Market News: Condo sales still above average

Numbers may not lie, but they can certainly tell different versions of the truth.

Take the year-to-date sales numbers released by the Building Industry and Land Development Association (BILD) for new homes and condos sold across the Greater Toronto Area between January and May. During that time, 8,924 new high-rise units were sold — down 22.4% from last year. Low-rise sales during the same period, though, were up 1.6%, at 8,040 sales.

All of that would seem to signify a bad year for the new high-rise market, and a good year for low-rise — except that’s not the case, says George Carras, president of market analysis firm RealNet Canada, which provided the data to BILD. “It’s down [from last year], but relative to the last 12 years it’s the second best year,” he says of the high-rise market. “In fact, when you do the average of the last 12 years, you’re about 37% above average. You’re still seeing on a relative basis very strong sales over the long term.”

Low-rise, though, is a different story. Though sales of new low-rise homes were higher than last year, they were down 25% compared to long-term averages, Mr. Carras says.
Put low-rise and high-rise sales together, though, and what do you come up with? A pretty average year so far, he admits — down 12.7% from 2011’s record numbers. Overall, sales from January to May were at 16,964 units sold, compared with long-term average sales of 17,293 during the same time. “You’re almost right on average in total,” he says.

“The main difference, of course, is the shift in the kind of housing. And that’s continuing.”

Another difference is price. With supply down in the low-rise sector, prices are rising there. RealNet calculated the average index price for a low-rise home at $607,893 in May, “the first time it’s ever gone beyond $600,000,” Mr. Carras says. In the high-rise sector, meanwhile, prices have been levelling off in general, though did rise in May to $439,549. “You usually look at a price gap between low-rise and high-rise, and in the long-term it tended to be about $78,000,” he says. “This is the widest gap on record.”

Affordability continues to drive the high-rise market, adds Jasmine Cracknell, partner with Toronto real-estate consulting firm N. Barry Lyon Consultants Limited. The June 21 announcement by Finance Minister Jim Flaherty, reducing the maximum mortgage amortization period to 25 years from 30 years, will see that trend continue, she predicts.

“Affordability will be much more critical … now somebody who qualified for a 700-square-foot condo before will have to get a 600-square-foot condo,” she says. “Some people’s expectations might have to be lowered in terms of what they can afford.”

The result, she adds, will be a market slowdown — the very intention of the change. Did Toronto, specifically, need it, though? Ms. Cracknell doesn’t think so. “It was slowing anyway,” she says.


Toronto Condos

Lisa Van de Ven, Special to National Post Jul 10, 2012 – 8:00 AM ET | Last Updated: Jul 5, 2012 6:04 PM ET

Canadians Now Richer Than Americans

On July 1, Canada Day, Canadians awoke to a startling, if pleasant, piece of news: For the first time in recent history, the average Canadian is richer than the average American.
According to data from Environics Analytics WealthScapes published in the Globe and Mail, the net worth of the average Canadian household in 2011 was $363,202, while the average American household’s net worth was $319,970.
A few days later, Canada and the U.S. both released the latest job figures. Canada’s unemployment rate fell, again, to 7.2 percent, and America’s was a stagnant 8.2 percent. Canada continues to thrive while the U.S. struggles to find its way out of an intractable economic crisis and a political sine curve of hope and despair.
The difference grows starker by the month: The Canadian system is working; the American system is not. And it’s not just Canadians who are noticing. As Iceland considers switching to a currency other than the krona, its leaders’ primary focus of interest is the loonie -- the Canadian dollar.
As a study recently published in the New York University Law Review pointed out, national constitutions based on the American model are quickly disappearing. Justice Ruth Bader Ginsburg, in an interview on Egyptian television, admitted, “I would not look to the United States Constitution if I were drafting a constitution in the year 2012.” The natural replacement? The Canadian Charter of Rights and Freedoms, achieving the status of legal superstar as it reaches its 30th birthday.
Canadian Luck
Good politics do not account entirely for recent economic triumphs. Luck has played a major part. The Alberta tar sands -- an environmental catastrophe in waiting -- are the third-largest oil reserves in the world, and if America is too squeamish to buy our filthy energy, there’s always China. We also have softwood lumber, potash and other natural resources in abundance.
Policy has played a significant part as well, though. Both liberals and conservatives in the U.S. have tried to use the Canadian example to promote their arguments: The left says Canada shows the rewards of financial regulation and socialism, while the right likes to vaunt the brutal cuts made to Canadian social programs in the 1990s,
which set the stage for economic recovery.
The truth is that both sides are right. Since the 1990s, Canada has pursued a hardheaded (even ruthless), fiscally conservative form of socialism. Its originator was Paul Martin, who was finance minister for most of the ’90s, and served a stint as prime minister from 2003 to 2006. Alone among finance ministers in the Group of Eight nations, he “resisted the siren call of deregulation,” in his words, and insisted that the banks tighten their loan-loss and reserve requirements. He also made a courageous decision not to allow Canadian banks to merge, even though their chief executives claimed they would never be globally competitive unless they did. The stability of Canadian banks and the concomitant stability in the housing market provide the clearest explanation for why Canadians are richer than Americans today.
Martin also slashed funding to social programs. He foresaw that crippling deficits imperiled Canada’s education and health- care systems, which even his Conservative predecessor, Brian Mulroney, described as a “sacred trust.” He cut corporate taxes, too. Growth is required to pay for social programs, and social programs that increase opportunity and social integration are the best way to ensure growth over the long term. Social programs and robust capitalism are not, as so many would have you believe, inherently opposed propositions. Both are required for meaningful national prosperity.
Orderly Fairness
Martin’s balanced policies emerged organically out of Canadian culture, which is fair-minded and rule-following to a fault. The Canadian obsession with order can make for strange politics, at least in an American context. For example, of all the world’s societies, Canada’s is one of the most open to immigrants, as anyone who has been to Toronto or Vancouver will have seen. Yet Canada also imposes a mandatory one-year prison sentence on illegal immigrants, and the majority of Canadians favor deportation. Canadians insist that their compassion be orderly, too.
This immigration policy is neither “liberal” nor “conservative” in the American political sense. It just works. You could say exactly the same thing about Canada’s economic policies.
Canada has been, and always will be, overshadowed by its neighbor, by America’s vastness and its incredible versatility and capacity for reinvention. But occasionally, at key moments, the northern wasteland can surprise. Two hundred years ago last month, the War of 1812 began. Thomas Jefferson declared, “The acquisition of Canada, this year, as far as the neighborhood of Quebec, will be a mere matter of marching.” The U.S. was comparatively enormous -- with almost 8 million people, compared with Canada’s 300,000. The Canadians nonetheless turned back the assault.
Through good luck, excellent policy and even some heroism, Canada survived the war. But it has taken 200 years for Canada to become winners.


(Stephen Marche is a novelist and columnist for Esquire Magazine. His most recent book is “How Shakespeare Changed Everything.” The opinions expressed are his own.)
Read more opinion online from Bloomberg View. Subscribe to receive a daily e-mail highlighting new View editorials, columns and op-ed articles.
Today’s highlights: the editors on good news from Guantanamo, why Jamie Dimon’s bonus should be clawed back and how to put more electric cars on the road; William D. Cohan on Romney’s magical IRA; Albert R. Hunt on the candidates’ need to spell out debt-cutting plans; Anthony Luzzatto Gardner on Bain Capital under Romney.
To contact the writer of this article: Stephen Marche at stephenmarche@gmail.com
To contact the editor responsible for this article: Mary Duenwald at mduenwald@bloomberg.net



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How TIFF headquarters and area condos plan to celebrate Toronto’s biggest bash

Condo living can come with fabulous perks — access to a luxurious spa, 24-hour concierge services, maybe even a five-star restaurant in the lobby. But recently, in celebration of the Toronto International Film Festival, developers have been literally rolling out the red carpet to welcome buyers at a number of new condos in Toronto’s entertainment district.

“We have a history of celebrating the festival. Two years ago, we had an amazing time when we opened Festival Tower. Ivan and Jason Reitman were here with us for [their film] Up in the Air,” says Niall Haggart, executive vice-president for Festival Tower developer, The Daniels Corp.  “It’s a chance for us to show purchasers that they are buying a lifestyle that is connected to TIFF. We like to do that with a party.”

This year, Daniels partied again. On Sept. 9, it hosted a red carpet gala event for future residents and prospective buyers at Cinema Tower — the company’s latest project in the area. Located at Adelaide and Widmer streets, one block north of festival headquarters at the TIFF Bell Lightbox, Cinema Tower offers a TIFF “interconnectivity”package for purchasers.

Each Cinema Tower buyer receives a three-year membership to the Lightbox, with special privileges during the festival and throughout the year. (Gala opening tickets, anyone?) Cinema Tower also has a private theatre for residents, with programming by TIFF executives, which will show films unlikely to be seen at typical mainstream cinemas. The only thing missing is a bottomless bag of popcorn.

And what about that party? Beyond nibbles and bubbles, the evening was to include a circus-style aerial performance and pyrotechnics display. Special guest Piers Handling, TIFF CEO, and other TIFF hotshots mingled with the crowd. This year, purchasers received tickets to buzz film The Ides of March, starring George Clooney and Ryan Gosling.

“We want our buyers to see what the festival does for the city and how being a part of Cinema Tower means you’re connected to all of that,” Mr. Haggart says. “The opening of the Lightbox last year means we’re at the epicentre of TIFF. The whole neighbourhood feels incredibly vibrant.”

Other developers in the area are making the most of the energy TIFF brings to the neighbourhood. Aspen Ridge Homes will host a friends and family soirée on Sept. 15 to launch its Studio 2  project located at Richmond and Duncan streets, two blocks north of the Lightbox. (Construction will begin soon on the company’s Studio on Richmond development located next door to Studio 2.)

Aspen Ridge will roll out a red carpet for guests as well and project movies on the walls of its sales centre throughout the night. The party will include a DJ, an espresso bar, a creative popcorn menu and other movie-themed munchies.

“There’s so much happening in the area now because of TIFF and the Lightbox. We want people to see that transformation and to see the action on the street. It’s going to be a very cool party,” says Aspen Ridge marketing manager Christene DeGasperis.

There’s no denying TIFF’s migration south from its former Yorkville hub. Now the hoopla is in the heart of the entertainment district at King and John streets, where the Lightbox draws a crowd during the 10-day festival and throughout the year. Yorkville, typically abuzz at TIFF time, is quiet compared to previous years. New haunts that are closer to the action, such as the Thompson Hotel and The Ritz-Carlton, have trumped former Yorkville hot spots.

The Ritz is packed with actors, producers, directors and cinephiles from around the globe. “The Ritz brand attracts people from all over the world and the hotel is located in the midst of the all the festival happenings. We expect everything — the hotel, the restaurant and the bars — will be running at a very high pace,” says Graywood Developments COO Stephen Price.

While the Ritz will host a number of private industry functions throughout the festival, Graywood hosted a TIFF party of its own just up the street. The company’s Mercer Condos , located one block south of King on Mercer Street, held a bash for buyers at the presentation centre on Sept. 8.

The iconic red carpet was replaced by a pink one (The Mercer’s signature colour), and guests were greeted by a human Oscar statue, painted gold and posing outside the sales office. Food, drinks and a DJ kept the movie-themed party going inside.

The Mercer is in an ideal location for people who are attracted to the festival, smack in between the Ritz and the Lightbox. Though the building will stand in the centre of the festivities, Mercer is a small private street, tucked away from the hubbub.

“The Mercer is in a unique spot, just a block away from the centre of it all and people are recognizing that. The people who live here will be connected to everything in the neighbourhood but still have the privacy of a quiet little street,” Mr. Price says.

Graywood hosted its Mercer TIFF party to thank purchasers, entice prospective buyers and allow everyone to experience the location at the height of festival activity. “There was a time when King Street was not necessarily a first choice for condo purchasers, but over the past five years, the area has seen tremendous growth in housing and cultural development,” Mr. Price says. “All the pieces are coming together and the movement of TIFF into the neighbourhood has really cemented the draw to the area for people who want to live downtown. Why not be at the centre of the action?”

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