Toronto area home prices predicted to rise 4 per cent this year

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The average Toronto area re-sale home price rose 1.7 per cent year over year in January to $748,328, including single-family homes and condos, according to the Toronto Real Estate Board (TREB), which is forecasting a 4 per cent annual price increase for 2019.

That means homes that sold for $787,195 on average in 2018, would increase to $820,000 across all housing categories. But condos are expected to continue driving price growth this year, with detached houses anticipated to lag again.

For sale signs at a home in East York, Toronto.
For sale signs at a home in East York, Toronto.  (Rene Johnston / Toronto Star)

“Although we won’t experience record levels, we do expect to see a better year in 2019 for sales and selling prices,” said TREB president Garry Bhaura in a news release issued prior to the publication of the board’s 2019 market outlook report on Wednesday.

TREB joined the growing chorus in the housing industry calling for the Office of the Superintendent of Financial Institutions (OSFI) to reconsider the mortgage stress test it introduced last year. The test, which is designed to protect consumers from drowning if their housing or other costs increase, means home buyers have to qualify for mortgages 2 per cent higher than they negotiate with their banks or the Bank of Canada’s five-year benchmark rate.

In a speech in Toronto on Tuesday OSFI assistant superintendent Carolyn Rogers acknowledged that housing affordability is a problem. But she said the answer isn’t to allow consumers to pile on more debt.

The stress test, along with higher interest rates, has been blamed for the volatility of the 2018 housing market following frenzied activity in 2016 and the first four months of 2017.

Home sales rose slightly year over year in January. The 4,009 transactions in the first month of 2019 was only .6 per cent higher than the same level last year, but was up 3.4 per cent from December, according to preliminary seasonally adjusted figures.

The average price of a detached house in the region was $941,488 last month, a 2.8 per cent year over year decline. Condos averaged $548,176, up 7.9 per cent compared to January 2018.

Apartments and higher-density ground-level homes such as town houses are seeing better price gains simply because they are more affordable said TREB director of market analysis Jason Mercer.

“Market conditions in January, as represented by the relationship between sales and listings, continued to support moderate year-over-year price increases, regardless of the price measure considered,” he said.

Last year’s listings on TREB’s Multiple Listings Service (MLS) returned to post-2009 levels of about 155,000, after a spike in 2017.

An Ipsos consumer home buying survey for the real estate board being released Wednesday will show a dip in home owners expecting to list their properties next year but a slight increase in those looking to buy, said TREB’s press release.

TREB anticipates a continuation of the region’s tight rental market with rents expect to grow in the high single-digits or low double-digits for one- and two-bedroom condos leased on the MLS.

“Almost two-thirds of investor-owners are thinking about selling one or more of their units over the next year,” according to the Ipsos survey. TREB says that is likely a result of rent controls.

Tess Kalinowski is a Toronto-based reporter covering real estate. Follow her on Twitter: @tesskalinowski

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RCMP’s sexual harassment suit bigger and more expensive than predicted

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The Royal Canadian Mounted Police need more money to help cover a historic class-action lawsuit after more women than expected came forward with stories of harassment and sexual abuse.

The « need to seek additional funds » was flagged in a briefing note from RCMP Commissioner Brenda Lucki to Public Safety Minister Ralph Goodale, obtained by CBC News through access to information laws.  

In 2016, Bob Paulson — then the RCMP commissioner — delivered a historic apology to female officers and civilian members as part of a settlement in two class-action lawsuits.

The settlement — known as the Merlo-Davidson settlement after plaintiffs Janet Merlo and Linda Davidson — covers all women who were harassed while working for the RCMP during and after September, 1974. Each victim is eligible for a payout of between $10,000 and $220,000.

As the settlement was announced, the government set aside $100 million to cover the claims but left open the option of increasing the sum.

That $100 million fund was established back when the RCMP expected about 1,000 people to submit claims. Instead, the assessor’s office received more than three times that number of claims.

« The RCMP will soon determine the amount of incremental funding required to pay for both the compensation awards to claimants above those originally estimated and the resulting impact on the assessor’s office, » wrote Lucki back in June.

The RCMP won’t say how much extra money they’ll need.

« Every claimant who is determined by the independent assessor to be eligible for compensation will receive the amount she is entitled to under the settlement, however, we are not in a position to speculate on the total amount at this time, » said RCMP spokesperson Staff Sgt. Tania Vaughan in an email to CBC.

« The RCMP is continuing to monitor the claims process and the amount of incremental funding required to pay for the whole of the claims process. »

Scott Bardsley, a spokesperson for Goodale, said the department hasn’t yet received a request for funding from the RCMP but is expecting one. Once it arrives, it will be forwarded to the finance department.

Last fiscal year the force paid out $6.7 million to 144 claimants and more than $12 million in legal fees, according to the annual Public Accounts tabled recently in Parliament. The deadline to file was extended until May of this year.

Goodale has called publicly for a « new culture » within the force, one free of « workplace harassment, bullying and sexual misconduct. »

« Those suffering mental anguish as victims must have access to the help and support they need to heal, » he wrote in a blog post this summer.

#Metoo effect

David Klein, one of the lead lawyers in the RCMP class action lawsuit, said the boom in the number of claims is a good thing.

« We’re encouraged that women have felt sufficiently comfortable to come forward and tell their stories, » he said.

Retired RCMP officers Linda Davidson, left, and Janet Merlo share a laugh outside Federal Court in Toronto on Wednesday, May 24, 2017. Davidson and Merlo were representative plaintiffs in a class-action suit against the RCMP on behalf of sexually harassed female employees. (Colin Perkel/Canadian Press)

« We think the increased numbers sends a message to the RCMP and all employers that this is something that needs to be taken seriously and addressed, that everything that can be done to address sexual harassment in the workplace should be done. »

The briefing note says the forecast of 1,000 claims was based on « the information that was available at that time. »

« During the claims window, greater societal attention became focused on issues of harassment and discrimination, including the rise of the #MeToo movement, which may have contributed to the greater-than-expected number of claims being submitted, » it says.

More help needed

As of Nov. 15, 2018, independent assessor Michel ​Bastarache — a former Supreme Court justice — had waded through about a quarter of the claims, rendering 809 decisions out of 3,131 claims.

Late last month, the Federal Court assigned Lynn Smith, a former judge with the British Columbia Supreme Court, as an additional assessor « to ensure the expeditious processing of claims. »

Successful claimants are awarded compensation on a sliding scale, ranging from level one claims — which cover sexualized comments —  to level six claims involving « forcing [the] complainant to engage in penetrative sex acts. »

Guy Versailles, a spokesperson for the assessor’s office, said the office isn’t ready to provide a breakdown of how many claimants have been assessed at each level so far.

« We do not give numbers beyond those on our website. Complete breakdown by categories will be given in our final report, » he said in an email to CBC.

Versailles said the assessor’s office expects it will take another 18 to 20 months to process all the claims.

The RCMP could be on the hook for even more money if a second class action is approved. Earlier this year, lawyers for two veteran male RCMP officers filed a $1.1 billion class action claim in federal court that seeks compensation for thousands of past and present employees for what they claim is widespread « bullying, harassment and intimidation. »

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