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CONGRATULATIONS! Congratulations and happy first anniversary to Globe Real Estate – time flies when you’re having fun! It’s hard to believe that a year has past since the inaugural edition of Globe Real Estate. It has been a priviledge and a challenge to write a regular column for the section. The challenge comes in the test of opinion, the search for material, and the articulation of ideas. The priviledge comes in being provided a platform for expression and the necessary support from the Globe and my team at PMA to deliver on a timely basis. Many thanks to Diane Tierney and Dale King at the Globe, Margaret Pattenden and Kent Wengler at PMA. This past year has been a study in confusion and contrast. The new housing market entered 2001 on a cautionary note. Economic forecasts were very gloomy; high tech markets were collapsing, unemployment was rising, the manufacturing sector was overextended – it was a classic condition for recession and normally housing leads the various indices downward. The year produced the mildest recession on record and new housing acted in a completely contrarian fashion with sales results hitting record levels by year-end. The unintended consequence of 9:11 was an emotional tug to home ownership that further strengthened demand. The economic story of 2001 was of course interest rates. Prime rate declined to the lowest levels in over 40 years. Mortgage rates did not change as dramatically but the consumer recognized value and took action. In the GTA affordability combined with record low rental vacancy levels, continued immigration growth, tight resale housing supply and modest (not negative) economic performance to produce record new home sales of over 42,000 units. The project story of 2001 can be divided into a ‘416/905’ scenario. Downtown Toronto is literally under a construction siege. Tower cranes are everywhere! In the short term this has been tough on the movement of goods, services and people but in the long term is great news for the economic and community vitality of downtown Toronto. The ‘416’ success stories are many – Cityplace and Avondale are the most prominent. Cityplace is, of course, the redevelopment of the railway lands nestled between the financial district and the waterfront. In less than three years this project has sold nearly 2,700 units and in 2001 absorbed over 800! A spectacular and impressive addition to Toronto’s neighbourhoods. Avondale is the redevelopment of the MacLean Hunter publishing site at Yonge and the 401. A consortium of builders: Tridel, Menkes, Urbancorp and Baghai have combined for over 1,000 sales in less than two years and 600 in 2001. A development by Whittington Properties, this site is a mixed use of townhomes mid and high-rise product. Downtown Toronto is characterized by both major high-rise success stories and many smaller infill developments. The movement to “live in the city” is a powerful trend and should continue unabated for some time. The phenomenal growth in ‘905’ has been led by Mattamy Homes. Their refinement and leadership in ‘wide lot’ development has been exceptional – the consumer response overwhelming. This product type didn’t exist five years ago and now accounts for over 32% of all suburban housing. Mattamy was number one on the housing hit parade in 2001 with over 3,000 unit sales – their great success coming in Milton at Hawthorne Village and Scarborough On the Rouge – both projects topped 700 sales each. Vellore Woods for Arista and Fieldgate also produced amazing results in Woodbridge with nearly 600 unit sales in this vibrant community. Noteworthy performances were achieved by Great Gulf in Brampton’s Fletcher’s Meadow, Aspen Ridge in Markham’s Cachet Fairways and Fernbrook in Brampton’s Stone Castle. The common theme for great consumer acceptance – innovative design, outstanding community merchandizing and fundamental value. In terms of innovative planning and community development there is no question that Tribute Communities was the leader in 2001. Together with Runnymede Developments their Nottingham project in Ajax set a new standard for community planning and development. This ‘enclave’ concept created a real sense of privacy and exclusivity while maintaining important neighbourhood connectivity. Tribute was the first to include rear yard planting as a standard component of their community development. The ‘enclave planning’ concept will be repeated by Tribute in the future and has already been copied in other markets. It is a trend worth watching and one which the consumer has endorsed with a rousing “Two thumbs up!” Will the amazing housing story of
2001 continue throughout the balance of this year? The answer
is emphatically - YES! Although
interest rates will rise between one and two percentage points
it will only soften, not stop, demand. Resale supply will improve
dramatically by the summer months bringing the used housing market
into greater balance. The first quarter of 2002 will produce record
sales results with continued upward pressure on prices. The general
economic scene will gradually improve through the balance of 2002
maintaining a strong foundation for housing demand. New home sales
will produce another record performance. The issues for 2002 will
be land supply, material and commodity pricing, product delivery
and affordability pressures – all great subjects for future
columns. Keep Positive!
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