The slowdown in activity and pricing in residential real estate was a frequent media headline for much of 2022, and for a good reason. In 2021, the Canadian benchmark home price increased by 28% (1), the highest one-year increase ever. As central banks pursued monetary policy tightening measures to control inflation, home prices across the country reacted as expected – they went down. As the country’s largest city and home to the most construction cranes in North America, Toronto is often the focus of attention in real estate circles. While average prices were down 9% in 2022 (2), recent market activity suggests the bottom may have been achieved, with a number of reasons to be optimistic for a recovery in the near term.
The inescapable truth behind Toronto’s consistently strong housing market is a continually widening gap between supply and demand for new housing. On the demand front, Toronto is one of the fastest-growing cities in the world, with the most significant contributor to growth driven by immigration. Historically, approximately one third of newcomers to Canada settle in the Greater Toronto Area (GTA) (3), and this trend is expected to continue. With the federal government targeting 500,000 immigrants annually by 2025 (4), double the level from only 15 years prior, there is strong reason to believe housing demand will be robust. From a supply perspective, the market is struggling to produce new housing at the levels required to achieve equilibrium. There are many reasons – rising land and construction costs, labour shortages, and municipal approval delays, to name a few – and there is no simple solution to increasing supply to the required levels.
Digging deeper, micro trends suggest that the condominium market remained relatively resilient through the 2022 downturn, with room for appreciation in the coming years. While average resale home prices across the GTA were down 9% in 2022 (2, condominium prices were effectively flat. The dichotomy is explained by COVID-induced behaviours where many buyers bucked traditional trends of buying in amenity-rich submarkets, and instead sought isolation. As the world returns to normal ways of living, housing demand is strongest in areas that promote convenience and connectivity.
Alan Leela, Vice President of Investments at EMBLEM Developments, is a big believer in the return of downtown Toronto. “With the concentration of nightlife, restaurants and cafes, being downtown Toronto has re-emerged as the place to be. As developers, we would love to have the opportunity to bring more housing in core locations. However, doing so has become increasingly challenging. With very few parking lots remaining – what we consider to be the low hanging fruit for intensification – developers need to get creative and pursue complicated land assemblies, many of which can take years to put together.”
Against this backdrop, EMBLEM Developments is bringing the most anticipated condominium project to Toronto in 2023 – ALLURE. The process started in 2020, with the assembly of 8 individual properties. Following the successful zoning achievement last year, EMBLEM is concentrated on delivering a landmark project that exceeds every expectation, generating value for both investors and end-users.
Kash Pashootan, Founder and CEO of EMBLEM Developments, recently discussed the intentional and strategic planning that went behind ALLURE. “We have built a reputation as a investment-minded development firm in the GTA,” says Pashootan, “as much as we obsess over design, we understand numbers, we understand cycles. We come from a world where we spent almost 25 years analyzing risk and looking for opportunity. Every site we have has had a very strong intention behind us buying it.”
As such, it comes as no surprise that award winning EMBLEM, known for excellence in design and penchant for creating striking new buildings, has been to unveil something special to Toronto. ALLURE stands in a market-driven mixed-use neighbourhood, connected to Toronto’s top amenities for everything from work to play. It is only minutes from many of the city’s best, including sports stadiums, shopping and dining, and the Distillery District, steps away from the waterfront and a short walk to the newly expanded St. Lawrence Market (scheduled to finish construction summer 2023). With the neighbourhood’s unparalleled Walk and Transit scores (100 and 100), it’s clear that this is an area just waiting for exploration. Many downtown locations have great nightlife but ALLURE bring both: Nightlife but equal appeal to daytime living for quality of life.
While it is unreasonable to expect interest rates to go back down to 2020/2021 levels, the post-COVID recovery clearly cemented the ‘location, location, location’ adage. Coupled with robust fundamentals supported by record immigration, ALLURE is sure to attract a lot of attention and interest from those looking to invest in the city's real estate market.
EMBLEM Developments is one of the fastest-growing real estate development companies in the GTA, with a focus on high-rise residential buildings. They are proud to have been recognized by prestigious organizations within the building industry with awards that stand as a testament to their approach and provide a motivation to continue crafting homes of the finest calibre for residents and the community. EMBLEM’s current portfolio comprises over 4,500 residences representing $3.6 billion of development value.
To register or for more details, visit EmblemDevCorp.com.
1. The Canadian Real Estate Association
2. Toronto Regional Real Estate Board
3. Statistics Canada
4. Government of Canada