By restricting the supply of low rise land in the GTA through policies like the Green Belt and Places to Grow we have in fact forced buyers into a growing and more affordable high rise product. This is why close to 60% of every new home sold in 2013 was a condo!
As stakeholders in the Toronto’s real estate industry, we try to temper the not so good news of record low sales in 2013 (16,201 high rise and 12,205 low rise as reported by RealNet Canada) with the reality that there has been no crash and no bubble bursting last year. Our soft landing may actually have already occurred without any fanfare and panic. The data and new home sales numbers from the last few months appear to imply a positive trend upwards. Investors and end users are sobering up and getting over the “Headline Hangover” of the last few years and once again seeking and finding value in real estate. Whether they are purchasing as a long-term investment to hold and build equity for their family or to hold and rent, the fundamentals in the GTA and Greater Golden Horseshoe are still ideal for owning real estate.
As mentioned by Benjamin Tal at the briefing this week, there appears to be some oversimplification regarding investors as well. First, there is a false claim perceived and at times portrayed in the media that foreign investors are buying up all our real estate. The reality is that true foreign investors with no actual connection (via family or children) to our region account for approximately only 5% of the buyers. The other investors we read about are not actual speculators. And ultimately, all buyers are “investors” looking for long term value and eventual returns on their equity.
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