If the seller’s market is over for the Toronto real estate market, what does that mean for the average homeowner?
The real estate boards in Toronto and Vancouver have just released their August reports, and the news is not particularly good for anyone selling their house.
CTV News reports that Vancouver sales August, 2010 over August 2009 were down 36%, while Toronto’s market was down 22%. While Vancouver’s prices are down 2.8% from April’s peak, Toronto prices are down 8.6% from May.
This data sounds ominous, if you are a homeowner selling your home. However, since 1953, Toronto home prices have risen more than 440%, after factoring in the impact of inflation. Since 1970, the increase has been approximately 280%, while since 1995, prices have risen 185%. Like the stock market, long term prospects for a natural increase in your home value are better than excellent.
On the other hand, in the short term, if the sellers’ market is over, then the converse is true: The buyers’ market is here! Fewer buyers tend to make sellers more eager to be flexible. Flexibility most often equates to negotiable prices or terms.
At the same time, mortgage requirements and the new HST have impacted on home sales in July, and now, August. This new cost may make buyers somewhat shy about submitting an offer to purchase, but the reality is that the HST is here to stay, as likely are the new regulations on mortgage eligibility. So, buyers ultimately will have to deal with these new realities.
This month, the Bank of Canada will contemplate raising the prime interest rate, again. Upward will be the new normal direction, it appears. So, the longer a buyer waits, the more likely that she/he will see higher mortgage rates.
This puts the emphasis back on the sellers’ situation. In truth, as the Toronto population ages, and baby boomers divest themselves of their home equity investment, smaller homes, condominiums or apartments will be required for them. At the same time, those boomers’ homes will enter the market.
So, is the end of the sellers’ market the precursor to a housing bust? Highly unlikely. In fact, houses will continue to be put on the market, and houses will continue to be bought and sold. The primary shift will be a more cautious approach to either buying or selling. Is that a really a “bad news” scenario? No.
Saturday, September 11, 2010
Aging & home purchasing trends
Bad news. We are all getting old. Good news. The market is adapting to our needs.
A new series on CBC’s The Current, entitled “Demographics Dilemma,” points out that, in the next five years, a significant shift in the average age of Canada’s population will occur, with more people over 65 than Canadians under 15. The same series stresses that we will need to respond to an evolving demand for housing.
One of the most significant changes will be the need for more “visitable” homes. That is the in-vogue term for homes that are designed to be handicapped-friendly, or easier to navigate for people with limited mobility.
Mobility issues, it should be pointed out, are not just issues that involve walking or wheelchairs. Mobility issues also consider visual or aural limitations. In many seniors’ facilities, the need for better lighting, brighter & more definitive colours to mark wall corners, stair risers or doorways is driving modifications to those premises.
Concurrent with the need to design living accommodations that reflect changing needs of the owners or tenants is the need to size homes appropriately. In recent years, the movement of the forty-somethings has been to spacious homes. As the boomers’ children left home, the larger homes remained a status symbol. Now, however, seniors and pre-seniors recognize that the big house needs big cleaning & maintenance. Fifty-somethings are travelling more, staying at home less, and requiring smaller living space.
Ownership, itself, is evolving. Life leases, condominiums and fractionals have become commonplace for the frequently-absent homeowner who does not wish to be burdened with high cost and high maintenance.
But household layouts and amenities, including furnishings, have kept pace, largely, with need. Zone & task lighting layouts have maximized lighting where needed, cut costs where warranted. Stairways are more spacious and navigable, as are washrooms and hallways. Even furniture has been adapted to meet changing preferences.
The idea that we are aging is not new. The idea that we can expect that housing will change to meet are preferences is new, however. And, while aging may not be welcome, adaptability of our surroundings is.
A new series on CBC’s The Current, entitled “Demographics Dilemma,” points out that, in the next five years, a significant shift in the average age of Canada’s population will occur, with more people over 65 than Canadians under 15. The same series stresses that we will need to respond to an evolving demand for housing.
One of the most significant changes will be the need for more “visitable” homes. That is the in-vogue term for homes that are designed to be handicapped-friendly, or easier to navigate for people with limited mobility.
Mobility issues, it should be pointed out, are not just issues that involve walking or wheelchairs. Mobility issues also consider visual or aural limitations. In many seniors’ facilities, the need for better lighting, brighter & more definitive colours to mark wall corners, stair risers or doorways is driving modifications to those premises.
Concurrent with the need to design living accommodations that reflect changing needs of the owners or tenants is the need to size homes appropriately. In recent years, the movement of the forty-somethings has been to spacious homes. As the boomers’ children left home, the larger homes remained a status symbol. Now, however, seniors and pre-seniors recognize that the big house needs big cleaning & maintenance. Fifty-somethings are travelling more, staying at home less, and requiring smaller living space.
Ownership, itself, is evolving. Life leases, condominiums and fractionals have become commonplace for the frequently-absent homeowner who does not wish to be burdened with high cost and high maintenance.
But household layouts and amenities, including furnishings, have kept pace, largely, with need. Zone & task lighting layouts have maximized lighting where needed, cut costs where warranted. Stairways are more spacious and navigable, as are washrooms and hallways. Even furniture has been adapted to meet changing preferences.
The idea that we are aging is not new. The idea that we can expect that housing will change to meet are preferences is new, however. And, while aging may not be welcome, adaptability of our surroundings is.
Ignoring Crime Statistics
Advice for homebuyers in Toronto: Ignore crime data. Perhaps that is an overly simplistic statement, but, in fact, statistics do not necessarily reflect the true situation in a province, region, city or neighbourhood.
Take for example, Statistics Canada data on rates of violent crime. Nunavit, Yukon, and NWT have the highest per capita crime rates in the country. However, with almost half of Canada’s land mass, and only a handful of residents, one or two violent crimes spikes the data severely. The North seems like an incredibly dangerous place in which to live! On a per-square-kilometer, basis, on the other hand, the region seems like the safest place on earth.
Winnipeg infamously calls itself the “Murder Capital of Canada.” On a per-capita basis, this claim is true. But, almost without exception, the fifty or so killings that happen in Manitoba annually are gang-on-gang, or friend-on-friend issues, placing the general public in very little danger.
PEI went from “0” murders in 2004 to “2” in 2008. That meant that their homicide rate was non-existent in 2004, compared to the Canadian average of 1.95 and Ontario’s of 1.51 per 100,000 people. Turn to 2008, and that rate skyrocketed to 1.43 for PEI, compared to 1.83 for Canada and 1.36 for Ontario. So had PEI suddenly become a “Murder Capital?” Two homicides hardly qualifies it for such a label.
Toronto’s various neighbourhoods experience different rates and types of crime. But relying purely on statistics that show a community to be either safe or violent is a false premise. First, news outlets focus on violent crimes in their daily reports. More densely populated regions generally experience more crime. Even in neighbourhoods, small pockets and micro-regions may have very high numbers while the area may be predominantly safe.
The most effective way to gauge the “safety” of a community is to speak to neighbouring homeowners. The very appearance of a community, and how well it is maintained can give clues to its track record. And, as many communities are upgraded, crime stats drop. In fact, almost all statistics are severely dated by the time they are reported, anyway.
Crime data is a significant consideration in any home purchase decision. But it is critical to take those statistics, and apply them, in a common sense analysis, to your own concerns and preferences.
Take for example, Statistics Canada data on rates of violent crime. Nunavit, Yukon, and NWT have the highest per capita crime rates in the country. However, with almost half of Canada’s land mass, and only a handful of residents, one or two violent crimes spikes the data severely. The North seems like an incredibly dangerous place in which to live! On a per-square-kilometer, basis, on the other hand, the region seems like the safest place on earth.
Winnipeg infamously calls itself the “Murder Capital of Canada.” On a per-capita basis, this claim is true. But, almost without exception, the fifty or so killings that happen in Manitoba annually are gang-on-gang, or friend-on-friend issues, placing the general public in very little danger.
PEI went from “0” murders in 2004 to “2” in 2008. That meant that their homicide rate was non-existent in 2004, compared to the Canadian average of 1.95 and Ontario’s of 1.51 per 100,000 people. Turn to 2008, and that rate skyrocketed to 1.43 for PEI, compared to 1.83 for Canada and 1.36 for Ontario. So had PEI suddenly become a “Murder Capital?” Two homicides hardly qualifies it for such a label.
Toronto’s various neighbourhoods experience different rates and types of crime. But relying purely on statistics that show a community to be either safe or violent is a false premise. First, news outlets focus on violent crimes in their daily reports. More densely populated regions generally experience more crime. Even in neighbourhoods, small pockets and micro-regions may have very high numbers while the area may be predominantly safe.
The most effective way to gauge the “safety” of a community is to speak to neighbouring homeowners. The very appearance of a community, and how well it is maintained can give clues to its track record. And, as many communities are upgraded, crime stats drop. In fact, almost all statistics are severely dated by the time they are reported, anyway.
Crime data is a significant consideration in any home purchase decision. But it is critical to take those statistics, and apply them, in a common sense analysis, to your own concerns and preferences.
Thursday, July 8, 2010
Frontage Costs for Sewer Add to House Cost
In many municipalities across Canada, the cost of extending sewer/water services from a main line to a new, subdivided or unserviced lot is the responsibility of the landowner or developer. Particularly, in rural communities where businesses wish to construct a facility that is not able to be served by the existing water line, those businesses often pay the full cost of new water services infrastructure, minus any provincial or federal government contributions.
In 1999, Toronto reconsidered its policies on reimbursement for extension of water services to unserviced lots, in order to bring it in line with the practices of nearby communities. This change in policy is often unnoticed by homebuyers, until the developer levies the charge against the cost that he has incurred, or the city seeks to recover a portion of those costs. The costs can be quite significant!
Sewer line costs are calculated on the basis of the length of the line, or a per-meter basis. In recent years, those costs have increased by more than 280%. Where a prospective buyer of a new home is considering a new development community, it is imperative that he inquires about all costs, including any one-time or ongoing levies.
While the city of Toronto reimburses new water services clients a portion of the construction costs, those fees are less than 50% of the actual construction costs.
One of the ways to mitigate the buyer’s frontage costs is to look for homes on lots that run lengthwise into the property, rather than across the property face. Vertical construction such as this will reduce the lot width demand, and, in turn, reduce water services charges. Even where the developer has absorbed the costs of infrastructure into the purchase price, the narrower lot should result in a lower cost for a lot of the same square footage but wider frontage.
Perhaps the most effective way to ensure that you are not absorbing more than your share of the cost of development for your home site subdivision is to use the services of a realtor. The experience of a professional realtor, much like the expertise of a lawyer or doctor, is the best return on investment that you can make, when making the largest purchase of your life.
In 1999, Toronto reconsidered its policies on reimbursement for extension of water services to unserviced lots, in order to bring it in line with the practices of nearby communities. This change in policy is often unnoticed by homebuyers, until the developer levies the charge against the cost that he has incurred, or the city seeks to recover a portion of those costs. The costs can be quite significant!
Sewer line costs are calculated on the basis of the length of the line, or a per-meter basis. In recent years, those costs have increased by more than 280%. Where a prospective buyer of a new home is considering a new development community, it is imperative that he inquires about all costs, including any one-time or ongoing levies.
While the city of Toronto reimburses new water services clients a portion of the construction costs, those fees are less than 50% of the actual construction costs.
One of the ways to mitigate the buyer’s frontage costs is to look for homes on lots that run lengthwise into the property, rather than across the property face. Vertical construction such as this will reduce the lot width demand, and, in turn, reduce water services charges. Even where the developer has absorbed the costs of infrastructure into the purchase price, the narrower lot should result in a lower cost for a lot of the same square footage but wider frontage.
Perhaps the most effective way to ensure that you are not absorbing more than your share of the cost of development for your home site subdivision is to use the services of a realtor. The experience of a professional realtor, much like the expertise of a lawyer or doctor, is the best return on investment that you can make, when making the largest purchase of your life.
Wednesday, July 7, 2010
Best Home Location Not As Clearcut As It Seems
You want a home near elementary schools, because you have children ranging in age from 9-12. You want to be near a thoroughfare, because you want the fastest route to and from work. A community club or recreation centre is important, with all of your kids in sports. Shopping centres nearby means walking distance to get a few bags of groceries. And, of course, good medical facilities – even a hospital – in striking distance, is vital. Sounds like a utopian community, doesn’t it?
But there is also a downside to each of the amenities and advantages that you have listed as priorities, even if such a community was readily accessible. It is the negatives that we often fail to contemplate when purchasing a home. This is particularly true for first-time buyers.
Yes, the elementary school is important. But, with the children reaching the point where they will move on to middle, and then high school, looking a few years into the future becomes of greater concern, as the kids are unlikely to want to give up established friendships quickly. So, a balance of advanced schooling and elementary facilities is the key.
A thoroughfare offers obvious disadvantages, with vehicle noise, exhaust fumes and more frequent construction headaches. Consider, as well, that one of the partners in the household is likely to change jobs in the next eight years, and that thoroughfare is less significant. To be sure it is an important factor, think about driving the route during peak hours, before buying. Or check on construction history and the city’s five-year capital project plans for the area.
Community clubs and recreation complexes offer few downsides, except for the increased traffic and parking issues, as well as a general increase in graffiti near many public venues, according to the Center for Problem-Oriented Policing.
Similarly, shopping centres provide the same downsides.
The hospital – a vital consideration – is more likely to be an annoyance than a benefit, with sirens and parking as issues. Most of us are aware, as well, that all but the most urgent health issues require a much longer wait than a clinic or doctor’s office, so, instead, seek out a mall with a physician or clinic in it.
While many realtors and home vendors promote their listings using these most popular demand items, resist the urge to “follow the herd.” Instead, assess what is important to you, in the short, near and long term. Resist the popular trends and “hot” communities as the utopian area or market. “Popular” and “hot” often equal “pricey.”
Look to patterns, dynamics and directions of a community, rather than what that community now may be. Some of the best deals may be available in emerging or revitalizing communities, rather than in “in” markets. Those emerging centres may also offer the greatest potential for property appreciation.
The cautions listed should not be interpreted to mean, however, that you should shy away from a property because it has all the amenities listed, or because it is in an established, vibrant and “hot” community. Rather, your focus should be on identifying items important to you, today. If it is your intention to remain in this new home for a longer period, consider future needs. However, if the house is a short-term stopover of a few years or less, consider its marketability at the end of that period.
In short, you are investing in your life, not an inanimate, impersonal building. Your home, like the turtle’s shell, is uniquely yours, and should reflect the wants and desires you harbour as much as your needs and priorities. Utopia, indeed, is personal!
But there is also a downside to each of the amenities and advantages that you have listed as priorities, even if such a community was readily accessible. It is the negatives that we often fail to contemplate when purchasing a home. This is particularly true for first-time buyers.
Yes, the elementary school is important. But, with the children reaching the point where they will move on to middle, and then high school, looking a few years into the future becomes of greater concern, as the kids are unlikely to want to give up established friendships quickly. So, a balance of advanced schooling and elementary facilities is the key.
A thoroughfare offers obvious disadvantages, with vehicle noise, exhaust fumes and more frequent construction headaches. Consider, as well, that one of the partners in the household is likely to change jobs in the next eight years, and that thoroughfare is less significant. To be sure it is an important factor, think about driving the route during peak hours, before buying. Or check on construction history and the city’s five-year capital project plans for the area.
Community clubs and recreation complexes offer few downsides, except for the increased traffic and parking issues, as well as a general increase in graffiti near many public venues, according to the Center for Problem-Oriented Policing.
Similarly, shopping centres provide the same downsides.
The hospital – a vital consideration – is more likely to be an annoyance than a benefit, with sirens and parking as issues. Most of us are aware, as well, that all but the most urgent health issues require a much longer wait than a clinic or doctor’s office, so, instead, seek out a mall with a physician or clinic in it.
While many realtors and home vendors promote their listings using these most popular demand items, resist the urge to “follow the herd.” Instead, assess what is important to you, in the short, near and long term. Resist the popular trends and “hot” communities as the utopian area or market. “Popular” and “hot” often equal “pricey.”
Look to patterns, dynamics and directions of a community, rather than what that community now may be. Some of the best deals may be available in emerging or revitalizing communities, rather than in “in” markets. Those emerging centres may also offer the greatest potential for property appreciation.
The cautions listed should not be interpreted to mean, however, that you should shy away from a property because it has all the amenities listed, or because it is in an established, vibrant and “hot” community. Rather, your focus should be on identifying items important to you, today. If it is your intention to remain in this new home for a longer period, consider future needs. However, if the house is a short-term stopover of a few years or less, consider its marketability at the end of that period.
In short, you are investing in your life, not an inanimate, impersonal building. Your home, like the turtle’s shell, is uniquely yours, and should reflect the wants and desires you harbour as much as your needs and priorities. Utopia, indeed, is personal!
Wednesday, June 30, 2010
Muslim Mortgages – An Opportunity for Investors and Islam
The question facing money-lenders who recognize the huge purchasing power of one of the most rapidly growing religions in Canada – Muslims – is, how do you lend money to someone whose religious beliefs ban the creation of money by money. “
Not unlike the Christian faith, Islamic law takes a dim view of usury. In the Islamic world, the charging or paying of interest is equated to usury. So, a conventional loan or mortgage would violate the teachings of the Koran. On the other hand, the Koran does allow money to be used in trading or investing, to generate a profit. Specifically, Islamic beliefs allow for investment based on “partnerships,” in which risk and profit are shared by the parties.
For the past six years, United Kingdom banks have been offering a form of Muslim mortgage, based on two Islamic principles of Ijara and Mudaraba.
Canada and the USA have entered the Islamic mortgage market slowly; a surprise given that the number of Muslims in Canada in 2006 was estimated at 783,700, and expected to grow by over 160% by 2017.
Indeed, Muslim mortgages have been offered by one small Ontario company since 2007. That company claims to have a 5,000-person waiting list. It is difficult to dispute or challenge that claim, given that 23% of Canadian Muslims call Ontario “home.”
Also in 2007, the Bank of Nova Scotia and the Toronto Dominion Bank began active exploration of the viability of providing mortgages that meet the requirements of those of the Islamic faith. In 2010, the Assiniboine Credit Union in Winnipeg began offering its version of the Muslim mortgage. It is too soon to gauge how well these products will be received.
A major impediment to the success of the mortgage concept is the CMHC insurance that is required on most home loans with less than 25% equity. A study commissioned by the Canada Mortgage & Housing Corporation in 2007, and released this January, states emphatically, “CMHC Insurance business has no plans to insure Shari'a mortgages.” It goes on to say that “(there is) little empirical evidence based on a sound methodology assumptions exists to accurately project what portion of the Canadian population would be interested in [using] Shari'a-compliant financing."
Even some Islamic leaders are speaking out against the mortgage concept. Tarek Fatah, founder of the Muslim Canadian Congress, describes Muslim mortgages as “the biggest con job ever.”
The Muslim mortgage seems, on the surface, to be a reasonable adaptation of existing lending to meet the reasonable religious beliefs of a significant religious group in Canada.
The Islamic principle of Ijarah is similar to Western-style lease financing concept. Under this proposal, the bank would buy the property for a customer, and then lease it back over a period of time. A similar arrangement --- Ijara-wa-Iqtina – allows the customer to buy the home at the end of the contract. These two ideas are almost indistinguishable from a conventional equipment or vehicle lease.
Mudaraba provides financing where both the bank and client share the risk if the property loses value, but share the profits if values increase. The bank, however, will not charge a handling fee unless a profit is achieved.
Murabaha involves the bank buying the home and selling it to the customer on a deferred basis.
CMHC has declared that the Shari’a-based loans are legal, yet still declines to adapt its regulations to accommodate the desires of the Islamic community. Without CMHC backing, it becomes less likely that larger banking institutions will risk financing these investments without much higher interest rates. This leaves the market to credit unions and smaller, closed investment houses that focus on such niche markets (although a market that is almost 2.8% of Canada’s population is hardly a “niche”).
Not unlike the Christian faith, Islamic law takes a dim view of usury. In the Islamic world, the charging or paying of interest is equated to usury. So, a conventional loan or mortgage would violate the teachings of the Koran. On the other hand, the Koran does allow money to be used in trading or investing, to generate a profit. Specifically, Islamic beliefs allow for investment based on “partnerships,” in which risk and profit are shared by the parties.
For the past six years, United Kingdom banks have been offering a form of Muslim mortgage, based on two Islamic principles of Ijara and Mudaraba.
Canada and the USA have entered the Islamic mortgage market slowly; a surprise given that the number of Muslims in Canada in 2006 was estimated at 783,700, and expected to grow by over 160% by 2017.
Indeed, Muslim mortgages have been offered by one small Ontario company since 2007. That company claims to have a 5,000-person waiting list. It is difficult to dispute or challenge that claim, given that 23% of Canadian Muslims call Ontario “home.”
Also in 2007, the Bank of Nova Scotia and the Toronto Dominion Bank began active exploration of the viability of providing mortgages that meet the requirements of those of the Islamic faith. In 2010, the Assiniboine Credit Union in Winnipeg began offering its version of the Muslim mortgage. It is too soon to gauge how well these products will be received.
A major impediment to the success of the mortgage concept is the CMHC insurance that is required on most home loans with less than 25% equity. A study commissioned by the Canada Mortgage & Housing Corporation in 2007, and released this January, states emphatically, “CMHC Insurance business has no plans to insure Shari'a mortgages.” It goes on to say that “(there is) little empirical evidence based on a sound methodology assumptions exists to accurately project what portion of the Canadian population would be interested in [using] Shari'a-compliant financing."
Even some Islamic leaders are speaking out against the mortgage concept. Tarek Fatah, founder of the Muslim Canadian Congress, describes Muslim mortgages as “the biggest con job ever.”
The Muslim mortgage seems, on the surface, to be a reasonable adaptation of existing lending to meet the reasonable religious beliefs of a significant religious group in Canada.
The Islamic principle of Ijarah is similar to Western-style lease financing concept. Under this proposal, the bank would buy the property for a customer, and then lease it back over a period of time. A similar arrangement --- Ijara-wa-Iqtina – allows the customer to buy the home at the end of the contract. These two ideas are almost indistinguishable from a conventional equipment or vehicle lease.
Mudaraba provides financing where both the bank and client share the risk if the property loses value, but share the profits if values increase. The bank, however, will not charge a handling fee unless a profit is achieved.
Murabaha involves the bank buying the home and selling it to the customer on a deferred basis.
CMHC has declared that the Shari’a-based loans are legal, yet still declines to adapt its regulations to accommodate the desires of the Islamic community. Without CMHC backing, it becomes less likely that larger banking institutions will risk financing these investments without much higher interest rates. This leaves the market to credit unions and smaller, closed investment houses that focus on such niche markets (although a market that is almost 2.8% of Canada’s population is hardly a “niche”).
Monday, June 28, 2010
Toronto Housing Value Great for Buyers & Sellers
Value has little to do with price. Media reports that “Toronto’s house values have skyrocketed” could as easily be seen as a positive indication of the significance of the city as an indication that price has risen.
While the media consistently ranks Toronto, Vancouver, Calgary and Edmonton among Canada’s most pricey housing markets, it fails to add the corollary that those markets lead the way in price because they are the areas that have the most to offer in terms of home ownership, convenience and lifestyle.
While no reporter or commentator would suggest that a Lada could be compared favourably to a Lexus in any other category other than purchase price, the most popular criticisms of Toronto’s real estate market versus other locations across Canada involve little more than a comparison of that price difference.
Real value is derived from price measured against benefit. Commercial value, and, in particular, real estate value is based on market dynamics and competitive pricing, and has little relationship to personal value.
Often slammed sarcastically as “the centre of the universe” by other Canadian communities, Toronto, in fact, has earned the reputation as the centre of the Canadian universe. That reputation derives from the immense benefits that Toronto offers to its residents, and to newcomers.
One of the contributors to rising home prices is rising demand, fuelled, in large part, by the influx of people from across Canada, and the in-migration (and immigration) of people from other nations. While Canada holds front-runner status among western & democratic nations for ratios of immigrants, Toronto is a real Canadian leader in attracting people from all corners of the country and globe. Do those people yearn to live here because it is an average city, or because it draws people like a magnet with its diversity of opportunity – employment, economic, social, educational, athletic and cultural?
As a westerner, I am proud of my rural, pioneer-like roots, and of the opportunities within my own region of the country. Our housing prices are among the lowest in Canada. Yet, if I am asked for an honest opinion, as to the value of housing here versus Toronto (not price), I must confess that there is no fair comparison.
In recent years, Toronto and southern Ontario have experienced an economic challenge that has seen their relative strength & influence across Canada diminish. Economic strength in Alberta and British Columbia has impacted on the Ontario position in Canada. Yet, Toronto still offers the best long-term potential, with its location among a host of influential cities, communities and regions. So, relative to Canada`s western cities, Toronto`s real estate market has waned. But, when considering the advantages of home ownership in this city, the prospects of newcomers to the city and upward mobility of locals, and the variety of housing stock available, this market still has great value, in spite of increasing prices.
In fact, Torontonians should take pride in its rankings as a city with a ``skyrocketing value of housing.” So long as value means worth, rather than solely being based on price, Toronto should encourage the national media to promote the city as a valuable place in which to live.
While the media consistently ranks Toronto, Vancouver, Calgary and Edmonton among Canada’s most pricey housing markets, it fails to add the corollary that those markets lead the way in price because they are the areas that have the most to offer in terms of home ownership, convenience and lifestyle.
While no reporter or commentator would suggest that a Lada could be compared favourably to a Lexus in any other category other than purchase price, the most popular criticisms of Toronto’s real estate market versus other locations across Canada involve little more than a comparison of that price difference.
Real value is derived from price measured against benefit. Commercial value, and, in particular, real estate value is based on market dynamics and competitive pricing, and has little relationship to personal value.
Often slammed sarcastically as “the centre of the universe” by other Canadian communities, Toronto, in fact, has earned the reputation as the centre of the Canadian universe. That reputation derives from the immense benefits that Toronto offers to its residents, and to newcomers.
One of the contributors to rising home prices is rising demand, fuelled, in large part, by the influx of people from across Canada, and the in-migration (and immigration) of people from other nations. While Canada holds front-runner status among western & democratic nations for ratios of immigrants, Toronto is a real Canadian leader in attracting people from all corners of the country and globe. Do those people yearn to live here because it is an average city, or because it draws people like a magnet with its diversity of opportunity – employment, economic, social, educational, athletic and cultural?
As a westerner, I am proud of my rural, pioneer-like roots, and of the opportunities within my own region of the country. Our housing prices are among the lowest in Canada. Yet, if I am asked for an honest opinion, as to the value of housing here versus Toronto (not price), I must confess that there is no fair comparison.
In recent years, Toronto and southern Ontario have experienced an economic challenge that has seen their relative strength & influence across Canada diminish. Economic strength in Alberta and British Columbia has impacted on the Ontario position in Canada. Yet, Toronto still offers the best long-term potential, with its location among a host of influential cities, communities and regions. So, relative to Canada`s western cities, Toronto`s real estate market has waned. But, when considering the advantages of home ownership in this city, the prospects of newcomers to the city and upward mobility of locals, and the variety of housing stock available, this market still has great value, in spite of increasing prices.
In fact, Torontonians should take pride in its rankings as a city with a ``skyrocketing value of housing.” So long as value means worth, rather than solely being based on price, Toronto should encourage the national media to promote the city as a valuable place in which to live.
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