As I drive into work every day, and I make no apologies for that, it’s impossible not to notice how much Toronto’s landscape has changed in the last ten years.  There was a time when driving on the Gardiner Expressway provided views of Lake Ontario to the south, and Toronto landmarks to the north.  Those views have all but disappeared.  If you find concrete and glass esthetically pleasing then a drive on the Gardiner is a must.  Not exactly my idea of visual bliss but who am I to judge or question progress?  If there’s a need, and demand, someone will build it.  And build it they have.  Yes, that’s what makes my drive into work every day, (I guess I could say I’ll take public transit in the future to score some brownie points…nah) a little less more stressful.  I have to look at the concrete jungle knowing the condo market will bring hell fire and brimstone of biblical proportions on our industry, and the overall economy.  It’s too much to bear, unless you’re a condo owner in the downtown core who can charge between $2,000 and $2,500 for a 700 sq. ft. condo.  And based on the now called Residential and Tenancies Act, tenant protections only apply to buildings that were occupied before 1991.  Soooo, if you own a condo in Toronto, and you’re a landlord, you can increase rents as high as you want when the lease expires.  Let me rephrase that, to as high as you can get.  Good news for condo owners, bad news for renters.

So, who are these renters that now have to fork over significantly more of their disposable income for shelter?  People who want to be closer to work, don’t want to depend on cars, want all the amenities at their door steps, have no desire to live amongst the suburban sprawl etc.  Sound like first time home buyers?  That indeed is one of the reasons that demand for rental units is on the rise in Toronto.  There is no doubt that first time home buyers (or as it became fashionable to describe this sector as the tail end of the credit curve) were significantly impacted by all the changes to mortgage rules.   What’s one to do if you can’t buy a home?  Living with mummy and daddy might be an option, assuming your parents are eligible for sainthood.  But the only other option is to rent and that’s lead to a BOAM!  As in rent will increase.  It seems like the condo supply side of the equation has not caught up with investors, and there’s enough data to suggest that it will not.  Toronto is no different than most major urban centers in North America.  Over the past 20 years there’s been an urban renaissance, empty nesters, first time home buyers, people looking for different life styles, flocking to the core to buy property.  When land is scarce, last time I checked no one was building land, purchasing a condo may end up being the only option.

Who really knows what the future holds for the condo market.  On one side of the argument you have the” thinkers” predicting Armageddon.   On the other side of the argument you have the “doers”, the actual builders working within the free market economy.  They didn’t amass their fortune by guessing or taking bets on projects worth hundreds of millions.  If I had to place a wager my money is on the “doers”.

Until next time.

Cheers

Click Here:  An interesting infographic on Toronto condo market