Condo market stronger than ever so why do these myths still persist?
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The condo market is stronger and hotter than ever before. Condos are the future. Condos are the only affordable housing option that exists in the GTA. Our market is strong, our buildings are full, and supply can’t keep up with demand. And yet many people still hold on to ridiculous beliefs that are simply not true. Today Andrew la Fleur ventures into the comments section of the internet to address some of the more popular myths that many people still believe about the condo market.
1:57 Toronto’s condo boom in the east side downtown.
4:37 If one in three units right now are unoccupied, why would you build even more?
6:33 Vacancy rate in Toronto.
7:43 Condominiums are the future.
9:15 Condo and rental markets is strong.
Condo market has never been stronger and hotter than it is right now, and yet there’s still so much misinformation out there, and I want to address some of that in today’s episode. Stay tuned.
Speaker 2: Welcome to the True Condos Podcast with Andrew la Fleur. Thee place to get the truth on the Toronto condo market, and condo investing in Toronto.
Andrew : Hi, and welcome back to the show. Thank you for listening, thank you for your support, and thank you for the many, many kind and helpful comments that I have been receiving from you, the listener of the show, the condo investor, the person who’s out there learning to be a condo investor getting ready to invest in the market for the first time. Thank you. Today’s episode I wanted to talk about, I’m actually going to do something I said I would never do. I always say, “Don’t read the comments.” The comments section in the internet is the lowest of the low, it’s where the trolls lives, it’s where people just say ridiculous nonsense, and everyone just insults each other, and everything else. I’m sure you’re aware.
This is especially true on anything real estate related, housing related, condo market related. Just seems to bring out the absolute most asinine comments, and ridiculous statements from people, and other people just agreeing with that kind of stuff. I just was on Facebook, I saw this, I’ll include a link in the show notes for this episode so you can see if you want to check it out for yourself. Of course you can get the show notes for this episode and every episode at TrueCondos.com/Podcast, TrueCondos.com/Podcast. I believe we are on episode 138, episode 138 is today.
Toronto’s condo boom, there’s a little video City News put together about the condo boom. Talking specifically about the East side of Downtown, East of Young Street. According to their numbers, not sure where they got them from, but they’re saying 40,000 condo units across 74 condo buildings are in the proposal or construction stage, I suppose for the downtown East. First thing is to understand that 40,000 condo units of course, it’s a headline, it sounds like a huge massive amount of condos. But of course this is going to be spread out over probably six or seven years, maybe even eight years by the time this pipeline of units is built. When you’re spreading it out over that period of time in a city of, in a region of six million people, that is really not a lot of units when you think about it like that.
By the time that all these condos are built, 40,000 condo units, the region of Toronto is going to have probably another six, even, maybe even 800,000 more people living here than they do today, so think about that first of all. Some of these comments, they just drive me nuts that there’s still people out there, a lot of people that still do not understand what’s happening in the condo market, they don’t understand the evolution, the progress of our city. I mean, I guess on the one hand it’s good because as a condo investor we don’t want everyone to know what we know, otherwise everyone would be doing it, and there would be less profit for us in the market.
On the other hand, I just, part of the reason for this podcast is to educate, and inform you, the listener. You, the person who’s thinking about investing in condos. And especially you the person, who’s thinking that condo investing is a bad idea, and it just doesn’t make any sense to you at all. I’d love to be able to educate you, and help you see that actually it makes a lot of sense, a lot of people are making a lot of money, myself included by doing it, and doing it smartly. The future of this city is very, very bright, and very strong.
I mean, the first comment that pops up on here that seems to get the most, Facebook pushes to the top, presumably because it’s the most viewed, or most clicked, or most liked or whatever, as Facebook algorithm determines. Somebody says, “If one in three units out there right now are unoccupied, why on earth would you build even more? Especially when people can’t afford to live in them??” Question mark, question mark. Again, there’s so many fallacies addressed in one comment. The first one obviously being, “One in three units out there are unoccupied.” Again, this ridiculous notion that some people seem to still have this idea of ghost towers, or ghost city, or ghost downtown, you’ve got all these unoccupied vacant homes.
I addressed this in the video this week as well, if you want to check out that video. This just silly notion that there’s … Well, this guy is saying, “One out of three.” He’s saying 33% of condos are unoccupied or empty. It’s absolutely ridiculous that people think that there’s massive quantities, and huge numbers of unoccupied, empty condos. That is completely ridiculous. There’s no substance to that, there is no statistic, there’s not even anecdotal evidence to suggest that this is true. You can maybe argue that in something like Trump tower where the building is in tremendous trouble, and a lot of people never closed on their units, and it’s a lot of foreign investors in a super high end expensive building like that. Maybe you could just pick and choose here and there where there might be a building or two where there’s a chunk of units that are not regularly occupied. But, other than that, 99.9% of the condo market are fully occupied. Either people living in the units, or renting the units.
The vacancy rate in Toronto, again, is like one percent. It’s complete nonsense to suggest that there are all these empty condo units out there, and to say that we shouldn’t build anymore because we’ve got so many of these empty units is just ridiculous. He goes onto say, “Why would you build more when people can’t afford to live in them?” Again, I don’t know where this is coming from. The whole point of building condos, and the whole point of the condo industry is it is the only affordable housing product that we have in the GTA. All affordable housing is condominium housing, my definition. It is the future of housing in the GTA, and really in any city anywhere. it is high rise living, this is the future, this is where we are heading. We’re going to be building fewer and fewer low rise homes, and more and more high rise homes. This is just a reality of living in an urbanized environment.
Unless we invent some magical new form of transportation where we can live further and further apart from each other, then this will continue to be the reality. Condominiums are the future. Again, we need to be building more condos. If we have an affordability issue, we need to be building more and more houses and condos. Reality is we don’t have land to build houses, so we need to build more condos.
Another comment goes onto say, here’s just another example. Somebody says, “Step one, buy condo units. Step two, don’t let anyone move in. Step three, make money doing nothing else because you exploit the market and create artificial demand. What do you think the Chinese are doing in Vancouver? Same thing.” This one’s got a lot of attention as well, and a lot of likes, and clicks. Again, similar idea, he’s talking about I guess, he’s thinking that people are buying condo units, not letting anyone move into them. “Making money doing nothing because you exploit the market and create artificial demand.” Again, I don’t even know how he’s making these logical jumps here, but a lot of people seem to be liking it, and agreeing with it, which is scary. This is just scary. Again, part of the reason for this podcast is to educate. I hope that as you’re listening and as you’re learning stuff on this podcast, you are also spreading the word, and you’re telling your friends, and telling your family.
If people start saying stuff like this at the cocktail party, around the dinner table, or at the office or whatever, you can jump in and say, “That is factually untrue, and the condo market is very strong, the rental market is very strong. We are building more condos than ever, and yet the prices of condos and the rental rates of condos continue to go up. Therefore it’s very obvious that the supply is not meeting the demand. We need to build more, and until we do that the prices will continue to rise on the rental and on the resell side.”
Yeah again, I can go on and on. People talk about laundering money, and it’s just all this nonsensical comments. As opposed to what would be great to see, would be people saying, “Wow, isn’t our city amazing? Wow, we are growing at a faster rate than pretty much any other city in North America. Wow, Canada’s one of the greatest countries in the world, Toronto’s one of the greatest cities in the world.” 20, 30 years from now, this city is going to potentially double in size. Where are all these people going to live that are coming here? Would you prefer that Toronto would be a horrible city where people are leaving, where the population is shrinking, where the economy is contracting? Would that be a better alternative to these people who seem to be just constantly bashing the condo market as if it’s some kind of a negative thing that our city is doing well, and our economy is strong, and our political climate is stable?
We are a light on the worlds stage, and people want to be here. That’s an amazing, amazing thing. All this negativity is just really misguided. I think it’s just a lot of people who just fear change, and fear things being different from what they were used to, or what they grow in with the white picket fence and suburban dream, or whatever it might be for different people.
Another article along these lines came out as well on the Toronto Star. CBC’s talking about it. another one of these articles where a tenant has received notice that their rents are going to be increasing. They brought this to the attention of the media, and the media is jumping all over it, and writing stories talking about how, “Look at how housing affordability is out of control. Look at these poor people, these poor tenants are so hard done by because look, their rents are increasing, and they have to move.”
Well, according to the comments in the other section, they shouldn’t have a problem moving because there’s 40,000 condos, and 33% of them are unoccupied. It shouldn’t be a problem at all to find a place to live because there’s 40,000 condos coming down the pipe, and a third of them are unoccupied. But of course what’s really happening here is again, it’s just a simple situation where the landlord of these particular tenants … Again, this is not a widespread thing. This is two people in an entire building. Two people are being told their rents are doubling.
Well, nobody’s rents are actually doubling. Rents are not going up by 100% a year. It’s just nonsense. What is actually happening here. Again, if you see these headlines, if you hear people talking about this, just again, remind them that there’s no rent controls on buildings in Ontario built after 1991, and therefore you can increase the rents at any amount you want one per year. The tenant has a choice to either accept the new rent, or to move out. Obviously if a landlords coming in and doubling the rent, they’re not going to get $3,300 a month for a one bedroom apartment in a subpar location, and a subpar building downtown. It’s not going to happen. I wish it were true, I wish I could get $3,300 a month on my one bedrooms. But, it’s not the reality of the market right now.
The landlord simply wants those tenants out of the building for what reason we don’t know. Maybe they smoke, maybe they have pets, maybe they have wild parties. Maybe the landlord just wants to sell the property, and have it with vacant possession. Maybe there was some dispute behind the scenes between the landlord and the tenant. We have absolutely no idea, cause the landlord is not saying, and they don’t have to say. All they have to do is follow the law, and the law says, “You must give 90 days notice if your rents increasing, and your rent can increase by whatever amount you want.” It’s up to the tenant to decide whether to pay that amount, to move out, or, hey, here’s a third alternative. Negotiate a different rate, if you feel like it’s unfair and you feel like you want to say.
That is another example of many of the myths and just nonsense that’s out there in the media right now, and stuff that you’re reading online, in papers, and hearing around the office or wherever you might be. Take it with a grain of salt, use this podcast, get yourself educated, spread the word about what’s really happening in the condo market, and we’ll all be better off because of it. Okay, that’s the end of the rant for today. I just wanted to get that out there to you. Hope you found this useful, and until next time, hope you’re having a great week and we will talk to you soon.
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