Industry All-Star – Barbara Lawlor, CEO of Baker Real Estate Inc.

Housing supply, rising interest rates, affordability, inflation, the economy… homebuyers have a lot to think about these days, when it comes to things that may impact their purchasing decisions.

To help you understand all the factors to make a better, more informed homebuying decision, we sat down with a select group of Industry All-Stars for our 2023 Builders' Annual for their insights and advice.

The recent pause in interest rates announced by the Bank of Canada has given new confidence to prospective homebuyers. All major banks have forecasted that rates will hold steady and will begin to come down in Q2 of 2024. Toronto Dominion bank has even forecast that by 2025, we may see rates as low as 2.5 per cent.

Encouraging news

This is encouraging news for buyers in all areas of real estate, but certainly for investors in new construction condominiums. They understand the wisdom of investing today, when prices are lower than they will be in the future, and of not having to close for years. Let’s face it: Immigration is a number that continues to grow. Currently, Canada welcomes about 500,000 new immigrants a year, which is one of the highest rates per population of any country in the world. As of 2022, approximately 20 per cent of the total population of Canada were immigrants with permanent residence. As we welcome newcomers to the country, about 45 per cent of them will come to Toronto and the GTA. As I say so often, these people have to live somewhere.

Then when you consider international students, it adds another complexity to the equation. In 2022, Canada welcomed a record 551,405 international students. That led to an end-of-year total of 807,750 international students holding valid study permits in Canada. Our country is well on track to welcome 900,000 international students this year. A great percentage will come to Toronto to study at our world-class universities.

Great time to invest

This is great news for investors, especially now in this atmosphere when we are not allowed to sell to foreign buyers. Yes, there is an exemption on that restriction, but only up to 500,000. These students are guaranteed renters for investors.
Rents have continued to rise, going as high as $7 per sq. ft. in the best downtown Toronto neighbourhoods, and as high as $5 per sq. ft. in the west end of Toronto. The recent news from the federal government that construction of new rental apartments no longer requires the payment of GST will help, but more steps are required.

The industry is far from building new homes and condos at the rate we need. This is a great time to invest in real estate. My advice for prospective new-home buyers is no different now from what it has been for years: Buy new and buy now.

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