Maintaining Resilience in a Rollercoaster Real Estate Market
How a builder is ensuring properties remain good investments as the housing market stabilizes.
Home is many things: a place to create memories, a reflection of identity, a sanctuary from the world, and for most people, the biggest investment of their lives.
Earlier this summer, The Economist Intelligence Unit The 2022 Global Liveability Index ranked Toronto among the 10 most livable cities in the world. But investing in a home in the Greater Toronto Area (GTA) now involves careful risk assessment. Recent monthly reports from the Canadian Real Estate Association show activity returning to pre-pandemic levels as the housing market corrects after two frantic years of record prices and sales volumes.
Planners are risk experts. Millions of dollars are at stake with every project, even in a robust economy. Sam Mizrahi, President and Founder of Mizrahi Developments, takes pride in honing his expertise. He is currently building The One, the first $1.5 billion tower in Canada at the corner of Yonge and Bloor. When he shifted from building single-family homes to building luxury high-rises in Toronto’s Yorkville neighborhood in 2011, uncertainty clouded the economy in the wake of the 2008 financial crisis. But he carefully researched the market and moved forward. All units on these projects, 133 Hazelton and 181 Davenport, were sold before construction began.
His years of experience in Toronto, along with the insight of real estate professionals who have navigated the ups and downs of this city, provide wisdom on how best to secure your real estate investment, no matter what the market brings. .
Remember that location is an emotion
Mizrahi understood that Yorkville was a desirable location, but he also says it’s critical that buyers understand why people become emotionally invested in their communities.
“Buying a home is always driven by emotions,” says Mizrahi. “My approach has always been to identify mature and popular neighborhoods and then listen to the local community. This way we begin to understand the underlying emotions of why a place is favored and we learn how we can add value to an area not only for potential buyers but also for the people who already live there. .
By adding value to the community, a builder can help ensure the resilience of their properties in these neighborhoods. This can be seen in Mizrahi’s The One, an iconic superstructure designed by Foster + Partners that will be tallest building in canada with many facilities for residents and visitors.
Identify scarcity in the market
The pandemic has created a pent-up demand for a social life downtown, with access to culture, cinema, restaurants and entertainment. Proximity to public transport is therefore highly valued, explains Paul Maranger, broker and senior vice president of Sotheby’s International Realty in Toronto, but there is little land on the subway lines. “The city is confined by the lake to the south and there’s a mentality that the northern boundary is the 401,” he says. The increased density around TTC stops reflects this demand, which also helps explain the continued value of The One, located at the epicenter of downtown with underground access to the Northeast Subway Lines link. south and east-west.
Space is clearly limited along the spine of the TTC. The number of residences in The One is only 416—a tribute to Toronto but also a decision to maximize a sense of peace with a smaller population in the tower. In comparison, other downtown skyscrapers of a similar height offer up to 2,000 units.
Invest in the high end of a category to avoid buyer’s remorse
Homebuyer comparison store, whether they’re actively shopping or just keeping an eye on the market. Even if they immediately fall in love with a house, they always tend to consider other options to ensure that their emotional response also makes practical sense. It’s an easier decision if there are few similar options to compare.
A proven strategy for owning a solid investment property is to make sure it doesn’t pale in comparison. Simply put, it’s not the same or worse than most other comparable homes. Sellers with listings in the top 10% of their category will always attract buyers. “It’s mass-market mediocrity that languishes,” says Maranger.
This explains why The One residences have not seen a price drop and are now over 80% sold. “There’s nothing to compare them to,” says Katy Torabi, real estate agent at Royal Lepage. “These residences are in a class of their own.”