Posts Tagged ‘economics’
The Globe and Mail‘s Alex Bozikovic really quite likes the proposed redevelopment of the area of Honest Ed’s and Mirvish Village.
Mirvish Village is dead. Long live Mirvish Village. In the area near Honest Ed’s this week, workers had put up fences around a string of Victorian houses on Markham Street, preparing to gut them, while creatives assembled an “Art Maze” inside the old Honest Ed’s store for a festival and sendoff, An Honest Farewell, this weekend.
It’s the end of an age at Bloor and Bathurst Streets: the loveable shambles of Honest Ed’s is gone forever. But as this weekend’s events suggest, the past will continue to have a presence on the site.
The new development at Mirvish Village, after two years of conversation between developers Westbank, locals and the city, is inching closer to approval, with a new proposal submitted in January to the city. Westbank paid $72-million for the site, a big number, and yet the result is as good as private development gets in Toronto. It features meaningful preservation of heritage buildings, a serious sustainability agenda, and affordable housing – not to mention an architectural and leasing strategy geared at making the place as lively as possible, even a bit weird.
That’s all because the developers have been ready to engage in meaningful discussion: The city and the community have made this proposal better through talking and listening.
When the first Westbank proposal emerged in early 2015, “I think [the City of Toronto] were surprised by how much we were offering,” the main architect, Vancouver’s Gregory Henriquez, told me last week. “That’s how we deal in Vancouver: We come with our best offer.”
Doug Alexander and Katia Dmitrieva write for Bloomberg about the statement by the Royal Bank of Canada’s chief executive officer that Toronto’s housing market needs to be slowed down like Vancouver’s
Toronto may require measures to cool its red-hot housing market similar to moves taken in Vancouver if interest rates don’t increase, said Royal Bank of Canada Chief Executive Officer David McKay.
The head of Canada’s largest lender said Toronto housing is “running hot” and is fueled by a “concerning mix of drivers” that include lack of supply, continued low rates, rising foreign money and speculative activity. Similar circumstances in Vancouver prompted British Columbia’s government last year to impose a 15 percent tax on foreign buyers.
“In the absence of being able to use higher rates to reduce that, I do think we’re going to at some point have to consider similar measures to slow down the housing price growth,” McKay said Friday in a telephone interview.
The comments from the bank CEO come as frustration grows over the unaffordability of properties in Canada’s biggest city. The average home price in Toronto jumped 22 percent in January from the previous year, the fifth straight month of gains topping 20 percent. Listings have dropped off, down by half from last year, squeezing prices further.
The CEOs of Canada’s other big banks last year called on the government to increase housing regulation amid skyrocketing prices in Vancouver and Toronto. National Bank of Canada CEO Louis Vachon said that minimum downpayments should return to 10 percent from 5 percent, while Bank of Nova Scotia head Brian Porter suggested his company was pulling back on mortgage lending due to concern about high home prices in those two cities.
blogTO’s Derek Flack notes that 205 Yonge Street has been put up on the market for the initial asking price of $C 1.
One of Toronto’s most beautiful buildings has hit the market for the grand sum of $1. Just don’t expect the former Bank of Toronto at 205 Yonge St., to sell for anywhere near that price.
Designed by landmark Toronto architect E.J. Lennox in 1905, the bank was built in the neo-classical style with a remarkable domed roof, terrazzo floors, marble walls, and striking Corinthian columns that face Yonge Street.
It’s one of two glorious old bank buildings that’ll be injected with new life as the Massey Tower rises above them. Nearby 197 Yonge St. is also one of Toronto’s iconic historical structures.
As for the listing price, it’s basically an auction. Real estate agent Shawn Abramovitz argues that this pricing strategy also hints at the difficulty of putting a value on such a unique property.
The Toronto Star‘s Tess Kalinowski reports on one new pitfall of the Toronto real estate market.
It’s not enough that Toronto area home-buyers are facing competition so fierce that list prices have become virtually meaningless and bully or pre-emptive offers are increasingly the norm.
Now there’s an added twist.
Some sellers’ agents say they will no longer notify other interested consumers when their client decides to entertain a pre-emptive bid, and not wait for the date they set to consider all offers.
Ontario’s real estate rules require the property seller’s brokerage to notify all other interested buyers that a “bully” offer, usually well over the asking price for the property, is being considered.
That notice allows other consumers to compete for the same property if they want to.
But, in the super-heated Toronto-area market, some brokers are including a line in their listings saying they reserve the right to accept pre-emptive offers without notice.
The Globe and Mail‘s Carolyn Ireland shares a warning that Toronto’s housing market is about to lock up for want of available real estate.
Toronto’s real estate market is heading toward a state of paralysis, says Chris Kapches, president and chief executive officer of Chestnut Park Real Estate Ltd.
Mr. Kapches says the shortage of listings prompted house hunters to head out in force in January. They were also making quick decisions. Properties for sale sold in 19 days, on average, Mr. Kapches says. In the same month last year, the average was 29 days. Mr. Kapches reminds clients that 2016 was already a record-breaking year – including in the “days on market” category.
One reason existing homeowners aren’t listing their houses for sale is that the cost of moving is so high. It takes a huge investment to make the jump to a larger property or a more coveted location. There are commissions and legal fees to pay. Land-transfer taxes are levied by the province and the City of Toronto.
Bank of Montreal is not backing down from a call that residential real estate prices in the Toronto area are moving too fast: economists at the bank are comparing prices to a runaway train.
BMO recently urged market watchers to drop the pretense and acknowledge that Toronto’s housing market is in a bubble.
Chief economist Douglas Porter explains he made the bold call to reinforce the message that the market has lost contact with economic fundamentals and has the potential to become dangerously overheated.
“This is not a near-term call on the market,” he stresses – “in fact, given the outlook for interest rates and an improving underlying economy, there’s nothing obvious to meaningfully slow the market at this point,” Mr. Porter says in a note to clients.
It’s in that context that Robert Kavcic, senior economist at BMO, probes the calls by some industry players to remove part of the Ontario Greenbelt, “as if that would be a magic bullet to slow the recent pace of home-price growth.” Mr. Kavcic says it’s unlikely that would be the case.
Gary Mason wrote Thursday from Victoria for The Globe and Mail about the Toronto affordable housing crisis, contrasting the belated responses of Toronto and Ontario unfavourably to those of his province of residence.
Of all the political U-turns B.C. Premier Christy Clark has undertaken in power, perhaps none was as jarring and unexpected as the one she performed on housing.
For most of 2015, and at least half of the following year, the Premier refused to do anything about rapidly escalating house prices in Metro Vancouver. She maintained that bringing in measures to cool the market might hurt the equity in people’s homes. She denied foreign investors had much to do with the fierce escalation in costs, relying on the faulty, self-serving data from a real-estate industry that wanted the sticker-shock insanity to continue.
And there was also the not-insignificant fact that the B.C. treasury was getting fattened on the provincial tax that exists on home sales – easy money that can become like crack to a government.
But then Ms. Clark and her cabinet came to an uncomfortable realization: The growing public outrage over the fact that the middle-class dreams of owning a home were evaporating by the day for many and might cost the government re-election. So the Premier did what she vowed she wouldn’t and brought in a 15-per-cent foreign buyer’s tax that did precisely what it was intended to – put the brakes on the absurd, and immoral, goings-on in the real estate industry.
Unfortunately, by the time she did, it was too late for thousands.