JUNE A SOLID MONTH FOR GTA CONDO SALES

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The Altus Group statistics for June 2019 released by BILD show that sales for new condominiums in the Greater Toronto Area were up 14 per cent from one year ago, and only 5 per cent below the 10-year average. In addition, the benchmark price of new condos increased slightly from May and were up 3.9 per cent over the past year. Interestingly, the total number of condos sold in June was 2,420, and only 1,214 were in Toronto. The 905 areas of Durham, Halton, Peel and York accounted for 1,206 of those sales. Of the 932 new single-family home sales in June, only 6 were in Toronto. The rest were in the 905 municipalities.

Toronto
Sales for new condominiums in the GTA were up 14 per cent from one year ago.

A lot of this success has to do with overall inventory. In June, there were 19,062 new homes for sale, which was up over 25 percent from the year before. A full 14,377 of these were condos, up over 39 per cent over the same time period. Of the 3,352 new home sales in June 2019, 2,420 were condos – meaning once again, condos are king in the GTA!

CONDO MARKET IN FULL SWING AGAIN!

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The Altus Group statistics are in for the GTA new home market for May 2019 (https://bit.ly/2IO7Lqk), and the news is wonderful. BILD has posted the stats, which show that the slowdown in the first quarter was temporary. The market exploded in April and May. In fact, in May, total new home sales were up 94 per cent from 2018 and up 27 per cent from the 10-year average. Sales of new condos were up 76 per cent from May 2018 and 64 per cent above the 10-year average. In addition, the benchmark price of new condos increased from April to $779,687.

There were a near record number of condo units launched in April, which accounted for much of the success. Perhaps the strongest factor in the upsurge in sales, however, is the fact that interest rates are holding steady. After a series of increases in 2017 and 2018, for the fifth consecutive time recently, the Bank of Canada left key rates unchanged. This is encouraging for both end-users and investors, and people are obviously finding ways to cope with the stress test imposed by the federal government. 

Some experts are calling our current robust market our “new normal,” and I agree. When is the best time to buy a new condo in the GTA? The answer will always be NOW!

BILD COMES THROUGH WITH CLARITY ONCE AGAIN

Kudos to BILD (The Building Industry and Land Development Association) GTA, which has created an innovative interactive website called BUILDINGANSWERS.CA. The association invites people to ask questions about the building and land development industry in the Greater Toronto Area – and with the amount of construction going on, there are surely questions. BILD’s commitment is to answer honestly, factually and openly.

The website has many frequently asked questions already answered, such as:

  • Why does the price of homes in the GTA keep rising?
  • What role do land developers and home builders play in housing prices?
  • What are housing prices going to do in the long term?
  • How do parks and public spaces benefit from new housing and developments?
  • What makes up the cost of a new home or condominium?
  • How does new housing and development support public infrastructure?
  • How does the economy benefit from new housing?
  • Why are developers building so many condominiums instead of houses?
  • How do housing and condominium developments get approved?

These are just some of the questions that are answered on the website. According to BILD, “Our goal is to provide you with accurate information on how the building and land development industry is working with residents, communities and the governments to build a livable GTA for all.” Remember, that’s BUILDINGANSWERS.CA

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AT LAST, A BUDGET THAT ADDRESSES HOUSING SUPPLY IN ONTARIO

The 2019 Ontario Budget entitled “Protecting What Matters Most” upholds that promise where housing supply in the province is concerned. The upcoming “Housing Supply Action Plan” addresses problems that I and many builders, developers and other real estate professionals have pointed out for years.

After public consultation, the Ontario Government is taking action regarding the following:

  1. that it takes too long for development projects to get approved;
  2. that there are too many restrictions on what can be built to achieve the right mix of housing where it is needed;
  3. that development costs are too high because of high land prices and government-imposed fees and charges;
  4. that tenants need to be protected, and it should also be easier to be a landlord in Ontario;

and that innovative solutions to increase housing supply should be encouraged.

As for bullet points #1 and #2, remember that the longer it takes to get approvals, the more costs go up, and of course, these are passed on to purchasers. Governmental red tape holds up the development and building of new homes and condos to the point that supply is low, and prices are unattainably high for far too many would-be buyers.

And let’s talk about #3, development charges. According to Dave Wilkes, president and CEO of BILD, in an article that appeared in November 2018, development charges for a single-family home in the City of Toronto increased last year from $41,251 from May 1 to $60,739 on November 1. As of November 1, that number will increase to $71,432 on November 1, 2019 and then to $80,227 on November 1, 2020. That will add $38,976 to the cost of a new home in three years. An Altus Group study commissioned by BILD last year showed that government fees, taxes and charges amounted to 22 per cent of the cost of a new home. Development charges mounted to 30 per cent of all charges. And it is not just Toronto: since 2004, development charges have increased between 236 and 878 pre cent across the GTA.

As for #4, yes, tenants must be protected, but right now, they are far more protected than landlords. Making landlord requirements less complicated will achieve balance. One thing potential investors can be sure of is the continued need for rental accommodations in the city. Many people who dream of owning a home have to rent until they can afford one, and nowadays, we see numerous empty-nesters looking to cash out on their large homes and move to a rental property for convenience or the fact that they are priced out of buying again at today’s prices.

The Budget contains the commitment for the Ontario Government to support the residential construction industry more, as it is a major source of employment in the province and extremely important to our economy. If we have ever needed a housing supply action plan, it is now! To read the contents of the Ontario 2019 Budget, visit http://budget.ontario.ca/2019/contents.html

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The United Building

CANADIAN HOME SALES BODE WELL FOR ECONOMY

I have always said that people create the economy, and when they feel good about it, they buy homes. According to the Canadian Real Estate Association (CREA), in April, sales on MLS systems across the country increased 4.2 per cent year over year, and 3.6 percent month over month. (https://bit.ly/2GpPPQK) Greater Toronto Area sales were a driving factor in this gain.

We also know that in the new homes arena, condominiums are the driving force, and in the first quarter of 2019, the construction of condos hit an all-time high. According to Urbanation
(https://bit.ly/2YRax3y), which tracks the GTA condo market, there were 242 projects underway, representing 71,378 units. In downtown Toronto alone, there were more than 100 cranes. Developers can begin construction on condos only when they have substantial sales, so this flurry of activity is an exciting step in our local economy.

According to BILD (https://bildgta.ca), the home building, land development and professional renovation industry is one of the largest in the GTA and represents $30.2 billion in economic value (7 per cent of Ontario’s Gross Domestic Product). This also represents billions in wages. When home-buyers show faith in our economy, in turn, they help to improve it with their purchase decisions.

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SXSW Condos

GTA NEW HOME MARKET CONTINUES MOMENTUM IN APRIL

In May, BILD released the Altus Group statistics for April GTA new home sales, and once again, things looked great for condominiums. Condo sales were up 137 per cent from April 2018 and 37 per cent above the 10-year average. In fact, total new home sales were up 123 per cent from last year, and approximately even with the 10-year average. Overall, this bodes well for the new construction industry.

As for condos, the number of new towers launched had a lot to do with increased sales. The benchmark price was up 2.5 per cent over the past 12 months. Things are definitely on an upswing for this resilient market. With immigration continually bringing in new buyers, and with prices keeping many out of the low-rise market, condos will undoubtedly be the new homes of choice for years to come!

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M2M Condos

PARENTS ARE HELPING CHILDREN ENTER THE NEW CONDO MARKETPLACE

Canada’s Federal Budget 2019 provides some help for first-time home buyers in the form of the CMHC First-Time Home Buyer Incentive. Qualified buyers will be able to finance up to 10 per cent of the price of a new home or 5 per cent on an existing home through a shared equity mortgage with Canada Mortgage and Housing Corporation. Considering today’s prices in the Greater Toronto Area, this may still not be a deciding factor for many would-be homeowners. Nowadays, at Baker Real Estate Incorporated, we see the bank of mom and dad as a popular option for those who have parents to turn to. And condominiums are, by virtue of financial attainability, the choice for most first-time buyers.

Many parents are looking at the purchase of a condo for their children to live in while attending university or college, and then eventually, a retirement residence for themselves. They may also look at it as an investment they can bequeath someday as well. Condos across the GTA are increasing in equity quickly, often before owners actually move in. Encouraging children to enter the real estate market and making it possible to achieve that goal is one of the most loving things parents can do. Real estate is a cyclical business, and nothing can happen until people buy their first homes. They become the move-up buyers of the future and the right-sizers as they age. Smart parents buy sooner rather than later!

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The United Building

THE UNITED BLDG CONDOS LINKS THE PAST AND PRESENT FOR THE FUTURE

Soon, history will be made on Toronto’s urban landscape when Davpart Inc. introduces The United Building at University Avenue and Dundas Street West. Registrations are now being taken for condominium residences in this spectacular mixed-use re-envisioning of the historic Maclean Publishing/Maclean Hunter building.

Davpart enlisted the impressive firms of ERA Architects and B+H Architects to design the exterior, which will create a new landmark on the cityscape. It will feature the restored heritage structure housing office and retail at the base, with a new contemporary residential tower rising above it (rising to 54 storeys in total). Imagine the opportunity to live, work and play on one of the City’s most distinguished thoroughfares.

And the convenience! Residents will have direct access to the St. Patrick’s TTC station from right inside the building, and the 505 streetcar from the front door. And of course, they will be able to walk to an enviable array of local amenities including Nathan Phillips Square, the GAO, Ryerson University, University of Toronto and Eaton Centre.

Kudos to Davpart for working hard to preserve this beautiful building, which is designated under the Ontario Heritage Act and listed on the City of Toronto Inventory of Heritage Properties. Residential interiors by Tomas Pearce Interior Design Consulting are the icing on this lifestyle cake. Amenities will range from an absolutely stunning lobby housing 24/7 concierge service to lounges, a party room, fitness facilities, an idea room, a 4-season reflecting pool, plus a sauna and rain room. The opportunities for exercising, socializing and entertaining will be phenomenal. Suite choices will range from studios to three-bedroom + den designs – something for everyone! Register NOW at www.theunitedbldg.com

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The United Building

WILL CANADA’S BUDGET HELP HOPEFULS BUDGET TO BUY A HOME?

Ah, the circle of real estate! It all begins with first-time buyers who get their foot in the door, eventually have families and become move-up buyers, and later on, right-sizers before the circle closes. If we miss out on one of these steps, we are not serving our communities well. Considering the challenges first-time buyers face today, we are missing out on the foundation that keeps our real estate circles dynamic. Canada’s proposed Federal Budget 2019 addresses this situation in part with a provision to help first-time buyers achieve homeownership. Called the CMHC First-Time Home Buyer Incentive, the program will enabled qualified buyers (with combined incomes lower than $120,000 annually) to finance up to 10 per cent of the price of a new home or 5 per cent on an existing home through a shared equity mortgage with Canada Mortgage and Housing Corporation.

Let’s say someone wants to purchase a home for $500,000, which requires a minimum 5 per cent down payment of $25,000. Through the program, CMHC would provide up to $50,000 (which would eventually have to be paid back), meaning that instead of a $475,000 mortgage, buyers would have to borrow only $450,000. This would lower their monthly mortgage payments and help them pass the stress test imposed by the federal government last year.

Certainly, this is good news for first-time buyers, but the Budget does not address the biggest problem in housing today: the shortage of supply. We see it all the time in the Greater Toronto Area. Our developers and builders are bogged down in red tape at the municipal level, causing approvals on new projects to be delayed, often for years. This situation results in making new homes and condominiums more expensive than necessary. The Ontario Municipal Board was disbanded, and we now have the Local Planning Appeal Tribunal to hear cases dealing with everything from zoning by-laws to subdivision plans, but I have not seen any proof that this process is any less cumbersome and time-consuming than before. What good is the provision for first-time buyers in the Budget, if they have nothing available to buy?

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Azura Condominiums

TOP 10 REASONS TO BUY PRE-SALE CONDOS IN TORONTO

  1. Price – Both end-users and investors can buy into the new condo market in Toronto at attainable price points.
  2. Availability – New low-rise homes in Toronto and across the Greater Toronto Area are scarce.
  3. Bright Outlook – The new condo market is positive, strong and has legs to grow.
  4. ROI Potential – Investors saw 2018 cause a frenzy in the rental market, where rents have increased substantially.
  5. Something for Everyone – In addition to being the choice of most first-time buyers, new condos also serve those wanting to move up but are still priced out of the low-rise market.
  6. Appointments – Purchasers of pre-sale condos can select the features, finishes and upgrades that express their aesthetic tastes and fit their budgets.
  7. Location – New condos are going up across the city in locations that are close to amenities and public transit.
  8. Amenities – New condominium buildings are graced with luxurious amenities, from chic multi-purpose rooms to fabulous fitness facilities, lounges, games rooms, barbecue/dining terraces and more.
  9. Convenience – With exterior and common area maintenance and repair handled by the Condominium Corporation, condo residents have more leisure time to spend with family and friends, and to use the great amenities in their buildings.
  10. The Wave of the Future – With ongoing immigration and the lack of developable low-rise land across Toronto and the GTA, condos are the wave of the future and will always be in demand.XoHero_CAROUSEL.jpg