Rachelle Younglai and Chen Wang's recent piece in the Globe and Mail on suburban household debt (in Canada) has a number of interesting stats. Here are some of them:
Looking at debt service ratios across the country, the most financially stressed neighborhoods in Canada are almost exclusively in the suburbs. (Map of the Greater Toronto Area shown at the top of this post. Data from Environics Analytics.)
34 of the top 100 most financially strained neighborhoods in Canada are located in Brampton, Ontario.
Brampton has grown at 2x the rate of Toronto over the last decade.
43% of Brampton's housing was built between 2001 and 2016.
80% of homeowners in Brampton have a mortgage compared to 63% across the Toronto region as a whole.
80% of Brampton's property tax revenue comes from residential property (not surprising). In comparison, 47% of Toronto's property tax revenue comes from commercial properties.
About 2/3 of Brampton's work force leaves the city for their job. This makes sense given the above point.
The other thing the article talks about is the increase in the average household size in many suburban communities as a result of people renting out parts of their house.
One Brampton gentleman is quoted as saying that he rents his basement out to 3 or 4 students and his upstairs bedrooms to two truckers. This translates into typically 6 vehicles parked in his driveway.
Assuming this is the trend, I wonder how much of this additional income is being reported to CRA. Because if it's not, then it could be throwing of these debt ratios and making the financial situation look more dire than it is.
In any event, I think this speaks to, among other things, the role that many suburban communities now serve for new immigrants coming to Canada. They are doing what they can to try and get ahead.
It's also worth noting that if you look at the above map of the Greater Toronto Area, the lowest "debt spots" are in fact where homes tend to be the most expensive -- the core.
Map: The Globe and Mail
Rachelle Younglai and Chen Wang's recent piece in the Globe and Mail on suburban household debt (in Canada) has a number of interesting stats. Here are some of them:
Looking at debt service ratios across the country, the most financially stressed neighborhoods in Canada are almost exclusively in the suburbs. (Map of the Greater Toronto Area shown at the top of this post. Data from Environics Analytics.)
34 of the top 100 most financially strained neighborhoods in Canada are located in Brampton, Ontario.
Brampton has grown at 2x the rate of Toronto over the last decade.
43% of Brampton's housing was built between 2001 and 2016.
80% of homeowners in Brampton have a mortgage compared to 63% across the Toronto region as a whole.
80% of Brampton's property tax revenue comes from residential property (not surprising). In comparison, 47% of Toronto's property tax revenue comes from commercial properties.
About 2/3 of Brampton's work force leaves the city for their job. This makes sense given the above point.
The other thing the article talks about is the increase in the average household size in many suburban communities as a result of people renting out parts of their house.
One Brampton gentleman is quoted as saying that he rents his basement out to 3 or 4 students and his upstairs bedrooms to two truckers. This translates into typically 6 vehicles parked in his driveway.
Assuming this is the trend, I wonder how much of this additional income is being reported to CRA. Because if it's not, then it could be throwing of these debt ratios and making the financial situation look more dire than it is.
In any event, I think this speaks to, among other things, the role that many suburban communities now serve for new immigrants coming to Canada. They are doing what they can to try and get ahead.
It's also worth noting that if you look at the above map of the Greater Toronto Area, the lowest "debt spots" are in fact where homes tend to be the most expensive -- the core.
Map: The Globe and Mail
Shaun Hildebrand (Urbanation) and Benjamin Tal (CIBC) published a report today called, “A Window Into the World of Condo Investors.” In it they revealed that last year (2017 data) no less than 48% of the Greater Toronto Area’s newly completed condo units were closed on by “rental investors.” In other words, almost half of the units became new rental supply.
This stat was not surprisingly turned into clickbait-y type headlines like, “Half of Toronto condos bought last year were by investors”; whereas an alternate headline might read: “Half of Toronto condos completed last year became new rental housing.” Not as jarring, I know.
In any event, there are a bunch of other interesting stats in the reports. Here are a few of them:
- 80% of all new home sales in the GTA last year were condo.
- Average resale condo prices (per square foot) increased by 26% last year and rents grew by 9%.
- Over 20% of condo investors purchased their property with no mortgage.
- Average down payment made by investors was 20%; non-investors were closer to 15%, likely because of mortgage insurance and other factors.
- Out of the condo investors who took possession in 2017 with a mortgage, no less than 44% are in a negative cash flow position – meaning their rental income isn’t covering their carrying costs.
- The returns, which the report calls exceptional, have been coming in the form of price appreciation.
- As a stress test for the market – what if all these negative cash flow investors suddenly sold their condos? – the report also estimates that if you took all of the rental investors who closed in 2017 with a mortgage and who are in a negative cash flow position greater than $500 per month, it would represent only 3.4% of the total annual supply of condos (both new and resale product).
If you would like to check out the full report, you can do that over here.
Photo by Scott Webb on Unsplash
BILD (the Building Industry and Land Development Association) just released its June 2017 data for the Greater Toronto Area’s new housing market. You can read the full release here. But I would like to point out a couple of things:
About 91 percent of the 6,046 new homes sold last month were multi-family condo apartments in high-rise and mid-rise buildings and stacked townhomes, while only nine percent were low-rise single-family homes.
The average price of available new condo apartments continued to rise with an increase of more than $22,000 from May. June’s $627,000 average price marked a 34 percent increase from a year ago. The average available unit was 845 square feet with an average price per square foot of $742. A year ago, the average price per square foot was $587.
From this, it’s once again clear that Toronto is in the midst of an incredible transformation from a low-rise city to a more vertical city. New supply on the low-rise side of the market is heavily constrained.
I get the sense sometimes that many people in this city, and others, believe that access to a low-rise detached house should be a right. Go to school. Get a good job. And then buy that house with a backyard.
The data speaks to a very different reality.
Photo by Victoria Heath on Unsplash
Shaun Hildebrand (Urbanation) and Benjamin Tal (CIBC) published a report today called, “A Window Into the World of Condo Investors.” In it they revealed that last year (2017 data) no less than 48% of the Greater Toronto Area’s newly completed condo units were closed on by “rental investors.” In other words, almost half of the units became new rental supply.
This stat was not surprisingly turned into clickbait-y type headlines like, “Half of Toronto condos bought last year were by investors”; whereas an alternate headline might read: “Half of Toronto condos completed last year became new rental housing.” Not as jarring, I know.
In any event, there are a bunch of other interesting stats in the reports. Here are a few of them:
- 80% of all new home sales in the GTA last year were condo.
- Average resale condo prices (per square foot) increased by 26% last year and rents grew by 9%.
- Over 20% of condo investors purchased their property with no mortgage.
- Average down payment made by investors was 20%; non-investors were closer to 15%, likely because of mortgage insurance and other factors.
- Out of the condo investors who took possession in 2017 with a mortgage, no less than 44% are in a negative cash flow position – meaning their rental income isn’t covering their carrying costs.
- The returns, which the report calls exceptional, have been coming in the form of price appreciation.
- As a stress test for the market – what if all these negative cash flow investors suddenly sold their condos? – the report also estimates that if you took all of the rental investors who closed in 2017 with a mortgage and who are in a negative cash flow position greater than $500 per month, it would represent only 3.4% of the total annual supply of condos (both new and resale product).
If you would like to check out the full report, you can do that over here.
Photo by Scott Webb on Unsplash
BILD (the Building Industry and Land Development Association) just released its June 2017 data for the Greater Toronto Area’s new housing market. You can read the full release here. But I would like to point out a couple of things:
About 91 percent of the 6,046 new homes sold last month were multi-family condo apartments in high-rise and mid-rise buildings and stacked townhomes, while only nine percent were low-rise single-family homes.
The average price of available new condo apartments continued to rise with an increase of more than $22,000 from May. June’s $627,000 average price marked a 34 percent increase from a year ago. The average available unit was 845 square feet with an average price per square foot of $742. A year ago, the average price per square foot was $587.
From this, it’s once again clear that Toronto is in the midst of an incredible transformation from a low-rise city to a more vertical city. New supply on the low-rise side of the market is heavily constrained.
I get the sense sometimes that many people in this city, and others, believe that access to a low-rise detached house should be a right. Go to school. Get a good job. And then buy that house with a backyard.
The data speaks to a very different reality.
Photo by Victoria Heath on Unsplash
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