Fri. May 20th, 2022


One of the agents on my team just asked what I wrote about for tomorrow’s blog, and I told him so.

“Oh, so it is ‘mail-it-in Friday’ then? “he replied.

Tsk Tsk. I take a lot of shit in here, you know. I may be the team leader, but man-oh-man, I am greatest at more than my fair share of jokes.

That’s fine, think of today’s blog post whatever you want.

But I’m fully aware of how readership falls on Friday over a long weekend, so with that in mind, I figured I would save my statistics-heavy post about the rise in house prices in the Durham region until Tuesday, and today , I I will give you one must be read list of real estate items.

I read almost every real estate article I can get my hands on. It’s a business hazard, and while I differentiate reading Globe & Mail real estate articles from watching “Million Dollar Listing” with my wife (the damn show is in my house every night …), I would say that many of these property articles bother me. Mainly those that the federal government “helps” the housing market or ridiculous ideas on how to “eliminate” blind bids, but typically after I have killed a dead horse and beyond, I can not stand reading about the reincarnation of the body.

There were a few solid readings this week that I want to draw your attention to, and I feel that is not the last we have heard of them.

The Globe & Mail ran this article on Thursday:

“The debate over buying a house as opposed to renting is over – renting lost and it was never close”

Columnist is Rob Carrick, who has written more about personal finance in the last decade than anyone I know.

Rob has brought economic literacy to many in a society where few are born with it. His columns may seem like a “Wealthy Barber” read to those of you who have a vocational education or work in finance, but for so much of the population it has been invaluable.

But Rob has also written a lot about real estate in a bearish perspective over the last decade or more, and I have personally sat down with him and discussed our prospects for the Toronto market. So to see this article now is a little Monday-morning quarterbacking.

I know from experience that columnists do not choose the headlines; editors do. So maybe Globe & Mail was looking for a sexy and provocative brand on his column that was actually pretty tame.

I just thought the headline was pathetic.

To say “rent lost and it was never close” in the fall of 2021 is like saying “It’s official: digital music has replaced the CD. ”

From the article:

The real estate company Royal LePage has released a study which it commissioned on whether it is better economically to own a house or rent. The conclusion was that it was more economically advantageous to own in the long term than to rent in 91 per cent of the analyzed cases, assuming an advance payment of 20 per cent.

Bulletin for Royal LePage and the rest of Big Real Estate: The buy-to-rent debate is long over. Buy won the battle for hearts and minds and it was never close.

Keeping the rent-to-buy argument going is the most pointless exercise in personal finance. Our reality is that rent is how an increasing percentage of the population will live unless house prices fall. In this country’s housing crisis, the situation of tenants is worse than the affordability of houses.

I can not believe I am wasting this topic in one Friday’s headlines blog, but again, have we not already said enough about this?

The headline alone is clickbait-enough:

One million new homes needed in Ontario over the next 10 years to end the ‘cruel game of music chairs’ “

Great reading in the Financial Post!

I would also like to add that the subheading sums it up nicely:

“Rising house prices are causing a number of young families to run until they are qualified.”

That’s exactly what they do. They say, “How far do I have to drive out of GTA before I can afford what I want?”

Or maybe it’s actually, “How far do I have to drive out of GTA until I want to buy what I can afford?”

Because there are very few people happy about what they get for what they can afford, and then many of them are also assessing what life would be like with a 90-minute daily commute, or what life would be like if they quit their jobs at RBC Capital Markets and moved to North Bay to run a hardware store.

The fight is true, yes.

Wednesday’s blog post showed how hot the suburbs are, and with a 31% year-on-year change in average house prices in the Durham region, it shows you how far people move and how many of them have the same idea.

From the article:

As Ontario’s population grows rapidly, a political think tank argues that Canada’s most populous province will need about one million new homes over the next 10 years.

The Ottawa-based Smart Prosperity Institute and the Ontario Home Builder’s Association reached the near-million home population after examining how many homes and what types of homes would be needed to meet the needs of the expected 2.27 million more people will live in the province over the next 10 years, according to the Ontario Treasury Department.

The report determined that 910,000 units for new families would be needed, 65,000 units would remedy the current supply gap in the market, and 25,000 would provide a cushion for any other unexpected additional population growth during this period. Of the 910,000 units for new households primarily for couples planning to have children, the report projects that 195,000 will live in high-rise buildings and the remaining 715,000 will live in all other forms of housing.

“The goal of building one million new homes over the next 10 years is a challenge for Ontario,” said Mike Moffatt, senior director of policy and innovation at the Smart Prosperity Institute. “However, the premium is significant: to ensure a sufficient supply of accessible and affordable high-quality housing, while at the same time driving economic prosperity and enabling climate efforts. If this is not done, it will be impossible for Ontario to attract and retain the talent it needs to compete in the global economy. ”

This next one is rather, umm, uhhh, imaginative.

Read the headline:

“Post rush: Small towns may face even greater housing correction than cities red-marked by CMHC”

I see the words “correction” and “red-marked”, and I already know where this is going.

Then I see the subheading: Pandemic price increases of over 40% must continue to fall.

Okay, so this is written by a market bear.

But their choice of photo to accompany the article is just silly:

The only cheezier would have been one actual photo of a tire fire. Or maybe a tractor-trailer driving off a cliff. Or a bull being slaughtered.

Look at those flames!

It’s silly.

It’s like this:

Or this:

Or even this:

Right……….

If you are not familiar with Posthast, it is a fixed feature of the Financial Post that is always alarmist and often lacks substance.

In fact, I do not really have an excerpt to share from this article because nothing in the article itself can hold a light to that headline.

Here is the intro:

Good morning!

Canada’s housing agency caused a stir last month when it warned of a high risk of correction in housing assessments.

Canada Mortgage and Housing Corp. in September, its market risk assessment rose to high from moderate for only the second time, the last being during the 2016/17 housing boom.

“The discovery of price acceleration at the national level together with persistent imbalances in the overestimation led to the change,” the assessment states.

It’s like a book report in grade eight.

Market risk assessment from CMHC?

So what.

They issue this every year and the market has done nothing but go up. I can probably draw a “market risk assessment” from 2007, where CMHC said the market was “overvalued”, and yet house prices have risen every year since.

Do you know what would have made this article better?

Nicholas Cage.

Let’s see here….

… ..Ah, right!

No matter how hot the condominium market is, developers will have to stay ahead of the proverbial curve if they want to be in business in the long run.

We talk incessantly about housing costs, the struggle for families to enter the market and how and where we’re going to house people.

Perhaps this story is fresh breath we have been longing for:

“On the map: A family-centered condominium community comes with its own daycare”

The cynical side of me amazes me, how?

The even more cynical side of me says, oh sure, in a pandemic, no less.

But maybe this was an eventuality?

Do you remember when Goodlife Fitness set up day care centers in their gyms so parents could drop off the kids and work out? Life is busy and life is hard.

It was only a matter of time before we asked the real estate company to look after our children, right?

From the article:

A decade ago, for some it would have sounded ridiculous to start a family in a condominium – grandparents and everything else. But that mindset has changed, says Fan Yang, general manager, Canada, of Aoyuan International.

Designed by Wallman Architects, the developer’s five-tower master-planned community, M2M, located at Yonge and Finch in North York, is aimed at multi-generational families. Upon full expansion, the 8.6-acre area will include 1,750 units spread across five buildings and a convenience program that includes a safari-walled children’s playground that opens to an outdoor mini-putt.

Not to mention the commuter-free day care. Here it is a zipper down the elevator to the two-story childcare facilities at the bottom of the apartment that includes 11,000 square feet of indoor space.

The day care is adjacent to a 46,000-square-foot community center with a double-height fitness center, basketball court, running track and activity room.

“In the past, families looked to the suburbs, and only investors, students or single young people chose an urban lifestyle,” says Yang. “We wanted to create a real family community in a part of town.”

-Okay, that’s it for me, guys!

But if you have nothing insightful to share in the comments section below that relates to real estate, you should at least answer this pop quiz …

It’s Saturday night, you’re alone in your basement, and you turn channels. There are three Nicholas Cage movies on TV. Which one do you see?

a) Klippen
b) Con Air
c) Face Off

Bonus points if you can guess mine.

Happy Thanksgiving!



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