Rechercher dans la communauté

Cooling housing market exposed to crash Prices, demand drop after record growth Alia McMullen, Financial Post; Canwest News Service Published: Friday, August 08, 2008 Edmonton's housing market is estimated to be more than 10 per cent overvalued.Ed Kaiser, The Journal, FileEdmonton's housing market is estimated to be more than 10 per cent overvalued. TORONTO - A big decline in commodity prices could spell disaster for Canada's housing market, which already appears to have entered a "sustained downturn," David Wolf, an economist at Merrill Lynch Canada, warned on Thursday. He said while the risk of a housing market crash was small, an "outright bust" in commodity prices would make the scenario "a rather more serious threat." The recent trickle of data has shown a significant slowdown in the country's housing market, following its record pace of growth. Demand has eased, supply continues to creep up, credit conditions remain tight, and house-price growth has turned flat, with declines in some regions. The value of building permits in June fell a seasonally adjusted 5.3 per cent from the previous month, indicating that construction activity in the coming months would likely be lower, Statistics Canada figures showed Thursday. The data is notoriously volatile, but the trend rate of growth for residential building has declined since the beginning of the year. "Canada's housing market is entering a sustained downturn, in our view," Wolf said. "It does look like Canadian houses finally got too expensive, and builders too aggressive, for the underlying demand environment." He estimated that markets with the strongest price growth in recent years, such as Regina, Saskatoon, Vancouver, Victoria, Calgary, Edmonton, Sudbury, and Montreal, were all more than 10 per cent overvalued. On a national basis, Wolf predicts house price growth to remain flat. Merrill Lynch expects commodity prices to moderate over the medium term, a scenario that would aid in the housing market downturn but not cause an outright bust. Others, such as CIBC, have a more bullish forecast for commodities, namely oil, expecting prices to continue to rise. This would continue to support Canada's terms of trade by bringing in higher export revenue relative to the amount spent on imports. But Wolf said the risk of a housing crash would become "a serious threat" if the recent correction in commodities continued because it could cause the terms of trade to deteriorate. The price of light crude has fallen about 18 per cent since peaking at a record high of $147.27 US a barrel on July 11 continued. Light crude for September delivery settled at $120.02 US a barrel in New York on Thursday. "The takeoff in commodity prices since 2002 has driven an enormous improvement in Canada's terms of trade, accounting for much of the strong growth in Canadian national income that has, in turn, provided the fundamental underpinning for the housing market boom," Wolf said. A Bank of Canada working paper by senior analyst Hajime Tomura released earlier this year argued that a decline in the terms of trade would likely cause house prices to fall. It said that "if households are uncertain about the duration of an improvement in the terms of trade, then house prices will abruptly drop when the terms of trade stop improving."

Housing market seen following commodities Value of building permits drops. Homes in Montreal, elsewhere overvalued by 10%, Merrill Lynch economist says ALIA MCMULLEN, Canwest News Service Published: 8 hours ago An outright decline in commodity prices could spell disaster for Canada's housing market, which already appears to have entered a "sustained downturn," David Wolf, an economist at Merrill Lynch Canada, warned yesterday. He said while the risk of a housing market crash was small, an "outright bust" in commodity prices would make the scenario "a rather more serious threat." The recent trickle of data has shown a significant slowdown in the country's housing market, following its record pace of growth. Demand has eased, supply continues to creep up, credit conditions remain tight, and house-price growth has turned flat with declines in some regions. The value of building permits in June fell a seasonally adjusted 5.3 per cent from the previous month, indicating that construction activity in the coming months probably will be lower, Statistics Canada figures showed yesterday. The data is notoriously volatile, but the trend rate of growth for residential building has declined since the beginning of the year. "Canada's housing market is entering a sustained downturn, in our view," Wolf said. "It does look like Canadian houses finally got too expensive, and builders too aggressive, for the underlying demand environment." He estimated that markets with the strongest price growth in recent years, such as Regina, Saskatoon, Vancouver, Victoria, Calgary, Edmonton, Sudbury, Ont., and Montreal, were all more than 10 per cent overvalued. On a national basis, Wolf predicts house price growth to remain flat. Merrill Lynch expects commodity prices to moderate over the medium term, a scenario that would aid in the housing market downturn but not cause an outright bust. Others, such as the CIBC, have a more bullish forecast for commodities, namely oil, expecting prices to continue to rise. This would continue to support Canada's terms of trade by bringing in higher export revenue relative to the amount spent on imports. But Wolf said the risk of a housing crash would become "a serious threat" if the recent correction in commodities continued because it could cause the terms of trade to deteriorate. The price of light crude has fallen about 18 per cent since peaking at a record high of $147.27 U.S. a barrel on July 11. Light crude for September delivery settled at $120.02 U.S. a barrel in New York yesterday. "The takeoff in commodity prices since 2002 has driven an enormous improvement in Canada's terms of trade, accounting for much of the strong growth in Canadian national income that has, in turn, provided the fundamental underpinning for the housing market boom," Wolf said. A Bank of Canada working paper by senior analyst Hajime Tomura earlier this year argued that a decline in the terms of trade would likely cause house prices to fall. It said "if households are uncertain about the duration of an improvement in the terms of trade, then house prices will abruptly drop when the terms of trade stop improving."

Construction slowdown looms VIRGINIA GALT Globe and Mail Update August 7, 2008 at 6:22 PM EDT The head of construction powerhouse EllisDon said Thursday he is “very wary and very concerned” about where the Canadian economy is going. “I am worried right across the country that things are tightening up and that a year from now we are going to see a drop-off,” Geoff Smith, the company's president and chief executive officer said in an interview after Statistics Canada reported that the total value of building permits fell 5.3 per cent in June to $6.3-billion. Economists had projected a decline in the value of building permits issued in June, but not of the magnitude that Statistics Canada reported. The consensus had been for a 1 per cent drop Mr. Smith expressed concern for the construction industry as a whole Thursday, although EllisDon has not yet experienced a drop in demand for the heavy construction in which it specializes. “Over the short term, we [at EllisDon] are still seeing a reasonably healthy market. A lot of that is in public sector work and infrastructure rebuilding work,” he said. “But I certainly understand that once you get outside of that space, the big hospital and infrastructure spending, that things are quite tight in the industry,” Mr. Smith said. Statscan reported Thursday that the slowdown in the residential sector resulted in a month-to-month decline of 4.4 per cent to $3.6-billion in June. And in the non-residential sector, the value of permits decreased by 6.6 per cent to $2.8-billion, due to declines in industrial and commercial building intentions, Statscan reported. Mr. Smith said major commercial and industrial customers are being “more careful” about committing to new projects. However, the outlook is not nearly as bleak as in the 1990s, “where things just dried up very dramatically,” he said. The market is cooling, but new projects are still being planned, added Sandy McNair, president of Toronto-based Altus InSite, which conducts market research for governments, lenders, building managers and the heavy construction industry. “No-one's gone crazy and thinking they are going to start 30 new buildings tomorrow. But on the other hand, there is no sense that the sky is falling and our world is about to end either,” Mr. McNair said. Toronto-Dominion Bank economist Millan Mulraine said in a research note that the decline in the value of building permits was broad-based – and “on a city-by-city comparison, the report was fairly ugly.” The value of permits issued in Montreal was down 12.1 per cent, in Calgary down 15.2 per cent, in Vancouver down 13.4 per cent and in Saskatoon down 16.7 per cent, Mr. Mulraine wrote, adding that the overall value of building permits is now 9.1 per cent lower than in the corresponding period last year. Merrill Lynch economist David Wolf said in an economic report Thursday that Canada's housing market is entering a “sustained downturn” and he expects Canadian home builders to pull back “substantially” in response. Bank of Montreal economists had expected June building permits to decline 3.1 per cent, “as the housing market continues to cool and non-residential intentions retrace part of the prior month's massive gain,” the bank said in a research note. The steepest decline occurred in Ontario, where the value of building permits was down 7.9 per cent to $2.3-billion, due mainly to a 15.8 per cent decline in plans for non-residential buildings, Statscan said. The decline in Ontario's residential sector was 1.7 per cent. Alberta posted a 7.5 per cent decline, due to a 19.6 per cent drop in the residential sector. British Columbia and New Brunswick also experienced declines in both the residential and non-residential sectors, Statscan said. “In contrast, intentions rose 3.5 per cent in Quebec, with gains in both the residential and non-residential sectors.” Overall, there was a slight increase in the value of permits issued for single-family residences – up 1.8 per cent to $2.3-billion. But there was a sharp drop in the value of permits issued for multiple-family dwellings. “Municipalities issued $1.3-billion worth of permits for multi-family housing in June, down 13.8 per cent, a second consecutive monthly decrease. Most of these declines occurred in Ontario and Alberta,” Statscan said. “It is now becoming clear that the Canadian housing market is continuing to cool, as the level of activity moderates to more sustainable levels,” the TD Bank said in its research note. “And we expected this correction to continue at a measured and orderly pace.” Mr. McNair said the month-to-month data on non-residential building activity tends to be “lumpy” because these tend to be larger projects “and the decisions don't get made evenly spread out across the 12 months of the year.” There is “a reasonable level of activity going on across the country” right now, he said. “Edmonton has never had more construction activity in 20 years in terms of office building activity. Calgary is extremely active as well. Toronto has a healthy level of construction activity going on right now. Ottawa, even Montreal, have a healthy level of activity under way,” Mr. McNair said. “They have got their permits and they are building them out.” Mr. McNair said the residential sector appears to be stable as well, although construction activity is moderating from the rapid pace of the past few years. “It [residential] is moderating, but it's not going over a cliff the way it has in the United States,” he said. Comme si c`était surprenant que Montreal aille bien..... Globe and mail cr**

Calgary population surge shows signs of slowing DAWN WALTON From Tuesday's Globe and Mail July 22, 2008 at 4:17 AM EDT CALGARY — Calgary's stunning population growth continues, according to the city's latest census, but boomtown is starting to show signs of a slowdown. Fewer people are pulling up stakes to move to the country's oil and gas capital, and the city's housing frenzy, which saw unprecedented bidding wars and zero vacancy rates, is a thing of the past, according to figures released yesterday. But with the addition of 22,950 new residents in the 12 months preceding April of 2008, bringing the city's population to 1,042,892, it's too early to say the boom is going bust. "Calgary still remains the trendsetter in the nation in terms of not only population growth, but those who are moving to our city," Calgary Mayor Dave Bronconnier told reporters yesterday. Affordable housing is finally easier to find in Calgary, as supply starts to catch up with demand. Chris Bolin for The Globe and Mail Enlarge Image Affordable housing is finally easier to find in Calgary, as supply starts to catch up with demand. (Chris Bolin for The Globe and Mail) The Globe and Mail The 2.3-per-cent population increase was fuelled by the birth of about 27 babies each day and about 34 people moving here daily. The pace is still slightly higher than the 10-year average, but 2007-08 marked the second consecutive year population growth did not amount to what the mayor called a "phenomenal" year in 2005-06, when the city added 35,681 new residents. In 2006, the city surpassed one million residents, two years earlier than projected. But as more and more people were lured to Calgary amid an acute labour shortage, newcomers arrived to find apartments converted to condominiums and home prices out of reach for many first-time buyers. Calgary's latest census figures show that affordable housing is finally easier to find. "[The market] couldn't maintain the frantic and hectic pace through 2008," said Gerry Baxter, executive director of the Calgary Apartment Association. "The whole housing industry had gone crazy." According to the census, the city's vacancy rate increased to more than 2.2 per cent in April, 2008, up from almost 1.5 per cent 12 months earlier. Meanwhile, the number of housing units - both existing residences and those under construction - jumped to 432,997 from 420,311. "After such a record growth in the last few years, you're finally starting to see supply catch up with demand," Mr. Bronconnier said. Still, Calgary's population growth continues at the fringes of the city where new suburbs are being built. The city faces about $7.5-billion to keep up with infrastructure demands over the next decade. "I think growth is a good thing in a lot of ways as opposed to a bad thing," said David Watson, the city's general manager for planning, assessment and development, "The challenge is of course the farther out you go there's more and more requirements for infrastructure." http://www.theglobeandmail.com/servlet/story/RTGAM.20080722.wcalgary22/BNStory/National/home

Calgary's homeless population balloons As thousands of migrants have poured into Calgary, housing costs spiralled out of the range for many of those at the lower end of the income spectrum.Dean Bicknell/Canwest News ServiceAs thousands of migrants have poured into Calgary, housing costs spiralled out of the range for many of those at the lower end of the income spectrum. Canwest News Service Published: Wednesday, July 16, 2008 CALGARY -- Calgary's homeless population has reached more than 4,000 - an increase of 18.2% since 2006, according to this year's homeless count. As of May 14, there were 4,060 homeless people in Calgary. Officials cannot explain it but the rate of homeless families jumped dramatically to 197 from 145 in 2006 -- an increase of 36%. Calgary in many ways has been a victim of its own success. As thousands of migrants poured into the city over the past number of years, housing costs spiralled out of the range for many of those at the lower end of the income spectrum. Alberta does not have any traditional rent controls. The average rent for a two-bedroom unit in Calgary is now $1,100. Many of Calgary's homeless are employed - as many as 60% staying at the downtown Mustard Seed Street Ministry, said operations manager Floyd Perras. Mike Nault, 40, who hails from Winnipeg, said he has been living on Calgary's streets with his girlfriend, Debbie Reid, for eight months. "The stress level of being on the street is just phenomenal," said Mr. Nault, who regularly works temporary construction jobs. Ms. Reid said she drinks up to two dozen beers a day because it is "depressing" being homeless. "You turn to self-medication." Civic and business leaders have come up with a 10-year plan to end homelessness. The province has followed up with tens of millions of dollars more for affordable housing and the creation of a Secretariat for Action on Homelessness. http://www.nationalpost.com/news/story.html?id=659002

Canada's housing boom is over, bank says VIRGINIA GALT Globe and Mail Update June 26, 2008 at 10:44 AM EDT After a long run of rapidly-rising prices, the Canadian housing market has cooled to the point that it is no longer a sellers' market, Toronto-Dominion Bank said Thursday. “The long-awaited end of the Canadian housing boom has occurred, reflecting more moderate demand and increased supply of properties for sale,” TD economists Craig Alexander and Pascal Gauthier said in a report. “The year-over-year price growth for existing homes in Canada's major markets fell to only 1.1 per cent in May, down from 8.6 per cent just four months earlier,” the TD economists wrote. “The trend has been broadly based, but is has been particularly sharp in some of the markets that had experienced the most dramatic price growth. Calgary and Edmonton home prices in April and May fell to below year-earlier levels.” The TD economists said they had expected the slowdown to occur before now, but “housing remained stronger for longer than we had anticipated, largely due to increased affordability through new financing options, such as no money down or extended amortization.” Regional economic strength related to the commodity boom also helped to fuel “unsustainably elevated home price growth in the west,” they wrote. Last month, the Canadian Real Estate Association reported that resale home listings across Canada rose by 17.7 per cent in April from a year earlier – pushing the number of home listings to the highest level on record. At the time, Bank of Montreal economist Douglas Porter noted: “For the first time in a long time, sellers are not in the drivers' seat any more. I'm not necessarily saying that buyers are in the drivers' seat either, but what we've seen truly is a return to a balanced market.” The TD economists concurred in their report Thursday. “Most of Canada's major housing markets have moved out of sellers' territory to more balanced markets.” Mr. Alexander and Mr. Gauthier forecast modest national average price growth of 2 per cent this year and 3.5 per cent in 2009, “down substantially from the 10 per cent annual pace of the last six years.” However, the Canadian housing market remains fundamentally strong, unlike the U.S. market, where the National Association of Realtors reported Thursday that median home prices continued to fall. The median price of an existing U.S. home sold in May was $208,600 (U.S), down 6.3 per cent from a year earlier – fallout from the subprime mortgage crisis. In Canada, the TD economists forecast an average existing home price of $313,300 (Canadian) in 2008, up 2 per cent from last year's average. Canadians, the TD economists said, are “cashing in, not foreclosing. “... It should be stressed that the rise in listings does not reflect homeowners of principal dwellings desperate to sell, and this is the dominant difference between the Canadian and U.S. experience,” they wrote in their report, Canada's Housing Boom Comes to an End. “Indeed, the U.S. has been characterized by an abnormal rise in delinquencies and foreclosures or large negative equity positions. In Canada, speculators may be quickly dumping properties on the market to get out while the times are good, but individuals that have a principal dwelling are not under financial duress. “Canadian consumers are nowhere nearly as leveraged through their home equity as American consumers are.” Throughout the rest of this year and 2009, most regional housing markets in Canada “will see low to mid single-digit gains, but Saskatchewan and Manitoba will continue to post double-digit gains in the near term, followed by a significant cooling in 2009 – with the risk of a mild price correction in the major cities that have recently experienced extraordinary price growth,” the TD economists said. “Alberta will have further weakness in the near term, as Calgary and Edmonton will likely see prices continue to fall for another three or four quarters, dropping 8 per cent to 10 per cent from their peak, after which prices should stabilize and start rising at a low single-digit pace.” http://www.reportonbusiness.com/servlet/story/RTGAM.20080626.whousing0626/BNStory/Business/home

Canada's housing market cools Home prices are still rising but much more slowly.Tyler Anderson/National PostHome prices are still rising but much more slowly. Resale price growth lowest in seven years Garry Marr, Financial Post Published: Friday, June 13, 2008 More On This Story TORONTO -- The Canadian real estate market is being flooded with homes, causing prices to start falling in some key markets, according to the Canadian Real Estate Association. The average price of a home sold last month in the country's top 25 markets was $337,071, an all-time record. But that record price was only up 1.1% from May, 2007 -- the smallest year-over-year increase in seven years. "The record number of new listings means more opportunities for buyers," said Gregory Klump. chief economist with CREA. "The resale housing market has evolved in just a few short months." CREA said there were 67,628 new units on the market in May, a 7% jump from last year. It was the second straight month that a record number of houses has gone on sale. The impact on prices is being felt most keenly in Alberta. The average price of a home sold in Calgary last month was $418,881, a 2.4% drop from a year ago. Edmonton sale prices averaged out at $340,499, down 4.8% from a year ago. Unit sales in both Alberta cities are also plummeting. Calgary homes sales were off 34.2% from a year ago while Edmonton sales were down 34.8% during the same period. The home sales are dropping across the country. CREA said on a national basis sales were off 16.9% in May from a year earlier.

The New York Times Printer Friendly Format Sponsored By June 8, 2008 Allez voir plus de photos sur le site: http://www.nytimes.com/2008/06/08/magazine/08mvrdv-t.html?_r=1&sq=montreal&st=nyt&oref=slogin&scp=1&pagewanted=all By DARCY FREY In the fall of 2002, a young Dutch architect named Winy Maas came to Yale to give a lecture on designing and building the 21st-century city, the challenges of which he illustrated by showing a 30-second video that could have been shot above any American metropolitan airport: a view of the tops of several buildings and then, as the camera rose, more and more buildings, more roads and bridges and asphalt lots, until an ugly concrete skin of low-rise development spread to all horizons. Maas was not the first architect to protest the unsightly sprawl that humans have left over much of the earth’s surface, but he may have been the first to suggest that we preserve what’s left of our finite planetary space by creating “vertical suburbias” — stacking all those quarter-acre plots into high-rise residential towers, each with its own hanging, cantilevered yard. “Imagine: It’s Saturday afternoon, and all the barbecues are running,” Maas said, unveiling his design for a 15-story building decked out with leafy, gravity-defying platforms. “You can just reach out and give your upstairs neighbor a beer.” He turned next to agriculture. Noting that the Dutch pork industry consumes huge swaths of land — Holland has as many pigs as people — Maas proposed freeing up the countryside by erecting sustainable 40-story tower blocks for the pigs. “Look — it’s a pork port,” he said, flashing images from PigCity, his plan for piling up the country’s porcine population and its slaughterhouses into sod-layered, manure-powered skyscrapers that would line the Dutch coast. Maas is the charismatic frontman for the Rotterdam-based architecture, urban-planning and landscape-design firm known as MVRDV, which brims with schemes for generating space in our overcrowded world. With his messy, teen-idol hair and untucked shirt, Maas strolled the stage extolling the MVRDV credo — maximize urban density, construct artificial natures, let data-crunching computers do the design work — while various mind-bending simulations played across the screen: skyscrapers that tilted and “kissed” on the 30th floor; highways that ran through lobbies and converted into “urban beaches”; all the housing, retail and industry for a theoretical city of one million inhabitants digitally compressed into the space of a three-mile-high cube. The Netherlands, prosperous and progressive, has long been one of the world’s leading exporters of architectural talent. By the mid-1990’s, not only Rem Koolhaas and his Office for Metropolitan Architecture but also a whole new generation of designers — MVRDV, West 8, UNStudio — were trying to enlarge Le Corbusier’s definition of architecture as the “magnificent play of volumes brought together under light” and arguing for a process driven by research, information and a greater social and environmental awareness. Fighting their battles not just building to building but on a sweeping, citywide scale, Holland’s architects and designers were, in the words of the Dutch culture minister, “heroes of a new age.” Still, paradigms tend to fall only under pressure, and at the start of the new millennium an audience at the Yale School of Architecture could be forgiven for greeting vertical suburbs, pig cities and the rest of MVRDV’s computer-generated showmanship with the same slack-jawed disbelief that once greeted Fritz Lang’s “Metropolis” or the 1909 Life magazine cartoon that promised an urban utopia of country villas perched atop Manhattan skyscrapers while double-decker airplanes whizzed through their atria. When Maas came to New Haven, MVRDV was barely 10 years old and had hardly built outside its native Holland. And yet there he was with his straight-faced scheme to “extend the globe with a series of new moons” — send up food-producing satellites that would orbit the earth three times a day. “Can you imagine,” he said with a boyish, science-fair enthusiasm that indulged no irony, “if we grew our tomatoes 10 kilometers high?” On the lecture-hall screen, New York’s skyline appeared just as the MVRDV satellite passed overhead, darkening Gotham with a momentary eclipse of the sun. Who were these Dutch upstarts? And in the so-called real world, would anything actually become of their grand, improbable visions? The 45 architects and designers who make up MVRDV (the name is formed by the surname initials of Mass and his two founding partners, Jacob van Rijs and Nathalie de Vries) work out of a converted, loftlike space in an old printing plant in Rotterdam, a dull but industrious port city whose historic districts were leveled by the Nazis and whose jagged skyline of new office towers and construction cranes attests to its still-restless effort to rebuild. Inside MVRDV, a liquid northern light pours through a wall of high arched windows, and the occasional cries of foghorns and seagulls confirm its location just blocks from the city’s main shipping lane. But otherwise, the mostly 30-something architects who sit with a slouching intensity at rows of long communal tables, surfing Google Earth or manipulating blue-foam architectural models, seem to have their minds in other places. “Now here’s a nice project of ours,” Jacob van Rijs said, leading me over to a small cardboard model for a library near Rotterdam when I visited the firm this spring. Because zoning laws required that the library not exceed the height of the town’s steeple, MVRDV designed it like a barn and filled its spacious interior with a continuous spiral of book-bearing walls leading to a bar and a fireplace at the top. “It’s like a spatialization of a library filing system. Every title will be visible, so you won’t have to know what you’re looking for — you can just come in and browse.” Van Rijs — menschy, informal, with a skill for taking Maas’s flights of rhetoric and bringing them helpfully down to earth — guided me on to the next model, this one for a new housing block in a generic, somewhat featureless region of the Netherlands; from a distance the housing block will appear as giant letters spelling out the region’s name. “It’s like the Hollywood sign — you’ll see our building and instantly know where you are.” And on to the models for an arched, open-air market hall whose ribs are formed by apartment units (“so you can call down from your kitchen window and ask your husband to pick up some fruit”); the design-your-own mountain grottos with interchangeable rooms for a developer in Taiwan (“they’re like customizable Native American caves”); the new soccer stadium in Rotterdam that, because it replaces an older one fondly known as the Tub, will sit like a dish in the Maas River. “You know, what’s the best place for a tub? So we put it in the river!” Van Rijs gave a giddy laugh. “Some projects just make you happy.” Maas and van Rijs, who both worked for Koolhaas, and de Vries, who practiced with the Delft-based Mecanoo, formed MVRDV in 1991 after their design for a Berlin housing project won the prestigious Europan competition for architects under 40. Holland has always been a good place to think creatively about space, with its congested countryside (16 million people squeezed into an area the size of two New Jerseys), its faith in planning and the democratic welfare state and its keen appreciation for land that comes from having reclaimed two-thirds of its own from the edge of the North Sea. Meanwhile, young designers were hoping the economic boom and housing shortage of the 1990s would give them the chance to build domestically on a large scale. Still, two years after they formed MVRDV, Maas, van Rijs and de Vries were struggling to find work and practicing out of makeshift offices (during meetings with prospective clients, they’d sometimes recruit friends to keep the phones ringing and wander through in suits) when a Dutch public broadcasting company, VPRO, approached them about a possible new headquarters in Hilversum. The project’s constraints were formidable. VPRO’s 350 employees — “creative types,” van Rijs says; “individualistic,” de Vries adds; “a settlement of anarchists with an obnoxious attitude toward corporate identity” Maas concludes — were then spread out among several buildings, enjoying their fiefs and the company’s culture of noncommunication. Even if a new headquarters could bring them all under one roof, it was impossible to predict how the employees would actually use the building, given their fluid work patterns and chaotic organizational hierarchies. “The mandate was: How can we get them to start communicating with each other?” Maas says. “And the answer was: By putting them in a box.” Villa VPRO, which became the defining project of MVRDV’s early career, is a densely constructed, five-story box — a “hungry box,” as one critic called it — with an endlessly flowing and adaptable interior that renders in spatial form the company’s anarchic spirit. MVRDV created a concrete labyrinth of winding stairs, twisting ramps and narrow bridges; a continuous surface of stepped and slanted planes with no real walls, just colored-glass partitions so that sunlight could penetrate into the depths of its compact terrain. “Clearly, VPRO was a social-engineering project,” Maas says. “We built a vertical battlefield for the users, one place where they could all meet and argue and find out how to behave. Because of all the hills, slabs and stairs, they were forced to maneuver through the building. Some people hated it — they lost their way, they were overwhelmed by their colleagues. Others loved it. But they all had to deal with each other. I like that. That’s part of life.” A year later, MVRDV took social engineering to a new level when it won a commission to represent Holland in Expo 2000 in Hanover, Germany. Expos are notorious excuses for creating second-rate architecture, piling up dreary national pavilions and Disneyfied theme parks around which crowds circulate in a candy-consuming stupor. At the Hanover expo, MVRDV stole the show with another vertical confection — this time a six-story tower of stacked and sustainable artificial Dutch landscapes that included an oak forest, a meadow of potted flowers, ersatz concrete sand dunes for purifying irrigation water and a “polder landscape” of dyke-protected turf powered by wind turbines spinning away on the roof. The MVRDV pavilion was, one critic wrote, “science class with the chutzpah of Coney Island.” Another predicted that it would “go down as one of the few truly great pieces of expo architecture,” alongside Mies van der Rohe’s Barcelona Pavilion and Moshe Safdie’s Habitat flats at the Montreal expo. Visitors lined up for hours to climb through what was inevitably dubbed the “Dutch Big Mac.” But beyond its playful innovation, MVRDV had lofty aspirations for its pavilion, hoping that it would carry the optimistic (and very Dutch) message that in the face of extreme population densities and the craving for open land, you could actually manufacture space — even create an artificial nature out of thin air — by condensing your landscapes on the floors of a building and reproducing them endlessly toward the sky. “The Dutch population is essentially antiurban,” de Vries says. “Therefore as architects in Holland we have a special responsibility to make living in cities and under dense circumstances not just habitable but preferable.” “It was sort of a test case,” Maas says. “At a time when urbanism is still dominated by ‘zoning,’ which is a very two-dimensional approach, we wanted to know: can we extend our surfaces? Can we develop an urbanism that enters the third dimension?” The Hanover pavilion was “a utopian formula born of necessity to allow the unlimited creation of new real estate,” wrote the critic Holger Liebs. It was “a practical model for the reinvention of the world.” At the architectural library at the Delft University of Technology, there’s a copy of a 736-page book by MVRDV called “Farmax: Excursions on Density,” which is a hodgepodge of essays, transcripts, photos, computer designs, graphs and charts, all examining the growing suburban “grayness” of the Dutch landscape and proposing different solutions for saving the pastoral landscape by “carrying density to extremes.” So many students have borrowed, read and plundered that copy of “Farmax” that it had to be pulled from circulation and has sat in a state of complete disintegration inside a kind of glass vitrine. When I mentioned this to van Rijs, he laughed and said: “Yeah, I’ve seen that. Our book is like a museum piece. Isn’t that fun?” While projects like VPRO and the Hanover pavilion were leading to design commissions in Copenhagen, Madrid, Paris, Tokyo and China’s Sichuan province, MVRDV was also reaching outside the realm of established architectural practice by producing a series of theoretical exercises — books, films, exhibitions, even computer games — that amounted to an ongoing propaganda war on behalf of the firm’s radical ideas about space. After “Farmax,” MVRDV put out another doorstop manifesto, “KM3: Excursions on Capacities,” which warned that if the global population “behaved with U.S.-citizen-like consumption,” another four earths would be required to sustain it. In the exhibit 3D City, they pushed ever upward, advocating giant stacking cities that, as MVRDV breathlessly described them, exist “not only in front, behind or next to you, but also above and below. In short a city in which ground-level zero no longer exists but has dissolved into a multiple and simultaneous presence of levels where the town square is replaced by a void or a bundle of connections; where the street is replaced by simultaneous distribution and divisions of routes and is expanded by elevators, ramps and escalators. . . .” Perhaps MVRDV’s most ambitious theoretical exercise was the traveling computer installation they called MetaCity/Datatown. Predicting that globalism and an exploding planetary population will push certain regions throughout the world into continuous urban fields, or megacities, MVRDV conceived a hypothetical city called Datatown, designed solely from extrapolations of Dutch statistics. (“It is a city that wants to be explored only as information; a city that knows no given topography, no prescribed ideology, no representation, no context. Only huge, pure data.”) According to its creators, Datatown was a self-sufficient city with the population of the United States (250 million) crammed into an area the size of Georgia (60,000 square miles), making it the densest place on earth. MVRDV then subjected this urban Frankenstein to 21 scenarios to see how they would affect the built environment: What if all the residents of Datatown wanted to live in detached houses? What if they preferred urban blocks? What could be done with the waste? (Build 561 ski resorts.) What kind of city park would be needed? (A million Central Parks stacked up over 3,884 floors.) “The seas, the oceans (rising as a result of global warming), the polar icecaps, all represent a reduction in the territory available for the megacity. Does that mean that we must colonize the Sahel, the oceans or even the moon to fulfill our need for air and space, to survive? Or can we find an intelligent way to expand the capacities of what already exists?” On one level, MetaCity/Datatown was a game and a provocation — architecture as a kind of thought experiment: can the urban landscape be reduced to a string of ones and zeroes? Is what we think of as outward reality nothing more than the physical manifestation of information? But MetaCity/Datatown was also a serious investigation: by translating the chaos of the contemporary city into pure information — or, as MVRDV called it, a datascape — and then showing the spatial consequences of that datascape through computer-generated designs, MVRDV set out to reveal how our collective choices and behaviors come to mold our constructed environments. “These datascapes show that architectural design in the traditional sense only plays a very limited role,” Bart Lootsma, an architectural historian, writes in one of many essays inspired by the exhibit. “It is the society, in all its complexities and contradictions, that shapes the environment in the most detailed way, producing ‘gravity fields’ in the apparent chaos of developments, hidden logics that eventually ensure that whole areas acquire their own special characteristics — even at a subconscious level.” Lootsma cites a number of these invisible forces — market demands precipitating a “slick” of houses-with-gardens in the Netherlands, political constraints generating “piles” of dwellings on the outskirts of Hong Kong, the cultural preference for white brick causing a “white cancer” of housing estates in the Dutch province of Friesland. These are “the ‘scapes’ of the data behind it,” he writes. Moreover, to the extent that MVRDV approaches architecture not as a conventional expression of aesthetics, materials and form but as an almost scientific investigation into the social and economic forces that influence our constructions, the datascapes were also a dry run for the firm’s own built work. That work, says Aaron Betsky, the former director of the Netherlands Architecture Institute and a longtime MVRDV-watcher, is really an ongoing project of “giving shape to those zeroes and ones,” of making the conceptual real, of turning abstract information into concrete form. When MVRDV begins a project, it starts by assembling information on all the conceivable factors that could play a role in the site’s design and construction — everything from zoning laws, building regulations and technical requirements to client wishes, climatic conditions and the political and legal history of the site. Architects often view these rules and regulations as bureaucratic foils to their creativity. MVRDV sees them as the wellspring of invention. In fact, believing that subjective analysis and “artistic” intuition can no longer resolve the complex design problems posed by the ever-metastisizing global city, the architects sometimes use a home-built software program called Functionmixer. When loaded with all the parameters of a particular construction project, Functionmixer crunches the numbers to show optimal building shapes for any given set of priorities (maximizing sunlight, say, or views, or privacy) and pushes limits to the extreme, where they can be seen, debated and, often, thoroughly undone. It creates a datascape that is the basis of the design. In 1994, for instance, MVRDV was asked to build housing for the elderly — an apartment block with 100 units — in an already densely developed suburb of Amsterdam. Because of height regulations and the need to provide adequate sunlight for residents, only 87 of the called-for units could fit within the site’s restricted footprint. Rather than expand horizontally and consume more of the neighborhood’s green space, MVRDV borrowed a page from its “vertical suburbia” and hung the remaining 13 apartments off the side. Their wonderfully odd WoZoCos housing complex takes the conventional vertical housing block and reorganizes it midair with these bulging extensions that seem to be levitating right up off the ground. Four years later, when MVRDV was selected to build economically mixed housing in Amsterdam’s docklands area, the firm held countless negotiations with the parties involved — local politicians, the planning authority, possible future residents — all of whom advocated for a different distribution of the housing. Eventually MVRDV threw all the data into a computer and came up with the Silodam — 157 apartments of various sizes and prices that sit together in one 10-story multicolored block that rises on stilts from the harbor like a docked container ship. From the outside, the Silodam looks simple enough — as literal as a child’s giant Lego construction — but inside the block is filled with a vast array of dwellings arranged into economically mixed “mini-neighborhoods,” while a series of communal galleries and gangways allow residents to walk from one end of the “ship” to the other. MVRDV’s radical, research-driven methodology has been a source of fascination to critics and competitors from the start. “No one else has found as convincing a way,” writes the historian Lootsma, of “showing the spatial consequences of the desires of the individual parties involved in a design process, confronting them with each other and opening a debate with society, instead of just fighting for one or the other, as most architects would.” And the urbanist and designer Stan Allen, now dean of the Princeton School of Architecture, points out that “rather than impose structure, leading to closure and more precise definition, MVRDV works to keep the schema open as long as possible, so that it can absorb as much information as possible.” In fact, MVRDV’s architects rely so much on gathering and metabolizing data, information and competing points of view that they insist they leave no formal signature on their work. “We try to avoid any sort of aesthetic aspect in our designs,” van Rijs told me. “Unlike Gehry, Zaha and others whose work is easy to recognize, we don’t have a strong personal style. Our methodology is based more on logic. Sometimes we call it an iron logic: depending on the situation, we come and take a look and say: ‘What’s happening? What should be done?’ Then we follow a step-by-step narrative, and when you see the building, you get the final result. It’s the only possible outcome. You cannot see anything else.” But if MVRDV’s design process is really so rational and objective — if, as Stan Allen says, the architects reject “fuzzy intuition” and “artistic expression” for a step-by-step pragmatism in which “form is explained only in relation to the information it encodes: architecture as a series of switches, circuits or relays activating assemblages of matter and information” — then why, Allen asks, are their creations so unexpected and witty, sometimes even so spectacular? Commissioned to build large-scale housing in a sprawling Madrid neighborhood already choked with monotonous low-rise construction, MVRDV designed a typical horizontal housing block with an interior courtyard. Then the architects flipped the block on its side to create Mirador, a towering 22-story icon for the neighborhood with the courtyard now transformed into an enormous, open-air balcony offering sweeping views of the Guadarrama Mountains. Some MVRDV designs are so logical they seem to turn reality on its head. In 2007, two years after Hurricane Katrina devastated much of New Orleans, the actor and architectural enthusiast Brad Pitt asked 14 design firms to help his nonprofit Make It Right rebuild the city’s impoverished Lower Ninth Ward, one of the neighborhoods hardest hit by the storm. Specifically, he asked for designs for an affordable — but also floodproof — 1,200-square-foot house with three bedrooms and a porch. Maas, van Rijs and de Vries — citizens of a country that is continually defending its buildings from the threat of inundation — had already contributed to an exhibit of post-Katrina architecture: inspired by a child’s crayon drawing of New Orleans residents walking to safety up an imaginary hill, they conceived a new elementary school made safe from rising waters by tucking it inside an artificial, grass-covered mound, where balconies hung off the sides and a playground covered the top. Now, having received Brad Pitt’s call, they came up with an ingenious, almost whimsical solution to the problem of future flooding: their “Bend House” was a variation on the South’s traditional low-slung shotgun houses, this one hinged in the middle so that its front and back are raised above the waterline. Some critics were appalled. By creating a dwelling that already looked flood-damaged, perhaps even uninhabitable, MVRDV appeared to be using the New Orleans disaster to score political points or, worse, to be winking ironically at the residents’ ongoing plight. Others thought the Bend House was emblematic of MVRDV’s best work and of the architects’ knack for creating buildings whose formal inventiveness arises from the explicit display of the social or environmental problems that brought them to life: VPRO’s endless interiors signaling the need for social connection; WoZoCos’s hanging boxes showing how to preserve our green spaces; the festively striped Silodam offering ways to mix rich and poor. “The architecture that we make is part of the ordinary, part of our pop culture,” Maas told me. “At the same time, the buildings try to engage with society by questioning our behavior and offering alternatives. And they offer those alternatives by showing — visibly, obviously — in their actual design the social problems we were trying to address. When you see the object, you see the question.” Maas’s remark brought to mind an appraisal of MVRDV’s work by the French architect Alain Guiheux. “A great mystery in architectural projects surrounds the definition of what is acceptable to the client,” he writes. Where does the client’s caution and censorship begin? At what point does that caution become the architect’s own self-censorship? Guiheux goes on to say that MVRDV tries to resist society’s censorship — and overcome its own — by using playfulness to “soften up conformity” and by “pushing back the line between the reasonable and the incredible.” That, he says, is their “magic,” and has effected a break with architectural convention “like that undergone by painting at the beginning of the 20th century, pre- or post-Duchamp.” In the case of MVRDV’s New Orleans Bend House, the playful break with convention was not accomplished without considerable debate. “When you have a federal government that doesn’t invest in its levees, that makes people’s land completely worthless, that makes its own citizens insanely poor, you need a design that makes a protest, that rises up and says, What is going on here?” Maas said. “But in discussions with Brad and the others, we kept asking: Yes, but can we show that explicitly? Can we come out with that? It’s going to look ironic! How can you be ironic in the face of disaster? Will the American people be angry? “But even in the most tragic circumstances,” Maas went on, “there is often a moment of irony. Well, is it irony? Or is it really more like . . . ?” He paused, at an uncharacteristic loss for words. “There is this beautiful German word, Trost. It means empathy, or solace, or maybe consolation. I think that is what our building meant to express. You know, if the waters are going to come, let them come. Let’s do it. Let’s just turn and face it.” Darcy Frey is a contributing writer for the magazine. His last article was about bears who were overtaking a Canadian town. Home * World * U.S. * N.Y. / Region * Business * Technology * Science * Health * Sports * Opinion * Arts * Style * Travel * Jobs * Real Estate * Automobiles * Back to Top Copyright 2008 The New York Times Company

Toronto's Condo Kings: Is their boom sustainable? Property developer Peter Freed, head of Freed Decelopments poses for a photo at his penthouse apartment in downtown Toronto.Chris Young for Financial PostProperty developer Peter Freed, head of Freed Decelopments poses for a photo at his penthouse apartment in downtown Toronto. Jacqueline Thorpe, Financial Post Published: Monday, June 02, 2008 From his penthouse in Toronto's hip fashion district, Peter Freed can track the development of his six next condo projects taking shape along King Street West. One of Mr. Freed's buildings will have interiors by Philippe Starck, the must-have French designer of the moment. Another will be inspired by the Neoplasticism art movement made famous by Mondrian, where design is pared down to the basics of lines and the primary colours red, yellow and blue. Mr. Freed has eight projects on the board worth a total of half a billion dollars, a tiny fraction of the record 33,980 units under construction in the city. Canada's biggest city has become North America's biggest condo market, with more units now under development than Manhattan, Chicago and Los Angeles. As Mr. Freed looks off his terrace, where the lap pool and giant padded loungers are looking a little forlorn on a wet spring day, he is confident Toronto will not also become North America's biggest condo meltdown. "Right now, there's very large demand," says Mr. Freed, dressed casually in jeans, shirt-tails hanging out, no laces in his shoes. At 39, the laid-back developer is the fresh face of an eclectic group of condo kings who are transforming the very skyline of the city. Along with other design-focused builders like Cityzen Development Group, stalwarts like Tridel Corp. and Menkes Developments Ltd., and newcomers like Bazis International Inc., Mr. Freed is banking on the view Toronto is undergoing a seismic housing shift. Figures show a marked slowing in the Canadian housing market this year, including a 7.3% year-over-year drop in existing homes sales in Toronto in April and a subsiding of the mania that drove the condo market into overdrive last year. But builders say demographics, immigration, government regulation and cultural change will continue to skew demand for housing toward the condominium. Housing hotspots like Calgary may have already burned themselves out in a frenzy of building and soaring prices, but Toronto's rise as a global city will allow it to ride out any short-term weakness, they say. "We understand there's 75,000 people a year for the next 20 years projected to move into the city core," says Mr. Freed. So Toronto's condo kings, mostly privately held, backed by joint-venture partners and old-fashioned bank loans, are knee-deep in a building boom that has seen 67,984 condo units in 316 buildings launched since 2004. To anyone walking the city streets, the scale of activity is eye-popping, with dozens of cranes swinging like mammoth meccano sets across the skyline, the monotonous thud of foundation pilings being driven into the ground and convoys of cement trucks causing endless traffic snarls. They are building by the waterfront, around the subway line in the north of the city and in the east end where work-live lofts are all the rage. At Concord CityPlace, an 18-hectare master-planned city near the waterfront, 21 condo towers will eventually arise from barren railway lands, along with town homes, lofts and a large park. The city-within-a-city will be home to 16,000 people. "People ask us all the time what's going to go on in the market," says James Ritchie, vice-president of sales and marketing at Tridel, the biggest builder of condos in Toronto and owned by the DelZotto family. "To be candid, it's very difficult to tell you where it's going to go one way or another, other than when we look at the fundamentals, what's happening here in Toronto and how it's going to affect housing. The fact is, it's sustaining itself." Toronto real estate developers need to be an optimistic lot. Not only do they have the current U.S. housing bust hanging over their heads, but also the still-fresh memory of the Toronto property crash of the early 1990s. "We didn't call that a recession in our industry; it was a depression," says Sam Crignano of Cityzen, which has 14 projects and 9,000 units on the board, including the Daniel Libeskind-designed glass L Tower, which will rise like a glam-rock platform boot at the foot of the city on Front Street. "It was that perfect storm - a number of factors all converged to create that disaster." Double-digit interest rates, overbuilding, the introduction of the GST and a recession that sent unemployment soaring to 12%, brought the Toronto property market to its knees. According to Goldman Sachs, it was the fourth longest of 24 housing busts in the OECD since the 1970s. Prices declined from December, 1989, to September, 1998, a 34-quarter marathon that took values down 50% in some areas. Not only did the residential market fall apart, but Canada was home base for some very public flameouts in the commercial and retail real estate sector, with Campeau Corp. and the Reichmann's Olympia & York Developments Ltd. filing for bankruptcy. Now, the U.S. housing meltdown looms large, with prices down about 14% from their 2006 peak and so many homes on the market it would take nearly a year to shift the supply. The developers have noticed the first quarter softening. But they are not afraid. New condo sales totalled 3,433 in Toronto, only eight fewer units than last year, according to Urbanation, a condo tracking firm. And the price per square foot for sales rose to $388 from $348. However, with a glut of new buildings nearing competition or under construction, the market is definitely expected to cool. Brad Lamb, Toronto's biggest condo broker, and its most flamboyant, says new condo sales could be off as much as 40% this year and resales 10%. Mr. Lamb has his head, plastered onto the body of a lamb on billboards all over the city. He also hosts Big City Broker on HGTV, a "docu-soap" looking at the business of real estate. "But last year was an incredible, stupid year, where literally every property we put on the market sold by auction, with four or five bidders for every property," he says. "We're still getting that a bit, but it will start to taper off. The time to sell is about 30 days. A year ago it was 15 days. It will probably go to 60 days, which is a normal market. Sixty days is still a seller's market." The condo kings take a long-term view of a city they say is still in its infancy. "Over the last 10 years Toronto has grown by over a million people," says Alan Menkes, president at Menkes Development, which has been developing homes in the Toronto area for the past half century. Its latest project is the Four Seasons Hotel and Private Residences, a two-tower development in tony Yorkville, where luxury suites will run from 1,100 to 9,000 square feet and prices from $1.2-million to $16-million. "You're adding jobs, you're adding buying power," Mr. Menkes says. "They come with capital and they're looking for housing." Immigration is the main driver behind the condo story for Toronto, say developers, each one of whom can reel off the statistics on their fingers. Immigration to Canada totals roughly 225,000 a year and some 40% to 50% settle in Toronto. The Greater Toronto Area is expected to swell from about 5.5 million people to 6.9 million in 2016 and 8.3 million by 2031. The city proper is projected to reach 3.05 million by 2031. The Ontario government increasingly wants that population contained. In 2005, the province slapped an 800,000-hectare greenbelt - about the size of Prince Edward Island - around Lake Ontario, protecting a large swathe from development. The effect has been to intensify construction around established cities and vertically. Immigrants are used to living in apartments, developers add. With rental units all but disappearing as a result of the rent controls of the 1990s, the condo is a natural alternative. "The house is really more a North American phenomenon because no one in Europe can afford it because land is so expensive," says Michael Gold, president of Bazis North America. The developer has 35 projects underway around the world, including 1 Bloor, an 80-storey tower to be built on the corner of Canada's priciest retail strip. "We really see Toronto catching up to the rest of the world." Mr. Ritchie is loath to call the recent increase in building "a boom." Rather, he prefers to call it a slow, steady ramp-up to accommodate the growing swell of people. Besides immigrants, young people - especially women - are fuelling condo demand. They live with their parents longer, save money and move directly into home ownership. "One of our developments at Broadway and Redpath, I would say 25% to 30% of those units were purchased by single women probably in their late-20s, early-30s on a career path," says Mr. Crignano of Cityzen. Mr. Lamb says his company has reams of buyers in their 20s, drawn by the affordability of condos. "They used to be over 30," he says. "It's a very industrious generation of young people who see the benefit of owning their own property." The condo scene is turning Toronto into a young and very social city, Mr. Lamb adds. "CityPlace is like Peyton Place or Melrose Place," he says. "In a building like CityPlace with 400 people - 400 people typically under 40 - I can tell you the scene at the pool is crazy." At the other end of the spectrum, empty-nesters and an increasingly mobile and wealthy international set are demanding luxury and high-end design. It is a trend being witnessed around the globe, the end product of years of strong economic growth - spurred by the development of China, Russia, India, Brazil and fanned by low interest rates - which has raised income across the world. Phillipe Starck, for example, is designing interiors in Thailand, China, Japan, and Denmark. Canada's resource boom has brought it to the party. Mr. Freed says demand for more expensive units has risen gradually and that the luxury buyer is prepared to shop around. "We sold 20 high-end units in other buildings that were between $1-million and $2-million, but we had a lot of people who didn't buy," he says. "They didn't want to be in buildings with people who were buying units for $180,000." In March, he sold $20-million worth of condos in two weeks at one of his higher-end buildings, where units range from $1.5-million to $5.million. Mr. Menkes at Menkes Development says 70% of the Four Seasons Private Residences have been sold. "We're really providing a product that was not available before. We're putting Toronto on the map in terms of international draw," he says. The developers see every downtown Toronto parking lot or disused industrial space eventually filled with condos, mixed with shops and restaurants, and an increasingly educated and wealthy public - working in banking, design, media, medical research and the arts - moving in. Even if there are lean years ahead, they say they are much wiser than they were in the early '90s, with buildings pre-sold before the foundations are dug. "The fiscal discipline that has been instilled in developers today because of the '90s debacle has put us in much better standing," Mr. Menkes says. "Just in terms of banking underwriting, when we do construction loans, the discipline is much more rigorous." Cautionary notes aside, it is clear the condo kings are thrilled to be participating in the rise of Canada's condo city. "The city is going to be much wealthier and much more exciting because of all these new developments," Mr. Lamb says. Adds Mr. Menkes: "I think everyone feels proud when they see the nice skyline of the city they're living in." "I've lived in Toronto my whole life," says Mr. Freed. "To see certain downtown neighbourhoods take shape and become so liveable, so fast, it's incredible." Financial Post jthorpe@nationalpost.com http://www.financialpost.com/reports/property/story.html?id=552055 ________________________________________________________________________________________________________ From boom to gloom? Is that a continued property boom on the horizon or is a bust just around the corner?Peter Redman/National PostIs that a continued property boom on the horizon or is a bust just around the corner? Jacqueline Thorpe, Financial Post Published: Friday, May 30, 2008 Leave it to Garth Turner to throw cold water on the notion Canada can achieve a soft real estate landing, when history and the slump south of the border show that is a rare feat indeed. The personal-finance author-turned-Conservative-turned-Liberal MP for Halton, Ont., was one of the first to warn of the 1990s property flop - albeit several years too early. Now he thinks Canada is facing precisely the same mix of elements that burst the U.S. real estate bubble. "We are in a monumental denial phase," says Mr. Turner, who's book Greater Fool - The Troubled Future of Real Estate was published in March. "My theses is now reality, we are starting to see substantial sales declines that were ruled out only six months ago as impossible," he says. "But now people are saying prices aren't moving down. They will." The figures do show a noticeable retreat in the Canadian housing market this year. Nationally, resales fell 6.1% year-over-year in April, while price gains have slowed to 4% from around 10% in each of the prior five years. Calgary saw sales drop 31.2% over the year, Edmonton, 25.4% and Victoria 14.2%. Calgary and Edmonton also saw prices dips. According to Urbanation, a condo tracking firm, the condo market has defied the trend and remained fairly steady through the first quarter, even as a several new buildings hit the market. Mr. Turner says housing markets blow themselves out when prices rise beyond the reach of average buyers. This is what happened in the United States. "To keep the party going, the mortgage industry, the credit industry, backed by the banks, decided to lower the bar to ownership," he says. The subprime industry was born and home buyers with scant credit history and skimpy income were drawn into the market, enticed by no-money-down mortgages and interest rates that started out low, then ballooned to unsupportable levels. Similarly, in Canada, prices have risen beyond the reach of the average buyer, Mr. Turner argues. "What has been the response?" he asks. "The 40-year mortgage." Economists estimate amortizations longer than 25 years now constitute about 70% of all insured mortgage applications and about half of that amount is for the 40-year product. Mr. Turner reserves his starkest warnings for sprawling suburbs mushrooming around Canada's major cities. He says many new home developments have mortgage representatives onsite offering the same kind of no-money-down deals that dragged down the U.S. market. Buyers just have to come up with 1.5% of the house value to cover closing costs. These will become the "particle board slums of the future," Mr. Turner says, as smaller families and surging energy costs cause the suburbs to fall out of favour. But the Toronto condo market is heading for trouble too, as overbuilding swamps demand, he says. "We are classically at the end of a bull market," Mr. Turner says. Read the argument for a boom Financial Post jthorpe@nationalpost.com Close Presented by Reader Discussion http://www.financialpost.com/reports/property/story.html?id=552055

Downtown lacks affordable housing: group Jan RavensbergenThe Gazette Wednesday, May 21, 2008 MONTREAL - Lower-income Montrealers - anybody with annual family revenue of $55,000 or less - are getting the squeeze during the city's downtown condo-construction boom, a study released Wednesday concludes. No social or community housing was built in the downtown Ville Marie borough during 2006, a round-table group on downtown housing said. Construction of that type of affordable housing completely dried up, plunging to zero from 11 per cent of residential construction across the borough during 2005. For the two years, an overall total of 184 such housing units were built in Ville Marie. Among the overall total of 3,186 units, that boils down to roughly one affordable unit for every 17 built. The report was produced by the Department of urban and tourism studies at l'Université de Montréal, with the participation of the Comité logement Centre-Sud, which represents tenants. "We need a counterweight to the speculative effect brought to the downtown by such projects as the Quartier des spectacles, the new (French-language) super-hospital and the expansion of the universities," said Éric Michaud, coordinator of the tenants' group. The Quebec, municipal and federal governments have to put in major financing to ensure that construction of affordable housing can resume in Ville Marie, Michaud said. However, he added, the 121-page study wasn't designed to produce a cost estimate, and didn't. Across Montreal as a whole in 2006, there was a slight decline in the production of what is considered affordable housing as a proportion of overall residential construction - to 12.3 per cent in 2006 from 13.8 per cent in 2005. As a 10-year objective from 2004, the city's urban plan foresees construction of between 60,000 and 75,000 new housing units. Of those, 30 per cent, or 18,000 to 22,500 units, would be considered affordable, units occupied by households with annual income of $55,000 or less. Half of these would be government-financed housing for low- or very-low-income tenants, with annual revenue of $35,000 or less. "Downtown, there is a long way to go," Michaud said. About 58 per cent of households in Ville Marie report annual income of $35,000 or less, according to the study. Across all of Montreal's 19 boroughs, the proportion is a significantly less 47 per cent. janr@thegazette.canwest.com © The Gazette 2008 http://www.canada.com/montrealgazette/news/story.html?id=e349d22d-d262-45e3-bcef-537dbd1cc360

Step aside Toronto, the next housing boom is in Montreal Karen Mazurkewich, Financial Post Published: Friday, January 11, 2008 Gordon Beck/Canwest News Service What sets Montreal apart from other urban centers is the fact that it has retained its neighbourhood mosaic. When Montreal architect Henri Cleinge purchased an old wine depot in Montreal's Little Italy district in 2002, he transformed it into a contemporary three-unit condo with polished wood and concrete floors, iron staircases and stainless steel kitchens. He then flipped two of the units for seven times the original investment of $200,000. Mr. Cleinge had a few sleepless nights wondering whether the units would sell. He didn't have to worry. In Montreal, there's big demand for contemporary-design living. Much has been made about Toronto's big museum projects and condo lineups, but Montreal is also changing its shape. Toronto housing prices have experienced 58% growth since 2000. The island of Montreal, however, has seen housing sales jump 50%, but the city itself has gone up 94%. In addition, a new concert hall and 28-storey condo tower is being erected atop Place des Arts metro, two mega hospitals are under construction and Sotheby's International Realty recently entered the market. As well, the largest private real estate investment in decades, involving 4,000 dwellings and a shopping plaza, is scheduled to get a green light from city hall. Montreal's mojo is back. But its not the big urban projects that are redefining this city. What makes Montreal distinct from other urban centres is the fact it has retained its neighbourhood mosaic. The most famous is the northeastern district known as Plateau-Mont-Royal. The Plateau has become the most expensive address in the city, with its average housing price jumping 105% in the past seven years. It's also one of the reasons Montreal consistently ranks among the top 25 cities in the world for quality of life. Like Greenwich Village in New York or Haight-Ashbury in San Francisco, the Plateau is where culture and haute couture intersect. In the 1980s, the Plateau was a string of shabby row houses. Owners lived on the main floor and rented the walk-ups. But the working-class enclave changed dramatically in the 1990s, when new legislation made it possible to subdivide duplexes and triplexes into condo apartments. "Instead of a single owner, who would rent one or two of the other floors, now each apartment is owned individually and people are now willing to invest," says Susan Bronson, a Montreal heritage conservationist. The artists and architects that moved into the area with nothing in their pockets can now afford to invest. The hood became hip because it maintained "high bohemian index," she says. Montreal's Mile End, a subsection within the Plateau immortalized by Canadian author Mordecai Richler, has seen the greatest upheaval. Gone are the icons: the discount grocery store Warshaw's, Simcha's Fruit Market and St. Laurent Bakery have closed. Instead, a slew of new high-concept design stores, including Interversion and Latitude Nord, have staked out Boulevard Saint-Laurent, turning it into the new fashion Mecca. Even the old rag-trade factories, religious buildings and empty lots have received a radical facelift. Architect Eric Gauthier, who created the landmark Espace Go on Saint-Laurent, is currently constructing the all-new Théâtre de Quat'Sous on formerly grungy Avenue Pins. The firm Lepointe Magne has also made its mark on the Plateau, redesigning the public swimming pool Bain Lévesque and converting an old fire hall into the high concept Théâtre Espace Libre. In Plateau's housing, one of the first innovations was Atelier Big City's 1989 Sept-Plex condominium project on Clark Street, which made creative use of the narrow street fronts and back lanes. Atelier Build reinvented the notion of infill with its 2004 "thin house" project along Avenue L'Hotel-du-ville. When she started her architectural company with partner Michael Carroll 12 years ago, Danita Rooyakkers of Atelier Build, says few others were betting on the Plateau. Political instability in the province was a deterrent for developers, but it was the perfect time for a young architect with modest means and big dreams. Ms. Rooyakkers biked around Plateau in search of cheap empty lots and made her mark by eschewing the traditional walk-ups, where every family gets a floor, and subdivided the property so each owner has a front door, backyard and terraces. By opening up the walls and adding skylights, the architectural firm created a vertical loft. It won awards because it offered another prototype for high-density Montreal living, she says. The design aesthetic in Montreal has been tempered by activism. The Plateau is not only governed by a planning advisory committee stacked with architects and landscapers, it has community watchdogs galore, including the Mile End Citizens Committee and Urban Ecology. Every architect working here has had to face fierce town hall forums before building begins. "As educated local residents, we have both a sense of entitlement and empowerment," says Owen Rose, an architect and head of the Urban Ecology group, which focuses on urban green spaces. "It's easy to get involved in issues because we are constantly bumping into each other on the street in this urban village," he says, adding that community involvement has permeated the local culture. As one of the first architects to help reshape the plateau, Mr. Gauthier was frequently forced to marry old facades with his slick contemporary style to meet the borough's strict guidelines. With Théâtre de Quat'Sous, he's been given an exemption: the historic synagogue in which the theater is currently housed didn't meet safety codes so it will be replaced by a showy new architectural structure. Mr. Gauthier is concerned about a public outcry, but he's excited about the new design. "If you want to keep the city alive, you need to add new buildings and new layers." While the strict development guidelines built a "cohesive" neighbourhood, he says, "we've passed the point where conservation should now trump freedom." Mr. Cleinge, the architect, is trying to exercise that freedom. In recent years he has revamped in his sleek industrial design look a microbrewery on Duluth Street as well as the Les Chocolats de Chloe of Roy Street East. He avoids wood stairs and plastered ceilings, preferring concrete and steel for urban living spaces. The look reflects the city's history, he says. "Montreal is an industrial city with a large garment industry so it's appropriate language to use in a residential context," he says. Luckily for him, clients such as Stéphane Dion and Éloïse Corbeil, typical Plateau dwellers, are looking to restyle their 1880s duplex. Ms. Corbeil's father purchased the building on Christophe Columb Street in 1996 when she and her brother needed a place to live while they attended university. Ms. Corbeil's brother has since moved to the United States, but the 33-year-old writer-filmmaker and her lawyer husband still love the mixed neighbourhood. They looked in the swank neighbourhoods of Westmount and Outremont after the birth of their two children, but decided to stay put. "We didn't want to go to the suburbs because we like the diversity here," says Ms. Corbeil. Conscious of their limitations but eager for a contemporary style, they hired Mr. Cleinge after seeing his work in a magazine. His mandate was to keep a portion of the "stacked wood" interior shell of the house, but rebuild the place from top bottom. He proposed a mezzanine open-style approach to filter more light into the home and create more space. Concrete floors and iron railings are part of the new plan. For most young buyers, the Plateau is now untouchable - meaning overpriced. Its evolution, however, has created a ripple effect across the city and intensive gentrification is happening in the shabby districts of Point St. Charles and the Jean Talon market area. "The Plateau has matured," says Mr. Cleinge. But the condoization of Montreal has only begun. Financial Post kmazurkewich@nationalpost.com http://www.financialpost.com/magazine/family_finance/story.html?id=231679

(Courtesy of The Globe & Mail)

Edmonton's economy hottest in Canada: CIBC Western city tops ranking for first time as Calgary slips into second spot OTTAWA -- Edmonton's weather may be cold but its economy isn't, says CIBC World Markets, which reported Monday that the Alberta capital has the hottest local economy in Canada, surpassing Calgary. Montreal, Toronto and Vancouver also rank high in economic activity, while there's little economic momentum in the national capital region of Ottawa-Gatineau, according to CIBC's economic activity index, which is based on nine economic variables. "For the first time on record, the city of Edmonton tops our city ranking in terms of economic momentum," it said, crediting strong population growth, impressive employment gains, low unemployment rate, and below-average personal and corporate insolvency rates. Calgary, meanwhile, slipped into second spot with a score of 24.5, compared with 30.1 for Edmonton. Calgary's slippage reflects what the report said was a slowdown in the pace of job creation momentum in the city -- less than that of Edmonton, Saskatoon and Victoria -- and a cooler housing market. Saskatoon reached third spot with a score of 23.7, propelled by strong job and population growth, and the hottest housing market in the country. "Interestingly, Montreal is currently enjoying some renewed momentum," the report said, noting that Montreal's third-place score of 22.8 -- the only other city with a ranking above 20 -- indicated improvement in labour and housing market activity. However, the report cautioned that the momentum in Montreal's industrial economy -- based on data up to September -- is not likely sustainable with a loonie at or near parity with the U.S. dollar. Toronto, the country's largest city, had a consistently strong showing in the rankings with a score of 17.5. This reflects the growing diversity of the city, which has the fourth-fastest population growth in the country, and which boasts relatively high-quality employment. However, its labour market is softening with below-average job growth and above-average unemployment of 7%. Vancouver's ranking, at 17.3, just slightly below Toronto's, is due to the fact that -- while it did not excel in any area -- the city was above average in many areas, including strong population and job growth. Among the larger cities, Ottawa-Gatineau had the lowest ranking at just 4.7, reflecting what the report's author CIBC economist Benjamin Tal said was "some softening in employment growth, housing activity and non-residential building permits." There has been a cooling in the city's large high-tech sector, which was very strong over the past two years. The other cities and their rankings were: Sherbrooke 16.3, Victoria 15.8, Trois-Rivieres 13.6, Regina 12.5, Saint John 11.4, Quebec City 10.2, Halifax 9.1, Kitchener 8.8, Greater Sudbury 7.9, London 7.8, Hamilton 6.0, St. John's 5.5, Kingston 3.4, Thunder Bay 3.0, St. Catharines-Niagara 2.4. Two cities had negative readings -- Saguenay -2.8 and Windsor -3.3 -- highlighting the difficulties in their manufacturing sectors. "The recent appreciation in the dollar and the weakening in the U.S. economy are probably adding another layer of difficulties facing those cities," the report said.

Housing starts climb in August, led by Montreal's 283% increase Foundations poured for 1,878 homes. Construction of condos rises highest, while rental properties fall vs. last year MARY LAMEY, The Gazette Published: 6 hours ago Housing starts rose in August for the fifth consecutive month in greater Montreal, though market demand for rental housing showed signs of cooling, Canada Mortgage and Housing Corp. reported yesterday. A total of 1,878 dwellings were started, a seven-per-cent increase over the month a year earlier. The number of condominium starts increased by 65 per cent, while the number of single-family homes rose by 20 per cent. Rental starts fell by 22 per cent to 692 units, compared with 890 a year earlier. Montreal had less new construction than other parts of the metropolitan census area, but still managed the biggest percentage gain for the month, with a 283-per-cent increase in starts. That was powered by the start of work on 413 rental units, compared with 20 a year earlier, and by 252 condo starts, vs. 118 last year. In contrast, Laval and the North Shore construction fell by 29 per cent to 734 units. The drop was most noticeable on the rental front, where the number of new units underway was 155, vs. 618 a year before. Those results were distorted by the start of work on a 500-unit rental project for seniors in August 2006. Construction of single and attached homes and condominiums all rose. On the South Shore, construction declined by 35 per cent for the month, including a 91-per-cent drop in the biggest city, Longueuil, where there wasn't a single rental or attached home start and where only five single-family homes and 14 condominium units were started. The 19 starts for Longueuil compared with 200 a year ago. In Vaudreuil-Soulanges, construction rose by 144 per cent, totaling 100 new units. CMHC considers a project started when the concrete foundation is poured. For the year to date, Montreal is 27 per cent ahead of last year, while Laval and the North Shore are down seven per cent. The South Shore is up eight per cent, and Vaudreuil-Soulanges is up seven per cent.

60 Story Building WOW imagine the square footage of this thing.