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A Real Estate tale for the times

June 4, 2021   ·   0 Comments

By Constance Scrafield

It is almost impossible to have general sort of conversation these days without the price of real estate coming up. Shock, despair, some anger and, now, the deep speculation of what’s next. Will what has gone up, up, up necessarily come down, as the old adage insists? The Bank of Canada is (finally!) raising concerns about the big increase of household debt across Canada, citing the disproportionately high prices of housing.

We have all heard about the Toronto house, a crummy little place, that sold for a whopping $600,000 over asking price. Personally, I reckon a crime of some sort was behind the money that was spent on that piece of real estate: when the money paid is far greater than the value of the object, be it a house or a diamond, there is very likely another reason for the deal.

So, exhausted by the whole business, I happened upon a story on the BBC, similar to one in another European country, tis time a feature in Italy.

(Ah, Italy!) You may have seen it too: houses for sale for one Euro – $1.47 at today’s rate. Yes, you can buy a house in Italy for under $2.00. Let’s go!

Of course, there are reasons why. They all need renovating, naturally, although the degree to which varies broadly. This offer began in Mussomeli, Sicily, as a means of re-populating the town years after a devastating volcano. Mainly, it has been the British who have come, their natural love of Italy and the Italian way of life tempting them to take on the challenge and the adventure.

The conditions of such a purchase are to pay the taxes, about 350 Euros or $514.00 and to complete the renovations within three years. The offer has been reasonably successful, although the homes are more for holidays than full time living. 

In Teora, also in Sicily, another approach has been taken. The price has stayed the same with added perks of taxes and schooling coming included for families with at least one child, in an effort to bring people in to actually live in the place, evident when children are going to school. Yet another village had no luck with the plan, as it took too long to discover all the owners of the abandoned houses, for permission to sell their properties.

What has happened, by and large, is the original owners in all the towns offering the one-Euro sale had abandoned their homes and moved away.

The fact is that people have bought many of these homes in Italy, in the beautiful countryside, where the food is among the healthiest in the world: more people live to 100 in Italy than anywhere in the “western” world. You can just imagine what all is not on their menus.

It is also the quality of life, the resistance to pressure; the refusal to indulge in the crazy 24 hours-a-day work style; the craving for acquisitions, for stuff.

What works is a passion for quality, not quantity – in food, clothing, possessions. An Italian will own many fewer dresses, suits, shoes and so on but they will all be the best quality – one silk shirt, worn maybe every day but lovingly washed in the evening. Things are still made in Italy; food products, clothing, the best jewellery chain (silver and gold). They have not bought into the cheapening alternatives but insist on crafting products at home. Someone said to me just now, “Yeah, some guy’ll go over there and buy twenty of those houses, fix them up and then flip them…”

Funny thought, taking this idea to a nice place like that…although it might not work out quite as imagined.

Back here, where the scam, as I now see it, hyped-up, back breaking – just wait for the fallout: real estate gone mad – back here, the rush will be over sooner than expected, I predict, and people might be licking their wounds, wondering how all this went so far over the top and what on earth are we going to do about it?

Lots of people pushed themselves or were pushed by agents, to compete with the other, many bids; some people won through and were surprised; some bought a house that was more than they can comfortably afford long term and will live with the worry of an increase in interest rates. 

One might suggest that the governments, federal and provincial, could have/ should have stepped in to slow down the frenzy but there is no real jurisdiction for that kind of action in a free market like this. We all know, it is not only here that the whirl wind is spinning. Right across Canada, right across much of the world, the same bubble is in control and spending is out of control.

As for Dufferin and Orangeville, where the cost of rent and real estate has been puzzlingly high for some years, it will be interesting to see how the new homes are priced and whether the influx of dwellings will help to balance the market here.

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