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MARCH 2012 |www.opp.org.uk The Asian home buyer has long been


considered an integral part of the Toronto condominium market. Prior to 1997, there were many Hong Kong Chinese who had been investing in Toronto. However, after the handover, this abated and more and more mainland Chinese became prominent buyers.


“The Chinese market in Toronto is a


signifi cant investor,” says Eve Lewis, founder, principal and president of MarketVision Real Estate Corporation, a leading residential condominium marketing company. “They are very astute and they have always been very fi nancially minded, and condominiums represent to them an easy way to invest in Toronto.” With the city’s condominium


apartment prices appreciating annually by approximately 7.5% in 11 of the past 15 years, this ‘easy’ investment is also a lucrative one. Two decades ago Lewis would sell Canadian real estate projects in Hong Kong. “Now, the market in Toronto is so good that they come to us, typically either through a family member that is living here or a broker, and that broker is working the mainland Chinese market by going there and by creating relationships,” she adds.


In the wake of the current global


economic crisis, Canada has stood out as a mecca for safe, secure investment. Its banking system has been applauded for its conservative lending practices which has, in turn, shone the spotlight on Toronto as the nation’s fi nancial centre. With over 100,000 people moving


to Toronto each year, about 50,000 single family homes and condos are built annually. Unlike other Canadian cities, no rental program exists. In other words, there are no buildings that are built specifi cally with rental units in them. A recent report from the Canada Mortgage and Housing Corporation shows that the city’s rental vacancy rate is less than one per cent therefore the risk of buying a condo for investment purposes and not being able to rent it out, is diminished. Lewis explains “Other markets usually have some kind of rental program. Our condo market? That’s also our rental pool.” Her company has been hired to


market the recently-announced Massey Tower project, a brand-new 60-storey development in the heart of downtown Toronto which will incorporate the front


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portion of the city’s landmark century-old Canadian Bank of Commerce Building that has stood empty for the past 25 years. Once restored, its distinctive Ionic columns and neo-classical design will serve as the entrance to the tower through which residents will pass on their way to the elevators.


The appeal to the Chinese investor will


“Recent immigrants are the backbone behind the growth of Canada and Toronto.”


be instant, she says. “It has a magnifi cent design and they are very design conscious beyond just the economics of the building and how much it costs. They like trophy buildings and they like to be in a prime location. I would say that in that building we will have quite a high proportion of Chinese purchasers whether owner occupants or investors.” Gary Switzer, president and CEO of MOD Developments which is building


the project, agrees. “Its location is centre ice,” he says, pointing out its position on downtown Toronto’s Yonge Street at the Queen subway station and proximity to major shopping complex, the Eaton Centre, with more than 200 stores. “It’s also within walking distance to Ryerson University and the University of Toronto as well as a couple of blocks from the fi nancial district, City Hall and one of the major hospitals. It works in terms of walkability, centrality and rentability,” he says.


His company is currently constructing


another residential condominium tower, Five St Joseph, which again combines contemporary and historical architecture. It is scheduled to complete in 2014 and is already 90 per cent sold out. Switzer says that this has had a good response from the Asian community due to its downtown location, closeness to a subway station, and proximity to urban amenities. ‘Flipping’ was a North American term that was coined a few years ago that refl ected buyers who bought and sold quickly with the aim of making


CANADA OUTLOOK | 39


an instant profi t. Is this still the reason that many buy a condo now? Switzer disagrees. “From what I can observe, [buyers] are looking at it from a long-term investment. They’re not interested in just buying and fl ipping, they’re looking at it from the point of view of whether this is going to be a building where there will be capital appreciation. If you do a really good building – one that people want to live in - it becomes conversely worth more money.” The Canadian media often discusses


whether foreign investment is propping up the real estate market here. Scott McLellan, senior


vice president of Plaza, the top performing developer for condominium apartment unit sales in Toronto in 2011, remarks “It really isn’t foreign investment, it is ‘new Canadians’, ie. recent immigrants, who are coming to Canada and they have brought wealth with them or acquired wealth. They are the backbone and ingenuity behind the growth of Canada and in particular Toronto. They are coming from parts of the world where when you have success and you really want to show your wealth .. you buy real estate.” Plaza was one of the fi rst condominium developers to deliberately cultivate relationships with the different communities in the city.


When selling homes in one of


their recent projects, York Harbour Club, the company used locally-based brokers who market and sell directly to foreign buyers and new Canadians. Almost 90% of the development’s 502 condos were sold in four weeks, with approximately 60% selling to new Canadians and international buyers. The company has a number of other projects currently under construction with completion dates ranging from six months to two years. Two of these are in the Liberty Village neighbourhood of downtown Toronto’s lower east side, close to Lake Ontario, and another, Ivory on Adelaide has already sold 245 out of its 358 units since sales began last November. Will the number of investors decline?


Eye-catching | Ma Yansong’s “Marilyn Monroe” building put Toronto on the map


McLellan doesn’t think so. “Real estate is really part of their savings plan as no matter what happens with the stock market, you can still knock on the front door of your home” he concludes. ”That’s a strong driver to the success of the Toronto condo market.” .


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