When it is in the newspaper then it is usually too late.

 -----Original Message-----
From: 	Dorland, Dan  
Sent:	Wednesday, December 12, 2001 9:34 AM
To:	Dorland, Chris
Subject:	Read Bold: Toronto real estate seen as solid value 


Dec. 12, 01:00 EDT Toronto real estate seen as solid value 
15% to 20% increase in equity expected over next 10 years
Tony Wong
business reporter
	
Worried about what your home will be worth 10 years from now if you buy it today? 
After deducting inflation, the average Toronto home should be worth anywhere from 15 per cent to 20 per cent more over the next decade, says a study released yesterday. 
Resale values for a Toronto home should do better than the national average, with a solid - although unspectacular - gain in equity, once inflation is factored in. That conclusion comes from research by real estate analysts Clayton Research Associates Ltd. in conjunction with ReMax Ontario-Atlantic Canada and ReMax of Western Canada. "Toronto will remain the rock of Gibraltar, showing decent, steady gains over the next decade," says Pamela Alexander, chief executive of ReMax Ontario-Atlantic Canada. 
Given that capital gains on a principal home are not taxable, that means an average gain in equity to the Toronto homeowner of 1.5 to 2 per cent every year over the next decade. That might be nothing to do cartwheels over, but it's a relatively comfortable return considering the meltdown in the equity markets. Across Canada, the average home is expected to increase by about 13 per cent in 10 years. 
"I've always said real estate is investment for dummies. You pay your mortgage, have someplace to live and you own a home in 25 years. It's not spectacular stuff, but you do come out ahead," says Alexander. 
That was not the case in the previous decade, however. From 1991 to 2001, home prices increased by only 9 per cent, from an average of $234,313 in 1991, to a forecasted $255,000 by the end of this year. If you factor in inflation, you'd be getting a negative return on your investment. 
However, Clayton Research says the next decade will be different than the last, primarily because: 
Demand for home ownership will remain elevated due to the low vacancy rates in Toronto rental accommodation. 
About half of Canada's international migration is destined for Toronto, which will boost population growth and first-time buyer demand. 
While the present economic slowdown is taking a toll on the Toronto economy, the medium-term outlook for Toronto is favourable. 
Canada-wide, the number of households is expected to expand by another 1.5 million over the next 10 years. 
While homes in Toronto, Ottawa and Kitchener-Waterloo are expected to post gains of 15 per cent to 20 per cent over the next decade, Calgary is forecast to lead the country in terms of appreciating housing values of between 20 per cent and 25 per cent. 
Clayton Research says the most significant event driving the housing market will continue to be demographic. The post-war generation born between 1946 and 1966 is moving into prime homeownership years. 
The youngest members of the group are 35 years old and will be 45 in 2011. According to census figures, people older than 45 are about 15 per cent more likely to own a home than people between 35 and 45. They are also set to inherit considerable wealth from their parents, a factor expected to affect their housing choices. 
On the other end of the market, the 20 to 35 age group is also expected to see a significant upswing, which means more people buying starter homes. Despite the lust we see for condominiums today, the study says that single detached homes will be the most popular dwelling of choice. 
"The traditional single detached home will be in strongest demand over the coming decade" representing 60 per cent of net new households. Condominiums and apartments will still see healthy demand.