well) to immediately reach out to a mortgage broker and get your application and pre approval done NOW, to help protect against the changes to come.

So, what are the changes and what impact will they have?

The main change will be the setting of a new minimum qualifying rate, or “stress test,” for borrowers making a down payment of more than 20% of the home’s value. In the past, stress test requirements only applied to insured mortgages (those with down payments of less than 20%,) most variable mortgages and mortgages with terms less than five years.

Is it needed. In a nutshell I would say yes, it is. Brining financial stability to the housing market is a good thing for almost everyone. Is it overkill with what’s happening in the housing market in Toronto of late where interest rate increases over the past 6 month’s, and rumours of another on its way, have already helped play into a slowing of the market alongside other government implemented changes?

This is the part we will have to wait and see. None of the changes we are seeing of late address the supply side of our housing crisis. It seems only the demand side is consistently been targeted. Our city and our country continues to grow, the multiple levels of government through legislation such as the Greenbelt Protection Act and other municipal restrictions on development, are curbing the ease to build.

This is why areas such as Hamilton, Guelph, St Catherines and Kitchener/Waterloo have been booming on housing as many buyers are being pushed out due to affordability. In many of these regions housing is now considered unaffordable as well!

You have government who are opening the doors aggressively through immigration and refugee to bolster our ranks in numbers, also restricting the volume of housing to meet the demand of a rapidly growing population, also implementing aggressive rules on rental restrictions. Draw your own conclusions but much of this doesn’t seem to add up?

Reach out to me if you have any questions on how this might impact you on a personal level, I’m always happy to be of help!


A more balanced market ahead?

With the month of September behind us and looking at the statistics provided by the Toronto Real Estate Board, the overall market looks to be heading into a more balanced territory.

September’s Sales-to-New Listings ratio was similar to those of May, June and July, which were all off from the torrid pace set at the beginning of the year (see graph).  Keeping in mind that these statistics take into consideration the Greater Toronto Area. When you drill down into cities, and even further into neighbourhoods (and even some streets in particular neighbourhoods), we are still seeing a strong sellers market in some areas.

Real estate has always been and will continue to be first local, then regional, national then a global market.  Values rise and fall at different times throughout these markets and understanding the premise behind this, can help you better understand where and why prices are either rising or falling.

Not only are there “submarkets” to consider when it comes to houses, but even more so when we look into the condo market.

TREB’s Director of Market Analysis Jason Mercer says this “With more balanced market conditions, the pace of year-over-year price growth was more moderate in September compared to a year ago. However, the exception was the condominium apartment market segment, where average and benchmark sales prices were up by more than 20 per cent compared to last year.”

If you actively work in the condominium market you would well be aware that condos priced under about $450,000 are selling like hot cakes the past few months. Down-sizers? Investors? First Time Buyers? Who is driving it? 

This next graph sheds light on this a little better. Only 14% of all sales across the GTA were under $400,000! 85% were $400,000+. That’s quite an impressive feat. This further shows why Toronto condos are selling so fast. These figures don’t include new condo development sales and prices, but would you be surprised to hear that in the downtown core a luxury new build that hasn’t even broken ground yet sold out recently at an average of $1,150 per square foot! There are countless other examples of sold out developments happening over the past few months on product that won’t even be built (or may never?) for the next 4-5 years.

This is a very different story to what the general overall GTA housing market is reporting.

Get local. Get very narrow in your focus. Truly understand your market, and then be confident in your buying or selling decision. No has a crystal ball but you will feel better when you have a better grasp on what’s happening around you.









Stress Test on all Mortgages could soon be coming!

A rule already in place for insured mortgage borrowers (those that purchase with typically less than 20% as a down payment) could soon be coming to all mortgage borrowers.

The Office of the Superintendent of Financial Institutions (OSFI) is contemplating brining in changes that will make it mandatory that all mortgage borrowers go through a “Stress Test” (as if anyone who has gone through the buying process over the past many years haven’t experienced enough stress!) when qualifying for a mortgage.

Talk on the street is that everyone will need to show they can cary a monthly payment that’s 2% higher than the rate they are looking at. Some are saying this could knock approval amounts down by as much as twenty percent! Many think this could flatten the Toronto real estate market.

What will this mean for house prices, it’s too early to say. But it seems that both at the Provincial and Federal levels, governments are hell bent on cooling the housing market.

We should know more soon but for anyone contemplating making a purchase, make sure to reach out to your mortgage professional to find out what this could mean to your affordability.
For questions on what effect this might have on the sale price of your property, contact me and I would be happy to discuss further.

With many changes on the mortgage side over the past few years these seem to have been effective like jabs in a boxing match. Will this new change amount to the knock out punch they’ve been looking for? Time will tell.


Toronto Real Estate Board does away with weekly and mid month statistics – Why??

Recently TREB did away with its reporting on weekly and mid month statistics, and they did so with very little explanation to it’s members.

TREB’s official posted explanation on our member website was “These intra-month statistics are more susceptible to volatility, and are not necessarily reflective of the monthly and quarterly market activity TREB captures and reports in its suite of reports, including the monthly Market Watch publication.”

That’s it. All of a sudden we are in a market with uncertainty, and our Realtor board decides to do away with information, that personally, I found quite helpful. Yes, it was a singular tool in a box composed of many, but still, it was of value when needed. And if was so susceptible to volatility, why only are they cancelling its use?

In an environment where providing relevant and timely data is of premium importance, cutting off a branch from the tree doesn’t help the very so members who pay costly dues to operate the real estate board. This is yet another example of TREB being out of touch with its memberships needs. I mean, come on, at least put up a poll and see what the members think?