“Now,” says Rosanna, after plucking a flyer from her mailbox, “I have seen it all.
“This is taking it to the next level, putting doubt in people’s minds, and praying on the fear that our kids will never own real estate. This whole thing is going to end badly.”
And if it does, Felix Laurent will have a special seat on the GTA market jetliner that comes in for a landing so hard half the area’s middle class is blown up. Yes, welcome to Condos for Kids.
If you’ve nothing better to do Tuesday night, head up to the Montecassino Banquet Hall in Woodbridge and see Felix in action. (By the way, this is the place made famous by former, fallen, mayor Rob Ford who nailed a city agency for handing over $47,715 of taxpayers’ money to finance a Christmas party for 760 guests featuring a chocolate fountain and deluxe antipasto bar. No strippers, though.)
The point of the evening? FOMO. Oodles of it. And the latest marketing twist to engender more Fear of Missing Out in a real estate market living on borrowed time is… children. Shameless. Blatant. I mean, how could you ever look your four-year-old in the eye, knowing you’d failed to plunk down a deposit to buy her a 400-square-foot concrete box with a 400-series highway view in the wastelands north of the Big Smoke? Dig out that chequebook. It’s what good dads do.
“How will our kids ever afford to buy a home when they grow up? With the price of Real Estate continuing to rise, parents know that their children will definitely need help purchasing their home one day,” says Felix’s new company, Realtrz. “How expensive will that be for parents later on? Will there be enough money to help all of our kids and still retire comfortably? What can easily be done today to make your family financially more comfortable in the years to come?”
Turns out, Felix is an interesting guy. An American (natch) he came to the GTA via Montreal and launched into a glasses-selling career. Twenty years ago he opened an optician business in Toronto, which he owns. Which is a good thing, given this venture. Felix says he was a house flipper in Quebec, then became a GTA realtor a dozen years ago, first with Re/Max, then Royal LePage. “Now,” he self-describes, “happy to do for others what he grew up doing, and the Felix family has always done… make money and secure our futures with smart real estate.”
How smart is it buy a pre-build condo for your toddler?
Hard to say. About 30,000 units will change hands in the GTA this year, and the average price seems to have stalled out over the past six months at about $415,000. Of course, condos also come with ongoing overhead disproportionate to their cost – monthly fees that are lumped on top of property taxes and financing charges, plus special assessments which are the black swans waiting to swoon down on the owners of so many glass-walled towers across the metropolitan area.
Meanwhile the entire marketplace is changing. Wild Bill Morneau’s mortgage shoot-up, announced October 3rd, has brought a new stress test to the market while reducing the pool of buyers eligible for critical mortgage insurance. Now with Trump set to assume the US presidency, the odds of an interest rate increase have increased to 88% for next month, and top 80% for one or two more hikes in 2017. For the first time yesterday, markets posted positive odds for a Bank of Canada rate increase next year. Meanwhile bond yields have been surging, and the expectation is that the new American administration will be mildly to wildly inflationary in its policies. So, yup, the bottom for rates is in the rear view mirror.
Will all this make condos more expensive, forcing them out of reach of your house horny pre-schooler?
Nah. Actually the opposite. But that does not stop Realtrz from pitching: “Discover how investors are using priceless advice… to buy real estate for their children in the current market.”
By the way, Tuesday night’s big event in the hinterland is the first of a planned series – in Mississauga (January), Richmond Hill (March) and the Kingdom of 416 in the Spring. The whole region is about to feel Felix FOMO just about the time market fundamentals shift – and not for the better. It’s worth remembering what happened in Vancouver, of course, where a single tax affecting only 9% of buyers was enough to crash sales by up to 90% in key neighbourhoods. The fear of missing out that realtors had worked so hard to ingrain into people (buy now or Chinese dudes will snatch all the houses) was erased in mere weeks. Real estate’s like that. It channels emotion.
And what engenders emotion more than children?
Well, dogs, of course. But Bandit already has a detached.