Housing data highlight Windsor hard times

Two sets of housing data released Thursday bear witness to the hard economic times being experienced in Windsor, Ont., the country's only major centre to show a year-over-year drop in new home prices along with no increase in the cost of rental housing.

A manufacturing centre hit hard by the high Canadian dollar and cutbacks in the auto sector, new home prices in Windsor dropped 2.6 per cent in October from the year before, according to a report by Statistics Canada.

Nationwide, new home prices rose 6.1 per cent from last year. It was the 14th straight month in which price growth either slowed or held steady. However Windsor was the only city that experienced year-over-year new-home price deflation.

While some markets, such as Saskatoon and Regina, had lofty year-over-year price gains (47.9 per cent and 29.5 per cent, respectively), new-home prices in most markets were nearly unchanged in October compared with September.

In Calgary, new-home prices dropped 0.2 per cent from September to October, the first such decline since December, 2006.

In general, healthy economic conditions are still fuelling demand for all types of housing in Canada, according to Canada Mortgage and Housing Corp (CMHC). “Strong employment growth, solid income gains, and high immigration levels continued to support strong demand for both ownership and rental housing,” CMHC chief economist Bob Dugan said in a statement.

A big increase in home prices over the past couple of years, along with rising mortgage rates, property taxes and utility costs, has been keeping more Canadians in the rental market.

However, tight supply means renting an apartment is also getting pricier, according to a report on the rental housing market by CMHC.

The average rent for a two-bedroom apartment in an existing building rose in each of the 34 major Canadian centres included in the study, except Windsor, where rents were nearly unchanged for the second year in a row.

Excluding new buildings, in which rents tend to be higher, the average rent for a two-bedroom apartment in Canada rose 3.5 per cent this October compared with the same month last year, the study said. Western cities topped the list of largest year-over-year price increases, led by Edmonton (18.8 per cent), Calgary (15.3 per cent) and Saskatoon (13.5 per cent).

Including new buildings, cities with the highest monthly rents for a two-bedroom rental unit in October were Calgary ($1,089), Vancouver ($1,084) and Toronto ($1,061). The lowest average monthly rents were in Trois-Rivières ($487) and Saguenay ($490).

For two-bedroom condominium apartments, the highest rents were in Toronto ($1,535), Vancouver ($1,435), and Calgary ($1,217).

The vacancy rate for Canadian rental apartments in October was 2.6 per cent, unchanged from the same month last year, according to the CMHC. Some new rental building construction, combined with increased competition from the condo market, kept vacancy rates stable despite strong demand, the CMHC's Mr. Dugan said.

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source: reportonbusiness.com

Reverse commuters reflect shift in land use

TORONTO — Most weekday mornings, Brian McWilliams leaves his downtown Toronto condo, hops in his car and gets out of town - slowly.

Mr. McWilliams and thousands of other commuters are part of a trend in which, judging by the traffic, there appear to be nearly as many people leaving Toronto every morning to go to work as there are heading toward the city's office towers.

These "reverse commuters" - those going against the traditional tide of traffic by living in urban centres and commuting to the suburbs for work - also reflect complex demographic, transportation and property developments of recent years.

Last week, two reports shed light on this trend.

Census data released by Statistics Canada showed that new immigrants are flocking to Canada's major urban areas but, unlike Mr. McWilliams, they're choosing to live in the suburbs of Toronto, Vancouver and Montreal. They're not only finding cheaper housing but a large pool of potential employers, who have been moving offices and factories to more available land in the suburbs.

And the flight to the suburbs is expected to continue, suggests a report last week from Cushman & Wakefield LePage. In its 2008 outlook, the real estate firm expects the national office vacancy rate to drop to 5.6 per cent next year. But in major cities, such as Vancouver, Calgary and Toronto, the vacancy rate in downtown areas will be much tighter, prompting tenants to consider moving to the suburbs where new office space is coming on stream.

In Toronto, which Cushman says represents more than 40 per cent of the total Canadian office market, the downtown office vacancy rate is expected to fall to 3.8 per cent this time next year from 6.2 per cent a year ago.

"We are now at the point where demand will have to slow in the central market, simply due to the lack of available space," Paul Morse, Cushman's senior managing director and national practice director of office leasing, warns in a release. "Those expanding or entering the market are now considering space in mid-town or further into the 905 [suburban] regions to meet their space needs."

This shift can be seen every morning in Toronto, where the likes of Mr. McWilliams are forming long lines of traffic on major outbound arteries - a change from just a few years ago when the heavy traffic was primarily inbound.

Not only are reverse commuters growing in numbers because their jobs are relocating out of the city, but residential space in the downtown core is growing exponentially faster than office space, according to figures from Toronto's planning department.

Currently, there are seven commercial office projects in the works in Toronto, representing nearly five million square feet. In comparison, there are 149 residential housing projects with a total of 39,398 units in the pipeline. Even if each of those units were only 600 square feet, that would amount to a whopping 23.6 million square feet.

Urban planners have been trying to adjust to these trends, especially as it applies to transportation.

"There was a strategy in the late 1970s and early eighties and it was focusing on decentralization," says Rod McPhail, director of transportation planning for Toronto.

At that time, planners decided that the city needed to grow from about 1.5 million people to about three million. The problem was that the transportation infrastructure, designed to bring people into the city from the suburbs, couldn't accommodate that kind of growth.

"We had to come up with a development strategy," Mr. McPhail says.

The solution was to make use of the empty commuter trains, subway cars and roads heading out of the downtown core in the morning and back into the city at night. To do that, planners encouraged the creation of pockets of jobs at the edges of the city and at the far ends of the transportation system to draw people outward each morning.

The strategy was wildly successful. In Mississauga, for instance, just west of Toronto, there are 406,000 jobs but a labour force of only about 364,000, according to figures supplied by the city.

The sprawling metropolis has been wooing companies with its lower taxes, space availability and attractive rental rates for years - it is currently the Canadian headquarters for 59 Fortune 500 companies and 51 Global Fortune 500 companies, and building permits were issued for more than 1.5 million square feet of office space in the past year and a half.

"The concept that most people are travelling to work in Toronto, well that used to be the case," says Robert Sasaki, Mississauga's manager of transportation planning. On a typical weekday between 6 and 9 a.m., 122,000 commuters travel to jobs in Mississauga, about 40,000 of whom are from Toronto, he says.

But the strategy's success has created a new set of challenges, Mr. McPhail says.

At first, reverse commuters happily sailed past incoming traffic on the roads and enjoyed empty trains, but now their commute has become just as clogged as the traditional commute in many cases. As well, there isn't sufficient public transit infrastructure to get city folk to their increasingly dispersed suburban offices and factories, leaving them with no option but to drive.

"The transit to do that type of [reverse] trip just doesn't exist. ... That's why we're seeing such a huge increase in car traffic because almost every new job in the 905 area that's filled by a City of Toronto resident is a car trip," Mr. McPhail says.

Mr. McWilliams, for one, drives every morning from a condo complex a home run's distance from the Rogers Centre to Mississauga, where he works in the health care division of General Electric Canada Inc.'s headquarters.

"All my friends are downtown. I'm just not ready for a suburban life. There's not much going on for people our age," he says.

"The extra time I spend commuting each week is worth the tradeoff."

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source: reportonbusiness.com

Vick estate fails to sell at auction

SURRY, Va. — The 15-acre estate that served as Michael Vick's dogfighting headquarters failed to sell at auction Saturday.

The owner of the property in rural southeastern Virginia, real estate developer Wilbur Ray Todd Jr., rejected a final bid of $747,000, the assessed value of the property at 1915 Moonlight Road. The bidder was anonymous. There were only two bidders and the opening bid was $345,000.

"I didn't see the people in the crowd I thought we needed," a disappointed Todd said after the auction held inside the house. He said he will list the property for sale.

Todd said it would cost about $1 million to build a similar house on 15 acres.

Vick, the suspended Atlanta Falcons quarterback, is serving a 23-month sentence for a dogfighting conspiracy. Vick and three co-defendants raised pit bulls and trained them for fighting in the rugged wooded area behind a 4,600-square-foot white brick house.

Vick paid about $34,000 for the tract in 2002 and had the house built. Behind the house and a full-size basketball court, partly obscured by a fence, are four outbuildings and dozens of dog cages.

According to court papers, some of the dogfights were held on the second floor of one of the outbuildings. There are other remnants of Vick's "Bad Newz Kennels" dogfighting enterprise, including a metal pole and chain that was used to restrain pit bulls.

Hundreds of people — most of them just curious — toured the property during three open houses over the past week.

Vick sold the property for $450,000 to Todd, who spent an additional $50,000 fixing up the place, which had been trashed by burglars and looters.

"By the time you pay a commission and taxes, it gets eaten up real quick," Todd said to explain why the nearly $250,000 he would have made from auction's final bid was not enough.

The house has two master suites and a media room with wet bar. A double-sided gas fireplace separates the bathroom from the bedroom in the upstairs master suite.

Other amenities include jetted tubs, freshly refinished hardwood floors, a two-car garage and an expansive kitchen with center island, granite countertops and built-in stainless steel appliances.

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source: globesports.com

Confidence in Newfoundland sets off home buying binge

TORONTO — The historic agreement that put the massive Hebron offshore oil project back on track last summer has set off a boom in consumer confidence and an unprecedented home buying binge in parts of Newfoundland.

On the back of a phenomenon industry watchers are calling “the Danny Williams effect” – after the Newfoundland and Labrador Premier who hammered out the oil deal – home sales in St. John's surged 68 per cent from October to November, data from the Canadian Real Estate Association (CREA) show.

St. John's is the latest in a string of Canadian cities including Calgary and Saskatoon to experience big surges in housing sales activity, often on the backs of their booming commodities markets.

In fact, Canada seems to have “barely blinked” in the face of the global tightening in the credit markets, along with the real estate woes south of the border, said Douglas Porter, deputy chief economist at BMO Nesbitt Burns.

“At least one Canadian economic train fully decoupled from the U.S. this year – the housing market,” Mr. Porter said in a report yesterday.

Existing home sales across the country beat expectations in November, rising 3.2 per cent from October and 7.6 per cent year over year, according to CREA.

It was an unexpected rise in a market expected to show a slight decline in activity, the second successive month in which expectations have been “confounded” by stronger-than-expected sales, said CREA chief economist Gregory Klump. CREA continues to expect a decline in home sales activity in 2008, he added.

“Eastern Newfoundland had Canada's biggest single market increase last month, Mr. Klump said. “I've spoken to a number of people about this amazing surge, and they're attributing it to the ‘Danny Williams effect,' ” he said.

In St. John's and its suburbs, home sales really started to take off in September, shortly after Mr. Williams reached the deal for the province to take a 4.9-per-cent equity stake in the $5-billion Hebron project, said Denise Brophy of Re/Max Realty Specialists in St. John's. Many of those real estate deals would have closed in November, and would therefore be reflected in the latest resale home data from CREA.

“The entire eastern section of this market is selling hand over fist. I will tell you unequivocally, without one hesitation, that Danny Williams and the oil announcement are what is driving this market,” Ms. Brophy said. “I haven't seen anything like this before.”

A total of 559 resale homes were sold in Newfoundland and Labrador in November, a 72-per-cent increase from the same month last year. The total value of existing home sales was $76.8-million, an 81-per-cent jump from last year.

Any “decent” home is now subject to a bidding war, and even run-down properties are selling quickly, Ms. Brophy said. New homes are selling as soon as the foundations are laid, she added.

The positive sentiment also appears to be spilling over into the commercial market in St. John's, said real estate lawyer Bruce Chislett.

Mr. Chislett's three-partner law firm recently purchased the two-storey former town council building in the St. John's suburb of Paradise, a town in which there are lots of real estate deals taking place.

“We believed it was a good place to win business, and a good time to stop renting and purchase something due to our long-term view of where property values are headed,” he said.

In addition to the Hebron agreement, Newfoundland and Labrador's economic momentum continues to build with Mr. Williams' announcement yesterday of a formal agreement to expand the White Rose offshore oil field, along with contemplation of the expansion of the Hibernia project, said Andy Wells, mayor of St. John's.

“Clearly people see there's opportunity here, and people buying real estate believe there's something of substance happening,” Mr. Wells said.

Many recent home buyers are Newfoundlanders returning home from Alberta, Ms. Brophy said.

It's important to keep in mind big jumps in price or activity often take place in smaller cities, said Phil Soper, president and CEO of Royal LePage Real Estate Services.

“In smaller markets like Saskatoon, Regina and St. John's, it's much easier to have these huge spikes due to their smaller base,” Mr. Soper said. “Nonetheless this is a dramatic increase that is both culturally important and economically unique.”

The booming atmosphere of St. John's reminds him of Calgary, said Mr. Soper, who plans to hold his company's national conference in St. John's next year.

Part of the region's challenge will be how it manages its future growth and deals with the labour shortages it is likely to face, Mr. Wells said.

“It may end up being a problem, but based on past history, this is one of the nicer problems we could have,” he said.

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source: reportonbusiness.com

Zen and the art of a harmonious abode

Lean and industrial-looking on the outside, infused with organic materials and a feeling of fluidity on the inside, the house at 8 Misty Cres., near York Mills and Leslie, marries yin with yang, dark with light, feminine with masculine.

The flow of positive energy and minimalist aesthetic represent the last word in what could be called New Age interior design.

Paul Ng, a Toronto-based professional feng shui consultant has approved the home's "qi," or sense of balance. His certificate is available for perusal. But why bother? One glance out the dining-room window at the sunken Zen rock garden, dominated by a sculpted Buddha head and fleshed out with a Japanese maple, and you know this is a house with a heightened sense of harmony.

The owners — Lowell and Jacqueline Strauss, a couple with four children — bought the house not only for these Eastern influences, but also because it contained aspects that reminded them of the very Canadian great outdoors. Windfields Park is across the street, featuring woods for hiking and hills for tobogganing in winter.

And while the unadorned concrete façade lends the house an austere, fabricated look from the curb, the flamed stone floors on the inside recalled for the owners the granite cliffs of the Canadian Shield.

The feeling of raw Canadiana was a big draw, considering they had just moved back to Toronto from California for work.

The Strausses' time in the sunny state influenced them when they embarked on a costly renovation that included updating the kitchens and baths with exotic woods and thick natural stone.

Ovangkol, a reddish high-grain wood traditionally used to make fine musical instruments, went into the kitchen and the dining-room cabinetry, while Santos rosewood, used to make guitars, formed the built-ins in the master bathroom.

The woods add a handcrafted feel to a house that is otherwise slick, sleek, up-to-the-minute chic.

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source: theglobeandmail.com