300 square feet of parking, $10 high-speed rail to Toronto and a broken economy. This is the Marshall Report

Parking. It’s more than just 300 square feet

There was a story last week about a condo developer in Waterloo applying to the city for a variance for parking. The city said, “No”. A compromise was reached a few days later.

There is a condo on Victoria Street that is going to have parking issues – the issue being there aren’t enough spaces for the number of units. It’s “festival parking”. Oh yeah, that’s going to work.

A parking pace takes up 300 square feet. But it’s not just 300 square feet beside or under where you live, if you drive a car, it’s also 300 square feet at work, at the grocery store, when you go out for dinner and at your kid’s school. Wherever you go, you’re going to need a parking space.

As Kitchener Waterloo quickly becomes a city, we should look at big, world class (European) cities and learn how to live without our cars.

 

The world according to Garth

The economy is broken.

Too many people are employed in construction and businesses related to building more buildings. Heck, there are too many Realtors, one for every 250 Canadians over the age of 18. According to Garth, 26% of the economy is directly related to building, selling or financing real estate.

Construction is great for the economy, hiring and purchasing is local, there are lots and lots of well paid jobs. Materials and supplies are local too. More money starts slushing through the economy. From construction, it trickles down to local businesses. People make those local purchases, they go out for lunch, they splash it around lavishly. Fun times.

Of course if you read Garth Turner you know that the good times cannot last. It is going to go bad and when it does it is going to be apocalyptic. The bubble is going to pop, everyone is going to get thrown out of work, interest rates are going to double, then triple. We’ll all be riding the rails.

I wonder for how many days these pundits have been predicting the big crash. 1000 days? 2000 days? Since the year 2000? I don’t know. I do know (or think I know) that our economy is out of whack, and that housing prices are crazy high. But I don’t think prices are ready to drop 20% over night. That sort of thinking leads to great headlines and new stories.

 

High-speed rail to Toronto for $10

Within a decade (maybe) we will have a high-speed rail link from Kitchener through Pearson Airport into downtown Toronto. Hotdog. I don’t know how many times I’ve made that trip to Pearson.

I was in China twice last year. I rode the Maglev from the Shanghai Airport into downtown. I rode high-speed trains 300 kilometres an hour through three provinces. From Shanghai to Beijing, a trip that used to take a day on an overnight train, takes just over six hours now. China is doing it right and Canada is playing catch up, but at least now we are talking about it.

 

Blame it on the rain

Amidst reports of real estate running off the rail, prices going through the roof, mass hysteria amongst realtors, home buyers and sellers (not to mention condo developers), our local and sometimes beloved ol’ Waterloo Region Record headlines their statistics story “Home sales heat up after a tepid spring”.

Tepid eh?

I like to measure my year against what the media is reporting. I like to be ahead but sometimes I’m behind. But then I remind myself that real estate is local. It matters not to me if sale volume is up in Moosejaw, prices down in Antigonish. It only matters in KW (frankly I don’t even care about Cambridge much). So this story doesn’t have much relevance.

The Record reports that Canadian home sales, after a sluggish start due to a friggen’ cold winter and lousy spring, June made up the difference In a BIG way.

What’s happing is that people were late to list, demand built up and it will take till the end of the year for this jumbo economic juggernaut to come in for it’s scheduled soft landing.

Forget about Calgary and Toronto. They are going to keep on flying high.

What do the economist and other experts have to say?

1. “It is a tad concerning that prices are running firmly ahead of income growth in a few major cities.” Robert Kavcic, senior economist, BMO

2. “Affordability, even at low interest rates, is already becoming an obstacle in many markets – particularly Toronto.” Diana Petramala, economist, TD

3. “Later this year and into next, we expect higher interest rates to erode affordability more broadly.” Robert Hogue, senior economist, RBC

4. “Existing home prices (average and on a quality adjusted basis) are on track to outstrip income growth for a second straight year in 2014, which only adds to concerns of an already overpriced market” Diana Petramala, economist, TD

5. “Canada’s housing market arguably has more downside than upside risk over the medium term.” Adrienne Warren, senior economist, Scotiabank

6.“Toronto might be getting too hot for its own good.” Robert Kavcic, senior economist, BMO

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