Ontario’s New Rental Housing Policy: A Step in the Right Direction

Ontario Government Announces New Rental Housing Policy

Last Thursday, Doug Ford’s Provincial Conservative Government released its Fall Outlook. In that report, it announces that all new rental units, or those that are currently unoccupied as of November 16, 2018, will be exempt from the rent control rules that were implemented in April of 2017. This announcement comes after the average rental rate in the City of Toronto grew 12.1% since last April. That’s a whopping $2,379 a month!


What does this mean?

Conversely, all existing buildings and tenants will still be covered by the 2017 Rent Control rules under the Landlord and Tenancy Act. As stated by the Government, the intended consequence of rolling back rent control on new rental units is to incentivize investors and builders to create more rental inventory, which the city of Toronto so desperately needs. According to the Government in its press release, “the demand for housing in Ontario has risen rapidly in recent years, driven by strong population growth and low interest rates.” However, the supply of housing has not kept pace. And this only further leads to higher prices and rents. Over the last few years, rent control policies that weaken investment incentive and construction activity play a heavy role in limiting supply growth in purpose-built rental housing.

Shaun Hildebrand, President of Urbanation – a company that tracks the Toronto rental market data – describes the current state of the market, as “rental supply has fallen to a critically low level. Demand has been pouring into the market while rental construction still remains relatively low. Condo projects are taking longer to reach completion, not as many investors are offering their units for rent, and tenants aren’t moving as often.”


Why is this happening?

With immigration continuing to pour into Toronto, we clearly need more supply and according to Hildebrand, “we need to be building at a pace of probably at least 10,000 a year. To get there, we would need to see the level of units under construction triple at least — above 30,000.”

The results of strong immigration into the GTA combined with the stifling effects of rent control have caused near crisis-like conditions in the Toronto housing market. We see the effects of low inventory in our marketplace daily. Recently, we rented out a  one bedroom in downtown Toronto. Given the lower price point ($1,800 per month), we advertised privately on craigslist and Kijji. In 36 hours, we received 300 email inquiries, with close to 100 people at the open house. We also got 31 rental applications and in the end, we rented the unit for $100.00 over asking, without even asking. If this is not evidence of a housing shortage, we’re not sure what is.

But, it’s a step in the right direction.

While the issue of rent control is a political hot topic, most economists around the world agree that over the long-term, rent controls will have a very negative impact on affordability. It stifles investment into the new supply and updates to the existing supply. We happen to wholeheartedly agree. Is this new government policy going to solve Toronto’s rental housing crisis? Probably not. However, it’s a good long-term step, heading in the right direction.

Top 12 Considerations Any Pre-Construction Buyer Should Know

The Pre-Construction Buyer Guide


The downtown Toronto resale condo market has been a real challenge for those looking to purchase a condo. Especially for both end-users and investors alike, this has been the case. Because of low inventory and continual bidding wars, many investors and first-time home buyers are turning to buying pre-construction versus resale. While buying pre-construction is both exciting and lucrative, it’s a far more complex process than buying resale. There are many common pitfalls to avoid. That’s why it’s important to know what to look out for as a pre-construction buyer.

With the Toronto real estate market, there are many things to think about when it comes to pre-construction. From my experience in selling pre-construction development projects on behalf of developers and assisting hundreds of clients through the process of acquiring pre-construction properties, there are a number of need-to-know’s. Before proceeding with a pre-construction condo purchase, here are 12 considerations you should be aware of.


1. Know the Developer

When looking at pre-construction, you are essentially purchasing something that hasn’t been built yet. That’s why you need to do your due diligence and research the developer. There are always risks to consider when buying pre-construction. However, those risks can be mitigated when you choose to buy from a reputable developer – one who has a great track record. Research with these questions in mind:

•How long has the developer been in business?

•What were their past projects?

•Do they have a good reputation in dealing with their purchasers?

•What is the quality of their work?

Simply put, you never want to buy from a developer who’s on their first project or one with a bad reputation.

2. Location, Location, Location

It’s a common saying in real estate, that it’s all about location. Looking at the Toronto real estate market, this is especially true. When purchasing a condo that may not be completed for 3 to 5 years, your ability to see into the future becomes even more magnified. Ask yourself:

•Is the area gentrifying?

•Will there be transit or any large infrastructure projects?

•What is the access to parks, coffee shops, and restaurants like?

•Will this area or submarket outperform the overall Toronto market?

These are all important investment and lifestyle considerations to think about as a pre-construction buyer.

3. The Cost of Amenities

It’s important to consider, “what are the amenities and the costs associated”? In reality, most residents don’t really use the amenities available to them. And, over time, amenities can cause maintenance fees to rise, which in turn increase monthly carrying costs. With this, these fees can put downward pressure on appreciation, especially as buildings begin to age. Although a state of the art gym and infinity pool look great on a sales brochure, the question any investor should be asking is, “how will this impact my ROI”? Similarly, as the end user, you should be asking, “will I actually use these these amenities more than once a year to make the added costs worth it”? While every pro-forma and individual will look at this differently, it is nonetheless, important to consider.

4. Get a Good Look at the Floor Plan

It’s paramount that you choose a good floor plan. Your choice of floor plan can be a make or break decision for your investment or future home. Especially as a pre-construction buyer, purchasing from a floor plan can be difficult. So, think about some of these considerations:

•The best condos are the ones that have the most natural light.

•Wide and shallow floor plans are superior to long and narrow ones, which often tend to be darker.

•Does the master bedroom have a door?

•Are the ceilings stipple?

•Is a kitchen island or option to have one available?

•Will you be able to hookup a gas BBQ?

Envision what this will look like from an investment perspective – whether that’s for the eventual tenant or buyer, or as a future home.

5. The Deposit

When acquiring a pre-construction property, the deposit (typically 20%) is spread out over time. While it can vary, it’s usually broken down into payments of 5% across a timeline like so:

•30 days

•90 days

•365 days

•And then, the final 5% on occupancy (which could be 3 to 5 years away, presuming you purchased at launch)

Generally, price isn’t negotiable. In some instances, deposit structure can be pushed out, which can be helpful to an investor looking to preserve cash flow or to a first-time home buyer on a budget.

6. The 10-Day Rescission Period

By law, when you purchase a new home in Ontario, you have what’s known as a 10-day cool off period. This means, from the time a purchaser receives an executed copy of their agreement from the developer, they have 10 calendar days in which they can walk away from the agreement with no recourse. This law is in place to ensure that buyers aren’t pressured into a sale at a showroom. In other words, it gives you time to “cool off” and do your own soul searching and due diligence before firming up.

We always highly recommend that you do most of, if not all, your due diligence and soul searching prior to signing an Agreement of Purchase and Sale. Otherwise, your 10-day rescission period could be a fairly traumatic experience full of second guessing yourself. It’s always best to objectively evaluate an opportunity before you are fully vested into it.

7. Hire a Real Estate Lawyer that Specializes in Downtown Toronto Pre-Construction Condos

A new home Purchase and Sale Agreement is a very thick document. Besides this, signing on for a new home can be quite intimidating! While fairly standard, these agreements are written by lawyers and can be somewhat one-sided to favour the developer. It cannot be stressed enough, how important it is to have a real estate lawyer – one that specializes in this line of work – to review the documents for you during the 1o-day rescission period. An expert lawyer in Toronto pre-construction will know what to look for, where the anomalies are, and what in the contract is up for negotiation.

Furthermore, these lawyers have the experience to guide a pre-construction buyer in the right direction. They will be able to walk you through the document and outline your commitments and closing costs. In fact, the closing costs – including developer charges and taxes – can be upwards of $75,000. And, since you can’t roll these costs into a mortgage, it’s important to be aware of what could be coming down the pipeline in 3 to 5 years, should you decide to move forward.


8. Understand the Assignment Clause and Right to Rent During Occupancy Period

The right to assign means that you, as the purchaser, have the right to sell your contract to another buyer prior to occupancy. This is beneficial to have as part of your agreement. It gives you the option to sell the property so that you’re not locked in until close. However, make sure to read the agreement fine print for any limits to your ability to assign the property – something that should be reviewed with your lawyer. With this, check that you have the contractual right to rent out your property during the occupancy period, as in many instances, the developer will not allow for it. This condition is important, even if you are intending to live in the condo since many things can change over a period of 3 to 5 years.

9. Expect Condo Maintenance Fees to Rise

As a pre-construction buyer, you should keep in mind that the developer is making assumptions on what the condo budget could be like once the building is complete. More often than not, the developer is incentivized to make these projections appear as low as possible to appeal to a prospective purchaser (like yourself). In reality, upon completion, the condo corporations may find themselves underfunded and because of this, increases to the monthly maintenance fees result. Any investor or end-user running a pro-forma should always take this into account.

10. Think About Interim Occupancy

The interim occupancy period is when you get the keys and possession of the condo. But, you do not actually own the property until the building registers and ownership transfer from the developer into your name. Another key point: this is when your mortgage kicks in. On average, the interim occupancy period can take from 3 to 9 months. During this time period, you are paying what is known as a “fantom mortgage”. This consists of interest on the principal owning plus maintenance fees and property taxes to developer. And, this occurs on a monthly basis until the building registers. Furthermore, during the interim occupancy period, you will not be making any mortgage payments on your principal.

11. Factor in Closing Costs

There are a lot of costs to consider as a pre-construction buyer. Specifically, these are costs that are due on close and which are not on the developer’s price list or disclosed in their marketing material. It’s imperative that you have a qualified lawyer review all these costs so that you can properly evaluate the opportunity. What’s more is that you’re not taken off guard when the property closes 3 to 5 years from now. The average closing costs can range from 2 to 4%. These costs include, but are not limited to:

•Development charges

•Land transfer taxes

•Utility connection fees

•Education levies

•Park levies

•Reserve contributions

•…and, the list goes on.

The moral of the story is, don’t get caught off guard! Know your costs and what can be capped at the time of purchase.

12. The HST Rebate

The HST rebate is not always clearly explained at the time of purchase. So, it’s important to understand that HST (unlike resale) is applicable to all new home purchases. As a pre-construction buyer, if you are an end-user (meaning, you are going to live in the condo), the developer will pay HST and will, in turn, have the right to apply for the rebate. If you are deemed to be an investor, you will have to pay the HST owing and have the right on your own behalf to apply for the rebate. You should speak to your lawyer prior to purchasing or before going firm, so that you are clear on how this could financially impact you on closing.


Pre-Construction Buyer Questions?

As you can see, there are many considerations to be taken prior to purchasing a new home, especially as a pre-construction buyer. This is a big purchase! So, there’s one more thing to consider – make sure you have the right team behind you to help you ask all the right questions (and answer them too). The Townsend Team knows pre-construction, and we can be your team.


Michael John Lau, Salesperson

The Townsend Team Real Estate Network
Century 21 People’s Choice Elite Realty Inc.

Direct:  (647) 308-9000  |  Office:  (416) 238-9667


113 Tundra Rd

113 Tundra Rd, Caledon ON

113 Tundra Rd


3 Bedroom

3 Washroom

2 Storey, Townhouse


New Freehold Townhouse built by Monarch Corp in beautiful Southfields Village. This amazing layout includes a massive Master Bedroom, large Walk-In Closet and a beautifully designed Master Bedroom Ensuite.




Kitchen finished with Stainless Steel appliances including Gas Stove, Stainless Steel Overhead Range, Custom Backsplash, Granite Counter Tops, Under-mount kitchen sink, plus more!

113 Tundra Rd Kitchen


This home has an unfinished basement so you can design it to your own preference.



Mike's Pick Of The Week December 4th

57 Victoria Park Ave, Toronto Ontario

Listed Price: $699,900


This is a beautiful semi-detached home by the Beaches! With homes being sold in the $750,000 range, this is a superb purchase with newly renovated floors, built in shelves, pot-lights, and a walk-out private fence to the back yard.

This is a perfect home for first time home buyers who are looking to live close to the beaches!

Location: Victoria Park Ave / Windsor Ave


We all hear prices of homes in Toronto are on average over $1,000,000. The beaches is gaining popularity in the last few months because you can still purchase a home around the $750,000 range. There are many new developments around thee area which in turn can be a very good return on investment.

There are plenty of parks, groceries stores, and many shopping plaza’s nearby.

Nearby Schools:

Balmy Beach Elementary School (rated 8.6)

Blantyre (rated 6.2)

St Michael’s Choir (rated 9.9)

Neil Mcneil Secondary School (rated 8.2)

W A Porter Secondary School (rated 7.6)


If you are interested to view this property or want to see other properties nearby, please let me know!


Michael John Lau

Sales Representative, Yonge St Realty Brokerage

Mike's Pick Of The Week November 27th

147 Brentcliffe Rd

Listed Price: $2,978,900

SOLD: $2,890,000

This Architectural Gem Is The Epitome Of Contemporary Luxury Design Just Steps To Sunnybrook Park! Indiana Limestone & Brick Exterior. Centre-Hall Open Concept Layout Boasts Approx.4800 Sqf Of Living Space. Flooded W/ Natural Light. Floating Glass & S/S Staircase. Cameo Eat-In Kitchen. Private Ravine-Like Backyard.

Location: Bayview Ave & Eglinton

This is a beautiful quiet area in midtown Toronto. You are steps away from Yonge and Eglinton which is one of the hippest areas in the City. There is a movie theatre close by with many new trendy restaurants booming up.

If you have the urge to find some snacks, there are plenty of grocery stores nearby. Sobeys, Longo’s, Metro are all within walking distance.

Nearby Schools:

Many of the schools close by are all top ranked. They all have a rating of 8/10 and above based on the school ratings provided by School Report Cards by the Fraser Institute.


Bessborough Drive



Lawrence Park

Cardinal Carter Academy for the Arts


If you would like more information about this property, feel free to chat with me below!


Michael John Lau

Sales Representative, Yonge St Realty Brokerage

Black Friday Top Buy For Home Owners

1. Philips Hue A19 Smart LED Light Bulb Starter Kit


Light up your home with creativity and convenience with the Philips Hue smart light bulb! You can control your lighting options with your smart phone. The lights can be adjusted to the specific moods or programmed to work as handy alarms and timers.

Save $50 between at Best Buy for $129.99 (Reg Price $179.99)


2. Nest Wi-Fi Smart Thermostat 3rd Generation


If you don’t have one already, the Nest Thermostat will remember what temperatures you like, learns your schedule, and programs itself to save money on your gas bill.

As a bonus, you can receive $100 Enbridge bill credit!

Save $70 at Best Buy for $259.99 (Reg. Price $329.99)

3. Ring WiFi 720p Video Doorbell



If you want to feel safe when your not at home, this gadget will do the trick! Ring will allow you to see and speak to the person at your doorstep without you leaving your cozy sofa or comfortable bed. It is Wifi enabled and battery operated all from the touch of your smartphone.

Save $70 at best Buy for $169.99 (Reg. Price $239.99)




If your a busy person and don’t have time to clean, the iRobot 630 Vacuum Cleaner is here to help.

Save $210 at Canadian Tire for $287.99 (Reg. Price $499.99)




Whether you are changing the lightbulbs, repairing ventilations, doing electrical work, every household should have a ladder.

Save $80 at Canadian Tire for $49.99 (Reg. Price $129.99)

Mike's Pick Of The Week November 20th

101 Bowie Ave, Toronto Ontario

Listed Price: $1,199,000

This beautiful custom built detached 2 storey house is an amazing opportunity for buyers to relocate in the Dufferin / Eglinton Area.

Priced reasonable well too for the area!

This house has a unique modern design with 4 Bedrooms, 4 Bathrooms and over 2700 sq ft of living space!

Location: Dufferin / Eglinton

Currently, there is major construction along Eglinton for the Metrolinx stops. Roads are also in desperate need of repairs. The city is gradually working on repairing all the pot holes. This could be a good investment property for the lucky buyer who fortunate enough to buy this custom home.

This property is only 15 mins away from Yorkdale and Dufferin Mall Shopping centre!

Nearby Schools:

Fairbank Memorial

Fairbank PS

York Memorial CI

George Harvey CI


Michael John Lau

Sales Representative, Yonge St Realty Brokerage

Renting a Property


The government has made it harder for buyers to purchase homes especially for first time home buyers. With the new changes in the October 17th mortgage rules, you will see an increase in leases. For those who are unsure what you would need to rent, here is a list of items required.

What do you need for a lease?

  1. Credit Report
  2. Employee Letter
  3. References
  4. Certified Cheque for 1st and last month rent
  5. Your commitment for at least 1 year =)

If you would like to have more information about renting, feel free to contact me at michael@michaeljlau.com

Mortgage Appraisals



In Toronto, the real estate market has been HOT. With homes being sold at record prices, banks are doing more appraisals to protect themselves. You might have offered to purchase a home for $1 million dollars but that home is really worth $900,000. Banks would have a lot to lose if you default in payments. The lenders want to make sure that the money being lend to you is protected and appraisals are usually the way to do it.

Lenders would send in an appraiser after an offer to purchase has been accepted, but before the mortgage is advanced and the Buyer takes possession. The appraiser will physically go to the house and compare it to recent sales in the surrounding neighbourhood.

There are situations when the appraiser does not think the home is worth what the buyer and seller agreed what it was worth. In this situation, the buyer would have 2 options:

  1. Find another lender who sends in another appraiser.
  2. Put in a larger down payment.