Part of our series of Outlook 2020 Q&As with building industry executives
How do you see the outlook for the new home industry in 2020?
It's bright. The economy is getting better and more homes are being sold, financial and mortgage markets are improving and the federal government is a little easier to deal with. However, the affordability for new-home buyers, especially firsttime buyers, is a challenge because of the stress test. We need to help these buyers, not make it more difficult.
[caption id="" align="alignnone" width="393"] Shakir Rehmatullah, President, Flato Development Inc.[/caption]
And for Flato Developments?
Similarly, the outlook is strong, largely because our target market is firsttime buyers and young families, and the homes we build are lower than the $1-million price point. For Flato Developments, most of our new homes will be outside of the GTA, from mid $400's to $1 million, so affordability is key. People don't mind driving outside the GTA as long as the location is right, the community is good, and they are getting value for their homes. It's not just because home prices are lower, the cost of living is, as well. Living outside of GTA will be a trend.
What is your company doing to address the issues facing the homebuilding industry – namely, affordability and new home supply?
Affordability is the key. Most people can't afford homes in the GTA. They are becoming too expensive too quickly, especially in last five years. All associated costs keep going up, such as developing charges, parkland levies, cost of construction, infrastructure and taxes. But personal incomes haven't risen accordingly, so there is a gap and affordability has been affected.
In addition, the mortgage market has become very difficult and very tight. Most young families can't afford to buy a home in the GTA. For example, single-detached homes in Markham are about $1.5 million. At Flato, we are stepping outside the GTA and going to place such as Dundalk, Beeton and Shelburne. We are exploring those areas because of the lower development charges, and we can afford to build the houses that people can afford.
What more could the industry do to address these issues?
The biggest thing is to work with the government, and we are fortunate to have the Conservatives in Ontario. They are cutting the red tape, and they are open for business. The less red tape, the better the market will be. The sooner we can bring homes online, more choices and more supply will bring down the prices. So, we need more supply, and the supply can only come with the government's help. We also need to cut the red tape at the municipal level. The industry should continue to work with BILD on these initiatives.
What should prospective new-home buyers know about Flato Developments for 2020?
We are going to continue to build our Canvas on the Rouge condos in Markham, where construction just began, and the goal is to complete the project as soon as we can. We are continuing to build our master-planned communities in Dundalk and Beeton. Every year, we are looking to finish a part of the subdivision of these projects. In Dundalk, we have Edgewood Greens and we are excited to release Carriage House. In Beeton, we have Beeton Village and going to release another one, Green Ridge. We will have Grand Openings for Carriage House and Green Ridge early this year. They are all townhomes and single-detached. We are going to release the first senior apartment building, called Edgewood Suites, in Dundalk.
Why should prospective new-home buyers consider buying from your company in 2020?
We are building communities, not just homes. We spend a lot of time on master-planning the communities. We consider everything that homebuyers will need, from amenities to accessibility to facilities to transit. We consider where the parks and schools will be, and how residents can walk to these places safely. Wherever we can do safer plans for them, save greenspace, plant more trees and work with the conservation authorities… we do it. We take all of these things into consideration at Flato.
Our customers have chosen to trust us when it comes to making the biggest investment of their lives, and we strive to return that trust – from the moment we meet them, to the time we hand over the keys, and beyond.
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