Monday, November 19, 2007
Florida Shines a Light on Toronto
I recently bid on a nearly condemned property that would have needed over $100k in renovations to make it a viable rental property or a nice house for someone. It was priced a little low so I bid $37k above asking price. The winning bid was $87k above the asking price. This scenario is playing out in every category of real estate and in almost every neighbourhood in Toronto. People are being paid $2,000 to stand in line so their benefactors could be the first to buy $10M condos.
Despite all of this many experts will tell you that Toronto is still a bargain on a world scale. We used to have a bit of an inferiority complex and dreamt of being compared to other world class cities. People around the globe are finally starting to see Toronto in precisely those terms. The ultra rich of the world, especially those from less politically stable environments are finding that they will not find a more open, safe and tolerant city anywhere else in the world and they're buying property here to hedge their bets in case they need to relocate.
Several ultra luxury condos are being built in town and they're selling for record prices. But when you put it in the category of so-called world class cities then there is still a lot of room to go up in value. So despite all the market turmoil in the US, New York City is not suffering price declines. While Florida properties are selling at deep discounts in the US another kind of Florida is moving to Toronto.
Richard Florida is the world authority on how the Creative Class help make a successful and livable city. His books have sold in the millions while he taught at Carnegie Mellon. But now Richard Florida has relocated here to teach at the University of Toronto. Florida will be heading The Prosperity Institute at the Rotman School of Management as well as working with the MaRS Discovery District which is another group that will have a hand in bringing global attention to the innovations going on in this city.
I know a lot of people who used to dream about moving to New York that no longer do so. They are starting to see that we've got something cooking right here at home. It's no accident that Toronto has the highest Facebook penetration of any city in the world. The people here are the most socially integrated people on Earth and this collaborative approach will be priceless in the future. Real estate trends are just the tip of the iceberg. People will pay more to live where everybody else wants to live. What this means for affordable housing is another matter altogether.