Rule changes … rate changes … bond yields … home prices … Bank of Canada announcements – we’ve had you covered! But compared to the hectic weeks (and even months) we’ve had, it has been a relatively quiet week.
MPAC’s Market Snapshot: Ontario
Municipal Property Assessment Corporation (MPAC) released their first report on residential property sale prices in Ontario. MPAC is a not-for-profit, public sector corporation who is responsible for accurately and uniformly valuing all properties in Ontario every 4 years.
MPAC uses a CVA (current value assessment) which is based on what value a buyer and seller would likely agree upon and also takes into consideration other comparables when calculating the assessed value. This fall, all property owners in Ontario will receive a Property Assessment Notice as of January 1st 2012.
Since property taxes are directly affected by the assessed market value, the Ontario Government has integrated a 4-year phase-in program to assist with keeping up with an increase in taxes. For an example on how this will be applied over the next 4 years, check out page 3 of the report.
Residential Sales Price Index: Ontario
The average Ontario home has increased in value by 17 per cent between January 1st 2008 and January 1st, 2012, which is quite the return on investment when you consider inflation only increasing by only 5.37 per cent over the same 4 years. Here is a breakdown for other regions across Ontario:
The average sales price in Ontario has increased by 17 per cent since 2008, but how would you feel if I told you that (on average) you’re going to kiss just over 30 per cent of that profit goodbye??!
Consider this: The average sale price in Ontario in May was $375,605 (taken from CREA) and the average real estate agency will charge you 7 per cent on the first $100,000 and 3.5 per cent on each additional $100,000.
So since 2008, the average home price has gone up almost $55,000 but you have to fork over 30 percent – or $17,000 – to your real estate agent. That’s crazy! And this is exactly what Giorgio Lupinacci thought before he founded Bidcomhomes.com. This website empowers the seller by having realtors compete against each other for the listing by offering lower commissions. This is a great option to assist sellers in finding an acceptable commission rate during the sale of their home and hold onto more of that appreciated value! But maybe you’d rather have ALL of the $17K in your pocket? There are websites for that too – check out ComFree – the largest commission free network in Canada!
RateSupermarket.ca Week in Review
*Yawn* No changes. Not one! But, over the last week there were some changes to the 5 year variable rate which started (and ended) at 2.60 per cent but went as high as 2.80 per cent this week the only other rate that hopped around at all was the 10 year fixed rate which still sits at 3.78 per cent but did get up to 2.84 per cent.
The 5 year terms remain the most popular searched rates with 88 per cent of visitors looking for the best rates on the market! Nearly one third (28 per cent) are searching for the 5 year variable rate second to the all time low 5 year fixed rate. 60 per cent of our visitors were looking for this special 2.89 rate!