Doom or Boom
The last 12 years, by and large, have been a phenomenal period of growth for Toronto. It was recently reported in the Globe and Mail that most cities are fortunate to have one 5-star hotel open every 10 years. Toronto has seen the Trump, Ritz-Carlton, Shangri-La, and Four Seasons open for business with 5-star world-class properties all in the last 1 ½ years. This is unprecedented, for a New York City or a London, but for a city like Toronto, it is nothing short of incredible.
In addition, virtually every Toronto art institution has received significant upgrades, additions, or new properties over the last decade. The arts are alive and well in our fair city.
The condo boom has brought unbelievably prosperity and change. Hundreds of thousands of new homes and rental accommodations of an incredible quality and style have been successfully built. More will be completed soon. On the coattails of this human reorganization to the city’s core has come a dozen new significant office towers, creating tens of thousands of professional white-collar quality jobs, unprecedented for a city of Toronto’s size.
Further evidence of Toronto’s arrival is the opening of ‘The Soho House’ – a world arbiter of style and prestige that exists in just a few enviable cities – LA, New York, Miami, Berlin, and London. Not a bad list for a city to join.
While this great rebuilding of Toronto largely is over, a new era is set to start. It is unlikely that any new 5-star hotel will open in Toronto over the next decade as we are now well served. We will not see 25,000 condos built next year, or the year after, and fewer office buildings will be announced over the next 2 years. We have transformed Toronto into a world city; a city that is talked about in all corners of the planet. A place worth of envy. A place people want to live in and visit to.
It is not over for Toronto, this is really just a beginning. China will still need to feed and house its population, and continue to move its people into some form of middle class. This goes for most of Asia, South America, and Africa. The United States economy has started to roll. I can you tell without a word of a doubt that the U.S. real estate economy is clearly recovering with prices significantly higher than the bottom experienced two years ago. Europe will struggle but it too will get its house in order over the next 2-5 years. Toronto is in great shape, and in a fine position to benefit from the new U.S. growth and the growth of the third world’s population into a form of a middle class.
While we will see a slower Toronto real estate economy, it will still retain strength. It will need to house 60,000 new households per year from new immigrants alone. It will continue to attract international money into SAFE real estate as one of the world’s few real opportunities. It will create jobs from a recovering U.S. economy, and that will encourage the new and already employed to buy homes and investment properties. Our downtown core will continue to populate and great new entertainment choices will emerge. We will continue to enjoy very low interest rates for many more years, and that too will encourage and stimulate the Toronto real estate market.
You may choose to bet against Toronto, but you will lose. You heard it here first.