Hard Times Hit Home (April 05, 2001)
Realtor Mike Donia is standing in front of a $3.6 million house in Mississauga.
At 17,000 square feet, it is the most expensive home ever listed in the city. Parked outside are a Ferrari, a Bentley, a Porsche and a BMW.
Donia knows these are hard times, but he has an offer he's hoping the remaining dot-com millionaires that haven't been wiped out in the stock market will go for. It's a sweeter for these desperate times of questionable earnings reports and rapidly evaporating venture capital.
Pick a car, any car, says Donia. It's yours. If you're willing to cough up the $3.6 million for the garage to park it in.
"The NASDAQ (stock market) is the ultimate barometer of disposable income", says the Remax agent. "When it's up, people spend. When it's down, people stop buying luxury goods and homes."
For Donia, one of the top selling luxury-home realtors in the country, falling stock markets are not good. Over the past two months he's had a couple of $2 million home deals fall through after the markets took a dive. " I had one person ready to move on a house in Caledon and he was stopped cold the day the market dropped. Another guy had his stock drop from $220 to $58 and he bailed out of a $2 million home is Mississauga." The agent doesn't need to read the stock pages to figure out things aren't going well.
To attract customers, he typically advertises in the upscale American Dupont Registry magazine that features fine homes and cars.
"Last April when the NASDAQ dropped, my calls went down 40 per cent," says Donia. "There are still a lot op people out there who are flush with cash. The question is, how deep is the downturn going to be, and are there going to be a lot of desperate people out there willing to drop the prices on their homes?" The statistics don't show any fire sales just yet. The million-dollar home market in the Greater Toronto Area is minuscule, accounting for less than 1 per cent of the Toronto Real Estate Board resales. Every month in the GTA, there are about 30 homes sold that cost more than $1 million. That figure has been pretty constant over the past year. In February, 40 homes worth more than $1 million sold, below the peak of 45 last summer, according to an analysis prepared by Will Dunning Inc. for The Star...