Making Sense of Toronto Real Estate

This is a bit of a change from the topics I usually explore, but in a hot real estate market like everyone else I’m watching the action in the neighbourhood. The most interesting nearby street is Sandfield Road, particularly the long block between Misty Crescent and York Mills Road. Sandfield is a wide street with big lots where large bungalows or split levels were first built in the Seventies. With a light at York Mills across from York Mills Collegiate, it gets so much traffic that speed bumps have been installed.

Replacing the Original Houses

Many of the original homes have been torn down and replaced with the latest upscale fads. These have included first Tudor-style country houses, then faux French chateaux, and most recently ersatz Italianate palazzi with multiple windows and smooth concrete facings. Sandfield has one exception to houses mimicking styles of centuries ago, a Bauhaus-influenced house that combines glass, wood, and concrete. It is by far my favourite.

The Pace of Construction

I am amazed by the slow pace of construction here. The new houses take several years to complete, the only exception being the Bauhaus-influenced house that was finished in one year. Is it an implication of the hot real estate market that workers and materials are in short supply? And if prices are rising, are builders then in no hurry to finish the job? However, that would surprise me, given how much capital is tied up in unfinished houses.

Unfinished or Vacant Houses

The neighbourhood has occasional unfinished or vacant houses. One on Sandfield was started three or four years ago but sits with walls covered in Tyvek and surrounded by mud and a chain-link fence, with no construction happening.

After the tenants left or were evicted from a rental near me, the owner did a lot of internal cleaning and renovation, but the house has been unoccupied for over a year, with brown paper covering the windows.

In both cases I wonder what is going on and why the owners are paying the cost of holding assets that are not being utilized. Perhaps they are overseas investors who are motivated only by profit, with no consideration for the impact of unoccupied housing on the community. There have been public policy discussions about imposing taxes on unoccupied properties so as make them available to willing buyers or renters. It can’t be good for the neighbourhood or city if another consequence of a hot housing market is that properties are sitting unoccupied as “investments.”

These are strange times in Toronto real estate, even in expensive neighbourhoods. An activist housing policy that induces builders or investors to make properties available for people to live in would be a good idea.

 

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