Will the housing bubble ever burst? Are people really leaving the city in droves? Peter Politis, CEO of Greybrook, answers all of our post-pandemic real estate questions.
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Peter Politis, CEO of Greybrook Realty Partners, a leading Toronto-based real estate private equity firm, joins us as the leader in residence for September. Here, Politis talks with writer Alex Derry about how housing trends in Toronto have been affected by the pandemic, why the city’s market is a unique investment opportunity, and what new options are emerging for home buyers. for the first time in the rapidly growing Greater Golden Horseshoe (GGH) region.
What attracted you to a career in real estate?
He wanted to do one of two things since he was young: be a real estate developer or play for the Blue Jays. He wasn’t necessarily good enough to play for the Blue Jays, so I turned to real estate. I am the son of Greek immigrants and owning property is ingrained in the immigrant mindset. There are very few investments that will retain their long-term value like real estate. While real estate has gone up and down, it rarely loses its value over time. Where other industries are often sensitive to changing trends (if you invested in tech companies 20 years ago, many of those companies don’t exist today), real estate, as a tangible asset, is more likely to retain its value or are appreciated over time. finished.
What trends do you see emerging in the Toronto housing market as we emerge from the pandemic?
For a brief period, many people believed that the city’s long-established urbanization patterns were going to change due to the pandemic, which was a myopic view of the situation, although understandable given that a global pandemic is not something that anyone. of us have ever had. experienced before. What we are seeing is that people are not suddenly changing the way they want to live; In addition, all the infrastructure and policies have been built to increase urbanization and densification. We are also seeing renewed interest in “sprawling living” with more people willing to consider suburban life than ever before, which has created an increase in demand for land-related housing in the GTA and exterior parts of Greater Golden. Horseshoe, in places like Shelburne, Ont. And Colgan, Ont., Where we are developing.
Will Toronto prices continue to rise? Will the bubble burst?
What is undeniable is that we have a legitimate supply and demand problem in Toronto. We will continue to see average prices across the GTA hold and rise, as demand for housing within the urban core continues to rise, buyers who can afford to buy a $ 1 million condo in the core are now willing to buy a home. with more space in other parts of the GTA, creating demand and driving up prices even in parts of the Golden Horseshoe region. Continued population growth will continue to fuel demand for homes, and given current supply challenges, this will continue to drive up prices.
In your opinion, what policy tools would be most effective in cooling the Canadian housing market to make it more affordable for average Canadians?
It is very difficult to cool the market in any meaningful way across the country. You are dealing with a complex problem due to the number of people migrating to Canada, coupled with a supply and demand problem and existing land limitations. We need all levels of government to come to the table with a variety of solutions. What I’ve learned from talking to many people across Canada, from longtime investors to first-time home buyers, is that affordability is one issue, but affordability is another – the ability to enter the housing market. first. Opportunities exist for governments to improve some of the existing programs. For example, new housing developments are charged HST, which is included in the sale price of a housing unit. The government could create strong incentives for first-time home buyers by reimbursing a larger portion of the HST on new-build homes to these buyers, effectively reducing the total purchase price of pre-construction homes. If similar incentives are provided through rebates or exemptions in the Land Transfer Tax for homes under construction, the combined impact of a consumer refund on HST and LTT could materially improve the affordability of new homes. This would not only help a person to access a home that they could not otherwise, but it would also help bring new supply to the market, generate additional tax revenue and create jobs.
What advice would you give to people looking to invest or buy their first home?
It used to be that people wanted to live in a specific neighborhood, and if they couldn’t live there, they stayed out of the housing market or waited until they could go where they wanted to be. Today it is more important to enter the market somewhere, even if it is not your preferred area, because it is not getting easier. Once you are in the housing market, it is easier to stay in it and move to a different area, because you are capturing appreciation.
What Greybrook projects or investments are you excited about?
We are involved in the development of a variety of housing projects, from affordable rental apartments in major US urban centers, to townhomes in Durham, Ontario, and the highest-end luxury condos in Yorkville. We have a luxury development on the corner of Yorkville Ave. and Avenue Rd. That we believe will provide a standard of luxury and exclusivity in Toronto closer to what you might expect in Manhattan or London. At the other end of the spectrum, we are buying a large parcel of land in Lindsay, Ontario – 500 acres of land for 2,700 homes. These are two totally different developments for different markets, but we are equally excited about them.
What are the biggest challenges in real estate development?
There are so many moving parts and tug of war to real estate development that if you’re not really familiar with how they all work, it can create considerable risk. Manage municipal approvals, time, building design efficiency, and costs and revenues. Then there’s the marketing and careful management of your inventory and costs in relation to the project schedule. These are all things that we spend a lot of time focusing on with our developer partners, because that’s how you manage risk and ensure successful results for investors.