Special Feature
R. Scott Davie has been working in real estate for over 25 years, and specializes in pre-construction sales of low and high-rise homes. He is vice president at Milborne Real Estate, one of Toronto’s largest real estate marketing companies, which traditionally sells between 12 to 15 percent of all new condos in the GTA.
Seasoned veteran Davie is tired of what he feels is unwarranted doom and gloom propagated by media and the banking industry. He feels the market is slow because buyers are waiting for a bubble that doesn’t exist.
“When the media and the banking industry are continually spreading bad news, not based on fact, that hurts consumer confidence,” Davie says. “But people still need to move due to life changes like a new job or family formation.”
“When you hurt consumer confidence for a year or two, you create pent-up demand.”
Davie is not the only person suggesting people who need to move have been holding off. Jason Mercer, TREB’s senior manager, market analysis, suggested possible pent-up demand on the RealNet Q3 conference call. (Glad I tuned in for that one!)
“There’s a limited inventory for my clients to choose from right now,” explained Davie. “It’s hard to get a property so people get frustrated and hold off.”
Many who are priced out of low-rise may need time to adjust their expectations and find an acceptable condo unit.
The October CMHC report also showed that, though condo sales were down overall, they were up by 31 percent in some areas of the 905. Clearly viewing the GTA as a number of unique submarkets can provide needed perspective on any numbers that get batted around.
“Whether we’re in the 1980s, 1990s, or 2000s, it always boils down to this—what are the real things driving the market?” asks Davie.
He feels the key driving factors are low-interest rates and immigration, both fuelling a need for housing developers can’t keep up with.
“Despite all the cranes you see, we’re not keeping up with demand.” He suggests we look to rental vacancy rate, which has hovered around one percent for years (April 2013 - CMHC 1.7 percent).
“If we’re building condos and they are all rented, this shows us we will see the market continue to absorb [new condos].”
If others cities can’t, Toronto still can, says Davie. “Toronto is performing very strongly despite what you hear.” Even if 2013 continues along its current flat trajectory, Davie predicts the GTA will still be the top North American new home market for volume of sales.
What next?
“The last time we saw the situation we have right now, with negative stories in the media, was during the recession [of 2009]. There was very little inventory and no one was buying or selling. It was very hard to find a property,” Davies says.
“Once the media started reporting that the economy was improving—suddenly we had this big buying spree! We sold 28,000 new homes and condos in one year.”
“When people realize the sky’s not falling, we’re going to have another record year.”
When will that be? Davie predicts anytime from six months to a year and a half from now.
