So we have a debt problem to an extent, I think, that is exaggerated. And an amazing thing happened over that first five years that we were living there. I think there’s a broad, shared consensus that we have a very serious supply problem magnified by the fact that we’re very popular. And so, I think we are looking at people working very, very differently. MODERATORS: Nikki Gill, Ron Johnson, PANELLISTS: We’re too far apart. They don’t even know what the questions are. We’re holding down the entire renovation, which is pushing the cost up, which is making it very expensive for anyone to renovate in this city. Rates are low and the prices will continue to rise in the medium- and long-term. When those two things detach — when the amount people earn no longer allows them to live in the city where they are earning the money — that’s when you see a crisis emerge, because you need money from elsewhere for people to be able to live and work here. This year’s event will be moderated by Post City Magazines managing editor, Nikki Gill, and editorial director, Ron Johnson. I’ve installed a few systems, and I know, in the summertime, you can get your energy bills down to almost nothing. Land prices are too high. Detached houses remain in much higher demand when compared to condos; While all areas in the … Michael Kalles, President, Harvey Kalles We are looking at purchasing a detached home in Durham region, ideally Pickering or Ajax as our primary residence however we are concerned with the economic uncertainty of Canada. The consensus is that you cannot stop it. Benjamin? For instance, with roads, we can’t build enough roads: more people will just drive on them. Once we are through this, prices will continue to climb upwards. BRIAN: And I think people are somewhat deluded in thinking, “I’m going to buy at Yonge and Eglinton: I work downtown at Bay Street, and it’s fabulous. C$619,000. Everyone is trying to buy homes that only have income property potential. Related Articles. View original. The Future Of Toronto’s Real Estate Market: You Decide . And our first home, we bought a home in Roncesvalles and we rented out the basement. Real estate lead generation can be done through various methods. Lockdowns. And so, you know, we’ve looked at doing apartment buildings across the GTA, and there are only a few areas where they work, but they absolutely will not work downtown. We need to change it. In the Toronto real estate market we have experienced two distinct cycles over the past 25 years. Welcome to Post City Magazines’ and Rotman’s Real Estate Roundtable. But it’s far cheaper to rebuild the infrastructure where the infrastructure is than to build new infrastructure. Let’s all give up and leave.” But that’s not the answer. One of them was mentioning cutting immigration. It makes all the difference in the world. I think what will happen is that the next few months will be dominated by this story, and then people will see that things are stabilizing, and a year from now, we will not be talking about it. We have asked our roundtable participants to revise their predictions for the real estate market and COVID-19’s impact in the near future for this article. The podcast is available via Apple Podcasts and SoundCloud. SEBASTIAN: I think my biggest renovation mistake is the current house that I’m just building. From a seller’s perspective, the market was dramatically undersupplied, and one could argue that now it’s even more so. Weekly Update - Keeping Real Estate Real Over the past few months, price increases in the suburbs such as Mississauga , Oakville and beyond have outpaced the City of Toronto. I think we have to put into perspective that we have 170,000 people coming to the city of Toronto over the next three years. BRIAN: We can’t even keep up. So we need to cluster in the cities. As property prices have risen there, so have effective salaries. It’s the inventory and listings that fluctuate depending on the time of year. I don’t know what the solution is. Is Toronto affordable now? And perhaps that’s indicative of the crisis, the affordability, because, you know, the era of buying and flipping homes is long gone. She does say that prices will also still be affected by the season like when students start their semesters in September and January. I’ve met many people who own the first house they’ve ever had. WILLIAM: Well, one thing we need to do is we need to stop thinking about the infrastructure problem as a building stuff problem and instead think about it as a pricing problem. I asked Lou Di Gironimo, the head of Toronto Water at the time, “Lou, will the toilets flush on Super Bowl Sunday?”, I found out that underneath King Street is the original infrastructure from when it was first built in the late 1800s, and the water actually travels through wooden pipes along King Street. A few months ago, nobody was talking about the Bank of Canada cutting interest rates. We can’t add more and more and more. Therefore I believe that, if this market is strong enough, it might be even stronger a year from now, enjoying the benefit of lower interest rates. It’s a meaningful change, for us. So the horse has left the barn. What would you recommend for millennials in today’s market? On a purpose built — and I think Brad brings up a great point —  there’s return and then there’s capital appreciation. Our 2020 Real Estate Roundtable took place in front of a sold out live studio audience at the Rotman School of Management when the storm clouds of COVID-19 were predominantly impacting China, Iran and northern Italy. BRAD: That’s true. “The interest rates might even go down,” says Ravji. First, those investors in the condo space, you know, they don’t see [this argument] … and we spoke to many of them. It’s up. So it’s not like we didn’t do something fabulous, because we did, to unlock more supply in the city. A few members commented, saying the rent they collect on a condo is already not covering the cost of carrying that condo. We need to do something to make sense out of this investment because, at this point, correct me if I’m wrong, if you don’t own the land, you don’t make money as a builder. In the U.S. it is at a record low. If we want real housing for people that can’t afford to buy, we must change some of these buildings and work with the private sector and the government to build affordable housing. Somebody else is paying 50 per cent of your mortgage. Contracting “Condos will remain the hottest market in the city with multiple offers and multiple offers across the board – they just can’t build them or keep them vacant fast enough,” says Kutyan. We know it’s not possible to be properly housed now or access housing. This marks the 13th roundtable and the second time we’re in front of a live audience here at Rotman. Where to buy real estate in 2020: Greater Toronto Area By Romana King on June 24, 2020 This year the prestigious title of Best Greater Toronto Area (GTA) neighbourhood goes to Pringle Creek in Whitby. November 11th 2016. That’s how this problem is going to be solved, in small increments. The Market will be Stable with Modest Growth. This is very, very important because the new wave of rentals will be families with young kids. People start saying stop growth, and that’s desperation. I think we need to get back to doing some of them, [like] sharing homes. Immigration. “We are expecting a stable growth of between six to eight per cent with a lot of research coming out in recent weeks supporting that. Is that a crisis when the cost of housing is completely detached from the amount of money people who live and work in this city — and who we need to live and work in this city — make? ROTMAN MBA STUDENT RINOR SHKODRA: For the past few generations, home ownership has not only been a component of the Canadian dream, it’s also been a good financial decision because of the equity that you can build up. “The rental market is still going to be super tight and we are seeing prices going up.”. And we’re at the top: we’re knocking off Chicago, New York, Los Angeles. You know, we got the entire house, a single-family home. This is why planners get their backs up because planners stand in front of the room at public meetings when people say, “Hey, stop approving new projects because there’s zero capacity on transit [and] the neighbourhood park is overrun with dogs and dog urine, because it’s a tiny little park that was never designed for the amount of density that exists.” My point is we must be thinking about planning to communicate with the infrastructure that you need to ensure those communities, quite frankly, don’t become really unpleasant and undesirable places to live. Nobody knows, but if we assume that a year from now, maybe we will not be talking about it, we can say a few things about real estate, regardless of the virus. What we need to do is charge people for them. There are some sellers who believe it could be an opportunity to sell, and buy when the market becomes better supplied. My employees tell me, “My minimum to live in this city is $70K now.” There are lots of people at tech companies who have to start way below that for us to build a business that’s reasonable. They need stability. I expect a weak recovery in the third quarter and back to semi-normal in the fourth. Now what we need to do is to encourage them [developers] to do it. It’s a long-term play.” And they’re right. The Covid 19 surge in the Toronto and Peel regions are no doubt crimping home hunting and sales, so we'd be inclined to say sales could be even better. There are so many different things to think about than the conventional “can I buy, a condo or a starter home?”. JENNIFER KEESMAAT: Well, sure. The panel was hosted at the University of Toronto’s Rotman School of Management with journalist Philip Preville leading the discussion. It gives you an idea of what’s happening in the city of Toronto. Interest rates back then went up to the sky. MICHAEL: It’s interesting. Nobody’s doing that anymore, right? It’s doubled. Micro Condos Are The Future of Downtown Toronto. We have a lot of cranes. We have to do something, and it’s urgent because young people simply cannot afford housing. So there was an idea that we need to free up the Greenbelt. For example, we’re building on 16 acres right now, my company. BARRY COHEN: I didn’t start that rumour. Therefore, despite the fact that more than 50 per cent of investors are in negative cash flow, they’re not selling the way people expected them to sell. Infrastructure is the purview of the city, and it’s absurd to me that the city engineers have been aware of the fact that on Richmond Street, as well and on King Street, we have a 140-year-old sewer system. It’s not working right now. So where do we want to build? We can’t live in the country in Canada. That is a market, you know. Prices will likely not move up or down. 1. You’re the ones driving up commercial real estate,” but you know, we’re actually really struggling. In this video we go over some possible causes, and talk about whether this is short term or the start of a long term shift in Toronto Real Estate . You need access to labour, which is a really big [concern]. Hard-working doesn’t begin to describe how hard this real estate agent works.... 2020 © Storeys Publishing Inc. | All Rights Reserved, Toronto’s Ever-Expanding Population Needs to be Housed, Toronto Storeys’ Five Most Read Stories Of 2019, East or West, Good Transit Planning Is Key To GTA Growth in 2020, Mississauga Outpacing Toronto in Rental Price Increase, Bill 145 – The Trust in Real Estate Services Act, Saving For A Home In Burlington, Oakville, Milton Differs, A Bad First Experience With A Real Estate Agent Led Her To Become A Great Agent: Meet Zuzana Misik, Economist Calls March Home Sales ‘Lacklustre’ As They Dip YoY, It’s Currently Better to Rent Than Buy a Condo in Most Toronto Neighbourhoods: Report, Townhouses Have Hot Run in Major Canadian Markets in 2020, 14 Incredible Bathtubs We Want to Soak in This Winter (PHOTOS), Toronto Had Nearly 11K More Home Starts Than Any Other Canadian City in 2020. NIKKI: OK. We’re going to move on to the next section now. The hope is you’re going to get it on capital appreciation. He came back, and he said, “Look, the toilets will flush in the Mirvish+Gehry project, but not if you have another project like this one. At the top of the list are real estate professionals. BRIAN: Well, a very inspiring development is at Lawrence and the Allen expressway, which was community housing, a huge, huge community housing. I think I am, like, the average millennial who has moved to a lot of different places. If you held it for seven years, you’ve won in the real estate market. So the cost of renovations is going up. It’s the most absurd approval I’ve ever heard of in my life. All the design firms, they’re moving up there. A lot of people can’t afford it. It’s up because of demographics. Buy if you need a house. Central 1, the economists for the credit unions, predicts Toronto prices will rise 7% in 2021. Not going to be, not maybe, it is today. People are desperate. This euphoric housing market over the past almost two decades was in part due to extremely low interest rates. “It’s simply a supply and demand equation.”. I think that we are in a crisis, and it’s getting worse and worse and worse. Toronto’s top experts discuss the future of real estate in 2020 Housing affordability and COVID-19 dominate this year's roundtable. We have no playbook for coronavirus and have never seen anything like this before. It must be quite a sight … And at the end of the day, their chauffeur is sitting there at the subway station to take them because the car can’t even go anywhere if the traffic is so bad. For the month of November, we witnessed price increases across the board for the Greater Toronto area. You know, add more power, add more trains, make them more frequent, and we have to create more subway lines, maybe more subway lines above the ground and below the ground. When the Mirvish+Gehry proposal came forward, I went down the hall to the head of Toronto Water: three 90-storey towers on a site that we had never conceived of having that much growth. BRAD LAMB: All right. Border closures. My father is here today, the founder of Harvey Kalles Real Estate, and he’s been in the business for close to 70 years. “I don’t think we’re going to see anything different next year from this year,” says Munira Ravji, award-winning realtor at TOrealestategroup. JENNIFER: It is impossible to know what is going to happen to the market. Tanya Mok . You know, the number of income properties we’re [doing] … we’re trying to squeeze them into every closet. “. The highest forecast in a September Reuters poll of 16 economists was price growth of 16% in 2021, while the lowest prediction called for an 11% drop. Which is why opening the Greenbelt isn’t really the [solution] because there are no jobs out there. I’m always astonished at the prices of what’s going on in the city — not only in the city, but in the cottage country. NIKKI: Barry, you’ve got boots on the ground. It’s not a GIC. The only thing we know for sure is that we are going to see bumps and changes that we cannot begin to predict, and trying to do so is futile. Unless the person buys it with 60 per cent or 70 per cent down, they’re going to lose money every month. There’s tons of housing there. At the right price. BRAD: So there was a period around 2015, 2016 where purpose-built rentals worked in the core, even south of maybe Lawrence down to waterfront, DVP and Dufferin. You may be able to score a great deal from a motivated seller and at an incredibly low interest rate. The same goes for baby boomers who will be downsizing. If you buy and hold a home or a condominium any time in the last 45 years, you’ve made money on it, no matter when you bought it. Since so many people asked for the notes, we thought we would assemble them into a series of articles for all to read. And murder hornets…. I’ve lived at Yonge and Eglinton, and when I moved into my neighbourhood, we moved actually into a smaller home, closer to the subway, so that we could go down to one car [and] live the dream, walking to work, doing all these great things. Oct 14, 2016. Anything on that? Every basis point counts. But the magnitude of disruption we are facing is not yet fully understood or felt. We need more supply.” But then, on the other side, what Brian said is actually the opposite: “The whole city is changing right before our very eyes.” And it is. Interest rates are now going down, not up. I can’t remember them all, but they’re all based on the same thing that Barry talked about. That’s the correction we are going to get driving the cycle. We’re asking [to go from] six to nine. To put that in context, a tower went up just south of Bloor and Yonge street, 1,000 suites, and 2,000 people lived in that building. For this reason, unless you have an enormous financial buffer and an appetite for significant risk, this is a moment for wait and see. The issue is that going over a decade of this kind of activity with extremely low interest rates can generate a bit of a problem. I am just curious as to why we haven’t actioned that money. RON: All right. In a place like Bayview Village there are 116 properies still on the market with only 80 sales over the last six months and an average price of $2.938 million. You can’t do your whole trip on transit. So how much more can you build with the few lines we currently have? We added nine listings yesterday, so the real estate market marches on in Toronto. Of course, we are not going to do it because it would be madness, I think. MICHAEL: I remain confident in the city of Toronto from a real estate standpoint. So much of the city has changed. If we are all agreeing that Toronto will never become affordable, this means that, over time, condo prices will be even higher. Where will people in the tech industry live in this city? NIKKI GILL: To begin our 2020 roundtable, we’ve asked economist Benjamin Tal to offer his current state of the market. Dufferin Street is currently being completely redeveloped because we’ve put a plan in place in keeping with our avenue strategy to intensify the corridor. So this is a long-term play, and they know what they’re doing. We walked through our house, and we’re, like, “OK, Louis could have the main floor. If we don’t link the growth to infrastructure, then I think you get the concern that you heard in Ottawa. Sign up now to receive the latest news, narratives and advice on Toronto's real estate sector. We also know, from an economic perspective, starting with SARS in 2003, that China was much smaller and not as interconnected with the global economy. Now, it’s going to happen at Yonge and St. Clair.” But that’s the situation they’re telling us, even employees of mine saying, “Brian, I walk. They won’t.”. As with the stock market looking for a reason to go down, the macroeconomy is in a 10-year boom, and 10-year booms end, usually after nine years. We know that’s happened. I don’t usually plug other websites on TRB, but we had a gentleman from in our office last week, and he showed us some fascinating stats about the Toronto real estate market. Because I think the way people are buying their homes is changing. Took eight years from connection to completion, and that handled the immigration for Toronto for 10 days. Either when I sold something — because someone offered me a stupid amount of money and, in hindsight, it wasn’t enough — and I wish I’d bought more [or] I wish I never sold anything. You know, let that sun work for you. BRIAN GLUCKSTEIN: I’ll be quicker. Today [the building] is surrounded by high-rise towers varying from 35 to 45 storeys. So what is the solution? RON JOHNSON: All right. “Your best case scenario in neighbourhoods like those is prices will be flat,” says Kutyan. It’s not unusual for someone to spend more on a cottage than the most expensive house in a city. Toronto. As Toronto closes the book on 2019, prospective buyers and sellers are eagerly looking to answer one scintillating question: What will happen in the Toronto Real Estate Market in 2020? But we put in a basement apartment, we rented out the main floor, we lived on the top two floors. ROTMAN MBA STUDENT ANDREW JI: As a new immigrant to Canada, I realized the inflow of immigrants contributed quite a bit to the real estate market, with Canada welcoming almost a quarter million new immigrants per year and a majority of them settling in our major city. From the age of six, my dad and I would drive around, and he’d point out every building and site that he could have bought. That building I could only get 16 floors for should have been 30 or 35. But they don’t want to stand on a subway platform for three trains to go by. There are too many variables at play day to day, let alone making a prediction for more than a month or two out. They want the company. Toronto Real Estate Year End Review 2020 Home Buying, Video, Weekly Update - Keeping Real Estate Real . And it’ll rent, you know, when it’s finished in three or four years for $2,500. By spring, housing supply … So, overall, the Toronto real estate market is actually doing better than it ever has, even amidst the COVID-19 global pandemic. Regarding purpose built, I totally agree, that’s the future. 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