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.

18 September 2017 ~ 0 Comments

Sellers you should never let your agent “double end” your sale

NOTE: I originally published this in May 2014. With recent talk of Mandatory Designated Representation being potentially introduced to the Ontario Real Estate industry, below is an example by me on why we need this in the Toronto marketplace.

A few weeks back an extreme example of a multiple bid scenario played out on a detached home in the Avenue Road and Eglinton Road area.

For those that may have heard, the home was listed at “not seen pricing since the year 2000” which was $699,000.  In the agent’s words, “we listed it at this price to get attention”.

10 days later, 72 offers, 71 pissed off Realtors and their clients, the Selling broker double ended the sale which then sold for 195% of the list price.

Okay, so why shouldn’t a seller want their agent to represent both them and a buyer you ask? After all, everyone thinks you will save some money off of the commission right? This often becomes the case, and most likely in the above scenario the seller might have saved 1%(?) in fees which would amount to about $14,000. Buyers also want to benefit in the savings so the sellers piece of the pie can be even smaller. Peanuts compared to the sale price and even what might have been if the agent focused all their efforts on pushing the other 71 agents harder in achieving a top dollar price.

A recent sale on a newer built house sold for about $2,300,000.00 dollars. One with a smaller lot to boot!

What if the focus was on working solely in your Seller clients’ best interest and instead of focus on saving $14,000 you could fetch and additional $50,000 or $100,000 from a motivated buyer? In the end, your client nets more money, and your focus and attention as a Realtor lies where it should be, on your Seller client.

Today I was in a similar situation where the exact same scenario could have played out. Instead, I opted to inform every agent who called on my listing as well as every potential Buyer who called without an agent, that I would only be representing the Seller in the sale. No offers would be presented by me to the Seller. Everyone would have to have their own agent.

It took a lot of effort but in the end, we had a fair and transparent offer presentation where each Buyer had their own representation, and my Seller had me. The results were amazing! The Realtors, whose clients didn’t win out, were appreciative of the fact that they all had an even and fair field to work from. My client was thrilled and was appreciative that all of my attention was focused on her and her alone.

Without a doubt I think the time has come to outlaw double ending or multiple representation in offers. Anything we can do in our industry to enhance the professionalism should be a top priority. Hopefully this way of working will catch on.


Sales down 40% in July

To anyone who follows Toronto’s real estate market, it will come as no surprise that sales transactions are down when tracked over the comparable month of July’s sales last year. Down by a whopping 40% on the other hand, can lead one to wonder if Toronto’s sizzling hot real estate market is starting to crumble!

5921 reported sales at first glance for a month that traditionally throughout the year is one that falls towards the lower side in sales activity, isn’t eyebrow raising in itself. But it led me to scour through the archives to research that the last time the hard working members of the Toronto Real Estate Board posted less sales in July was in the year 2002. Fifteen years ago! Even in the recession summer of 2010 sales transactions were 9% higher than 2017’s numbers!

Okay, so what could this mean?

In February, March and early April of 2017 Toronto’s market defied logic to most. It’s well known that it triggered multiple policy changes amongst governments, regulators such as OFSI – The Office of the Superintendent of Financial institutions ( OFSI)
and even our beloved City of Toronto chimed in by increasing the Land Transfer Tax collected on our hard working citizens. After all, I mean you must be filthy rich to be able to purchase real estate in Toronto right?! Sucka!!

Most of the changes came with good intentions (not Toronto’s, sorry) to help balance a very hot real estate market. Have they achieved this? It’s still too early to tell, but a closer look reveals something that was mostly overlooked in the mainstream media, but played out through social media amongst those in support of, which I am, which is attacking the supply side of the issue (create more housing) and not the demand (buyers) side alone.

Back to July’s numbers. Most of the price appreciation in the early part of the year recorded in the 905 regions (they count in TREB’s numbers) has been given back with detached homes trading at 2.4% higher than July 2016. In Toronto, they are 8.5% higher. Looking back since March where it peaked in the 905 (April for Toronto) prices are trading 33% lower year-over-year. Almost the entire gain has been wiped out.

Still, I’m not sure I’m convinced?

Well, over the past ten days or so, there has been a notable uptick in viewings in not only my properties listed for sale, but those of other agents whom I’m in contact with. The demand side is still there, albeit buyers are slightly frozen on what they should do. They feel in their gut it’s a good time to buy now; and it really is, assuming your reasoning for buying in the first place is a sound one. Maybe motivated by talks of more interest rate hikes, or the stress test for all mortgage holders to qualify against, or maybe even because right now you can even pick up a property without major competition or even none at all! Whatever the reason, people are out looking.

The demand is there, the supply side hasn’t been adequately addressed (and no, I don’t mean let’s build more condos everywhere) and something I didn’t even touch on, is that we have a strong local economy happening around us. This all points to stability on the housing front and now that the madness of the FMA (February, March and April) is behind us, go find and purchase your next home and get back to experiencing the true joy of what owning a property long term brings.




What The Heck Happened to Toronto’s Hot Real Estate Market?

You may have heard that in the month of May, sales activity across the GTA was down. This is true. When compared to year-over-year sales comparisons in which the Toronto Real Estate Board utilizes, sales are down a staggering 20% from those recorded in May 2016.

Wait! Wasn’t May 2016 the busiest year ever for sales in the month of May? Yes it was. It was about 10% higher than May 2015 and was part of a record year last year in total sales. Also about 10% higher than the total of 2015, which was the second busiest year ever recorded for sales.

This year started out on the same record-breaking pace as January, February and March all surpassed their 2016 monthly totals. April 2017 was a tipping point and sales activity dropped moderately. The first 2 weeks of June we’ve seen a 50% drop in sales activity.

New listings are increasing (which this in itself can be slightly deceiving as TREB counts a re-listed home as 2 listings). More listings are welcome news for Buyers who have been in the market the past two years and have been in constant multiple offer situations due to a lack of inventory.

Well, the inventory is finally building. Where are the Buyers?

For starters, the Toronto Real Estate Board tracks numbers from a wide stretch (mostly GTA with limited exceptions) and in the surrounding areas of Toronto is where there have been large upticks in new listings. Toronto proper listings are not sitting long on the market and prices in May were up all across the board on prices from May 2016.

In Toronto proper the averages sale prices are as follows:

  • Detached homes $1,503,868 up 16.6% over 2016
  • Semi-detached $1,062,318 up 27%
  • Townhouse $741,211 up 18%
  • Condominiums $564,808 up 27.7%

Sales activity is down, prices are still higher than the previous year albeit it looks like the crazy price gains we had at the start of the year are subsiding and we are certainly moving to a more balanced market.

The demand for Toronto real estate remains high and all other economic indicators point to this being more a pause for the time being, than an all out souring on the housing market. There is opportunity in every market depending on your individual situation, and if I were a Buyer I would take advantage of the pause if possible. After all, we need a place to live and call home.


What are Rental Rates Like in Toronto?

With all the talk of the heated real estate market we are starting to hear more and more about the options of renting a home or condo, instead of owning one.

With Canadian Home ownership rates around 66.50% roughly two-thirds of Canadians are Homeowners.

My thoughts about renting for those who have the option of owning their home verses renting, is that it can be a viable option for some, based on a variety of factors.

As of late, the topic of discussion seems to be, do I try and sell in a high market and rent until the market subsides; and then buy back in when real estate goes on sale?

That’s a tough question and that doesn’t come with an easy answer. It really depends on your personal beliefs and financial situation.

To help in your decision here’s what it will cost you to rent on average throughout Toronto.

  • 1 Bedroom condo (450-500 square feet) $1600-$1800 per month. Look to the higher end if parking is needed.
  • 1 Bedroom + den (500-700 square feet) $1800-$2300 per month.
  • 2 bedroom condo (700-1000 square feet) $2500-$3000 per month
  • House rentals vary on size and condition more so but a bare minimum starting point would be $2200 per month + utilities.

Luxury condo rentals of late have seen a surge in demand with monthly rental rates between $4000-$5000/month. Even with the recent proposed rental legislation rental rates are only going to continue to rise. The demand for good housing (including rentals) is on the rise and it will continue to be difficult to find a deal.

Not all decisions to rent are financially based, nor like purchasing a property to live in should it be so. But if that is the reason you are thinking of doing so, carefully think through all of the costs involved and I suspect you will find that owning versus renting in the long term is a much better option.



Is Toronto’s Real Estate Market in Trouble?

Finally, it looks like Toronto’s red-hot real estate market seems to have subsided. Or has it?

Much of the news of late has spoken to the “cooling” of Toronto’s housing market, which on the surface seems to be the case.

In April, the Toronto Real Estate Board started to see a surge in new listings hitting the market. This surge began before the anticipated provincial government announcement of their 16-point Fair Housing Plan (read about it here).

Early 2017 started off with a frenzied start and sales prices across pretty much all housing styles and price points were on fire! Most of the new listings that we have seen in April have come from Sellers looking to capitalize on the recent high sale prices from January thru March and I would suspect very few were actually related to the government’s announcement. After all, anyone who has ever sold a property before knows it’s not as simple as deciding within a day or two, “hey, let’s put our home up for sale!”

So along comes April with added “inventory” and sales volume down in comparison to the previous April, in which TREB foresees the decline attributed to Easter holidays falling into April of this where as last year they were in March. Mid-month numbers show about a 14% decline in transactions and an increase of about 25% in new listings. Both numbers are higher outside Toronto proper.

So what now? I for one think we are still in for multiple offers on properties that are desirable and priced within reason. This past week alone I’ve been involved in 3 sales (2 on the selling side) that have all sold above the asking price. 4th property Buyer clients of mine were prepared to offer on but it sold before the offer date for $241,000 above the $999,000 list price!

Confused, who wouldn’t be? The media says the sky is falling and prices are dropping. Not exactly true. What is happening is with all of the new listings on the market Buyers finally have more inventory to look at, and the sense of urgency is not as high. Some Sellers (and their agents) haven’t caught up with the current market and expectations haven’t been managed on what to expect when selling over the past few weeks.

Buyers whom have been looking and realize that there’s opportunity to pounce, are snatching up properties after years of heated competition. I sold a house recently where my Seller clients received $222,000.00 above our listed sales price, and the Buyer was thrilled about it according to his agent!

Being educated about the housing market and maintaining a strong vision, are paramount to the success of both Buyers and Sellers in a time of uncertainty. Just make sure that you base your decisions and get your facts from a trusted source, and act according to the market you are in.



Are your tenants costing you money?

With all the talk of late of the government’s recent request to change the provincial rent control laws to include buildings built after 1991 to the existing cap program*, it has some wondering what the outcome of the rental market in Toronto and its impact might be?

A few months back there were a few tenants who went to the media complaining that their rents were being doubled from $1660/month to $3320/month. What wasn’t spoken much about was that these units were owned by the bankrupted developer Urbancorp, and that their trustee company KSV, most likely were doing so to evict the tenants so they could sell the units to offset the millions of dollars owed to hundreds of people who were hit hard by Urbancorps bankruptcy.

Hundreds of thousands complain that Hydro rates have doubled; yet a few complaints come in and now we have new rental laws being enacted! That rant is for another day. J

One of the new rental laws is that rent increases will be capped at 2.5% on all buildings.

What will this mean to you if you are the owner of a condo that you have been renting and haven’t increased the rental rates in years? You were happy with your current tenant and although expenses have been increasing on your unit at least in the 5%-6% range (property taxes and maintenance fees aim between 2%-4% respectively at minimum to be raised) you’ve been nice (or lazy) and have not sent out increases.

Do you sell? Do you start to make scheduled visits to look further into whether your tenant has been maintaining the place? Do you hold off on replacing or repairing items in need but that isn’t an absolute necessity?

All valid points but let’s look at what most likely will happen.

For starters, I would suspect that everyone who can legally do so would send a notice to increase rents immediately. After all, you have to play catch up now in order so that you can maintain the value of your investment. Wear and tear is a reality. And as mentioned above, so are increasing taxes and maintenance fees.

Many will start considering cashing out on their investments as we all are starting to learn that when politicians act swiftly, there is no notice or phased in grace period anymore. When will the Federal Liberals enact higher capital gains taxes? Who knows? But you can be assured that if they do, it will be without notice and take affect immediately.

Those who want to keep their investment units may start to pay more attention and look for ways to legally evict a tenant for contraventions in the lease agreement. Have a no pet’s clause but discover one on your scheduled visit? More people living in the unit who aren’t on the lease?

There are so many scenarios that can play out. Whatever your course of action makes sure you are well versed in both your rights and your tenants right. The Landlord and Tenant Board website is a good resource and place to familiarize yourself. If you have specific concerns or questions I encourage you to contact me so we can discuss what is the best course of action for you to take.

* The proposed changes will only become law if the bill passes final reading in the legislature and is signed by the Lieutenant Governor.



Provincial Government Announces Housing Plan Including Non-Resident Speculation Tax

The provincial government has announced a 16 point plan intended to improve housing affordability, including a Non-Resident Speculations Tax, and a commitment to review the Real Estate and Business Brokers Act, 2002.


The provincial plan includes the following actions:

  • Introduction of a 15 per cent Non-Resident Speculation Tax (NRST) on the price of homes in the Greater Golden Horseshoe (GGH) purchased by individuals who are not citizens or permanent residents of Canada or by foreign corporations.  The proposed tax would apply to transfers of land that contain at least one and not more than six single family residences. “Single family residences” include, for example, detached and semi-detached homes, townhomes and condominiums. The NRST would not apply to transfers of other types of land including multi-residential rental apartment buildings, agricultural land or commercial/industrial land. The NRST would be effective as of April 21, 2017, upon the enactment of the amending legislation. Binding agreements of purchase and sale signed on or before April 20, 2017 are not subject to the NRST. Refugees and nominees under the Ontario Immigrant Nominee Program would not be subject to the NRST. Subject to eligibility requirements, a rebate would be available for those who subsequently attain citizenship or permanent resident status as a well as foreign nationals working in Ontario and international students.
  • Expanding rent control to all private rental units in Ontario, including those built after 1991. Rental costs will only rise at the rate posted in the annual provincial rent increase guideline. Over the past ten years, the annual rent increase guideline has averaged two per cent. The increase is capped at a maximum of 2.5 per cent. Under these changes, landlords would still be able to apply vacancy decontrol and seek above guideline increases where permitted. Legislation will be introduced that, if passed, will enact this change effective April 20.‎
  • The government will introduce legislation that would, if passed, strengthen theResidential Tenancies Act to further protect tenants and ensure predictability for landlords. This will include developing a standard lease with explanatory information available in multiple languages, tightening provisions for “landlord’s own use” evictions, and ensuring that tenants are adequately compensated if asked to vacate under this rule; prohibiting above-guideline increases where elevator work orders have not been completed; and making technical changes at the Landlord-Tenant Board to make the process fairer and easier for renters and landlords. These changes would apply to the entire province.
  • Establishing a program to leverage the value of surplus provincial land assets across the province to develop a mix of market housing and new, permanent, sustainable and affordable housing supply. Potential sites under consideration for a pilot project include the West Don Lands, 27 Grosvenor/26 Grenville Streets in Toronto, and other sites in the province. This builds on an agreement reached previously with the City of Toronto to ensure a minimum of 20 per cent of residential units within the West Don Lands are available for affordable rental, with an additional 5 per cent of units for affordable ownership.
  • Introducing legislation that would, if passed, empower the City of Toronto, and potentially other interested municipalities, to introduce a vacant homes property tax to encourage property owners to sell unoccupied units or rent them out, to address concerns about residential units potentially being left vacant by speculators.
  • Ensuring that property tax for new multi-residential apartment buildings is charged at a similar rate as other residential properties. This will encourage developers to build more new purpose-built rental housing and will apply to the entire province.
  • Introducing a targeted $125-million, five-year program to further encourage the construction of new rental apartment buildings by rebating a portion of development charges. Working with municipalities, the government would target projects in those communities that are most in need of new purpose-built rental housing.
  • Providing municipalities with the flexibility to use property tax tools to help unlock development opportunities. For example, municipalities could be permitted to impose a higher tax on vacant land that has been approved for new housing.
  • Creating a new Housing Supply Team with dedicated provincial employees to identify barriers to specific housing development projects and work with developers and municipalities to find solutions. As well, a multi-ministry working group will be established to work with the development industry and municipalities to identify opportunities to streamline the development approvals process.
  • The province will work to understand and tackle practices that may be contributing to tax avoidance and excessive speculation in the housing market such as “paper flipping,” a practice that includes entering into a contractual agreement to buy a residential unit and assigning it to another person prior to closing.
  • Working with the real estate profession and consumers, the province is committing to review the rules real estate agents are required to follow to ensure that consumers are fairly represented in real estate transactions. This includes practices such as double ending. The government will modernize its rules, strengthen professionalism and improve the home-buying experience with a goal to make Ontario a leader in real estate standards.
  • Establishing a housing advisory group which will meet quarterly to provide the government with ongoing advice about the state of the housing market and discuss the impact of the measures in the Fair Housing Plan and any additional steps that are needed. The group will have a diverse range of expertise, including economists, academics, developers, community groups and the real estate sector.
  • Educating consumers on their rights, particularly on the issue of one real estate professional representing more than one party in a real estate transaction.
  • Partnering with the Canada Revenue Agency to explore more comprehensive reporting requirements so that correct federal and provincial taxes, including income and sales taxes, are paid on purchases and sales of real estate in Ontario.
  • Making elevators in Ontario buildings more reliable by establishing timelines for elevator repair in consultation with the sector and the Technical Standards & Safety Authority (TSSA).

Source: Toronto Real Estate Board


What should we expect with the Liberal governments housing plan?

The provincial government has announced a 16 point plan intended to improve housing affordability, including a Non-Resident Speculations Tax, and a commitment to review the Real Estate and Business Brokers Act, 2002.

So what should we expect the impact will be on our current hot housing market?

I don’t see much of anything changing with regards to the announced changes in the short term.

The housing market ebbs and flows and without a doubt, we currently have a major supply issue. This is clearly evident with the many buyers having to look out far across the GTA for affordability reasons. Nothing in the Liberal’s fair housing plan truly addresses supply.

So let’s talk demand. 15% foreign investor tax. Sounds sexy…and protectionist at its core, but in reality will have little affect other than raise more income for a fiscally inept group of misfits.

Are foreign buyers in the GTA a problem or not? The government itself at various times, has said no it’s not, it’s a very small issue. Maybe 5% of sales are related due to foreign buyers? To wash your money from an unstable and corrupt environment to one where stability (in comparison) is greater, even the mafia would be happy to pay 15 points for this wonderful opportunity. Zero long term affect.

Rent control laws being adjusted. Almost every housing related economist in the world agrees that this will have the reverse intended affect. Rental units will tighten, existing low rent buildings will fall into disrepair (maybe even rival city owned and managed properties?) It will become harder to lock down a good rental apartment and Airbnb’s will become even more prevalent (a real contributor already to rental shortages).

I would venture to say that just the sheer amount of conversation from our three levels of government, Bank of Canada, the media (although we need to come up with a new term for this group as they mostly seem to be self interest slanted), will have a greater affect on sales slowing.

The real estate industry in Ontario accounts for 20% of its GDP. All levels of government benefit financially to a large degree. It’s no coincidence that they led with their first point being the 15% F.B.T.

Demand will soften in time as frustrated buyers remove themselves from looking. Additional sellers will come onto the market hoping to cash in on the crazy high prices some are fetching, allowing the remaining buyers opportunity to purchase.

I just don’t see much else happening in the short term, which is unfortunate in some ways. You want to feel that people who have grown up in our city, have a realistic chance of owning property in it. But this is not the Canadian way. We don’t grant land rights to its citizens.

People make choices on how to live their lives and real estate markets ebb and flow.



Do we really have a housing shortage?

Almost everyone knows the Toronto real estate market has gone mad as of late, although many would like to have you believe for the most part; that all is okay and the madness is justified.

Governments manipulate interest rates to mask affordability. Banks either prop up or speak down housing depending on how it currently rates to their bottom line. Real estate associations tell you it’s not the “foreign” money driving high prices, its mainly local move up buyers and demand behind the recent high percentages of price escalation.

Let’s set the entire above aside and focus on who loses when the party is over and the lights are turned back on.

I’ll start by saying that not all properties or buyers may be at risk. We all can see that demand is high for choice quality houses in highly desirable neighbourhoods. The same can be said for condominiums as well.

Buyers who are selling property in this market and moving up, down or sideways are taking gains from the sale of one (and sometimes two) property and parlaying their gain often into a more desirable or suitable property. They too are not as much at risk.

Who is at risk? Maybe it’s better to say what is at risk! The entry-level condo market is becoming insane in its price per square foot. Rent, although on the rise the past two years, is not close to what it would cost to purchase and carry an average condo downtown, or in the west and east sides.

You would need $4 per sq.ft in rent after investing in a $475,000 condo with a $100,000 of your own money invested to break even. It’s not happening as of yet so unless rental rates continue to rise, you are operating at a loss on a monthly basis. What happens when interest rates rise on renewal?

What you are also doing is taking a unit that should sell for say $425,000 to an end user (owner occupied) out of the market by pushing up pricing, forcing the first time buyer away from home ownership and the chance to build equity and appreciation. Instead they become renters in a long cycle.

So what happens then? A dwindling supply of first time buyers who are forced into buying what used to be a move-up home/condo price tag as their first home? People trapped into a first time buyer type product because they can’t move-up due to very high prices? What happens when/if rent becomes so prohibitive that people in there 20’s, 30’s and 40’s can’t afford to live within a reasonable commute to where they work?

Our transit system is a joke! It’s nowhere near ready to support density growth outside the downtown core and this is now, not becoming, a very real problem.

Where and how it ends nobody knows. And in someway I hope I’m off in what I’m currently seeing in the marketplace. But don’t believe for a minute that our government’s encouragement and support of foreign investment in real estate isn’t a very big part of the problem.


Spring has come early and sellers are doing very well!

The Toronto real estate market is on fire as of late, and properties that have come early to the market are reaping very big rewards!

Detached homes continue to be in very high demand everywhere, and semi-detached and townhomes in the trendier parts of Toronto, multiple offers are the norm and will continue to be so for a long time to come.

Rental demand along with buyers who are switching their focus from the house market to a condo, has translated into multiple offers on many condos as well.

So when will this hectic pace end many buyers are wondering? Not anytime soon.

Supply is near all times low on the house side of things and with demand far exceeding new listings that are coming to market, it will continue to be a battle to buy. Battles can be won, you just need to be prepared properly, and act swiftly and confidently when the right opportunity presents itself.

Rental demand and costs to rent are rising as well, so this can weigh in on housing availability.

In 2016 there were approximately 20,000 sales of detached, semi-detached and townhouses in the 416 area of Toronto. Add in about 21,000 condo sales (neither include all new construction sales figures).

When you look at this on a monthly basis and take into consideration how many neighbourhoods this represents, you can see the picture clearer. Some neighbourhoods have a few dozen sales throughout the entire year in certain price points.

If these areas are seeing 10-15 offers per property consistently, then it may take a long time to get your purchase. This goes back to the being prepared for when the opportunity presents itself. Make sure you are.

Owning real estate in Toronto is truly a wonderful thing. Be it a house or condo where you will live, laugh and make lifetime memories, or that of an investment property which will help build your wealth. Even though it can seem like madness trying to get in or move up, in the end it is well worth it. Happy house hunting!