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4 ~ Sunday, April 30, 1989 -

North Shore News

MY WIFE and I have had quite a few good chuckles at the
expense of our Toronto acquaintances lately.

For over a year, we've been say-
ing house prices in the overheated
Toronto market would soon start
falling. We were laughed at. ‘This
market has the potential to just
keep on heating up forever,’’ one
fool stated.

We explained patiently, over and
over again, that the same madness
had happened to the real estate .
market in Vancouver back at the
time of Mount St. Helen’s.

Mount Saint what? Vancouver
who?

When the price of an ordinary
suburban house anywhere within
50 miles of downtown Toronto
crossed the quarter-million mark
last winter, my wife’s eyebrows
wagged knowingly, and 1 smiled a
secret little smile as we listened to
happy Torontonians burble about
the value of their tiny homes and
tiny lots, and how rich they were
going to be forever.

Sure, we said. Sure.

But our cynicism about house
prices in Toronto was dismissed as
sour grapes because we got ere
too late or something.

Who would stay, who could
stay? we replied. How does the
bumpersticker 30? Toronto — a
nice place to live but you can’t af-
ford to work there.

It is easy for us to chuckle, of
course. We aren’t getting burned,
except in the form of high rent.
That’s nothing compared with the

-poor immigrants who arrive with

only a fistful of cash in hand, if
they're lucky (Ottawa doesn’t
allow most of them to bring in
anything more than $8,000), who
try to buy a house in a housing
market that is past the point of
overheating.

In fact, a kind of economic

Greenhouse Effect has hit real
estate around Toronto. That’s
what I would call the point beyond
which things get too hot and life
begins to smother.

Imagine taking on a $250,000
mortgage two years ago, and hav-
ing to renew it today. Obviously,
the real victims are the people who
were either tricked or forced by
harsh necessity into buying when
prices were inflated.

By mid-April, the tide had turn-
ed in. Toronto. For the first time,
published figures showed house
prices being cut. Of course the cuts
were just a few percentage points,
real estate agents hastened to say.
But ‘Pace could see them packing
their b

The ‘banks had been jacking up
mortgage rates for months, and
everyone knew a Tory hard-times
budget was coming. The squeeze
simply got to be too much, even
for desperate people.

One of the big questions in all
this is why are banks allowed to
give out mortgages to people who
can’t possibly renew them nex.
time around? If you’re looking for
someone to blame for rising house
prices, look no further than your
friendly neighborhood Canadian
megabank.

As prices slip in Toronto, they
rise in Vancouver. As West Coast
property owners, my wife and I
cannot help feeling slightly smug.
After listening to Torontonians
bragging about their worth for so
long, we get to do the boasting.

There is little joy in it, however.
We have kids. As the prices rise,
their chances of owning their own
place some day diminishes accord-
ingly. Maybe it has always been
thus. But if there was ever a Great
Canadian Dream, I’m sure it was

the single-family dwelling.
Mortgage rates being at a five-
year high have obviously not

’ dampered Vancouver’s market,

where house prices rose 45 per cent
in 1988. This is still lower than the
rate in 1980, when the last boom
was rolling, and the increase was
68 per cent.

Pity the poor souls buying into
Vancouver now. Pity the poor
souls trying to seli in Toronto. Pity
the kids trying to buy anywhere a
couple of decades from now.

Give the Vancouver market
another year of heating up before

greenhousing.

There is a certain pathos, of
course, to the situation in Toronto.
Despite our warnings, hardiy any-
body except for a few sensible
sharks sold while they could. What
I don’t think they realized was that
just because it’s huge doesn’t mean
the market can’t react in-
stantaneously.

The instant it turns, it turns
completely. The whole kit and
kaboodle. If you’re not out a mo-
ment before it turns, you're stuck
there with everyone else until the
entire real estate cycle goes
through its minimum seven-year
swing.

The rise of house prices in Van-
couver, as I’m sure we all know, is
almost exactly on schedule. They
last collapsed in 1981.

They'll collapse again soon
enough, after a brief period of in-
candescence. And a lot of people,
as usual, will get burned. In-
evitably, it will be the people who
can least afford it.

Still, | have to say — low ievel
as this may be — it is rather fun to
study the expression on the faces
of homeowners in Toronto as the
gold mine begins to run dry. A lit-
tle bit of Wester: citchiness, you
know @

‘What is‘it worth to you?

Your house is more than a home,
it’s an investment in the future. —

For a brighter future,
call:
“ DIANE ABOUD

645-9517
or 984-9711

MAHON PARK —SATURDAY, MAY 6

liam-2pm
PRIZES
1. Child and dog — most laps 14” colored TV
2. Child and dog — most money 10 speed bike

3. Child and best dressed dog Ski pass, Zoom Camera
4. Sony Walkmans for 3 next best dressed dogs

5. Adult male and dog — most laps watch
6. Adult female and dog — most laps crystal bowl
Other prizes for largest dog, smallest dog, most obedient dog, noisiest
dog, with the waggiest tail, fluffiest dog, dog with most spots, most
unusual dog

Refreshments — goody bag — balloons for all participants
Proceeds to Variety Club Telethon

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