This year is passing by unbelievably fast! Another month is behind us, which is good news for those who are eager to have fresh updates about the housing market in the Greater Toronto Area. The market report for April 2012 has been published, and here are its findings!

As Greater Toronto REALTORS® reported, 10,350 homes were sold through the Toronto MLS system last month. Compared to April 2011 and 8,778 transactions, the level of sales rose by a very strong 17.9 per cent. With a 22 per cent increase, single-detached homes contributed to the overall rise the most. The same type of home recorded the most noticeable growth in prices too, as the average price went up by 9 per cent. In general, the average price for a property was $517,556 this past month, 8.5 per cent higher than $476,802 seen in April 2011.

Overall, 2012 has been a fantastically successful year for home sales in the GTA. In the next couple of months, the current trend is expected to continue. The reason is simple: in the words of TREB’s Senior Manager of Market Analysis, Jason Mercer, “Borrowing costs are expected to remain a positive factor influencing home sales.”

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Real estate investment is not an easy business. It takes a lot of time, energy, effort, and patience to succeed. Some might feel that they are doing everything they can, yet nothing seems to work. In my opinion, success very much depends on one’s personal qualities. What should one do and what qualities should one posses to be a successful real estate investor? Of course, there is no formula for success, but sometimes it is helpful to generalize.

• Read! Before you enter the world of real estate investing, it is important to know as much about the business as possible. Especially if you are a beginner, I strongly recommend you start by reading well-written and informative books about real estate investment. Here is my list of ten great books that I believe can teach you a lot. Give some of these books a try.

• Do not expect too much! Not even all the publications in the world can completely prepare you for what comes once real work starts. According to EpicProfessionals.com, “On the court and in the game is where one will truly learn how to be a real estate investor.” The switch from books to actual actions is not always smooth. Do not be upset if something does not work out the way you planned or if you do not quite know how to react in certain situations. To be amazing, one has to overcome many obstacles; do not give up after a few little mishaps. Nobody’s career is completely unproblematic, and even the best real estate investors deal with unpleasant situations every single day. Remember: practice makes perfect!

• Do not get too self-confident! People have a tendency to get a little too cocky if everything goes well. While it is fantastic that you are doing a good job, a huge ego can ruin everything. Just because you are succeeding now, it does not have to be like this forever. If your work is going amazingly well, celebrate, but do not think you can do anything. You will never know everything; even the most experienced investors have much to learn. Stay humble because those who do not can fall very hard.

Tie by Faramarz Hashemi

• Goodbye, free time! If you want to be a successful real estate investor, you should be prepared for work, work, and more work. All those with great careers, even outside real estate investing, know how much time they have to devote to working. From the very beginning, you will most likely be completely exhausted, and your family and friends might feel a bit neglected. It is nearly impossible to be the best without hard work, however. It is tough, but only those who work really hard can experience huge success.

• You need motivation! Why do you want to become a good real estate investor? The very best in this profession do not only do it for the money. All extremely successful real estate investors live for their work — they see a lot more in their job than a source of income. If you want to do something purely for the money, you will never actually enjoy the job and it will be nearly impossible to be the best.

• Be responsible! With great power comes great responsibility. The more power you have and the deeper you are involved in real estate investing, the more you have to look after your business. Pay attention to everything happening in the world of real estate investment, try to deal with whatever comes your way, and do not overlook your duties or try to make someone else do your job. Whatever happens, you always have to take your responsibilities into consideration; do not just leave something unfinished because it might have very negative effects.

Naturally, this is not to say that people who do not share these characteristics cannot be fantastic real estate investors or that those who have all these qualities will necessarily be successful. It is more or less just a generalization of the qualities that many greatly successful real estate investors share. If you believe in yourself and have confidence, I say go for it! Nobody has ever succeeded without at least trying. Good luck!

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If you were wondering how March real estate sales in the Greater Toronto Area fared, we have some fresh data for you! As Toronto Real Estate Board President Richard Silver said, “The GTA resale market has not suffered from a lack of willing buyers this year.” Indeed, Greater Toronto REALTORS® reported a noticeable year-to-year increase in sales, which was accompanied by rises in prices and new listings as well.

GTA sales through the Toronto MLS System increased by nearly 8 per cent over the year, from the 8,986 recorded in March 2011 to the 9,690 seen last month. In the City of Toronto alone, the rise was less significant, with the number of sold homes going up from 3,610 to 3,682. The selling price, however, increased quite noticeably in Toronto, as well as in the rest of the GTA. The average selling price in the GTA was $501,614 last month — approximately 10 per cent higher than the average selling price recorded in March 2011, $456,234. The average selling price in Toronto rose from $498,050 to $548,354 over the year.

As mentioned, new listings also saw a year-to-year increase, but it was not quite as significant as we would have liked to see. In the words of TREB’s Senior Manager of Market Analysis, Jason Mercer, “The GTA resale market should be better supplied.” I can only agree with that statement, even though I believe that in general, March sales indicate a strong start to the spring market.

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Scarecrow by Peter Pearson

Why is It So Scary?

In recent years, both mortgage debt and consumer debt have significantly grown. In 1980, the ratio of household debt to personal disposable income was 66 per cent, while the recent release for the last quarter 2011 says the ratio is 153 per cent. This means that households owed $1.53 for every dollar of disposable income. According to a report by CIBC World Markets Inc., the surge in Canadian borrowing over the last five years has been driven by the most indebted households. Households heavily dependent on borrowing now hold 73 per cent of all household debt in Canada.

“Some 34 per cent of households that have debt are now in the high debt burden category and they account for nearly three-quarters of household debt outstanding,” added Avery Shenfeld, Chief Economist at CIBC.

This can cause serious problems when interest rates rise and home prices that are now highly overvalued in most of Canada start falling. Consumer spending would reduce, and a slowdown in the housing market and economy would be unavoidable. And there is still the possibility that a new recession will occur as a result. Are you prepared for the worst scenario?

Can You Calculate Your Debt-to-Income Ratio?

Consolidated Credit Counselling Services of Canada

“Another flaw in the debt-to-income ratio is that it lumps together people who have no debt with those who are heavily indebted,” wrote Carrick. “So you get seniors who have paid off their mortgages combined with Vancouver and Toronto residents and their mega-mortgages.”

Or you can use another approach suggested by the Consolidated Credit Counselling Services of Canada and divide your monthly payments by your monthly after-tax income and multiply by 100. This is comparable. If your debt-to-income ratio is 36 per cent or less, everything is all right. At 37 to 49 per cent, you should try to reduce your debt, and at 50 per cent or more, you should ask for professional assistance to help you reduce your debt.

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How easy is it to determine the selling price of a property? There are many factors involved, and sometimes even experienced real estate agents can be surprised by the outcome of a sale.

The Globe and Mail recently presented this quiz, using properties featured in their Done Deals section, to ask you: Can you guess the selling price of these properties?

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Take the Quiz!

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