Attempting to fully get a handle on the real estate industry in India from our North American perspective may be an exercise in futility. You can try, but there’s no guarantee you’ll succeed. They’re two hugely different cultures, after all. 

A push in both Canada and India for greater industry professionalism

“Comparing India to Canada is not the right approach,” insists Re/Max India’s CEO and co-owner, Aditya Agarwal. Still, it’s fair to say that in both countries there’s a push to varying degrees for greater professionalism in the industry.

With around 1.45 billion citizens, India has recently overtaken China as the world’s most populated country, according to the United Nations. Real estate is one of India’s fastest-growing sectors. The economy is stable. The cost of living is low. The country has heavily invested in infrastructure development. Demand for housing is strong, with loads of growth potential.

Realtors in India can make “very good money” and so can their clients, attests Agarwal.

Look for ‘a new and different change in Indian real estate’ and a market ‘on the verge of rapid expansion’

The real estate industry in India, however, is highly unstructured and unregulated, although change has been underway in recent years. The legal framework and government rules “are stricter in substantial cities” like Mumbai and Delhi than in small communities, Agarwal notes. 

“In the last seven or eight years, the government has taken significant initiatives to regulate the market,” with the help of the establishment of a Real Estate Regulatory Authority in each state, he explains. “In the next few years, we will see a new and different change in Indian real estate.” 

Earlier this year, India Today magazine applauded the industry’s efforts to improve standards, stating in an article that, “Recent government reforms aimed at fostering accountability and openness have put the Indian real estate market on the verge of rapid expansion.”

India’s market ‘frontier-like’: NAR-India

Even so, the National Association of Realtors (NAR-India), formed in 2008, has been known to openly deem the country’s market “frontier-like.” 

This is where the Indian and North American worldviews can deviate. We tend to feel a “correction” is in order. Many of those living in India may disagree, content for the most part with the status quo. Lest we forget, India was exploited under colonial rule for close to 100 years —  a legacy that shapes the nation’s psyche in ways we can’t imagine.

There’s no standardized MLS in India. No mandated licensing or training of agents. Solid data for backing up sales prices and comparables may be lacking. Organized crime in the industry is known to be an issue. Regulatory complexities and bureaucratic hurdles abound.

Some feel industry is unorganized, more should be done

NAR-India could be doing more to empower the country’s realtors, Agarwal feels.

The legal framework can be poor. Especially outside the cities, there may not even be listing agreements, with the result that realtors’ unpaid commissions become lost causes. Buyers and sellers may use an agent or they may not, preferring instead to handle the transaction by networking with friends, neighbours and family. 

“It’s unorganized,” asserts Eldred Fernandes, who sold real estate on the side for a top builder in the state of Goa while working as a marketing professional with an Indian paints and sealants company, before moving to Canada. “Most people in India buy on trust.” 

They’ll pay a finder’s fee or divvy up a commission between the friends who assisted them. It can be similar for agents, with quite a few often involved in the same transaction, Fernandes continues. (In India, he adds, realtors generally require both the seller and buyer to pay 1.0 or 2.0 per cent commission.)

Industry inconsistencies with ‘huge potential to organize the sector’: An ‘enormous challenge’

Fernandes, now a Royal LePage agent in the Greater Toronto Area (GTA), still occasionally lends a hand in overseas transactions. In his experience, the new-build condominium market in India overseen by builders/developers in the concrete jungles of the big cities is “somewhat organized” (although it’s widely reported that developers differ greatly in terms of ethics).

This doesn’t hold for the resale market though, he feels, especially in small towns and villages.

“There are a lot of inconsistencies,” he states. “There’s huge potential to organize the real estate sector.” But it’s an enormous challenge. Corruption continues to be an issue, with some clients opting to do a hefty portion of deals under the table in cash to avoid taxes and other costs, he says. “How can the industry be regulated until that’s regulated?”

Many locals happy with status quo and don’t want change

While North American-based franchises have begun making inroads towards further professionalizing the business, some locals are leery of the offerings of the smattering of big Western-world brands that are infiltrating India’s vast market, Fernandes has found. Many are satisfied with the system as-is and don’t necessarily want change.

When Keller Williams Worldwide announced its expansion into India last year, company president William Soteroff remarked on the country’s “extraordinary growth and strong economic outlook” and explained that Keller Williams wants to “raise the bar of real estate service” in India to differentiate themselves from the rest.

Time will tell whether or not directives along these lines are something the nation will eventually embrace.

Calgary-based realtor Renata Reid has an inspired way with open houses that’s helping to reshape the traditional format and kick this timeworn marketing tool up to the next level.

As senior vice president of sales for Sotheby’s International Realty Canada, Reid believes that open houses should tell a story and sell a lifestyle. Her brokerage has done a number of marketing videos featuring her techniques, hoping to fire the imaginations of agents across the country.

Are open houses still worthwhile in this fractured, digitally-driven market? And what, you may ask, could Reid possibly be doing in this threadbare milieu to attract that kind of attention?  

The world of extreme open houses: An ‘immersive’ experience with the ‘Martha Stewart’ touch

Welcome to the world of extreme open houses, where superior enticements such as catered refreshments, entertainment and prizes are used to generate buzz about a property, stimulate the senses and create an unforgettable “elevated” experience. 

Envision an open house held by Martha Stewart, if she was a realtor.

The home has a gourmet kitchen? Have a chef at the open house cooking up a storm. There’s a gorgeous deck? Throw an epic barbeque. The idea is for potential buyers to see the home sizzling with life and energy, making it easier for them to imagine themselves living there. 

“If you don’t do anything out of the ordinary, people won’t come,” insists Reid, who maintains that potential buyers are attracted to the “immersive experience” she creates.

Of course, there also continues to be a need for quieter open-house experiences.

But if you’re going all-out, a paper plate of cheese and crackers won’t do. At Reid’s open houses, depending on the asking price and the package the sellers choose, there’s live music — everything from a violinist or wandering professional singer to a jazz band. There may be games and prizes set up in the backyard to keep the kids occupied, white linen tablecloths making the event more reminiscent of a wedding than an open house, floral displays and fresh baking scenting the air, elaborate trays of food (and wine, if allowed) and waiters smoothly circulating with canapes.

Once, to symbolize “iconic luxury,” Reid had an Aston Martin on display in all its glory. “I have sponsors for my open houses — mortgage specialists, architects, interior designers — who may be there to give advice to potential clients,” Reid adds. 

Creating hype with advance advertising and a warm welcome

Creating momentum leading up to her “grand open house weekends” is a key part of the hype, with plenty of “coming soon” advertising, she explains.

Wife and husband team Kelly and Michael MacKendrick concur that “a lot depends on advertising in advance.” Without going to the radical lengths that Reid does, the couple, with Sutton Group Heritage in Ontario, recently managed to pack the open houses they held for the sale of their own home in Markham, prior to moving to the small town of Meaford. 

“Even during COVID we’d have people lined up out the door for open houses, once they were allowed again,” recalls Kelly. 

It can’t hurt that you’d be hard pressed to find realtors more hospitable than these two. We’ve all been to open houses where the agents barely acknowledge visitors. That’s not the MacKendrick’s style, nor do they feel it’s constructive. 

It’s about ‘the art of selling’

“A large part of whether or not you’re successful at an open house comes down to the art of selling,” asserts Michael. “If you’re not engaging, I can see why an open house wouldn’t be as effective.” 

He and Kelly like open houses because they maximize exposure for their clients — which is the name of the game, they point out — and also have potential to be a source of new clients, thanks to those who come through unrepresented or bring along friends and family. Unlike many agents, they’re not adverse to extending invitations to people who aren’t in the market to buy, as it can be helpful in getting the word out.

This includes neighbours — nosy and otherwise. “Some of your best advocates are the neighbours. We’ve gotten clients that way,” says Kelly. “And they give you great intel on the neighbourhood.”

Look for out-of-the-box opportunities and strategies

Thinking outside the box, the duo have occasionally held open houses at odd times, including in the evening and when school is about to let out. “You never know what will work. Look for opportunities,” they advise.

Taking that kind of strategizing further, realtors could consider timing open houses to coincide with events in the area, such as street fairs, neighbourhood-wide garage sales, concerts and other community gatherings. 

Another perspective: Don’t ‘water down’ the experience

Re/Max top producer and real estate advisor Tim Hill of Greater Vancouver cautions though, that the sellers’ interest in open houses tapers off after the beginning stages. “Open houses are most effective when a property is just listed,” or has recently had a price reduction, he’s observed.

Hill explains that holding too many open houses tends to “water down” the experience for everyone, especially sellers, who grow tired of all the cleaning and the amount of time they’re required to remain away from the house.

In his opinion, open houses “are not the most effective tool,” due mainly to the attendance of “looky-loos” and potential buyers who haven’t been prequalified. 

Make seller expectations clear and give buyers plenty of notice

This familiar beef notwithstanding, Re/Max broker Akash Bedi, a past president of the Winnipeg Regional Real Estate Board, has found that recent open house “traffic counts” have increased now that summer is over.

Bedi advises making it crystal clear to sellers what’s expected of them, and allowing at least “four to five days of pre-marketing” to help ensure that people who want to attend an open house are available and up to speed.

Many realtors get new agents to help with open houses and with marketing them, he adds. From what Bedi has seen, the majority of agents and their clients “still use open houses as a listing and marketing tool.”

Most clients, although by no means all, still seem to like and expect them … elevated experience or not.

Fantasizing about living and working abroad is practically a national pastime here. Europe looms large in many people’s daydreams, with visions of closing down shop there in the afternoons, having a leisurely lunch then later enjoying an evening stroll around the piazza arm-in-arm with friends or family.

“It can be quite the idyllic lifestyle,” affirms realtor Valerie Dooley of Forest Hill Real Estate in Toronto. Dooley lived in Italy for years and still takes on the occasional European transaction. She describes the pace there as “more laid-back, like stepping back into another century.”  

‘A relaxed lifestyle, with multigenerational families often cohabiting’

European culture “embraces a relaxed lifestyle, with multigenerational families often cohabiting,” she continues. “You work less hours, with personal and leisure time put ahead of work schedules. Quality of life is paramount.”

As the maxim goes, Europeans work to live, not live to work. 

Of course, Europe is a vast area and every region is different. In North America, we tend to romanticize it somewhat. But the opposite is also common, at least when making comparisons between working here or there.

The experience can be viewed as heaven, hell or somewhere in between, depending on your perspective. Take for example the saying, “If you fear the world will end, come to Europe. Everything happens decades slower there.”

Is that a good thing, or not? 

Agents in Canada ‘have no idea how easy they have it’

Cultural bias is unavoidable and there’s no question that it warps our worldview. What one person finds charming, another may see as crazy-making.

Agents in Canada “have no idea how easy they have it,” asserts Ontario-based realtor Irene Kaushansky, who’s on Keller Williams’ global luxury task force. She’s of the widely-held opinion that the real estate business in Europe tends to be less organized and predictable than here, although she feels that’s started to change. 

“It’s very country-dependent,” she notes. 

Kaushansky tells the story of a realtor friend of hers in England who’s begun charging her buyer clients a retainer. “She doesn’t want to work for free (and) this weeds people out. There’s no buyer representation there, no contracts.”

A dynamic arena with enormous opportunities for the Canadian industry but buyer agency is complex

Michael Polzler, CEO of Re/Max Europe, lends weight to that anecdote when he describes the results of the feasibility studies done prior to Re/Max first launching on the continent 30 years ago. “They all came back resoundingly saying that it would never work,” he explains.

It turned out to be a dynamic arena with enormous opportunity.  

“There’s no question the European way of living and working has its own appeal,” Polzler observes. “But it’s still a marketplace where there’s essentially no formal set of rules, no MLS, no sharing of information or historical data and where the idea of cooperation between agents doesn’t formally exist.

To see 30 different homes, in most cases, you have to ask 30 different agents …The lack of buyer agency is really very complex.”

‘It’s double-ending paradise’: Key differences between North American and European industries

The industry in Europe is highly fragmented and deregulated, Polzler maintains, with different dialects, cultural norms, ownership rules and business practices everywhere. Many countries have no organized real estate whatsoever. Client and realtor protection may be minimal.

Small “mom and pop” offices have traditionally defined the industry there. Hugely productive superstar agents as we see in North America are thinner on the ground (leading to much tone-deaf and contentious speculation that European realtors are happier but have less entrepreneurial spirit than their counterparts in North America). 

Industry licensing is uncommon. As for payment, many realtors are salaried, but if on commission, “There’s generally no standard fee here in Europe,” notes Polzler. “It’s double-ending paradise.” 

Real estate offices, particularly in rural areas, may shut down for a couple of hours each afternoon and be closed on weekends. “You’ll see offices closed through the summer for weeks,” says Polzler. “And it’s hilarious how long it can take to get a call back.”

In his view, “If agents can learn to provide a better customer experience, that would change the industry here.” 

Professionalism and cooperation on the rise

Professionalism is on the rise though, including — very slowly — cooperation between agents, Polzler notes. (He attributes this to “trans-Atlantic education” from Re/Max and its competitors.) “I can get frustrated, but people here are listening and starting to understand and cooperate. There’s progress.”   

Dario Castiglia, president and CEO of Re/Max Italy and a managing director of Re/Max Germany, describes how North American practices have “enhanced the role of the realtor” in Europe via measures such as cooperation among offices and the introduction of favourable commission splits, along with “the open house concept, the large office concept, the agent-centric idea, the personal promotion of agents, the team concept,” and so on.

“But,” Castiglia adds, “We’re still a minority and our impact is limited.”

The next generation will tell the tale, he believes.

There’s speculation that Canada’s housing market is headed in a direction that will land us in a foul-up similar to much of Europe, with housing prices so out of reach that many people will never be able to afford a home unless they inherit one.

In a country like ours, recognized globally for its opportunities, this harsh forecast comes as a shock. But experts aren’t denying that it’s a possibility.

The housing supply crisis’ magnitude

“It’s a valid question,” says Kevin Hughes, deputy chief economist with the Canada Mortgage and Housing Corporation (CMHC). “Housing affordability and the housing crisis have been in the news for several years now.”

To get an idea of the magnitude of the housing supply crisis, CMHC recently updated its Supply Gaps Estimate report in hopes of determining how many housing units beyond current trends would need to be built between now and 2030 to restore affordability. The number CMHC came up with is 3.5 million.

“That’s a lot,” Hughes stresses. “I’m not saying it’s a realistic goal. But it’s what we’re looking at.”

It would in fact be an unprecedented boost in construction, which would come at what many consider an unacceptable societal cost, majorly stressing the system and creating countless spin-off issues around infrastructure, traffic and the environment.  “We can’t look at housing in isolation of these other factors,” Hughes asserts.   

What’s realistic?

Reading between the lines, such an extreme level of supply may very well not be achievable, despite ongoing government initiatives at all levels, including the recent federal budget, which lays out a plan to unlock 3.87 million new homes by 2031. 

According to the CMHC report, Ontario and British Columbia continue to be Canada’s least affordable housing markets, with the lion’s share of the housing supply gap. As financial pressure mounts for Canadian households in large centres battling high prices and insufficient supply, “more people get priced out and move elsewhere,” notes Hughes.

Increased population density is another path forward for cities in this situation, he explains. 

“There are roughly 4,000 people per square kilometre in Montreal, and Toronto is about the same. That can go up to 7,000 and above in some centres in Europe. The starkest comparison is Paris, where there are 20,000 people per square kilometre.”

Yowza. No wonder France is experiencing a major lack of housing supply.

Similar trends around the globe

In cities worldwide with similar issues around population and housing shortages, experts have observed that there tend to be:

• greater numbers of compact housing units being built,
• more focus on public transit over cars in the downtown core,
• increased cohabitation and communal living,
• more people commuting greater distances,
• a significant percentage of young people living at home who’d normally have moved out and
• mortgages being held for longer periods, even well past retirement.

All of these things are happening to some extent in Toronto, Vancouver and Canada’s other large, busy cities.

“We’re already seeing density increasing,” Hughes affirms.

Many possible future paths — including those like Europe’s

The True-North-strong-and-free is shifting to a new normal. Take the example of commuting. “Before, no one would travel an hour to get to work. Now no one gives it a second thought,” Hughes points out. “What people think of as ‘normal’ changes. When we think we’ve reached the limit, we realize we haven’t.” 

He continues: “The future in Canada will likely be a mixture. We’ll see more supply, more density and more people moving elsewhere. The variables aren’t mutually exclusive. It’s never all or nothing. It could go many ways with many variables. Nothing is inevitable and none of this will happen overnight. There are many possible paths.”

So yes, it seems that watching our housing market become more like Europe’s may be among these. 

“I’ve heard that,” confirms Valerie Dooley, a sales rep with Forest Hill Real Estate in Toronto who’s lived in Europe. “Multigenerational living is common in countries like Italy,“ she adds. “I think we’re starting to move more in the same direction.”

Another outlook

Despite perceptions to the contrary, Re/Max Canada president Christopher Alexander states that homeownership rates throughout much of Europe remain high, “upwards of 70 per cent in places like Malta, Estonia, Hungary and more.” (At the time of the last census in 2021, Canada’s homeownership rate sat slightly beneath that, at 66.5 per cent — a 20-year low.) 

Alexander insists that Canada still has a lot of affordable markets. “Many people tend to make affordability comparisons to our most expensive and sought-after cities when it’s not realistic for first-time homebuyers to expect to buy their dream homes at their first purchase,” he points out.

The best advice he can give homeowners, he says, is to get into the market within their means and start building equity. “That’s a surefire way to be able to eventually afford the home you want in the city you want.”

And in case of any lingering doubt, Alexander asserts that real estate in Canada continues to be a good investment.

“Canada is aggressively trying to build more homes and create greater affordability. I’m confident that homeownership will be in reach for most people for years to come.”

Few things will sink the serenity you achieve during a vacation faster than coming home to find your basement flooded. I know this from experience, recently having returned from a trip to discover that a burst pipe had been furiously gushing water out into my basement for weeks. 

I live in Toronto, where water usage is metered, as it is in most large centres across Canada. With a metered system, any leak, no matter how small, can quickly drive up your water bill. Experts note that even tiny so-called “invisible leaks” can easily bleed away a significant amount of water, and a burst pipe running for just a few hours can potentially flood a home from top to bottom. You may eventually get an alert from the municipality, but by that time many in this predicament find themselves in deep water financially with the utility.

In my case, I’m looking at a probable $6,000 hit, unless I can convince the water utility to take pity on me and adjust the bill, by no means an easy task. So far, as per the City’s guidelines on these matters, the documents I’ve sent them include confirmation of my age and income, a licensed plumber’s letter, proof that my water meter is free of defects and that the leak was not in my control and even, as added validation, airline ticket receipts proving that I was out of town when the leak occurred. 

I’m hoping the next step won’t be handing over my firstborn, but it’s a crapshoot.

Advising clients when it comes to leak issues

Issues around leaks can be of particular concern to realtors with clients whose houses are sitting empty due to divorce, death, a job transfer, etc. It’s important to ensure in these situations that plumbing systems are in good repair, are being checked regularly or are shut off. The latter of course isn’t ideal for showings and open houses, but it beats having your clients get hit with a crippling water bill.

“Tell them to shut off the water and put a ‘don’t use’ note on the toilet,” advises Richard Fleming, broker/owner of Re/Max Mountain View in Calgary. “Often homeowners say they wouldn’t have thought of that.”

Or you could turn on the water when holding an open house but shut it down again when you leave. 

Homeowners can ensure that their water use isn’t creeping up due to unnoticed leaks or a continually running toilet by monitoring usage via their water bills and/or their account on the utility’s website, Fleming points out. 

In his observation, Calgary’s much-publicized water main break this past June didn’t have a noticeable impact on the city’s realtors and their clients, other than some water restrictions which he deemed only “a minor inconvenience.”

On the flip side, he recalls his “worst water leak story ever,” involving buyers who didn’t get their own home inspection but instead, against his advice, used one provided by the sellers that was a year old. Within a few months of his clients moving in, heavy rain caused their basement to flood. The neighbours informed them that this was a common occurrence and was, in fact, the reason the previous owners sold the house.

“My clients sued for $40,000 — the cost of a proper repair — and won. But it took five years,” says Fleming. “Never use a pre-existing home inspection … and don’t list with clients who refuse to disclose these issues to potential buyers.” 

Advice from the Canadian Institute of Plumbing and Heating

Tips from the Canadian Institute of Plumbing and Heating on how to troubleshoot begin with the obvious: keep an eye out for drips. “This is a hot topic,” says the organization’s CEO, Satinder Chera, explaining that a hefty percentage of insurance claims stem from water damage. “The problem can be costly, not to mention that if left untreated, water damage can develop into a mould issue with real health risks.” 

In his experience, the most common source of water leaks tends to be burst faucets, toilets or appliance supply lines. 

“When vacationing, the best way to prevent potential water leaks is to shut off your incoming water service valve, which is typically right by your water meter,” says Chera. “If you do that, make sure to also turn off your water heater.”

There are numerous products available to help with detecting and managing potential leaks, he continues, including automated shutoff valves.

Insurance claims: The big message is ‘maintain your property’

If your client winds up having to make an insurance claim, be aware that only certain types of water damage are covered under a standard policy, explains Rob de Pruis, a national director with the Insurance Bureau of Canada. For instance, sudden and unexpected plumbing leaks are covered. But sewer backup and flooding from heavy rain aren’t — for those, you generally need optional coverage. 

“If a supply line under a sink has been leaking for years and bursts, that’s not covered,” adds de Pruis. Normal wear-and-tear isn’t insurable, so the big message is “maintain your property,” he emphasizes. 

An insurance claim may also be denied if the owners didn’t have anyone checking on the home regularly in their absence. Depending on the insurer, in these cases, the homeowner is expected to have someone stop by the property at least once or twice a week. 

My basement is unfinished and well-drained, so in my situation, the damage is manageable and didn’t call for an insurance claim. Getting an adjustment to the water bill from the City for uncontrollable consumption is something else altogether (especially right now when the utility is dealing with a much bigger issue, having just discovered that a huge number of Toronto’s water meter transmission units have failed, wreaking havoc with billings). 

But there’s hope for me. For starters, to be considered for a bill adjustment, water usage during the period in question has to be at least three times the home’s usual daily average. No issue there; it was 40 times my norm.

It also seems that the water utility is more likely to cut you slack in these matters if — how shall I put it — your age has reached the “vintage” stage and your income is such that you’re unlikely to have a wallet full of platinum credit cards. I meet those criteria, relatively speaking, which isn’t something I ever thought I’d find particularly helpful. But if it is in this case, so be it.

Fingers crossed.

Good luck, parents and grandparents hoping to get a pat on the back for those tall tales about the challenges you endured growing up. Now it’s millennials and Gen Z receiving all the sympathy for the hurdles they go up against.

Fair or not, growing sentiment holds that the long slog through snow drifts that grandpa contended with to get to grade school pales in comparison to the current realities younger generations face, in a world waving farewell to affordability and leaving homeownership out of reach for many. 

About 50% of university students graduate with debt

One barrier that tends to scoot under the radar is student loan debt. According to Statistics Canada, roughly half of university students graduate with debt. This can impact long-term financial plans, so much so that many young people cite it as their primary reason for being unable to get into the housing market. 

It’s been dubbed “gateway debt,” as it can hamstring financial independence, leading to social inequity and postponing important life choices.

“Entering the workforce with debt from other sources compounds housing affordability issues”

Recent government measures to reduce interest accumulation and otherwise make student loan debt more manageable need to be stepped up, housing activists insist. They reason that student loan debt is more than just a financial burden. For many young buyers, it can be the biggest obstacle not just to homeownership but also to meeting other major milestones, such as moving out of the family home and having children.

Says Craig Munn, vice president of communications for Greater Vancouver Realtors: “Saving the large sums necessary to buy your first home is a significant issue for all young adults. While the investment in education and skills-building strengthens individuals’ earning potential long term, entering the workforce with debt from other sources unfortunately compounds the housing affordability issues that young people face today.”

Debt delaying significant adult landmarks — like buying a home

Kate Phifer graduated with $40,000 of student debt from Greater Vancouver’s Capilano University in 2016. She’s now a student success facilitator there. The debt is behind her, having been paid off relatively quickly, over four years. But Phifer believes that student debt ended up delaying key adult landmarks for herself and her wife (a paramedic), who haven’t yet been able to afford to start a family or buy a home. 

“Without debt that picture would be different,” contends Phifer.

Many of her friends who graduated without debt — or whose parents paid off their loans for them — own homes and have children now, notes Phifer, although a significant number have had to move to smaller, more affordable communities to do so. 

Hannah Moffet, 29, who graduated from Ontario’s Trent University seven years ago, has whittled down her student debt by half, to $16,000. She lives in a rented condominium with long-time boyfriend Denny and is working as an administrative assistant at Toronto General Hospital. Her bank statement continues to take a heavy hit monthly when her Ontario Student Assistance Program (OSAP) repayment is withdrawn. 

“It’s definitely slowed me down” in terms of saving for a house or marriage, acknowledges Moffet. “Rent is high in Toronto too. I don’t think I’ll ever be able to afford a house here.”

But she reasons that at least she doesn’t have a bank loan or line of credit along with the student debt, like some of her friends.

42% of Ontario graduates consider leaving due to the affordability crisis

A poll around the impact of student loan debt on home ownership, released last fall by the Ontario Real Estate Association (OREA), found that with the weight of loan debt making it harder to save for a home and qualify for a mortgage, 42 per cent of Ontario graduates are considering leaving the province due to the affordability crisis.

British Columbia is experiencing a comparable dilemma, with many graduates opting to move to less pricey provinces like Alberta. “Millennial buyers are facing some stiff headwinds,” notes Randy Ryalls, a Royal LePage broker from B.C.

With young grads looking to other provinces for affordable housing and “taking their skills with them,” OREA president Rick Kedzior is among those who feel that homeownership policies aimed at easing the squeeze of student loan debt need to hit harder. “By championing policies that can help break down barriers to homeownership and foster a supportive environment for education financing, we can help alleviate the pressures of student loan debt and empower the next generation of homeowners.” 

OREA’s recommendations for the government

Among the recommendations OREA put on the table for government action as a result of its recent survey are:

• eliminating the accumulation of interest on all provincial student loans (federal interest is already eliminated Canada-wide after initially being introduced as a relief measure during the pandemic)
• increasing the initial repayment grace period, so that new graduates have additional time to find employment and save up before starting repayments
• allowing graduates to alleviate a portion of their student loan when they add funds into the federal First Home Savings Account (FHSA)

Younger generation more willing to compromise

One result of the current challenging economic picture, according to recent RBC findings, is that young first-time homebuyers are becoming increasingly willing to accept trade-offs that older generations wouldn’t, displaying greater flexibility around location preferences and living in smaller spaces. 

And despite debt and out-of-sight prices, a recent survey by Wahi, a digital real estate platform, found that Canadians aged 18 to 34 have the strongest homebuying intentions this year of any demographic. Results suggest that young aspiring home buyers are willing “to make sacrifices, including spending less, working longer hours, or taking on a side hustle,” to overcome obstacles and get on the property ladder, notes Wahi CEO Benjy Katchen. 

“They’re willing to make lifestyle and work changes to realize their dreams.”

If you’ve wondered how the Bank of Mom and Dad is faring in these dodgy economic times, rest assured it’s more popular than ever.

Recognizing that it’s harder to buy a home now than when they were young, in recent years Canadian parents have passed billions of dollars to their adult children to give them a leg up entering or advancing in a housing market where they’re up against impossible prices, limited supply, stringent mortgage requirements and steep interest rates and taxes.

It’s being hyped as an unprecedented transfer of wealth, taking FOMO — fear of missing out —  to new levels, with boomer parents doing all they can to ensure their kids grab the receding brass ring of homeownership before it’s completely out of reach. 

Embracing extreme measures before homeownership completely out of reach

This has gone way beyond providing a loan or helping with the down payment, especially in the past five years. Parents are embracing more extreme measures, pitching in with mortgage installment payments or becoming loan guarantors, liable for mortgage payments if the child defaults. Many are even going on title as co-signers to help their offspring qualify for a mortgage. 

In some cases parents are flying without a net, pulling funds out of their retirement savings or equity from their own home, using a second mortgage or home equity line of credit to assist, potentially putting their retirement at risk.   

Suggest clients get legal advice if asked about parents loaning or gifting money to kids

It’s a wonderful thing to be able to help get your struggling offspring launched — especially if they’ve been getting a little too comfortable in your basement. But realtors need to be aware of the potential risks when representing clients in these situations, “or they could find themselves in hot water,” warns Toronto business and real estate litigation lawyer Matthew Mulholland.

If things go sideways, realtors may be exposing themselves to an expensive and time-consuming lawsuit. “In all cases, real estate agents should encourage their clients to obtain legal advice when consulted about parents loaning or even gifting money to their children,” Mulholland advises.

He provides this sobering example: “Imagine a situation with a pre-construction home and rising interest rates. There’s a risk that a child may not be able to secure a mortgage by the time the sale closes. They may face exposure for damages from the developer … but exposure may be limited by their limited assets. A parent, on the other hand, may have another property or other assets, and face significant exposure because they’re named as a buyer on the agreement of purchase and sale.”

Tough saving for down payment with rent and mortgage payments so close

Greater Vancouver Re/Max agent Tim Hill says he’s seeing parental bounty in well-off families extending to helping with second home purchases: “It’s not just limited to the first.”        

Hill has witnessed parents providing these funds as an early inheritance or finding other creative ways to get their kids into a more stable situation or keep them nearby. “Everything is so expensive here,” he says. “If rent costs nearly as much as a mortgage, it’s hard to save enough for a down payment to make the jump to owning.” 

He recalls clients — a young couple —  whose parents helped with a down payment and also went on title, which enabled the pair to move from a condominium into a fully detached house, potentially their forever home. “That financial nudge put them ahead of the game, allowing them to get something long-term now and avoid having to potentially make the jump to a townhouse first.” 

What about families with fewer resources?

Those who come from families without deep pockets have fewer options. “In the past year I’ve seen more young families make the move to Alberta than ever before,” Hill says.

Unfortunately, parental generosity is increasingly necessary if younger generations are to get ahead, especially in large urban centres. Without that foot in the door, the dream of home ownership is “slipping away from too many young families,” observes Tim Hudak, CEO of the Ontario Real Estate Association (OREA). 

The phenomenon exists across the country, but Ontario and British Columbia “are in greatest jeopardy of losing younger generations to other provinces” due to lack of housing affordability, Hudak asserts.

Student loan debt: Among the biggest barriers for young adults wanting to buy a home

The government urgently needs to prioritize housing supply and affordability issues and first-time buyer initiatives, in his opinion. 

“The divide between the haves and have-nots is growing wider. If you can’t borrow from mom and dad, it makes getting into the market much more difficult,” and access to housing and financial security more precarious, with disadvantaged groups particularly at risk, states Hudak.  

According to a 2023 OREA poll around the impact of student loan debt on homeownership, this type of debt is among the biggest barriers for young adults wanting to purchase a home. “Young people have far more debt today,” confirms Hudak. One offshoot of this is that it’s taking them longer to hit life’s milestones — homeownership, marriage, starting a family, etc., the poll found.

Because of high housing and living costs, their parents are postponing milestones too. Nearly half of those surveyed by OREA said they’ll stay in their family home for the foreseeable future rather than downsizing.

75% of post-secondary graduates “still believe in the (homeownership) dream” despite worsening affordability

A different survey conducted by OREA in 2022 found that at that time, 4 in 10 parents in Ontario had helped their adult children (aged 18-38) financially with a home purchase. The average loan provided was about $41,000, while those parents who gifted money averaged close to $74,000. (Many parents gave a combination loan/gift.) 

Some bank studies put that amount significantly higher, especially in large cities like Toronto. Today, as prices have climbed, it’s believed that gift amounts have likely risen as well, experts note. And it’s been observed that it’s not uncommon for “children” as old as 40 and over to be the recipients of parental largesse around housing. 

“Now, two years later, it’s our expectation that the affordability crisis has deepened,” says Hudak. In spite of this, 75 per cent of post-secondary graduates “still believe in the dream and want to own a home.”

We’ve reached that dreaded time of year when homeowners are slapped with property tax hikes. It’s hitting particularly hard in this economy when many Canadians are struggling to make ends meet.

Post-pandemic, with communities across the country battling high interest rates and disintegrating infrastructure while seeking to improve services and offset the financial deficits of recent years, soaring property tax increases way beyond the inflation rate are being seen Canada-wide.

Is this necessary? Or are homeowners being bled dry?

Changing Canadian city centre landscapes thanks to eroding affordability and shifting migration

According to a recent analysis by Re/Max Canada, although land transfer taxes and higher property tax assessments in key markets “appear to have little effect on the surface,” the reality is that they’re eroding affordability levels and slowly shifting migration patterns, changing the landscape in Canadian city centres. 

Examining six of the country’s leading housing markets — Vancouver, Calgary, Winnipeg, Toronto, Montreal and Halifax — Re/Max’s Taxes & Canadian Real Estate report notes that “governments at all levels are collecting billions” through levies and development fees on new construction and land transfer and property taxes on residential properties.

Tax rate increases, along with record-high housing values and mortgage rates, are sparking “a post-pandemic exodus from the country’s most expensive markets,” the report maintains.

“For many, the dream of home ownership is fading,” says Re/Max Canada president Christopher Alexander. 

Affordability and opportunity are keys to a healthy market and economy, Alexander asserts. “The goal should be to make homeownership more affordable, not less … Clearly, public policy is contributing to a myriad of issues, with affordability front and centre. And there’s no relief in sight.”

“You can’t tax your way to affordability”

Alexander says that government over-reliance on the housing sector as a means of funding is making access to housing increasingly problematic. “New and proposed property tax assessments are creating confusion in markets across the country.” 

As Tim Hudak, CEO of the Ontario Real Estate Association bluntly puts it: “You can’t tax your way to affordability.”

Nearly 40% property tax increase proposed in Osoyoos, B.C.

Count yourself lucky you don’t live in Osoyoos, on the southernmost fringe of British Columbia’s Okanagan Valley. Residents of this scenic little town — nearly half of whom are seniors — were shocked to learn that an astronomical property tax leap of almost 40 per cent was slated to be adopted this year, largely due to the need for upgrading aging and foul-smelling sewer and water infrastructure, to the tune of over $60 million over the next five years. 

There was a huge outcry from the town, with many people questioning why the hike couldn’t at least be spread out over several years. Mayor Sue McKortoff warned that that would just delay increases down the road. But as she explained to REM, council rescinded the unpopular budget and “agreed to conduct a review” in a special meeting. The revised final increase hasn’t yet been officially announced.

Come of that what may, there’s no getting around the fact that the community’s trust in its governance has eroded.    

Significant hikes throughout the country

To varying degrees, this is a widespread issue.

In Halifax, property tax assessments this year have jumped by more than 20 per cent, prompting a hike to tax bills of almost 6 per cent. This “adds to the already significant number of hurdles for first-time buyers,” leaving residents wondering when something will be done, reports local Re/Max broker Ryan Hartlen. He believes a good place to start would be incentivizing first-time buyers through property tax subsidies.

In Montreal, reassessments are higher than recent sales prices in some cases. The almost 5 per cent property tax increase (the biggest chunk of which is for public security, mainly police) is the city’s highest jump in 13 years. Montreal’s mayor has stated that Canadian cities are facing “unprecedented challenges” around inflation, housing and climate change. 

Meanwhile, both Vancouver (up by 7.5 per cent) and Calgary (up 7.8 per cent) are seeing significant property tax markups this year as well. And although Winnipeg’s 3.5 per cent rise is more modest, the city has raised and added fees for other services. 

Toronto sees historic 9.5% jump in property taxes — “one of the worst types” of levies

Torontonians are facing a whopping 9.5 per cent property tax jump, reportedly needed to shore up services, combat a $1.8 billion budget deficit and help get the city “back on track,” according to Toronto mayor Olivia Chow. 

City councillor Brad Bradford is among those opposed. 

Yes, there will now be “hundreds of millions in new spending,” Bradford acknowledges, but it comes at a time when homeowners can least afford it. 

“I’ve heard loud and clear from many in my community that they think this historic tax hike is too much … Deciding to spend money is the easy part of budgeting. It’s finding savings that requires hard work.” 

Bradford recommends that those looking to buy or sell property make sure they’re factoring in the cost of the tax hike. 

On the plus side, the Ontario provincial government has agreed to bail the city out of some significant capital costs, including those for two major Toronto highways (the Gardiner Expressway and Don Valley Parkway). 

The city and other levels of government will need to continue to explore new, efficient measures to raise revenue besides property tax, states Toronto-based Re/Max Realtron general manager Cameron Forbes. He notes that examples could include road tolls and taxes on gasoline and parking. 

“Property tax is one of the worst types” of levy in his opinion, as it’s a regressive tax applied uniformly regardless of income.

Not easy: Fort St. John, B.C. worked hard to raise taxes by less than 5%

British Columbia realtor Trevor Bolin, former leader of B.C.’s Conservative Party, is well versed in budgets, having sat on the local city council of his hometown of Fort St. John for the past 16 years.

“If you can imagine what your home and personal costs have looked like the past year — forced up due to skyrocketing costs — now imagine providing those same services to swimming pools, hockey rinks, city-wide fleets of vehicles, staffing wage increases, etc.,” Bolin says. “That’s what’s happening with your property taxes right now.”

He explains that the Fort St. John council worked hard to ensure a less than 5 per cent increase this year, which wasn’t easy. He adds, “Sadly, as municipalities continue to cover expenses for provincial and federal governments, you’ll have a tax increase next year as well.” 

Lastly, “I can tell you that politicians really don’t like being sworn at while grocery shopping,” he advises, laughing.

If you’ve listed a property for a couple locking horns in a hostile divorce, you know it’s not a job for the fainthearted or inexperienced.

In some cases, you may merely witness a little bickering. Alternatively, you’ll watch plates fly. One agent describes leaving a couple alone together for 10 minutes and returning to find they’d called the police on each other. 

Your communication and conflict resolution skills are put to the test, setting boundaries and convincing two people who agree on virtually nothing to come to terms long enough to get the best financial outcome possible. 

“Emotion makes people do stupid things,” says Toronto-based Re/Max agent and divorce specialist, Michael Shuster. “I won’t take the listing if I think one spouse will tie it up in court for years.” 

Remain neutral and stay professional: “You cannot pick sides”

In less extreme situations, Shuster may recommend that clients try a settlement conference or get a detailed court order, outlining specifics such as the percentage below asking price that will be accepted by both parties. Mostly though, he handles things himself, laying the groundwork with the help of a collaborative agreement signed by the couple setting out terms for the sale.

He maintains that it’s the realtor’s job to remain neutral and keep things professional. “You cannot get emotionally involved,” says Shuster. “You cannot pick sides.”

And even then, many agents say that one party may feel you favour the other.

Extra work, extra complication

Divorce listings differ from regular transactions. They may involve more work and more complications. These complications extend to protocols in all areas, right down to deciding not to use a lockbox, as these could potentially traumatize a divorcing couple’s children. “It’s important to minimize triggers,” Shuster advises.

Along with intense negative emotions and potential court orders, you may run into situations where one spouse tries to sabotage or delay the sale. Or each spouse might hire their own independent experts. So, you wind up with a double whammy of assorted professionals — two real estate lawyers, two or more licensed appraisers, two financial advisors, two divorce lawyers, etc. — and all the extra emailing that entails. 

You may be part of a double whammy yourself, agreeing to co-list with another realtor if the parties distrust each other so much that they each insist on their own representation. 

Empathy and patience are essential. “You’re kind of doing everything twice,” says Anthony Riglietti of Oakwyn Realty in Vancouver. “You’re hearing both sides. Remember, you’re not their psychiatrist.”

Communicate fully and carefully

Keeping both parties on the same page is also key. “Or there’ll be issues,” he cautions. 

That includes keeping both aware of all showing requests, even if one spouse is no longer living there. Document everything meticulously, in case you wind up in court. Stick with clear, consistent wording. 

“Always communicate at the same time and with the same words with both parties, using the same comments to each. I use copy and paste or a screenshot,” says Riglietti.

Divorce listings can be stigmatizing for buyers

Marketing must also be handled with extra care, as it’s stigmatizing for potential buyers to know they’re dealing with a divorce listing. “That’s like blood in the water,” Riglietti insists.

But keeping this information under wraps can be tricky. One agent recalls asking a woman to bring her clothes back to the house, in hopes that having her items there as well as her husband’s would prevent potential buyers from realizing that she’d moved out. 

She refused.

So, the agent spun various tall tales until one day the story was that the woman had recently started a job at Lululemon in another city. To this, someone viewing the property responded, “Lululemon doesn’t have an office there.” 

Oops.

Sound advice from a lawyer

While it’s generally agreed that you don’t need to volunteer the divorce narrative, it’s best to avoid fibbing about it, says Salima Virani, with Blue Letter Law in Toronto. Virani is a realtor as well as a lawyer, so she’s doubly well-versed in the nuts and bolts of divorce listings. She suggests responding to prying questions with, “We don’t discuss clients’ private situations.”

She advises that realtors should also:

• Determine whether the couple is married or common law. Depending on the province, a common law marriage may not bestow property rights. (This is the case in Ontario, for instance.)
• Find out if the property was the matrimonial home at the time of separation. If so, even if one party is not on title and the couple has been separated and living apart for years, both may have a claim on it.

“Do your due diligence,” counsels Virani. “It’s imperative to establish contact with both parties, be transparent and send emails and offers to both parties. If both are on title or only one, spousal consent is still needed to divest the matrimonial home.”

Legal issues don’t end once the offer is signed

“Make sure the lawyer is jointly approved by both parties,” Virani cautions. “And if the deposit exceeds the commission, don’t just cut a cheque to each party.”

Instead, she advises transferring the risk by telling the clients that you’ll accept direction on the split from a lawyer. 

The ultimate goal: “Get divorced quickly and live well”

Although divorce deals can be challenging, “It’s where you get to show why it’s worth using a realtor,” asserts Ontario-based Re/Max agent, Steven Sarasin. In some markets in recent years, without divorces, deaths and such, there’d have been little movement in real estate, he observes.

Sarasin has noticed an increase in divorce sales in the senior population.

“These older clients are easier to deal with. They tend to be more mature. They’re not causing drama on social media.”

Divorcing clients of all ages may fight bitterly over choosing a realtor though. Long-time divorce real estate expert Barry Lebow, with Weiss Realty in Toronto, finds that one of the biggest issues for agents in this arena is that pickings may be slim unless you’re “being fed clients by divorce lawyers,” as he is. The reason? If you’re referred by one spouse, the other will almost automatically reject you.

“The more a couple fights over the real estate, the more their legal and other professional bills increase and their walk-away money decreases,” continues Lebow. Clients need to find a realtor “who understands this process” and can help them navigate it successfully. 

As he tells his clients, their ultimate goal should be “to get divorced quickly and live well.”

Like many people, Paul Brooks fled the city for greener pastures during the pandemic. He jokes that now he has a nice rural view to admire while agonizing over why on earth he made the move in the first place. Living amid the forested hills of Hockley Valley north of Toronto, Brooks, a contractor, often finds himself confined in his car for close to four hours on weekdays, battling traffic commuting to and from the city for work.

A rising tide of opinion contends that challenges like this have steered large numbers of those who bolted from cities back into them, now that there’s momentum around returning to the workplace and regular life. 

There are also plenty who hold the opposite view, though, believing that the flood of people expected back in the cities post-Covid hasn’t materialized and that young families in particular are now leaving major centres in higher numbers than usual.

Priced out of urban areas as immigration continues

“Inflation stretched the delta of unaffordability much farther, such that many of those who traded their urban homes for suburban or rural dwellings are now finding themselves priced out of the urban neighbourhoods they came from,” says Re/Max Canada president Christopher Alexander. This means that many will have no choice except to stay put “until inventory rises and affordability returns to the market.” 

Statistics Canada has no definitive data on this yet for 2023 and was only able to tell REM that immigration remains the main driver for growth in large urban centres like Toronto and Vancouver. As such, “it’s fair to expect them to continue to grow as a whole, though whether this growth is still stronger in peripheral areas than their core in 2023 we cannot say yet,” the organization states.

Even in the past couple of years with Canadians moving around the country within and between provinces in unusually high numbers, “internal migration” out of Canada’s largest municipal centres didn’t have a significant impact on their population, according to BMO Capital Markets. 

Urban exit trend starting to reverse

All things considered, it’s fair to say that the exodus from Toronto and other big cities has “definitely slowed,” according to Jake Spelic, an area district vice president with U-Haul Canada.  “As things are shifting closer to normal, we are starting to see that trend reverse.”      

Leading Royal LePage agent from Vancouver, Adil Dinani, notes that the clients he’s seen return to the city tend to be those who’d moved so far off the grid that they’d run into a critical lack of amenities. Access to resources such as public transit, good schools, daycare and nightlife isn’t a given in rural areas.

Small-town life not meeting expectations

Re/Max Hallmark agent Jacqueline Pennington, located in a small rural community an hour east of Toronto near Cobourg, has seen a few key drivers of the trend back to the city, predominantly “the call to return to work in person.” 

Culture shock can hit hard in the country, observes Pennington. “Without anything other than a pizza joint open past 8:00 p.m., the quiet life of small towns can be sleepy. A common theme I’ve found is that the lifestyle is different from what people expected. They miss the entertainment, restaurants and ease of access to everything in the city.”

City dwellers buying a farm on a whim may have a particularly rude awakening.

“I recall eager millennial buyers asking me, ‘Who is responsible for maintaining all these trees?’” says Pennington. “They were shocked when I explained that it would be them.”

Affordability and extra space are what those moving away from cities are primarily seeking. But with the growing expense of living outside the city, they’re having to go further and further afield to find what they’re looking for. 

What happens when reality hits?

The gap between living in a city like Toronto and living outside of it, whether in a suburb or a small town, has closed, notes Toronto agent David Coffey, who’s with Bosley Real Estate. “The bargain you think you’ll find out of the city may not be worth it anymore.”

Families may choose to move deep into the country, or close to the ocean or mountains in another province. “People romanticize that life,” says Coffey. 

But he’s found that many eventually realize that both the weather and roads are bad and that they’ve wound up driving as much or more than when they lived in the city. “The commute is killing them,” Coffey maintains.

Or they get bored. A number of people living outside the city have told Vancouver realtor Tyler Burrows, of Oakwyn Realty, that they miss being able to walk to coffee shops and restaurants, and that the extra square footage they get having a suburban home isn’t worth having to endure the commute into Vancouver.   

“Sometimes, the head leads the heart,” maintains Steve Fisher, who moved back to Vancouver in 2022 with his wife and their two dogs after a year-and-a-half up the coast in Sechelt. “I loved living on the Sunshine Coast,” he says. But his wife “never managed to find the community she needed and missed the vibrancy of a larger city like Vancouver,” he explains.

Domenic Amatuzio, who left Toronto a year into the pandemic for the charming rural vibe of Prince Edward County, further east along Lake Ontario, took a job as a sous chef at a local brewery. So he’s avoided the dreaded long commute, the downfall of many who clear out of big urban centres. However, he’s found the nearby roads aren’t maintained anywhere near as reliably as in the city. 

“People looking to move here should come see it in January first,” Amatuzio laughs.     

He likes the area though and plans to stay put for now. But, he’s found that “being off the grid” can be isolating, with challenges running the gamut from unreliable internet to “wells running dry and stores either closing early or not being open at all in the off-season.”  

Amatuzio moved to the country because he thought it would be healthier and less expensive. In reality, the area is as pricey as anywhere else. “And since I have to drive everywhere, I’ve put on 10 pounds and my blood pressure has gone squirrelly.”

His appraisal of country living? “It ain’t Green Acres.”