It’s time to make a pact: no more avocado toast.

And that’s just the first step to saving up enough dough to purchase a home in Toronto.

According to new data from Zoocasa, buying a house in Toronto is only accessible to those within the top 10% income group, as the city’s houses have a benchmark price of $873,100.

Toronto is the second-priciest Canadian city to dwell on the list. Vancouver buyers must be within the top 2.5% tier to buy a home, with the city’s benchmark of $1,441,000, sourced from the Canadian Real Estate Association and local real estate boards.

The study calculated the minimum income required to qualify for a mortgage in the above 13 census metropolitan areas (CMAs) across Canada. The calculations assume a 20% down payment, 3.75% mortgage rate, and 30-year amortization.

Findings were then cross referenced with income tax filings as reported by Statistics Canada to determine which income group buyers must align with in order to be able to purchase.

Findings show that it’s not just home-prices that call for buyers to be in such spaces of income. Similar requirements apply for apartments and condos, too.

According to the study, those in Vancouver and Toronto must still have an income within the top 25% to swing respective prices of $656,900 and $522,300.

On the flip-side, the study highlighted the most affordable place in Canada to buy a home: The Prairies.

It’s noted that for those within the top 75% income group in Regina, affording a home is feasible with a benchmark property costs $275,900. Saskatoon and Winnipeg are both close behind; incomes in the top 50% can afford homes priced at $301,900 and $326,433, respectively.

And even apartment purchasers can enjoy greater affordability in those places, with units accessible to the top 75% income group at respective benchmark prices of $160,200, $170,800, and 227,538.

So on top of quitting your avocado toast habit, there’s something else to consider: moving to Regina.

above its rapidly changing urban centre.

There are 104 cranes set up in Toronto’s core, according to construction consultancy Rider Levett Bucknall’s latest Crane Index, which counts the presence of the lofty lifters in the 13 cities it has offices in around North America.

Not only was that up from 97 in July and the highest total recorded during the most recent January survey period, it was more than RLB tallied in America’s three biggest cities combined.

There were 28 cranes in New York, 44 in LA and 26 in Chicago. The closest city by crane count to Toronto was Seattle, where 59 cranes are perched. Construction in the tech-industry city that is home to Amazon’s headquarters has been steady of late, and RLB anticipates continued activity.

“[S]everal major projects are slated to start construction, including renovations to Key Arena and an addition to the Washington State Convention Center,” notes RLB in the index report.

While the index only tracks what are called tower cranes, which are bolted to a foundation, sometimes these are used for other big projects. “For example, a stadium might not be tall, however, it is a major project so it may require a tower crane,” Cathy Sewell, principal at RLB, tells Livabl in an email.

RLB attributes Toronto’s clustering of cranes to housing projects as well as mixed-use developments, which could include condo towers with retail or office components.

“Heading into 2019, increased infrastructure spending is anticipated to trigger additional activity, with more than 400 high-rise buildings on the docket for development,” the RLB report reads.

“We are seeing a trend, where the cranes installed in the Toronto Core, and losing ground by percentage compared to the number of cranes being erected outside the downtown core,” the report continues.

Calgary, the only other Canadian city covered in the index, is also seeing its crane total climb higher, reaching 33 at the beginning of this year. In July 2018 there were 26 cranes.

“Newly implemented standards governing urban density account for a jump in the crane count for Calgary, with high-rise multifamily projects making an impact on the skyline,” says RLB’s report.

Counting cranes is a good way to get a sense of market confidence, RLB previously told Livabl.

The chart below displays the total dollar volume invested and average price per unit on a quarterly basis for all apartment building transactions over $1M in the GTA. Total investment volume in 2018 reached a new high at $2.71B, outpacing 2017 volumes by 77%. Investment volume in the second half of 2018 reached a combined total of $1.87B – more than double the amount of dollar investment than the first half of 2018, 94% higher than the last two quarters of 2017 and over three times the amount of investment seen in Q3-Q4 2016.

Q3 2018 saw investment levels hit $1.27B – the highest quarterly investment activity ever recorded by Altus Group for apartment buildings in the GTA. This marked a 126% upswing in investment volumes since the previous quarter and a 58% rise from the last recorded high of $801M, which occurred in Q1 2004.

After experiencing peaks in both Q1 2016 and Q2 2017, the average price per unit also reached another recorded high by Altus which occurred in Q3 2018, rising to $319,361 per unit.

The chart below displays the total dollar volume invested by region and the average capitalization rate for all apartment building transactions over $1M in the GTA. Metro Region experienced an extremely high volume of investment activity in 2018 at $2.3B, more than doubling the volume since 2017.

Investment in the Metro Region in the second half of 2018 was 169% higher than the last two quarters of 2017.

Investment in the third and fourth quarter of 2018 combined accounted for 85% of total investment activity in the region for the year. Durham Region experienced a significant increase in investment volume, up from $42M in 2017 to $231M in 2018.

After experiencing years of compression, the average cap rate for apartment buildings in the GTA drifted up by 22 basis points since 2017 to 3.98% in 2018.

On a sunny afternoon two years ago, as panic about the overheated housing market in Canada’s big cities was spreading, three key policy-makers hunkered down in Toronto to figure out what to do.

Federal Finance Minister Bill Morneau, Toronto Mayor John Tory and then-provincial finance minister Charles Sousa emerged with an acknowledgement that the housing market was indeed in a precarious state. They made a vow: they would try to take some action, but they would certainly not do anything that would make matters worse.

Morneau put a finer point on it. Government measures that would bolster the demand for housing were verboten. That’s because government helping out buyers would only drive prices up further, exacerbating the problem.

That vow hasn’t aged well, and now the federal government is thinking of jumping into the fray with budget measures on Tuesday to help young people to get into the housing market for the first time.

On the surface, there shouldn’t really be much of a public-policy problem any more. The housing market has cooled significantly in Toronto and Vancouver. Talk of a housing bubble wiping out homeowners’ wealth has quieted.

But to conclude that all is as it should be would be wrong.

In its most recent analysis of overheating in major cities across Canada, the Canada Mortgage and Housing Corp. (CMHC) concluded that there was a “high degree of overall vulnerability” at the national level, for the 10th quarter in a row. Vancouver, Victoria, Toronto and Hamilton are particularly susceptible.

More concerning — and this is where the federal budget comes in — is affordability. Real estate markets in the big cities may have backed away from the precipice, but prices are stabilizing at high levels. At the same time, the federal government has made it more difficult for homebuyers to qualify for a mortgage. And mortgage rates have risen.

At RBC, where economists have been measuring how affordable houses are at a national level and in big cities, its index is at the highest point since 1990. Put another way, homes are at their least-affordable point in almost 30 years. Average homeowners in Canada are putting 54 per cent of their family’s income towards carrying a house. In Vancouver, it’s 87 per cent. In Toronto, 75 per cent.

This means that moving to the big cities for a good job is unfathomable for many, unless they commute long distances or find substandard accommodation. There’s a growing concern that urban housing exacerbates income inequality, favouring those who already own homes in the cities to the detriment of newcomers, and to the detriment of companies hoping to hire new talent.

The federal Liberals believe the affordability problem is even worse for millennials, and point to recent research from CMHC that shows first-time homebuyers in the millennial age-bracket are stretched to the max. This group also happens to be fertile ground for Liberals looking for votes. Justin Trudeau’s victory in 2015 was thanks in part to new, young voters. And polling shows support among that demographic is still strong.

But the solutions are tricky, especially given the vow made two years ago to steer clear of bolstering the demand side of the equation.

The bubblelike conditions of Toronto and Vancouver are not yet a distant memory, and so policy-makers would want to avoid pushing markets in that direction so soon. And anything that would encourage homebuyers to take on debt is imprudent right now because the country’s dramatically high levels of household debt are probably Canada’s number one economic risk.

Canadian households now need much higher income to qualify to buy a home
Income required to cover the costs of owning an average home with a 25% down payment and clear the mortgage stress test, in thousands

However, pouring more federal money into building more homes — bolstering supply — is extremely expensive. The federal government has already earmarked $40-billion for housing over the next decade. Adding more, or speeding up its delivery, wouldn’t necessarily hit the specific demographics that the Liberals have in mind.

So the vow has been quietly revised, internally. Instead of “don’t touch demand,” it’s now “if you boost demand, you also have to boost supply.”

Some of the ideas have been around for a while: enhancing the ability of first-time homebuyers to use retirement savings for a down payment; or extending the length of time buyers can stretch out their mortgages.

There’s a new idea decision-makers are eyeing too: shared equity mortgages. Government would partner with certain first-time homebuyers in taking on a share — say 30 per cent — of a mortgage. When the time comes to sell the house, government would reap part of the reward, taking profits in proportion to its equity stake.

Unless, of course, there is no profit, and instead there’s a loss — posing a risk to the federal balance sheet. Given the political points to be gained, it’s a risk the Liberals may well be ready to take.

If you’ve ever nervously watched water drip from your apartment ceiling, or have nearly set your oven ablaze by neglecting a tray of chicken fingers, you’ve probably found comfort in your tenant’s insurance coverage. Homeownership is no different — something will inevitably burst, break or leak, and you’ll want the safety of home insurance for when accidents happen.

“Home insurance is always a good idea as it ensures all the things you value most are covered in case of a loss,” says belairdirect spokesperson, Jennifer Beck.

While home insurance isn’t mandatory by law in Canada, opting for coverage is one measure of defence against potential damages and unforeseen events — fire, severe storms, burglary and acts of God. Yet, as a new buyer, picking a home insurance policy is not like choosing other kinds of insurance; it’s a challenge to determine the exact coverage you’ll need for a home you’ve never lived in before.

“For home insurance, until you buy the property or put an offer in, you don’t necessarily know some of the issues — the age of the home, the wiring system, when the roof was last done,” says Pete Karageorgos, the Insurance Bureau of Canada’s Director of Consumer and Industry Relations for Ontario. “Those are all important factors that contribute to the final cost of insurance. In many cases you won’t know what those are until you’re buying.”

If you’re shopping around for your first home, here are a few tips to keep in mind when applying for your first insurance policy.

1. Even the broadest coverage will have some gaps. Know those gaps!
As with all contracts, it’s important to understand the terms of your coverage, right down to the nitty-gritty.

Insurance providers will offer a range of plans for you to choose from, starting from a basic no-frills policy with the least amount of coverage, up to comprehensive packages that cover all risks to your home and its contents. Home insurance will cover the expenses of damage, loss or theft to the inside and outside of your property, your possessions, and accommodation costs if you can’t return to your home right away. Insurance will also protect you from the expenses of damage or injury to others who are visiting your home, like if someone delivering a package slips and falls off of your porch.

Karageorgos explains that homebuyers need to read closely to understand what they’re covered for, especially if they opt for a named peril insurance policy — a plan that lists specific hazards or events that will exclusively receive coverage. Any potential hazard not listed on the policy could cost you.

“It’s unfortunate when someone does have a claim and realizes they didn’t have the right coverage,” says Karageorgos. “That’s why it’s important to understand the insurance coverages available, because some companies will offer optional insurance for those things, and consumers need to understand what the risks are.”

Karageorgos points to water damage as one of the main culprits for this. Canada has seen a rise in severe weather insurance claims, with insured damage reaching $1.9 billion nationwide in 2018, according to a report by Catastrophe Indices and Quantification Inc. Karageorgos finds that homeowners can overestimate the extent of their insurance. Even an all-risks policy, which provides the broadest coverage, might have conditions or only cover the most likely perils.

“Homeowners sometimes, especially new homeowners, take it for granted when they see that you’re covered for water damage and assume that water damage includes a whole list of things from burst pipes to flooding,” he says.

Karageorgos recommends talking with a home insurance professional to understand the depth of coverage you’ll receive for named policy perils.

2. Brush up on your history
An insurance provider takes several factors into account when determining your premium, which is the amount you’ll pay for the insurance. This will range from the characteristics of your home and neighbourhood, to your policy of choice. A provider will also factor in your deductible, which is the amount of your claim you’ll pay out first before your insurance company. The age of your home is one of the most important aspects to analyze, Karageorgos says, when it comes to insurance policies.

“The age of the property, the size of the property, how old the property is does make a difference because today’s building standards may be different,” he says. “From the insurance companies perspective, they may recognize that an older home may require greater costs to rebuild if it’s damaged by an event.”

Many policies provide coverage on a replacement cost basis, meaning they will either repair the existing item or replace it with a similar new item. In older homes, this is important as providers will need to consider old building and fixture standards compared to current ones. In some situations, Karageorgos says, insurance companies may have difficulty insuring older homes that don’t meet the structural demands of modern living, especially when it comes to electrical needs.

“There’s a lot more appliances, a lot more electronics in the home today,” he says. “They want to make sure the electrical system is appropriate for the type of use and appliances that homeowners are plugging in today.”

Karageorgos advises working with insurance professionals to determine the appropriate coverage for your home, especially if it was built prior to current codes.

3. Reno’d recently? Make sure you report it
If you’ve bought a fixer-upper or are planning to do some renovations down the road, you’ll need to keep your insurance provider in the loop.

“In the event the homeowner makes a change such as a renovation or installing a pool, they should inform their insurance provider to confirm they have the right coverage,” says Beck. “This will help ensure they always have the coverage they need and there are no surprises in the future.”

Karageorgos says that while insurance policies are typically reviewed annually, any major investment to your home is worth reporting. Otherwise, when you file your claim, your provider may only reimburse the old value of the item you’re making the claim on.

“If you increase the value of your home, you also need to let your insurance company know because that value that you originally bought the house for may be different now,” says Karageorgos.

This also applies to any added square footage in the home. If you’re building an addition, or finishing a basement, Karageorgos advises letting your insurance provider know that you’ll be needing coverage for these new areas too.

4. Cut costs, not corners
Homebuying isn’t cheap. Once you add up the lawyer’s fees, moving costs and land transfer taxes, you may feel like there’s little leftover. But Karageorgos warns not to skip over using professional services like realtors and home inspectors during the homebuying process just to save a few dollars.

“Sometimes we try and do things on our own, but it’s always best to seek out some professional advice, especially with protecting your most expensive asset, the most expensive thing you can buy, which is your home,” he says. “It’s beneficial to get some professional advice, to get the right coverages, to have someone you can ask questions to and get answers to as opposed to doing it yourself.”

Neglecting to get professional insight on the integrity of your home could backfire. When buying a resale property, a home inspection can uncover problematic construction, poor renovations or missing permits. By fully disclosing the conditions of a home to an insurance provider before filing a claim, a provider can make the best assessment for repairs and rebuilding.

“Insurance companies are obligated to rebuild something that is lawful and in good standing. It makes no sense for a homeowner to rebuild a property if you’re just going to have the municipality or local government deny you an occupancy permit because it wasn’t built to code,” says Karageorgos.

If you’re looking to save costs, Beck and Karageorgos recommend bundling your home insurance with other insurance policies, such as health and auto, under the same provider. In some cases, providers may offer you a discount for streamlining your plans together. Beck says you can also try opting for a higher deductible to lower your monthly payments.

The Bank of Canada for some time has been suggesting higher and higher interest rates are coming soon — until this week.

Economists are noting the central bank took on a dovish (read: less aggressive) tone at its March 6th policy meeting when it announced the overnight rate was being held at 1.75 percent.

“The Bank of Canada has finally pulled its head out of the sand and acknowledged that the deteriorating economy no longer justifies higher interest rates in the near term,” writes Stephen Brown, senior Canadian economist with Capital Economics, in a report.

The Canadian economy performed below expectations in the fourth quarter as the energy sector kept struggling.

As recently as at its January policy meeting, the central bank had been laying out plans for interest rates in the “neutral range” — considered to be between 2.5 and 3.5 percent — but now it is targeting rates “below” that range, albeit higher than at present.

“Although the Bank still expects its next move to be a rate rise, we think that it will end up cutting rates by the end of the year,” Brown continues in the Capital Economics report.

The central bank uses its overnight, or policy, rate to keep inflation in check, scheduling eight meetings a year to announce any changes.

Lower rates encourage borrowing and spending, and this demand typically inflates prices.

In a depressed economic environment, lower rates can stoke the flames while higher rates can keep an economy’s growth at a healthy level.

Faced with a more sluggish showing from the economy, the central bank may be more limited than previously thought in terms of its ability to continue to hike rates. Between summer 2017 and fall 2018, the bank increased the overnight rate five times.

In a separate response to today’s announcement, Benjamin Reitzes, BMO’s Canadian rates and macro strategist, also notes a softer approach from the Bank of Canada this time around.

“Following the lead of most of the world’s central bankers, the Bank of Canada continued to take a more dovish tone. It’s clear that while the hiking bias was left in, any potential move higher in rates is a long time away,” he writes.

While the general consensus among Canadian economists is not in line with Capital Economics’ prediction, it appears some observers are considering the possibility of a rate cut. “Indeed, any further deterioration in the backdrop will prompt discussion of rate cuts to heat up further,” Reitzes adds.

Urban Toronto reports on a new proposal submitted to the City at the end of February seeking rezoning and an Official Plan Amendment to permit an 8-storey development on Bayview Ave. south of Balliol St. The proposal by Gairloch Developments calls for the replacement of four existing buildings including two brick semi-detached homes numbered from 1408 to 1414. To the north of that two buildings numbered 1416 and 1420 are included. The new address for the condo would be 1410. The website notes a retail space of 98 m² proposed beside the lobby. It can be seen at the south end of the depiction above