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Toronto housing prices force buyers to think creatively

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The housing market ended 2016 with Toronto as an epicenter of rising prices. An average detached home in the city cost $1.3-million in December, high enough to keep a lot of buyers out of the market unless they think creatively.

The options include tiny houses, home sharing, moving to the distant suburbs and even renting. Or, as suggested in this video on The Beaverton's satirical website, you can look at homes that were the site of a grisly murder. HGTV personality Bryan Baeumler plays along by talking up a new show called Crime Scene Interiors.

Call it extreme satire for an extreme housing market. Prices for detached homes in the entire Toronto market were up an incredible 23.1 per cent on a year-over-year basis in December, even as markets in many parts of the country started to cool off. The latest surge in the city's real estate market has caught the attention of longtime housing bear Garth Turner. In his latest blog post, he wonders if we're seeing the last gasp of the housing rally.

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By the way, there really is a website where you can check whether a crime has been committed at a house. I mentioned it in a newsletter last May – it's called Housecreep.

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Ask Rob
The question: "I am a First Nation person who has RRSP deductions at work. We can max at 5 per cent and the company will match it. There are no tax savings on RRSPs due to the fact that I am a Status Indian. Should I max my RRSP savings at work?"

My reply: For help on this one, I turned to Martin LeClair, vice-president at the pension consulting firm Proteus.

An edited version of his reply: "Yes you should max your RRSP since you get the matching [employer] contribution. This is a 100-per-cent return on every monthly contribution. Not bad. Also, the employer-sponsored group RRSP is likely to have access to lower fees. This is the second benefit. Since tax is of no consideration here, it means that this employee will have access to the money free of tax at any point in time. This is why maximizing the amount that goes into the RRSP is essential."

Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length.

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About the Author
Personal Finance Columnist

Rob Carrick has been writing about personal finance, business and economics for close to 20 years. He joined The Globe and Mail in late 1996 as an investment reporter and has been personal finance columnist since November 1998. Rob's personal finance columns appear in The Globe on Tuesday and Thursday, and his Portfolio Strategy column for investors appears on Saturday. More


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