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Outlook 2020 – Mike Parker, Vice-President, Sales & Marketing, Georgian International Build Corp.

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Outlook 2020 – Mike Parker, Vice-President, Sales & Marketing, Georgian International Build Corp.

Part of our series of Outlook 2020 Q&As with building industry executives

What is the outlook for the new home industry in 2020?

New housing starts have declined from the elevated levels of 2016 and 2017, however, we anticipate a more stabilized average in 2020. The average resale home price is expected to rise, and combined with an anticipated low risk of mortgage rates increasing, this is positive for consumers considering a new home closing one to two years out.

Mike Parker
Mike Parker, Vice-President Sales & Marketing Georgian International Build Corp.

And for your company?

Many of our homeowners are from the 905 and 416 area code regions. Our value proposition in terms of price, lifestyle and location will continue to be a favorable option for GTA buyers looking to escape urban congestion. Our new home construction pipeline is full for 2020, based on positive sales results in 2019.

What is your company doing to address the issues facing the homebuilding industry – namely, affordability and new home supply?

Homeownership should be attainable for all Canadians. We are currently providing a product mix that consists of condominium suites, semi-detached and single-detached homes with varying prices. Offering a wider range of home styles opens up more doors for consumers based on their affordability. We continue to study opportunities to provide housing that suits the needs of an even wider range of Ontarians.

What more could the industry do to address these issues?

All members of local, provincial and national home building associations should continue to raise awareness of the challenges builders face in providing housing that is attainable for all Canadians. We’re lobbying to reduce unnecessary legislation, and policies that create red tape for developers and additional development soft costs should be eliminated. All levels of government need to be supportive in creating positive changes in the industry. Developers need to be seen as partners to the townships and cities in which they build.

What should prospective new-home buyers know about your company for 2020?

If living an active lifestyle and a love of nature is important, we have three different options new-home buyers should consider. All of our developments will be releasing new ownership opportunities this year.

Windfall at Blue, located slope-side on 148 acres in Blue Mountain, is set to deliver The Shed in 2020 – a rustic yet refined community gathering space for neighbours to come together to socialize and create traditions. There’s parkland, outdoor pools, a sauna and more for our residents to enjoy.

Right next door to Windfall, Mountain House at Windfall will be opening its final phase. This community offers chalet living without the maintenance. Mountain House features an exclusive amenity area comprised of hot and warm pools with a waterfall feature, a sauna and a relaxation and fitness room, all with Blue Mountain as the backdrop.

Braestone Horseshoe Valley offers distinctive and timeless architectural style, one that combines the elements of early Oro-Medonte farmhouses, barns and sheds. Residents have access to the neighbouring Braestone Farm, which features a maple sugar shack, skating pond, pumpkin and berry patch and more. In addition, there are kilometres of trails on the 566 acres that make up Braestone, with 60 per cent of the land preserved in its natural state.

Why should prospective new-home buyers consider buying from your company in 2020?

We focus on providing a remarkable lifestyle for our residents. Our communities offer thoughtful amenities that are inspired by the natural landscape and the environment in which we build. We are building small-town Canada, and this is reflected in our streetscapes and timeless architectural style. Recognized not only locally but nationally, we are creating something unique in the Simcoe and Grey County regions.

Special Report: Outlook 2020

Outlook 2020 – Jim Andrews, Director of Sales & Marketing, Fieldgate Homes

Outlook 2020 – Shakir Rehmatullah, President, Flato Development Inc.

Outlook 2020 – Brad Carr, CEO, Mattamy Homes Canada

Outlook 2020 – Deena Pantalone, Managing Partner and Director of Marketing & Innovation, National Homes

Outlook 2020 – Art Rubino, Contracts Manager & Marketing Manager, Regal Crest Homes

 

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Outlook 2020 – Deena Pantalone, Managing Partner and Director of Marketing & Innovation, National Homes

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Outlook 2020 – Deena Pantalone, Managing Partner and Director of Marketing & Innovation, National Homes

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?

We’re going to see strong demand fueled by record population growth. The period from August 2018 to July 2019 was the largest 12-month population increase in Canada’s history. And the industry is not building enough housing, especially rental housing. At the end of November 2019, ReMax predicted a six-per-cent increase in the average cost of a Toronto resale home in 2020 – fueled by demand that just isn’t being met.

Deena Pantalone
Deena Pantalone, Managing Partner and Director of Marketing & Innovation, National Homes

Ben Myers of Bullpen Research says Toronto needs 22,000 new rental apartments a year to create a healthy vacancy rate of three per cent. If you include all the new purpose-built rental units coming on, say 4,000, plus if you assume that three-quarters of all new condos will be rented, then we’re still falling 9,000 units short. That’s not good for renters, homeowners or the health of our economy.

One thing I definitely see is that people are open to new ideas, new technology and design that will make their lives easier and give them time for the important things in their lives. And that means property technology (Proptech) will become more and more central to their lives, and to the building industry in general.

And what’s the outlook for National Homes?

For decades now, National has focused on putting the needs of our customers first, and that’s what our You are the Blueprint philosophy is all about.

This year, we’re introducing a wide range of “Bright Ideas” that were developed at National’s inaugural Blueprint Workshop. Globally recognized leaders in the fields of technology, product development and design, participated in group interactions and the co-creation process. Also taking part were dozens of past and prospective National buyers of varied ages and demographics; National staff architects, designers and engineers; and students from York University’s Schulich School of Business real estate master’s program. The results are now being unveiled in our newest communities.

What is National Homes doing to address the issues facing the homebuilding industry – namely, affordability and new home supply?

Our Bright Ideas are intended to make people’s lives simpler, from innovative Proptech to design solutions. We are introducing four different townhome projects, from Courtice in the east to Burlington in the west. We are also introducing new construction thinking, such as our Panergy Wall Systems that bring factory efficiency and quality with significant energy cost savings, year after year.

We’re also making it easier for young families to own with plans for flexible down payment programs.

What more could the industry do to address these issues?

It’s all about innovation! The building industry hasn’t changed much in 100 years. New thinking, new products, new technology… the only way we’re going to adapt to the needs of a new millennium are by doing things differently and better.

Our industry needs new ways of building that save time, and therefore money, new products that save real dollars in energy costs, new construction methods that reduce waste and improve quality.

What should prospective new-home buyers know about National Homes for 2020?

In Bradford, we have 40 detached ravine lot homes from the mid $800’s at The Forest. In east Brampton’s Three Rivers Claireville, we have Phase 2 of our townhomes, right next to the 850- acre Claireville Conservation Area. In Burlington, we’re launching townhomes at Tyandaga Heights on Brant Street, by the Tyandaga Golf Course. And in Courtice, we’re introducing The Vale by National, backing onto woods and a stream.

Why should homebuyers consider buying from your company in 2020?

We design with the needs of our customers in mind. That’s more than a motto, it’s central to the way we work. Our Blueprint Workshops are the spark that drives our design. We learn what people want; what they wish builders could offer; then we create the communities, the homes and the features that satisfy those dreams. And we’re building communities from east to west, so if you’re looking for a National home, we’re where you want to live.

Special Report: Outlook 2020

Outlook 2020 – Jim Andrews, Director of Sales & Marketing, Fieldgate Homes

Outlook 2020 – Shakir Rehmatullah, President, Flato Development Inc.

Outlook 2020 – Mike Parker, Vice-President Sales & Marketing, Georgian International Build Corp.

Outlook 2020 – Brad Carr, CEO, Mattamy Homes Canada

Outlook 2020 – Art Rubino, Contracts Manager & Marketing Manager, Regal Crest Homes

 

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Outlook 2020 – Art Rubino, Contracts Manager & Marketing Manager, Regal Crest Homes

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Outlook 2020 – Art Rubino, Contracts Manager & Marketing Manager, Regal Crest Homes

Part of our series of Outlook 2020 Q&As with building industry executives

What is the outlook for the new home industry in 2020?

There are buyers out there, as witnessed during several openings this year. If the developer does not adjust his land price to more current numbers, then sales will not be evident. This year looks promising, and several new projects are slated for release.

Art Rubino
Art Rubino, Contracts Manager & Marketing Manager Regal Crest Homes

And for your company?

Regal Crest is preparing two large project releases, as well as two new phase releases. We are bullish on new home sales, and our development arm is staying abreast with consumer demands, so we can deliver what our customers want.

What is your company doing to address the issues facing the homebuilding industry – namely, affordability and new home supply?

We are currently redesigning down – eight-ft. basements instead of nine-ft. basements… Nine-ft. main floors instead of 10-ft… Architectural design made more simple for construction.

What more could the industry do to address these issues?

The stress test is killing us, and yet the government continues to pound away. Increased development charges pressure the builder and developer to raise prices due to increased costs. We need to lobby the government to remove the stress test and to open doors for immigration – with skilled labour.

What should prospective new-home buyers know about your company for 2020?

Our website is up to date with current availabilities, but they should know that Regal Crest Homes has been building homes since 1965 and will continue to build for another 54 years.

Why should prospective new-home buyers consider buying from your company in 2020?

Our consistent delivery of quality-built product continues to be our success.

We build homes better today than yesterday, and when spending your life savings, you really want a quality-built product that will last the test of time. The days of buying and selling quickly are gone, and you want a really well-built home. That’s what we do best!

Special Report: Outlook 2020

Outlook 2020 – Jim Andrews, Director of Sales & Marketing, Fieldgate Homes

Outlook 2020 – Shakir Rehmatullah, President, Flato Development Inc.

Outlook 2020 – Mike Parker, Vice-President Sales & Marketing, Georgian International Build Corp.

Outlook 2020 – Brad Carr, CEO, Mattamy Homes Canada

Outlook 2020 – Deena Pantalone, Managing Partner and Director of Marketing & Innovation, National Homes

 

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Outlook 2020 – Jordan DeBrincat, Director of Operations, Altree Developments

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Outlook 2020 – Jordan DeBrincat, Director of Operations, Altree Developments

Part of our series of Outlook 2020 Q&As with building industry executives

Condo Life: What is the outlook for the new home industry in 2020?

DeBrincat: The outlook has changed from what we are traditionally used to. Buyers are becoming savvy and really looking at the economic feasibility and viability of the units they’re purchasing, whether for investment or personal use. Location, amenities and pricing are all becoming such big factors now that there are lots of developments on the market in all different areas around the city. Purchasers are starting to come around to the idea of condominiums being homes where they can raise a family and have a life, instead of the traditional thought that a “home” is a detached house with a picket fence. Condominiums are becoming the way of life and are really starting to resonate with people when they are looking to decide their first home purchase.

Jordan DeBrincat
Jordan DeBrincat

CL: And for Altree Developments?

DeBrincat: Altree has always focused on going into neighborhoods that already have character, and add to that by developing strategically designed buildings. Downtown sites that are fit for towers are increasingly difficult to find, and the emphasis has shifted to neighborhoods outside the downtown core. One of the biggest aspects Altree considers when deciding on a site is that we first look at all aspects of the neighborhood, and look for not how we can change the neighbourhood, but how we can become a part of it.

CL: What is your company doing to address the issues facing the homebuilding industry – namely, affordability and new home supply?

DeBrincat: Altree looks for condominium developments in a variety of different neighborhoods throughout the city, all with different characteristics. Whether developing a boutique building in Forest Hill, a tower in Etobicoke or a midrise in Scarborough, Altree looks to build condominiums people will call “home.” We look to develop buildings in areas that are untapped and that allow us to really add to the neighborhood we are coming into. Developing in areas just outside of the downtown core allow us to have more flexibility on pricing, which allows us to offer products that are more affordable.

CL: What more could the industry do to address these issues?

DeBrincat: City approvals are a lengthy process, and in return this restricts supply to the market. Restricted supply creates more demand by buyers and more competition with construction, increasing construction costs tremendously. Altree believes the City needs more support in its planning and development process to allow for more seamless approvals which would provide more supply to the market in a timely manner.

CL: What should prospective new-home buyers know about your company for 2020?

DeBrincat: Altree Developments has a number of developments coming to the market over the next 24 months:

  • Forest Hill Private Residences: A nine-storey boutique building coming to Forest Hill in early 2020
  • Two eight-storey midrise buildings coming to the Highland Creek community in late 2020/ early 2021
  • A nine-storey building coming to Briar Hill early 2021

CL: Why should prospective new-home buyers consider buying from your company in 2020?

DeBrincat: At Altree, we place emphasis on building a home for prospective purchasers, and put a lot of time and effort creating a product of value. Whether that is offering superior quality products, more functional layouts or more square footage for less money, we always have the end goal of a “home” in mind. We understand that a home is one of the biggest purchases someone is going to make in their lifetime, and we want to make it as memorable as possible. These buildings take anywhere from two to five years to construct, and we want to maintain that level of excitement from the time of purchase to the time of move in.

Special Report: Outlook 2020

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

Outlook 2020 – Angela Marotta, Director of Sales & Marketing, Solmar Development Corp.

Outlook 2020 – Jared Menkes, Executive Vice-President, Menkes High Rise

Outlook 2020 – Anson Kwok, Vice-President Sales & Marketing, Pinnacle International

Outlook 2020 – Samson Fung, Vice-President Marketing, Tridel

Outlook 2020 – Nick Carnicelli, President, Carriage Gate Homes

Outlook 2020 – Fan Yang, Deputy General Manager, Aoyuan

 

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Predictions for the 2018 real estate market

Welcome to 2018!

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Welcome to 2018!

The only safe prediction for the real estate market for this year is that it will be unpredictable.

by Gale Beeby
HPG Editor-in-Chief

As we head into the Year of the Dog, the only thing I can predict with absolute certainty is that are as many diverse opinions about the state of the real market in the GTA as there are breeds listed by the Canadian Kennel Club.

According to the Chinese zodiac, the dog — full of energy, faithful and intelligent — has a long-held position as the protector of the home and as man’s best friend. So, regardless of what the economists say will happen, perhaps it is an auspicious year for the homebuyers.

MY TOP FIVE PREDICTIONS

Rough Time For First-Time Buyers

This is the sector of the market that is being hit hardest by new government policies, especially the new mortgage qualification stress test imposed by the Office of the Superintendent of Financial Institutions (OFSI). The rule requires anybody buying a property with less than a 20 per cent down payment of their own money (not mom and dad’s) be qualified for their mortgage at either the Bank of Canada’s rate of 4.99 per cent or with an extra 2 per cent added to their approved mortgage rate. Experts think this might eliminate about 10 per cent of buyers out of the market. Many will put off buying a new home until they can save enough money for a down payment under the new rules.

Interest Rates Will Rise

I know, we’ve been hearing that interest rates will increase the last few years, but the Bank of Canada raised the rate in July and September to its current rate of 1 per cent, up from a record low of 0.5 per cent. Experts differ on when — and how much — the Bank of Canada will raise rates, but they do all agree that rates are going up. I’m betting they are and I’m locking in my mortgage in the first quarter of 2018.

Condos Will Be The New Norm in Family Housing

As prices of ground-related housing (detached, semi-detached and townhomes) has escalated to point where most buyers can no longer consider anything but a condo unit in a midrise or highrise building, buyers are looking at multi-residential buildings, not just as an entry into the market, but also as their permanent home.

According to Altus Group, the average price of a condo apartment in the GTA in November was $702,992, while new single-family homes grew to $1,223,610. Builders are responding by designing larger condo units suitable for family living and Toronto is responding by building more schools and community centres around areas of intensification. Growing up in condo will become the new normal for many families in the GTA.

Detached Home Prices Will Continue to Escalate

Supply cannot match demand resulting in a squeeze for anybody with the dream of a owning a detached home anywhere in the GTA. In November, the average price of a new single-detached home was over $1.2 million, 25.1 per cent above November 2016’s benchmark of $977,890, according to Altus Group, adding that single-family home sales represented only 17.3 per cent of the new homes sold in the GTA in November 2017.

But the lower sales do not represent a decline in interest, warns the Building Industry and Land Development Association (BILD). “Single-family housing is still the first choice for many people, especially for those with families,” said BILD CEO and president Bryan Tuckey.

The reasons for the lack of land supply is complicated — Places to Grown policy, Greenbelt restrictions, lack of serviceable land to name a few — but the fact is there are fewer detached homes being built.

Buyers will be moving out of the GTA in order to afford a new house. Hotspots will include the Kitchener-Waterloo area, Burlington, Hamilton, the Niagara Region and Bowmanville.

New Appeals Process Will Continue to Slow Development

In December, the province passed legislation to eliminate the Ontario Municipal Board (OMB) and replace it with the Local Planning Appeal Tribunal (LPAT). Over the years, the OMB suffered from a reputation that was less than stellar, with many believing that the board sided with the developers in most appeals, which is, in fact, not the case. And, of course, an OMB appeal caused a lengthy delay, costing the builder/developer money, which is passed on to the homebuyer.

The government says that LPATs, on the other hand, will be an independent tribunal with the hopes of making the land-use planning appeal process faster, fairer and more affordable, and allowing community members have a say in how their neighbours are shaped. That’s a good thing, really, as community involvement should always be welcomed by developers.

However, I don’t believe that the LPATs will take any less time to resolve an appeal than the OMB. These things take time, and with more people involved, and more depositions to hear, LPATs could actually take longer. And when the tribunal is no longer made up of independent members who decide on a development using fact-based planning principles, then decisions are bound to be based on the dreaded NIMBY code rather than on whether the proposal has merit in and of itself.

Just remember, the Distillery District would not have come into existence if it were up to the City of Toronto — the OMB gave it the green light. And that’s just one example of a good planning decision made by the OMB.

WHAT THE EXPERTS SAY

New Housing

The Conference Board of Canada expects an overall modest increase for single-family homes in 2018 and predicts the economy to grow by only 2 per cent in 2018, which will inhibit Canadians’ ability to buy new homes. The building industry has responded by making the shift toward multi-residential buildings, with two out of three new homes built today multi-family. However, Toronto’s real gross domestic product (GDP) is expected to grow 2.5 per cent in 2018, showing few signs of problems on the horizon for the region. The real estate sector will continue to benefit from this robust economic performance. People still crave the live-work-play lifestyle in the core and companies, eager to be close to talent, are moving into new office spaces nearby to fill the new tech and research jobs they’re creating. Urban intensification will continue, especially in Toronto, where the GTA will see significant densification efforts.

PWC reports that the condominium market will perform steadily in the near term, with demand steady in most markets. Downtown cores remain most attractive to young professionals, retiring boomers and young families. The size of condo units has been slowly increasing, the Building Industry and Land Development Association (BILD) reports, in answer to the demand of family-sized units.

Resale Housing

According to research by the Bank of Canada and reported by the Canadian Real Estate Association, which oversees the resale housing market in Canada, tightened mortgage rules will reduce sales activity across Canada in the first half of 2018, particularly in and around Toronto and Vancouver. Some homebuyers will stay out of the market as they save for a larger down payment. Taking these factors into account has led CREA to revise its sales forecast for 2018. CREA also anticipates that tighter mortgage regulations will lead some buyers to opt for a smaller, lower priced home.

Re/Max predicts national home prices will increase by 2.5 per cent in 2018, with the GTA facing a flat year except in downtown Toronto and some suburban areas west of Toronto, including Oakville and Brampton.

Royal LePage predicts a 4.9 per cent price increase nationally and a price increase of 6.8 per cent in the GTA.



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