Toronto Real Estate Blog

By Derek Raymaker – Globe and Mail

Toronto is among the most extraordinary condominium markets in North America, not so much because of the quality of the suites but the vast array of pockets that seem to perform well.

As we look at the lesser known condo submarkets around the Greater Toronto Area, it’s apparent that the city’s proud neighbourhoods have played a role in staking out markets beyond downtown.

The eastern reaches of Toronto include some of the most stridently independent neighbourhoods, including The Beaches, Riverdale, Leslieville and the Danforth. Each of these communities has endured its own peaks and valleys in terms of affluence, and all are in demand today among younger buyers. In the case of The Beaches, older empty nesters are drawn to the shoreline neighbourhood.

On the fringes of these neighbourhoods are Kingston Road and Eastern Avenue. Both arterial roads are flush with heavy traffic during the day, but they also have surplus commercial and industrial buildings ideal for lofts or more experimental condominium developments.

The east end has become a test canvas of sorts for art-deco, mid-rise designs reflecting South Beach and other maritime styles. Certainly, the buyers who gravitate to the east end are more likely to take a chance on designs that reflect their free-spiritedness rather than the standard cookie-cutter suites of downtown or the harbour front.

But the kicker for most buyers is, as always, affordability. At the end of 2007, the average price for this neighbourhood stood at $402 a square foot, pretty close to the Greater Toronto average of $399, according to data collected by RealNet Canada. That’s up 17% year over year.

The average suite in this neighbourhood is quite a bit larger than the average in Toronto, and prices are higher, too, at an average of $379,601, compared with $355,998 in Greater Toronto. That’s also a cool hundred grand higher than the area’s average price of $276,992 in 2006.

Hyde Park Homes has been active in the east end, starting with a successful 18-unit infill townhouse redevelopment in the Upper Beaches and following it up with Leslieville Lofts just north of Queen Street East at Broadview Avenue.

Leslieville Lofts will be a new eight-storey building on the site of a former auto-body shop made up of 157 suites and 14 two-storey townhouses, with prices ranging from $180,000 for 470 square feet to $1.4-million for a 2,265-square-foot penthouse.

Leslieville Lofts, which was launched last November, features open-concept spaces and vast terraces on the seventh floor. The townhouses will be zoned as live/work units.

If you’re looking for spectacular views, Minto’s Skyy project at the top of Pottery Road near Danforth Avenue will soar 25 storeys above the Don River Valley. It features contemporary open-concept designs suited for younger buyers, but it’s also been a big hit with local residents who want to cash in on their valuable houses but stay in the same neighbourhood. The project is now under construction.

Prices here range from $189,000 for 522 square feet to $1.5-million for a 4,482-square-foot penthouse with two terraces and an enormous living area with a curved bank of floor-to-ceiling windows.

An authentic loft project – living space that is converted from industrial use – that has turned a lot of heads for its shape-shifting design and intriguing courtyard is the Printing Factory Lofts, developed by Beaverbrook Homes. This 254-unit project will also include 44 stacked townhouses with street-level access on Boston Avenue, just north of Queen. Prices here range from $189,000 for 573 square feet to $491,000 for 1,235 square feet, with extensive landscaping in common outdoor areas as well as private yards.

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By Tavia Grant – Globe and Mail

Canadians are spending a greater chunk of their incomes on housing, air travel and cell phones while the proportion devoted to personal taxes has hit a 14-year low, a government report showed Tuesday.

Canadians were in an expansive mood in 2006, boosting spending by 4.6% from 2005 – more than twice the rate of inflation, Statistics Canada said in its survey of household spending.

The biggest share of Canadian household budgets was still on personal taxes, shelter and transportation, at 20%, 19% and 14%, respectively.

However, relatively less appears to be going to the tax man. Personal taxes edged higher – to an average of $13,630 – but that was the lowest share since 1992. A dwindling portion is also going towards food – where the proportion of spending hit the lowest on record.

“In the 1960s, food represented the largest proportion of household expenditure, accounting for nearly 19% of total spending,” the report said. This has steadily tumbled, to just over 10% of total spending in 2006.

Spending on shelter rose 5% to an average of $12,990 while transportation spending rose 4%.

Nowhere was the money flowing more than in oil-rich Alberta, which set a record for spending growth.

“Spending growth in Alberta surpassed all other provinces by a wide margin,” the report said.

Average household spending in Alberta soared 14% – the largest year-over-year increase for one province ever recorded by this survey. Prince Edward Island tallied the second-largest growth, followed by Saskatchewan and Quebec.

The slowest growth in spending on goods and services was in Manitoba, where it rose just 1%, and in Ontario where this figure grew by just under 2%, Statscan said.

Spending differs broadly between income levels. The poorest fifth of the population spend more than half of their budget on food, shelter and clothing. The wealthiest fifth spend mostly on taxes and shelter.

Among other findings from the survey:

- Canadians used public transportation more in 2006, with spending rising 17%. This was mostly towards air travel, followed by city commuter buses and subways.

- Spending on clothing swelled 13%.

- Household spending on cell phone and other wireless services jumped more than 18%. At the same time, spending for conventional land-line telephone service continued to fall, dropping 3%.

- More than two thirds of households say they own at least one cell phone – up from 64% in 2005. One in five households say they own two cell phones while 1 in 20 use cell phones only and no conventional land-line phone.

- Calgary was the most wireless city, with 87% of households having a cell phone. Quebec has the lowest rate of cell phone ownership.

- A record 31% of households bought new computer hardware.

- More than three-quarters of households reported owning a computer in 2006. Nearly 97% of the highest income households had a computer, and 93% had internet access from home. By contrast, 45% of households in the lowest income group had a computer, and one-third had home access to the internet.

- Average spending on internet access services rose 12%.

- Ownership of DVD players surpassed VCRs for the first time.

- Spending on digital cameras grew 6%, while spending on conventional cameras plummeted 29%.

- Spending on movies fell 8% while reading materials spending slid 5%.

- Spending on pharmaceutical products is rising, led by Alberta.

- Spending on “games of chance” dropped 5%, led by declines in non-government bingos and raffle tickets.

Statscan produced the study by interviewing about 21,000 Canadian households between January and April of last year.

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The Canadian Press

Bank of Nova Scotia expects a more moderate rate of Canadian real estate construction, sales and price gains in 2008, compared with the heated activity of recent years.

Adrienne Warren, senior economist at the bank, said Tuesday the key factors will be “decreasing affordability, especially for first-time buyers, and some softening in domestic economic conditions associated with the intensifying U.S. slowdown.”

She said housing starts “will likely ease to around 204,000 units, still firmly above underlying household formation, with the more affordable multiple-family segment holding up better than single-detached construction.”

Ms. Warren said housing starts totalled 228,343 units in 2007, essentially matching the high level of activity of the previous two years and only 2% below the peak of 2004.

Strength was evident across the country, but was led by more than a 60% surge in new homebuilding in Saskatchewan, underpinned by strong job growth, good affordability and a positive shift in interprovincial migration.

Resale activity was equally brisk, with multiple-listing sales reaching a record in 2007 and average home prices climbing 11%.

While Western Canada continues to lead in price appreciation, average home prices rose by at least 5% in all provinces last year.

Also speaking at Scotiabank’s real estate outlook forum, Phil Soper, chief executive of Brookfield Real Estate Services, predicted that “balanced conditions will prevail throughout 2008, which will mark a return to a more ‘normal’ environment …”

Ms. Warren said the current housing upswing “is going on 10 years, whereas the prior three cycles ranged from five to six years. It has also outlasted the housing booms experienced in many other advanced economies this decade.”

However, average annual price appreciation over this period has been typical at just under 6% per year, well below the almost 10% average gains recorded in the late-1980s.

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Canada News Wire

Pent-up demand, population growth, tight inventory levels, and the longest economic expansion since World War II collectively fueled one of the best decades on record for residential real estate in Canada, according to a report released today.

Re/Max Decade in Review 1997 – 2007 found that major housing centres across the country experienced strong consecutive growth between 1997 and 2007. Average price spiraled upward while unit sales climbed in tandem as more and more Canadians bought into homeownership. Nationally, average price almost doubled in the 10-year period, rising from $154,606 in 1997 to $307,265 in 2007, for a 7.1% annually compounded rate of return.

Home sales across the country increased just over 57% from 331,092 units in 1997 to more than half a million sales last year. Edmonton led the country in terms of percentage increase in average price. The city saw a 203% upswing in housing values – or an 11.7% increase annually – with average price rising from $111,587 a decade ago to $338,636 in 2007. Prince Edward Island experienced the highest percentage increase in unit sales, with the number of homes sold up 119% in the 10-year period.

“Immigration and in-migration have played a serious role in jumpstarting residential real estate markets, particularly in British Columbia, Alberta, and to some extent, Saskatchewan over the past decade,” says Elton Ash.

“At first, there was an influx of American buyers, especially in Canada’s coastal regions and recreational hot spots, as our southern neighbours took advantage of the almighty US greenback. Then the European and Middle Eastern purchasers flooded the market, buying up real estate considered ‘cheap’ by international standards. In recent years, there have been a growing number of purchasers from Mainland China. From a global perspective, there’s no question that Canadian real estate brings good value to the table.”

Percentage increases in home sales varied across the country, with Prince Edward Island experiencing the greatest upswing over the past decade. Most markets (12 of the 19 surveyed) reported increases between 40% and 60%. Average price has also seen substantial escalation over the 10-year period, with posted gains ranging from a low of 54.4% in London-St.Thomas to a high of 203% in Edmonton.

In 2006, homeownership rates in the country were the highest on record at 68.4%. Population growth has contributed to heated market conditions – especially in Calgary (+31.4%), Edmonton (+20%), Toronto (+20 per cent), and Vancouver (+15%) where percentage increases have hovered in the double-digit range. Overall, Canada’s population rose to almost 33 million in the 2006 census, up approximately 10% from 1996 figures.

“The non-cyclical nature of the decade comes as some surprise,” says Michael Polzler. “Never before have we seen such a continuous run up in Canadian real estate. Clearly, strength in all markets has been directly linked to solid growth in local, provincial and national economies. Low interest rates, job security, and consumer confidence have all served to further bolster home-buying activity across the nation.”

Robust economic performance in Western Canada has also drawn job seekers from across the country, looking to capitalize on employment opportunities.
   
As demand for housing increased across the country, the supply of homes listed for sale began to contract. Multiple offers were commonplace in many areas, some with sales-to-listings ratios as tight as 80% to 90%. Nationally, 1997 marked the first year since 1988 that the sales-to-listings ratio hit 50%. The sales-to-listings ratio would remain above 60% per cent from 2001 onward – rising to as high as 68% in 2002.

The decade was not without its obstacles – the high-tech meltdown, a US recession, 9/11, SARS, Mad Cow, a blackout that affected the entire Northeastern seaboard, natural disasters such as ice storms, hurricanes, and forest fires and more recently, the credit crunch south of the border. Given the continuation of sound economic fundamentals, it’s expected that residential real estate markets across the country will continue to experience healthy activity, albeit at a more moderate pace.

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Reuters

TORONTO — Real estate markets across Canada posted solid gains over the past decade, and the economic fundamentals remain in place for continued but more moderate growth, real estate broker Re/Max said Thursday.

Between 1997 and 2007, average home prices in Canada almost doubled, to $307,265 in 2007 from $154,606 in 1997, for a 7.1% annually compounded rate of return, they said.

The number of homes sold nationally rose over 57% to more than 500,000 last year from 331,092 in 1997.

“Never before have we seen such a continuous run up in Canadian real estate,” Michael Polzler, an executive vice-president said in a statement.

Low interest rates, a robust job market, and strong consumer confidence were all credited as drivers. Immigration and domestic migration to tap Western Canada’s booming economy also helped lift demand, the report said.

Real estate considered cheap by international standards attracted droves of U.S., European, Middle Eastern and Chinese buyers to the Canadian market over the past decade, according to the study.

The booming energy sector in Western Canada drew job seekers from across the country to that region, helping the housing market lead the way in terms of growth.

“Given the continuation of sound economic fundamentals, it’s expected that residential real estate markets across the country will continue to experience healthy activity, albeit at a more moderate pace,” the report said.

Its 2008 housing outlook, released in the fall, said it expected the domestic market to stay strong, but the the red-hot growth seen in 2007 would likely cool some, partly due to the economic slump south of the border.

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Contact the Jeffrey Team for more information – 416-388-1960