Toronto in a 1980s Style Housing Bubble

Bank of Montreal economist Doug Porter says Toronto is the midst of a housing bubble, and is making comparisons to the housing bubble of the 1980s - which ended in a collapse and a recession.

"There’s nothing tentative about the red-hot housing market in Toronto and neighbouring areas," says Porter, in a note out Monday.

Porter is referring to the 22 per cent price appreciation of existing homes over last year's prices. He is now predicting a 19 per cent increase in condo prices in the Greater Toronto Area (during 2017) and says to watch for double-digit gains in the Greater Golden Horseshoe.

"An apparent influx of foreign wealth, coupled with record-high demand and a shortage of detached properties, are driving the frothiest price increases since the late 1980s. Prices are even accelerating in segments and areas without shortages."
 
"Admittedly, condo supplies in the GTA are down sharply from prior elevated levels, but a record number of units are now under construction…so why the froth?" asks Porter.

Porter also notes that Montreal and Ottawa have entered a lengthy period of stagnation, that Alberta is stabilizing.

And that there should be "some further softening in Vancouver’s prices", compared to last years 33% increase in Vancouver prices.

The national average price for homes sold in January 2017 was $470,253, up only 0.2 per cent from a year ago and carried mostly by sales in Toronto and Vancouver.

However if you ignore Greater Toronto and Greater Vancouver, the average price of a home in the country is reduced by almost $120,000 to $351,998.

Counting adjustments for inflation and the lack of increases in housing prices across most of Canada, the cost of homes across most of Canada is actually going down comparatively. The GTA and GVA are inflating the national average and skewing the results. Which is similar to what happened in the 1980s. The average prices across Canada stagnated and went down first, while Toronto and various cities experienced a real estate bubble.

And then the bubble burst, economic chaos and a recession resulted. The stagnation across Canada was basically the canary in the coalmine, warning of the impending disaster.

2010s Vs the 1980s, What is Different?

Toronto and Vancouver's real estate bubbles are now mostly driven by foreign investors. That is what is driving the prices to ridiculous heights. That means that the rest of the country could go into a recession and as long as Toronto/Vancouver's prices continue to balloon upwards, the investors will just keep investing.

In British Columbia, Vancouver is trying to curb that by introducing a 15% land transfer tax on foreign investors.

In Ontario, Toronto has rejected the idea of a land transfer tax and has embraced the status quo for now...

But then Toronto Mayor John Tory announced recently that he would be increasing property taxes in Toronto by 2%.

Which gave me an idea.

Don't increase the property taxes for regular Torontonians.

Increase the property taxes for foreign owners of Toronto residential real estate instead. By say... 22%. Or more. Perhaps 27%.

You will note that this would only effect residential investors.  It would still allow for foreign investors in commercial and industrial real estate, which means they are investing in Canada's economy.

If the prices of homes in Toronto are going up by 22%, increase the property taxes on foreign owners of by a like amount (plus maybe an extra 5% to make it 27%).

So if prices in 2017 go up 19%, the property tax for foreign owners should be 19 to 24% higher than people who actually live here.

The thing about property taxes is that it is every year. The land transfer tax is only an one time thing.

Now property taxes are not a huge amount, but those property taxes would mean the mayor wouldn't need to raise taxes on Torontonians (people who might actually vote for him) and only harms non-voters who don't even live in Toronto.

Over time the property taxes on foreign owners could be increase gradually until Toronto's housing market stabilizes to a more reasonable and normal growth. Which means Toronto ends up with a stable and sustainable housing market that can withstand global and local recessions - instead of an ever ballooning market that will burst the moment the local economy hits a recession.

Why you should Schedule an Electrical Inspection

Schedule an Electrical Inspection for Peace of Mind

Having safe electrical equipment and wiring around your home is not something you want to take lightly. If things aren’t right, you could not only be at risk for a personal injury from electrical contact, but you could be risking a fire as well. If there are electrical problems that are causing fire or shock hazards, you will want to know about them so they can be fixed before you find out the hard way that you had a problem.

If you are not absolutely certain that everything in your home is up to code, you might want to schedule an electrical inspection or home inspection. Companies like Mister Sparky have qualified electricians who can come and check out your entire electrical system. If any problems are identified, you will also have a source for getting things fixed. 

Or better yet, get a home inspection and you will get your roof, walls, foundation, wiring, plumbing and everything else inspected too.

Depending on what is deficient after the inspection, you may just need simple things done like installing some new outlets. In other cases, the job may be more extensive. Whatever the problem is, having knowledgeable electricians at your disposal will enable you to get everything in safe working order and up to code.

The electrical code is rather lengthy and can be complicated for people who are not trained in the electrical field. As a result, doing an evaluation is not something you should attempt to do yourself, unless you are an electrician.

There may be times when you need to upgrade your electrical panel. If you live in an older home and your panel has never been upgraded, it is highly likely that it needs to be. Most older homes were built when people did not rely on electricity to the extent they do today. To illustrate, just take a look around the rooms in your home and identify the items that you use on a daily basis that run with electricity. Then think about how many of those items did not exist a generation or two ago. If you have the same electrical panel that was in place then, there should be little doubt that you need an upgrade.

Another time when your panel may need to be upgraded is when you are making additions like building another room. You clearly do not want to overload your existing system. An upgrade is the smartest and safest thing you can do.

Because you can’t actually see electricity, it can be a bit difficult for untrained people to understand. For this reason, you should have your home evaluated by a professional so you can have the peace of mind in knowing that everything is okay.

Boulder House

This is so kewl we should definitely build more homes like this. Unfortunately boulders conveniently placed like that and huge are pretty rare.

Project Gridless - Off Grid Home and Other Topics...

A few years ago (Oh wow, that was April 2011. Time flies...) I started an offshoot website titled Project Gridless.

The goal of the new website was to primarily deal with real estate that was "off the grid". Cabins up north, farms that use solar and wind power, etc. As part of that initial idea I also included a variety of posts on various topics connected to the lifestyle of living off the grid.

Topics such as Archery, Bow Making and a Homemade Crossbow that I made dealt with my avid interest in archery and by relation, Hunting Food Off The Grid. Over time I even got into Compound Bow Repairs.

But hunting isn't the only way to get food, so I also explored issues like Farming, Gardening, Fishing Off the Grid, Trapping, and of course Cooking Tips. I even added posts about Veganism for those people who don't like eating meat.

For those people who really love animals I also wrote about Animals / Pets and Falconry. (Sometime I really should do some posts about birdwatching too.)

Because it was still a real estate website many of my posts dealt with things people needed around their home. Thus I wrote about solar, wind, hydro and other ways of getting Electricity Off The Grid. And because this is Canada and we have hot summers and cold winters, I also had posts about Heating and Cooling. And Green Homes / Sustainable Architecture for those people obsessed with the environment. And "modern necessities" like how to get Off The Grid Internet and plumbing, aka Water and Sewer Off The Grid.

For the preppers / survivalists out there I wrote posts about:

• Bug Out Bags
• Camping
• Nomadic Lifestyles
• Survivalism

But it still was not enough. I also had topics such as:

• DIY Projects
• Education Off The Grid
• Exercising Off The Grid
• Healthcare
• Recycling Materials
• Sailing
• Sports
• Transportation
• Treehouse

In April 2017 it will be 6 years since I started Project Gridless and there is still is so much to do. It is an expansive topic that goes beyond real estate and into the realms of being self sufficient, providing your own food, your own heat sources, your own entertainment, and all of your necessities.

My efforts have not been in a vacuum either. Project Gridless is now twice as popular than MSfaH.

Therefore I am putting the call out for more bloggers to join me.

Join Project Gridless and write about the off grid topics that most capture your interest.

To join email charlesmoffat{atsymbol}charlesmoffat.com.

Once you have joined you can post on the above topics to your heart's content, knowing that you are posting to an already popular and successful blog that is currently read by 5000+ people per month.

Renovating Home Offices in Toronto

On Renovating Home Offices for Work from Home Professionals

By Rob C.

This author was there when Laura Bilotta from Single in the City walked a renovator around her Toronto area townhouse and laid down plans for a new perfect home office. “Rip out the wall cabinets and put up vision boards,’ was how she started her fix list. "Bookshelves are so last century."

The contractor agreed, and he nodded his head like he was expecting it. Keith Travers, home renovations expert in Toronto has years of experience and his own ideas about transforming living rooms, basements and guest bedrooms into cost efficient modern home offices. "What Laura asked for is what every work from home professional wants, a clean modern home office."

Clear the walls and ‘desks’

In Laura’s vision for tomorrow there are no desks and no shelves, but rather tables stuck to bare walls with nothing underneath to bang her knees on when swivel-chairing around the room. By having clear walls and desk surfaces she can do three jobs at once in three or more separate work stations in her office, or on busy days, she can bring in support staff and easily scale her operations.

By having white boards and cork boards on the walls instead of shelves, Laura can effectively organize tasks for staff using pins and post-it notes. This makes it easy for interns to pick-up and go forward with initiatives laid out literally right in front of their eyes. Perhaps more important is how it allows Laura to compartmentalize her campaigns in her own mind.

"Shelving is still important." Keith Travers insisted, “But now the shelves go up to the top of the wall. Shelves are necessary for storage, and small things can be put in wood boxes we can make to match the décor.” And another item that’s now stored high on the shelf – the office printer.

Install Offices Doors that can be Closed

High on Laura’s list for Keith was to amend the walls of her living room to host French doors (double doors with twelve panel glass windows in the center of each) so she could seal off her home office and therein her business from the rest of her life.

Keith told me later that doors and walls are necessary mental as well as physical barriers; the modern work from home professional needs a door for privacy and security of course, but also, they must be able to close a door in their mind at some point everyday too. A physical door that locks helps them mentally encapsulate their work inside their home life.

Office Telephone Wifi Solution

While most work from home professionals function effectively these days without an office telephone, WiFi must be present in their home office. Why not get a business phone? There are still plenty of advantages to using an old-school Nortel Meridian phone with a display fromStandard Telecom because over time it becomes a super handy easy-to- use business rolodex that can store call data for years. Regardless home office professions must have a strong Wifi signal, and so the modem / router connection MUST be in the home office.

The alternative is to embrace walking back and forth, up and down stairs every time there’s a problem. If the residence did not previously have a home office than the cable modem is likely found behind the television – it must be moved into the office and a proper airport Wi-Fi set up high on the shelf, in the room where people are working – not in the room where kids are playing network videos or spouses watch TV.

Put a Safe in the Wall

Somewhere in the home office there should be a wall safe. Its important. It’s a line item on many small business insurance policies. There should also be a filing cabinet ‘solution’ and if you don’t have a safe then you need a good filing cabinet with at least one drawer that locks. Where else can you keep your master business license? Or your lifetime discount deals, exclusive contracts, or your bottle of the good stuff and maybe your handgun? ‘Handgun owners must have a safe’ Keith adds, ‘they’re required by Federal legislation to have and use a secure lock box to store their weapons.’

A Clock above a Calendar

Further to the idea of keeping track of time and resources – the wall clock and calendar combination is critical for keeping small business CEOs and staff on track. The wall clock is different than the wrist watch and cellphone clock and computer monitor time keeper. The wall clock is a powerful judge that knows when you start late, and finish early.

For small business professional who work alone and talk to themselves, the clock & calendar is one character who becomes a mental butler. He or she is a concierge who schedules calls and appointments and becomes an operational framework for the business. The device also serves to answer questions that other visitors to the home office (mostly family members) might have
regarding your time, especially if they can see the business agenda on the home office calendar and plan accordingly.

Leave Room for Visitors

"There needs to be space for visitors", Keith made Laura think about her new office layout from the perspective of a visiting client that might come to her house. Where will he or she sit? And what will they see? How comfortable will they be in here?

Laura’s home office of the future is set to look very Spartan indeed. With hardwood floors under the swivel chairs and wide open surfaces on white walls and wood tables, the blank office chamber is designed to invite creativity and banish clutter.