Shift Being Felt Across The Industry

At Baker, we are selling new condominium inventory to bulk purchasers and investors who believe prices will go up. We are also renting suites in these buildings as we wait for purpose-built rentals to be constructed, and people are taking advantage of this renter’s market. Prices have adjusted, and there are great deals to be had. We are even seeing an uptick in luxury rentals, up to $17,000 per month for suites under 2,000 square feet for prestigious locations walking distance to upscale amenities. When this inventory is gone, with no new construction going on, we are heading for a rude awakening.

The investor market is coming back, but they are not the mom-and-pop investors of yesteryear. We are seeing wealthy families and business partnerships buying up condo suites in bulk to hold until the standing inventory is sold and prices start to go up again because of scarcity. They realize that there has never been a better time to buy and get your foot in the door of home ownership.

This is, indeed, an excellent market where inventory is concerned. Potential renters can even take advantage of incentives. Depending on the developer, these may include two months of free rent, a $1,000 move-in bonus to put toward rent or other expenses, and even two months’ credit on a Vanilla Visa card (if your rent is $2,000 per month, you get a Visa with $4,000 credit).

Remember that there is one major difference between renting in an individually owned unit and a purpose-built rental (PBR) unit. In a PBR, as long as you can keep up rent increases, you can stay. You can renovate, have relatives move in with you, etc. You have a property manager on site, so service is faster. In an individually owned unit, you can be put out for any number of reasons but remember that these will be brand new and will be built to last, so the quality is impressive and matches that of brand-new market condos, including the beautiful amenities.

What we need is some clear leadership from governments on all levels. The federal government seems to be taking halfway steps. In fact, the foreign buyer’s ban they implemented a few years ago has done tremendous damage to the new condominium industry and put us two steps back. Canada is an obvious great place for foreign buyers to feel confident in their purchases. All great cities are built on foreign investment. It’s time to revoke that ban and give the industry the kick in the pants we need.

And how about the HST rebate that supposedly took place April 1 for a year? We are still waiting for federal approval, and the year is passing by quickly. People are hoping it will be extended, but we need more pressure from associations like BILD. Proactive builders are building in the rebate up front, but there is confusion on how that will work. The idea was a great olive branch, but now we need to plant the actual tree. This situation is unacceptable.

In Ontario, we also see strong mayoral powers granted by Ford – and very little action in asserting them. Instead, this seems to have put in another layer of bureaucracy. Where are our politicians with courage to get more things done?

Business is different, but it is brisk. Now may be the optimal time to seek out an inventory unit. The choice is yours!