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March, April and May are the housing market’s biggest months, and real estate watchers are busy prognosticating whether Toronto’s sluggish-of-late market will see a rebound this spring. One of the more in-depth accounts, courtesy of the Globe and Mail, hones in on how first-time buyers are faring. Below, five key facts about this segment of the market—including what might convince them to take the plunge.
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Target’s plans to charge higher prices in Canada than in the U.S. triggered a new round of grumbling about the Canadian–American price gap last month. Now, a Senate committee report on the issue has made the country’s consumers—and consumer journalists—even more fired up. The report’s most anger-inducing section describes “country pricing,” the system by which manufacturers charge Canadian retailers 10 to 115 per cent more on wholesale products on the grounds that sucker Canadians are simply willing to pay more (the retailers pass the higher costs along to consumers). Higher customs tariffs, fewer economies of scale and higher transportation costs also contribute to Canada’s steep prices—though Diane Brisebois, president of the Retail Council of Canada, told CBC’s Marketplace that those factors should only raise wholesale prices by five or 10 per cent. On the upside, the committee found that U.S. and Canadian prices will converge as more Canadians start to compare prices using smartphone apps and websites—which should put competitive pressure on manufacturers and retailers. We hope.
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The Royal Canadian Mint will stop distributing pennies to banks and businesses tomorrow, which means that, although the humble copper coin remains legal tender, businesses will now no longer give them as change. The day’s bewildering array of penny-centric articles suggests that Canadians have a strong attachment to the wee copper coin (as well as an awful lot of anxiety about the country’s ability to round to the nearest nickel). Below, the 10 weirdest—and yet strangely touching—send-offs.
Smart phones have invaded every aspect of our lives. We use them at the dinner table, in bed, even on the john. Some people call it an addiction. I call it progress
I lift phone to face hundreds of times a day. If smart phones are addictive, then I’m the Amy Winehouse of Android. My wife can’t stand it when I read the news on my phone at the breakfast table, an annoyance I’m certain she wouldn’t suffer were I reading the same article on newsprint. She gets irritated with me, and then I catch her doing the same thing a day later, and I make too big a deal about it. It’s time we gave each other a break.
All of us, that is. A growing body of research is revealing a global epidemic of smart phone dependency. Lookout, a mobile security firm, recently conducted a “mobile mindset” survey that asked more than 2,000 Americans if they checked their phones while on the toilet. Nearly 40 per cent of them did. More than half of those studied curled up in bed with their phones, 24 per cent used them while driving and nine per cent checked email while at church or other places of worship. Researchers also learned that 94 per cent of users felt “panicked,” “desperate” or “sick” when they misplaced their phones. Only six per cent said they felt “relieved.” Another widely reported survey of 1,000 employed smart phone users found that 80 per cent of them continued to check in with work via their phones after leaving the office; 57 per cent did so during family outings, and 25 per cent admitted to arguing with their spouses about these phone habits. A cheeky survey asked Americans which they would rather go without for a week if they had to choose: smart phones or sex? Thirty-three per cent said sex.
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As the global economy fizzles, our city is being inundated with a new cohort of foreign professionals. They’re coming for the stable economy, the chart-topping livability and the promise of a steady job. Meet the new refugees.
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Sean and James McQuillan left Ireland for Toronto in 2010
In the mid-1990s, companies such as Microsoft, Intel and Apple, attracted by Ireland’s well-educated workforce, tax incentives, minimal regulations and low wages, opened offices in Dublin with a speed that surprised even the gravest doubter. By the time the Celtic Tiger, as the exploding Irish economy was dubbed, had fully deployed its claws, the unemployment rate had dropped to just under five per cent, one of the lowest in the developed world. Ireland’s GDP grew to one of the highest in Europe, exports doubled in just five years, and the average income was climbing seven per cent a year, almost triple the Read the rest of this entry »
eurozone average.
The city’s great period of growth won’t continue if we don’t enlist the best and brightest minds from Bay Street, the universities and the public sector
Richard Florida believes Toronto should take a cue from innovative city-building strategies in Silicon Valley and Chicago
In 2007, when my wife and I moved here from Washington, D.C., Toronto was ascendant. I’d been offered a job at the University of Toronto’s Martin Prosperity Institute, a think tank investigating the competitiveness of cities. Toronto, it seemed to us, was an open, tolerant place offering a superb quality of life for its wide range of citizens. It was a destination of choice because of its thriving, stable economy, world-class banks, medical centres and cultural institutions, safety and livability, and diverse neighborhoods. It appeared a model of social cohesion, where people from across the globe were attracted to the prospect of a better future. Toronto’s best days were ahead.
The U.S. presidential race has been depressing to watch. The portrait of America that has emerged from the conventions and the debates and the attack ads is grim: a country plagued by vast unemployment and a shrinking middle class, where many average citizens can’t pay the bills. For the first time in generations, Americans anticipate their kids will never make as much money as they do. Even the flow of illegal immigrants to the U.S. is slowing; since the economy crashed in 2008, the number of Mexicans sneaking across the border has declined.
Both presidential candidates think they know how to fix the country. Obama believes in sharing the wealth, and Romney believes in the power of the free market. The only thing they agree on is that the American dream is in tatters.
Or maybe it just got displaced. Maybe it moved to Canada. We have our share of economic challenges, as anyone in Stephen Harper’s office could tell you. But compared with many troubled spots on the globe, Canada is paradise. Our middle class is relatively stable, and people from all over the world are desperate to move here. This country, of course, has always attracted immigrants in search of a better life. But Canada wasn’t necessarily a first-choice destination. Now, as Europe experiences extreme economic volatility and the U.S. becomes a place where people are working three minimum-wage jobs to make ends meet, Canada’s status abroad has greatly improved.
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The city’s condo boom may be keeping both Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney up at night, but at least one high-level economist is contradicting both (because when has anyone ever agreed about the real estate market?). Robert Hogue, a senior economist at the Royal Bank of Canada, insists there’s no bubble in Toronto and, while the market will likely see a bit of cooling, there won’t be an epic condo crash. In a report released today, Hogue argues that demand for housing remains strong—after all, there are roughly 38,000 net new households in the Greater Toronto Area each year and they have to move in somewhere.
Back in 2004, when I was in my late 20s, my husband and I bought a condo in Toronto for all the reasons young people typically buy condos: we wanted to be right downtown, close to the things we enjoyed, and we couldn’t afford a house in any of our favourite neighbourhoods. Plus, the ease of condo life appealed to us. With no kids and little furniture, we had modest space requirements, and we certainly didn’t want to spend our weekends doing home repairs. Still, it took us a while to find a condo we wanted to live in. Even though many of the buildings we saw were just a few years old, they already looked timeworn, with cracking drywall and battered fixtures. If the finishes were shoddy, I worried there might be structural deficiencies, too. We ended up buying a one-bedroom-plus-den in a 1980s building—ancient by Toronto condo standards. Nothing about the common areas looked cool (in fact, the hallways had dated pink carpets), but the structure was reassuringly solid. In the few happy years we lived there, no infrastructure problems were revealed, the building was well maintained, and the monthly fees never went up.
Since then, hundreds of new condos have risen in the city. The pace of development has been frenetic—and that’s mainly a good thing. For decades, the downtown core was under-built and the city’s skyline remained unchanged. The new skyscrapers are populating formerly empty areas of the city, spawning new restaurants and retail, and creating vibrant new neighbourhoods. Condos can largely be credited with revitalizing Toronto’s core. The vast majority of the 160 or so condos now in development are within a kilometre or two of Union Station, which means we can expect Toronto to get even more dense and interesting in the next few years.
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Toronto’s housing market has been as hot as this week’s weather, but new data from the Greater Toronto Realtors Association suggests that the oft-predicted and much-feared cooling of Toronto’s market could finally be here. It seems that Canada’s new, stricter mortgage rules and a raft of bubble warnings have made buyers more cautious—well, that’s what pundits think, anyway. Here’s a breakdown of the most important numbers and what they may mean for Toronto homeowners:
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The runaway real estate market in Canadian cities (and whispers and shouts of bubble trouble) is worrying Finance Minister Jim Flaherty enough that he’s again introducing new mortgage rules. Among the new measures, which kick in July 9: the amortization period for a government-insured mortgage will max out at 25 years, rather than 30; the maximum amount homeowners can borrow against their homes will be reduced from 85 to 80 per cent; and only homes with a purchase price under $1 million will be eligible for government-backed mortgages. Flaherty specifically singled out the increasingly absurd condo markets in cities like Toronto as cause for unease—but a recent Globe and Mail article suggests developers and some industry experts still aren’t concerned about things going south. The general belief is that, though Toronto’s market may be cooling slightly and buyers are becoming more skittish, the expectation of sustained low interest rates means the construction cranes aren’t going anywhere. [Globe and Mail]
Turner outside his Caledon home, a former inn built in 1855
If the Toronto real estate market has nine lives, so, too, does its most famous prophet of doom, Garth Turner. Over a 40-year career, Turner has worked as a journalist, a broadcasting entrepreneur, a newspaper chain proprietor, a hotel and restaurant operator, twice as a federal MP (including a stint in Kim Campbell’s short-lived cabinet), a PC leadership candidate, and a financial author and speaker (or, as his critics put it, “seminar shill”). Most Canadians still know him best as the rebellious member of Stephen Harper’s government who was kicked out of caucus in the fall of 2006 for blogging about party business, then crossed the floor to join the Liberals.
Turner, you may be surprised to learn, is also a self-professed real estate junkie who over the years has bought and sold—very profitably—about 50 commercial and residential properties; he moved four in 2011 alone. But as he has watched prices and consumer debt levels soar, especially in Toronto and Vancouver, he has come to see the housing market as a grossly distended balloon that will—any day now—explode, raining debt and misery on the Canadian populace. Each delay to the inevitable reckoning, he argues, more deeply entrenches our delusion that the real estate boom—“the biggest bubble economy in history,” as he puts it—can continue forever, and leads a few thousand more naive young couples to sign five-per-cent-down mortgages on wildly overpriced fixer-uppers in Leaside or Riverdale. “The real estate correction will hurt,” he warns, “and the longer this thing goes before it tips, the more pain there will be.”
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Toronto is the rare city experiencing a construction frenzy (185 high-rises, to New York’s 80), a hiring spree (in the last quarter of 2011, while Bank of America and Citigroup fired almost 10,000 staff, our eight biggest banks added 2,800), and a surge in swaggering confidence. As our reputation for stability spreads, the world has begun to look at us differently. Many of the units in those 185 towers are owned by wealthy foreigners who see Toronto as a smart investment.
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After years of crushing mortgage payments and escalating maintenance costs, one homeowner sold her house and signed a lease on a place a few blocks away. Life has never been sweeter
Our last house was a little gem. Few homes in Leslieville are stately or architecturally impressive—it’s a neighbourhood of unremarkable brick semis with the rare Victorian or Tudor flourish—and the one my partner and I owned for two years was no exception. But inside, stripped down to its simple bones, with Benjamin Moore cloud white walls and dark wood floors, a cute IKEA kitchen and mid-century decor from local vintage shops, the place had charm. We bought it for $450,000 in 2007, a deal, if not a steal, for a home on a coveted street less than a five-minute walk from all the amenities required by the middle-class hordes: good coffee, a busy playground, decent restaurants. Soon, however, our house began to make exhausting demands: the furnace needed to be replaced, then the roof; the basement felt damp in the summer humidity, and in the winter our barely insulated bedroom, with its ancient windows, was so cold we had to run a space heater through the night.
There was no money to fix any of it. Our line of credit and credit cards were maxed out. We had two comfortable incomes, but after mortgage payments, utilities, property taxes, car payments, insurance, daycare and groceries, there was little left over. We added up the sums, living expenses against income, on increasingly complicated spreadsheets—it would be years before we would be in the black. Meanwhile, the company I worked for faltered during the recession. First the frills were cut: fewer couriers, no fancy Christmas parties, no taxi chits. Then jobs; I lost mine in early 2009.
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