Kori Marin's 2014 Outlook Report

2014 OUTLOOK REPORT
& BEYOND
THE FUTURE OF TORONTO

&

Taller
Smaller
More Expensive

TALLER
Toronto has $25 BILLION DOLLARS in HIGH
RISE homes under construction.
Okay, just to give you some context?
This is 2x the GDP of Iceland

We have more HIGH RISE
development than ANYWHERE
IN NORTH AMERICA
All of this taking place in our city! This can be
looked at in 2 in different ways. Is this
something we should EMBRACE or FEAR?
Ontario’s Greenbelt Legislation is
part of our govt’s provincial policy
to “build up & not out”.
It’s expected that the protected
lands around the city will remain
undeveloped for reasons:

3

1.tearing down the Greenbelt = political suicide
2.intensification is more cost effective for gov’t
3.should legislation alter, development would take
years to build needed infrastructure

10+

SMALLER
10 YEARS AGO, the price gap
between low rise (a house) & high
rise (condo) in Toronto was $75K.
Today, that GAP is $222,412K.
Consequently, first time
buyers will have
no other choice but
to consider a CONDO
as an entry level

Micro Units Trending
As real estate prices rise, demand is growing for affordable
downtown living in Canada's biggest cities. The reality is
that the size of condo units will continue to shrink. Toronto
joins the ranks of major international cities with the
emerging micro condo trend. As urban space becomes
scarce, unit sizes have grown smaller and smaller.
THE SMART HOUSE is a joint project by Urban Capital
and Malibu Investments located at Queen St. and
University Ave. “Spaces become smaller as downtown
land has really shot up in price, like other successful cities
and I think this is a sign of success” says David Wex,
partner at Urban Capital.

Units are as small as 300 square
feet and start at $249K or $830
a square foot.

MORE EXPENSIVE
THE
STATS
November “416”
Statistics

UNIT
SALES

Yr./Yr. %
Change

AVERAGE
PRICE

Yr./Yr. %
Change

DETACHED

913

+23.9%

$855,188

+16%

SEMI-DETACHED

267

-(1.1)%

$640,208

+9.9%

TOWNHOUSE

249

+4.2%

$472,722

+6.4%

CONDOS

1,081

+12.7%

$385,968

+10%

Who lives in Toronto?

Source: TREB

The Globe and Mail recently reported on the affluence of Toronto. It turns out that Toronto has
182,432 households that earn $200,000 or more per year. This represents 8.4% of the
population. Six years ago, it was just 133,877 households for a total of 7% of the population.
In Toronto, almost 50,000 more households can be considered affluent. This is enormous
progress considering the large number of new immigrants that arrive every year. Montreal has
just 68,226 households that earn $200,000 or more per year, for a total of 4.1% of the
population. Vancouver stands at 54,001 for 5.6% of the population.
Media suggest that prices have to fall because they are UNAFFORDABLE. The fact that you
cannot afford to buy a home in Toronto is not a reason for prices to fall. Vancouver, Hong Kong,
London, New York, Paris, San Francisco, Boston, Tokyo and dozens of other cities are totally
and completely unaffordable and have been this way for 25 years. Toronto's housing future is
more condos and rental apartments. Just as it was for the other cities that reached affordability
decades before Toronto. It is likely that many central Torontonians will NEVER own a home.

Generation Y:
Lifestyle,
Young Talent,
Condo Living,
Entry Price
Points,
Micro Units,
Don’t Drive
Live, Work
& Play

Source: Brad Lamb

50% 50%

The Canadian population is 34M people. of the world’s
Number Gen Y’s is 9.2 M (ages 18-34)
equivalent to 1/3 of the population.

of the world’s
population is
population lives
under 30 yrs old in cities

The average age of a first time of buyer is
35.
34% of the market are first time buyers.
84% of RENTERS from age18 to 34
intend to buy a home.
More than one-quarter of 16 to 34 year
olds, who are known as Generation Y, do
not even have a driver’s license.

the RENTAL MARKET
Condominium rentals are proving to be an increasingly popular option for Toronto residents.
The Greater Toronto Area REALTORS reported in mid-October that 6,541 condos were rented
in the third quarter of 2013 which has increased a remarkable 25% from the same time period
in 2012. Rents are growing, albeit at a slower pace of 3.5% year-over-year. This reflects a
market that is starting to balance out following 3 years of exceptional growth in rents. Note, that
the rentals-to-listings ratio remains elevated at above 70%, which still supports further growth in
rents.

It’s important to recognize that rental demand is currently
running at a 20-year high, driven by such factors as reduced
ownership affordability for ﬁrst-time buyers, strong growth in
the population aged 25 to 34 and migration into the core. This,
combined with the lack of growth in conventional apartment
buildings, is why vacancy rates remain near historic lows
despite the growing supply of condos — which made up 85% of
the growth in rentals over the past 10 years.
Source: Urbanation

Assuming a flat profile for household formation and ownership rates, the
number of net new renter households will average around 10,000 per year
until 2016. Over the same period, condo completions are expected to
average 20,000 units per year.
Assuming 60% of these units are owned by investors and 3/4
will list their units for rent, we will see an average of roughly
9,000 condo listings per year from new completions. While
supply can also be added from older condos (as owners hold
onto their units after moving out) and some new purpose-built
units, the point is that demand and supply should remain at
similar levels.

HOUSING SUPPLY
LOW RISE:
Constrained land supply has caused land prices to increase dramatically over the past decade,
particularly in the low and medium density sectors where it has grown as much as 232%," said
BILD President and CEO Bryan Tuckey. "Near record high pricing has pushed the affordability of
ground-related housing (residential low-rise) beyond the reach of many new home buyers in the
GTA. This has resulted in a considerable reduction in sales, and the economic effects will likely
be felt within a few years.
In addition to exceptionally low interest rates — pricing has been driven by the worsening
shortage of new and existing low-rise properties for sale which has plagued the Toronto market
for more than 3 years.
The number of new “for sale” signs dotting the region was down 4.4% in November, year over
year, and month-end active listings were down 12.1%, according to TREB. That means sellers
have edged even further into the driver’s seat. The supply problem has been exacerbated,
especially in sought-after city neighborhoods close to transit and good schools, by an
unexpected rush of buyers into the market over the summer and fall, who were panicked that
interest rates were headed up.

did you know?
Toronto requires 31,555 new residential units a year to
keep up with current demand.
86% of NEW CONSTRUCTION CONDOS
going up today in Toronto are already SOLD.
39% of Canadians own their own homes mortgage-free.
3.15 million have neither mortgage nor home equity line of credit.
68% who carry a mortgage have over 25% equity in their home.
7% of Canadians own homes with less than 10% down.

WHAT TO EXPECT:
2014 will mark another year in which the
“BUBBLEHEADS” will predict once again, that real
estate prices are going to collapse.
Maclean’s and Toronto Life Magazine will have shocking covers predicting the
upcoming real estate apocalypse that never seems to happen.
Publications will be sold, hot air will be blown on talk shows & guests at dinner parties
will talk about the Toronto Market with inaccurate information.

Historically, Real Estate prices do not fall significantly in periods of economic growth.
That is a fact. Having just come out of a very mild recession, Canadian economic growth
will hover next year at about 2%. This number will get stronger with time as the
developed world sees the end of the latest recession.

Overall, expect to see Toronto’s market out perform inflation with a growth rate of 3.5 4%.

With the realities of continuing immigration, rising costs, development levies, land
costs & decreasing land supply, prices will continue to climb. Expect 2014 to have
moderate growth compared to past record years. In a sense, this will be a year where
the market catches its breath. Given the fundamentals, Toronto Real Estate will catch
on fire sometime in 2015 . Those who remain on the sidelines in 2014 will end up out in
the cold.

Wanna mark my words?
A 400 sq.ft studio will sell for $325K+ by 2020.

& you won’t be able to find a downtown

semi-detached house for under $1Million.

What are YOU waiting for?

About Kori:

For the last few years, Johnston & Daniel,
through its affiliation with Royal LePage, has
had the distinction of being Toronto’s Number
One Real Estate Brokerage for the Greater
Toronto Area. Johnston & Daniel has a
reputation for exceptional client care and a
long-term commitment to their broad
spectrum of buyers and sellers. In light of
this, I am confident that I have found a
company that I can truly partner with to best
service my clients over the years to come.

In both my work and other aspects of my life, I
have proven I have a killer work ethic. With a drive
to be continually challenged, my personal vision
for the future continues to broaden and expand.
My seven-year corporate sales career developed
my ability to negotiate, analyze numbers and find
creative ways to resolve big problems. As a parttime fitness instructor, I am able to temper my
unparalleled energy and am reminded daily that
everything I give out, comes back tenfold from
the participants I work with. Additionally, my
extensive travels have given me greater global
perspective and have allowed me to appreciate
how fantastic Toronto is to work and live. As
someone who considers herself to be business
savvy, entrepreneurial and bright, I cannot think of
a better way of bringing the best of who I am to
an industry in which I have directly thrived for
close to a decade.

I fell in love with real estate when I learned that
buying and selling properties was truly
empowering; both personally and financially. I also
know first hand how overwhelming all of it can all
be! I worked exceptionally hard and sacrificed a
lot to get into the market and would like nothing
more than to coach clients through the process.
I believe in this city and see enormous growth
opportunity in the residential and commercial
sector over the years to come. My intention as a
Realtor® is to make the selling and buying
experience both fun and easy – I will walk my
clients through transactions using a step-by-step
approach and bring my positive outlook, listening
skills and negotiating chops to each and every
meeting.

Kori Marin's 2014 Outlook Report

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