NOVEMBER 2011. Greater Toronto REALTORS reported 7,642 home sales through the TorontoMLS in October 2011. This represented an increase of 17.5 per cent compared to the 6,504 transactions reported in October 2010.

Monthly sales data follow a recurring seasonal trend that should be removed before comparing monthly results within the same year. After adjusting for seasonality, the annualized rate of sales for October was 97,100, which was above the average of 90,700 for the first three quarters of 2011.

"The pace of October resale home transactions remained brisk in the GTA. This bodes well for a strong finish to 2011," said Toronto Real Estate Board President Richard Silver. "Home buyers who found it difficult to make a deal in the spring and summer due to a shortage of listings have benefitted from increased supply in the fall."

The average selling price through the TorontoMLS in October was $478,137 - up eight per cent compared to October 2010.

"Sellers' market conditions remain in place in many parts of the GTA. The result has been above-average annual rates of price growth for most home types," said Jason Mercer, the Toronto Real Estate Board's Senior Manager of Market Analysis. "Thanks to low interest rates, strong price growth has not substantially changed the positive affordability picture in the City of Toronto and surrounding regions." (Source: Toronto Real Estate Board)

Canada's real estate market will stabilize this year and next, with new home construction and resale homes moderating from their previous highs. The federal home insurance agency says it expects housing starts to come in somewhere between 170,900 to 199,900 units in 2011.

That's around the range of the 189,930 units started in Canada last year, a decline from the highs hit in previous years. In its first quarter outlook, the agency says it expects starts to stabilize at levels consistent with demographic fundamentals this year and next.

"Despite continued uncertainty in the global economy, Canada’s economic fundamentals remain positive, particularly with respect to interest rates, employment and immigration," CMHC's deputy chief economist Mathieu Laberge said.

In 2012, the agency expects housing starts to be in the range of 161,650 to 206,350 units, with a point forecast of 186,750 units.

On the resale front, CMHC says it expects between 423,600 and 470,100 homes to be sold in 2011. Sales are expected to move up modestly in the range of 406,100 to 509,000 units in 2012, with a point forecast of 458,500 units. In terms of price, the agency price says the average price of a Canadian home sold in 2011 is expected to move up to $363,900 in 2011, while 2012 will see a more moderate increase to $368,200.

Those figures are consistent with the balanced market conditions that have occurred so far in 2011, and that are expected next year, the agency said. (Source: CBC)

Many people think being a landlord and investing in real estate is a way to make easy money. It can be financially rewarding if you do your homework and reduce your risks. But easy, it isn’t and it can lead to financial ruin if not done properly.

The trick is to end up with money in your pocket at the end of the month after paying your bills and collecting the rent as you slowly pay down the mortgage and end up with a nest egg.

Here are some tips:

Research the area where you’d like to buy. Is it in decline or on the way up? A good indication is if chains like Wal-Mart, Tim Hortons and Home Depot are moving in. These companies do a lot of work on demographics and income before deciding where to locate. You can get a big picture look at vacancy rates at settlement.org, a federally funded site that helps immigrants with information and resources to settle in Canada.

Use a real estate agent who also is an area investor. Ask them to show you their properties and the rents. Ask for the names of other investors they have helped. Call them. Make sure they have a team of professionals you can use, such as property managers, insurance advisers, mortgage brokers, home inspectors, accountants and lawyers.

Once you own more than four rental units, find a reliable property manager. You don’t want to take a call in the middle of the night. A rule of thumb is that you should allocate up to 10 per cent of monthly rent to a property manager. They will make sure your building is properly maintained and can help find tenants.

Do not be in a hurry to rent a vacant unit. Take your time to qualify any potential tenant, since it can take months to evict a problem tenant. Call all tenant references, ask for a current pay stub and speak to at least two prior landlords. Where possible, require the tenant to pay for utilities. The tenant will have to apply to the utility company for an account, which amounts to an extra credit check being done by the utility company.

Be careful with basement apartments and homes rented to students. Although these units can provide additional income, you must make sure that they are legal, comply with the fire code and have any required licenses to operate.

Buy and hold your property for the long term. This way, you have an income and slowly start to pay down your mortgage.

If you are investing with others, have a partnership agreement. Problems may occur later if the friendship breaks down, especially if one partner loses their job and cannot pay their share of expenses, or if one partner wants to sell while the other does not. With a partnership agreement, you can provide what will happen in these situations in advance, without having to pay costly legal fees to figure it out later.

Investing in real estate is not easy. But by taking the proper precautions, it can be very rewarding. (Source: Moneyville via The Toronto Star)

1 | Gutting Everything. It can be tempting to want to just tear everything out - including the walls - and start from scratch. But that is where the additional costs can come creeping in.

2 | Inaccurate Measurements. Measure once, twice, three times and then again before ordering anything. When dealing with countertops, always choose a company that will come and do the measuring for you, preferably using a cardboard template. That way, the onus is on them to ensure it fits correctly. That also allows you can take a look at the template and make sure you’re getting the shape you want. When you’re talking about a slab of stone worth thousands of dollars, you don’t want to take any chances.

3 | Going Too Trendy. Trendy means that it’s short term and – chances are – your taste will change. Unless you’ve got the extra cash to redo your kitchen, the best thing to do is keep it classic and simple.

4 | Ignoring Lighting. Another mistake that homeowners will often make is not taking into consideration the lighting in their home. The lighting in your home can completely change the colors, feeling, and ambiance of the room.

5 | Failure to Anticipate Chaos. Your reno might go smooth as molasses, but just in case, it’s a good idea to assume it will be dustier, messier and more annoyingly inconvenient than you ever could have imagined.

6 | Not Using Green Materials. People will often make the mistake of not going green with their home project for two reasons: a) They don't know how to, and b) they think that it costs more money. This is not necessarily true. If you're doing your renovation green, you're really ahead of the market right now – so going green is a very smart investment.

7 | Avoiding Permits. The bottom line is if you do perform work without a permit and something serious happens, your homeowner's insurance will not cover it.(Source: Moneyville via The Toronto Star and HGTV)

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The Bank of Canada isn't expected to change its benchmark interest rate this morning from its current 1 per cent, but markets are watching closely for tone and signals. Today's policy announcement will be followed by tomorrow's Monetary Policy Report, which is expected to contain updated forecasts. Here's what some analysts expect:

"We have no doubt that the bank will hold its policy rate at 1 per cent. Considering the recent concern expressed both by the governor and senior eeputy governor on Europe’s financial mess, we would be surprised if the written policy statement continued to mention there was any need to withdraw monetary policy stimulus at all. As such, we think the bank will continue to keep rates on hold for the foreseeable future, consistent with our long-held view." David Madani, Capital Economics

"The Bank of Canada won’t surprise markets at its policy meeting ... shrugging off upside surprises to core inflation and holding rates at a stimulative 1 per cent, pointing to external uncertainty and sluggish growth. The MPR release (Wed) should add more colour to the BoC’s cautious outlook, likely to include downgrades to prior growth forecasts." Emanuella Enenajor, CIBC World Markets (Source: The Globe and Mail)