Expert homebuying advice from Angela Marotta, Director of Sales and Marketing, Solmar Developments
December 02, 2022
Housing supply, rising interest rates, affordability, inflation, the economy, the lingering effects of COVID… there’s a lot on prospective homebuyers’ minds 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, our 2022 Builders' Annual sat down with some of the industry’s top builders and developers for expert advice.
Given the various characteristics of today’s housing market, what is your outlook for 2023?
There isn’t too much supply in the market today, especially in resale. Given some of the financial circumstances many vendors are experiencing right now, buyers who have some financial flexibility could see great opportunities here where vendors can no longer afford to maintain their homes.
The increase in interest rates is a result of high government spending, which is unfortunate, and it has knocked off 10 to 20 per cent of people from the buying market.
With respect to pre-construction, land pricing and the cost of construction has increased significantly, will continue to do so. Purchasing from a reputable builder with a long lead time of about four to five years would be a very smart investment right now. Buying now with a 2026-27 closing date can see high appreciation in value and sidestep the increase in interest rates. Many are forecasting a reduction in interest rates in less than three or four years.
What advice would you offer to buyers?
Depending on your financial situation, I would recommend buyers invest now in pre-construction. Prices will continue to increase as a result of higher labour and materials costs, and rising land values. With many highrise builders offering extended deposit structures and estimated closing dates for many to be 2027, it is a solid investment that can see high returns. The average rent is about 40 per cent higher than it was in 2021. With rent continuing to increase, and interest rates expected to have decreased by three or four years out, buyers can experience a decent margin on their return. Buying in proximity to transit is important, as people may be looking to alternate means of transportation as apposed to owning a car, due to high gas prices. Renting in communities here will also see a high demand.
How is your company addressing the affordability issue?
Solmar Developments has launched Bristol Place in Brampton, which will be Brampton’s tallest towers and a landmark community. Our pricing per sq. ft. is not out of market and is reasonable given today’s landscape and our forecast time of construction. With closings estimated in 2027, it’s a good opportunity for investors and first-time buyers looking to enter into the market. Bristol Place is a two-minute walk to the Brampton GO station; it was very important for us to build this community of two towers close to transit to make it convenient for homeowners, potential renters and investors alike. It adds great value to the project and is a big draw. We are offering an extended deposit structure of 20 per cent with zero at occupancy, recognizing purchasers will need all the resources they have to commence their journey of owning a condo at that time.
We will also be offering a “car sharing” program that gives residents immediate access to electric mobility options, such as scooters and cars. This app-based car sharing program will be an economical option for those who can’t afford to buy a car.
What is it about your company that you would like prospective buyers to understand as they go through the homebuying process?
Canada is expected to have 440,000 immigrants this year alone. Due to a shortage of land, and long and complicated development approvals processes at municipal levels, the supply of new homes and condos will continue to be low. This imbalance between supply and demand will cause prices to rise. Therefore, taking a long-term view and locking in at a price now for pre-construction is a wise decision for homebuyers.
Buyers should also look at purchasing in areas that are close to post-secondary institutions and transit, and where growing manufacturing and development will afford employment opportunities.
At Solmar Developments, these are the requirements we look for when looking to develop high- or lowrise communities. It is always with the consumer in mind, and ensuring we are building something that meets their needs and lifestyle, while providing a home or condo that they can see a positive return on investment.
About Wayne Karl
Wayne Karl is an award-winning writer and editor with experience in real estate and business. Wayne explores the basics – such as economic fundamentals – you need to examine when buying property. email@example.com