Depending on how you assess the couple’s finances, the fact that they are on the hook for two condos might scare the heck out of Jim Flaherty, or put a smile on his face. Flaherty has been worried about overheated real estate markets and ballooning household debt for years, which is why he tightened mortgage insurance rules effective July, 2012.
Demian and Jalilpour put a fat 20% down on the Richmond Hill condo, and they’ve put 5% down on the Cinema Tower unit. That’s a total of almost $100,000. How did they get the money? The old-fashioned way: They saved it. They both stayed at home with their parents during college, and they watch expenses carefully. “It taught us a lot of discipline—budget, budget, budget,” says Demian.
For the moment, they aren’t too worried about owning two units. Their monthly mortgage payments downtown are $1,900, but payments on the Richmond Hill unit won’t start until the close date. The couple don’t think they’ll have trouble selling it by then. As for the Cinema Tower unit, they figure it will at least hold its value, even if the market cools. “There are a lot of young professionals like us moving downtown,” says Jalilpour.
In the meantime, they’ll keep watching expenses. “We’re looking at buying a bed, an L-shaped couch and a big-screen TV, and that’s it,” says Demian. There won’t be room for much else.
Edna Manlangit, 59, and Rue Quizon, 25
Like a lot of big North American cities, Toronto has many 1950s and 1960s suburbs filled with modest-sized houses sitting on big lots. But as the city has sprawled past them, those houses have become far too expensive for middle-class buyers. Yet many of those buyers would be happy with apartments in those neighbourhoods, especially if they are near transit, stores and other services. The simple supply-and-demand solution is density—let a developer tear down a block or two and build high-rises.
Of the condo projects shooting up in midtown Toronto, one of the biggest and most architecturally startling is NY Towers. Six spired 28- and 20-storey towers (named Chrysler, Waldorf and so on) are surrounded by several low-rises. Daniels didn’t design the development, but when the original builder ran into trouble early on, in 1999, Cohen saw several positives. One was that he thought he could realize economies of scale. Another was an upscale shopping mall across the street. And a station on the proposed Sheppard subway line was scheduled to open near the site in 2002. Many people scoffed at that extension as a white elephant. But a decade later, it’s doing its job—attracting more housing and businesses.
The downtowner’s cliché of the suburbs is that they’re parochial and white-bread. But people like Manlangit and her daughter, Quizon, belie that notion. Manlangit, born in the Philippines, has worked all over the world, in recent years in procurement at the U.S. consulate in Toronto. After spending most of the past eight years in Ottawa studying and working on Parliament Hill, Quizon now works, like her mother, in downtown Toronto. Both mother and daughter travel widely on vacation.
For all that urban worldliness, Manlangit and Quizon both liked their apartment in Richmond Hill—it was quiet, and next to a supermarket and a commuter rail and bus station. But in recent years, it was taking far too long to get downtown.
NY Towers looked attractive to Manlangit, but she didn’t have the down payment for the unit she wanted. So she enrolled in a Daniels rent-to-own program, and moved into a one-bedroom-plus-den unit. The program gave her credits that could be allocated toward a down payment. This past May, she bought a one-bedroom unit with a den for $330,000. She put down $50,000, of which $8,000 came from the rent-to-own credits; she borrowed $25,000 from her RSP.
The biggest attraction? “It’s in the middle of everything: cinemas, shopping malls—it’s all very accessible,” says
Manlangit. She and Quizon think the unit will hold its value. The neighbourhood is desirable, and Toronto is becoming “a world city,” says Quizon. Prices at some new downtown developments near her office are nearly double what they are at NY Towers. “Who can afford to live there?”
Jason Keddy, 40
Families go through stages—marriage, children, divorce, illness. Sometimes those changes compel people to move into, or stay in, an expensive city. Is there a way to lower their costs?
Keddy found himself in a squeeze in the summer of 2012. He’s used to wheeling and dealing—he’s bought and sold six houses since the mid-1990s. He’d bought a house in Mississauga in 2010, but then sold it in early 2012, figuring it would be easy to afford the next one. The sale was due to close that July, but he was blindsided on June 21 by Jim Flaherty’s announcement tightening federal mortgage rules. Prices took off. “The market went crazy,” he says. “Houses would go up for sale one day and be sold the next.”