What Is An Exclusive Listing?
The short answer is; that it’s a positive but small step in the right direction. Its overall impact on affordability will be minimal at best or better described as a drop in a bucket.
We at Fox Marin have been shouting from the mountain tops for decades now that prices in Toronto will continue to rise in the face of solid immigration and domestic demand. The only way to mitigate or bring some level of affordability to the Toronto Real Estate Market is by increasing supply on a massive scale.
The recent passage of new zoning laws allowing for garden suites may give some homeowners the ability to construct smaller secondary units that cannot be severed or sold separately.
Like laneway houses, garden suites provide a way to house family members in separate dwellings on the same property (in this instance) not located on a laneway. Alternatively, garden suites can be leased as legal rental units. Additionally, these dwellings may provide an opportunity for children who are priced out of the real estate market to live in a mature neighbourhood with their parents or grandparents.
In light of this, garden suites may provide a solution for some families willing to live close to one another. Or, for individuals looking to rent in more traditional neighbourhoods with few purpose-built or legal rental options like the Annex, Roncesvalles or North Riverdale.
We fundamentally support zoning that allows for the creation of more affordable housing. Additionally, existing homeowners have more opportunities to add value to their properties. However, adding a few hundred rental units a year to a city that receives 100,000+ immigrants annually will give the resale or rental market next to no relief. In turn, it may only provide a marginal increase in rental inventory in established neighbourhoods, which likely can lease at premium rental rates.
As of this writing, the average detached house in Toronto is just under 1.9M, and semi’s are approaching the 1.5M mark. Today, the average Torontonian cannot afford to buy a home at these prices. To the lucky few who already own a low-rise house in Toronto, the passage of this new zoning by-law will give some the ability to add value to their properties by constructing a garden suite.
Over the last few years, property appreciation has given current homeowners more leverage than ever before. Consequently, home equity could finance the construction of a garden suite. Anticipate the cost to build between $400 – $600 PSF with the maximum height at 20 feet and set back from the existing house at 16 feet.
Since these suites cannot be severed, one could anticipate on a cap rate basis that the average house with a garden suite could see its property value rise by $500,000 – $1,000,000 when it comes time to sell. Not a bad return on investment!
With real estate prices already sky high and out of reach for most, exactly how is this going to help bring affordability to Toronto Real Estate? Drop us a comment or note anytime – we’re always open to chatting more!
When it comes to the equity in your home or managing and growing assets in your real-estate portfolio, you need a committed and competent team in place, consultants who are always available and in it for the long haul, even long after the transaction has been completed.
This article was written by Ralph Fox, Broker of Record and Managing Partner here at Fox Marin Associates. Ralph is a Torontonian native who recognized from an early age that the most successful people in life apply long-term thinking to their investments, relationships, and life goals. It’s this philosophy, along with his lifelong entrepreneurial drive and exceptional business instincts, that help to establish Ralph as a top agent in the real estate market in downtown Toronto.