Tag Archives: leveraging
Downsview plan set for North York council vote
Proposal for residential development to pay for park
Anna Mehler Paperny – Globe and Mail
In 1943, it was the centre of Toronto’s Second World War aviation effort.
In 1994, the federal government announced its future as a massive national park.
Next week, the Downsview plan goes before North York community council when councillors vote on the latest iteration of the city’s proposals for the area, which make provision not only for 100 hectares of parkland, but for thousands of units of mixed-use residential development intended to pay for it.
If the vote passes and sends the proposed Downsview Secondary Plan to city council, it will set in motion plans 16 years in the making.
But Michael Baigel would really rather it didn’t.
“It’s a dreadful plan,” he said. “It was meant to be a national park … a real gem in the city.”
But plans for the Parc Downsview Park rely on turning much of the site – running from Keele Street in the west to Wilson Heights in the east and as far north as Sheppard Avenue – into intensified residential developments in order to raise money for the park itself, which is meant to be self-funding.
“They want to make it like downtown,” Mr. Baigel laments – something he moved to Toronto from Manchester, England, specifically to avoid.
“The reason people live in the suburbs is because they want to live in the suburbs. They don’t want to live in condos.”
Plans for the site have ruffled more than a few residential feathers in the various neighbourhoods bordering the park. But one of the most offensive is the proposal to remove ramps on and off Allen Road from Wilson Heights Boulevard.
The plan to foster “transit-supported mixed-use communities” includes 400,000 square metres of mixed-use development and a transportation plan that emphasizes transit use and provides for an internal pedestrian and bicycle network.
But residents argue this would add to already clogged traffic and force commuting motorists into residential areas.
Local councillor Mike Feldman is putting forward an amendment at the June 22 meeting asking city staff to shelve plans to remove the ramps, at least until residential development transforms the area enough for different traffic systems to make sense.
Apart from that detail, he said, the secondary plan is “a nice first step” for a project that, like a growing number of public initiatives across the city, will attempt to pay for itself by leveraging the real estate value of the land on which it sits.
But Mr. Baigel would rather see the plan scrapped altogether. He fears Torontonians “will never get that greenery back again.”
“They’ll make one area residential and then a few years later another bit will get developed. Eventually it’ll all disappear. Over 50 years, we’re going to lose that park in the centre of Toronto. … It’s going to be chipped away at.”
————————————————————————————————————–
Contact the Jeffrey Team for more information - 416-388-1960
————————————————————————————————————–
Related posts:
- Communtity Focus — North York by Amy West – New Dreamhomes & Condominiums Magazine The...
- Giant condo project for North York 20 or more towers on drawing board after site bought...
- Community Real Estate Focus — North York By Andrei Zaretski – New Dream Homes and Condos Anyone...
- Toronto Condo Profile — C-Condos in North York New Dream Homes and Condos The landmark community of C–Condos...
- Pulse Condos in North York Pemberton’s latest North York release From The Condo Guide One...
Lending curbs may open gates
Tony Wong – Toronto Star
Frank Lee is looking to buy a condominium in Toronto as an investment. He’s hoping to purchase something downtown and close to the subway. But his $300,000 budget means many first-time buyers and other investors are looking at the same properties.
“The market is tight in terms of product, because the interest rates are so low, everyone is looking,” Lee said. “You see people out there who are leveraged up to their eyeballs.”
On Tuesday, federal Finance Minister Jim Flaherty introduced tighter mortgage rules in Canada to slow the heated housing market before it becomes a bubble. Real estate industry insiders generally applauded the moves that will make it harder for investors to speculate in real estate while beefing up financing requirements for borrowers.
“The changes reflect reasonable public policy,” said Phil Soper, president and CEO of Royal LePage. “Our government has taken the opposite tack to what has happened in the United States, where they have tried to attract the maximum number of people to make financial commitments regardless of ability to pay.”
Jim Wong, a veteran mortgage broker with the Royal Bank of Canada, said he typically counsels borrowers to make sure they can afford a bigger mortgage down the road, in case interest rates go up.
“Circumstances can change, so you have to be prepared for the worst, and that you have some kind of cushion,” said Wong.
Realtors say a rule requiring investors to make bigger down payments will likely have an immediate impact on the Toronto real estate market, as it forces some speculators out.
The Toronto condominium market has been particularly vulnerable to buyers trying to make a quick buck. Estimates range as high as 40% as the number of suites sold in some downtown buildings to investors.
Comment: Remember, that is only an estimate. And we do not know whose estimate it is.
“Speculators want to put as little down as possible, so this will hurt,” said RBC’s Wong. “They might put 5% down and try to flip it. This is aimed at the guy who is buying three or four units at a time.”
Lee, an investor who works in the financial services industry, is looking for a longer-term investment he can rent. He welcomes the new rules because he believes they will sideline marginal players, allowing solid investors to come to the fore with less competition.
“You have a lot of investors out there who are leveraging, but they’re not doing it wisely,” Lee said. “You also have some people using their homes like it’s a piggy bank, and none of that is good for the market.”
Jim Ritchie, senior vice-president of condo developer Tridel, said his company typically requires 15% down on new units with another 10% on possession.
“We’re not crazy about people overextending themselves, we want our customers to be able to close on our properties,” said Ritchie.
Natalie Gierman, a researcher and policy analyst at a Toronto non-profit, said she has been saving for a home for two years.
Like Lee, she is looking for something downtown for about $300,000. But so far it has been a frustrating search because of so many competing buyers in the market.
“There is nothing out there, and everything affordable gets snapped up,” she said.
The first-time buyer also suffered sticker shock when she realized the $300,000 properties she was looking at ranged in size from minuscule to small, at 400 to 600 square feet. Cheap money fuelled by low interest rates has kept home prices buoyant.
Gierman, who describes herself as a conservative purchaser, said she will likely take a five-year fixed rate at 3.79%, though she could take a variable rate at 2%.
“There is a real temptation in North America for some people to stretch themselves, so the new rules are a good thing,” said Darren Ford of Keller Williams Real Estate.
Ford said he expects that the new rules will affect his sales in the short run.
“As a realtor I would prefer stability. I didn’t make as much money last year, but I was still able to make a living. That’s preferable to having the ups and downs.”
Gregory Klump, chief economist at the Canadian Real Estate Association, said the rules will have a “marginal” impact on home sales.
“We are pleased the government did not overreact,” said Klump. Ottawa had been rumoured to be considering bumping up down payment requirements for all borrowers and reducing amortization rates.
“That would have had a deep and damaging impact, especially when our forecasts are calling for a slower market in the second half of this year and a decrease in sales next year.”
————————————————————————————————————
Contact the Jeffrey Team for more information - 416-388-1960
————————————————————————————————————
Incoming search terms
Related posts:
- Flaherty announces mortgage crackdown The new rules, which go into effect April 19, mean...
- Home ownership at record levels… so is mortgage debt By Colin Perkel – The Canadian Press Never before have so...
- Irresistible rates drive Canada’s recovery In the midst of recession, the average national price of...
- Tone down the real estate speeches Tales of an overheated housing market show why Bank of...
- Easy credit, soaring prices raise new housing fears Canadians are in the midst of a mortgage binge,...
Caution helped Canadian real estate markets dodge US collapse
By Jonathan Chevreau – National Post
Despite gloomy prognostications from certain authors and pundits, thus far Canada has eluded the real estate collapse suffered by Americans. A survey released today from PricewaterhouseCoopers and the Urban Land Institute confirms that conservative banking practices and stricter regulation helped keep excessive lending in check. As a result, “most Canadian real estate investors were saved from overleveraging.”
Even so, Canadians are still worried about suffering further economic shocks if America can’t get its financial act together, PwC warns. The report, which takes input from some 900 real estate experts, developers and consultants on both sides of the border, finds total value losses in Canada will average 10 to 20% off previous highs but warns “some markets and sectors could suffer steep losses.”
Comment: How can losses average 10–20% when average prices are up? If houses are worth more today than ever, across the nation, where are the value losses? That makes NO sense whatsoever…
Frank Magliocco, leader of the PwC Canada Real Estate practice says the conservative approach has paid dividends for Canadian real estate players. While sideswiped by the U.S. fallout, “they experienced a manageable market correction rather than a full-blown credit crisis-precipitated market meltdown.”
A mild buyers market
The Emerging Trends 2010 investment barometer forecasts a “relatively stable” transaction market that’s slightly in favor of buyers over sellers. Across Canada, apartment investments get a rating of 5.44 out of 10 [slightly above a “fair” rating], while office is at 5.04, retail at 5.0, industrial/distribution 4.68 and hotels at 3.69. Development prospects are no better than 3.74 in any segment with hotel development prospects at a low 2.68.
Comment: Buyers market? Are they on crack? Pretty much every major market in Canada is in serious sellers market territory. How and why is that going to change?
Condos may stall until prices firm in Vancouver & Toronto
PwC partner Lori-Ann Beausoleil expects developers to curb their activity as bankers rein in construction loans in light of softened demand. “Certain condo projects will likely stall out until residential prices firm up in Vancouver and Toronto.” While office markets in major U.S. cities are suffering from double-digit vacancy rates, Canadian markets are averaging only 8% vacancies. Builders in Calgary are experiencing a supply surge as demand wanes from deflated energy companies. Some smaller residential developers may be in “over their heads” in Toronto but Beausoleil says there could be an opportunity for larger more experienced players with solid lender relationships to take over some struggling projects.
Rush of condo and single-family home sales before HST kicks in
Comment: How are condos going to stall when there is a rush of sales predicted?
Vancouver is viewed as the strongest market but “many wonder what will happen after the Olympics.” Toronto has better investment prospects than development prospects: single-family home and condo buyers are rushing to make deals before the harmonized sales tax comes into play on July 1st: developers fear a subsequent drop-off in demand afterwards.
————————————————————————————————————
Contact the Jeffrey Team for more information - 416−388−1960
————————————————————————————————————
Incoming search terms
Related posts:
- Toronto Real Estate Forecast 2010 MLS® sales in the GTA will hit a record high…
- Real estate deep freeze now hot thaw Sales in May and early June have outdone May and…
- A Closer Look at Canada’s Decline in Real Estate Prices For the past couple of months John Pasalis has been…
- Correction, not crash for Canadian real estate market in 2009 Historically low interest rates, stable local economies and increasing affordability…
- Housing market improves Canada’s slumping housing market is showing signs of stabilizing, but…
