Month: June 2021

The federal government’s Canada Greener Homes Grant is proving wildly popular after coming online less than a month ago.

The grant, which will draw upon a $2.6 billion pool and is targeting 700,000 homes nationwide over seven years, provides Canadians with up to $5,000 to make energy-efficient retrofits that follow EnerGuide evaluations to their homes.

“We’ve had a huge uptake since the program started,” said Jordan MacDonald, president of ThermalWise, a building performance consulting company in Atlantic Canada. “We have a team of energy advisors in New Brunswick and Nova Scotia. We were providing a similar service before the Greener Homes program, but we’ve seen a tenfold increase since the government launched it and we’re in the midst of increasing our staffing.”

The upgrades covered include building envelope insulation, air ceiling, replacing windows and doors with energy-efficient units, and installing air or ground source heat pumps, which function better in colder climates.

The Canada Greener Homes Grant also covers renewable energy, which can involve installing photovoltaic panelling to regenerate electricity that’s used in the home, and in some cases is fed back into the grid.

“Air ceiling is certainly a low-cost energy upgrade that can dramatically improve comfort in the home and reduce energy consumption. Part of the EnerGuide evaluation is doing a test to depressurize the house to identify areas of home leakage,” MacDonald said, referring to the most popular upgrades grant users are opting for. “Basement insulation and adding more attic insulation are also quite popular. For a home that is re-siding, meaning it’s coming up to needing the siding replaced, adding rigid exterior insulation to the house has been popular, as are building envelope upgrades and heat pumps.”

The Canada Greener Homes Grant is also being touted as a way to boost the economy by creating what the government says are 110,000 jobs.

“We worked with Statistics Canada on the model of the program—we think it’s about 110,000 direct and indirect local jobs in their communities,” Minister of Natural Resources Seamus O’Regan told CREW. “We’re also taking into account the recruitment, training and mentoring of up 2,000 EnerGuide energy advisors.”

The incentive for Canadians to take advantage of the program is that energy efficiency upgrades, in addition to creating a healthier environment, can augment home values, added Minister O’Regan.

“Any time you improve your home, one would think it increases the value, but you’re also going to see an increase in the literacy of this,” he said. “People want to be able to do something to combat climate change, which seems so insurmountable that there is an appetite out there amongst Canadians to do their part. The only way this will work, aside from the fact that we’re talking about 1.5 megatons of greenhouse gas reductions beginning in 2027—that is sizeable—but in order for change to be expandable, I think people need to benefit from it and save money. This is not just about lowering emissions and creating good jobs, it’s also about lowering Canadians’ energy bills and that’s how it will be sustainable.”

There is a big upside to Ontario’s minister’s zoning orders (MZOs) that have been much maligned recently in certain media coverage over the past few months. Indeed, MZOs are needed to cut through red tape and streamline snail-paced municipal development approval processes across the province.

Why? Because we have a housing supply crisis and infrastructure deficit. Connect the dots.

So, what are MZOs? Under Section 47 of Ontario’s Planning Act, the Minister of Municipal Affairs and Housing (MMAH) has the authority to issue these orders, allowing the minister to regulate the use of land, along with building location, use, height, size and spacing. MZOs are employed to help overcome delays to critical projects, including residential developments during a housing supply crisis.

Municipalities have often been slow in updating zoning to align with provincial land-use planning policy. This ultimately can affect the speed of new housing supply coming to market. Until that gets fixed, the use of MZOs should be encouraged to help implement provincial Growth Plan policies to increase density around mass transit corridors and mass transit station areas (MTSAs).

The challenge with updating land-use plans to meet these Growth Plan targets has been slow at the municipal level.

Consider this: the Growth Plan calls for minimum densities within MTSAs (areas within a 0.5-0.8-kilometre walk, or 10 minutes from a major transit station on a priority transit corridor). Minimum MTSA densities along priority mass transit corridors are: 200 jobs and residents per hectare combined in MTSAs served by subways; 160 jobs and residents per hectare combined in MTSAs served by light-rail transit lines; and 150 jobs and residents per hectare combined in MTSAs served by GO rail lines. However, this has yet to be reflected in municipal rules. As such, critical projects are delayed because local rules are out of date and don’t align with the Provincial Growth Plan.

Following are three recent projects where MZOs have been used or might be in the future:

SmartCentres Cambridge redevelopment

The 73-acre shopping centre in Cambridge is being redeveloped into a mixed-use neighbourhood of 40 buildings, including about 10,000 residential units, over 20 years. A new major transit station for the Waterloo/Kitchener-to-Cambridge light-rail line is planned within 800 metres of the mall redevelopment area, fitting nicely with intensification targets.

Cambridge Mayor Kathryn McGarry supported a request by SmartCentres for an MZO to speed up intensification activity. She and Municipal Affairs and Housing Minister Steve Clark noted significant economic benefits from accelerating the timeline, including creation of thousands of jobs. The MZO has been issued.

Innisfil, new GO Station – The Orbit

The Orbit—a transit-oriented community around a GO station that add 150,000 people to rural Innisfil—has been planned in different forms since 2006. It aligns with potential private-public partnership approaches to transit-oriented development, under which private developers using land-value enhancement induced by high-quality transit infrastructure, can cover at least part of the cost of constructing the transit station that has enhanced nearby real estate values.

In July 2020, town council endorsed the vision, and in October a request for an MZO was sent to MMAH. According to Innisfil Mayor Lynn Dollin, the desire to have the community constructed quickly is the main impetus behind the MZO request.

Proposed GTA West Corridor (Highway 413)

Highway 413 is a proposed four-to-six-lane, controlled-access 400-series highway and bus transitway currently undergoing planning and environmental impact assessment by the Ministry of Transportation.

The highway would include two extensions to connect to Highway 410 and Highway 427. It would serve as an outer ring road around built-up areas of Brampton and Vaughan and is intended to help traffic from southwestern Ontario bypass much of the GTA to reach cottage country and Northern Ontario.

It would cost about $10 billion, extending 53 kms from Highway 407 to Highway 400. The Ontario government announced the resumption of a formerly suspended environmental assessment (EA) process in November 2018. The federal government is also designating the proposed highway for a federal impact assessment.

A preferred route for the highway was determined in August 2020, with the EA process now expected to be completed at the end of 2022. Three MZOs have been used so far to encourage development along the proposed Highway 413 area.

MZOs expedite critical projects in keeping with the Growth Plan. Right now, and until the approvals process is modernized, they are the government’s handiest tool to grow our economy and recover in the aftermath of the devastation of COVID-19.

Richard Lyall, president of RESCON, has represented the building industry in Ontario since 1991. Contact him at [email protected]

Canadian mortgage debt has grown too heavy and will likely result in a financial crisis, charges a Vancouver-based housing market analyst.

“It gets harder to service the debt, and history is very clear: when you have a massive amount of household debt, debt servicing becomes difficult, even at negative interest rates,” said Steve Saretsky. “It can lead to a financial crisis—that’s proven itself throughout history. In Canada, it’s a systemic problem. I think housing now is too important to the Canadian economy, which is why the government doesn’t want to interfere with it.”

According to a report from Statistics Canada, household mortgage debt grew by $12.9 billion in March, followed by a larger increase of $17.7 billion in April. Compared to April 2020, Canadian mortgage debt has increased by 7.8%.

“Overall, the total credit liabilities of households reached $2,482.3 billion by the end of April. Real estate secured debt, composed of both mortgage debt and home equity lines of credit, stood at $1,961.9 billion,” said StatCan.

Canadian households carry $782.7 billion of non-mortgage debt, adding to the heavy collective debt load. Saretsky noted that household wealth, the GDP and consumer spending are largely built on debt, and that appears to be the only way to support housing prices. However, it’s only a matter of time before it collapses on itself.

“Everyone has been talking about debt for 15 years now, but the problem isn’t going away, it’s just getting bigger,” he said. “Eventually, we will have a credit crunch and it’s only a matter of when it happens—it could be a year from now or 15 years from now—but it’s inevitable with private debt.”

As a result of the looming crisis, it is probable that policymakers intervene in some way, but it will only delay the unavoidable, says Saretsky.

“In the next crisis, what will policymakers do? Some form of mortgage deferrals is coming back. It had proven to be a fairly successful program during the pandemic. Extending amortizations is another one, but eventually household debt will drag everything down.”

Looking to start investing in real estate? Increasing dissatisfaction with the typical 9 to 5 corporate job along with the rising price of living has caused more people to seek financial freedom through investments and “side hustles” now than ever before. Although investing in real estate comes with many benefits like increasing wealth and possible financial freedom, most find it daunting.

The complex financial and legal terminology, calculations of compound interest, appreciation, and mortgage rates along with the complexities of being a landlord can scare any potential investor. But you shouldn’t let this ruin your chances at growing your wealth and finding financial freedom.

This article will provide a comprehensive introduction to investing in real estate. By the end of this article, you will be knowledgeable on the basics of real estate investing and will be able to make an informed decision on whether you are ready to invest in real estate.

Why invest in real estate?

Many people who consider investing in real estate typically wonder whether it’s worth it in the first place, or if they should invest their wealth in other ventures like a mutual fund or the stock market. Little do they know, real estate is one of the safest, risk-free ways to earn money.

As an investor, you can build home equity and wealth based on the amount of appreciation your property gains and any other cash flow coming from your rental income. Rental income is the most constant form of income and usually covers your mortgage payments. Appreciation, the increase in the value of your property, increases wealth and home equity much more than rental income, but typically takes years to gain. This isn’t the case in Canada’s current housing market.

Currently, the Canadian housing market is booming due to low-interest rates and limited inventory. This has resulted in residential and commercial properties increasing in appreciation much faster, whereas appreciation would have taken years to increase. It’s now happening on a month-to-month basis in almost all regions across Canada. Overall, even amid the COVID-19 pandemic, this is the best time to invest because investors can buy a property and pay less on mortgage payments all the while their property increases in value.

How to start investing in real estate

While it may be a great time and idea to invest in real estate, it is often easier said than done. There are many different factors that you should consider before investing in real estate. Every potential investor should consider their goals, current financial situation and the current market conditions. These tips will influence your strategy and help set you up for success:

1. Determine your goals

The first step of real estate investing is determining your goals. Don’t get into it blindly. An investor’s goals should outline what they want out of their investment and guide their next steps. Despite this, many people set very general goals like “I hope to grow my investment.” Consider setting S.M.A.R.T. goals instead. These goals are specific, measurable, attainable, relevant and timed. S.M.A.R.T. goals will help you get a better understanding of what you want out of real estate investing and how you can make that happen.

Let’s revise the goal “I hope to grow my investment” using the S.M.A.R.T. goals criteria. This goal could be “Within the first two years of buying a rental unit, I hope to have a positive cash flow of at least $500 a month.” This goal is specific, measurable, attainable, relevant and timed. All in all, it’s a great goal!

2. Speak with a seasoned investor

Jumping into investment real estate can be difficult, especially if you have little knowledge of the topic, but again, that doesn’t mean it’s impossible. We recommend speaking with an experienced real estate investor to learn more about the realities of investing and asking about any advice they have to offer.

Someone with years of experience investing in real estate is likely to have an abundance of investment knowledge. They can share advice on all aspects of investing where it is purchasing an initial investment property and expanding your financial portfolio. A seasoned investor’s lived experience will be invaluable to helping you learn the ins and outs of real estate investing. Their help may even save you from having to undergo as many trials and tribulations during your initial investment.

3. Become familiar with the market

The current housing market trends play an important role in real estate investment because it determines how well an investment will do and how quickly. This is why every person considering real estate investing should get to know the housing market, its history, and any expected changes.

One of the best ways to familiarize yourself with the housing market is by evaluating historical data alongside current trends. Real estate is considered to be a cyclical industry because its demand and supply are impacted by economic trends. Assessing data and seeing how the market has changed over several decades will help you understand the market better.

Speaking to real estate brokers, investors or realtors will also provide you with invaluable information on the housing market. They will have the most up-to-date information on the market and will be able to forewarn you of any expected changes or downturns.

4. Get to know your target audience

In real estate investments, a target audience means the demographic that an investor hopes to attract to their rental property and sign as tenants. This plays an important role in the location and type of property that they purchase.

For example, an investor that prefers working professionals will need to understand their values and demographics in order to appeal to them. Working professionals typically work long hours in a city or urban area with plentiful jobs. They may also have recently graduated from college or university and have not settled down or started a family yet. Investors who would like to appeal to working professionals should choose a small condominium or apartment unit near an urban centre. The unit’s proximity to offices could attract many working professionals who don’t need a large amount of space.

You can determine what a property and location need to attract your preferred demographic by simply evaluating their lifestyle and values.

5. Find the right location

Before searching for properties to purchase, a potential investor should determine what location that they would like to invest in. While some cities like Toronto and Vancouver are growing hubs of real estate, there are many other areas in Canada that have great potential for successful real estate investments. We encourage you to explore your options before settling on a popular location or one that is close to your home.

When considering locations, every potential investor should complete a market analysis. A market analysis should assess details like the economic, employment, educational and environmental conditions of the area to help determine whether your investment will thrive or be vulnerable in a particular location. For example, properties in a location with population, employment and economic growth will likely increase in appreciation much more in areas that don’t. The information revealed in a market analysis can help protect your investment for the future.

6. Find the right property

After you have determined your target audience and narrowed down the desired location of your investment property, it is time to find an actual property to purchase. This can be a stressful task for any beginner investor, but it doesn’t have to be.

The first and most important quality to look for in a property is whether it has appreciation potential. As mentioned previously, appreciation is one of the most important factors in ensuring that your investment is a success. Look for a property that will likely increase in value over time. This could be a cheap apartment in an up-and-coming neighbourhood or a large condo in Toronto.

Properties that need minor renovations or cosmetic changes have great potential for increasing their appreciation value too. Don’t let the cost of these changes deter you from investing either; the New Residential Rental Property Rebate (NRRP Rebate) can help new investors save money on their renovations. We’ll touch more on that later.

7. Sort out your finances

Buying an investment property can be an overwhelming task, especially if you are concerned about how it will affect your current financial situation. Little do people know, they are sitting on a pile of cash in their primary residence which can make investing easier.

Home equity, which is the difference between the value of your home and how much you owe on your mortgage, can be taken out as a home equity loan and used for a down payment on an investment property. For instance, if you bought your primary residence for $325,000 and owe $200,000 on your mortgage, you will have $125,000 in home equity.

Up to 80% of your home equity can be borrowed at rates as low as 1.5%, allowing you to invest in real estate easier. A home equity loan is also tax-deductible, meaning that it can reduce your income tax. Overall, a home equity loan is a great way to use your assets to expand your financial portfolio.

8. Work with a professional

Real estate investing can feel overwhelming and complicated, especially if a new investor is starting this journey by themselves. Rather than trying to rely on yourself, seek some help from an industry expert.

There are many professional real estate investors who offer their services to help new investors get off on the right foot. They can act as mentors and help guide you through the investment process. Many mentoring services have lead their members to great success, including Connect.ca’s Inner Circle which has 36 certified millionaires taking part.

Some organizations like the Professional Real Estate Investors Group of Canada (PREIG) can also provide guidance to new investors. Their various training sessions on financing a home, being a landlord, current market trends and more can be invaluable for those looking to invest in real estate.

9. Commercial vs. residential real estate investing

One of the most important decisions you need to make while investing is whether you would like to invest in residential or commercial real estate. Each path comes with its own benefits and challenges, all of which should be carefully considered against your goals, risk tolerance, capital and timeframe. This will help you determine what investment strategy is the best fit for you.

Benefits of commercial real estate investing

 

There are two categories of commercial real estate: multi-unit residences or commercial buildings like office buildings, warehouses and retail spaces. While both are considered commercial real estate, they can differ greatly.

Properties with five or more rental units designed for living spaces can be considered commercial real estate. This means that investors who choose to buy condos, duplexes and quadruplexes are considered commercial property. In contrast, office buildings, warehouses and retail spaces are the most common commercial real estate buildings and they typically host a business of some sort.

Long-term leases

Commercial real estate is known to have longer leases than residential. Residential properties typically have leases that last from anywhere from six to twelve months, whereas commercial properties’ leases can last years. In fact, some commercial properties can have leases that last anywhere from five to ten years.

Commercial real estate’s long-term leases can help an investor can protect their investment for a relatively long period of time. Long-term leases can ensure that tenants remain longer, thus maintaining cash flow and lowering vacancy rates. This is much more secure than residential which can often have quick turnovers in tenants.

Higher ROI

Return on investment (ROI) is a ratio between net income and investment. This ratio is used to determine how much money an investor receives after all the necessary payments have been deducted. This is determined by a simple equation:

ROI = (Investment gain – Investment cost) / Cost of investment

Investors have found that, traditionally, commercial real estate has the highest returns on investment. According to Matt Larson, a real estate investor, “Commercial properties typically have an annual return of the purchase price between 6% and 12%.” This is much higher than residential properties’ 1-4%. As a result, commercial property’s ROI is higher.

Tax benefits

A commercial real estate investor can save a lot of money on taxes compared to those who have invested in residential properties. This is because commercial investors can take advantage of a double net lease (NN) or a triple net lease (NNN).

An NN lease and an NNN lease are when a tenant rents an entire commercial property. In a double net lease, tenants pay for the rent and two other incidentals – typically the property taxes and insurance. In a triple net lease, tenants are responsible for all costs except any structural repairs. This means that landlords do not need to pay property taxes on their commercial property.

Benefits of residential real estate investing

Much like families, residential properties differ greatly. Condominiums are popular residential properties in urban areas because of their compact size. Single-family homes are private homes that hold one family and have direct access to a street. Vacation homes are typically secondary residences located in a tourist hotspot like Muskoka. These properties are great getaways for families and are typically rented out for days or weeks at a time.

While these properties differ in their sizes, location, and purpose, they are all categorized as residential real estate and reap much of the same benefits, including a lower cost of investment.

New Residential Rental Property Rebate

Unlike those buying a primary residence, investors need to pay all HST upfront when purchasing an investment property. This can cause a property to cost much more than originally anticipated. Thankfully, beginner investors can take advantage of the New Residential Rental Property Rebate (NRRP Rebate) to lessen their financial burden.

The NRRP Rebate is an HST rebate that is available for investors who have bought newly built rental properties or have completed major renovations on their rental property. This rebate will pay back the majority of HST as long as investors apply for the NRRP Rebate within two years and have tenants that have signed a lease for one year. Few investors take advantage of this rebate, but it can greatly alleviate some of the costs associated with buying an investment property. Most investors receive a maximum $24,000 HST rebate when they apply for the NRRP Rebate.

Lower cost of entry

The cost to invest in residential property is noticeably less than commercial real estate. Commercial real estate typically is priced much higher than residential, resulting in investors needing to put down larger initial down payments. It is much more viable for the average person to save for a residential property, even if they need to place a 20% down payment on the property.

Residential real estate offers a lower cost of entry to investments. This can make it easier for those who are hoping to diversify their portfolio without as much financial risk.

More potential tenants

Those who invest in residential real estate can look forward to many potential tenants. This is because more people like working professionals, students, immigrants and those looking to downside choose to rent out residential properties rather than buy a home for themselves. This is especially true in Canada’s current housing market. With skyrocketing housing prices, more people are staying in the rental market longer. This benefits investors and landlords because have more potential tenants and they can be selective as to who they rent their property to.

Are you ready to become a landlord?

When you buy a rental property, you simultaneously become a landlord. There are many responsibilities that are associated with being a landlord like finding good tenants, managing properties and completing any necessary maintenance. Handling these responsibilities can take many hours a week depending on the number of properties and tenants that a landlord has. For most investors will another full-time job, being a landlord is a time-consuming responsibility.

If you are too busy to take on the responsibilities of being a landlord or simply don’t want to, consider hiring a property management company. Property management companies handle the operations, maintenance and administration associated with a rental property. Their tasks can include anything from balancing budgets, collecting rent, recruiting tenants or fixing broken utilities.

Hiring a property manager may be a great option for those who are simply looking to make a profit off of their real estate investment, not become a landlord. This route can reduce the stress and time commitments for an investor, but the fees associated with hiring a property manager could reduce the amount of profit you make. Carefully weigh the pros and cons of both options before deciding whether to become a landlord or hire one.

What are REITs and how do they work?

Real estate investment trusts (REITs) are companies that own or finance real estate across a range of income-producing properties like retail stores, shopping malls, and industrial real estate. These companies provide an investment opportunity, much like a mutual fund, and allow anyone to invest in a portfolio of real estate assets without needing to purchase a rental property or manage it. In a sense, REITs are like property managers for the hundreds or thousands of people who invest in them.

This is how it works: Investors place a small amount of money in REITs to invest in that company’s portfolio of real estate properties. As rental income and appreciation are earned from those properties, REITs pay out at least 90% of it to their shareholders in the form of dividends. In turn, the shareholders pay income taxes on those dividends.

This seems simple, but not just any company can be a real estate investment trust. Companies need to meet a number of criteria to qualify as REITs including being a publicly-traded unit trust, 75% of their holds must be in Canada, 75% of their annual revenue must be from their properties, and they need to meet the tests outlined in the Income Tax Act of Canada. This ensures that investors’ money is protected.

The benefits of REITs

First, REITs are much easier to invest in because of their lower point of entry. Rather than having to save up to place a down payment on an investment property (a feat that may be impossible for many), an individual can invest in REITs as they would a mutual fund. This investment is significantly lower than a down payment and a mortgage, making this route more viable for those with fewer savings or disposable income.

Just like any rental property, REITs’ properties will bring in steady rental income and gain capital appreciation over time. This makes REITs a relatively safe investment for those looking to invest.

Real estate investment trusts can also help safeguard your financial investments, increase your returns and better your financial portfolio. REITs differ greatly in comparison to other investment opportunities. This makes them great portfolio diversifiers. An investor who invests in REITs and other various investments can trust that they aren’t putting all of their money in one place – a risky move if the market, business or stock market experiences a downturn.

Making the most of your investment as a beginner

In order to find success in your real estate investment, you should make the most out of your investment. Ryan Coyle, seasoned real estate investor and co-founder of Connect.ca, has learned how to do just that.

When Coyle started investing 20 years ago, he focused on leveraging his asset base and buying more real estate rather than cash flow. By following the guidelines of the Multiplier Effect and refinancing his properties that have grown in appreciation and compound interest, he has been able to buy a staggering 35 properties that bring him to a portfolio of $19.5 million.

After finding success, Coyle has shared his secret to expanding his property portfolio: don’t be afraid of a negative cash flow. Unlike most other investors and gurus, Coyle stands firm that “Capital appreciation is the most important thing.” While positive cash flow is most people’s goal when investing in real estate, capital appreciation can help expand wealth.

Beginner investors shouldn’t be scared of a negative cash flow. Rather, they should see it as a potential opportunity. As their assets grow, they can refinance their properties and use that money to expand their portfolio. More properties will gain appreciation faster than one, thus increasing an investor’s wealth. Negative cash flow can even reduce income taxes, so they’ll have more money to spare.

Overall, there are many ways that you can make the most out of your investment as a beginner. All you need is passion, strategy, and some extra help from seasoned investors. As Coyle says, “Don’t get cause up in analysis paralysis, it’s important to get out there and do it.”

Artificial intelligence has made its way to the real estate industry and it’s helping cut costs and maximizing efficiency.

BrainBox AI is an autonomous building technology firm that has just launched the Real Estate Energy Savings Calculator, which the company claims can, among other things, reduce a building’s carbon footprint by 20-40%, double the service life of HVAC equipment, and spur a 60% “improvement of occupant comfort” in commercial buildings like schools, hotels, retail stores, offices, and medical facilities.

The AI technology self-adapts to optimize HVAC systems, which typically comprise 45% of commercial buildings’ energy consumption, and that in turn creates a self-operating building that forgoes human intervention. Moreover, energy costs can drop by 25%.

The platform is being touted as a giant leap for building operators towards net-zero carbon ambitions, and while these buildings do exist, realizing such lofty aspirations is notoriously difficult and expensive.

“BrainBox AI was created to help make commercial buildings considerably more energy-efficient, thereby reducing their carbon footprint and making better use of existing building infrastructures,” said Jean-Simon Venne, Brainbox AI’s co-founder and chief technology officer. “The development of the Real Estate Energy Savings Calculator is an important milestone in our mission to transform the commercial real estate industry with the implementation of advanced artificial intelligence technologies.”

According to a study by IotaComm, a commercial building’s energy consumption per square foot can be best understood by establishing profiles based on the operations housed in the complex rather than the building itself. For example, food service facilities consume about 56 kW/sq, while a retail mall averages of 23 kWh/sq. A public assembly building would only consume approximately 15 kWh/sq, and a warehouse 9 kWh/sq.

BirdBox AI is a Montreal-based company that launched four years ago and endeavours to bring about a green revolution in the commercial real estate sector, having already helped reduce carbon emissions across over 100,000 sq ft in 16 countries.

Brampton is getting its first purpose-built rental apartment building in nearly two decades, thanks to a joint venture between Daniels Corp. and Choice Properties.

The project, Mount Pleasant Village, named after nearby Mount Pleasant Go Station, is a sprawling master-planned community with a 26-storey rental tower—Brampton’s first in 17 years—36 stacked townhomes and a six-storey mid-rise condominium building.

Amy Chan, VP of development, design & engineering at Choice Properties, says it’s a head-scratcher that Brampton has gone so long without new rental stock, given how quickly it’s growing and years of strong demand. At 26 storeys, Mount Pleasant Village’s rental component can at least try to make a dent.

“We found there was quite a lot of demand,” she said. “There’s always a need in the GTA for rental housing, and at the end of the day we saw an opportunity to be integrated into the community long-term. The site is exceptional—you see it with the GO Station across the street, which is beautifully designed, and the development’s proximity to transit makes it a fantastic site.”

“For people who can’t afford to purchase, they still have an opportunity to access transit and all the services that are close by, including the community centre and skating rink up the street. It’s a little bit of an oasis away from the city. I think it’s something for people who can’t afford to live in Toronto but can still afford to rent here.”

According to Dil Banga, a sales agent with Royal LePage Flower City Realty who works in Peel Region, the paucity of new rental buildings in Brampton hasn’t gone unnoticed. He noted that the site is near the proposed (and contentious) Highway 413, which will span Halton Hills, Brampton and Vaughan before connecting to Highway 400, indicating that the area is sure to see additional development.

“Daniels made a wise decision because that section of land has Mount Pleasant GO Station there, so having accessibility in and out of Brampton, and being close to the 400-series highway, was their end goal. People can live and work there,” he said. “Rents are cheaper in Brampton than they are in downtown Toronto, but you can still get downtown in 45 minutes.”

More development is sure to follow. The City of Brampton’s planning and development website has designated Mount Pleasant Village an “urban transit village.”

“The Village is centred around a landmark public amenity complex – a cultural and education centre including a community centre located within a reconstructed Brampton train station (the former downtown CPR station), a library and a two-storey elementary school sharing facilities with the library and community centre. At the heart of the Village is the public square framed by a three-storey row of live-work units that are accommodating commercial and service space.”

Condominiums are real estate investors’ preferred asset class, but the laws of supply and demand dictate that higher returns on investment await in the single-family detached market.

“We have a growing population in Toronto, and as far as demand for detached homes goes, it’s going to continue rising, as will demand for detached modern and contemporary homes,” said Jason Ferreira, CEO of ONE Development, a new firm that buys detached houses to gut and rebuild them into modish abodes. “From an investment perspective, our forecasts, market research and consultations indicate that robust demand for detached homes likely isn’t going away. If anything, demand will continue increasing.”

ONE Development is a builder but it also secures investor funds to help pay for the fix-and-flip properties it purchases, and as a result they receive preferred or common shares. The company finds project sites in parts of the GTA like Etobicoke and East York that are replete with wartime bungalows built on opportune lots that, while narrow, are deep and allow square footage to be maximized.

“Our model and style is modern, contemporary and with very clean lines, open spaces and a minimalist feel,” said Ferreira. “Most modern homes have a connection with the outdoors, so we’re always using and maximizing natural lighting through floor-to-ceiling windows and skylights, especially in areas of the house that are dark, like a stairwell. Any time you walk into a main area, you see natural light from any point in the home. What we try to create are bright, wide-open spaces.”

The houses sell, on average, for $2.2 million—the median selling price of a detached home in the GTA was $1,415,698 last month, according to the Toronto Regional Real Estate Board—but Ferreira says that while the price may sound exorbitant, there’s a scarcity of detached homes for sale in the GTA, to say nothing of how few tony houses are for sale at any given time.

“There’s already a supply shortage for detached homes, and an even greater supply shortage for rebuilt modern and contemporary homes. Inventory is so limited that you couldn’t build enough homes to satisfy demand.”

ONE Development, although nascent, intends to rebuild and sell 20-30 homes over the next five to seven years, and the trick, says Ferreira, is to know where to find the lots.

Because so few of these houses are listed on the market at the same time, a compelling case can be made for investors to set their sights on the detached home market.

“Every few months, we’ll buy one, tear it down for rebuild at which time we’ll also be securing the next property,” he said. “There are many pockets on the border of Toronto and Etobicoke with huge concentrations of the types of homes that are perfect for this kind of redevelopment.”

A new non-profit, non-partisan organization is leading the charge to impress diversity, equity and inclusion upon the real estate industry, particularly the commercial sector, in which it says there’s a dearth of women and minorities in leadership roles.

And in developing its own playbook, The Evolution of Workplaces: Building a Culture of Excellence, the Commercial Real Estate Equity and Diversity (CREED) Council endeavours to spark a culture shift in the industry, countrywide, as its members discussed during a webinar last week.

“The industry doesn’t have gender equality, in terms of an equitable gender divide, and even people of colour, unless they’re in the administrative positions,” Leona Savoie, CREED member and senior VP of development at Hullmark, told CREW. “Companies have diversity but it isn’t seen in leadership positions. There’s often a ceiling for each of these groups.”

Savoie, a 23-year real estate sector veteran, says there is widespread acknowledgement in the industry that diversity is lacking, but far too little has been done to rectify demographical discrepancies. Implementing so-called diversity principles as institutional targets would be a good place to start, she added.

“It’s about setting measurable targets to institute change. If they’re just words, you’ll never get there, but if you set targets you can measure it. Leadership has to take ownership of it—make some broad statements, even mission statements, to create diverse, inclusive and equitable work environments—but if company leaders aren’t behind them and don’t actively check to make sure it’s happening, something’s lost.”

Part of CREED’s mission is to help people from diverse communities, whose aspirations might be stunted by what the organization believes are systemic hurdles, climb the ladder. One such way is through a mentorship program, although given CREED’s nascence, it’s still in the works.

“A lot of companies don’t know where to start, and for those that have not started we’d like to be a go-to resource to help them through this journey,” said Savoie.

Another similar initiative in the wider real estate industry is the Magical Unicorn Project, started by Vancouver-based Kyra Wong, a district vice president at Manulife Financial. Wong, who works in Canada’s mortgage sector, launched the project four years ago to inspire women and minorities to smash through glass ceilings, whether corporate, social or emotional, and while her project has been well received, the nature of the mortgage space makes institutional change difficult.

“Part of the problem in the mortgage space is it’s mostly self-employed individuals—agents and brokers—rather than many corporate entities, so there’s no body in the industry to promote a culture of diversity and inclusion. The onus, therefore, falls on individual real estate franchise owners to promote, then nurture, that kind of culture,” said Wong, who chose the unicorn and “loud colours” as themes to stand out and flout the status quo. In getting people’s attention, she’s issuing a direct challenge to accept differences.

However, there has been noticeable progress among Canadian mortgage brokerages and lending institutions, with women being promoted to more leadership roles in recent years.

“I created this project in 2017 and in the years since I’ve seen more women promoted into leadership positions,” said Wong. “Today, we have a much stronger group of male allies in the industry.”

Condos in the Greater Toronto Area appreciated by 44% between their April 2017 peak and June 2021, says realty brokerage Properly.

Interestingly, condos in the GTA struggled through most of 2020, save for before the COVID-19 pandemic and the very end of the year, but they nevertheless managed to subsequently surge in value again.

“This past year, condo sales were hit the hardest by the pandemic. While sales are now back up to pre-pandemic levels, it’s relieving for condo owners to know that their investments have appreciated significantly over time,” said Anshul Ruparell, co-founder and CEO of Properly. “Moving forward, it’s forecasted that solid growth in condo sales will continue as pandemic restrictions ease. I anticipate we’ll see people coming back to the city centre and back to our incredible city that offers world-class dining, entertainment, and liveability.”

There’s a host of reasons for rapid appreciation in the condo market, beginning with the price spread between low- and high-rise housing growing too wide beyond most homebuyers’ means. That, in effect, spurred such strong demand for condominiums that there were too few units available for purchase.

“There was a lag in condo pricing for the couple of years prior to 2017, and with that and the slow appreciation from 2014-2017, condos were due to jump in price,” said Alex J. Wilson, broker of record and owner of RE/MAX Wealth Builders Real Estate in Toronto. “You had a growing gap between the freehold and condo markets and the tipping point was affordability.”

The preponderant reason for supply constraints in the condo market is the timetable for developments. Wilson noted that, from the time a project is conceived to delivery, eight to 10 years could pass. Coupled with extremely robust demand for precious few units, values skyrocketed. Additionally, assignments appreciate in the years between their purchase and delivery, and as a result buyers often flip them, which further adds to condos’ surging valuations.

“You can’t just build condos tomorrow; from the launch period, it takes three to five years, but you have to go through zoning and approvals before that,” said Wilson.

The other reason for surging appreciation is most condos are developed in very close proximity to the strongest market fundamentals, namely transit and entertainment amenities. There aren’t any low-rise subdivisions built in downtown Toronto, but there are myriad condo units on subway lines, close to Scotiabank Arena, bars, restaurants, and the highway network. Wilson anticipates that, in H2-2021 or early 2022 when more people return to the city, the chasm between detached homes and condos will grow even wider, pushing the value of condos higher.

“The best market fundamentals drive appreciation and downtown Toronto has amenities, and people will want to live near work so that they can walk there, especially now that the end of the pandemic is near,” said Wilson. “The convenience and lifestyle factors that condos have to offer are they’re relatively maintenance-free, meaning you only have to worry about what goes on inside the unit, not outside.”

One of the most beautiful neighbourhoods in Canada will be home to a brand new master-planned community, which will include much-needed purpose-built rental apartments.

Jesta Group is developing Place Gare Viger in Old Montreal, an expansive development that will feature a Hyatt Centric hotel, an array of retail, Novartis Pharmaceuticals Canada’s new office, and 321 residential rental units across over 1 million sq ft. Additionally, Lightspeed, the cloud solutions firm, is doubling its office space at the Gare Viger Château, making it the official anchor tenant.

Place Gare Viger was years in the making, says Jesta Group’s Anthony O’Brien, because of the city’s naturally fastidious requirement that nearby heritage buildings be preserved, if not their facades maintained. And if there’s one thing Old Montreal has in spades, it’s heritage.

“We’ve been working on this for almost a decade because the City of Montreal’s minister of culture has a strong say over anything we do in the old city,” said O’Brien, Jesta Group’s senior managing director. “We started the project by renovating the château and then focusing on the master plan. We always have a vision of creating a community onto itself and the concept behind the urban campus is having near 24/365 usage. We accomplish this with the hotel that has a destination restaurant, which is done by the Burgundy Lion Group, meeting rooms and other amenities, and then the apartment buildings containing 321 units. Then we have the office tower, which will be built around the château. There’s a central courtyard that’s huge and that will bring a lot of pedestrian traffic; it will be landscaped so that people can work and relax outdoors. There will even be outdoor gym activity.”

Jesta Group anticipates robust demand for the rental units, especially because Old Montreal has a dearth of purpose-built rental units. Typically, the only residences for rent in the area are investor-owned condos or expansive, and therefore expensive, lofts.

Patrice Groleau, owner of McGill Real Estate, concurs that the units will be scooped up quickly.

“It’s going to be really good because the problem for rentals in Old Montreal is there are a lot of historic buildings, and most of them don’t have elevators,” said Groleau. “There are some new projects but they’re condo projects and not rental-oriented. A lot of the rental units in Old Montreal are lofts, but you usually live in a loft once, not twice.”

Place Gare Viger, in many ways, is the final piece of the Montreal waterfront’s revitalization. Le Solano by St-Luc Habitation on Rue de la Commune E. is a lynchpin project in the area, and the site of the iconic Molson Brewery by the Jacques Cartier bridge is also being redeveloped into a mixed-use community, as is the nearby Radio Canada campus, which recruited reputed developer Broccolini to create a media and digital production hub by the St. Lawrence River.

“The demand is going to be significant,” said O’Brien. “We’re only going to start the leasing process in September but the reality is we’re one block from the St. Lawrence River and right by Place Jacques-Cartier, the second busiest tourist spot in all of Canada. Most buildings in Old Montreal are three to five storeys high, but from the fifth floor up there will be tremendous views in all directions. There isn’t a lot of potential for development in the old city because of heritage considerations, so when we talk about demand, there will be no other sites for people to choose from.”