For those of us who earn our living in occupations associated with Canadian real estate, few of us would have predicted that within weeks of the federal government introducing lockdown measures to combat the Covid-19 pandemic in March 2020, housing prices would start to escalate to precedent-setting sums. In fact, even CMHC’s housing market reports predicted a 9 to 18 percent decline in house prices before Canadian real estate began its recovery in 2022.
A Brave New World
This turn of events fascinated me – both as a realtor, a designer, and as a shelter analyst – prompting me to create a new category on the blog called COVID-19 & Toronto Real Estate which now contains over 30 posts. Early on I noticed Demand For ‘Forever Homes’ In Toronto’s Downtown Family Neighbourhoods Persists Despite COVID-19 while the Toronto condominium market withered when the pandemic arrived on the heels of new policies restricting Airbnb ghost hotels. I looked at The Role Of Fiscal Stimulus During COVID-19 & Our Asset Based Economy, how there is a growing Need And Demand For Live/Work Properties In Toronto, and why the traditional seasons to real estate morphed into The Season Of COVID-19.
The impact of this pandemic is also reshaping our shelter wishes, wants, and needs, as well as how it may more broadly impact urban planning, urban design -and – high-density living going forward. I unpacked my thoughts on How COVID-19 Will Likely Change How We Design Our Homes, documented The Increased Desire For Outdoor Space In Toronto Condos while offering guidance on How To Resolve Your Work From Home Dilemma. Many of us are still reeling from the ongoing media reports about the conditions in Long Term Care Homes, which makes me wonder With COVID-19 Outbreaks In Long-Term Care Facilities, Is Multi-Generational Housing Better?. I certainly anticipate the Rise Of The Family Compound to be trending over the next few years, just as The Movement To Hipsteading is now.
The ‘Haves’ Newfound Freedom
Without question, the pandemic has brought to the surface the privilege of the ‘haves’ (who tend to own real estate) and the ‘have-nots’ – many of whom are essential workers – who, along with those in health care and education, are truly our heroes navigating the front lines of risk. As the K-shaped economy reveals the inequities that inherently exist within our economy, and the pandemic exacerbates these differences, the privileged have been able to take advantage of low-interest rates, the freedoms associated with Working From Home and skyrocketing real estate values spurned by blind bidding wars, to reevaluate their priorities. Never before during peacetime, to my knowledge, has so large a population been given free agency, financial freedom, and secure employment to relocate according to the unique needs and desires of each household. It’s transformational.
Welcome To The New Space Race
Right now – in the world of real estate during a pandemic – size matters. In what I call ‘The New Space Race’, how big the property is (both inside and out) ranks higher in importance than location (we’re less tied to the office) and condition (we’ll upgrade with future earnings). This shift in priorities is reshaping the Canadian housing market in a manner we haven’t witnessed before.
Over the past 28 years, by and large, my recommendation to property owners has been to invest their capital into upgrades and betterments to elevate their property to garner the highest sum. Today, I’m more inclined to suggest a homeowner invest only sufficient capital into refreshing their property cosmetically (and certainly those deficiencies that might otherwise be considered a ‘deal breaker’ by a prospective purchaser like asbestos removal, black mold remediation or extracting a buried oil tank) so that the property presents as ‘tidy and livable’. Why? Because in our current real estate market more than ever, the cheaper the habitable dwelling, the larger the pool of Buyers there will be seeking to secure it. And the more Buyers there are actively in pursuit of those less expensive properties, the higher their acquisition costs relative to their size or condition. Because competition is greater and fierce for the less expensive product, Buyers are often forced to pay sums that are more likely at their top end of affordability. And because of this, these houses are selling for sums that are not much less than properties finished to a higher standard.
At the beginning of April, a fixer-upper in an up-and-coming neighbourhood listed at $799,000 received 10 offers and spiked to the stratospheric sale price of $1,250,000. Yes, it was larger than most semi-detached 3bed dwellings and it had a large 2car garage/workshop, but it also needed almost every major building component to be replaced within the next four years. I was surprised by the sum it garnered, but it also demonstrated that there are buyers who are ready and willing to lock down the biggest property they can afford which they can upgrade over time. This is what a lot of buyers are looking for right now.
There are two recent posts where I explore this. The first, called The Affordability Conundrum For Toronto House Buyers: Livability, Condition & Costs explores how the growth of the media and technology over the past 40 years has fueled our obsession with housing as a status symbol, to the point that it’s impacting access to affordable homeownership in urban centres. The second, called Should I Sell My House In As-Is Condition, Upgraded, Or Elevated? offers my insights on how you might approach the sale of your property depending on what it is.
Here, There & Everywhere
From the lens through which I see the world as a realtor, the pandemic has invited those who can and choose to initiate the next chapter of their lives, however, that might be defined, to make haste. The result? A lot of people over the past year have sold their existing dwelling and purchased a new one, often in a location that is different than they may have otherwise chosen pre-pandemic.
Such was the case with our sellers of the fixer-upper mentioned above. A lovely couple – he’s a senior manager at a telecommunications company and she’s an interior designer – who, with a toddler and a newborn, decided to cash out and head east to Nova Scotia where she’s originally from. Having purchased their property for $540,000 eight years ago (see photo above) and spent around $50,000 on maintenance, repairs, and upgrades, it sold in April for $1,250,000.
The Exodus East To Atlantic Canada
If there was one destination in Canada that offers the best value-proposition and quality of life, it’s Atlantic Canada. I can personally attest to this, as I have owned a home in Charlottetown on Prince Edward Island for the past 13 years. It’s my sea-breeze sanctuary.
Its popularity is growing leaps and bounds, with this article in The Globe And Mail being published just a week ago –> “Wagons East: Meet The Homeowners Driving A Real-Estate Exodus To Atlantic Canada” – and – this piece in Maclean’s posted last month –> “Best Communities In Canada: Why Atlantic Canada Comes Out On Top“.
They Sold Their Fixer-Upper In Toronto For $1,250,000 & Bought A Modern Detached Family Home Near Halifax For $650,000
• 3 bed • 2 bath • 1872 Square Foot Dwelling With Shared Private Beach
“Welcome to one of Nova Scotia’s most exclusive locations. The very private and quiet neighbourhood is just 30 mins from downtown Halifax. This property will enchant you from the minute you set foot on the walkway over the running brook. Surrounded by beautifully manicured grounds with nature at your doorstep. The main floor features a kitchen/dining combo with a vaulted ceiling above the dining area. The generously oversized sunken living room includes a propane fireplace to keep you warm and cozy on those chilly nights. This level also includes a den/office plus a half bath. The second floor includes 3 bedrooms, updated large bathroom with a claw foot soaker tub. The lower level offers a play area, large laundry, workshop, and storage. A potting shed/carport with generous storage above sits towards the rear of the property. Your family will enjoy lazy summer days on the private community sandy beach and stunning waterfront views, or maybe they will enjoy the hot tub on a cold winter night.”
Our clients shared that:
“The market there is as hot as Toronto, and we were one of 23 buyers offering on the house. We’re very excited that we scored lots of outdoor space, close to the water (and the hot tub is included!). We paid $650k. So, yes we did have to offer quite a bit over asking. The real estate agent reassured us that the second-place bid was a squeak behind, so we feel that our purchase price reflected the market. It just goes to show how real estate is booming across the country. We learned from you to go in with our best bid when the property has multiple offers and it’s “the one”!
And they sent up this lovely note:
“To All Who Helped With Our Sale,
We have never seen your faces, hidden behind Covid masks, but you have all been amazing! Your expertise maximized the value of our home. Its sale has genuinely changed our family’s lives. If you have a year-end bonus based on customer satisfaction, please let the boss know that we give you 1000 stars out of 5.
We owe you a Nova Scotia lobster roll with no expiry date.”
Are you planning to sell your home- today or down the road? With my finger on the pulse of the market today, as well as a shrewd and strategic of profitably real estate ownership for the future, we are here to help!
My team and I are here to help!
With decades of experience navigating the ever-changing Toronto real estate market, a commitment to promote the sale of properties like yours with interesting and relevant information, and the ability to guide Buyers with credible insights and well-informed guidance, we are here to help without pressure or hassle.
Thanks for reading!
-The Urbaneer Team
Steven Fudge, Sales Representative
& The Innovative Urbaneer Team
Bosley Real Estate Ltd., Brokerage – (416) 322-800
– we’re here to earn your trust, then your business –
Celebrating Twenty-Eight Years As A Top-Producing Toronto Realtor
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