The coronavirus pandemic has given people plenty of food for thought – including about where they want to live.
That’s certainly reflected in the luxury real estate market, which has shown steady resilience amid a torrent of grim economic news worldwide.
In Toronto, sales have soared like the towers of Davpart Inc.'s United Building at 481 University Ave., with brisk business being done there and at boutique properties such as Menkes Developments Ltd.'s 77 Clarendon and Leaside Manor from the Shane Baghai Group of Companies.
Barbara Lawlor, president and chief executive officer of Baker Real Estate Inc., which is handling the sales and marketing of the United Building, says the year had started strong with a robust January and February. Demand exceeding supply was the main driver of the boom.
Then confinement from COVID-19 hit, but Lawlor says that led to people – particularly those with wealth – having discussions about their living arrangements.
“When the lockdown lifted, people were so ready to go that we experienced an explosion in our luxury market,” Lawlor says. “We noted a real uptick in commitment to buy.”
Marketing on the 55-storey United project, which springs up from the historic Maclean-Hunter building to currently be the largest retrofit restoration in North America, started less than a year ago. Despite the pandemic, Davpart had managed to sell 87 per cent of its 748 units by the end of October.
Royal LePage says median prices for luxury houses and condominiums have risen in many regions since the pandemic hit in mid-March.
The national real estate company says the median price of a luxury house in the Greater Toronto Area increased 5.9 per cent year-over-year to $3,177,500 since the pandemic began, while the median price of a luxury condominium decreased 3.6 per cent year-over-year to $1,830,000.
“While COVID-19 has had a profound impact on economies all over the world, we have seen that many of our clients have been able to take advantage of the volatility of the stock market, resulting in positive return,” says Cailey Heaps, managing director and sales representative of Royal LePage’s Heaps Estrin Team.
“Entrepreneurs within the tech industry have seen phenomenal growth and, with interest rates at an all-time low, this has been a great year for people to upgrade their homes in line with their changing lifestyle. People tend to be spending more time at home and are cutting back on international travel, which has led to many people making the decision to make a move up,” Heaps says.
Maintaining the strength of the market meant virtual visits and online or phone contact with buyers was ramped up. In-person visits are done with strict sanitary precautions to protect people’s health.
While buyers of luxury real estate have certain standards already in mind in terms of space and amenities, COVID-19 now seems to play into some of their questions about properties. Interestingly, developers seeking to be innovative have often already incorporated elements into their designs that make their buildings even more secure places in a world in which pandemics are expected to be a fact of life going forward.
Shane Baghai, president and chief executive officer of the Shane Baghai Group of Companies, says that extraction fans in his Leaside Manor recirculate the air in the main entryway and corridors four times an hour and the building’s home automation system allows residents to accomplish a lot of tasks, such as locking and unlocking doors, with their iPhone.
“The exercise and fitness area of this building is four times the size of what was required so people will have plenty of space at the machines,” he says. “The design of the fitness club basically was two years ago when we were doing the prep but it ended up being a room that complied with all the COVID-19 distancing.”
The project, which is already 50 per cent sold, is perfectly suited for those who are now no longer working at the office.
“Leaside Manor has a suite that can cater to people who work from home. Indeed, we have three couples who are working from home right now that just moved in. They have offices with cabinets and desks with computer pull-out tables and all kinds of things.”
Janice Fox, broker of record for Hazelton Real Estate Inc., which is marketing Menkes Developments Ltd.'s 77 Clarendon project, says some prospective buyers have asked about the building’s air filtration and more people are inquiring about having a personal gym built into their suite for them to use instead of the communal one.
“They’re a bit concerned about sharing space,” Fox says, noting there are lots of questions about outdoor amenities, such as areas to barbecue or garden. “Maybe the pandemic has heightened that question for them.”
She says she finds people are a little more aware of what space they need. “They’re probably a little more articulate in saying to me, ‘can you design it so that it has this, this and this?’,” she says.
“We’re giving people a lot of opportunities to customize and do some of their own décor ideas in there so, for people who are staying at home and not going away this winter, I think buying something that’s going to be custom-built for them is pretty attractive.”
While Baghai says he has seen plenty of ups and downs in the real estate market during the 45 years he has been in business and notes “there’s never been a dull moment,” he says there has been one constant: “People who want a certain luxury home or something unique always bought, even in the ’90s. Our market is unshakable.”
Advertising feature produced by Globe Content Studio. The Globe’s editorial department was not involved.