One of My Done Deals in the South Annex Was Featured in the Globe and Mail Today

April 19th, 2013


ASKING PRICE $1.05-million

SELLING PRICE $1-million

TAXES $5,167 (2012)


LISTING AGENTS Elli Davis, Royal LePage Real Estate Services Ltd.

CO-OP AGENT Noam Muscovitch, Royal LePage Real Estate Services Ltd.

The Action: This semi-detached heritage home was centrally located nearby eateries, entertainment and major educational intuitions, but some buyers couldn’t overlook the absence of a garage on the modest 20-by-95-foot lot, nor the steep ascension to the top floor.

During the course of a few weeks of marketing, there were two dozen showings and a price adjustment from $1.095-million to $1.05-million, which seduced a few buyers into drafting competing bids simultaneously.

What They Got: This 2,105-square-foot Victorian displays many of its late 19th-century trappings, such as a refurbished red brick façade, high ceilings, hardwood floors throughout, a fireplace in one of two entertaining areas and a separate dining area with side yard doors.

To address signs of aging, the roof and furnace were replaced; the galley kitchen was revamped with granite counters, pot lights and double garden doors; and a third bathroom was created off the master suite, which has a walk-in closet.

There are two second-floor bedrooms and a third-floor retreat naturally lit with a skylight and sliding doors to a two-tiered deck.

Storage areas include a 503-square-foot basement and parking off a laneway.

The Agent’s Take: “It’s was a great home with a lot of original detail, but it had a new kitchen and washroom,” says agent Elli Davis. “It was in move-in condition with a third floor that was added by the owner years ago.”

But more important, buyers liked local attractions. “It had a lot of activity because it was so close to Harbord Street and Spadina Avenue – to the university and to the great restaurants on Harbord Street,” Ms. Davis notes.


April 5th, 2013


Noam Muscovitch knows all about the angst of buyers. The agent with Royal LePage Real Estate Services Ltd. found himself sitting outside a mid-century bungalow last week when he was competing on behalf of his clients with 10 other agents.

On a lot with 78 feet of frontage, the house had an asking price of $1.088-million. Cars lined the street near York Mills and Leslie as the rivals all vied for the renovated bungalow with lots of light and air under cathedral ceilings.

“It was like a parking lot out there,” says Mr. Muscovitch. “It was kind of ridiculous.”

He had registered a bid on behalf of his clients early on the offer date because he had to be on the road for much of the day. At the time, one competing offer was already in place.

He says some bidders register early on in order to deter others.

“A lot of people don’t want to get into a multiple offer situation.”

When he checked in just before 8 p.m., he found out that the number had gone up to five.

With every additional offer, his clients became more jittery, he recalls.

In all, 11 groups ended up vying for the house. Later that night, each party was given a chance to improve their offer in a second round of bidding and the number dropped down to nine.

Mr. Muscovitch’s clients were a couple engaged to be married. They loved the house and tried to think of some creative ways to increase their chances of winning the competition. Mr. Muscovitch advised them to be very flexible about going along with the seller’s schedule. He let the seller know that the pair had no plans to demolish it as had been the fate of so many others in the area.

He also employed the delicate strategy of pointing out to the sellers that his buyers had done their research on the house and were knowledgeable about possible defects. Homeowners sometimes worry that a deal will fall through later on if buyers get cold feet.

“We understand any issues. We’re aware and we’re okay with them – and that’s good for you,” he says of his message to the sellers.

At the same time, his clients wanted the homeowners to know they loved the house the way it was.

“You’re not trying to offend them, that’s for sure.”

All the while, he was making frequent calls to the couple, who had brought one of their mothers along to a nearby McDonald’s “because you can stay there for a long period of time,” says the agent.

“You need to have them close in case there are changes.”

About midnight, Mr. Muscovitch began to have a good feeling when he began to see the red lights of one car after another reversing back down the street.

“Then finally I got the call,” he says.

In the end, he thinks their strategy beat all of the others partly because the buyers made an emotional connection with the sellers.

“I think they responded to the fact that the young couple didn’t want to do anything to the house.”

Jobs downturn mirrors slump in housing and trade

February 11th, 2013


The Globe and Mail

Saturday February 9, 2013

Byline: Tavia Grant and Tara Perkins

Slumping activity in Canada’s housing and trade sectors bodes ill for a job market that has just run out of steam.

Job creation had been the one positive outlier in a string of economic statistics that pointed to sluggish growth in recent months.

Friday marked a plunge in home construction starts, to the lowest since August, 2009, and a tumble in exports to the United States, Canada’s largest trading partner. It also marked the first decline in employment levels in half a year, along with cooling growth in wages.

As the housing market slows, governments pare spending and trade remains weak, last year’s rapid pace of hiring may also be petering out.

“I definitely think we’re going to have some softening,” economist Joshua Dennerlein of Merrill Lynch in New York said of the labour market, citing the outlook for housing and exports.

He projects monthly jobs gains averaging 15,000 in the coming months, a marked slowdown from the 27,000 of the past half year.

Employers shed 21,900 jobs last month as both the public and private sectors cut positions, Statistics Canada said. The jobless rate eased to 7 per cent, its lowest since December, 2008, as fewer people were looked for work.

The size of the labour force tumbled by 57,500, the biggest drop since April, 1995.

The jobs numbers came at the same time Statistics Canada reported that exports to the United States tumbled in December, led by a decline in car and energy shipments. Exports to all of Canada’s trading partners slipped 0.9 per cent, though imports fell at a faster pace, narrowing the country’s trade deficit to $901-million.

Housing, a long-standing support for the Canadian economy, has now become a “clear drag,” warned Bank of Montreal economist Robert Kavcic.

Indeed, the main sources of new employment in recent years have been construction work and public sector jobs, but the outlook for both is diminishing, said Benjamin Tal, deputy chief economist at Canadian Imperial Bank of Commerce.

He believes the slower pace of home building will soon show up in job numbers. “I really think that we’re going to see very weak construction jobs over the next six months,” Mr. Tal said in an interview.

A big reason for that is the slowing of Toronto’s condo construction boom. Fears of an overheated market, coupled with government actions that make mortgages harder to get, have caused developers to scale back or cancel some new projects.

Housing starts over all dropped sharply in January, according to Canada Mortgage and Housing Corp., to 160,577 measured at an annual pace.

The country’s labour market is in a period of “disruption” when many employers are hiring and firing at the same time, said Jeff Aplin, president of David Aplin Recruiting, citing energy firms, railways and retailers as examples.

“Organizations are restructuring to become more competitive, more leaner and meaner – so often there’s musical chairs depending on who’s growing and shrinking,” said Mr. Aplin, who is based in Calgary but observes national trends.

In the private sector, Sears Canada Inc., Best Buy Co. Inc., Talisman Energy Inc., Canada Bread Co. Ltd. and Cirque du Soleil have all announced job cuts in recent weeks. Canadian Pacific Railway Ltd. is eliminating 4,500 jobs and, on the public side, the federal government continues to trim its head count as it aims to balance the books.

Among the brighter spots, the youth jobless rate eased to 13.5 per cent from 14.1 per cent, while hours worked rose by 0.2 per cent. Hiring is still strong in technical and professional jobs, such as engineering, geo-science and technology, Mr. Aplin said.

Last month’s declines came in education and manufacturing.


Developers pan casino plans; Real estate firms tell city manager a big gambling operation doesn’t belong in the city’s core

February 6th, 2013


The Globe and Mail

Wednesday February 6, 2013

Byline: Elizabeth Church

The battle over where to place a Toronto casino is intensifying with a group of developers arguing a gambling complex in the city’s core will jeopardize “the success of our downtown.”

In a letter to the city manager, three real estate firms register their opposition to a “mega-style casino” downtown, one being RioCan Investment Trust, which happens to have the chair of the provincial gaming agency, Paul Godfrey, as the head of its board. Their comments come as city councillors gear up to decide this spring if Toronto should host a new casino and if so, where. Several large casino operators are pitching the economic benefits of a gaming emporium in the form of jobs and new development, while citizens groups rally in opposition.

“In our view, the risk of the potential negative impacts from developing a mega-casino in the downtown outweighs the potential benefits,” states the letter from RioCan, Allied Properties and Diamond Corp. The three firms are partners in a joint venture to develop a site at Front Street and Spadina Avenue where The Globe and Mail is now located.

Ed Sonshine, CEO of RioCan, said the partners are most concerned about plans by Oxford Properties to revitalize the Metro Toronto Convention Centre with a casino resort just down the street from where they are planning to develop a parcel of land that could be as large as eight acres, depending on the results of an outstanding land deal.

“It’s a bad idea because of traffic, because of infrastructure, because of all kinds of reasons,” Mr. Sonshine said. “Certainly we have no problem if the city decides to put a casino somewhere else. We just think it would be a disaster there on Front Street. We are not taking a position on a casino. We are taking a position on a casino in the core.”

The city has just completed public consultations on three possible downtown sites – the convention centre, Exhibition Place and the Port Lands. The city could also be home to a second casino on the grounds of the Woodbine Racetrack in north Etobicoke.

The owners of the racetrack, Woodbine Entertainment Group, also confirmed Tuesday that a billion-dollar development deal to build a retail and entertainment complex on that site has died.

Woodbine Live – a project cited by Rob Ford in his race for mayor as evidence of his business savvy – was supposed to bring up to 9,000 jobs to north Etobicoke. A spokeswoman for the racetrack said with the deal between Woodbine and Baltimore-based The Cordish Cos. now over, talks are possible with potential casino partners for an integrated development on the massive 680-acre site.

“We are free to have a new development partner to move this forward,” Woodbine spokeswoman Jane Holmes said. “We have our options open.”

A casino report from the city manager is expected to go to the mayor’s executive committee in March with city council debating the issue in April. The province has said it will not force a casino on a community that does not want one.

Mr. Sonshine said he contacted Mr. Godfrey about the letter to the city on Monday “as a courtesy,” but said it is not an issue for the board. “He is chair of RioCan, but this is a management decision,” he said. “I do what is best for RioCan.”

Mr. Sonshine said if a deal to secure the parcel of land at the corner is completed, the three developers will have about a $170-million investment in most of the block west of Spadina and north of Front. “We have to do what is right for that investment and Paul totally understands that,” he said.

Adam Vaughan, the councillor who represents the area and a casino opponent, said he expects developers with sites near the other proposed downtown locations will come forward with similar concerns.

Even so, he predicts pressure will mount to accept a casino. “There is big money and interests from offshore that are still going to try and have their way,” he said.

Councillor Doug Ford expressed surprise that any business would be against a casino development. “I have yet to meet one business person who has a concern,” he said Tuesday. “I have yet to meet a developer that is not 100 per cent behind casinos.”

Mr. Ford said he and his brother the mayor support a casino, but would like to see the money it generates for the city go to transit. “And not streetcars – subways,” he added.

In the case of Woodbine Live, the development was in line to get tax breaks from the city provided the first phase of building was completed by October, 2014. Although the “Live” label belongs to Cordish, Ms. Holmes said Woodbine holds the rights to the plan. City staff said it would be “extremely challenging” to meet that deadline with work not yet started on the site.

Consumer debt on track to follow housing’s decline

February 6th, 2013


The Globe and Mail

Wednesday February 6, 2013

Byline: David Parkinson

In every province but one, Canadian consumers are continuing their debt party like it’s perpetually midnight on New Year’s Eve. Yet in British Columbia, it looks like the housing market has already crashed the party – and it’s a major buzz-kill.

A new quarterly report on Canadian consumer debt levels, from consumer credit-data provider TransUnion, tells a familiar tale: We’re at record levels, yet still climbing. Average debt increased in every province last year – except British Columbia.

There, debt levels fell 4.1 per cent in the fourth quarter compared with the third quarter – a huge number given that the final quarter of the year typically features a runup in consumer debts, due to holiday-season buying.

On the surface, B.C. looks like the last place to suddenly feel a compulsion to belt-tighten. Its economic growth last year was considerably above the national average, and slowed only slightly from the year before.

But the housing market in B.C. – especially Vancouver and the Lower Mainland, where the bulk of the province’s population lives – is a different story. While the Teranet-National Bank House Price Index rose 3.1 per cent nationally last year, its Vancouver component fell 2 per cent, the only major market in the country to turn show a decline.

A Bank of Canada study last month found that Canadians’ willingness to run up non-mortgage debts has historically been closely tied to the value of their homes. When house prices rise, so do non-mortgage consumer debts – and when they fall, those debts retreat.

During the housing boom that was particularly loud in the Lower Mainland, British Columbians ran up the highest debt levels in the country. Sustaining debts at those heights would have been difficult anyway; the downturn in house prices is a sure-fire catalyst for a deleveraging. Debt reduction should translate to a decline in B.C.’s consumer spending – a key contributor to GDP – as this plays out.

Furthermore, the Lower Mainland is hardly the only place in the country where a home-price retreat could send consumers into retrenchment – it’s only the first. Others may soon switch from party mode to dealing with their debt hangovers. Get out the Pepto-Bismol, Toronto and Calgary.


After slump, first-time buyers are back; Decline in home sales slows as prices rise 4.3 per cent across GTA in January

February 6th, 2013


Interesting article from The Toronto Star

Wednesday February 6, 2013

Byline: Susan Pigg

Just a few weeks ago, the house on East York’s Marlow Ave. would have looked like a simple starter home – two bedrooms and two bathrooms crammed onto a 17-by-93-foot lot, listed for $469,900.

But by Monday night, after the barn-shaped detached home sold for $525,000 in a flurry of eight competing offers, it became symbolic of something much bigger.

The first-time buyer is back.

“January can be very volatile. I’m usually struggling for buyers. But I cannot remember having this much business coming into the new year,” says Remax listing agent Carolyn Griffis.

Mortgage brokers have also seen a surge since Christmas in would-be homebuyers, especially first-time buyers, looking to get preapprovals or to renew approvals that lapsed last fall and winter as they headed for sidelines, waiting for the housing market to cool.

“There seems to be a lot of pent-up demand in the first-time buying community,” says longtime mortgage broker Joe Sammut of Mortgage Architects.

“People seem to have let the dust settle (since the market started softening last summer) and they’re saying, ‘Maybe it’s time to buy now that we’ve had six months more to save up and see what is happening in the marketplace.’ ”

In fact, the Toronto Real Estate Board (TREB) is reporting a strong start to 2013.

Home sales were down just 1.3 per cent in January over a year earlier, welcome news after six months of largely double-digit decreases. And prices were up 4.3 per cent last month across the GTA, according to figures released Tuesday by TREB.

The average sales price of a GTA home last month was $482,648, up from $462,655 in January 2012.

Assuming the turnaround holds, “expect annual price growth in the 3- to 5- per-cent range this year,” says TREB’s senior market analyst, Jason Mercer.

Even some condos that have languished on the market for months have suddenly been selling with multiple offers, realtors report.

The strong January “suggests that some buyers who put their decision to purchase on hold last year due to stricter mortgage-lending guidelines are once again becoming active in the market,” said Toronto Real Estate Board president Ann Hannah in a statement.

She noted that sales were especially strong in the suburban regions around Toronto, citing the dampening effect of the city’s land transfer tax. But affordability can’t be discounted: the average sales price of a detached house in the city was $765,049 in January compared to $563,675 in the 905 regions, TREB’s January sales figures show.

The resale condo sector remains soft, with TREB reporting a 5.1-per-cent decline in sales in January over a year earlier. The biggest drop in sales (6.4 per cent) was in the 905 regions, compared to a 4.5-per-cent decline in the city.

The average price of a resale condo in the 905 regions dropped 1.4 per cent to $269,073, while units in the 416 area were down 1.3 per cent to an average $340,295, says TREB.

Townhouses saw the biggest decline in sales in January year over year in Toronto, with sales slumping 11.2 per cent. Prices, however, were up almost 2 per cent to $418,262. That compares to a 1-per-cent increase in 905 sales.


‘Good start’ for GTA’s 2013 existing home sales

February 6th, 2013


The Globe and Mail

Wednesday February 6, 2013

Byline: Tara Perkins

The number of existing homes that sold in the Greater Toronto Area in January was down only slightly from a year ago, a development that a realtors’ association says suggests that buyers are returning to the market.

There were 4,375 sales over the Multiple Listing Service during the month, compared with 4,432 in January of 2012. There had been 3,690 sales in December, down from 4,585 sales in December of 2011, as the market saw a sharp decline in year-over-year sales each month during the latter part of the year.

“The January sales figures represent a good start to 2013,” Ann Hannah, the president of the Toronto Real Estate Board, stated in a press release Tuesday.

“While the number of transactions was down slightly compared to last year, the rate of decline was much less than what was experienced in the second half of 2012.

This suggests that some buyers, who put their decision to purchase on hold last year due to stricter mortgage lending guidelines, are once again becoming active in the market.”

Finance Minister Jim Flaherty tightened up the rules for mortgage insurance in July by, among other things, cutting the maximum length of an insured mortgage to 25 years from 30. Realtors blamed the drop in sales on the new rules, saying that the changes knocked a number of first-time buyers out of the market.

Mr. Flaherty had been worried that consumers were taking on too much mortgage debt and that the price of homes were rising too quickly. Toronto’s condo market had been a particular worry for him.

The figures released Tuesday show that there were 730 sales of existing (as opposed to newly constructed) condos in Toronto’s downtown area covered by the 416 area code during January, down 4.5 per cent from a year ago.

In comparison, 680 condos sold during December, down 26.9 per cent from a year earlier.

The average selling price during January of all home types in the Greater Toronto Area was $482,648, up 4.3 per cent from $462,655 a year ago. The MLS Home Price Index Composite Benchmark price was up 3.8 per cent.

On Monday, the Real Estate Board of Greater Vancouver said there were 1,351 resales in January, a 14.3 per cent decrease from a year ago but an increase of 18.3 per cent from the previous month.

Experts point to Vancouver as the Canadian market that was most overheated, and the slowdown began earlier there than elsewhere in the country.

Rising home prices point to recovery

January 31st, 2013


The Globe and Mail

Wednesday January 30, 2013

Byline: Joanna Slater

NEW YORK — The U.S. housing market is experiencing a strange and unfamiliar sensation: Across the country, home prices are rising.

The price gains point to an increasingly solid recovery in the housing sector, driven by rock-bottom interest rates, pent-up demand and a smaller supply of houses for sale.

An index of house prices in 20 major cities rose 5.5 per cent in the year to November, the largest such increase since 2006, according to closely watched figures released Tuesday by S&P Dow Jones Indices.

The renewed activity – by buyers, sellers and builders – is a rare bright spot in an economy which is expanding at a slow and frustrating pace.

The increase in prices is particularly significant, since it helps to rebuild a modicum of the wealth destroyed when the housing bubble burst and prods consumers to spend.

“Housing is clearly recovering,” David Blitzer of S&P Dow Jones Indices said in a statement Tuesday. “Prices are rising, as are both new and existing home sales.”

Home builders echo that sentiment. D.R. Horton Inc., a major builder headquartered in Texas, reported Tuesday that its profit for the quarter that ended in December more than doubled from the same period a year earlier.

The firm experienced a broad improvement of demand across its markets and “substantial increases” in the number of homes sold compared with a year ago, its chairman Donald Horton said in a statement. “We are looking forward to the spring selling season with optimism.”

Not surprisingly, the areas of the country that experienced the most dramatic decreases in home prices in recent years are now notching some of the strongest recoveries. The star performer in the year to November was Phoenix, where prices rose 22.8 per cent, according to S&P Dow Jones. In Las Vegas, they jumped 10 per cent.

Of course, the damage from the bust remains deep. One reason prices are rising quickly in such cities is because many borrowers are stuck in their homes, depressing the supply of properties for sale.

In Arizona, for example, nearly 40 per cent of mortgage holders owe more than their homes are worth, according to data from research firm CoreLogic, making it difficult or impossible for them to sell.

Yet even for those “underwater” mortgages, the picture is improving, albeit slowly. Rising prices pushed 1.4 million such homeowners out of their predicament in the nine months through September, according to CoreLogic.

The sustained nature of the recent price increases is making a difference, economists say. Through November, the 20-city price index from S&P Dow Jones rose for 10 straight months once adjusted for seasonal factors.

That has translated into an increase in household real estate wealth, which rose by almost $1-trillion (U.S.) over the first three quarters of 2012, according to the U.S. Federal Reserve Board.

“The real game-changer in housing has been the turnaround in prices,” said Patrick Newport, an economist at research firm IHS Global Insight.

While rising stock prices also make consumers feel wealthier and spend more, the effect from an improving housing market is even stronger, he said.

Barring a major economic shock, the housing market appears poised for further steady, not spectacular, improvement.

Modest job growth, low interest rates and restrained inventories are forces that “are going to be in place this year and next year also,” Mr. Newport noted.



January 31st, 2013

Toronto developers commence building 24,388 units in 104 projects


TORONTO – January 31, 2013:  Urbanation Inc., the leading source of information and analysis on the Toronto condominium market since 1981, today released its Q4-2012 market overview.

In the Toronto Census Metropolitan Area (CMA) there were 3,841 new condominium apartment sales in Q4-2012, an increase of 16% over the third quarter. Overall, 17,997 new units sold in 2012, between the five-year CMA average of 20,119 annual sales (2007 to 2011) and the ten-year average of 17,139 annual sales (2002 to 2011), but down from the record breaking pace set in 2011.

The Toronto CMA condominium market set several records in 2012 including: construction starts (24,388), active developments (355), total active units (89,251), and total units under construction (56,866).

The average sold index price in the Toronto CMA was $536 psf in Q4-2012 (up 5.2% annually), while unsold suites were being offered at $568 psf on average in the fourth quarter.

Overall the active Toronto CMA new condominium market is 79% sold overall, down from 80% sold in Q3-2012 and 82% sold in Q4-2011, but above the ten-year average of 78%.

“Despite concerns over the level of unsold supply in the new condominium market, the ratio of sold to unsold units has consistently been above the long-run average in recent years” says Ben Myers, Urbanation Executive Vice President. “There remains confusion over unsold supply and standing inventory, to clarify, at the end of Q4-2012 there were just 613 completed and unsold new condominium apartment suites in the Toronto CMA – some would be rented out by the developer, some used for construction offices, and others used as model suites for subsequent phases, effectively lowering this standing inventory figure even farther”.

Overbuilding was a term cited quite often in relation to the Toronto condominium market in the second half of 2012, however, a survey of developers, lenders and brokers conducted by Urbanation in December indicated that just 11% of respondents indicated that over supply in the new condominium market was their top concern going into 2013.

The resale condominium market suffered from a lack of supply in Q4-2012, as just 3.2% of the 227,700 units (1,285 buildings) tracked by Urbanation were listed for sale in the fourth quarter, the lowest quarterly level in over 10 years. Resale activity declined 14% quarterly in the Toronto CMA to 2,941 transactions. Despite the decline in resale units traded, the Sales-to-Listings ratio increased quarterly to 40.2%, indicative of relatively balanced market conditions.

“Many investors chose to hold and rent their units in 2012 rather than sell them into uncertain market conditions” adds Myers. “This is contrary to the theory that condominium unit holders will panic and sell their suites at significant discounts during a softening market”.

Of the 2,941 resale condominium apartment transactions in Q4-2012, just 0.9% of these suites were sold for less than 90% of the list price. These 27 units sold at an average price of $641,000 ($282,000 over the average Q4-2012 resale price of $359,000), indicating that most of these luxury suites were owned by individuals with unrealistic value expectations, not investors looking to ‘cut their losses’.

Myers adds “We do not subscribe to the theory that a major correction in resale condominium pricing is forthcoming, the lack of recessionary conditions, the nearly non-existent foreclosure market, and the unwillingness of condominium sellers to accept low-ball offers will keep prices from falling to any significant extent in 2013.”

Overall, 15,292 resale condominium apartments traded in 2012, down from the five-year average of 15,609, but above the ten-year average of 13,486.

Urbanation is forecasting 14,500 resale condominium transactions in 2013 and 17,000 new condominium sales in the Toronto CMA. 53% of respondents to Urbanation’s industry questionnaire expected between 17,500 to 20,000 new condominium sales in 2013, while 42% expected sales between 14,000 and 17,500.


How much is Land Transfer Tax in Toronto, Ontario?

January 30th, 2013


Ever Wondered how much the Land Transfer Tax is in Toronto?  We developed an iPad and iPhone app to help first time home buyers and repeat buyers calculate how much their Ontario land transfer tax (LTT) and Toronto Land Transfer Tax (TLTT) is.



The unseen hands that help to shape Canadian home prices

January 29th, 2013


The Globe and Mail

Tuesday January 29, 2013

Byline: Tavia Grant

Canada’s housing market is a bubble about to burst in some cities, or in the midst of a soft landing. Either way, a crucial piece of information on just what’s driving the market is missing in action.

Unlike in other countries such as the United States and Australia, neither the Canadian government nor industry keeps track of the number of foreign buyers or where they come from. Anecdotal evidence about foreign buyers abounds, yet hard evidence is lacking.

It’s crucial, missing information. Understanding what’s sparking demand in real estate can offer insights into the health of the market and what’s driving prices, and to help to predict cycles.

It can also help politicians make wiser decisions, such as whether restrictions may be needed if speculation becomes too high.

“It’s very hard to have a policy debate about what we should do when we don’t really know what’s going on,” said Tsur Somerville, director of the University of British Columbia’s centre for urban economics and real estate.

On a quiet leafy street north of Toronto, Mr. Zhang – who asked that his full name not be used – taps the walls and inspects the furnace of a $2.68- million home.

He has five days in the city to make his decision. This five-bedroom house, with Jatoba cherry wood floors and a home theatre, is a little over his $2- million budget, but he’ll see half a dozen others this week before making a selection.

He’s looking to buy because his 15-year-old daughter will be attending private school in Canada later this year. The owner of a steel business in Beijing has applied to immigrate to Canada, and figures he may as well purchase a home now.

“Canada is a beautiful country. It is good for living, for higher education and it is not that populated,” said Mr. Zhang, who would eventually buy a $2.2- million home in Oakville, Ont.

Rumours are rife about foreign buyers. In Toronto, Russian and Iranian buyers, flush with cash, are snapping up condos. In Vancouver, Chinese investors are buying luxury apartments. In the Maritimes, wealthy Americans and Europeans are acquiring coastal vacation property.

Estimates of the level of foreign buying are all over the map. In the Toronto and Vancouver markets, they can range from 3 per cent to – in some pockets of the condo market – upward of 60 per cent.

Shifts in the housing market can have huge spillover effects on the broader economy, on everything from retail sales to employment and the building of new shopping malls.

And yet, “we’re missing quite a meaningful part of housing activity in this country,” said Sherry Cooper, chief economist at Bank of Montreal.

Canada’s housing market has boomed since the recession, until lately. Without knowledge of the source of buying, Ms. Cooper said, “we have difficulty assessing just how sticky this money is, how vulnerable we might be to international capital flow changes, or what are the fundamentals that determine what has been extraordinary building and buying in our major cities.”

Canadians, meanwhile, are flocking to the U.S. market, snapping up holiday homes in the sun. They are now, by far, the biggest bunch of foreign buyers of American real estate. Just how do we know this? Each year, the National Association of Realtors publishes a study on international buying activity in the U.S. It shows who the biggest buyers are, the fastest-growing nationalities of buyers (Canada, China), where they’re buying (Florida, California), why (bargain vacation homes) and how levels of foreign buying change from year to year.

The industry has collected this info for more than five years, gleaned from questionnaires and follow-up emails to 50,000 real-estate agents. It’s valuable information for the public, officials – and the industry itself, helping realtors better understand their markets, says Jed Smith, the association’s Washington-based economist.

It’s a contrast to Canada. CMHC does not monitor or compile data on foreign investors. The Canadian Bankers Association doesn’t keep data on this. Nor does the Canadian Real Estate Association. The Bank of Canada doesn’t track it, though Governor Mark Carney has noted that heavy investor demand – much of it foreign – “reinforces the possibility of an overshoot in the condo market in some major cities.”

As for the federal government, Finance Minister Jim Flaherty told The Globe and Mail last April that it doesn’t have a good handle on the amount of foreign money in the country’s housing market.

Monitoring foreign buying in Canada poses challenges. Some buyers purchase homes through local family or a lawyer’s office, so on paper they appear to be living in the country. Plus there may be privacy concerns around asking buyers where they come from or why they’re buying.

International interest in Canadian property is unlikely to abate any time soon. Volatile stock markets and Canada’s reputation for economic stability are luring investors. So are housing prices that are still lower than other major global centres. And, unlike many countries such as Australia and Switzerland, foreigners face no restrictions on home buying.

Interest in Canadian residential real estate among foreign buyers has been steady in recent years, with particular interest from Asia, says Luis Lopez, head of business development, for RBC Wealth Management.

There’s also more wealth sloshing around, looking for a safe place to park. Globally, 175,000 people crossed the millionaire threshold last year, led by growth in emerging markets like China and India, according to Boston Consulting. Investors from mainland China tend to see Canada as one of the top destinations for real-estate investment, according to real estate services provider Colliers International.

Tony Ma agrees. The agent in Markham, Ont., has hosted several groups of visiting Chinese buyers in recent months alone. They typically buy a house for $1-million or $2-million, either to live or as an offshore investment. Canada’s multicultural communities, affordability and democratic system will continue to lure buyers, he says. “I don’t see this market cooling any time soon.”

Thriving downtown lures jobs back to core

January 29th, 2013


Toronto Star

Tuesday January 29, 2013

Byline: Royson James–james-thriving-downtown-lures-jobs-back-to-the-core

Census data and City of Toronto building stats prove what our senses have been observing: downtown Toronto is back as the hottest destination in the Toronto region.

The buzz is not limited to the condo craze. Jobs are moving to the core faster than they are moving to the burbs.

For the first time in 20 years, growth in downtown commercial real estate is outstripping growth in the rest of the GTA, sparking a revival of fortunes for the once battered 416 region.

“New business creation, employment gains and population growth in the downtown core are now outpacing that in the surrounding suburbs, reversing a decades-long trend of exactly the opposite,” says a Jan. 22 report from Francis Fong of TD Economics.

The spurt is centred in two wards stretching from Ossington Ave. to the Don Valley Parkway and along a jagged line up to St. Clair Ave. And it has pulled the city along for the ride.

Fong, an economist at TD Bank, has been tracking the trend. He reports:

Since 2000, Toronto has added 4.7 million square feet of office space, compared with 3.9 million in Durham, York, Peel and Halton regions combined.

After 1991, downtown Toronto population growth stalled at 5 per cent or less over any five-year period, even as the 905 regions galloped ahead at 17 and 18 per cent growth. But since 2006, downtown Toronto growth has spiked by 16 per cent, while the 905 rose just 13.7 per cent.

The number of businesses in Toronto grew by 3,600 between 2006 and 2011. In the five years prior to that, there was a net loss of 1,700 businesses.

Over the past five years, jobs based in downtown Toronto grew 14 per cent, compared with 8.7 per cent in the rest of the Census Metropolitan Area, roughly equivalent to the GTA. (Provincial growth was 5.6 per cent). Compare that with the previous five years, when downtown jobs dropped 3.3 per cent, while the CMA reached 11 per cent and the province 9.5 per cent growth.

“This pace is a far cry from the 2000 to 2005 period in which downtown jobs were outright lost,” the report states. “These trends represent a substantial turning point for the City of Toronto.”

For the past decade, critics spoke of the hollowing-out of the downtown core whenever the topic turned to growth and economic development and planning for the 100,000 new residents expected in the region each year. Banks moved back-office jobs to the surrounding regions, following moves by manufacturing. And other office jobs followed the trend. Even when job losses were stemmed in the downtown core, planners fretted about the plight of the inner suburbs of North York, Scarborough and Etobicoke.

Ahead of all that, baby boomers had sprinted to the regions outside Toronto in search of more affordable housing options and open space to raise their families. Like just about every region on the planet, Toronto was unable to provide flexible and sufficient transportation options to match the spaghetti commuting patterns.

Kids of the baby boomers – the so-called echo boomers – saw the price their parents paid for having to travel across the region to work. Now that they have education, money, and housing options in condos close to the action downtown – where the commuting headache is minimal – they are choosing to live close to work in the urban core.

Francis says that choice triggered other outcomes. Businesses saw their aging workforce and realized the replacements were opting to live downtown, so they started moving offices closer to the future workforce. And the trend of outward migration was stemmed.

Now, retailers and other service industry businesses are following the echo boomers and their disposable income and jobs, creating a critical mass that’s led to a downtown renaissance.

Francis says downtown Toronto was always an attractive location. The current boom could propel Toronto towards the realm of the big players in international cities with huge, permanent downtown populations – think London, New York, Hong Kong.

Whether Toronto gets there may depend on how well it meets the challenges the downtown boom creates – especially transportation, which is already denuded and compromised.

The echo boomers are now the largest group in Canada. Born between 1972 and 1992, they comprise a quarter of Ontario’s population and the 905 region.

Downtown? These 20- to 39-year-olds make up 47 per cent of the population.

Will they stay downtown? Or will they, like their parents, move out when the children come, leaving a new hole downtown?

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