Since when has the Renfrew Mercury become a shill for the local real estate industry?
March 3rd saw an article in the online version of the paper talking about how there are homes available in Renfrew that won’t break the bank with prices under $400,000. The article then went on to describe three such homes, with descriptions that one would see on the website of a real estate company. That shouldn’t be a big surprise since the primary source was a website, realtor.ca.
Here’s two problems I have with it.
One, does the reporter have any inkling over how difficult it is for people, particularly young people, to purchase homes in this country? In a recent survey reported on by the Mercury’s parent entity, the Toronto Star, it was suggested that a record-high number of Canadians are expressing doubts that they will ever be able to afford a home.
Housing prices shot up during the pandemic, especially with urban work-from-home types seeking “affordable” housing in communities outside the major cities, places like Renfrew, for example. The market was so hot that people in Toronto sold their modest homes for huge mark-ups and moved elsewhere, like North Bay, where their new-found equity wealth allowed them to transition into luxury homes on the escarpment overlooking the lake and the city, where all the power homes are. A similar situation exists here in Renfrew relative to our proximity to Ottawa.
In the Mercury article, the first sentence is poignant.
“One does not need to break the bank to own a home in Renfrew.”
No, that’s right, the bank won’t be broken, but you might. Ask any homeowner whose mortgage has come due or is about to be renewed how they feel about home ownership. With interest rates at their current lofty level, people are losing their homes because their mortgage payments have become too onerous for them. That’s nothing short of a crime, not in a legal sense but in a moral one. Again, the so-called middle class is being priced right out of the picture.
No, you won’t break the bank, but the bank might break you.
The first property discussed was priced at $324,900. In what universe is this affordable, and to whom? Can the reporter afford this place? If we went with the rule of thumb of a 10% down payment, that would be $32,500. Does he have that amount of change sitting in his SuperSaver account?
With a 10% down payment, and on a five year fixed closed term at 4.64% and amortized over twenty-five years, the monthly mortgage payment would be $1641.25. Only try to get an interest rate like that, because the current rates are a full point higher, with TD Bank offering 5.54% interest on the same mortgage, resulting in $1791.66 a month.
That doesn’t strike me as affordable, unless I’ve sold a property in a large city or I’ve got thousands buried in soup cans in the back yard of my current place.
Secondly, why is the local newspaper hustling for local realtors? They advertise plenty in the Mercury, in fact they probably take up over a third of what’s in the thing. Why do they need a freebie? Realtors regularly make 4% commission on the purchase price of a home. On that place on Bonnechere Street for $324,900, a realtor stands to walk away with a shade under $13,000 for their efforts. Even if they share a cut with a city agent representing city buyers, that’s still $6,500 plus, which is not bad for showing a house. I don’t want to talk of the guys who charge 5% commission.
This on a home suggested as being “affordable” in Renfrew.
So, with respect, why do they need any help?
NEWSMAGRENFREW 