One of the hottest topics in real estate circles in Canada these days is the proportion of offshore buyers, and if and how they are inflating prices in local markets. This month, the Canada Mortgage and Housing Corporation has released a report which investigates the extent of foreign ownership in the condominium markets of Canada’s major cities. One of the interesting stats to come out of the report is that foreign ownership of condos tends to be higher in newer buildings – those built since 2010 in the cities of Toronto and Vancouver.
CMHC reports that the rate of foreign ownership in the overall Greater Toronto Area (CMA) is less than 2% for condominium projects completed before 1990, but foreign ownership rises to 7% for condos completed since 2010.
For Toronto, foreign ownership of condos is highest in the downtown core of the city, where the numbers approach 10%. CMHC does note that the methodology used for their study allows for some leeway in the exactness of the numbers.
The foreign ownership totals are higher in Toronto, somewhat surprisingly, than they are in the Vancouver area, where foreign investors count for less than 2% of the projects built before 1990, a number which increases to about 6% for those completed since 2010.
Also interesting to note, there are some fairly large statistical jumps from 2014 to 2015 – for example, in the overall Toronto CMA, foreign ownership of condos in that single year jumped nearly a full 2 percentage points – from 5.5% to 7.4% – for buildings completed 2010 or later. It’s important to remember, however, that some of these numbers can be skewed by condo construction completions, and when there are a large number of completions in a single year, the foreign ownership numbers will grow correspondingly. The growth in foreign ownership of condos, nevertheless, as shown by these CMHC statistics, is obviously real , and hard to ignore.
So what are we to make of foreign ownership of condos, and how does it affect our local market in the Greater Toronto Area? I think that the numbers are still relatively low, although certainly 10% foreign ownership of newer condos in the downtown core of Toronto will have a effect on the market. Toronto’s growing role as a global city brings added pressures on real estate market pricing, it’s a simple matter of supply and demand. That new offshore investors are most interested in newer projects indicates that attention is being paid to many of the latest condo project launches, many of which are being marketed globally. It appears that the word is getting out there that Toronto, and its environs, are a good, stable, and safe place to invest. Going forward, I believe this trend will continue.
I was recently interviewed by Point2Homes, a large internet real estate web portal, about the state of the Mississauga real estate market…. here is an excerpt from the Q&A session:
1. How has the Mississauga real estate market performed last year, and what are your expectations for 2016?
The Mississauga real estate market mirrored the overall Greater Toronto Area(GTA) in 2015. We saw very strong demand throughout the year, with multiple offers and bidding wars being the norm. There was an acute shortage of listings for freehold properties, and with nowhere left to build in the City of Mississauga, detached homes increased by about 9 percent during the year. What’s even more remarkable is that, on average, the average selling price for detached homes was 100% of the asking price – in other words, on average, throughout 2015, buyers were obliged to pay the full asking price for a detached home.
High-rise condos, where there are still many being built, especially in the Square One area of Mississauga, saw price increases of 5 percent overall. This is strictly a reflection of supply and demand, for unlike detached homes, there are many new condo projects coming on stream. Condos performed very well in 2015, in spite of the record number of new projects being completed. The average condo in Mississauga sold at 98% of asking price throughout 2015. Rental rates are also at record highs, something that condo investors can appreciate.
The strength in this long bull market has been built on three pillars: low interest rates, which make higher priced properties affordable; an overall good economy in southern Ontario, where most people have jobs; and immigration, where on average, 100,000 people move to the GTA on an annual basis. As long as these three pillars remain in place, my expectation is that the strength in the market will continue.
For the rest of the interview, check here.
A recent visit to the Grand Park 2 site being built by Vancouver developer Pinnacle International shows steady progress on the very deep parking structure. A large crew has been working later than most other work sites in the Square One area, and the results are impressive. Here are a few shots from this afternoon, showing crews pumping and pouring concrete. The above shot shows what appears to be a giant preying mantis, but what is in fact a giant concrete pump…
Grand Park 2 will eventually rise 48 storeys, making it one of the taller condos in Mississauga. There will be 469 units, and completion is planned for 2017. Architects are Turner Fleischer.
Lots of teamwork involved here with the crew, as some prepare the rebar, and others pour and work the concrete.
You can clearly see the vast size of the undertaking – there is an enormous amount of concrete and rebar on display, and this is just for the underground parking structure! Pinnacle’s Grand Park 2 condo tower is one of the dozens of highrise projects which are dramatically changing the downtown core of Mississauga City Centre.
Pinnacle Grand Park 2 Commences Construction
Late last week equipment arrived onsite, the sales office was quickly demolished, and ground work preparation commenced for the 48 storey Pinnacle Grand Park 2 condominium at Mississauga Square One.
We note the presence of a shoring rig!
It should be interesting to watch this building go up. Located at the extreme western edge of the Square One area, at the intersection of Webb Drive and Grand Park Drive, it is considerably taller than its sister tower Grand Park 1, and it will make a dramatic impact as the concentration of high rise condos stretches westward in Mississauga City Centre. Location is pretty good, as it is still walkable to Square One, plus it is directly across the street from the Grand Park shopping plaza, which houses a Shoppers Drug Mart, Winners, Staples Business Depot, Mr. India grocery, several restaurants and other stores. Come to think of it, it is also walkable to the massive T&T Chinese supermarket at Grand Park Drive & Central Parkway.
Interesting new video showing the pending construction of the Massey Tower condominium, located on Yonge Street in downtown Toronto….
As part of my ongoing series of profiles of Mississauga high rise condos in the Square One area, today we review Absolute World Tower #1, aka the Marilyn Monroe condo. This 56 storey tower was completed in 2011, and is today perhaps the most well known symbol of the City of Mississauga. Designed by Yansong Ma of Beijing based MAD architects, Absolute has won many international design awards, and is a sought after location for Mississauga condo fans. We provide a full profile for this amazing tower at my main site here: http://www.randyselzer.com/absolute-condos-marilyn.html
You will find more photos, a full list of amenities, prices, and more. Click through to my main article on Absolute Condos – Marilyn