Globe & Mail – April 8, 2005

By Jane Gadd 
 Page A14
 
There's a new definition of affordable housing in Toronto -- it's $1-million for anything in a tony neighbourhood.

Sales of homes costing $1-million or more are rising steeply, according to a new survey by real-estate agency Re/Max, and mortgage brokers say it's no longer unusual for customers to come shopping for $1-million home loans, which entail monthly payments in the $5,000 to $6,000 range.
Re/Max Ontario-Atlantic Canada reports that almost 300 homes sold for more than $1-million in the Greater Toronto Area in the first three months of this year. That's a 33-per-cent rise over the first quarter of 2004.

These luxury homes are clustered in the usual blue-chip neighbourhoods -- Hogg's Hollow, the Bridle Path, York Mills Gardens, Rosedale, the Kingsway and Oakville.

"The strong momentum in the upper end [of the market] shows no sign of abating," Re/Max regional director Michael Polzler said.

"I guess Toronto's finally getting to the point where it's a big city," said Kennedy Ho, a real-estate broker who has the listing for the most expensive home.

At $15-million, the modern, minimalist glass-sheathed playhouse at 83 the Bridle Path was built by the noted family-run design firm TAS DesignBuild for themselves.

"In the United States it would go for a lot more," said Mr. Ho of Sultan Realty, who notes there are five to 10 properties along the Bridle Path valued in the $10-million range. "There definitely is a market for these high-end homes."

The $15-million house is two years old and has separate wings for entertaining, for sport (including a swimming pool and basketball court) and a "tower" containing family rooms.

"[The family] have got their thrill out of it already, they're enjoying it, but they're ready to sell it, although there's no rush," Mr. Ho said, adding that the family have lived in the home less than a year.

Seven homes have sold for more than $3-million so far this year, the most expensive of them in Oakville for $4.75-million, Re/Max reported.

And it's not just detached homes that are commanding prices in the millions.

Toronto saw 13 sales of condominiums and townhouses priced above $1-million between January and now, compared with eight a year earlier.

There are 70 luxury condominiums currently on the Toronto Real Estate Board's multiple listing service in that price range.

The most expensive condo sold last year for $2.35-million and was located in the Annex, Re/Max said. And the priciest condo currently on offer is the penthouse suite at the Windsor Arms Hotel at $6.9-million.

So how rich do you have to be to play in the $1-million league?

Mortgage broker Jim Rawson of Invis Inc. says a family would need a gross income of $215,000 to qualify for a mortgage on a $1-million home, assuming they had a 25 per cent down-payment to keep it in the conventional-mortgage category.

The monthly payments would be $4,300, assuming the best five-year mortgage rate available at the moment, which is 4.9 per cent, Mr. Rawson said.

"It's not commonplace, but it's no longer unusual," he said.

The rule of thumb when figuring out how much mortgage you can afford is to multiply your annual gross income by 3.5.

A mortgage for three-quarters of the value of the $15-million home would cost about $64,000 a month, "but in that bracket, they wouldn't be looking at financing it," Mr. Rawson said.

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