Brian Brown has some advice for anyone thinking of returning to Toronto to rent or buy after decamping outside the city during the COVID-19 pandemic.
“Don’t wait,” says the principal at Lifetime Developments. “If you’re in the position to buy, do it as soon as possible.”
The housing market has been resilient during the pandemic but not unscathed. Some potential buyers who were worried about their finances and jobs got cold feet. Toronto’s downtown saw more condos available for lease due to short-term rental restrictions, reduced immigration, travel restrictions, a lack of international students and people moving outside of the core, says John Vandyk, president and chief executive officer of Vandyk Properties, who has seen a “meaningful migration” to the submarkets.
However, a cautious optimism seems to be arriving with spring.
“We’ve definitely noticed an uptick in sales activity at our downtown condo projects since the beginning of the year and I would say that some of the buyers are people who have renewed interest in living in the city,” says Mimi Ng, senior vice-president of residential sales and marketing for Menkes Developments Ltd.
“With news about the vaccine and an idea of the timeline for rollout, there is a sense of optimism in the marketplace around downtown projects.”
Among those are the pieds-à-terre at Menkes’ Sugar Wharf condominium community, which Ng says attracts retirees who have a home outside the city but want their own place when visiting family in Toronto, shopping or attending events. Other buyers include executives who work in the city and want to keep their country home.
Jana Korim, head of sales at North Drive, says many of their clients have spent more time at their cottages this year due to the pandemic.
“Our clients are definitely rethinking the purpose of keeping a large home in the city,” Korim says. Empty nesters were already considering this as a natural lifestyle change but have become increasingly motivated by the pandemic.
“There’s something of a ‘home swap’ pattern happening in that cottages are replacing city homes as de facto large primary residences and, as a result, urban homes are being replaced with condominiums,” Korim says. North Drive’s properties include One Forest Hill, 10 Prince Arthur and 36 Birch.
“People still want to have a base in the city, and, for our clients, any condominium must still satisfy all the elements of living in a house but with none of the hands-on maintenance. The freedom of a lock-and-leave lifestyle still holds huge appeal.”
Brown says he thinks the trend away from the city was only temporary. “We expect to see recovery very quickly towards the middle to the end of 2021 with the vaccine inoculation becoming more widespread over the coming months.”
Lifetime’s Oscar Residences in the Annex is appealing for its location in a central, established neighbourhood. “With Oscar and our range of suites, we are making the Annex more accessible to a broader group of people who may not have previously considered purchasing in the neighbourhood as an option,” Brown says.
Vandyk says people who sold their homes in the city and bought in the suburbs ended up being ahead in terms of overall equity and money in their pocket.
“These buyers have renewed confidence in the overall strength and resilience of Toronto’s real estate market, which is why they are using their equity wisely and investing back into the condo market.”
Still, he says many people who are currently renters or owners in Toronto are seeking better lifestyles after being confined to their condos for months due to provincial guidelines.
“Their sentiment around living right in the core has shifted and they are now seeking to live in more comprehensive, master-planned communities that are still accessible to downtown, but provide a lifestyle that is more well-rounded.”
Vandyk’s Grand Central Mimico project in Etobicoke offers a thriving community with retail and office components intended to create jobs, access to transit via the Mimico GO Station, a new 12-acre park, and proximity to Lake Ontario.
“All of this combined offers an incredible value proposition that’s attractive to both end users and investors,” Vandyk says.
Kimberly Sears, director of condominium rentals for Menkes Rental Suites Management Inc., which manages around 400 properties in downtown Toronto, says she’s noted an uptick in the past few weeks and that potential renters should move quickly.
“The rental rates ended up going through quite a dip,” says Sears. “It’s now quite affordable to move into places where typically you wouldn’t be able.”
That presents a particular advantage to renters who hunkered down with relatives and used the year to save.
“Some people could have taken that year off of paying rent and put it towards a down payment. Others saved up their nest egg, cleared off some debt and are now walking in at what is a very affordable rental rate,” Sears says. “I think there’s going to be a pretty rapid bump back up once the city starts reoccupying.”
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