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Real-estate agent who lost license now faces charges in murder plot

Toronto man sanctioned in tribunal ruling in November for ‘various nefarious schemes’
ANTHONY REINHART
From Saturday’s Globe and Mail
Published on Saturday, Feb. 27, 2010 12:00AM EST
Last updated on Saturday, Feb. 27, 2010 4:37AM EST
A 58-year-old Toronto man, charged in a plot to have three people murdered, was stripped of his real-estate licence for taking part in “identity theft, value fraud, property flips, unprofessional conduct and various nefarious schemes,” a provincial tribunal ruled last November.
Pietro Castelluzzo, arrested Thursday by Toronto police, was also the subject of two unfavourable court rulings in the late 1990s. One was a civil case involving “dishonest conduct” in flipping properties and misrepresenting income, and the other a bankruptcy case, in which a judge said Mr. Castelluzzo “took control and advantage” of an elderly man who leant him his life’s savings to fund a failed restaurant venture.
Police have said little about the circumstances around the current criminal case against Mr. Castelluzzo, who appeared briefly in a Toronto court yesterday and was ordered held until Tuesday for a bail hearing. Court heard he is charged with four counts of counselling two men, James Kelly and Pedro Diaz, to commit murder. The killings were not carried out.
Constable Tony Vella, a police spokesman, said there were three alleged targets of the plot: a personal friend and two business associates of Mr. Castelluzzo. His arrest followed an investigation by the Organized Crime Enforcement Unit, which began early this month.
There was no answer yesterday at the front door of the modest, semi-detached home listed on court documents as Mr. Castelluzzo’s current address. Property records for the brown-brick, 1970s-vintage house on Dolores Road, in the Jane-Finch area, do not bear his name and neither of the two cars in the driveway were registered to him.
A woman who used to be married to a cousin of Mr. Castelluzzo said yesterday that he is married and has two grown sons.
Sherri Haigh, spokeswoman for the Real Estate Council of Ontario, which regulates land transactions and enforces real-estate law, said Mr. Castelluzzo received his licence in 1983.
In 1996, a civil court judge ruled on a suit brought against Mr. Castelluzzo and his wife, Maria Stella Castelluzzo, also a real-estate agent, by the brokerage through which the couple had worked between 1986 and 1992. The brokerage claimed the couple owed it money, and the Castelluzzos counter-claimed for unpaid real-estate commissions.
The case ended in a judgment for neither party, because the judge found both sides were engaged in illegal dealings in which the couple’s income was misrepresented for tax reasons, and to share in secret profits from “flipping” properties.
“The finding of illegality tainted the claims of both parties,” Justice J. Sutherland of Ontario Court, General Division wrote. “The clear conflicts of interest and breach of fiduciary obligations amounted to objective dishonesty and the perpetrators could not waive the illegalities by tacit mutual agreement.”
In 1999, a different judge ruled on an application from the Castelluzzos, who had gone bankrupt, to have their bankruptcy discharged. One of their creditors, an octogenarian named Isadore Gold, objected to the discharge, claiming he had been bilked of $260,000 the couple used to bankroll a failed restaurant, court records show.
“The Castelluzzos befriended the creditor, a vulnerable elderly person, to take advantage of him,” Superior Court Justice J. Cumming wrote. “While fraud was not proven, the conduct of the Castelluzzos was sufficiently reprehensible and remorseless to justify a conditional order” discharging the bankruptcy but requiring a substantial repayment.
“I find on the evidence that Mr. Castelluzzo is a self-righteous, domineering and manipulative individual who took control and advantage of Mr. Gold,” the judge wrote.
Court records further show that Mr. Castelluzzo successfully sued two brothers, Nicola and Salvatore Rizzuto, in 1991 in connection with a physical altercation at the real-estate brokerage where Mr. Castelluzzo worked.
Court heard the Rizzutos went to the offices of HomeLife Romano Real Estate and “backed him up against a wall and began to punch him in the face and head” for what they felt was his harassment of Nicola Rizzuto’s wife, Nina. The judge awarded Mr. Castelluzzo $8,750.
http://www.theglobeandmail.com/news/national/real-estate-agent-who-lost-licence-now-faces-charges-in-murder-plot/article1483778/

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Housing market in Kitchener and Waterloo extremely tight, Re/Max says

February 24, 2010
THE CANADIAN PRESS WITH FILES FROM RECORD STAFF

MISSISSAUGA – The housing market in Kitchener and Waterloo is one of the tightest in the country, says real estate giant Re/Max.
House listings in Kitchener and Waterloo were down 33 per cent in January compared to a year earlier, Re/Max said. There were 884 active listings at the end of January, down from 1,323 a year earlier.
Re/Max said that there was an unusually strong amount of activity in January, traditionally a slow month for the industry, in most of the 16 major markets the sales organization tracked.
The uptick was felt in 87.5 per cent of the markets surveyed, while the average home price appreciated 81 per cent of the markets, it found in a survey.
Home buyers have entered the market amid expectations of higher interest rates and tighter lending, as well as the introduction of Harmonized Sales Tax in British Columbia and Ontario, Re/Max said today.
“Affordability is the catalyst for the vast majority of purchasers in today’s housing market,” Elton Ash, executive vice-president of Re/Max in Western Canada, said in a news release.
“While home ownership is still within reach in many major centres, levels are slipping. There is a growing sense, on both sides of the fence, that the time to act is now.”
The shortage of listings is making things tough for many homebuyers, Re/Max said.
“The level of frustration is growing, as pent-up demand builds,” said Michael Polzler, the company’s executive vice-president for the Ontario-Atlantic region. “For every successful offer, there are those that will walk away empty-handed.”
Re/Max said Toronto is affected the most by the tight supply, with a 41 per cent decline in active home listings. Both Ottawa and Victoria are off about 30 per cent, the survey said.
Other areas of the country were less impacted, with Saskatoon down 37 per cent, while Calgary and Edmonton were both off 26 per cent.
http://news.therecord.com/Business/article/675557

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Dos and don’ts for home buyers and sellers

If you’re thinking of moving, now’s the time
From Saturday’s Globe and Mail
Published on Friday, Feb. 19, 2010 7:57PM EST
Last updated on Saturday, Feb. 20, 2010 3:21AM EST
Advice for sellers from Toronto real estate agent Laurin Jeffrey:
1. Get Moving
“If anyone’s thinking of selling, now’s the time,” Mr. Jeffrey said “Prices are up, interest rates are down and there are slim pickings out there.” Spring is just ahead, and that’s high season for buying and selling homes. Mr. Jeffrey believes that spring 2010 could be strong as sellers move to take advantage of high prices and buyers capitalize on low rates.
2. Under-price
Ask a little less for your home than you think you could get, Mr. Jeffrey suggested. “If you think it should be $359,000, make it $349,000.”
The benefit: more traffic and more offers. “Hopefully you wind up with people walking out the door while another set of people are waiting to come in.” Other benefits: a quick sale that saves your from weeks of people traipsing through your home, and gives you more leverage in getting the closing date you want.
3. Stage your home
Stagers, or fluffers as they’re sometimes known, are invaluable, according to Mr. Jeffrey. “They can make or break a place. Most people’s decorating skills are not as good as they think they are.” Stagers can bring in a few pictures, rent you a snappy dining room table or provide some furniture to fill out an empty house. Expect to pay something in the area of 1 per cent of the value of the house. Can you get it back through higher sales price? “Hell, yeah,” Mr. Jeffrey said.
4. Be strategic with renovations
Fixing up kitchens and bathrooms offers the best return on your investment, Mr. Jeffrey said. Uniqueness is a good thing when planning a reno, he added. “If I see another kitchen with granite countertops, stainless steel appliances and potlights … please, some originality, people.”
Advice for buyers from Robert McLister, a mortgage planner with Mortgage Architects in Vancouver and editor of the Canadian Mortgage Trends blog (canadianmortgagetrends.com):
1. Reserve your mortgage rate
Negotiate your best rate and then ask how long your lender will hold it for you. Up to 120 days is typical, but Mr. McLister said one lender he’s dealing with will go to 180 days on a five-year mortgage if you give up a little bit on the rate.
2. Use a mortgage broker
Sure, it sounds self-serving of Mr. McLister to say this. But consider the rationale: “We have three dozen core lenders we deal with that have real good interest rates and a big selection of products,” Mr. McLister said. Your bank? One line of products, and the rates are what they are. Brokers can also help with the details. If you don’t think you’ll be making any lump sum payments on your mortgage, a broker might be able to save you 0.3 percentage points on your interest rate.
3. Don’t max out
Lenders will allow payments on your mortgage plus other debts to eat up to 44 per cent of your gross annual income. “The limits do not give you enough of a buffer in case interest rates rise,” Mr. McLister said. His suggestion: go no higher than 38 per cent.
4. Think about a fixed rate
Studies show variable-rate mortgages cost you less interest over the long term, but Mr. McLister quoted a forecast calling for the prime rate (which guides variable-rate mortgages) to more than double over the next several years from its current level of 2.25 per cent. His suggestion: first-time buyers putting 5 per cent down should think about a five-year, fixed-rate mortgage, while experienced buyers should take a look at hybrid mortgages that allow you to have a fixed-rate component and a variable-rate component.
http://www.theglobeandmail.com/report-on-business/dos-and-donts-for-home-buyers-and-sellers/article1475127/

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The home price puzzle

As Ottawa targets mortgage debt, Steve Ladurantaye visits Windsor, Ont., one of the many Canadian cities where there is no single story to be told about real estate values. Instead, two very different tales emerge: In some pockets, prices are skyrocketing. In others, prices struggle to rebound
If there is a real estate bubble in Canada, you sure can’t see it from Drouillard Road.
Three-bedroom houses in this hardscrabble neighbourhood can be had for less than $30,000. Yet there are no offers. Several houses on the busy semi-residential street sit empty, with foreclosure notices posted in their front windows. Nearby, corner stores that used to be open 24 hours a day have shut down.
It’s a far cry from the Toronto and Vancouver markets, where prices are leapfrogging and dinner-party chatter has once again turned to the latest neighbourhood bidding wars.
There’s no contest as to which end of the real estate spectrum is getting attention. Fears of a housing bubble among economists and policy makers seem much more attuned to a handful of high-end metropolitan markets than the norm.
Finance Minister Jim Flaherty’s tightening this week of mortgage rules was aimed at preventing Canadians from taking on more housing debt than they’ll be able to handle as interest rates rise, and Mr. Flaherty was careful to say that there is no clear evidence of a housing bubble.
But his policy, which will curb real estate speculation, has ignited a whole new set of concerns: What if prices crash?
The housing sector has been one of the main reasons Canada pulled itself out of recession. Any policy moves aimed at cooling off the market risk pushing prices too far in the other direction – especially because prices are not uniformly high across the country.
The two-tone texture of the market isn’t reflected once numbers are rolled into the national picture.
Canadian sales increased by 58 per cent in January compared to the same time last year, while average prices shot up 19.6 per cent. But while the gains in major markets grab most of the headlines, other markets have been far less buoyant. In Quebec and Atlantic Canada, which together represent about a quarter of Canada’s housing stock, prices have been level. There is no sign of a boom-and-bust-cycle.
Talk of a bubble puzzles agents in small- to mid-sized markets such as Windsor, Ont., a hard-hit manufacturing town where business is just getting back to a level that they deem acceptable. Mr. Flaherty’s move to dampen the market seems unconnected to this reality.
“Statistics may show that the market is recovering, but you can make statistics say pretty much anything you want them to,” says Janice Stowe, an agent at Windsor’s Buckingham Realty who specializes in high-end homes. “Yes, things are picking up and homes that would sit for a long time are starting to move again. But to try and cool anything down in the context of Windsor doesn’t make any sense at all.”
Toronto-Dominion Bank economist Pascal Gauthier says the diverse nature of Canada’s real estate market means a U.S.-style bubble is not likely in the works. Those national figures are largely driven by sales in just two cities: Toronto and Vancouver.
“To speak of a bubble, you have to be looking at a pretty broad-based phenomenon,” he said. In the United States, “prices pretty much doubled almost everywhere during the boom,” and that is clearly not happening in Canada.
‘CAUTIOUSLY OPTIMISTIC’
Windsor illustrates the pocket-by-pocket nature of real estate pricing, not only by comparison to the likes of Toronto but even within its own city limits.
A few kilometres away from the crumbling porches of Drouillard Road, Michelle Jamal gives a tour of her luxury condo overlooking the Detroit River. She put it on the market for $1.5-million in the fall when she realized that even a depressed city has effervescent micro-markets as well as bargain alleys.
For two years, Ms. Jamal has been itching to sell the 3,000-square-foot condo and move to a more family-friendly neighbourhood, maybe something with a backyard for her son to enjoy. She nervously watched property values slump as Windsor became the unemployment capital of Canada, opting to sit tight rather than take a big hit on her property, which she bought new in 2005 and then improved with tens of thousands of dollars worth of customization.
Sensing the mood was changing as the recession eased, she contacted Ms. Stowe in the fall and is waiting patiently for an offer. Although there have been few nibbles, she is hanging on to her price and is in no rush to compromise.
“I feel good about selling now,” she says. “I think the prospects are very good, the city is recovering.”
She’s not the only one returning to the market. Sales in Windsor increased by 54 per cent in January compared to the same month a year ago. Prices that had fallen 10 per cent through the recession to an average $156,000 also increased modestly, by 4.3 per cent. It may not seem like much, but in a city that rarely sees big price moves it is a shift that has agents hoping the worst is behind.
Buyers are even starting to open their wallets to buy some of the city’s worst homes, a development agents hope will reduce a backlog of inventory that helps depress prices for nicer homes. Nobody wants to spend $150,000 when tales are circulating about hundreds of homes going for $25,000.
“You’re always hearing those stories, even if for the most part they aren’t really true except for a handful of properties in a few troubled areas,” says Royal LePage Binder broker Frank Binder. He points out the average sale price in the city was $156,000 in January.
“You’re constantly working against the perception that things are very bad – and they were. But the reality is, we’re cautiously optimistic that they have started to turn for the better.”
For the most part, the low-cost homes aren’t being bought by city residents, says real estate board president Anna Vozza, an agent at Bob Pedlar Real Estate. For the last three months she’s been getting calls from investors across Canada who are taking note of the “affordable inventory” and the type of public infrastructure projects that will be needed across the country if housing markets are to regain a sense of stability and manufacturing jobs are to be replaced.
Windsor should benefit from those infrastructure plans. There are proposals for a new river crossing to Detroit, two long-term care facilities, a prison and an engineering complex at University of Windsor. Even WestJet Airlines has noticed the up-tick, she says. The airline announced on Thursday that it will introduce a daily flight from Calgary to Windsor.
“These people see properties listed at very good value and understand the business case of a city that is often the first in and first out of a recession.”
WHAT BUBBLE?
Windsor has taken a bruising in the recession, and most of the country looks more like Windsor than like Toronto.
In Calgary, Royal LePage agent Jim Sparrow points to the distorting effect that areas of Toronto and Vancouver have on the national picture.
Those markets are dramatically different from the rest of the country, he says, thanks to higher demand for upscale properties. “Both those cities have a far broader range of individuals who have been less impacted by the recession,” he says. Wealthy buyers had “put their money away for four to six months last year [but] they came back in droves,” he says.
In addition, both cities are located in provinces where the Harmonized Sales Tax will come into effect July 1. That has added another incentive to buy high-end properties before increased costs come into effect.
In markets like Calgary, “there is no sign of a bubble whatsoever,” Mr. Sparrow says, despite a return to more-normal levels of sales activity.
“I shake my head as I continue to see analysts suggesting that there is a real estate bubble.”
 JOB SITUATION IS KEY
Price escalation in Toronto and Vancouver is not contagious, according to TD Bank’s Mr. Gauthier. Smaller-scale bubbles – which may be appearing in some parts of Western Canada and Ontario – usually reflect real estate speculation, or a particularly healthy economic situation in a specific area, he says.
If a micro-bubble in one city or neighbourhood pops, it will not have the overall economic implications that come with the end of a broad-based bubble.
In general, the patchy nature of the real estate market tends to match the employment situation in various regions, Mr. Gauthier says. In the Greater Toronto Area, for instance, job losses have been far fewer than in manufacturing or resource centres such as Oshawa or Sudbury.
“Understandably, those housing markets must be in a much more difficult situation than others that have rebounded quite firmly,” he says.
With files from Richard Blackwell
http://www.theglobeandmail.com/report-on-business/economy/the-home-price-puzzle/article1475073/

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Red-hot housing market could get hotter due to mortgage rule changes


February 16, 2010

BY JULIAN BELTRAME

OTTAWA — Canada’s red hot housing market may get a little hotter following Tuesday’s announcement by the federal government that new mortgage rule changes are coming to discourage cash-light buyers and speculators.

Market analysts say Canadians who were just managing to qualify for government-insured mortgages may rush into the market before stricter rules take effect April 19.

Prospective homebuyers may also jump into the market this spring to beat coming interest rate hikes and, in Ontario and B.C., the introduction of the harmonized sales tax on July 1 that could add $1,500 to the cost of buying a home.

“The whole spring housing market is going to be on fire,” predicted Derek Holt, vice-president of economics with Scotia Capital.

The other end of the coin is that the market could slow more than expected toward the end of the year.

On Tuesday, Finance Minister Jim Flaherty acceded to months of pressure to get ahead of the curve and tighten rules to discourage marginal, cash-strapped buyers and speculators. All borrowers will need to meet stiffer criteria to take out mortgages, he said.

In order to qualify for an insured mortgage, borrowers will have to meet the standards for a five-year fixed-rate mortgage even if the interest they are paying is less. The government will also limit the amount Canadians can borrow on their homes from the current 95 per cent of the value to 90 per cent.

And to discourage speculation, many real estate investors who purchase properties for rental purposes will have to come up with a 20 per cent down payment, instead of the current five.

Flaherty said he has been told anecdotally of a tendency among speculators to purchase multiple condominium units and not live in any of them, which he says drives up prices overall.

The minister insisted there is no housing bubble in Canada as yet, but added that with interest rates set to rise as early as this summer, he wants to ensure Canadians don’t take on too much debt.

A new report suggests the danger is real.

The Vanier Institute of the Family reported Tuesday that average household debts loads climbed 5.7 per cent to $96,100 in 2009. The institute estimates some 1.3 million households could be vulnerable to a dangerously high debt service load by the end of 2011.

The new income test on homebuyers will have the broadest impact, analysts say.

TD Canada Trust president Tim Hockey estimated the rule change will effect up to 10 per cent of buyers, some who will choose not to buy and some who will opt to buy a smaller home.

Already, banks use the three-year fixed mortgage rate to test whether a prospective homebuyer can afford to meet payments even if the actual interest being charged — such as in a floating mortgage — is significantly less. Now, the test will rise to the five-year rate, which is about one percentage point higher.

In practical terms, it means that on the average $337,000 home, homeowners will need to have the financial means to absorb an additional $2,500 in mortgage costs a year, the TD Bank says.

Hockey said banks welcomed Flaherty’s intervention — the second in two years — even though they are free to move on their own.

“It’s a very competitive market. We’re all trying to find a way not to lose market share,” he explained.

Several market participants were relieved that Flaherty eschewed more dramatic changes open to him, such as doubling the minimum down payment on purchases to 10 per cent or further reducing the 35-year amortization period. That would have had the impact of shutting out a significant number of Canadians from the market, and in the case of the amortization period, actually increase mortgage costs.

“We would have opposed (those changes),” said Dale Ripplinger, president of the Canadian Real Estate Association. “We were very concerned the government would overreact.”

He said such drastic measures could cause home prices and sales to crumble, with a ripple effect on the general economy.

Although home sales and prices soared in the second half of 2009, Ripplinger stressed that it was far too early to call it a bubble since prices are only now returning to pre-recession levels. Part of the reason prices have risen so steeply in the last few months is because of limited supply, he said.

Although some prospective homebuyers will not welcome the changes, TD Bank economist Craig Alexander said the impact on most homebuyers will be minimal.

“All this change does is limit the size of the mortgage you are going to be able to get; it doesn’t prevent people from buying homes, it doesn’t drive a lot of new homebuyers out of the market and it doesn’t lead to higher payments,” he explained.

“It means if you are thinking of buying a $400,000 home, you may have to buy the $350,000 one.”

But Hockey said the changes will likely have the effect of “pulling forward” homebuyers and speculators to beat the April 19 deadline.

In a news conference, Flaherty said he sought a middle ground between doing nothing and taking more drastic measures.

“On the one hand we don’t want to discourage Canadians from home ownership,” he said.

“On the other hand we do want to discourage a tendency by some to use their homes as an ATM machine, and a tendency by some to buy three and four condominiums by way of speculation. These are not the kind of steps that fulfil the goal of affordable home ownership.”

The Canadian Press

http://news.therecord.com/Business/article/671409

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