Toronto Real Estate and Neighbourhoods Blog | Move Smartly

Best Toronto Schools 2012 (Realosophy Top Ten Neighbourhoods)

Urmi Desai in  Top Ten Neighbourhoods, Home Buying, Toronto Neighbourhoods

It's school time at Realosophy Analytics! Our month-long feature looks at the special relationship between real estate and schools.

Today's post looks at the top elementary schools in Toronto as measured by the province's latest standardized EQAO scores.

While it's tempting to tape this school list to your goal wall/fridge/dreams and "make it so",  it's important to remember that EQAO scores only tell us so much about school quality. For one, standardized testing results tend to favour advantaged socioeconomic groups, which can make the results more about 'who' attends than 'what' is being taught.

Educators also stress that some school strengths - like special curriculums or educational philosophies - fall outside testing parameters. But interestingly, specialty schools are a strong presence on our list. This is likely due to admissions requirements (e.g., for arts schools) and smaller class sizes.

Realosophy Workshop

Many of you have been in touch with specific real estate and schools questions - and we have lots more data and information to share. Sign up for our "Schools for Home Buyers" workshop on Sat Feb 25th (limited seating, first come first served). As part of the workshop, you'll receive a free Neighbourhood Match report which lists out the best Toronto neighbourhoods for your needs. Sign up below (scroll down to the end of this post).

The Data

• Overall score (in the bright yellow circle) represents an average of the six EQAO tests written by students in 2010-11 (reading, writing and math at the Gr. 3 and Gr. 6 levels)
• Covers all Toronto public schools (Note: some schools are too small to report EQAO results and are excluded)
• 3 Year EQAO Increase represents an average of percentage points change from 2007-08 for all tests
• Average house prices for the neighbourhood in 2011
• 3 Year increase in house prices from 2008 to 2011

Next Up: Best Toronto Schools for Math

 

1. Claude Watson School for the Arts
	Neighbourhood: Willowdale Grades: 1-8 Enrollment: 325 Address: 130 Doris Avenue Average EQAO Test Score: 100% 3 Year EQAO Score Improvement: 4% Average House Price: $488,344 3 Year Increase in House Prices: 30%
Browse detailed school scores and demographic data for Claude Watson

 

What’s Driving Toronto Real Estate Prices Up? The School Factor

Urmi Desai in Top Ten Neighbourhoods, Toronto Neighbourhoods, Home Buying

It’s time to get schooled!

We’ve updated www.realosophy.com with the latest 2011 EQAO data for over 1,800 GTA schools and the Realosophy Analytics team have taken a long, hard look at the data. Over the next few weeks, we'll be reporting on the symbiotic relationship that is Toronto real estate and Toronto schools.

Today, we’ll start with an overview of some key trends.

Move Over Starbucks

Look behind the crazy bidding wars in Toronto’s hottest neighbourhoods and you’ll find a lot of good schools. It’s not new that parents are anxious to give their kids the best start in life. (I’m reminded of the advice of a Richmond Hill high school principal once gave to my dad: “Frankly, Mr. Desai, if your kid’s smart, they’ll do great anywhere. If they’re not, well, that’s another story.”) But it’s an anxiety that’s only gotten stronger – or at least become more acted upon – thanks to the introduction of standardized testing at Ontario schools in 1995 and the reporting of results on the internet, a mini baby boom in Toronto and a growing sense that our children will be wrestling out their futures in a highly globalized bear pit of competition. Today, many home buyers with children focus their home search exclusively on school quality.

Forget about the Starbucks effect - it’s all about the school effect.

Toronto Schools are Getting Better

The good news is that our data shows that Toronto schools are improving under all this scrutiny. Compared to three years ago, there are 45% more elementary schools scoring an average of 80% or greater (this is an average of results obtained in the six different EQAO tests elementary school students write - reading, writing and math at the Gr. 3 and Gr. 6 levels). In November, a cross-Canada study carried out by Education Ministers showed that Ontario alone had students placing above the national average in all three examined subjects – reading, math and science.

Monday Morning Interest Rate Update (January 30, 2012)

David Larock in Mortgages and Finance, Home Buying

Last week’s big news was the U.S. Federal Reserve’s announcement on Wednesday that “economic conditions - including low rates of resource utilization and a subdued outlook for inflation over the medium run - are likely to warrant exceptionally low levels for the federal-funds rate at least through late 2014”.

Point of Clarification: The U.S. federal-funds rate, also called the policy rate, is the U.S. equivalent to the overnight rate of the Bank of Canada’s (BoC). It is the floor rate on which all U.S. short-term interest rates are based.   

This announcement extended the U.S. Fed’s previous target for the beginning of short-term rate hikes by another year and a half, and while it is still unusual for the U.S. Fed to make its views on the future direction of interest rates so transparent, the announcement didn’t come as a total shock to the market. After all, the U.S. Fed has now had a 0% policy rate for three years and has tripled the size of its balance sheet over that period. At the same time, the U.S. federal government has been pumping radical levels of stimulus into the economy, while running annual deficits that have averaged a colossal 10% of the nation’s GDP. Despite all of these measures, U.S. GDP growth has been anemic at best, and the country now looks mired in a classic liquidity trap (a phenomenon I first wrote about in the summer of 2010).

So what does this mean for Canadian mortgage rates? If the Fed stays on hold until late 2014, it is unlikely that the Bank of Canada will raise rates much beyond current levels between now and then. While BoC Governor Mark Carney has insisted that Canadian monetary policy is not entirely beholden to U.S. monetary policy, how could it not be substantially affected when higher Canadian interest rates will drive the loonie above par with the greenback and raise the cost of everything we sell to the U.S.? The higher the loonie soars, the greater the impact on our export-led businesses, which sell 80% of what they produce to U.S. buyers. This reduction in export-led growth would cause our economy to slow and exert downward pressure on rates.

Mr. Carney has said that Canadian rates can be theoretically sustained at levels as much as 2% higher than U.S. rates (we are about 1% higher today), but just because he wants the world to believe that is true doesn’t make it so. Think of the relationship between Canadian and U.S. interest rates as an elastic band - the harder the band is stretched by the difference in our rates, the harder other forces like our exchange rate pull it back in the other direction.

Five-year government of Canada bond yields were down 9 basis points this week, closing at 1.31% on Friday. As predicted in last week’s Update, the run up in yields that we saw the previous week was short lived. When you take the long view, the fundamentals for ultra-low Canadian bond yields are still well entrenched. A few lenders raised rates early last week, but most held firm, and rock-bottom promotional rates are still widely available.  

Variable-rate mortgage holders with deeply discounted rates should again raise a glass to Chairman Bernanke and the U.S. Fed. If the rate of Canadian household-debt growth reverses its recent slowing trend and starts re-accelerating, continued low rates in the U.S. make it far more likely that it will be Mr. Flaherty making more changes to our mortgage rules, rather than Mr. Carney raising the BoC’s overnight rate.

The bottom line: The U.S. Fed’s announcement has confirmed what I have written in this space many times; both the global and U.S. recoveries are going to take much longer than many (but not all) experts have been predicting and our fixed and variable-mortgage rates will stay low until the world looks very different than it does today.

(For a more detailed explanation of what I mean when I say that, check out my Winter Quarterly Mortgage Market Update which, coincidentally, was posted on the same day that the Fed offered its new guidance.)

David Larock is an independent mortgage planner and industry insider specializing in helping clients purchase, refinance or renew their mortgages. David's posts appear weekly on this blog (movesmartly.com) and on his own blog integratedmortgageplanners.com/blog). Email Dave

5 Questions for...a Frustrated Home Buyer Blogger (FML Listings)

Urmi Desai in 5 Questions, Home Buying

The blogosphere has been abuzz about “FML Listings” an anonymous blog launched by a frustrated Toronto home buyer. FML’s MO is as simple as it is addictive: post a not-so-hot house with a whopping price tag listed on realtor.ca and add raw commentary. See for example, this post about a $739,000 house at Jane and Finch:

Does this mean that not only can I not afford to live where I want in North York because of the million dollar bungalows, and I for sure can’t live in my first choice of mid-town, I can barely live in Leslieville because of crazy bidding wars, but now I can’t even buy a reasonably priced home at JANE AND FINCH?!?!  Is this what it feels like to hit bottom?

It’s like the Globe and Mail’s celebrity caption guy for houses. It’s also a tonic for those tired of hearing (and experiencing) that a house is worth what the market (i.e., the next buyer) decides it is.

FML and spouse own a home in Richmond Hill, but after being underwhelmed by suburban life, decided to move to Toronto to be closer to family, friends and work. That was three years ago. The search continues.

***

Urmi Desai: Why did you start blogging about the real estate situation in Toronto?

FML Listings: After seeing so many ridiculous listings, I started to think maybe I was the only one who was wrongly thinking they were insanely overpriced. But then I saw one that just put me over the edge. I posted it to Facebook, and I got a lot of feedback that I didn't expect. Firstly, it made me realize that it wasn't just me who thinks that a million dollar bungalow is out of whack, but more importantly that not many people were actually aware of the situation that was going on with some of the listings around the city. I started finding more and more of these listings, each one worse than the next, which drove me to start the blog so I could show at least a few other people what was really going on in this city. It's really disheartening to go into an open house priced at $600,000 that you know is worth $400,000 and you're sure it's not going to sell, but then the open house is packed with people and it ends up turning into a bidding war situation. So to be able to have this outlet where I see feedback from people actually agreeing that it is ridiculous, it has validated the years that I've spent watching the market, being stressed out, wondering "who's buying these?!”

UD: What do you think is driving the house feeding frenzy in Yonge St. neighbourhoods in North Toronto?

Toronto Real Estate Roundup January 27th 2012

John Pasalis in Real Estate Roundup   

Real Estate Bubble Talk

It's great to see the mainstream media stick to what sells papers this week.

Canadian Business, Macleans and the Globe and Mail all jumped on the real estate bubble band wagon (again) this week.  Unfortunately I can't say that any of the articles were very insightful.  Most were filled with "what if" type analysis.  What if Europe collapses, what if China slows down, what if 50,000 households default on their mortgage at the same time if house prices drop by 25%. 

The one argument worth mentioning here is the increase we are seeing in household debt. There has been a lot of talk about the fact that debt-to-income ratios in Canada are at an all time high, above 150%.  But I often wonder wonder how economists adjust what a normal debt-to-income level should be as financial products change.  For example, from 2006 to 2011 the federal government increased the maximum amortizion for mortgages from 25 years to 40 years.  

To understand what this change meant, an average household that qualified for a $450K mortgage with a 25 year amortization would quality to borrow $550K with a 40 year mortgage.  That means most home owners could now qualify to take on 22% more debt than they could with a 25 year mortgage.  

Furthermore, Canadian Home Income Plan (CHIP) reverse mortgages have grown in popularity over the past ten years.  Reverse mortgages allow seniors to use the equity in their home as income during their retirement.  These financial products could very well explain why a recent CIBC report concluded that baby boomers are driving the increase in household debt we are seeing.  

Rising debt-to-income levels are a function of the financial vehicles the federal governemnt and banks make available to consumers.  As the CIBC report points out "there’s simply no magic number for the average debt-to-income ratio that automatically spells trouble".

Prediction: The Canadian housing market will crash (Canadian Business)

Connect the housing bubble dots: There could be trouble on CMHC’s horizon (Globe and Mail)

What happens when Canada’s housing bubble pops? (Macleans)

Really, an increase in household debt isn’t all bad (Globe and Mail)

Punch Drunk (CIBC)

 

Other Real Estate News

Ritz-Carlton five-star condos proving a tough sell (Toronto Star)

Realtysellers gets green light for lawsuit (Globe and Mail)

Canadian home prices dip for first time since fall, 2010 (Globe and Mail)

Canadian home prices slide for first time in a year (Financial Post)

Canada House Prices: Vancouver Second Least-Affordable City, International Study Says (Huffington Post)

Rob Carrick's tips for investing in real estate (Globe and Mail)

For Chinese buyers, ‘hongza’ rings death knell for property prices (Toronto Star)

Think Toronto's real estate is expensive? You're right—and it might be the Greenbelt's fault (Open File)

New towers leave empty space in iconic buildings (Globe and Mail)

As Toronto condos shrink, space grows precious (Globe and Mail)

Toronto’s toughest real estate markets? Jane and Finch, and the Bridle Path (Toronto Star)

The new-home market is shifting into high gear (Toronto Star)

MLS regions: Hot or cold? (Toronto Star)

Real-estate board warns of appliance thefts (CBC)

$8.3M condo breaks real estate history in Calgary (National Post)

Real estate may do an encore (Financial Post)

Real estate: Investing in the U.S. (Globe and Mail)

Toronto’s tiny cube house gets six offers – and a buyer with two children (Toronto Star)

Dr. Doom reveals what lies ahead and where he’s stashing his money (Globe and Mail)

 

John Pasalis is the President and Broker-Owner of Realosophy Realty Inc. Brokerage in Toronto. A leader in real estate analytics and pro-consumer advice, Realosophy helps clients buy or sell a home the right way.

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Winter Mortgage Market Update (2012)

David Larock in Mortgages and Finance, Home Buying

This quarter’s Mortgage Market Update is a good news/bad news story.
 
I’m an optimist at heart so let’s start with the good news. Barring a global and systemic financial meltdown, our mortgage rates will probably stay at their current rock-bottom levels for an extended period of anywhere from one to five years.

The bad news is that these ultra-low rates will be the by-product of a massive global deleveraging process, which will be as necessary as it will be painful to the world’s most indebted economies. While Canada will not be at the epicentre of this debt purge and while we are somewhat uniquely positioned to endure the coming downturn (more on that later), we will not be immune from the negative effects that deleveraging will have on global economic growth.

Monday Morning Interest Rate Update (January 23, 2012)

David Larock in Mortgages and Finance, Home Buying

The Bank of Canada (BoC) left its overnight rate unchanged at 1.00% last week, and also released its latest quarterly Monetary Policy Report (MPR). The MPR tells us where the BoC thinks inflation is headed and offers the Bank’s perspective on where the greatest risks to the Canadian economy lie. Regular readers of the MPR can also compare the latest report to previous versions to gauge where the BoC’s views have changed at the margin.

For example, the BoC’s latest report said that “several significant upside and down risks are present” and that “the outlook for the global economy has deteriorated and uncertainty has increased”. This implies that the BoC sees greater volatility on the horizon and a broader range of possible outcomes ahead.  The latest report predicted that “the recession in Europe would be deeper and longer than the Bank had anticipated in October” and also said that “the Bank expects the U.S. recovery will proceed at a more modest pace going forward”. Despite this, the Bank said that it now expects the Canadian economy to return to full capacity in the third quarter of 2013, which is a quarter sooner than its previous forecast.

This begs the question. If the BoC is more negative on the prospects of both Europe and the U.S., why does it also think that our economy will return to full capacity more quickly than previously expected? The BoC’s answer is that “very favourable financing conditions are expected to buttress con­sumer spending and housing activity… and the ratio of household debt to income is projected to rise further”.

When one considers how outspoken  BoC Governor Mark Carney has been about the risks that rising debt levels pose to our economy, it was surprising to see the Bank predicting that a continued rise in our household debt levels will act as an effective counterbalance to stronger headwinds from oversees. But back to the earlier point about the broadening range of possible outcomes, the report goes on to say that our high debt levels “could lead to a sharper-than-expected deceleration in household spending”.

Five-year Government of Canada bond yields spiked at the end of last week, closing at 1.40% on Friday and finishing 14 basis points higher overall. It’s interesting that this happened at the same time that lenders finally started dropping their fixed-mortgage rates – a change that was long overdue given that gross-spread levels have been well above normal for some time (even when new lending costs are factored in). If yields continue to surge, the recent fixed-rate drops will be short lived, but I haven’t seen any obvious catalyst to suggest that this will be the case.

Variable-rate mortgage holders got some good news from the latest Consumer Price Index (CPI) released by Statistics Canada on Friday. The CPI dropped from 2.9% to 2.3% and core CPI (which excludes more volatile inputs like food and energy) also fell from 2.1% to 1.9%.  The core number was below the BoC’s projection of 2.2% for Q4, 2011 and is now below the BoC’s long-term target rate of 2%. This latest round of CPI data means that the BoC can continue to take its time before raising rates, and it also vindicates the Bank’s decision last year not to raise rates when higher food and energy prices caused inflation to temporarily accelerate.   

The bottom line: To paraphrase my key take-away from the BoC’s latest MPR, rising household debt levels are expected to provide the fuel needed to drive our economy through tougher times ahead, as long as no one lights a match.

David Larock is an independent mortgage planner and industry insider specializing in helping clients purchase, refinance or renew their mortgages. David's posts appear weekly on this blog (movesmartly.com) and on his own blog integratedmortgageplanners.com/blog). Email Dave

Toronto Real Estate Roundup January 20th 2011

 

Housing appears set for soft landing. But not Vancouver? (Globe and Mail)

Flaherty keeping wary eye on housing market (Globe and Mail)

Canada’s cities score poorly on economic rankings (Globe and Mail)

A January state of mind (Globe and Mail)

Moderate growth eases concern of crash in housing market (Globe and Mail)

Housing market shows signs of slowdown (CBC)

Bouncing back from recession, Toronto leads Canada’s growth (Globe and Mail)

Toronto house prices dip slightly in December (Toronto Star)

CIBC: T.O. tops in economic growth (Canadian Real Estate Magazine)

New office towers have changed the face of Toronto (Toronto Star)

Buy now to get an unheard-of rate for a 10-year mortgage (Globe and Mail)

Scotiabank considers selling Toronto tower (CBC)

More community consultation for controversial High Park Condo (Inside Toronto)

Nouriel Roubini Purchases $5.5 Million Condo in East Village of Manhattan (Bloomberg)

 

Toronto House Prices up 8.5% mid January 2012

The Toronto Real Estate Board's press release is below.

Greater Toronto REALTORS® reported 1,506 sales through the TorontoMLS® system during the first two weeks of January 2012. This result represented a six per cent increase compared to the first 14 days of January 2011. New listings were also up on a year-over-year basis, but by a lesser 3.7 per cent.

“The market didn’t miss a beat after the holiday season, with robust sales growth continuing and sellers’ market conditions remaining in place. Strong competition between buyers continued to push the average selling price higher in the Greater Toronto Area relative to a year ago,” said Toronto Real Estate Board (TREB) President Richard Silver.

The average selling price during the first two weeks of 2012 was $444,473 – up by more than 8.5 per cent compared to the same period in 2011.

“Prices were up for most major home categories in the GTA in comparison to last year. The strongest price growth was for single-detached homes in the City of Toronto. The average price of singles in the 416 area code was up by 22 per cent year-over-year, pointing to a greater weighting of higher end detached homes changing hands compared to the same time last year,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.



Monday Morning Interest Rate Update (January 16, 2012)

David Larock in Mortgages and Finance, Home Buying

The European Central Bank (ECB) made a bet in December that if they offered unlimited three-year loans to liquidity-starved European banks, those banks would then support ailing euro governments by buying up their bonds and creating enough demand to bring their spiraling bond yields down from the stratosphere. Specifically, they extended more than US$600 billion worth of these loans to 500 banks at a rate of 1% and hoped that the banks would use some of that money to buy-up sovereign debt with yields of 5% or more, locking in a handsome spread for their troubles.

The move was a controversial one, and it was a game changer. Consider that the ECB’s average loan duration was 10 weeks before the huge December auction and has now been blown out to 21 months; the ECB’s mandate has clearly shifted from providing short-term liquidity to acting as Europe’s lender-of-last-resort. Many of Europe’s more conservative stakeholders said that the ECB was doing an end run around treaties that were specifically designed to limit the central bank’s ability to buy sovereign debt. Meanwhile, market watchers questioned whether the banks would respond as expected, predicting that they would use the emergency loans to shore up their shaky balance sheets instead.

Over the short-term at least, the ECB’s big bet appears to be achieving the desired result. European bond yields were sharply lower last week and both Italy and Spain successfully issued new debt at significantly lower yields. That said, this encouraging trend was tempered by Friday’s news that Standard & Poor’s downgraded the credit ratings of nine European countries (most notably France) and by new data indicating that the German economy likely contracted in the last three months of 2011. Germany and France are supposed to act as counterbalances to Europe’s many struggling economies, so neither development is a trend in the right direction.    

Five-year Government of Canada (GoC) bond yields were basically flat last week, closing at 1.26% on Friday as investors continued to seek out safe-haven investments which are becoming harder to find at the same time that demand for them continues to grow. While steadily falling GoC bond yields have substantially increased our lenders’ profit margins over the past several months, fixed-mortgage rate drops have been slow in coming – until now.

Last week the Bank of Montreal announced a short-term promotion offering a five-year fixed-rate mortgage at 2.99% (the lowest five-year fixed rate ever offered by a major Canadian lender). The product comes with several restrictions, and the promotion is being offered for only two weeks, but it caught the market’s attention and other lenders have finally begun to lower various fixed rates in response. Let’s hope this trend continues – we have been saying that fixed rates have been due for a decrease for some time now.

Variable-rate mortgage discounts are holding steady, but with prime minus 0.20% among the best variable rates available, most borrowers are opting for the safety of the five-year fixed, especially now that the spread between fixed and variable is well under 0.5%.

The bottom line: The ECB had to take a more active role to help pull Europe back from the brink, and their loans have provided some welcome short-term relief to European bond markets. But a crisis caused by excessive credit isn’t likely to be solved by issuing more debt, even at dirt-cheap rates. This was like adding a few more decks to a wobbling house of cards. While Europe’s financial system is now relatively more stable, it is still fundamentally flawed, and the only real elixir, economic growth, remains in short supply.

David Larock is an independent mortgage planner and industry insider specializing in helping clients purchase, refinance or renew their mortgages. David's posts appear weekly on this blog (movesmartly.com) and on his own blog integratedmortgageplanners.com/blog). Email Dave