Tag Archives: GTA

Humber Bay, Etobicoke

Why Canadians should think long term in real estate – especially now

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Why Canadians should think long term in real estate – especially now

Humber Bay, Etobicoke

Unprecedented doesn’t even begin to describe it. A few weeks ago, we awaited an exceptionally active spring real estate market in the GTA, buoyed by the recent easing of mortgage regulations and interest rates.

Now, however, instead of seeing a spike in buying activity, we’re hunkering down, battening down the hatches and riding out the COVID-19 crisis, all in an attempt to flatten the curve.

Historic, surreal and unbelievable might be more suitable adjectives to describe these times.

And under such circumstances, with normal life routine displaced by the daunting and unknown, people naturally tend to worry.

In real estate, if location, location, location is the No. 1 rule of thumb, thinking long term is right there along with it, as 1A.

We’ve been through similar challenging times: The 1989 recession, Y2K, 9/11, the Great Recession of 2008-09 and SARS. Now we face COVID-19.

At times of economic uncertainty and extreme stress in the marketplace, people always revert to their number one emotional and financial investment – their home. People trust real estate. Buying that first condo, a new home for their growing family, downsizing once the kids move out or renovating the place you already love.

And, so it will be again.

Long-term lift

But don’t take our word for it. Consider, for example this report from the Real Estate Investment Network (REIN), a national group of investors which bases everything it does on independent research.

According to the REIN Special Report: The Coronavirus’ Impact on Canadian Real Estate, Canadian real estate will see an immediate cool-down – but a long-term lift. We may see a temporary decrease in GDP growth, but key drivers of real estate such as population growth and increased foreign capital, demand and property values will eventually rise.

“It’s still premature to predict how the coronavirus outbreak will be resolved, but data suggests that panic will only worsen the country’s economic situation,” says Jennifer Hunt, REIN’s vice-president of research. “There is reason to be alert, but there’s absolutely no reason to further raise alarm and cause more public fear. In fact, as a Canadian real estate investor, this may represent a buying opportunity for investors, with a likely future positive lift in rental and housing markets.”

Open for business

It might be a stretch to say it’s “business as usual,” but life does have to go on, as soon and as safely as possible. New home builders and developers are open for business, are accepting presentation centre visits to by appointment only, and as much as possible are moving communications to digital.

Meanwhile, the Bank of Canada recently lowered its influential overnight rate target twice in less than two weeks – from 1.75 to 1.25 per cent on March 4, then again to 0.75 per cent on March 16. Canada’s Big Five banks are following suit by lowering mortgage rates, and they, too, are increasingly going digital to facilitate business.

Buyer-friendly

All of this means the opportunities to buy are still there (though with a modified process), with less short-term competition and a more buyer-friendly mortgage and borrowing landscape.

Indeed, as challenging as these times may be, it’s even more important to focus on the long term. And on that front, new-home ownership in the GTA is still a solid investment.

RELATED READING

GTA home price growth to hit 10 per cent this year: TRREB

Outlook 2020 – 5 things you need to know about real estate this year

Get ready for a hot market in the GTA this spring

 

 

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The numbers don’t lie

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The numbers don’t lie

Now is the time to fix the housing supply problem in the GTA

Every month, BILD reports on new home sales in the GTA. This data is collected and compiled by the Altus Group and provides us with important information on how many new homes were sold, the average asking price and the remaining number of new homes in builders’ inventory. It is an important tool that gives those involved in housing, real estate and development real time insight on how government housing regulations, fiscal policy, economic conditions and consumer confidence influence the housing market in the region.

BILD recently released the 2019 year end new homes sales data, showing that GTA new home sales rallied from the 22-year low of 2018. Overall in 2019, there were 36,471 new homes sold in the GTA. Only 24,855 new homes had been sold the previous year, which made 2018 the year with the lowest number of new home sales in the GTA since 1996.

There were 26,948 condominium apartments, including units in low-, medium- and highrise buildings, stacked townhouses and loft units, sold in 2019, up 27 per cent from 2018 and 16 per cent above the 10-year average. Singlefamily homes, including detached, linked, and semi-detached houses and townhouses (excluding stacked townhouses), accounted for 9,523 new home sales, up 157 per cent from 2018 (the lowest year for new singlefamily home sales since comprehensive tracking started in 1981), but still 30 per cent below the 10-year average.

So what do these numbers mean? At first glance, it looks like new home sales were solid for 2019, but that was not the case. That’s what happens when the market recovers from the 22-year low of the previous year and new home sales remain 30 per cent below the 10-year average. What we saw in 2019 was a release of pent up demand from 2018.

We need to keep our focus on increasing housing supply, making sure that there’s a solid inventory base to ensure that housing prices remain stable. Consumer demand has not diminished; in fact, as the region continues to grow, we can be sure it will remain robust and we must make housing more affordable for the average person living in the GTA by eliminating barriers and build homes faster. We have to accept that demand will continue to increase, and both the building industry, municipal governments, and the provincial government must work together to keep all types of housing (rental and ownership) within reach.

On average, it takes 10 years to build a typical highrise project and 11 years to complete a lowrise project in the GTA. New homes must be built faster. Layers of bureaucracy, outdated zoning, and complex policies and procedures have created barriers to the efficient operation of the housing market that have resulted in a generational shortfall of housing. These obstacles have delayed the development of new homes, and have contributed to the increase in housing costs experienced over the past decade.

In addition, demand for new housing has increased as the Greater Toronto Area has become one of the most desirable places to live. The GTA is the fastest growing region in North America, with an estimated 115,000 new residents arriving every year. The population of the GTA is set to grow by 40 per cent, or an estimated 9.7 million people, by 2041; that timeline is not far away.

In May, 2019, the Ontario government announced the Housing Supply Action Plan, representing the first major step by any provincial government to address the supply challenges facing the housing market and their effects on affordability. The proposed changes also acknowledge the cumulative effect that taxes, fees and charges have on housing affordability. Land transfer taxes, HST, parkland fees and development charges collectively add $124,000 to the cost of an average new condo in the GTA, and $222,000 to the cost of an average new singlefamily home.

This is not a time for small plans. The numbers don’t lie. This year, all levels of government and our industry must continue to work together so we can fix the housing supply problem in the GTA.

Dave Wilkes is president and CEO of BILD (Building Industry and Land Development Association), and can be found on: Twitter.com/BILDGTA Facebook.com/BILDGTA YouTube.com/BILDGTA and BILD’s official online blog: BILDBlogs.ca

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Moving into a home the smart way

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Moving into a home the smart way

Whether you are a first-time homebuyer, a professional couple, a growing family or an empty-nester, if you are considering the purchase of a new or resale condominium suite or lowrise home with a condo component, it is best to be aware and prepared. The following are a few tips to get yourself organized so you come up with the best choice.

  1. Ask yourself, what are your personal and family needs? My advice is to make a list of priorities. Are you buying for the first time? Upsizing? Downsizing? Are you looking for more space, less space, or if you’re living in your parents’ basement, will any space at all do? Do you like the idea of having a backyard in a townhome, or does the idea of having beautiful condo amenities under your roof appeal? If children are involved, do you require proximity to a school? Realize that size is relative – you will find condo suites that are larger than some townhomes, and vice versa. Keep layout at the top of your interior priorities. Think about how you like to live and determine which plans accommodate those needs.
  2. Once you want to start looking around, hire a good realtor. The marketplace is packed with choices (including condominiums and lowrise homes with a condo component) in Toronto and the GTA. There are realtors who are familiar with the area you select, and they will guide your search. Remember that purchasing a condominium is different from freehold lowrise; it is wise to work with a realtor who can help you understand all of the nuances.
  3. Consider pre-construction for a variety of reasons. Resale is fine for some shoppers, but in many ways, it is like wildly looking in the dark. Buying early in the selling cycle of a new mid- or highrise condominium usually allows you a two-to-five year window until move-in, which means you can save more for your down payment, and you will likely earn equity before you even take possession. Many condo purchasers nowadays earn 20 to 40 per cent in equity prior to closing. This is huge for anyone, but especially young first-time buyers.
  4. Next, get your finances in order. Find out what you can afford, and buy as much as that allows for – as long as you’re comfortable with it. You know what debts you have to pay off and how much disposable income you need each month to keep up your current lifestyle. If you are downsizing from a large lowrise home, you have to decide how much money to take out of the home, how much to invest, and whether to use a condo as your main residence or a second property.

There are condominiums popping up in Regions of Peel, Halton, York and Durham, where prices are more attainable than Toronto. From Mississauga to Pickering and beyond, you will discover a plethora of choices with differing architecture, amenities, views, layouts, sizes and prices. The goal is to find the right one for you, and a realtor can help you along the way to your best decision.

Debbie Cosic, CEO and founder of In2ition Realty, has worked in all facets of the real estate industry for over 25 years. in2ition.ca

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In Conversation With… Rob and Ed Lucchetta, Lucchetta Homes

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In Conversation With… Rob and Ed Lucchetta, Lucchetta Homes

It’s no secret more and more homebuyers are heading out of the GTA to points west, including the Niagara Region, set to become one of the hottest markets in Ontario this year. For Lucchetta Homes in Welland, Ont., the appeal of this area is nothing new. In fact, the homebuilder has focused on delivering top-quality construction, design, value and exceptional customer service for more than 60 years. Second generation principals Rob and Ed Lucchetta discuss proudly carrying on the tradition of their father, Ugo.

HOMES Magazine: How’s business at Lucchetta Homes these days? How are you building differently now than you were, say, 10 or 20 years ago?

Rob Lucchetta: As a boutique builder in Niagara, we have always tried to stay true to our roots by giving our customers a white glove experience when putting together the endless combinations available in a home. Building a home can be very stressful, and our team of designers and concierges work hard to make the experience an exceptional one.

We have become more environmentally conscious. Leaving a smaller carbon footprint is important. We are doing our part through building science. We have always tried to stay ahead of the building code and home science technology. All our homes are built and certified to Energy Star levels and higher. We offer Net Zero and Net Zero-ready performance for those who want tomorrow’s technology today. We waste less material through a program to consciously use all materials wisely.

We also have systems in place to streamline the process. We are in the process of implementing a customer portal that will allow for almost endless choices when we build their home. It provides a point of communication with the customer and the staff, so everyone is on the same page.

Making our customers’ experience exceptional doesn’t end once they purchase. It continues when they move into their home, from educating them on the systems and addressing any issues in a timely manner. We focus on excellent customer service as part of our success story, since there’s no better referral than a satisfied customer.

HOMES: Lucchetta Homes has been building in the Niagara Region for more than 60 years… an area which is seeing increasing interest, as buyers move westward out of the GTA in search of affordability and value. ReMax, in fact, projects Niagara will be one of the top markets in Ontario in terms of home price growth this year…

Ed Lucchetta: Our father, Ugo Lucchetta, was trained by European craftsmen as a furniture maker. In the late 1950s, dad emigrated from northern Italy to the Niagara Region to join in a small homebuilding company of a relative. Over the years, after going on his own, he gained a reputation as a builder of quality homes, building one home at a time. My brother and I joined the firm in the late 1980s following dad’s retirement. We began investing in unique and special enclaves to build our own sites. Working with a great team of consultants and staff, we’ve had some very successful projects. We have also teamed up with reputable developers for larger communities.

Our key focus has always been the empty nester. We began building bungalows principally since the early 2000s, focusing on the empty nesters here, and then the trickle from the GTA began and has become a larger segment of the market.

HOMES: And how you do foresee this market performing over the next few years?

Ed Lucchetta: The influx of homebuyers from the GTA has meant a big change to the region. The area has a lot to offer – wineries, casinos, excellent shopping close to the border – it’s all here, minus the traffic and congestion. For empty nesters, Niagara offers great value. Our Hunters Pointe site, for example, has 1,400-sq.-ft. townhomes starting in the low $500,000s, and singles in the low $600,000s. This is excellent value. We see strong sales continuing, as long as the price gap between the GTA and Niagara continues.

HOMES: What about the Niagara Region and Lucchetta Homes would you want prospective new-home buyers to know?

Ed Lucchetta: Niagara is the perfect place to call home. We have easy access to great shopping, fun events, it’s close to Toronto and has easy access to Buffalo. We have more than 130 wineries and more than 30 golf courses in the area. There’s less traffic, so as you come here, you feel the stress just slip away.

Lucchetta Homes is the premier award-winning boutique builder of the Niagara Region. We offer a quality and experience like no other. Our team of sales specialists, architectural designers, interior design specialists and purchasers all work together to help buyers customize their home just the way they want it.

We offer great locations with different lifestyles. Hunter’s Pointe, our active adult lifestyle community, offers a full community centre complete with an indoor swimming pool and library, banquet facilities and a fitness centre. All this with singles and towns, all bungalow style. It has won a number of provincial and local awards and has been named Canada’s Community of the Year by Canadian Home Builders’ Association.

Our flagship site, national and provincial award-winning Davis Heights in Fonthill, features opulent finishes with soaring 10-ft. ceilings, metal and copper roofs and stone stucco fronts, linear fireplaces, engineered hardwood floors and spa-like ensuites with a large tiled shower. The quality and standards are exceptional.

HOMES: New home supply and affordability, due to land availability and approval processes, have been a hot topic over the last few years in the GTA. How are things on that front in the Niagara Region?

Rob Lucchetta: The Niagara region is open for business. The influx of GTA homebuyers who were driven out of the GTA by rising or unreachable home prices have flocked here and found better value and quality of life. With expanding GO train service and a new hospital planned for southern Niagara Falls, this area will have even more to offer.

As a unique and environmentally sensitive area, with large Greenbelt areas and fruit lands, Niagara’s regional government and local municipalities have a lot to contend with. We also have a two-tiered system in Niagara, so developers have to deal with both the regional government and the local municipality. However, there truly is a cultural change occurring here. The region wants to see growth and intensification, and some municipalities have opened their doors to help streamline the process. Land is available, and it’s less expensive than the GTA.

HOMES: You’ve had some success in home science, in terms of building Net Zero homes. How readily available, on a production basis, is such new home technology… without adding too much to the purchase price of these homes?

Rob Lucchetta: Lucchetta Homes is one of the leaders of advanced technology for the Canadian homebuilding industry. We are a certified builder of Net Zero, R2000 and Energy Star homes.

We built the first Net Zero-ready home for the Canadian Home Builders’ Association pilot program in 2017. To get there, we teamed with Enbridge Utilities and its “savings by design” program to help create and implement a higher standard for all of our homes – while adding only a few thousand dollars to the cost and achieving 20-per-cent increase in energy efficiency.

We build Net Zero housing on a made-to-order basis. In many cases, customers will opt out of the full certification but get the better triple-pane windows or air source heat pumps to boost their home’s efficiency. As our energy costs continue to rise and better methods and products come to the market, Net Zero-ready homes will become the norm.

lucchettahomes.com

AND ON A PERSONAL NOTE…

Our greatest inspiration in this business is: Our father came to Canada in the late 1950s with a borrowed suitcase, and worked hard for many years to create the foundation of our company. He was an avid sportsman, but his family was always his first priority and brought him the most joy.

When we’re not at the office or on a job site, we: Spending time with family and friends. We enjoy golfing and cycling and a little hockey and curling during the winter months.

The Ride to Conquer Cancer is an important cause to you because: We love how it unites so many touched by this terrible disease. We do it for our father, since cancer cut his life short a few years ago.

Portfolio

  • Davis Heights – Fonthill – Now open
  • Lusso Urban Towns – St. Catharines – Register now
  • Riverside at Hunters Pointe – Niagara – Now open
  • Ryan’s Grove – Fonthill – Now open

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Now is the time to fix the housing supply problem in the GTA

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Now is the time to fix the housing supply problem in the GTA

Every month, BILD reports on new home sales in the GTA. This data is collected and compiled by the Altus Group and provides us with important information on how many new homes were sold, the average asking price and the remaining number of new homes in builders’ inventory. It is an important tool that gives those involved in housing, real estate and development real time insight on how government housing regulations, fiscal policy, economic conditions and consumer confidence influence the housing market in the region.

BILD recently released the 2019 year end new homes sales data, showing that GTA new home sales rallied from the 22-year low of 2018. Overall in 2019, there were 36,471 new homes sold in the GTA. Only 24,855 new homes had been sold the previous year, which made 2018 the year with the lowest number of new home sales in the GTA since 1996.

There were 26,948 condominium apartments, including units in low-, medium- and highrise buildings, stacked townhouses and loft units, sold in 2019, up 27 per cent from 2018 and 16 per cent above the 10- year average. Single-family homes, including detached, linked, and semidetached houses and townhouses (excluding stacked townhouses), accounted for 9,523 new home sales, up 157 per cent from 2018 (the lowest year for new single-family home sales since comprehensive tracking started in 1981), but still 30 per cent below the 10-year average.

So what do these numbers mean? At first glance, it looks like new home sales were solid for 2019, but that was not the case. That’s what happens when the market recovers from the 22-year low of the previous year and new home sales remain 30 per cent below the 10-year average. What we saw in 2019 was a release of pent up demand from 2018. We need to keep our focus on increasing housing supply, making sure that there’s a solid inventory base to ensure that housing prices remain stable. Consumer demand has not diminished; in fact, as the region continues to grow we can be sure it will remain robust and we must make housing more affordable for the average person living in the GTA by eliminating barriers and build homes faster. We have to accept that demand will continue to increase, and both the building industry, municipal governments, and the provincial government must work together to keep all types of housing (rental and ownership) within reach.

On average, it takes 10 years to build a typical highrise project and 11 years to complete a lowrise project in the GTA. New homes must be built faster. Layers of bureaucracy, outdated zoning, and complex policies and procedures have created barriers to the efficient operation of the housing market that have resulted in a generational shortfall of housing. These obstacles have delayed the development of new homes, and have contributed to the increase in housing costs experienced over the past decade.

In addition, demand for new housing has increased as the Greater Toronto Area has become one of the most desirable places to live. The GTA is the fastest growing region in North America, with an estimated 115,000 new residents arriving every year. The population of the GTA is set to grow by 40 per cent, or an estimated 9.7 million people, by 2041; that timeline is not far away.

In May, 2019, the Ontario government announced the Housing Supply Action Plan, representing the first major step by any provincial government to address the supply challenges facing the housing market and their effects on affordability. The proposed changes also acknowledge the cumulative effect that taxes, fees and charges have on housing affordability. Land transfer taxes, HST, parkland fees and development charges collectively add $124,000 to the cost of an average new condo in the GTA, and $222,000 to the cost of an average new single- family home.

This is not a time for small plans. The numbers don’t lie. This year, all levels of government and our industry must continue to work together so we can fix the housing supply problem in the GTA.

Dave Wilkes is President and CEO of the Building Industry and Land Development Association (BILD).

bild.ca

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The GTA housing market in January 2020

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The GTA housing market in January 2020

Picking up where 2019 left off, 2020 began with strong sales growth, dwindling housing supply and high demand for ownership and rental housing.

January 2020 continued the monthly trend of increased sales coupled with a dip in listings supply. More than 4,580 sales were reported through Toronto Regional Real Estate Board’s MLS system in January 2020, up by 15 per cent compared to January 2019. However, the number of new listings entered into TRREB’s MLS system in January was down 17.3 per cent when compared to the same time last year.

Increased sales up against a constrained supply of listings resulted in increased competition between buyers and stronger price growth in the first month of 2020. The average selling price for all home types combined was up by 12.3 per cent to $839,363, compared to $747,175 in January 2019.

When it comes to an outlook for 2020, without seeing a significant increase in supply, it is likely that new listings will not keep up with sales growth, and over the next year an acceleration in price growth can be expected.

TRREB calls on all levels of government to create concrete housing plans for the next decade

Since entering a new year and decade, tighter market conditions with increased competition between buyers and pent-up demand for both ownership and rental housing has remained an ongoing phenomenon.

Persistent demand for housing in the GTA market can be attributed to a strong regional economy, including low unemployment, steady population growth and low borrowing costs. However, part of the answer to satisfying the issue of ownership housing is the construction of more mid-density housing to provide GTA buyers with more affordable housing options.

TRREB has demonstrated an ongoing commitment in calling on all levels of government to create concrete housing plans. In fact, since 2015, our organization has released an annual Market Year in Review & Outlook Report to shed light on the issues discussed above, using clear and hard evidence, as well as to offer solutions to other major regional challenges in the GTA, including infrastructure requirements and transportation and traffic issues.

The 2020 edition of the report, subtitled “The Time is Now” is all about planning for growth in the Greater Toronto Area and broader Greater Golden Horseshoe.

With the release of this report each year, TRREB continues to make great strides in working with policymakers and industry stakeholders to present fresh ideas on what is critically needed to accommodate the increasing population across the Greater Golden Horseshoe.

To download the Toronto Regional Real Estate Board Market Year in Review & Outlook Report, visit TRREB.ca. We hope you enjoy reading the report and join in the dialogue.

Michael Collins is president of the Toronto Regional Real Estate Board, a professional association that represents 54,500 professional realtor members in the Greater Toronto Area. You can contact him at trebpres@trebnet.com.

For updates on the real estate market, visit trebhome.com.

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New home and condominium sales will continue momentum in 2020

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New home and condominium sales will continue momentum in 2020

Predictions for new home and condominium sales in 2020 are abounding in the media, and I have some of my own. I see sales being similar to last year, with a heightened awareness for affordability driving the momentum and style choices. I also see a major shift in expectations for all generations of home and condo buyers, and as the last bastion of affordability, the condominium market should remain strong.

Condo sales in the Greater Toronto Area did extremely well in November, up 32 per cent from November 2018, which already put these numbers among the top four years ever. What’s interesting is how the demand for condos is growing in the outer boundaries of, and outside of the GTA. I call the 905 areas around Toronto the “ring of fire” for new condo sales. These are all areas people can drive to in an hour or so from the city. One example is Chestnut Hill Developments’ Universal City in Pickering, where the first two towers have sold out, and the third is in the registration stage anticipating a Public launch this Winter. Amacon’s AVIA Condos in the Parkside Village community in Mississauga City Centre is another multi-phased condominium residence experiencing hot sales.

Farther out, we are seeing heightened interest in new condos in areas such as Hamilton, Kitchener and Waterloo, which are within an hour’s drive of the outer boundaries of the GTA. In 2018, we launched the first phase in Sorbara Group’s The Way Urban Townhomes in Erin Mills, which nearly sold out, and the second phase released late 2019 is nearly 95 per cent sold. We’re getting ready for another release early this year. This product is smaller and tighter than in the GTA and offers affordable end prices. We’ve sold close to 500 homes in Dundalk over the last few years and our phones are ringing off the hook for Rosehaven Homes’ KiWi Condos on King William in Hamilton.

Remember those changing expectations I mentioned? We are seeing a strong market of Millennials who plan on being permanent renters, as owning in Ontario is becoming more of a financial challenge as time goes on. This is encouraging news for condo investors.

In November, we also saw lowrise sales in the GTA up 207 per cent over November 2018, which is largely due to builders divesting themselves from legacy communities of large lots. We will continue to see a redesign of more affordable home types. In addition, a growing number of people purchasing lowrise homes want multigenerational designs that include a basement apartment, loft, coach house or garage made into living space. Having accommodations for three to four generations that can share expenses is a hot trend right now, especially as not many people can afford millions of dollars for a home.

The other shift I see is in mortgage trends. Three-year mortgages are around three per cent, but some buyers are paying five to six per cent to have an edge in entering the marketplace. They will make that sacrifice to realize the dream of homeownership.

The economic indicators are there to keep new home and condo sales going strong: Immigration, jobs and interest rates. Time will tell.

Debbie Cosic, CEO and founder of In2ition Realty, has worked in all facets of the real estate industry for over 25 years.

In2ition.ca

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Shakir Rehmatullah, President, Flato Developments Inc.

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Shakir Rehmatullah, President, Flato Developments Inc.

New lowrise home supply and pricing are causing some buyers to look elsewhere – specifically north and out of the GTA. One company intent on catering to this demand is Flato Developments Inc., with projects in locations such as Beeton, Dundalk and Shelbure.

President Shakir Rehmatullah explains why, and what homebuyers can expect from Flato, this year and beyond.

HOMES Magazine: You have said that 2020 is looking to be a strong year for Flato Developments, and you’re focusing on developing communities outside the GTA. How much of a trend do you think this will be – people buying outside the GTA in order to afford a home they truly want?

Shakir Rehmatullah: I see a big trend of people living outside the GTA, basically because affordability and the new mortgage rules have made it very difficult for people to qualify for a mortgage. The average annual salary in the GTA is $36,573, household income $73,146. The maximum mortgage they can get is $350,000 to $400,000, so with a 20-per-cent down payment, the house price couldn’t be higher than $500,000. How many $500,000 homes are available in the GTA? Condos can be an alternative, but not everyone wants that type of home. Therefore, moving outside of GTA will be the choice for many young families and downsizers.

HM: You’re developing communities in Dundalk, Beeton and Shelburne. Why these areas, other than the above point. Specifically, what is it about these towns that appeals to Flato?

SR: Beeton is close to Hwy. 400, and Dundalk and Shelburne are connected to GTA by highways as well. Our projects in Dundalk and Shelburne are located along Hwy 10, so the commute won’t be a problem for homeowners. These areas are not over developed. On the contrary, with new homes being built and more people moving in, infrastructure will improve because the towns are growing the population and economy. In Dundalk, for example, because we are building big communities there, we will also build an apartment for seniors, and a commercial plaza for retailers. On one hand, people can live in a more convenient neighbourhood; on the other, more people will find jobs there. Towns grow this way. Moreover, these areas are calm, quiet and beautiful. People can enjoy their life there by living in a nice environment, with kind neighbours, and most importantly, living in a decent townhome or single-detached home. Flato is happy to help the towns grow, build decent homes for new families, downsizers and everyone who wants to live in a bigger home with an affordable price.

HM: What are you able to offer buyers in these communities, that you can’t in the GTA?

SR: We offer great value for the homes by offering large size lots and quality finishes. We believe in complete communities where people have good schools, good parks, walking trails, clean air to breathe, away from the hustle and bustle of a heavily populated city. We are able to offer bigger homes at lower prices, well-planned communities with schools, parks and trails close by. Our design caters to an older generation which likes the heritage style, as well as younger buyers who like modern style. Every homeowner is not just moving into a house, they are moving into a well-established community.

HM: What are you learning about building in these communities that, say, might differ from projects in the GTA or parts of Toronto? Whether it’s home sizing, pricing, amenities or…

SR: Home sizes are certainly larger, as our goal is to build good quality, decent sized homes at affordable prices. Our price per sq. ft. is much lower than in the GTA. Our communities are in the core of each area, with all amenities close by. For example, our projects in Beeton, Beeton Village and GreenRidge, are on and close to the main street, where all the restaurants, grocery stores, banks and other amenities are located. In Dundalk, our projects also sit right in the heart of town, with the amenities within walking distance. We plan them out when we plan the whole communities. That’s why we say we are building communities, not homes.

In addition, we are learning that people are okay to drive further north to get the home that they really want, in a community where they can live and grow their families.

HM: What’s next for Flato Developments… where might you build next, after Dundalk, Beeton and Shelburne?

SR: Planning and then building a master-planned community is a large undertaking, and we are currently very busy in delivering on the vision we have for these areas. But we also have other plans; our first senior apartment building will launch in Dundalk this year. We will also launch commercial projects in Markham, Mississauga and Dundalk this year. We have more plans down the road, but I can’t discuss them just yet.

HM: Flato is very active and involved in the community, through activities such as your sponsorship of the Flato Markham Theatre. Why is this so important to you?

SR: We strongly believe in working with the communities in which we build, that it’s our corporate responsibility to give something back. You can’t go wrong by giving back to your community, and as a community developer, Flato is proof that we keep our promises.

AND ON A PERSONAL NOTE…

If I wasn’t in the homebuilding industry, I would: Otherwise work towards making life better for people.

When I’m not at the office, I am: With my family. I enjoy my time with my kids! But during weekdays, I’m on the road for different meetings with municipalities and business partners to plan our next community.

My greatest inspiration for doing what I do is: My dad. I always watched him working hard in his construction business, and I just want to be like him.

Portfolio

• Beeton Village, Beeton, Now open

• Carriage House, Dundalk, Coming soon

• GreenRidge, Beeton, Coming soon

• Canvas on the Rouge, Markham, Now open

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Buyer confidence remains high

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Buyer confidence remains high

In December 2019, residential sales reported through TREB’s MLS System by Greater Toronto Area realtors were up by 17.4 per cent year-over- year to 4,399. Total sales for calendar year 2019 amounted to 87,825 – up by 12.6 per cent compared to the decade low 78,015 sales reported in 2018. On an annual basis, 2019 sales were in line with the median annual sales result for the past decade.

We certainly saw a recovery in sales activity in 2019, particularly in the second half of the year. As anticipated, many homebuyers who were initially on the sidelines moved back into the market place starting in the spring. Buyer confidence was buoyed by a strong regional economy and declining contract mortgage rates over the course of the year.

While sales were up in 2019, the number of new listings entered into TREB’s MLS system was down by 2.4 per cent year-over-year. For the past decade, annual new listings have been largely in a holding pattern between 150,000 and 160,000, despite the upward trend in home prices over the same period.

I asked Jason Mercer, TREB’s chief market analyst, for his thoughts on the latest numbers.

“Over the last 10 years, TREB has been drawing attention to the housing supply issue in the GTA. Increasingly, policy makers, research groups of varying scope and other interested parties have acknowledged that the lack of a diverse supply of ownership and rental housing continues to hamper housing affordability in the GTA. Taking 2019 as an example, we experienced a strong sales increase up against a decline in supply. Tighter market conditions translated into accelerating price growth. Expect further acceleration in 2020 if there is no relief on the supply front.”

The MLS Home Price Index Composite Benchmark was up by 7.3 per cent on a year-over-year basis in December 2019. From June 2019 onward, the annual growth rate in the MLS HPI Composite Benchmark accelerated. The average selling price in December 2019 was $837,788 – up almost 12 per cent year-over- year. For calendar year 2019, the average selling price was $819,319 – up by four per cent compared to $787,856 in 2018.

I asked TREB’s CEO John DiMichele what the new year has in store for the GTA real estate market.

“TREB is committed to conducting and sponsoring evidence based, empirical research on housing market and broader regional economic issues. We share this research in order to contribute to the policy debate. On February 6, 2020, TREB will be releasing its Market Year in Review and Outlook report, which will contain consumer polling results, market overviews and forecasts, and new third-party research on housing and the economy in the GTA.”

Michael Collins is president of the Toronto Real Estate Board, a professional association that represents 54,500 professional realtor members in the Greater Toronto Area. You can contact him at trebpres@trebnet.com. For updates on the real estate market, visit trebhome.com.

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Get ready for a hot market in the GTA this spring

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Get ready for a hot market in the GTA this spring

From the economy to interest rates, to government involvement and the mortgage stress test, to new home supply and affordability, there’s a lot to pay attention to this year as you go through the new-home buying experience. But, for all the challenges that these topics represent, know this: Ontario, and especially the GTA, is once again positioned for a hot market this spring.

According to the latest Royal LePage House Price Survey, the aggregate price of a home in Canada increased 2.2 per cent year-over-year to $648,544 in the fourth quarter of 2019. And for this year, the realty firm is forecasting 3.2-per-cent price growth to $669,800. For the GTA, the news is even better, and homeowners and homebuyers can expect a hot market this spring.

Greater Toronto Area

Low supply, population growth and increased consumer confidence continue to fuel home prices in the GTA. In the fourth quarter last year, the aggregate price of a home in the region increased 4.8 per cent year-over-year, rising to $843,609. During the same period, the median price of a standard two-storey home rose 4.4 per cent to $982,944, bungalows 2.4 per cent to $806,977, and condominiums increased 7.8 per cent to $565,919.

“The Greater Toronto Area is at a pivot point where we are seeing signs that prices could begin to rapidly increase,” says Kevin Somers, chief operating officer, Royal LePage Real Estate Services Ltd. “The region has a very low supply of listings while we are seeing more potential buyers trying to enter the market.”

Home price growth varied significantly across the region in 2019. While some areas showed stabilizing prices and healthy price growth, many regions, including the city centre, showed the potential for rapidly accelerating appreciation rates driven by high demand and low inventory. Significant price gains were seen in Pickering and Mississauga, where the aggregate price increased 9.7 per cent and 7.9 per cent year-over-year, respectively. The aggregate price of a home in the City of Toronto increased 6.6 per cent year-over-year.

Ajax and Oshawa were the only two areas to show a year-over-year decline in aggregate price. The aggregate price of a home in Ajax and Oshawa decreased 1.2 per cent and 1.8 per cent to $661,049 and $524,423, respectively.

Changes to the stress test?

In the first half of 2019, some buyers remained on the sidelines waiting to gauge the potential impact of the federal mortgage stress test, but began to return to the market in the third quarter.

“The federal government has signaled that changes could come to the mortgage stress test mechanism in 2020,” says Phil Soper, president and CEO, Royal LePage. “The stress test pushed people out of real estate markets across Canada temporarily. For the most part, buyers have adjusted, yet it still represents a significant hurdle as families pursue the dream of owning their own home.”

Soper adds that the impact of the regulations-driven drop in demand is felt very differently in different parts of the country.

“We believe policy makers have the necessary experience to modify the tool to meet the reality of today’s Canada – that we have very different and varied economies, and by extension housing policy needs, from region to region.”

RELATED READING

Outlook 2020 – 5 things you need to know about real estate this year

Forecast 2019 – where are Canada’s hottest housing markets?

 

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