The flow of new homes into Ontario’s bustling housing sector is
hampered by extremely lengthy development approval timelines,
according to the Ontario Building Officials Association.
Strong funding and construction activity are seemingly having
negligible impact in ensuring new supply.Per OBOA estimates, it
takes as long as 10 years to complete the required planning to get
new building permits in the province.
“We have the best building codes in the world, which is why
Ontarians feel safe in the places they live, work and play,” OBOA
president Matt Farrell said.
“We need to be cutting the red tape throughout the approvals
processes to bring this housing to the market as quickly as
A significant portion of funding is slated to come from the
federal and provincial governments, which will make the
implementation of a streamlined approvals process even more
“Premier Ford announced $1-billion in funding for affordable
housing last month, and the prime minister committed another
$1.3-billion before that, but cumbersome processes are going to
delay making that housing available to the people who so
desperately need it,” Farrell emphasized.
Any new supply will most likely be on the higher end, as shown
by developer Cortel Group’s latest projects across the
The Towers 3 and 4 luxury condo
RBC Ventures has announced the launch of a highly customizable,
AI-based property search platform covering the Greater Toronto
The OJO Home virtual assistant combines image recognition
software, mobile messaging, and web-based insights to provide
comprehensive results tailored towards each user’s particular
Its creators stated that the platform is ultimately aimed at
making property searches easier and more intuitive for GTA’s
hopeful home buyers.
“OJO analyzes information about a customer’s lifestyle,
neighbourhood and home preferences including commute, kitchen
style, and parking to find listings that meet a buyer’s needs.This
deeper level of customization allows home buyers to zero in on what
they really want before engaging a real estate agent,” RBC Ventures
said in an email to Canadian Real Estate Wealth.
According to RBC’s recent Home Ownership Poll, fully 83% of
first-time home buyers agreed that online resources are critical in
ensuring a successful home search.Nearly two-thirds (62%) of
Canadian home owners also indicated the same belief.
Most importantly, OJO offers a powerful option in cases where a
user might prefer to interact with an expert reference.
“Once a customer is ready to take the next step in their home
buying journey, OJO can connect them to an RBC financial
professional or a real estate agent to help
Downtown Toronto’s extremely low office vacancy rate could climb
to “just south of 6%” within four years and curb rapid rent
“Rental rate growth has been quite high and that’s why you’re
getting the construction activity, but the question, then, becomes
how does it continue performing once you get further down the
timeline?” said to Roelof van Dijk, market economist for Canada at
CoStar Group, a multinational commercial real estate research and
“With all the new supply, it won’t be enough to fill everything,
but you can anticipate vacancy to rise in the next three to five
years as all these new builds come to fruition.In downtown Toronto,
you’ll see vacancy go from just north of 3% to just south of 6% by
2022-23.As a result, you’ll see rental growth come down.”
Although there’s about 11 million square feet of commercial
construction in Toronto, chartered banks are expected to occupy
much of it as they house expansive anti-money laundering
operations.Much of the old stock presently housing banks will
likely be renovated and modernized.
Keith Reading, director of research at Morguard, added that
units slated for completion in the near future are already
“Outside of a couple of little pockets, there are virtually no
new speculative developments,” he said.“Buildings
The growing importance of tech companies has pushed Toronto’s
office segment towards having the largest investment volume of any
commercial property type last year, according to Avison Young’s
Commercial Real Estate Investment Review:Greater Toronto
“Sellers are taking advantage of the extremely tight market and
fierce competition among buyers,” the Avison Young study noted.
The sector represented a significant chunk of the city’s overall
commercial investment, which ended up at a record-high $15.6
billion in 2018.
Toronto’s office market was also the only commercial asset class
that enjoyed quarter-over-quarter growth during Q1 2019, increasing
by 8% annually to reach a total of $767 million.This also
represented 28% of the regional commercial market’s overall volume
for the quarter.
However, Avison Young warned that “despite buyers’ enthusiasm, a
bid-ask gap is impacting deal velocity and some anticipated sales
(such as those of Bloor Islington Place and AeroCentre) have yet to
Earlier this year, CBRE’s Paul Morassutti said that the tech
industry will serve as the Canadian commercial real estate market’s
pillar of stability in the event of a recession.
“Over the past 10 years, tech has grown at more than 2.5 times
the pace of the energy sector and three times the overall economy,”
Morassutti said in late February.“Tech
Steady consumer confidence will fuel strong housing performance
across Atlantic Canada this year, according to an analysis by
RE/MAX of Ontario-Atlantic Canada Region.
“Consumer confidence is on the upswing in Atlantic Canada and
that is translating into stronger home-buying activity in
residential real estate markets,” RE/MAX of Ontario-Atlantic Canada
Region executive VP and regional director Christopher Alexander
“Greater economic prosperity (the Maritimes are expected to lead
the country in GDP growth in 2019), combined with interest rate
stability and first-time buyer incentives are tipping the scales in
favour of home ownership yet again.”
Much of the renewed confidence will arise from robust economies
and falling unemployment, especially considering the strong
fundamentals in larger urban centres “as well as spillover in
several smaller markets.”
“The Atlantic Region traditionally has the highest rates of home
ownership in the country and we don't expect that to change anytime
soon,” Alexander added.
Immigration will play a central role, as 60% (9 out of 15) of
the region’s markets are enjoying increasing activity among buyers
from other parts of Canada.Newfoundland/Labrador and New Brunswick
are also seeing growing traffic from returnees, after having worked
in Alberta’s oil and gas industry.
First-time buyers were also found to have a major influence in
nearly 70% (10 out of 15)
A new development in Scarborough is a gem of an opportunity for
The Kennedy Central residential complex, KSquare Condos, is a
Kingdom Developments project and promises quick connection to
downtown Toronto.The project is just one of many edifices and
infrastructure projects changing the face of the neighbourhood, and
Eric Jensen, Kingdom Developments’ VP of projects, says the firm’s
experience, which spans over two decades, will ensure KSquare is a
“We are thrilled to enter the Toronto condominium market with
KSquare Condos,” he said, “and recognize the significance of being
one of the first developments part of this already thriving area’s
The 34- and 31-storey towers mark the Chinese company’s first
Toronto development, which is replete with a unique amenity package
that includes the largest private library and study area in any of
the region’s condominiums. Additionally, KSquare features a
music rehearsal room, pet grooming centre, sports lounge and a
playroom for children.
Kingdom Developments has partnered with Sunray Group, and the
latter is redeveloping the nearby Sheraton Hotel and opening its
amenities to KSquare residents.
According to the developer, KSquare will be the heart of the
Kennedy Rd.and Sheppard Ave.E.neighbourhood, which is also slated
to receive some subway stops, as announced earlier this month by
the Ontario government.In all,
The power of the multi-residential asset class has waned in
Toronto, ending up as the least traded commercial property type
during the first quarter of the year, according to Avison Young’s
latest Commercial Real Estate Investment Review: Greater
Toronto Area study.
Avison Young cited extreme scarcity, rather than thinning
interest among investors, as the main driver of the trend.
GTA’s multi-residential property had $236 million in sales
during Q1 2019 (with a 9% market share), considerably lower than
the $288 million seen during the same time last year.
“The top transaction was the $30-million sale of 15 Walmer Rd.in
Toronto’s Annex neighbourhood, representing nearly $385,000 per
unit and a cap rate of 2.2%,” the report noted.
“Starlight Investments, among the sector’s most active players
in 2018, also made the top five with its purchase of a 79-unit
Mississauga townhouse complex for almost $27 million.”
A significant drop was observed from Q4 2018 (activity
representing a total of $602 million), which itself already
suffered an even more massive decline from Q3 2018 (activity
reaching a peak of $1.2 billion).
GTA’s overall commercial sales – covering industrial, retail,
office, multi-residential, and ICI properties – fell by 18%
quarter-over-quarter to end up at $2.7 billion.Q1 2019 was the
second consecutive quarter
Metro Vancouver’s robust industrial market has seen sales
activity surpass $150 million during the first quarter of the year
alone, according to Avison Young’s Spring 2019 Metro Vancouver
Continuing the red-hot trend set by the record-breaking $1.8
billion in investment last year, the market reached a historically
low vacancy rate of 1.2% at the end of Q1 2019.
Strong demand and constrained land supply pushed the region’s
vacancy level down to the lowest level nationwide for the quarter,
Avison Young noted in its study.
The crucial factor is “the ravenous appetite for industrial real
estate among tenants, owner-occupiers, developers as well as
private and institutional investors to date in 2019,” the report
added.“Developers remain unable to keep up with demand as
industrial vacancy in Metro Vancouver has now remained at less than
2% for the past three years (and less than 1.5% through 2018)
despite the addition of more than 10.2 million square feet in the
past 36 months.”
“While construction of lease product is continuing by
institutional investors seeking to hold assets long term as well as
by those developers who acquired land at historical costs, the
volume is unlikely to have much of an impact on vacancy,” Avison
Young principal Garth White explained.
“Much of this
The federal and Quebec governments have announced the first of a
series of new developments aimed at the growing post-graduate
student demographic in Montreal.
Woodnote Co-operative is slated to be a 90-unit affordable
housing project, and it will herald the construction of over 160
affordable rental units in up to three separate developments across
“Post-secondary students in Quebec will soon have new affordable
housing options thanks to a new funding model dedicated to creating
affordable rental units specifically for students,” the governments
“This innovative financing model allows student unions and
similar organizations to more easily obtain equity and acquire
additional funds to develop affordable rental housing projects.This
is a first in Canada.Further, this financing model allows the
construction of student housing at little to no risk for
universities and colleges.”
The governments added that as much as $3 million will be
invested in the creation of the housing complexes.
Montreal is home to two of Canada’s leading universities and a
thriving AI research scene.The market is expected to enjoy
accelerated commercial development in the near future, brought
about by sustained demand from tech firms seeking even more
“[R&D is] encouraging the development of new purpose-built
rentals to meet the growing demand.Rental rent growth will remain
robust this year despite
The GTA office market saw the absorption of 763,000 square feet
during the first quarter of this year, with much of the activity
occurring in the downtown and Toronto West areas.
This volume has pulled down availability to a decade-low of
8.6%, according to Avison Young’s First Quarter 2019 / Office
Market Report:Greater Toronto Area report.
Vacancy also went down to 5.6%, with the downtown experiencing
even tighter market conditions at a vacancy rate of 1.9%.
The absorption has considerably outstripped the addition of
503,000 sq.ft.of new supply.Additionally, 94% of this new volume
has already been preleased.
“The Greater Toronto Area (GTA) office market recorded
impressive results in 2018, fuelled by the insatiable demand for
downtown office space – not only from traditional occupiers, but
also a growing cohort of technology and co-sharing tenants,” the
Q1 2019 represented the continuation of these trends,
characterized by declining availability, robust development
activity, and “significant upward pressure on rental rates in
select markets and asset classes.”
Around 11.2 million sq.ft.of office property is either confirmed
or being currently built, representing 6% of the GTA’s existing
office stock.However, only 1.1 million sq.ft.is scheduled for
completion by the end of this year.
Most of this new space will be situated
Rental completions in Toronto hit a quarter-century high during
Q1-2019, and it’s buoying hopes that the city might finally be on
its way towards solving a critical supply problem.
The 1,849 units were nearly five times the quarterly average
going back to the first quarter of 2016, according to Urbanation,
which furthermore noted that, considering there have only been
13,250 units built in 14 years, it is a considerable
“While vacancy rates surveyed within purpose-built projects
(completed since 2005) remained extremely low at 0.6%, rent growth
showed moderation in the first quarter,” said an Urbanation
report.“Purpose-built rents for units available for lease during
the quarter grew by 5% year-over-year on a same-building basis,
slowing from a 9% annual pace at the end of last year in Q4-2018.As
of Q1-2019, purpose-built rents in buildings completed since 2005
averaged $2,398, or $3.25 per square foot (psf) based on an average
size of 738 sf.”
Condo rents had a strong Q1 showing, although there are signs of
“Condominium rents, on a same-building basis, grew 7.7% psf in
Q1-2019, compared to a 9.2% annual increase in Q4-2018,” continued
the report.“Monthly condominium rents for units leased during the
first quarter averaged $2,376 ($3.28 psf) across the GTA, 7.8%
higher than a year ago.”
The Federation of
The Canadian Civil Liberties Association has petitioned for a
judicial review of the Quayside smart city project by Sidewalk Labs
in Toronto, amid anxiety that Canadians will be used as “Google’s
Among the chief attractions of the development is its widespread
use of “Internet of things” sensors, a feature that has both earned
praise for pushing the envelope in urban design, and alarm over
possible privacy rights violations as the sensors would collect
data gathered from residents, workers, and visitors.
The fears have been amplified further by the fact that Sidewalk
is planning to expand similarly sensor-laden communities into the
Port Lands, should the Quayside development prove to be a
To assuage the concerns, Sidewalk Labs – a subsidiary of
Alphabet Inc., the parent company of Google – said that it will not
be monetizing the data, and that it will depersonalize all such
information collected by the sensors.
The CCLA was not swayed by these assurances, however.The group,
along with Toronto resident Lester Brown, filed an application with
the Superior Court of Justice, seeking to invalidate any agreements
established between Sidewalk Labs and the organization responsible
for the area’s redevelopment projects.
“Waterfront Toronto, and our federal, provincial and municipal
governments sold-out our constitutional rights to freedom from
Vancouver real estate investment volume is shrinking due to
perceived instabilities in the market’s regulatory regime,
according to CBRE Ltd.
The successive introduction of new regulations that target
foreigners has done no favours for the market in terms of
investment.If anything, Toronto is benefiting more from the
“You have policy changes on a snap, on a whim,” CBRE
Ltd.executive vice president David Ho told Bloomberg in an
“Investors typically look at stability in a market and this is
CBRE figures indicated that from the $1-billion-plus volumes
seen in 2016 and 2017, foreign investment in Vancouver sharply
declined to just nearly $350 million in 2018.
In comparison, Toronto significantly exceeded its 2017 volume
with its $526 million in Asian investment last year.
Speculation levies, a wealth tax on homes, and the recently
proposed Landowner Transparency Act scared off a considerable
number of foreign capital holders, CBRE added.
Moreover, Toronto’s status as a vital global tech hub – which
continues to magnetize millennials and immigrants – has proven to
be a major boost for its commercial and industrial property
sectors.Many members of the two demographic groups participate in
the city’s flourishing tech and financial services market.
“That spells money because young people have to consume, they’re
There was an increase in purpose-built rental apartment
completions in the first three months of 2019.
Urbanation says that completions hit a 25-year high of 1,849
units, nearly five times greater than the quarterly average since
Q1-2016 and represented significant growth considering only 13,520
units have been built since 2005.
But for owners and investors, the increased supply meant weaker
rent growth despite strong demand and low vacancy rate.
Purpose-built rents for units available for lease during Q1,
2019 grew by 5% year-over-year on a same-building basis, slowing
from a 9% annual pace at the end of last year in Q4-2018.
As of Q1-2019, purpose-built rents in buildings completed since
2005 averaged $2,398, or $3.25 per square foot (psf) based on an
average size of 738 sf.
On a same-building basis, condominium rents grew by 7.7% psf in
Q1-2019, compared to a 9.2% annual increase in Q4-2018.Monthly
condominium rents for units leased during the first quarter
averaged $2,376 ($3.28 psf) across the GTA, 7.8% higher than a year
Demand lags supply
The volume of condominiums leased through MLS grew by 13%
year-over-year in Q1-2019 to 6,005 units, but supply grew faster
than demand pushing down the ratio of leases-to-listings to 73% —
the lowest level in four years.
The spring season is not expected to provide much relief for
Canada’s challenged housing market.
RBC Economics sees a continuation of the weakened demand
resulting from a cocktail of negatives for homebuyers including the
mortgage stress test, interest rates, economic uncertainty, and
In a report this week, senior economist Robert Hogue says there
was no break in March from the housing market slump.
Sure, there were some positives, a slight pick-up in Toronto for
example with sales up 1.8%.But this barely dented the effects of a
9% drop in the previous month.And tight supply accelerated price
growth after a pause.
Vancouver, Calgary, and Edmonton all saw a deepening of the
slump and Vancouver sales were the weakest since the recession
Hogue says the impact of poor weather earlier in the year may
have been limited and he says it’s likely to be a quiet spring
season, especially as measures to help first-time buyers announced
in the budget will not be active until later in the year.
Are you looking to invest in property?If you like, we can get
one of our mortgage experts to tell you exactly how much you can
afford to borrow, which is the best mortgage for you or how much
they could save