Hunting For Value Through Jungles Of Inflation

House hunting ain’t what it used to be. Not even compared to, like, two years ago. Back then I was looking to buy a place with my Dad, his wife and my brother. We looked for several months, got an idea of the market, put in a few offers and finally ended up with something that satisfied our needs. Prices were creeping up, as they had been for months, maybe a bit faster than usual, but not in an unsustainable, anxiety-inducing way.

Today we see a vastly different market. Prices in the last two years have escalated by leaps and bounds, leading many to speculate on the possibility of a housing bubble that’s about to burst. I’m not even gonna touch that here.

A main reason for this surge in housing prices seems to be foreign investment, particularly from mainland Chinese. The Greater Vancouver Area has been hit the worst—about a third of Vancouver properties have increased in price by more than 50% since 2010, with some having doubled—but the Greater Toronto Area is also feeling the pressure. As foreigners introduce their bags of money into local housing markets, prices inflate to unaffordable levels, thus leaving domestic buyers out in the cold (in some cases, literally).

What’s worse, many of these foreign buyers hide the true extent of their back-home earnings from Canadian tax authorities in order to minimize the taxes they pay; or they brazenly dodge tax payments altogether. Compounding the problem, Canadian real estate law allows foreign buyers to register homes in their spouse or child(ren)’s name as a primary residence rather than as investment property; so when they sell the house, they pay no capital gains taxes. Yet many of these dwellings are obvious investment properties, bought to serve exclusively as rentals. Praveena’s colleague spoke of a neighbourhood house that was empty seemingly forever, until the day a busload of Asian girls in school uniforms was unloaded in its driveway—either a party or a sorority house (which really is just a long-term party house). At any rate, countless houses sit empty for weeks or months as junk mail piles up and lawns overgrow, basically becoming neighbourhood eyesores. But we’ve gotten way off topic. I just needed to vent, because the likelihood that these foreigners are engaging in illegal activities infuriates me. They’re cheating us out of 1) precious federal and provincial tax revenues, and 2) affordable housing. Some estimates put the consequent overvaluation of Canadian homes at twenty percent in relation to long-term economic growth. But of course there’s nothing we decent, home-buying Canadians can do about it. Yet what of this proposed 15% tax on foreign-purchased Canadian real estate, you ask? It may be a nice gesture; but in reality, what will it actually inhibit? Fifteen percent seems like a drop in the bucket for rich Chinese (any racist undertones are completely unintentional).

Anyway, if all that’s not a big (and frustrating) enough obstacle to overcome, Praveena and I are looking in a rather specific area, simply because she can’t live far from her work. And if you think the prices in Toronto are inflated, in Vaughan/Maple they verge on spirit crushing. Based on the houses we’ve seen, the expectation seems to be that buyers will pay a lot to get a little. Not so long ago—five years ago? Ten? Certainly in the period leading up to the 2008 financial meltdown—a $700,000 house was plenty big and impressive for its cost. Today the same-priced house is old, small and shabby. To put things in perspective, a buddy of mine bought a new house in Maple eleven years ago for $325,000 and sold four years ago for $600,000. Nice little profit, yes? But two years ago his neighbour sold for a million. Granted, the neighbour’s house was noticeably bigger. Still, my buddy wishes he’d held on a couple more years.

If you crave that million-dollar house you’ve always dreamed of, you’re in for a surprise. Today, a million bucks doesn’t get you much. The house may be nice and shiny and even modern, but chances are, it’s not a value buy. Too small or too old or too isolated or too something. Is there value to be found? Possibly, but finding it requires diligence and patience. And probably luck. Many of the houses we’ve seen in the last few weeks were listed in the eight-to-nine hundred thousand dollar range. But when we went to see the place, the listing agent revealed that the sellers were looking for a million-plus. Value-wise, they probably were eight-to-nine hundred thousand dollar houses. Yet the strategy is to low-ball the listing price to get people to come and see the property, and from there the hope is for all-out (bidding) war.

Yes, house-hunters, be warned: bidding wars are everywhere. Many buyers have probably lost out on several previous bidding attempts. So they panic, worrying they won’t get the place they really want, or any place, without grossly overbidding. You never know when you’re competing against wealthy Chinese.

Real estate agents don’t help the situation. They come across as pleasant and helpful, with their price-raising optimism and friendly suggestions. They all have their own ideal features in a house. Some want the walkout basement, others the corner lot. Finished basement! Spacious backyard! Great neighbourhood! In an agent’s eyes, any of these elements turns a house into a must-have, especially compared to the rest of the market shite. Make no mistake, though: while these agents may altruistically seem to have your best interests in mind, their goal is to maximize the value of the properties they are selling. Sure, they’ll warn against emotional bidding or bully bidding, but secretly they love anything that fattens that good ol’ price.

House hunting has always been a source of stress. Now, though, the competition—faceless foreigners with apparently bottomless pockets—seems downright intimidating. But all isn’t necessarily lost. Be firm with your desires and demands. Do your research. Check homes in the area and their selling prices. Have a budget. (A pre-approved mortgage helps.) And keep shopping, shopping, shopping, in hopes of finding that special bargain everyone else seems to have missed. It’s basically the shopaholic’s credo put to use on the biggest purchase you’ll ever make. Most important, remember that no matter what the agent says, no matter what the cost of the house, it’s you who decides whether you’re getting value in return for the asking price. It’s you, ultimately, deciding whether to fork over your hard-earned money.

Hopefully you find what you’re looking for. It will require patience. We’re patient, and we’re hopeful. 

Medical Emergency

Ever been caught in a subway delay? It’s one thing to be waiting for the next train—which seemingly can take an eternity, depending on the severity of the reason for the delay—and another thing entirely to be at the delay’s epicenter.

Delays are usually grouped into one of three categories: a security situation, mechanical malfunction or medical emergency. Mechanical failures are probably the most common and least interesting, while security situations are likely least common and most interesting. It could be a fire or a crime or—an increasingly worrisome possibility today—terrorism, which is like a crime on steroids.

Medical emergencies fall somewhere in between. The overhead announcement never specifies what the medical emergency is, so one is always left to wonder, and one always does. It’s the equivalent of mental rubbernecking. Is it a heart attack, or a seizure, or maybe someone just suddenly collapsed while reading their Metro newspaper or that Trebas Institute poster? Heck, on more than one occasion I’ve found out after the fact that the reason for the delay was a jumper. Yes, an attempted suicide. Grim, perhaps, but apparently not important, at least not to those stuck in the delay. Imagine all those folks stranded in the station—or worse, between stations—grumbling about the wait, that they have to be somewhere; and all the while, somewhere up ahead someone is suffering indescribable pain, perhaps clinging to life. Such inconvenience!

Anyway, I’d never been at the epicenter of a subway delay, until today. On my way home from work I arrived at York Mills station and descended to the subway platform, only to discover the subway in a holding pattern. No one getting on or off, TTC personnel attending to a passenger in the first car, mere steps from me. Without properly assessing the situation, I’d tried to get on that first car, and one of the TTC guys pleasantly but firmly motioned me to stay off the train. Well, I thought, isn’t this inconvenient. All I could see through the subway window was an older woman in some apparent distress, and someone else standing beside her, rubbing her (the older woman’s) head. An overhead announcement declared that the Line 1 northbound subway would be delayed at York Mills Station due to a medical emergency, and that shuttle buses were being deployed.

While debating whether to wait it out or head above ground and try to catch a shuttle bus, I saw paramedics wheel an empty stretcher onto the subway car. That’s when I noticed all the people that had gathered to stare at the situation on the train. People were getting off the subway and coming up to the front car to gather round the window. Others were simply moving forward on the train to get a better vantage point. Even people from the southbound side of the platform were wandering over to watch. Typical of this voyeuristic society, eh? Everyone at home watching their TV’s and computer screens, and now they're happy to watch another spectacle here at York Mills station. I’m surprised I saw no one whip out a phone and start filming. Doesn’t mean no one did.

It didn’t take the paramedics long to get the passenger onto the stretcher. I saw a couple cops who’d obviously showed up out of nowhere, doing crowd control on the train. The mass of passengers continued to crowd forward to catch a glimpse of the passenger in distress, their eyes like tongues licking every last bit of salty sauce from the dish.

Presently, the paramedics wheeled the sick passenger off the train. I saw her lolling on the stretcher. Her arm fell out of the strap. Her eyes were rolled back and glazed a thick milky colour. Had she suffered a stroke? To me, she looked dead. I work in a hospital, so I see this stuff every day. To me, it wasn’t some neat novelty or some crazy, cool thing to stop and stare at. If the person was indeed dead, it seemed to be an expected kind of dead, since the accompanying person maintained a calm demeanour and showed no visible distress. Perhaps she was a care worker.

Once the stretcher had left the scene, the crowd on the platform immediately surged back onto the train. I shrugged and followed. Moments later came an announcement overhead that the delay at York Mills station had been resolved. Business returned to normal. It was as though nothing had happened.

Back on the subway, I noticed the abandoned, personal mobility scooter on the other side of the car. The paramedics had obviously removed the sick passenger from it and left it behind, an eerie reminder of the suddenness of tragedy for all the remaining passengers to see. Before the subway doors closed, a TTC employee got on the train. As we left York Mills station, he stood, swaying with the rest of us. Perhaps he was there to accompany the empty scooter.

At Sheppard station, someone leaned through the open door and asked, What happened? What was the delay? The TTC employee said in accented English, Someone had accident, maybe heart attack. Before the doors closed, the inquisitive person—who didn’t get on the train—nodded and said, Oohhhh, as though a great mystery had been solved. And that would’ve been the end of it for everyone, except for the empty scooter that swayed with the rest of us.

Tragedy can be so personal yet so impersonal at the same time. It always seems to happen to someone else, except when it doesn’t. And that someone else is usually out of sight and out of mind, except when she’s right in front of you. What’s perhaps most disturbing is that, no matter its cause, the tragedy in question grossly inconveniences everyone involved. Of course there’s the victim. But don’t forget the victim’s unseen, fellow subway passengers, who feel even more inconvenienced, because they’re forced to wait for the situation to be resolved.

The interesting thing, though, is that the closer one is to the tragedy’s epicenter, the less that time seems to drag. Why? Because we at the epicenter have an opportunity to gawk, to try to get a good look at the unfolding scene, to lap up all the details of this novelty, this spectacle, this terrible thing happening to someone else, to someone else’s family member or friend or lover. Or maybe we gawkers are simply wondering with muted fright if this is what our own personal tragedy might one day look like.

For what it’s worth, I hope the passenger in distress is all right.