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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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For months, market gurus have been predicting that condo prices would stagnate due to new mortgage regulations and a multitude of new condo towers (and many many more in the making). They were actually on point this time: over the summer, pre-construction sales (and prices) fell off, and now, for the first time since the recession, resale condos are also flattening. According to MLS figures for the third quarter, the average high-rise resale price was $334,204, only a modest rise from the $332,969 average price in the third quarter of 2011. Also, as increasing supply has moved power from sellers to buyers, a similar situation has shifted power from landlords towards tenants in the renters’ market. Average rents still rose, but only by 3.4 per cent for one-bedroom units (to $1,605) and 2.2 per cent for two-bedroom units (to $2,097). Of course, those figures only take into account units leased through MLS, which isn’t exactly the most popular avenue for renters. [Globe and Mail]
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Canada’s biggest banks are basking in good news lately: profits are up, as are payouts to shareholders, and (unlike their European and American counterparts) the largest lenders are expanding their workforces. However, those boom times aren’t trickling down to the common folk, according to the Globe and Mail’s Rob Carrick. Late last week, he decried the uptick in “bank shenanigans” since the tough times of the 2008 recession:
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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Silverstein’s Bakery is responsible for that bread smell at the corner of McCaul and Baldwin (Image: spDuchamp)
While it might seem as though much of the food you ingest comes from a million miles away, a lot more of it is processed in Toronto than you’d imagine. Yesterday, the Globe and Mail ran an in-depth piece about the economic impact of an industry that often chugs along below the radar (the restaurant component of it very much excepted, of course). Below, five things we learned:
An income of $196,000 places you in the country’s top one per cent of earners. But does it make you wealthy?
The Western world has become chastened and frugal. The reasons are many: corporations crouched in fear of another, much worse recession; penniless governments a-toppling; and Europe, for the foreseeable future, mired in a debt debacle. But you wouldn’t know it from life in Toronto, where a luxury condo opens its doors every week and we queue for hunks of exotic chocolate at the new Maple Leaf Gardens Loblaws. We’re bouncing along in a prosperity bubble.
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Read profiles of five Toronto households and how they spend their money »
Is the Toronto condo market in a bubble? Who knows! Yesterday, the Bank of Canada warned that the condo boom is about to get seriously less boomy (apparently, “the supply of completed but unoccupied condominiums is elevated, which suggests a heightened risk of a correction in this market”). Sure, that may sound gloomy, but some indicators of the market’s health aren’t even tracked. For instance, although rumour has it that foreign investors are buying all the condos they can, according to the Globe and Mail, Canada doesn’t track foreign investment in its real estate market. Meanwhile, National Bank analyst Stefane Marion believes a recession is the real threat to the housing market, and Urbanation predicts 2011 will actually be a record year for Toronto condo sales. If you’re not sure what to think, don’t worry: we’re pretty sure nobody really knows (not even The Economist). Read the entire story [Globe and Mail] »
(Images: Toronto skyline, Seekdes (Mike in TO); bubble, Rhett Maxwell)
The Manhattan site where an Ontario developer is proposing to build 5,000 new apartments (Image: Roblawol)
Manhattan Island was long thought to be fully built out, but apparently Canada’s largest real estate developer aims to conjure an entire neighbourhood on top of a 26-acre rail yard nonetheless. Oxford Properties—the real estate arm of the Ontario Municipal Employees Retirement System—has an ambitious vision of 5,000 new apartments, but it will first need to construct a $1.5 billion platform above the Hudson train yards in the island’s west end. It’s a Herculean task: New York City hasn’t seen such a transformation in over 100 years, when a similar platform was erected over Park Avenue and Grand Central Station. Oxford only took charge of the $15 billion project after some of the biggest names in U.S. real estate and finance pulled out, including Goldman Sachs and Tishman Speyer. The recession has bruised the American real estate sector to the degree that many companies can’t stomach the risk involved—especially since thousands of layoffs have left plenty of free office space in New York. The modest Canadians, however, still have the cash and cojones for such ventures. Construction starts next year, and hopefully the gamble pays off; the fund that sustains hundreds of thousands of Canadian pensions depends on Oxford’s success. Read the entire story [The Globe and Mail] »
It’s not particularly polite to ask rich people what they earn. But tact is overrated, and we wanted to know, so we asked anyway. When they told us to get lost, we got sneaky. We dug up disclosure documents, annual reports and the tax filings of charitable organizations. When those trails went dry, we surveyed industry insiders who know what other people make—headhunters and consultants and analysts and colleagues—and asked for an educated guess. After hundreds of calls and emails and deep-throat meetings in dark alleys, we phoned the high earners back and told them what we found. Again, with feeling, they told us to piss off.
What follows is our shamelessly gawking, as-precise-as-possible examination of the highest-paid people in the city’s top industries. When the information was available, we included bonuses and perks and, in some cases, exercised stock options. Our findings verified that a high earner in finance is almost always on a different plane (a private jet, usually) than a high earner in, for example, the lowly arts. One major discovery: Heather Reisman took a pay cut. One truth reconfirmed: no matter how rich you are, there’s always someone who makes a helluva lot more.
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The latest project of the gold magnate Peter Munk is a seaside resort and tax haven for fellow billionaires in the post-Soviet backwater of Tivat, Montenegro. A delirious tour of a world of champagne-drenched parties, supersize yachts and the recession-proof Ultra-High Net Worth Individual
Captain Fantastic: Peter Munk on his 40-metre yacht, the Golden Eagle, which has a full-time staff of five. (Image: Jim Ross)
There are birthday parties, and then there was Nathaniel Rothschild’s party this past July. The financier, scion of the prominent banking family and future baron was turning 40 and spent £1 million on the weekend-long extravaganza. The venue: Porto Montenegro, a newly developed luxury resort and marina in the Montenegrin coastal town of Tivat, on the southeast side of the Adriatic Sea. It was the sort of gathering that marks the end of an era or the birth of an empire—and in a way, for Europe’s youngest and smallest democracy, it was both.
Four hundred guests arrived at the village airport on private jets or stepped off the fleet of super-yachts that washed ashore from the world’s most glamorous tax havens—the Grenadines, Gibraltar, Grand Cayman. The attendees were described in the Guardian society pages as “200 ugly rich people and their poorer but more attractive partners,” or, as one guest more generously put it, “plutocrats and the women who love them.” A number of the partiers were so fantastically rich they could bankroll whole armies (which the birthday boy’s family, in its heyday, once did): Russian oligarch Oleg Deripaska (who arrived on his £70-million yacht, the Queen K); the wealthy Egyptian Sawiris family (who have embarked on their own Montenegrin development nearby); King Leruo Molotlegi, ruler of a tiny, platinum-rich part of South Africa, who hit the dance floor in a fabulous dashiki; British politician Lord Peter Mandelson; Jimmy Choo honcho Tamara Mellon; the historian Niall Ferguson and his Dutch-Somali partner, Ayaan Hirsi Ali, a feminist critic of Islam. There was a healthy smattering of European royalty, as well as members of the Guinness and Goldsmith clans.
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While the Occupy protestors entrenched in St. James Park are proof enough that times are bad, four high-profile economists are set to debate whether we’re clawing our way out of the recession or if we are, indeed, truly sunk. “Be it resolved, North America faces a Japan-style era of high unemployment and slow growth” is the topic of November’s Munk Debates, in which New York Times columnist Paul Krugman and Gluskin Sheff’s David Rosenberg argue for and former Treasury Secretary Lawrence H. Summers and Eurasia Group’s Ian Bremmer argue against. These titans have more Wall Street cred than Scrooge McDuck, so the discussion should be one to watch—and maybe by the end we’ll know whether we’re in brioche or gruel for the next decade. Read more at the Munk Debates website »
Gil Blutrich. (Image: Christopher Wahl)
Gil Blutrich believes in destiny. When he was a boy growing up in Ra’anana, a town north of Tel Aviv, he spent a lot of time fantasizing about what he wanted for his bar mitzvah. While most of the boys in his class opted for expensive stereo systems or family vacations in Europe, Blutrich chose to redecorate his room. It was the early ’70s, and photographic wallpaper murals were all the rage. Blutrich passed over the tropical beach scenes and snow-capped mountains for something different: a summer landscape with a lush green meadow and a reedy frog pond. It was, he now believes, a postcard of southern Ontario, cosmically mailed back in time by his future self. “I looked at that wallpaper every day until I was 18, and it’s only now I realize I was looking at Canada and thinking about Canada before I even knew it. If that’s not destiny, I don’t know what is.”
Given the amount of chatter generated by Dalton McGuinty’s erratic hand gestures last night, it would seem that the provincial election leader’s debate was the uninspiring affair that most suggested it would be. Aside from a few exciting moments and a couple of strange ones (like Andrea Horwath’s locker room anecdote), the debate was predictable enough to get any viewer properly buzzed—and we don’t mean on the political intrigue. Of course, even if uneventful, the debate could still play an important role in the final stretch of the campaign. With that in mind, we give you our summation of the ink that’s been spilled on the subject, after the jump.
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In the long, drawn-out saga of Blockbuster Canada’s demise, today marks a grim day for the national movie rental chain: already under a court-ordered receivership, the company is set to shut down all of its few remaining operations. Blockbuster’s folding isn’t just the work of YouTube, Netflix and piracy (we’re pretty sure that the worldwide recession did a lot of the heavy lifting), but it is a fairly impressive sign of how the film market is changing. HMV, for one, is downsizing, including the store at Yonge and Dundas, YouTube Canada just announced it will start renting movies and, in general, the movie retail industry doesn’t look much in 2011 like it did in 2001. Read the entire story [CBC] »
(Image: Gluekit; D-Sisive by Melanie Moore; Shad by Christine Lim; Drake by Christian Lapid/CP Images; Airplane Boys by Justin Create)
At 3:46 a.m. on December 12, 2010, a post titled “Introducing The Weeknd” appeared on the blog of Toronto’s most famous rapper, Drake. Two songs—“What You Need” and “The Morning”—revealed a new R&B singer to the world and kick-started a rabid following. The Weeknd’s free nine-song release House of Balloons garnered 200,000 downloads in its first three weeks, and his videos have been watched on YouTube hundreds of thousands of times. It’s been a rapid rise, like that of his mentor, Drake, whose 2010 full-length debut Thank Me Later went platinum in the U.S. just over a month after its release. This is Toronto’s hip-hop moment, and the city’s steadfast identity as safe, stable and middle-class—once the basis of its lack of rap credibility—is the reason.
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