Investor: ‘I believe the speculation hustle is over’

by Justin da Rosa on 20 Jul 2016
One popular market has been given a vote of confidence by the CMHC, but investors may be looking elsewhere to park their capital.

“I believe … the condo spec hustle is over. Those buying condos as investments now are doing so because they believe in Toronto long term growth potential,” Marcel Greaux, a Toronto-based investor, told REP. “They are prepared for an eventual slow down. They are preserving capital.”

And that trend has been noted by CMHC, which argues the Toronto condo market is safeguarded from experiencing a similar bubble burst that occurred in the 1980s.

“The housing bubble that occurred in Toronto in the late 1980s was arguably fuelled by huge speculative investment in the condominium apartment market,” the Crown Corporation said in its latest Housing Market Insight report for the Greater Toronto Area, released Tuesday. “Rapid house price growth in the late 80s transformed real estate investment.”

According to CMHC, developers are employing prudent tactics when construction new buildings: 79% of projects only begin construction after 70% or more of units are sold.

And those projects that go into construction prior to reaching that 70% sales mark are usually smaller developments or additional phases of a larger project.

Further, the vast majority of unsold units are found in two of the GTA’s most popular markets – Toronto and Markham.

“Condo building activity in Toronto seems to be well managed,” Dana Senagama, principal market analyst for GTA at CMHC said. “In spite of this encouraging information, future inventory management remains critical.”

Post a Comment

Most Trending News

How much do real estate agents make in Toronto?

Commission isn't everything. You should also take other things into consideration such as the cost of marketing, licensing, renting an office, and splitting commissions with the brokerage.

Read More
Can I use the word 'realtor' in advertising?

As a member of CREA, you can use REALTOR® in your advertisements but there are a few basic rules that you should follow in order to use the trademark correctly.

Read More
Personal real estate corporation Ontario

A personal real estate corporation (PREC) belongs to an individual agent or a broker. There can be many benefits to starting your own PREC in Ontario.

Read More