Welcome to the second installment of our three-part interview series with Jawad Rathore, President and CEO of Fortress Real Developments. We sat down with Jawad to further discuss the Canadian condo and real estate market.
Q: The Toronto condo market continues to confound any and all skeptics. What is driving this incredible growth?
A: Two fundamentals are the keeping Toronto condo market strong: the constant influx of new people and continued affordability.
Canada attracts about 250,000 people each year and about 100,000 settle in the GTA. The math is simple. We need to add 40,000 homes for these people, and the new land use restrictions have made condos a primary focus. A decade ago, it was 80 per cent low-rise and 20 per cent high-rise condos, but now we see the reverse.
The second factor keeping Toronto’s condo market so resilient is affordability, or more to the point the high cost of alternatives. A shortage of available land means prices of low-rise developments are going through the roof, causing these homes to become unaffordable to many, especially first-time home buyers. If you’re a young professional or couple and want to make your first purchase, it’s hard to spend $700,000 on a low rise unit in Toronto when you can spend under $400,000 on a condo. This is why the condo market is currently better serving the city’s needs.
You are developing condo projects across Canada. How does the Toronto market compare with others, say Calgary or Winnipeg?
The Winnipeg real estate market continues to enjoy steady, incremental growth. Condo projects there are doing well for many reasons, including the turnkey lifestyle they offer. No yard work or leaky roofs to worry about. And forget about shoveling snow.
Calgary and Edmonton are Canada’s fastest growing cities, thanks to the amazing strength of the Alberta economy. The province has the country’s highest migration rates, highest average wages and highest average income -- $60,000 in Calgary compared with $41,000 in Toronto and $37,000 in Montreal. You have more people, good paying jobs, all of which works to create the perfect storm for intensification.
Q: Population growth is clearly a prime driver for housing demand. Harmony Village Sheppard also benefits from another demographic shift – aging Boomers looking to reduce their housing needs while not downsizing their lifestyles. Why are other developers not recognizing this massive market?
A: Jack Pong and his City Core team are a winning formula. As far as we’ve seen, they are the first developers to pioneer this 360-degree concept, a harmonious “aging in place” style of living that directly meets the evolving needs of Boomers. We have all seen senior residences throughout Canada, but Harmony Village is designed at its core to deliver a complete lifestyle, not just a condominium unit. For those looking to purchase a unit, it’s the perfect community with every amenity you could need at your doorstep. For investors looking to purchase a unit, they are tapping into a credit worthy and stable market. Shortages of units in supported living facilities means strong rental demand. And there is plenty of upside if they ever choose to sell.
Q: You mentioned the Harmony Village offering to “age in place.” That is, once people start needing services such as meal plans and in-home healthcare support, there is no need to move. Do you think buyers will be looking that far ahead?
A: We are already seeing a large wave of Baby Boomers beginning to retire. They are indeed looking ahead and top of mind is maintaining a desirable lifestyle. Today, retirement lasts 20 to 30 years. They want to be comfortable, live in a quality home and have the peace of mind knowing that they do not have to move again as their need for in-home support increases. We talked to seniors who said that after years of taking care of other people, they want to start taking care of themselves. Access to top quality services – and anything else that feeds into a better quality of life, such as being part of a community -- is more important than ever before.
Q: Sales for Harmony Village Sheppard are starting up in late March. What kind of response are you expecting?
A: We’ve seen an incredible response already! We just had a massive launch for brokers. They are telling us they’re anxious to get involved. Everyone wants this product because of all of the needs it meets in the real estate life cycle. We truly feel it is going to be the next step in the housing transition for Boomers as they get older. It has an unparalleled number of amenities and custom service offerings; St. Paul’s L’Amoreaux Centre is an experienced partner who will design and run numerous services and classes. Plus, Harmony Village is located on a priority public transit corridor and close to major highways.
Stayed tuned for the third and final interview with Jawad coming soon!
Visit www.fortressrealdevelopments.com to learn more about Fortress and follow them on Twitter@FortressRDI
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