Markham Real Estate Today with Asif Khan

Since they came to Canada a decade or so ago, Reg and Rhonda have done well for themselves. They have three children, ages 10, 8 and 7, a new home that they are moving into this month and an existing house that they plan to put up for rent.

They both work in the health care field and have partly indexed defined benefit pension plans with the Alberta government. Reg is 42, Rhonda 37.

While they have built up modest retirement savings, they have been focusing intently on paying down their mortgage first. Once their previous home is rented, the rental income will go toward paying off the mortgage on it. (The mortgage on the new home is 2.99 per cent for four years, while the rental property mortgage is prime minus 0.85 percentage points for five years.)

“Our plan is to pay off the mortgage as fast as possible, then continue to build savings and perhaps retire early if all goes well,” Reg writes in an email. “But is this the right approach?”

They also want to set aside $50,000 for each of their three children’s post-secondary education.

Reg can retire at age 60 with no reduction in pension. Rhonda, who is five years younger, could retire at age 55 with a reduced pension. They figure they will need $70,000 a year after tax, which would allow them to do a bit of extra travelling.

We asked Ron Graham, financial planner at Ron Graham and Associates Ltd. in Edmonton, to look at Reg and Rhonda’s situation.

What the expert says

As long as Reg and Rhonda are getting a higher return on their investments than the interest rate on their mortgages, they are better off contributing to their registered retirement savings plans and tax-free savings accounts, Mr. Graham says. Even so, they should aim to be debt free by the time they retire. Once the mortgage on the rental property is paid off, it should generate rental income of about $10,800 a year in 2012 dollars.

How much they will have to save to achieve their retirement target depends on the rate of return on their investments, the planner notes. If their current investments plus future savings earn a rate of three percentage points above inflation (6 per cent when inflation is 3 per cent), then they will have enough to meet their retirement goal of spending $70,000 a year and still leave an estate.

If they get only one percentage point above inflation, they will need to save another $500 a year in TFSAs or another $700 a year in RRSPs to accomplish their goal.

“This would allow them to spend $70,000 a year, but they would have no financial assets left at age 90.”

Mr. Graham assumes the couple will use their non-registered savings for goals other than retirement.

To make the $26,000 they have in registered education savings plans for their children grow to $150,000 in 10 years, they will have to save a little more than $9,000 a year based on a return of inflation plus one percentage point.

“They can save the $9,000 by contributing $2,500 per child to the RESP and getting the matching grants totalling $1,500 per year.”

So how should they arrange their priorities?

Build up the RESPs first to take advantage of the 20 per cent government grant. Second, continue to make RRSP contributions, with Reg contributing to a spousal RRSP for Rhonda. Third, contribute to their TFSAs.

“Saving for vehicles and other short-term goals is fourth, extra payments on their personal mortgage fifth, and finally extra payments on their rental mortgage,” interest on which is deductible against income for tax purposes.

Assuming they both work for another 18 years, they should have no trouble achieving their goals, Mr. Graham says. In the first year of retirement, Reg’s pension income will be $32,000 in 2012 dollars and Rhonda’s (if she retires at age 55) $11,412. If Reg begins collecting his CPP at age 60, he will get $505 a month. Rental income will add another $10,800 a year. Rhonda can supplement her pension by withdrawing about $12,000 a year from her RRSP. That leaves a shortfall of $9,000 a year that will come from the couple’s TFSAs.

Rhonda can begin collecting CPP when she turns 60, and they will both get Old Age Security benefits at age 67, reducing the amount of money they will have to draw from their savings.

CLIENT SITUATION

The people

Reg, 42, Rhona 37, and their children

The problem

How to set priorities when it comes to saving and paying down debt.

The plan

Contribute first to RESPs for the children since that is the shorter term goal. Then save for retirement in registered plans. Once those are caught up, focus on paying down mortgage on the principal residence.

The payoff

Achievement of their saving and retirement goals with enough income to allow them a comfortable retirement and possibly a little something left over for the children.

Client situation

Monthly net income

$9,450

Assets

New home $450,000; rental property $277,000; TFSAs $18,800, stocks $1,800; index funds $2,800; other savings $23,480; RRSPs $65,200; present value of defined benefit pension plans (combined) $250,000. Total: $1.09-million

Monthly disbursements

Home insurance $180; car insurance $165; life insurance $150; utilities $350; telephone, cable $210; transportation $300; entertainment $50; home improvements $400; food, clothing $800; auto expenses $400; furniture $200; gifts $100; kids camp, sports $100; vacations $400; help for family back home $500; mortgage on principal residence $1,455; CSBs (saving to pay down mortgage) $1,250; RRSPs $400; other savings $300; TFSAs $700; RESP $325. Total: $8,735 Surplus: $715

Liabilities

Mortgage on new home $243,000; rental property mortgage $219,000. Total: $462,000

http://www.theglobeandmail.com/globe-investor/personal-finance/financial-facelift/mortgage-rrsps-resps-get-a-grip-on-what-comes-first/article2437757/

While most of my previous columns focus on residential new home construction and its impact on the economy, I think it’s time to take a look at some of the recent accomplishments of a very prominent industry affecting homeowners — home renovation.

It may surprise some of you, but the home-renovation industry is worth about $66 billion and accounts for 56 per cent of all residential construction investment across Canada — a fact that’s been overshadowed by the success of the new home construction market here in the GTA.

Much like new homes, though, the renovation industry is changing. Following the success of the highrise market in 2007, not to mention last year, homeowners and buyers in the GTA are shifting gears and embracing condominium living. But while the talk of the town focuses on new condo construction, condominium renovation has become a popular choice for people looking to upgrade their homes while remaining in their favourite neighbourhoods.

In fact, BILD has recently introduced a new category — Best Condominium Renovation — to its Renovation and Custom Home Awards as a way of recognizing the growing number of RenoMarkrenovators embracing the increasing demand for condo renos.Winners from our latest awards presentation are found here.

So what’s the renovation industry’s success story?

Earlier this year, I wrote about the success of the ecoEnergy Retrofit program, which provided homeowners with an incentive of up to $5,000 to upgrade the existing housing stock across Canada with things like energy efficient windows, furnaces and more. The number of homeowners that took advantage of the incentive hit 250,000 nation-wide, despite the harsh economic conditions of 2008-2009.

In a recent analysis of the Homeowner Renovation Tax Credit (HRTC), which was introduced in the 2009 federal budget and expired in January 2010, about three million homeowners took advantage of that incentive. It resulted in an 18 per cent increase in renovation spending for the duration of the program, eventually carrying over into the following year.

While home renovation dipped following the end of the HRTC, I think it can be credited with the 2011 resurgence of the renovation industry, which experts believe is now back on track with an expected growth rate of approximately 4 per cent over the next few years.

A contributing factor would, of course, be a permanent renovation tax credit. The province seems to be working on something of the sort.

In Ontario, a Healthy Homes Renovation Tax Credit was proposed earlier this year. The program, a permanent, refundable tax credit, would be worth up to $1,500 each year, calculated as 15 per cent of up to $10,000 in eligible home renovation expenses that would improve the lifestyle of senior homeowners in Canada.

In any case, with a government incentive or not, my advice is to seek out the help of a professional contractor. That’s where the national RenoMark™ program comes in.

Originally launched by BILD in the GTA in 2001, RenoMark has rapidly grown to 32 markets across seven provinces, becoming a highly respected brand of professional renovators who abide by a national code of ethics, as well as a renovation-specific code of conduct. The later specifies that the contractor will provide the homeowner with a detailed, written contract, offer a minimum two-year warranty, carry a minimum $2 million in liability insurance, and hold all applicable licences and certificates.

Simply visit renomark.ca to see if a Renomark program is administered in area, then use the “Find a Renovator” tool.

GTA residents can even customize their search to find the trade contractor specific to their needs.

With the way the renovation industry is going, professional renovators are in high demand, so be sure to give yourself some time. Don’t expect to find the right contractor a mere month before you start your project.

Much like buying a home, a renovation is one of the biggest investments you’ll ever make. Take your time to make sure the person you hire for the job is one that’s right for you.

http://www.yourhome.ca/homes/realestate/article/1180155--golini-home-renovation-in-canada-rebounds-in-2012

A. Sprucing up a bathroom before a sale doesn’t necessarily require swinging a sledgehammer. There are many small fixes and improvements that real estate agents and home stagers frequently recommend to help a bathroom look its best.

When a potential buyer sees the bathroom, “You don’t want that feeling of ‘Ew, I wouldn’t want to take a shower in there,’ ” said Lucie Holt, a senior vice president with Citi Habitats in New York. “You want the opposite effect, of ‘Wow, I would just love to come home and take a nice hot bath or shower,’ because it’s clean and luxurious.”

That said, she added, “You don’t have to spend a lot of money to transform a basic bathroom into something a bit dreamier.”

You should aim to give the room the pristine, uncluttered look of a bathroom in a good hotel, Ms. Holt says. For a recent listing in the meatpacking district, she spent about $60 at Bed Bath & Beyond, for a white shower curtain and rings, a bathmat, fluffy towels and flower vases. Although they’re just accessories, they made the entire room more inviting, she said.

Beyond accessorizing, there are other things you can do to “remove the ick factor” of an old bathroom, said Donna Dazzo, president of the New York and Hamptons home-staging company Designed to Appeal.

“First of all, the bathroom should be sparkling clean,” Ms. Dazzo said. “That’s the most important thing.”

Also, take a close look at the grout and caulking.

“Often, the grout between tiles is mildewed or crumbling out,” she said. “A regrouting can do wonders to make it look like you’ve just had new tile installed.”

And, Ms. Dazzo said, “recaulking around the top of the tub where it meets the tile, as well as where it meets the floor, which tends to get moldy, definitely helps.”

For a more elaborate fix, but one that doesn’t have to cost a lot, she suggests installing new light fixtures, faucets and cabinet pulls. And if you have a tired wooden vanity unit, she recommends a coat of dark semigloss paint.

Before each showing, she advises sellers to go through a quick checklist to ensure the bathroom is ready. “All your toiletries and used bars of soap have to be stored away,” she said. “The wastebasket should be emptied. The toilet seat lid should be down. The fluffy new towels should be out, and your used towels should be in the laundry.”

Essentially, “buyers don’t want to feel like they’re in someone else’s bathroom,” Ms. Dazzo said. To that end, “If there’s a well-worn toilet seat, I would recommend updating that as well.”

http://www.nytimes.com/2012/05/17/garden/making-a-bathroom-show-better-without-renovations-market-ready.html?_r=2&ref=garden

Toronto's downtown office market appears poised to explode again with construction, as the commercial real estate industry waits for that one spark to kick-start the office sector.

Rumours swirl that Brookfield Office Properties will begin a new round of aggressive building in the country's largest office market with an announcement it will go ahead with the second tower for its Bay-Adelaide Centre.

The initial tower provided significant impetus for a round of construction when it was announced in 2006.

Accounting and consulting firm Deloitte Canada is said to be the big fish Brookfield is courting for its second tower while the CPP Investment Board is said to be looking for as much as 180,000 square feet of space.

"I think we are definitely at the point where we can justify new construction," says Ross Moore, director of research for Canada for CB Richard Ellis, about the current vacancy rate of 4.7% in Toronto's downtown core.

Brookfield spokeswoman Melissa Coley says there is nothing to report on the Bay-Adelaide Centre other than it is in planning stages.

The company's website says its new building, Bay-Adelaide East, is a 43-storey, 900,000-square-foot office tower.

"You can feel the wave building by the day," says Mr. Moore, about new construction. "I think in the next 60 days we are going to have announcements that will probably surprise a lot of people."

If you add up everything that is about to be built in the downtown it equals 4.1 million square feet, just slightly below the 4.4 million square feet built in the last construction wave.

Among the buildings in addition to Bay-Adelaide expected to go, or already under construction, are RBC WaterPark Place, a 933,000-sq.-ft. development by Oxford Properties Corp.; One York, an 800,000-sq.-ft. project from Menkes Developments Inc. and Healthcare of Ontario Pension Plan; and a 760,000-sq.-ft. building from GWL Realty Advisors, which has signed two major tenants.

"We are getting to that point that we were at in 2006," said Bill Argeropoulos, vice-president director of research with Avison Young. "There is a lot of rumbling in the marketplace. Obviously we are on cusp of the next development wave."

His company projects the overall downtown vacancy rate at 5.3% and notes the earliest any new office supply can be delivered in the downtown core would be 2014.

The risk for landlords as these buildings begin construction is they end up cannibalizing their own tenants unless they can do what a company like First Gulf did and attract a tenant like Coca-Cola Canada back to the downtown core.

"There has been a bit of reverse migration," said Mr. Argeropoulos. "There has not been a lot examples that this is a trend. Last go around there was Telus Corp."

All of this comes as Bank of Nova Scotia continues to be in the midst of selling its head office in the heart of the financial district. Even with an aging building, Scotiabank has attracted numerous offers for the building, which is expected to fetch well beyond $1-billion.

"[Commercial] development also continues to compete with residential development [for space]," says Mr. Argeropoulos. "You have all these people living downtown but they also want to work downtown."

Dean Newman, principal and broker of record for Cresa Toronto, which represents tenants, said it could be a opportunity.

"Landlords are propping themselves up to launch new buildings and there is an appetite in the market for new buildings," said Mr. Newman. "Part of this is driven by the desire of tenants to reinvent the way they are using space and their layouts."

He says rents in the heart of the financial district remain high and that has many looking just outside for a better deal in a newer product.

"If you can buy a new car at the same price as an old car, just because the old car theoretically has a more prestigious sticker, why bother," said Mr. Newman.

"It's like a brand-new Hyundai, you see it on the road and say 'What is it?' You look at it [and] decide the car looks pretty nice."

http://www.vancouversun.com/business/commercial-real-estate/Toronto+office+market+poised+boom/6623854/story.html 

New records set in just over 60 per cent of markets in the first quarter.

Mississauga, ON (May 16, 2012) – The Canadian appetite for all things luxury continues to fuel demand for high-end housing, with first quarter 2012 sales well ahead of 2011 figures for the same period in most markets across the country, according to a report released today by RE/MAX.

The Upper-End Report found that 81 per cent (13) of the 16 major Canadian centres examined—including Victoria, Edmonton, Calgary, Regina, Saskatoon, London-St. Thomas, Kitchener-Waterloo, Hamilton-Burlington, Greater Toronto, Ottawa, Quebec City, Greater Montreal, and Halifax-Dartmouth—posted an increase in home buying activity, with the vast majority reporting double-digit appreciation. Records were set for upper-end sales in ten markets in Saskatchewan, Ontario, Quebec and Nova Scotia.

“While the ranks of the rich expand in both population and wealth, their impact on the Canadian residential landscape is undeniable,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “Their confidence abounds from coast-to-coast, irrespective of price point. Starting prices range from a low of $500,000 in markets like St. John’s and Halifax-Dartmouth to a high of $2 million in Greater Vancouver, and affluent homebuyers are still prepared to up the ante—choosing to further renovate or altogether tear down and custom build to suit their needs.”

The greatest percentage increase was reported in Regina, where first quarter sales of luxury homes priced over $500,000 climbed 56 per cent year-over year (50 units vs. 32 units). Quebec City placed second, posting a 50 per cent (48 units vs. 32 units) upswing in activity, while Toronto followed closely with a 49 per cent gain (412 units vs. 277 units). The mid-sized markets of London-St. Thomas (43 per cent) and Kitchener-Waterloo (39 per cent) rounded out the Top Five—demonstrating that upper-end enthusiasm is not exclusive to Canada’s larger centres.

“Canadians recognize and appreciate the stability of real estate,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Given volatility in other areas, housing has emerged as a blue-chip asset among the country’s most affluent individuals. The capital gains exempt status ups the appeal, particularly as we see ongoing fluctuations in stocks and uncertainty in Europe. All the variables have come together to support an upper-end market firing on all cylinders.”

The report also noted that although the top end of the market represents only a small proportion of overall residential sales, when measured in terms of dollar volume, luxury sales are a much larger part of the equation. As such, the strong momentum out of the gate speaks to the overall confidence in real estate. Several factors have worked in tandem to fuel the surge in demand for high-end properties in 2012, among them:

Equity Gains – Price appreciation has been a serious catalyst fuelling move-up activity in major Canadian markets in the past decade, providing current homeowners with the financial wherewithal to make more significant moves. In fact, from 2000 to 2010, average price gains in major Canadian markets ranged from a low of 68 per cent in London-St. Thomas to a high of 173 per cent in Regina. The same factor has pushed an increasing share of homes into upper-end price points.

Stock market volatility – Recent volatility in the stock markets, particularly the TSX, has once again shifted the focus to bricks and mortar. Investors continue to feel the pressure of serious headwinds (Economic signals from China appear worrisome and the fragile U.S. recovery continues to be dogged by weakness in the labour markets. Rising borrowing costs have threatened Spain, while austerity measures have fallen short in the U.K. Push back continues in France and the Netherlands). With equity markets quick to react to signs of stress, some are opting to shift money elsewhere.

Immigration – Immigration has played a key role in bolstering Canada’s population of High Net Worth (HNW) Individuals. A recent BMO Harris Private Banking study showed that Canadians of foreign decent account for almost one-third of all high net worth wealth throughout Canada and that almost all (96 per cent) keep the bulk of their wealth in Canada. In 2010, Canada admitted roughly 154,000 business and investor immigrants who reportedly inject $2 billion into the Canadian economy each year.

Changing Fortunes – Economic tides have turned in provinces like Saskatchewan, Newfoundland and Nova Scotia—contributing to the upswing in upper-end home sales. For markets like Saskatoon, Regina and St. John’s, million-dollar home sales used to be a rare phenomenon. With changing fortunes, these markets are playing catch up, building high-end homes where there once were few.

Rebound in global wealth – The number of high net worth individuals (HNWI), along with their overall financial wealth, increased once again in 2010, surpassing the 2007 pre-crisis peak in nearly every region, according to the Capgemini/Merrill Lynch World Wealth Report 2011. While North America is still home to the greatest portion of HNWI, the population of HNWI in Asia-Pacific is now the second-largest in the world, unseating Europe’s long-held position. The segment of ultra-high net worth individuals is also on the upswing. The rising ranks of the world’s rich have driven up demand for luxury products.

“The strength of the upper-end is underpinned by solid fundamentals,” says Sylvain Dansereau, Executive Vice President, RE/MAX Quebec. “Most markets remain largely balanced across the board, with stable or modest price growth forecast in the luxury segment. Inventory levels have played a role in some multiple offer activity, with shortages notable in Montreal, throughout Ontario, and Winnipeg. While selection may be adequate in other markets, the demand and competition for quality stands out. Buyers at this price level are very discriminating. They are raising the bar nationwide, altering the Canadian housing landscape in the process.”

Highlights:
Infill and teardowns continue unabated across the country, changing the Canadian landscape.
Canadian upper-end homes are redefining luxury. When it comes to bells and whistles, toys and technology, the features homeowners are incorporating into their residences are becoming decidedly more progressive.
While financing is not a huge concern for those spending multi-millions, purchasers at entry-level price points are ensuring peace of mind by locking in on five-year money.
Canadian upper-end communities are an increasing reflection of Canada’s diverse multicultural and ethnic mosaic.
Luxury condominiums continue to account for growing percentage of upper-end sales, with most rivaling the grandeur of single-family product. Case in point—units located in Greater Vancouver’s Westside and in Toronto’s Yorkville area, listed at $28.8 and $28 million respectively.
Greater Vancouver’s Westside is also home to the most expensive properties listed and sold in Canada this year. The priciest sale, $19.8 million, occurred in Point Grey for a 10,700 sq. ft. home with ocean and mountain views. A $31.9 million palatial historic home in Shaughnessy sports the highest sticker price.

Every few decades Toronto suddenly remembers it’s a city. It happened at the end of the 19th century, when we built E.J.Lennox’s masterpiece, Old City Hall, and again in the mid-20th century, when Viljo Revell’s New City Hall, not to mention Ludwig Mies van der Rohe’s Toronto-Dominion Centre, both modern landmarks, arrived.

It’s happening again; only this time, we are remaking the city as a 21st-century highrise metropolis.

Given Toronto’s historic sense of insecurity, it should come as no surprise that we spend so much time agonizing over our own urbanity. Until recently, when the flight to suburbia started to slow down, even reverse, urbanity wasn’t necessarily something to which we aspired as a city.

Many distrusted the very idea. This time around, however, Toronto has embraced cityhood. Leading the way are its architects, who more than any other professional group, for better or worse, have helped bring us into the future that is now. Given the extraordinary growth rates here, perhaps that’s not surprising. Last year, there were more towers under construction in Toronto (132) than any other city on Earth; this year there are more.

Architects in this city have had a lot to keep them busy in recent years. If nothing else, the condo boom has kept hundreds of practitioners working day and night.

Then there was the Cultural Renaissance of the early 2000s that brought to Toronto some of the best known architects in the world — Frank Gehry, Will Alsop and Daniel Libeskind among them.

And so architectural culture is alive and well in Toronto. More important, local architects have evolved to the point where they see their role is not just designing structures, but building a city.

Respected real estate consultant Barry Lyon refers to last few decades as “a Golden Age of growth in Toronto.” He points to the condo boom, the handful of new office towers and schemes such as the Southcore financial district as proof. “There’s a lot more design sensitivity,” Lyon argues. “We’re using land as it were a precious resource.”

Land is a precious resource, of course, though we haven’t always treated it that way. Few understand that better than Bruce Kuwabara, a founder of Kuwabara Payne McKenna Blumberg, one of Toronto’s most respected architectural practices. KPMB’s credits include One Bedford, Festival Tower and Maple Leaf Square, all dense urban projects aware of their context.

“As the city is intensified,” Kuwabara notes, “we need to design the bases of mixed-use developments with tall towers in ways that ensure ground floor animation, lively corners, and the formation of streets and public spaces. Even if every tower were an icon for the market place — and they are not — the responsibility of the base is to integrate with the city; that’s where buildings meet and form the public domain of the city.”

Architect Peter Clewes of architectsAlliance, considered by many the pre-eminent condo designer in Toronto, echoes Kuwabara’s thoughts.

“The issue is how buildings address the street, not height, glass or size of the floor plate. But the planning culture of Toronto is too focused on built form, not the public realm. As a result we’re starting to get a lot of buildings that look the same. In Toronto, we tend to look at the street as a series of individual buildings, not a streetscape.”

“Banks do not enliven the corners of the city,” Kuwabara declares. “Large format retail stores totally change the cadence and rhythm of streets. Large windows wallpapered with printed images do not replace individual shop fronts. Toronto will never have uniform streetscapes, but it could still have vibrant streets that are intentionally designed.

“Every building implies a city and an urbanism. Density and height should be proportional to the quality of design of the bases of large mixed use projects. And the city should ensure that the materials and details included in the Site Plan Approval are the ones that actually get used.”

Clewes, who designed condos such as the Pure Spirits tower in the Distillery District. 18 Yorkville and M27 at the foot of Yonge, can point out bad examples — Liberty Village — and good — the work of Waterfront Toronto and the Bloor Yorkville Business Improvement Area, which spearheaded the recent landscape improvements on Bloor St. between Avenue Rd. and Church St.

Speaking of landscape, Toronto has quietly brought some of the most distinguished landscape architects in the world to town and given them large chunks of the city to remake. That includesMichael van Valkenburgh and James Corner from the U.S., Adriaan Gueze from Rotterdam andClaude Cormier from Quebec. They are here thanks to Waterfront Toronto, which has also signed deals with developers who have hired major international architects such as Moshe Safdie and Cesar Pelli to work in Toronto.

Local firms —RAW Design, Core Architects, Quadrangle, Montgomery Sisam, Diamond Schmitt, Hariri Pontarini — are producing urban-minded work of the highest quality. Unlike many firms, especially those founded by so-called starchitects, Toronto’s finest have avoided a signature style. This is a critical point because it demonstrates a willingness to design projects that take their cues not from some architectural ego, but from the facts at hand, in other words, the city itself, context.

Though rarely recognized, planning is more crucial to creating a great city than architecture. Architecture’s important, of course, but it’s planning that enables the total to add up to more than the sum of its parts.

Given the relatively weak planning rules in this city (and province), we must rely more on architects to fill this yawning gap. In Toronto, where for decades architects such as Jack Diamond have exhorted their fellow practitioners to incorporate “good urban manners” into their buildings, the tradition of contextualism goes back a long way.

Still, as the cliché has it, great architecture requires great clients. With few exceptions, Toronto developers have yet to measure up. That’s changing, though not as fast as the skyline.

Just ask RAW co-founder Roland Rem Coultard. “Our clients are a lot more sensitive to design,” he says. “Before, we had to push them. Now they’re pushing us. I love it.”

Like it or not, the stars are here to stay

Though local architects haven’t always been happy about it, the stars of their profession have been coming to Toronto since the beginning.

Today that means Frank Gehry, who happens to have been born and raised in this city, Will Alsop (English) and Daniel Libeskind (Polish-American), but in earlier times it was Ludwig Mies van der Rohe (German-American), I.M. Pei (Chinese-American) and Edward Durell Stone(American). Before that, there was Carrere and Hastings, a prominent New York practice that designed a number of banks in Toronto.

Their contributions vary, of course, but their presence alone indicates that this is a city that can take architecture seriously. After all, the main reason developers bring in foreign practitioners is a desire for excellence, and if not excellence, the excitement and prestige that these names can bring to a project.

The modern age of starchitecture began in earnest in 1997 when Gehry’s Guggenheim Museum opened in Bilbao, Spain. The extraordinary titanium-clad structure instantly became the most celebrated building in the world and made Gehry the most sought-after architect of his generation.

Gehry’s Toronto project, the transformation of the Art Gallery of Ontario, was a reminder of why he is a master as well as a star. By contrast, Libeskind’s remake of the Royal Ontario Museum, though dramatic, is too provocative for many. Around the corner from the AGO, Alsop’s addition to the Ontario College of Art and Design University, with its brightly coloured legs, has been one of the city’s most striking buildings since it opened in 2005.

Mies van der Rohe’s Toronto-Dominion Centre (1965-69) ranks among his masterpieces, and Pei’s luminous Commerce Court complex (1974) are architectural fixtures. Originally clad in Carrara marble, Stone’s First Canadian Place was recently reskinned in white glass. It has never looked better.

http://www.thestar.com/specialsections/newinhomes35years/article/1176397--toronto-s-architecture-has-never-looked-better

All this talk about housing bubbles and impending market crashes is getting a bit crazy. The leader of the pack, Macleans Magazine, is it again. In an article titled "You're About To Get Burned" Macleans' "Arm-Chair Real Estate Experts" are trying to instill a level of fear in homeowners' minds. The comparisons made to the crash of the American market ignore key contributing factors. Without addressing the key factors leading to the demise of the American market and key factors to the growth of the Canadian market, the report isn't worth the paper it was printed on.

Examples they've used include a couple looking to purchase a single family home in Markham on a shoe string budget of $400,000. There are many areas around the city to purchase a home for $400,000, however Markham is not one of them. It is like settling on owning a Cadillac SUV, yet wanting to pay the same price as a Toyota Prius.

The story goes on to state how low interest rates are setting the stage for a collapse. Nowhere does it state that banks qualify purchasers' on their posted 5 year rate, which is much higher than the low rates being advertised, therefore protecting the homeowner from any such rise in interest rates. Using low rates as a contributing factor in the US is not a fair comparison either, as their contributing factor was sub-prime mortgages which resulted in major financial institutions taking a fall, leave alone the homeowners. The argument of people having "only" 35% equity in their homes is comical. In the sub-prime US days, homeowners were being given 110% financing in some cases. The table was set for disaster. Even Home Equity Lines of Credit in Canada require you to have a minimum of 20% equity in your home.

Traditionally, house prices have been expected to climb year after year. Until the recent economic collapses in the USA and Europe, double digit declines were unheard of. It is important to note that these collapses were mainly due to financial instability created by inappropriate lending practices. They had very little to do with over-inflated pricing. The Canadian banking system is one of the most conservative and sound in the world. There is a reason why it is continually ranked within the top two banking systems world-wide and also a reason why we continue to lead the world out of one of the worst economic catastrophes of all time.

It is funny how the "experts" called in by Macleans are probably sitting in the home they own, writing articles that scare people into selling their homes and going into rental properties in anticipation of a housing market collapse. Even if rates climb, they will be going up .25% or .50%. Maybe they may go up 0.75% or 1% max? So how would selling your home, renting for a few years and throwing away $1500-$2000 per month offset any possible loss? Also, the home you're to be renting is owned by someone - and you're technically paying their mortgage and putting a huge smile on their face while doing so.

Another key contributing factor that isn't mentioned in the article is immigration. With 250,000 people coming into Canada, and with ALL of them needing a place to live, the housing market will remain strong for a while. Annual housing starts, albeit strong, still have not outnumbered the number of people looking for a home.

The reason we are seeing an increase in multiple offers and price appreciation is the lack of inventory. As I've stated before, it is a supply and demand issue. Once supply increases and demand subsides, pricing will return to its normal levels for growth and the hype surrounding multiple offers will die down. Emotion is playing a huge role in misleading articles such as the ones Macleans seems to put out year after year.

For those that have bought into the hype Macleans and their "experts" are trying to create, please let me know. My homeowner clients and I are looking to grow our Real Estate portfolios and are always looking for investment properties and long term tenants. ;)

For current market information and for the lowest interest rates, visit www.teamkhan.net. If you'd like to discuss the value of your home and build a plan for future growth, call me at 905-888-6222 ext 3.

Asif Khan, ABR
www.asifkhan.ca
Re/Max All-Stars Realty Inc.
Re/Max Hall of Fame

In early May, WestJet announced the purchase of 45 new planes from Bombardier in a contract worth $1.35 billion. This deal, simply put, was great news for Canada. It was great news because Bombardier will assemble the planes in this country and because 54% of the aircraft’s components are Canadian-made. It was great news because Bombardier’s Q400 turboprop aircraft bested foreign competitors to win the contract. And it was great news because it represented a Canadian company confidently spending on new equipment and pushing toward growth. WestJet’s deal implicitly demonstrated conviction in the Canadian economy. Now, we need more businesses to do the same.

We have exited the age of uncertainty. Canada’s economic outlook is undeniably positive. True, the month-to-month employment rates occasionally stutter. And yes, the stock market occasionally sags. But taken as a whole, the economic evidence over the past few months has offered every reason for optimism. The Bank of Canada in April hiked its growth forecast to 2.4% for 2012, up from the 2% in January. The International Monetary Fund also upgraded its estimates for Canada, calling for 2.1% this year, an improvement over its previous call of 1.7%. From employment rates to GDP, the trend lines for almost every graph are now pointing in the same direction—up.

The one set of indicators that remain stubbornly uncertain deal with perception. Consumer and business confidence ratings still ebb and flow on a monthly basis. Only 23% of Canadians expect their family’s finances to improve over the next six months, while 18.4% think their family’s position will actually worsen, according to an April report by the Conference Board of Canada. Despite reasons for hope, Canadians don’t seem to have much faith in their economy. 

The collective mood of the corporate class finally seems to be improving. Roughly 43% of business leaders think conditions will improve in the next half year compared with just 19% last November, the Conference Board says. But the same leaders don’t appear inclined to act upon their renewed optimism. Since last year, there’s been a 7% drop in the number of firms planning big capital investments.

Worried about the global financial system, many companies are hoarding cash rather than investing. As Dominic Barton, the global managing director of McKinsey & Co., noted recently in Canadian Businesscash levels for corporations in this country have increased by 60% since 2008.

There is some expectation that Canadian firms might start spending more freely. The Bank of Canada now projects that business “fixed” investment in things like infrastructure and equipment could spur GDP growth by 0.9% this year, an increase over its previous projection of 0.6%. And a TD Economics report suggested Canadian firms will soon stop paying down debt and hoarding cash to “take advantage of the nation’s much-improved business tax climate to retool and raise productivity levels.”

If that happens, it would be a good thing. The ongoing woes in the rest of the world shouldn’t deter Canada from investing in itself. In fact, the global concerns mean Canada must rely on its domestic markets to spur growth. So it’s time to stop worrying and start investing. It’s time for Canadians to be confident again.

http://www.canadianbusiness.com/article/83282--canada-s-economic-outlook-is-glowing-so-too-should-our-confidence

OTTAWA—Statistics Canada says new home prices are continuing to rise in most metropolitan areas.

The agency’s new housing price index rose 0.3 per cent in March, building on a similar increase the previous month, with Winnipeg, Toronto, Ottawa-Gatineau, Edmonton and Calgary leading the way.

Over the past year, the new price index was up 2.6 per cent, with Toronto and Oshawa, a community outside Canada’s largest city, recording 6.2 per cent increases.

March’s index, however, found Vancouver and Victoria, once two of Canada’s hottest markets, showing some take-back. The index slipped 0.1 and 0.7 per cent respectively in the month.

Gainers in March included Winnipeg, up 0.7 per cent, Toronto and Oshawa, 0.6; Ottawa-Gatineau, 0.5; Edmonton, 0.4; and Calgary and St. John’s, both with 0.3 per cent increases.

The agency says Winnipeg’s gain was primarily the result of higher land development costs and increased material and labour costs.

Improved market conditions were most responsible for the increases in most markets.

http://www.moneyville.ca/article/1176095--new-home-prices-continue-to-rise