November 8, 2010
Thanks to Stephen Dupuis, President and CEO of BILD (Building Industry and Land Development Association), for the below article.
If we were living south of the border, the headline would read “Race to the Top,” but unlike our American neighbours, we operate on the principle that slow and steady wins the race.
At least that’s the theory behind our swift economic recovery, as hypothesized by Jonathan D. Miller – author of Emerging Trends in Real Estate 2011 and guest speaker at a seminar put on by the Urban Land Institute last Tuesday morning. Joining him on the panel were John O’Bryan, Vice Chairman of CB Richard Ellis Ltd., and RealNet Canada Inc. President, George Carras.
As Miller explained, while Canada’s “safe” real estate market might be described as “boring” when compared to the fast-paced and often erratic market in the United States, our cautious approach to doing business has resulted in less distress, a relatively short-lived recession and strong capital markets.
In fact, Miller went as far as to call Toronto one of the most important North American gateways, describing it as a world-class city with great potential for investments. It was identified as the top market in Canada, with Vancouver being the only competitive rival.
As Carras pointed out, since the turn of the millennium, the GTA has the second-highest number of housing starts in North America behind only Houston, Texas. That’s 424,204 new homes by 289 builders covering 722 million square feet worth about $140-billion! If these numbers were calculated solely on high-rise condominiums, we would sit on top of the list.
O’Bryan echoed Miller’s belief, adding that a considerable portion of our market’s success is owed to a large volume of private investors and new immigrants who are responsible for the ongoing success of the high-rise sector.
Investors scoop up new condo units due to their affordability and high demand, which comes from an estimated 80,000 new immigrants (approximately the population of Fredericton, New Brunswick) that settle within the GTA each year.
“That’s why multi-residential housing is so stable,” O’Bryan explained, adding that it’s “working the way it should.” He forecasted the Canadian Investment Volume for 2010 at approximately $18-20 billion, which is a good number that reminds us of 2005-2006 – a stable, peaceful time for the market.
While some people frown at the sight of construction cranes throughout Toronto, Carras points out that the City needs to increase that number to accommodate the wave of immigrants mostly settling in and around the downtown area rather than venturing out into the 905 Regions surrounding the City.
“The GTA is growing up, not out,” he explains, citing a need for anywhere between 900,000 and a million new units by 2030.
As I have written previously, the City of Toronto is quickly becoming a condo Mecca, and with the Greater Golden Horseshoe Plan pointing towards increasing intensification, I think we will soon cruise our way to being one of the most exciting cities in the world.
Read previous articles by Stephen Dupuis on BuzzBuzzHome’s blog here!