Looking forward to a successful 2023 for pre-construction condos

As we move into 2023, I cannot help but be optimistic. Last year was Baker Real Estate Inc.’s second-best year for sales since the company was founded in 1993. Momentum is strong, and we are starting out this year with great reasons to believe it will continue. This month, we are launching Olive Residences condominium at Yonge and Finch, and interest has been phenomenal. The demand for new-construction condos is as formidable as ever, especially as 430,000 new residents immigrated to Canada last year.

Whether savvy buyers are investors or end-users, they know that pre-construction is the way to go, because they will have years to save and plan before closing. With prices continually on the rise, they also earn equity in the meantime. Investors understand that rental rates are at an all-time high, so the ROI outlook for them is encouraging.

Tangible property

Adding to the benefits of purchasing pre-construction in the condo market is the fact that when you buy now, you wait a few years to take possession, building equity that entire time. Buying a pre-construction lowrise home usually involves a much faster occupancy, which often has many potential purchasers waiting on the sidelines to see what interest rates will do.

Another reason for real estate being a popular investment is that unlike stocks and bonds, which are money on paper and can fluctuate wildly day to day, property is tangible. Real estate is something you can touch and keep your eye on, and the return-on-investment is usually strong, especially with rental rates at an all-time high. In mid-December, the average rent for a one-bedroom apartment in Toronto was $2,279, which was 25 per cent higher compared to the previous year. Plus, the rental vacancy rate is close to zero per cent.

In addition, many long-time investors who paid double-digit mortgage interest rates in the past understand that our current rates are still relatively low. Inflation is on a downward trend and expected to fall to four per cent by spring. Of course, the Bank of Canada will do what’s necessary, so if you are in doubt, obtain a one-year mortgage and watch for rates to settle before you lock in for a longer period of time.

Already picking up

The need for new homes and condos will not slow any time soon, especially with the number of immigrants Canada will welcome over the next couple years. A great percentage will settle in Toronto and the GTA, and why not? Toronto continues to rack up international awards for quality of life, education and business. Remember, too, that with the government banning foreign buyers from purchasing real estate in Canada, more of the supply we have is available.

Baker has several developer clients ready to launch in Q1 and Q2. There are signs everywhere that the industry is picking up, and why wouldn’t it? It always does. We all need a roof over our head, including newcomers to our country. Here’s to an exciting and successful 2023, and my ongoing advice is: Buy new and buy now.