Posted in Investing, Real Estate

Three Lessons Learned from Owning a Bridle Path Home

Owning a Bridle Path Home 2

The Bridle Path or “Millionaire’s Row” seems the pinnacle of Canadian home ownership.  Celebrities such as Celine Dion, Drake, Prince, Mick Jagger and Gordon Lightfoot have all called this neighbourhood home.  Living in the Bridle Path is considered “making it” by many ordinary Canadians. 

My husband and I lived there with our four young children between 2012 and 2014 and there were definite pluses, the biggest being the park-like back yard.  But I would not go back even if I could.

The three lessons I learned from owning a Bridle Path home are as follows:

Lesson One: If you need a mortgage to afford a home in the Bridle Path, this neighbourhood is not for you. 

I was told this by one of our lenders at the time and thought it a strange comment, but in hindsight he was absolutely right.  This is a neighbourhood for extremely wealthy people – celebrities, titans of industry and old money.  If you require a mortgage to join them, you should move somewhere else.

Lesson Two: This is not a neighbourhood in the real sense of the word. 

You will not have any neighbours within view when you exit your home; your children will not have any playmates on the street; no one will have eyes on your house when you are not there; almost every house has large fences or walls around it; and you won’t meet any of your neighbours.  There is no street activity like ball hockey, raking leaves, playing hoops in your driveway, sitting on the porch, or walking and jogging like on a normal street.  This is an exclusive, estate-lot type setting, where everyone keeps to themselves and everyone expects privacy.

Lesson Three: Buying a home in the Bridle Path is not an investment but an expense. 

Even without a mortgage you will likely have property taxes of $10,000 per month, utility bills of $10,000 per month, and maintenance fees of $5,000 per month.  That tallies $300,000 per year in home expenses even without a mortgage.  Hence this type of home requires that the owner have a robust ongoing income from other sources to cover the $25,000 monthly bills. Even if the home increases in value over time, the ongoing expenses will likely eat up any capital gain.

Drake is a perfect resident of the Bridle Path.  Normal folk not so much.

Drake - Canadian Musician

Posted in Finance, Real Estate

Norma Walton Talks: Predictions for Residential Real Estate

I predict that the price of houses in towns and cities that are within one to two hours of Toronto will skyrocket in value over the next two years, outpacing the average price appreciation for all residential real estate in Ontario.  There are three reasons I make this prediction.

Residential Real Estate

First, with the onset of COVID, a lot of employers have been forced to permit their employees to work from home.  This is a trend that is here to stay.  Even bankers and lawyers are working from home.  That flexibility and the concept that you may only need to attend the office in person two to three days a week removes the need for people to live in or near the big city.  Commuting a few days a week is not as onerous as commuting every single weekday.  This provides flexibility and opens up a much larger radius around the city for purchasing a home.  The smaller towns are far more affordable than Toronto.  A colleague of mine recently bought a brand new home in Bracebridge for less than $500,000.  That is an attractive metric for many people who currently live in the city.

Second, there are so many condominium dwellers and apartment dwellers who are sick of waiting 45 minutes or more for the elevator due to social distancing.  They are also tired of heading up and down the emergency exit stairs trying to keep their distance.  They are desperate to breathe the fresh air and spend some time outdoors given the state of emergency orders that have been in place.  Many condominiums and apartments have no outdoor space.  Those feelings of having been cooped up in a box will drive many of those condominium owners to sell their condominiums and purchase houses that they can afford…and those affordable communities are typically at least an hour outside of Toronto and often as far away as two hours away.

Predictions for Residential Real Estate
Macleans photo

Finally, the price of houses in the city of Toronto remains incredibly high.  The prices are completely unaffordable for most families.  Anyone coming into the city from elsewhere in Canada cannot afford to buy in Toronto.  That lack of access to affordable houses in the city will drive people who want a backyard and their own house further and further outside of the city limits.

Those three trends support my prediction that homes in the surrounding communities within one to two hours of Toronto will skyrocket over the next two years.  We’ll see if the prediction comes to fruition.