According to data from the Toronto Real Estate Board, residential property prices are down nearly 19 per cent from the April peak and resales were about 40 per cent lower in July than a year earlier. Hyungwon Kang / Reuters
According to data from the Toronto Real Estate Board, residential property prices are down nearly 19 per cent from the April peak and resales were about 40 per cent lower in July than a year earlier. Hyungwon Kang / Reuters
According to data from the Toronto Real Estate Board, residential property prices are down nearly 19 per cent from the April peak and resales were about 40 per cent lower in July than a year earlier. Hyungwon Kang / Reuters
According to data from the Toronto Real Estate Board, residential property prices are down nearly 19 per cent from the April peak and resales were about 40 per cent lower in July than a year earlier.

Toronto's property buyers and sellers fall out over price


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The sharp reversal in Toronto's home prices has thrown Canada's biggest property market into chaos, with scores of buyers suddenly short of money and desperate to get out of deals that looked good just a few months ago.

Much of that turmoil is not just down to those who bid at the peak and now wanted to get out of a deal, but also to lenders tightening credit and property appraisers lowering their valuations. Given how long the housing boom lasted, a retreat was hardly unexpected, but after a nearly decade of bidding wars and swift deals real estate agents, lawyers, lenders and mortgage brokers struggle to cope with the new reality.

"The big issue is with financing," said John Pasalis, president of the Realosophy real estate brokerage in Toronto.

The first sign of a problem often comes when the lender sends out an appraiser, who judges the property is worth less than what the buyer offered a month or two earlier. A lower valuation means a smaller loan from the lender.

Mr Pasalis gave an example of a buyer who expected a C$1 million (US$800,000) loan from the bank only to have it cut to C$850,000 (Dh2.5 million) days before the deal was set to close.

"All of a sudden you have to come up with an extra 150 grand," Mr Pasalis said. He estimated that up to 5 per cent of deals were at risk now, something unheard of a year ago.

Toronto home prices are down nearly 19 per cent from the April peak and resales were about 40 per cent lower in July than a year earlier, according to the Toronto Real Estate Board data.

Two people with direct knowledge of the matter said that lenders had reduced their average valuation on properties by 12 to 15 per cent since March.

Property appraisers say that while they are the ones to break the bad news to buyers, it is the lenders that hire them who are getting more conservative.

"They have certainly tightened up their criteria," said Dan Brewer, an appraiser and mortgage broker in Toronto's Richmond Hill suburb and former president of the Appraisal Institute of Canada.

For example, lenders can require that the comparable sales used to help determine the value of the house be limited to a shorter period or smaller geographic area to ensure the appraisal reflects the cooling market, Mr Brewer said.

As a mortgage broker he sees the effect of more risk-averse lenders, he said, with many more calls from buyers who need a second mortgage because the first one no longer covers their bid.

"I would say about 20 per cent of our files are now asking for secondary financing. That is a marked increase," said Mr Brewer.

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Read more:

Is the global property bubble ready to burst? 

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The market rapidly cooled in April after the government tightened rules and Home Capital Group, Canada's biggest non-bank lender, ran into liquidity troubles, spooking other lenders and causing a pullback in mortgage financing.

With buyers short of money and sellers desperate to close deals before home prices drop further, many turn to lawyers. Sellers want to sue those dragging their feet on an agreed purchase while buyers look for a way out of a contract without losing between C$50,000 and C$100,000 in deposits.

Real estate lawyer Bob Aaron said he discouraged clients on both sides from considering a lawsuit, which could takes years to resolve and cost C$30,000 to C$40,000 in legal fees.

Instead, he is trying to help work out some compromises with sellers either agreeing to give buyers more time to get the money, dropping their price or offering to help with financing.

"Some people want to walk away, some want half their deposit back, some bury their head in the sand and say 'I'm not closing, if they want to sue, fine.'" said Mr Aaron.

Realtors say re-listings have surged in recent months, but it is not clear how many follow deals that collapsed and how many are listings with adjusted, lower prices.

Buyers' scramble for cash means brisk business for mortgage brokers and alternative lenders.

"What we have found recently is a whole bunch of aborted deals ... and we've stepped in," said Robert Goodall, chief executive of Atrium Mortgage Investment.

Lenders like Atrium pool money from wealthy individuals to lend to borrowers unable to access cheaper bank credit.

Atrium offers buyers second mortgages and bridge loans at between 7.5 per cent and 8 per cent interest - double or triple the rate available for a first mortgage.

"It is actually really good business ... these are good people with impeccable credit ratings, who just got caught," said Mr Goodall.

Mortgage brokers say they keep getting more requests for second mortgages, but Mortgage Professionals Canada chief economist Will Dunning said he was unaware of any reliable source that tracked the data.

Mr Brewer said that most borrowers now managed to secure second mortgages from alternative lenders, but the higher costs and rising Bank of Canada official rates were bound to hurt the broader market at some point.

"There will be an impact in the Canadian banking world. It may simply be the second mortgage guy gets wiped out and the first takes less of a beating, but really the Canadian housing market would be at risk, there is no question in my mind," added Mr Brewer.

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Three ways to limit your social media use

Clinical psychologist, Dr Saliha Afridi at The Lighthouse Arabia suggests three easy things you can do every day to cut back on the time you spend online.

1. Put the social media app in a folder on the second or third screen of your phone so it has to remain a conscious decision to open, rather than something your fingers gravitate towards without consideration.

2. Schedule a time to use social media instead of consistently throughout the day. I recommend setting aside certain times of the day or week when you upload pictures or share information. 

3. Take a mental snapshot rather than a photo on your phone. Instead of sharing it with your social world, try to absorb the moment, connect with your feeling, experience the moment with all five of your senses. You will have a memory of that moment more vividly and for far longer than if you take a picture of it.

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Tonight's Chat on The National

Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.

Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster who has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others.

Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.

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Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

Other workplace saving schemes
  • The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
  • Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
  • National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
  • In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
  • Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
2025 Fifa Club World Cup groups

Group A: Palmeiras, Porto, Al Ahly, Inter Miami.

Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.

Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.

Group D: Flamengo, ES Tunis, Chelsea, Leon.

Group E: River Plate, Urawa, Monterrey, Inter Milan.

Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.

Group G: Manchester City, Wydad, Al Ain, Juventus.

Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.

The alternatives

• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.

• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.

• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.

2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.

• PayPal is probably the best-known online goods payment method - usually used for eBay purchases -  but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.

Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home. 

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Pharaoh's curse

British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.

Jigra
Director: Vasan Bala
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
Rated: 3.5/5
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Scotland 59 (Tries: Hastings (2), G Horne (3), Turner, Seymour, Barclay, Kinghorn, McInally; Cons: Hastings 8)

Russia 0

The specs: 2018 Audi RS5

Price, base: Dh359,200

Engine: 2.9L twin-turbo V6

Transmission: Eight-speed automatic

Power: 450hp at 5,700rpm

Torque: 600Nm at 1,900rpm

Fuel economy, combined: 8.7L / 100km

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UAE tour of the Netherlands

UAE squad: Rohan Mustafa (captain), Shaiman Anwar, Ghulam Shabber, Mohammed Qasim, Rameez Shahzad, Mohammed Usman, Adnan Mufti, Chirag Suri, Ahmed Raza, Imran Haider, Mohammed Naveed, Amjad Javed, Zahoor Khan, Qadeer Ahmed
Fixtures:
Monday, 1st 50-over match
Wednesday, 2nd 50-over match
Thursday, 3rd 50-over match

The specs
Engine: 4.0-litre flat-six
Power: 510hp at 9,000rpm
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
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Price: From Dh801,800
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Squid Game season two

Director: Hwang Dong-hyuk 

Stars:  Lee Jung-jae, Wi Ha-joon and Lee Byung-hun

Rating: 4.5/5

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Most sought after workplace benefits in the UAE
  • Flexible work arrangements
  • Pension support
  • Mental well-being assistance
  • Insurance coverage for optical, dental, alternative medicine, cancer screening
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