Should The Toronto Condo Market Fear Foreign Investors? with Dan Flomen of Empire Communities
Dan Flomen is the Vice President of Sales at Empire Communities. Listen to him talk to Andrew la Fleur about whether the Toronto condo market should fear foreign investors or not, as well as their successful Eau du Soleil condo project on the city’s west waterfront.
Dan Flomen Interview Highlights
00:50 Nobody Blows Bubbles Like These Real Estate Writers
4:41 How Dan Flomen Got Into Real Estate
6:45 Going International
9:36 Are Foreign Investors Bad for Toronto?
12:21 Percentage of Foreign Investors in the Toronto Condo Market
14:08 Is There a Condo Bubble in Toronto Right Now?
17:08 What Would Cause Concern in the Toronto Condo Market?
19:40 What is Dan Flormen’s Personal Condo Investment Strategy?
22:18 King West Village
24:15 In 2025, GTA Population Could Be 6.7 Million
26:18 The Final Release of Eau Du Soleil Suites
32:10 New Condo Project in Yorkville
33:39 Where is Empire Communities Going to Be In the Future?
35:11 How to Reach Dan Flomen
Watch Empire Communities’ Eau Du Soleil Video
How to Leave a Review for The True Condos Podcast on iTunes
Dan Flomen Interview Transcript
Andrew la Fleur: Hello and welcome back to the True Condos Podcast. Once again, I’m your host, Andrew la Fleur and thanks for listening in. I appreciate your time and I appreciate your support. If you like the show, maybe you’ve been listening for a long time or maybe this is the first episode that you’ve ever heard but if you enjoy what you hear, if you don’t mind supporting the show, it would mean a great deal to me if you go to iTunes and leave a review for the show. Your reviews really help to get the word out about the show. Thank you very much for your support and for your reviews.
Before we get to today’s guest who’s Dan Flomen, he’s the Senior Vice President at Empire Communities, I wanted to just touch on an article that’s in the paper this week and I can leave a link to this one in the shown notes. The show notes for this episode can be found at TrueCondos.com/Empire. It’s from the Financial Post, the headline is “Nobody blows bubbles like these real estate writers.”
It’s talking about how in a booming real estate market that we’re experiencing for the past number of years that there seems to be also another boom happening and that’s with the doom and gloom crew that are constantly claiming that the real estate market is going to crash and that house prices are going to drop by 50% of something. There’s some other new guy who is coming out with a book this year predicting some big crash. We’ve seen this time and time again, year after year after year. We see these guys coming out with these crazy predictions that never come true.
There’s just a funny quote from the article. One of the guy says, one of these guys who is predicting the crash, he says, “Just because you missed it by a year or two doesn’t make you wrong.” And I just thought that was just such a telling quote to types of prognostic ears who are trying to predict something that is just never going to happen quite frankly. It’s interesting and you got a guy like Garth Turner who, of course, has been predicting it for much, much longer than a year or two.
My question is, okay, if it doesn’t make you wrong, if you’re late by a year or two, what happens if you’re five, six, seven years late and it still hasn’t happen. At some point, you’re not just throwing the towel and say, “Okay. I was wrong. The real estate market is fine. This is just ludicrous. I thought that was an interesting article there. You can take a look at that if you want to in the show notes.
Okay. Let’s get to today’s guest, Dan Flomen of Empire Communities. We had a very interesting discussion. We talked about, of course, his story as we always do. How he got into real estate. We talked about the condo market. Talked about his own personal tips for condo investing and he gave several great tips for the condo investor, both new investor or experienced investor. We also discussed the upcoming final release of units at Eau Du Soleil.
Eau Du Soleil is a great building on the Etobicoke Waterfront, one of the tallest residential towers on the waterfront anywhere in Canada. One of the towers being 66 stories high and the other one being around 46 stories or so. Coming up this month in October 2014, they are going to be releasing their final batch of units and many of those units have water views.
Very popular building with downsizers, I find. People who are going from a house or a larger condo, and wanted to get into something on the waterfront find it’s a great building for that. There’s a lot of units. I had a sneak peak at the floor plans. There are a lot of great units facing the water in this final release. If you like more information on that, just go ahead and go to TrueCondos.com/Empire. You can contact me for some more details about that project there. Great.
Without further ado, let’s get to my interview with Dan Flomen. It’s my pleasure to welcome Dan Flomen to the show. Dan is the Senior Vice President of Sales at Empire Communities and he’s also the owner of TFJM Realty. Dan, welcome.
Dan Flomen: Thank you very much.
Andrew la Fleur: Dan, why don’t you start by telling everybody a little bit about yourself, who you are and how you get started in real estate.
Dan Flomen: Yeah. How I got started in real estate is a funny story. I graduated university in 1991. At that time, the economy wasn’t doing well and I had degrees in Mathematics and Statistics. I sent out a series of resumes and at that time, nobody was hiring so ironically, I got 60 rejections. My family had always been in real estate in one fashion or another. My brother has been a broker for almost 30 years. My father was a contractor. It was a natural progression to go into real estate.
I get the bullet and I took the real estate courses and became a real estate agent at 21 years old. I’ve been in real estate ever since and loved every single minute I’ve been in real estate. I’ve had the pleasure of working in all the assets or facets of real estate from resale or residential to new homes, from commercial to actually being a builder myself.
What happened was several years ago, I decided to make the leap into the new home game fulltime by joining with Empire Communities as their Senior Vice President, as you mentioned, of Sales and I run their global sales operations of which we have offices not only in Canada, specifically in the greater Toronto area but we also have an office in Dubai and we are starting an outreach program into China, as well as into the United States.
With regard to the resale part of the business, I still oversee the operations of what’s called TFN Realty, and we are the exclusive brokers for Empire Communities, as well as several other builders in the greater Toronto area.
Andrew la Fleur: That’s interesting, Dan. You’re talking about opening offices internationally, Dubai, China, USA, you mentioned. Tell us about that and what’s the strategy there?
Dan Flomen: The strategy for opening offices in these other countries is that we wanted to have an outreach program internationally. There’s a lot of foreign investors looking at Canada now as a safe and sound investment. Canada has always been a safe and sound investment but it hasn’t been on the radar of a lot of people recently where the quick bucks in some other countries have driven those markets. Those are very high volts or high-risk markets.
Whereas in Canada and specifically the greater Toronto area, you tend to have a safe and steady appreciation of both capital, as well as rental income. The rental rates for investment condos, new product is very low. The vacancy rate, I’m referring to. Foreign nationals are seeing Canada as a great opportunity to buy -in in a long term process. These are not speculators looking to flip their unit. These are people looking in the long haul to own properties for several years because they do see an appreciation in the market and a steady one that has been occurring for the last ten to 15 years. We don’t foresee it ending anytime in the near future.
By opening up these offices in these countries, what we’re doing is we’re exposing the greater Toronto market to all of these investors specifically to buy. Recently we had a very large show called Cityscape Dubai with thousands and thousands of people attending, and I’m referring to 50,000 people attending. At Cityscape Dubai, we were able to sell quite a few units to local Emirates, as well as people from that entire region. The Dubai office not only is for Dubai but it’s for that whole region.
About three weeks ago, I went to Hong Kong to expand or reach into that market. Hong Kong and China have not seen the greater Toronto area as an investment hub. They focus in other markets. Now, they are shifting their gear to the Toronto. I’m referring not to local Asian people. I’m referring to the actual residence and nationals of China looking to move money into Canada as an investment.
With regard to the States, we are one of the large developers in the Houston area and we are now looking at expanding our reach and actually building and selling directly into that market as opposed to just being land developers. We see the US, we see Asia, and we see the Middle East as three markets that people assume were very tapped but have not been tapped at all relative to the size of those markets.
Andrew la Fleur: Interesting. Now, we talked about the foreign investor question quite a bit on the show with different experts. There seems to be a perception of the public that foreign investor is a bad thing for the Toronto market or that there’s a massive percentage of the market is being sold to foreign investors and that is putting the whole market at risk. What’s your take on that question given that what you just said, you’re actually reaching out to the foreign investor right now.
Dan Flomen: I strongly disagree in anybody who says that the foreign investor has any negative impact on the market. In fact, I see the foreign investors are very positive sign that they believe that the economy of Canada, the economy of Toronto, the economy of the condominium is strong. If anything, the foreign investor shows that other people are looking at us as the place to park your money or the place to actually move to.
The larger the foreign investment, people also misunderstand that a foreign investor is not necessarily a speculator which I fully am against. I’m against anybody, local or foreign, who buys with the sole intention to flip. These are people looking at a long term play who believe that the economy of Canada, and the economy of Toronto, and again, the economy that is surrounding the condominium market is strong.
By the way, many of these buyers put 100% down, don’t even carry a mortgage which says a lot that they’re prepared to place everything into the Canadian market. They are an essential part of the market. It’s without those foreign investors also, a number of condominium buildings which are successful, which have made Canadians a lot of money, who has invested in those., without that foreign content, we may not have been able to build those buildings because we would never had enough presales to go to the banks to get the financing to build the buildings in the first place.
Many of these foreign investors look also for tenants who are long-term tenants. They are not looking for the person who barely can cover their rent. They’re looking for a safe and steady tenant also, so they’re also putting tenants into these buildings which are making the buildings better by the virtue of the quality of the tenants that they’re putting in. A lot of people don’t think about foreign investors along those lines.
It’s very important to see that the foreign investor wants a safe and steady tenant and will need a place they get longer to make sure that that tenant is the right tenant because that foreign investor can’t come here on a daily or weekly or monthly basis to check up on that tenant to make sure everything is being maintained well. They want that perfect tenant before they are prepared to go with maybe a sub-perfect tenant.
Andrew la Fleur: That’s interesting. I’ve asked this question to different people. What would you say then, in your opinion, is the percentage of foreign investor in the condo market. You’ve heard some people say it’s 50% of the market is foreign investors but most people in the industry I think know that it’s actually a very small fraction of the market. What would you say it is in your opinion?
Dan Flomen: It’s important to know that foreign investors, I mean true foreign investors, foreign nationals who do not live in Canada comprise an unbelievably small part of the market. I would probably put it as sub 25%. Maybe in some buildings, it’s low as 5%. Keeping in mind that the foreign investor has a very difficult time at getting a mortgage in many cases which is why many of them put 100% down. On the minimum, they need 35% down for a schedule A bank to qualify them for a mortgage.
The actual number of foreign nationals who buy Canadian property is very, very small in the big scope of things. Canadian nationals who may hold dual passports, who may have a hold of Chinese passport and a Canadian passport or an American passport and a Canadian passport, do comprise another, let us say, 25% of the market.
If you take an investor component of a building, it’s 50% of the building, maybe half of that at the most is foreign nationals. Basically 25% of an entire building at the absolute most will be foreign. The buildings that I’m dealing with, probably closer to 5% to 10% in total of all the units sold are actually foreign investors buying who do not have a residence in Canada.
Andrew la Fleur: How would you describe the condo market in general right now? Do you think there’s a condo bubble or what do you say to people who think there’s a condo bubble? How do you characterize the condo market?
Dan Flomen: When it comes to the concept of the condo bubble, I’m always hesitant about that because the oldest sky is falling, the sky is falling, chicken-little things. If a single building, for whatever reason, doesn’t get built, those people come out of the woodworks and say, “See, I told you the condo market’s busting,” but that may be a standalone building that for different reasons was unable to get built. It had a first time homebuilder who wasn’t sure what they were doing or people didn’t gravitate to that building.
The condo market in totality is unbelievably strong right now. People are buying both as a place to live and as an investment. In many cases, the place you live is your investment because when you’re buying your property for yourself, you want it to appreciate. You want that to become an investment to you. Even if you don’t sell it for 20 years, you obviously want that property to appreciate in value.
We are seeing a lot of first time homebuyers coming into the market and they’re buying condos not because they can’t affords a detached or semi-detached home but it’s a lifestyle that they want to live in. It gives them the facilities that they want. It gives them the security if there’s a security guard in the building. It gives them a peace of mind so that when they go on a vacation, they can lock the door, and leave, and not worry about it.
We are seeing or I am seeing a lot of people buying and feeling very bullish about the market. As recent sales of many condominiums have attested to recently both my personal clients, Empire’s Communities’, as well as other builders, there is still a lot of people who have a lot of faith in this market and do not foresee the bubble.
I happen to be one of those people that don’t believe in the concept of the bubble bursting. I believe that there may be a handful of buildings that will not get built for the reasons I explained. As well, people should be very cautious when they’re buying a condo that they can afford the condo. They should know that interest rates will be going up over the next few years. That they’re not going to stay low.
If they are maximizing their purchase to their current income level and their current mortgage rates, they may be up for a little bit of a surprise in two to five years from now but that, again, will not a bust on the condo. It will be a – for a lack of a better word – a shift in the way people have to buy. In other words, somebody has to know that they can afford if the interest rates go up by a 0.5% or 1% over the next five years that they could still afford those mortgage gamut.
I do not believe for any reason out there that we are going to see any form of a “bubble bursting.” Again, we will see maybe a handful of condominium buildings not get built but that’s a handful in a market that has hundreds and hundreds of condominium buildings.
Andrew la Fleur: Right. Like you said, the market this year has been really quite strong. A lot of new launches have done very well. The numbers in sales are up significantly over the last year. Are you concerned at all about not bursting a bubble per se, but are you concerned of an overheating of the market right now with all these launches that are selling so quickly or what would cause you some concern if there was something you were looking for that would be concerning?
Dan Flomen: The first thing I am not worried about an overheating at the market. I think there’s a been pent up demand for well-priced, good quality buildings in good locations and a lot of the launches that we’ve seen this year have had ticked all of those bucks if they’ve been priced right, they’ve been priced to markets, they are in good locations, and they have good layouts, and they are perceived as both a good investment and a good place to live which I think has been a huge riding factor in the market.
Where I would be concerned is buildings that are sig-level buildings. Buildings that are not necessarily in emerging markets or good markets. Builders that are not providing the quality that they are marketing. Those are buildings that concern me. There are very, very few buildings that are like that right now which is why I think the numbers are the way they are this year, much higher than previous years because the builders that are coming out and not to name names but everybody from a Tridel, to a Canderel, to a Kendrell, to Cresford, to an Empire Communities – I’ve got to plug my own building group – and to Pace Developments, they’re all quality builders building quality products which I believe that both the end users, the investors and the real estate community at large does respect and will put their clients to.
Again, the only thing that would concern me is that if people are overpaying or paying future value prices for condos in the hope that the market reaches those numbers. I don’t believe in that. I believe you should buy it at current market levels, whatever those current market levels are. Obviously, they are drastically different in Yorkville than they are, say, my hub project, the Eglinton and Oakwood because Yorkville is two-and-a-half to three times the price per foot that you get in some other markets, but as long as they’re priced according to the market, I don’t think that there’s any issue or you should have any lack of comfort in acquiring those condominiums.
Andrew la Fleur: What’s your personal condo investment strategy? What do you like to buy or what have you bought for yourself? Do you have any tips for the new condo investor?
Dan Flomen: That’s a great question. I have bought several condos and sold several condos in my career. I recently sold one of the investments that I bought in 2009. What do I look for personally? I look for a few things. I look for standalone building that are being built by quality builders. If I see a building that is by itself is not part of a multiphase project and it’s got a good quality builder and a good quality building, I look to those buildings because those tend to be heavily end-user occupied, as well as quality-investor purchased because quality agents such as yourself, Andrew, know to focus on buildings like that.
I also look to multiphase projects where you can get into the first or second phase. Second phase if it’s a four or five-phased building. Builders know that they’re going to have to increase price you’re your project. If you get into the first phase or the second phase, again, of a multiphase building, you’re bound to make money.
I also look for signature building. Those would stand out. You’re going to pay a premium for those buildings but I always say, if you drive by certain areas and I’ll use even the Mississauga as one of them, when you drive by areas of Mississauga and you see the Marilyn Monroe building, you say, “Wow. Look at those buildings.” A lot of people forget that the base of buildings are a bunch of other buildings but those are signature buildings that stand out, One Blue or Eau du Soleil in my case, these are signature buildings that you’re going to pay a premium for but down the road will not be used as a comparable to other buildings that may be in the area.
The last thing I really look for if you’re an investors, look at emerging markets. Markets that you do have to have a little leap of faith and trust in your real estate agent to advise you, and those are markets that if you get into the first building in the emerging markets … Way back in the day, I was the original agent of King West Village when there was nothing in King West Village, the original people that bought there have made a ton of money. If you can get in and have the vision to see areas of Toronto and there are still several areas of Toronto that are emerging, and get into those buildings, that is to me a great investment.
Andrew la Fleur: That’s great. Take us back in time a little bit, if you will. You mentioned King West Village there. What projects were you referring to? What were you working on back in the day?
Dan Flomen: Back in the day through International Home Marketing, I was the agent for Urbancorp Development and all of what is King West Village today. We’ve all dilapidated lands, crazy properties, nobody thought anybody would live there. To the concept of living west of Bathurst along King was unheard of. You had literally crumbling buildings in that area and it’s a shock because we went out there and we used to sell one-bedrooms for 89.9 including parking. Today, you see this type of numbers and it’s a parking spot from the Yorkville project for an entire condo.
King West Village was a prime example of an emerging markets that Urbancorp had the vision to see the big picture of. Then, CanAlfa came into place with Liberty Village. These are beautiful communities now that are almost exclusively end-user areas. There are a lot of young professional, single, couple, families that have all moved into this area but 21 years ago, it was hard to even find one person even would consider buying in that market.
I am seeing that you go to the eastside. I can go to where projects like the printing factory, Lofts or at Carlaw, those areas, nobody would have thought to buy in that area. It is to me one of the most beautiful areas at town now downtown east. You got this interesting thing. You got this downtown east area which is a stone smoke from St. Lawrence market in the beaches and you got this whole downtown west area which is now wonderful restaurants and lifestyles in the fear districts.
These are two areas that 20 years ago, nobody even thought to go to. If you left that young university corridor, it was almost a foreign thing to leave that corridor.
Andrew la Fleur: Right. Right. It’s interesting to see that that was 20 years ago which is really not that long ago. I was reading the recent Bloomberg report that said in 2025, I don’t know if you saw this one, 2025, the GTA Population they’re projecting are going to be 6.7 million. 2025 is only 11 years away. You think about what’s happened in 20 years which is not that long really, you can imagine what’s going to happen in the next ten, 11 years in this city, the transformation that’s going to be taking place. People are probably going to miss out if they’re not looking forward, and thinking ahead, and purchasing in these areas like you said.
Dan Flomen: I look at it in a different way. The entire population of Vancouver is going to be moving into Toronto in the next ten years.
Andrew la Fleur: Wow, yeah.
Dan Flomen: If you look at it like that, it changes your perspective. It’s easier to swing numbers of population growth and whatnot but if you say the entire population of Vancouver is going to be moving into the greater Toronto area, now, that’s a shocking way to look at it.
Andrew la Fleur: Absolutely.
Dan Flomen: Those people need places to live.
Andrew la Fleur: Yes.
Dan Flomen: When people talk about this bubble burst thing or anything like that, I’m like, if all these people are going to be moving in and they need place to live, they’re going to need (a), rentals for those people that don’t have deposits or they’re going to need condominiums and houses in the greater Toronto area if they can afford to purchase at that time. At that time, our property values will be that much more as they’re constantly appreciated at very good rates, very safe and sound rates over the years. You’ve got this double whammy.
You’ve got all these people moving in, a strong market, a market that people think there are so many condos up but when you put it in a perspective of how many people are going to be moving in to the area, we don’t have enough condos. We do not have enough supply to meet the demand that’s coming down the pipeline.
Andrew la Fleur: Absolutely. Absolutely. So true. Let’s shift gears and talk about your project, Eau du Soleil. You mentioned it a couple of times there. Final release of units are coming up in the project. Maybe give everyone a quick overview of Eau du Soleil if they’re not familiar with it. Why are you excited about this building? What makes it so unique? What can you tell us about this final release of units?
Dan Flomen: Sure. Eau du Soleil is the vision of the owners of Empire Communities. It is what it’s called a signature bookend in the Humber Bay area Park Lawn and Lake Shore area, where the other bookend is an older building called Palace Pier. Two beautiful buildings.
Eau du Soleil is a very large project. It is 1285 units spread into two towers which are combined by a very large podium. These have unobstructed water views and there’s an expression, not all water was created equal. This new release that we’re going to be coming up with, these units have unobstructed water views because they are right on the water. Imagine looking in and seeing throughout your window not only Lake Ontario but the harbor, as well as the downtown core because of the way the city wraps around Lake Ontario.
We’ll be releasing this final 300 units which have never been released before. I would say 90% of them have a water view. 50% of the units have a completely unobstructed water view meaning that no matter what window you look at out in your home, you’re going to be looking right on to the lake.
The building has everything you can imagine in it from yoga areas, gyms with solar saltwater pool, hot tub, theater, nine guest suites. We’re going to be having two superintendent suites so that if the coming-in corporation proceeds to hire two fulltime super to man the building, they have that ability. It’s going to have a large commercial component as well on the main floor which we are currently entertaining different offers for. There’s going to be thousands of feet of commercial. Within this building which is almost going to become a community because it’s as large as it is. You’re going to be able to do your shopping and everything within the building.
We are the corner of Park Lane and Lake Short. We are the entrance gate of that whole area. Because of the signature building, as I mentioned earlier, it allows you in ten years down the road as you’re driving by, you’re going to be saying, “Wow, what are those buildings?” It’s also one of the largest, one of the tallest buildings on the water in Canada being 66 stories in height. That’s a key component to the building and that’s the taller tower. The shorter tower, per se, is still 49 stories.
These are beautiful architectural wonders that were created by two fantastic architects, Zeidler and Richmond Architects. We had a very large international well-respected, well –known architect combined with one of the architects in Toronto, combined their forces to create this master plan community. That’s what it is. It’s a vertical village. It’s a vertical community, and you’ll be able to do everything within the building.
We have units that run anywhere from one bedrooms to three bedrooms. We have terrace suites which we’ve never released which is also part of the release in this upcoming thing in the next couple of weeks. We have everything for everybody, again, from small one bedrooms to large three bedroom units. We have accessible parking. We have lockers with the suites. We have fantastic finishes. You have either nine or ten-foot ceilings. You get a lot of bells and whistles that are standard with this projects that other projects charge you as an upgrade.
Andrew la Fleur: It’s safe to say you’re just a little bit excited about this final release.
Dan Flomen: I would say this is one of the most exciting times for me because we waited until this last release to release our best units. It is an exciting time because most of the time builders hold back the “penthouse units,” the most expensive, the highest story units. We held back these great affordable water-facing units because we knew that there would be a demand for end users and investors looking for these very, very specific units.
Again, we held back what I believe to be some of the best units until this release. They aren’t just a multimillion dollar penthouse units that other builders hold back.
Andrew la Fleur: There’s a lot of end users, aren’t there, that are interested in this type of product? I know I’ve spoken to a lot of people looking at downsizing in the next few years who love the idea of living in, like you said, a signature type of building right on the waterfront and they’re looking for something with a little bit more space, not necessarily a one-bedroom investment type of unit. You gave me a little sneak peek of the floor plans there and I can say that yeah, I was really pleased to see a lot of larger two-bedroom units for that type of a buyer.
Dan Flomen: Yeah. I can tell you that that buyer will be able to be satisfied with our layouts. We have units that you can actually live in as opposed to some of these little bashers that you do see downtown which are great as [inaudible 00:31:36] but you could not live in them. Without you getting units 600 to 1200 square feet, two bedrooms, two bathrooms, great layout, decent-sized bedrooms, great living room, dining room layouts, and great kitchen layouts, kitchens that you’re going to actually cook in as opposed to just show pieces that you still have to order in every night.
These are really – for lack of a better word – bangles in the skies that people can buy and again, have this incredible oceanfront –excuse the expression – this great lake view that is incredible.
Andrew la Fleur: That’s great. You got another project coming up. I don’t know if you can give us any hints or sneak preview on what to expect. You got something in the works in Yorkville, don’t you?
Dan Flomen: Yeah. We have been working alongside with the Ratepayers Association, the City of Toronto, the Heritage Board. We have acquired the corner of Yorkville and Avenue Road. We are still in process of dealing with all the government authorities and the Heritage Board because we want to create a building that will work with the area. It’s not about just flopping up a big building especially there.
This building, we haven’t gotten into any of the minutia. We don’t have layouts. We don’t have pricing yet but we’re trying to create, again, a signature building and it is technically a bookend because it is a right at the corner of Avenue and Yorkville. It will be the northeast corner to be very specific.
We’ve had some great dealings with all the parties and especially the Ratepayers had been very supportive of us in this process because we have gone to them. We are listening to them and we do want to do something that will actually make the whole Yorkville experience an even better one than it currently is. It’s already an amazing experience to be down in Yorkville but because this is the signature corner and to me, for those people who understand Yorkville, it is to me the best corner in Yorkville because it is the gateway into it.
Andrew la Fleur: That’s great. One final question for you Dan to make you think a little bit perhaps but is there anything that no one has ever asked you about yourself or about your company or about the condo market but that you wish they would and what would that question be?
Dan Flomen: Wow. That is a tough question. I guess the question that nobody seems to ask is, where are you going to be in 20 years? Forget the condo market. Where is specifically you and your company are going to be in the next 20 years? I can say that just from my point of view, what the strength of the condominium market and the housing market in Toronto, we will all be alive and working hard and continuing to sell at prices that are going to be much higher than they are today. At that time, those people still think it’s a bargain for the people that are going to buy 20 years from there.
I will say that the only question I wished people asked is, forget the next five or ten years, what’s going to happen in 20 years? I do believe that we are going to be a stronger, better condominium market in the city in 20 years than we are today because we are stronger and better today than we were 20 years ago.
We’ll also probably see some more regulations to make sure that everybody from the builders to the buyers are all protected and I think, the whole condominium process and the condominium buying process is getting better and better every year with more and more openness about how we do things, what we do, and that’s probably the question I wish people would ask more.
Andrew la Fleur: That’s great. Thanks Dan. Thank you for your time. If people want to find you or get a hold of you, what’s the best way to reach you online or otherwise?
Dan Flomen: The best way to reach me is to buy units from Andrew la Fleur but aside from that, the best way to reach me is if you can go to www.empirecommunities.com or www.tfn – that’s Tom Frank Nancy, tfnrealty.com, and you can find me through either of those websites. Again, I still think the best way to reach me is to Andrew la Fleur as your real estate agent to buy a condominium through me.
Andrew la Fleur: There you go. Okay. You heard it here first everyone.
Dan Flomen: Really.
Andrew la Fleur: Great. Thank you very much, Dan, for your time and looking forward to all the things you’ve got coming down the pipe. Hopefully, we’ll speak to you again on the podcast soon.
Dan Flomen: Thank you very much, Andrew.
Andrew la Fleur: There you have it. That was my interview with Dan Flomen, once again, from Empire Communities. Thank you very much, Dan, for that great interview. I hope you enjoyed it. I hope you got some great nuggets from the things that Dan was sharing.
I found it very interesting, his take on the foreign investor market especially. Dan’s take on is a little bit different than most people that I’ve spoken to in the business in the condo industry. He was saying that it might be as much as 25% of the market being the foreign investor; although he did admit that in his own experience, it’s only about 5% or 10%. Whatever the number is, it’s a very small percentage of the market.
Previous episode, we talked to Winson Chan from Tridel, the largest condominium builder in Canada and he was saying it is no more than about 5%. Very interesting there, Dan’s take on this particular issue and the fact that empire is being very proactive in reaching out to international buyers in Dubai, and China, and even in the USA.
Of course, his whole point with the whole thing was, listen, even if there are foreign investors in this market, who cares? It’s not a bad thing for the market. It’s showing strength in our market. It’s showing that people see Toronto as a safe place to put their money long term. They could be anywhere in the world and they’re choosing to be here. It’s definitely something to think about.
He’s also highlighting the fact that these type of investors are not speculators. They’re not looking to make a quick buck. They’re not looking to Toronto as a get-rich-quick scheme. Quite the contrary, they’re looking to Toronto as a long-term stable place to park your money over the long term. These are not people looking to come in, make a quick profit, and get out.
There are plenty of other markets in Asia and the Middle East, even in Africa, South America, Eastern Europe where you do see prices escalating 15% to 20% in a year. Those are the kinds of places where if you could be anywhere in the world, you want to make a quick buck, that’s where you want to be. Toronto is very boring when you think about appreciation rates of 3%, 4%, 5%, 6%. That is extremely boring to somebody who could choose anywhere in the world to make a quick buck if that’s what they were looking for.
Yeah, again, to Dan’s point, these foreign investors, if they are out there, they’re looking to Toronto as a long-term play, somewhere to park their money over not five years, not ten years, but somewhere that they can be far beyond that and to own a property, and to enjoy a nice stable appreciation and protection of their capital.
That’s enough for me for one episode. Thank you very much for your support. Thank you for your reviews. Please go to iTunes once again and leave a review for the show if you enjoy it. Hey, even if you don’t enjoy it, give me some feedback. I do appreciate it. Yeah, we’ll catch you on the next episode. Thanks for listening. Bye for now.
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