Toronto condo market to continue to grow? Bet on it

Well, this is different. The performance of the Toronto condo market is so strong, that one local investment firm is betting on it – literally.

Toronto-based Connect Asset Management has issued a challenge to the investment community at large, wagering that the downtown Toronto condo market will outperform any other investment.

The real estate investment firm is betting $40,000 to go head-to-head with any investment, putting its money on The Daniel Corporation’s DuEast Condominiums. DuEast is located at the northeast corner of Dundas Street and Sumach Streets in the Regent Park area of Toronto.

“Not investing in downtown Toronto real estate is a huge mistake,” says Matt Elkind, co-founder of Connect Asset Management, who is also a realtor and real estate investor. “If you aren’t investing in the market, you should think again.”

How exactly will such a challenge work? Takers will make a $40,000 investment and track it for four years. The “winner” will be the investment that realizes the largest gains, net of all expenses except tax.

The winning investor then gets to donate the loser’s profit to a charity of their choice.

“We believe that investing in the downtown Toronto condo real estate market will yield far higher returns than any investment fund, hands down,” Elkind says.

“Toronto has an expanding economy and job growth, is a popular destination for new Canadians and is a business centre for the entire country. The demand for housing is increasing faster than new homes can be built, and that’s why the rental market is incredibly strong, with a one-per-cent vacancy rate, and prices have been consistently appreciating.”

Connect Asset Management chose Daniel’s DuEast as the investment target for three reasons: the condo is well priced, beginning from the high $200’s; Elkind expects DuEast units to be attractive as rentals; and the massive revitalization currently under way in the area bodes well for value appreciation as the neighbourhood matures.

As for the investment strategy to be used with DuEast, Elkind says the initial purchase will close, the unit will be rented for one year and then sold.

“While we don’t recommend selling, it’s necessary in order to get an accurate profit,” since the investment will be measured against stocks and mutual fund portfolios, which are easier to track.

As of mid-October, no one has stepped up to take on the challenge, Elkind told NextHome, but some investment advisors he deals with are so impressed with DuEast they’re buying their own units.