Subscribe
Below is a piece by Michael Salter from the Globe and Mail. It’s all about Toronto’s HOT, HOT housing market. Michael’s message: Here are the real reasons why home prices are skyrocketing and why they are going to remain high.
Did you find yourself agreeing with this article or did you notice that something was off? If you noticed something, it may be because this article was originally published on Friday, July 15, 1988. And by that time, the North American dream of home ownership had already died in Toronto.
Here’s the header I cut out from above:
Thank you to Tamsin McMahon for tweeting this out last weekend.
This morning, I am looking at the following chart of average home prices in the Greater Toronto Area:
It’s from this Globe and Mail article.
These are staggering numbers. The average price of a detached home in the suburbs (905 area code) increased 21% year-over-year. In the city (416 area code), the increase was 19.6% YOY. These numbers are almost unbelievable.
The article focuses on low supply (decrease in listings) and high demand. And that is certainly a big part of what’s going on here in this city, as well as in many others.
But of course, the backdrop to all of this is our low / zero / negative interest rate environment.
Larry Summers has a great post on his blog (which I discovered this morning via
When it comes to a real estate market, there are always the typical metrics: sale prices, rents, vacancy and so on. But I’m always interested when somebody looks at the market in a different way and comes up with other kinds of metrics.
That’s why I was intrigued when I stumbled upon this post by Sam Floy, where he looks at the concentration of coffee shops and friend chicken shops across London in order to determine which neighborhoods are in fact “up and coming.”
To give you a taste, here’s his coffee shop map:
Below is a piece by Michael Salter from the Globe and Mail. It’s all about Toronto’s HOT, HOT housing market. Michael’s message: Here are the real reasons why home prices are skyrocketing and why they are going to remain high.
Did you find yourself agreeing with this article or did you notice that something was off? If you noticed something, it may be because this article was originally published on Friday, July 15, 1988. And by that time, the North American dream of home ownership had already died in Toronto.
Here’s the header I cut out from above:
Thank you to Tamsin McMahon for tweeting this out last weekend.
This morning, I am looking at the following chart of average home prices in the Greater Toronto Area:
It’s from this Globe and Mail article.
These are staggering numbers. The average price of a detached home in the suburbs (905 area code) increased 21% year-over-year. In the city (416 area code), the increase was 19.6% YOY. These numbers are almost unbelievable.
The article focuses on low supply (decrease in listings) and high demand. And that is certainly a big part of what’s going on here in this city, as well as in many others.
But of course, the backdrop to all of this is our low / zero / negative interest rate environment.
Larry Summers has a great post on his blog (which I discovered this morning via
When it comes to a real estate market, there are always the typical metrics: sale prices, rents, vacancy and so on. But I’m always interested when somebody looks at the market in a different way and comes up with other kinds of metrics.
That’s why I was intrigued when I stumbled upon this post by Sam Floy, where he looks at the concentration of coffee shops and friend chicken shops across London in order to determine which neighborhoods are in fact “up and coming.”
To give you a taste, here’s his coffee shop map:
There are always people threatening that interests rates just have to go up. But Larry, as well as others, continue to argue that natural real interest rates are likely to remain close to zero going forward.
Fred mentions Albert Wenger on his blog this morning and I have written about him before as well, here. In his book World After Capital, Albert argues that capital is no longer the scarce resource of our time. Instead, it has become attention.
If you believe all of this to be true, then perhaps the numbers at the top of this post aren’t so unbelievable after all.
His thinking was that if a neighborhood had a high density of coffee shops, a low density of fried chicken shops, and relatively low house prices, then it could probably be thought of as up and coming.
Coffee shops are often considered to be leading indicators of urban change (i.e. gentrification), and, well, friend chicken places I guess speak to a different kind of neighborhood.
These sorts of playful studies aren’t going to tell you exactly which numbers you should be plugging into your development pro forma. But I think unconventional analyses can sometimes tell you a bit more of the story behind the numbers.
There are always people threatening that interests rates just have to go up. But Larry, as well as others, continue to argue that natural real interest rates are likely to remain close to zero going forward.
Fred mentions Albert Wenger on his blog this morning and I have written about him before as well, here. In his book World After Capital, Albert argues that capital is no longer the scarce resource of our time. Instead, it has become attention.
If you believe all of this to be true, then perhaps the numbers at the top of this post aren’t so unbelievable after all.
His thinking was that if a neighborhood had a high density of coffee shops, a low density of fried chicken shops, and relatively low house prices, then it could probably be thought of as up and coming.
Coffee shops are often considered to be leading indicators of urban change (i.e. gentrification), and, well, friend chicken places I guess speak to a different kind of neighborhood.
These sorts of playful studies aren’t going to tell you exactly which numbers you should be plugging into your development pro forma. But I think unconventional analyses can sometimes tell you a bit more of the story behind the numbers.
Share Dialog
Share Dialog
Share Dialog
Share Dialog
Share Dialog
Share Dialog