Toronto Luxury Real Estate: Chestnut Park Symposium
On Friday, October 19th, I had the pleasure of attending the Chestnut Park Symposium at the Crow’s Theatre, nestled on the ground floor of The Carlaw, a Streetcar Condo development in the heart of Leslieville. It was a full day of learning with some interesting speakers so I thought I would share some of the insights.
The first speaker was Monica Esteves, Managing Director of the Crow’s Theatre. It was nice to hear the story of how this theatre found its permanent spot in Leslieville. The city of Toronto Planning Act Section 37 states that any Toronto development looking to increase density must provide a “public benefit”. Toronto has benefited from this section of the act extensively through innovative art installations, new parks, playgrounds and dog parks, but a theatre space is very unique.
There was an extensive feasibility study to determine that Leslieville was an under-served market for cultural venues of any kind. With its demographic of the greatest number of people between 30 and 60 years of age, along with the greatest number of households with kids under 6 years of age, Crow’s Theatre felt Leslieville was a great spot to put its roots. The local city councillor at the time was thrilled to work collaboratively to get this cultural space built and introduced Monica and her team to the Streetcar Condo developer. It became clear this theatre was a great match and in fact the developer was so enthusiastic about what a contribution the theatre would make to this condo development they ended up altering the ground floor plans to accommodate it. Crow’s Theatre provides children’s programs, hosts condo corporation meetings and offers local residents subsidized ticket prices for their shows. It is a true example of a business, developer and government working in unison for one common goal, and they managed to raise $12 million for the project. Gentrification is often seen as a negative, but the introduction of these condo developments into a previously industrial area has brought new life and culture to the community. Note that Leslieville real estate sales and price increases continue to outperform the other neighbourhoods in Toronto and this theatre has become just one of the many selling features for the area.
Dann Conn of Christie’s Real Estate spoke about the significance of the brand and the extensive network of real estate companies that are affiliated with Christie’s Real Estate around the world. I had heard a lot of what he had to say at the Christie’s conference in New York City last month. One key point to note is that Hong Kong surpassed LA this year as the most expensive city in the world. Another fun fact he mentioned was that LA currently has the first ever billion dollar luxury real estate listing, a parcel that is 157 acres of land.
Tim Hudak, CEO of the Ontario Real Estate Board (OREA), was up next and educated us on the many changes that are coming to the real estate industry. The industry has already seen a few hurdles along the way, with the introduction of the double land transfer tax in Toronto about 10 years ago. Then the the Fair Housing Act came in spring, 2017, and finally, a new stress test for mortgages came into play this past year in an attempt to curb house prices and protect buyers when they go to refinance in a higher interest rate environment. The affordability of homes in Toronto is a key issue for OREA and they truly want to address it. Unfortunately, the government intervention seems to have limited the supply of homes and increased rental prices despite the rent control put in place. There are still not enough rental-purpose buildings in the city and developers will not build them as long as there are capped rental rates. It is very simple: increase supply and prices come down in an open market. Many homeowners are staying in place; the transaction costs don’t make moving feasible so they just renovate their existing homes. Interest rates are creeping higher which could curb the market, however immigration of 100,000 people yearly to Toronto, increased road congestion and lack of efficient public transit seems to trump any attempt to curb prices. Demand for central Toronto remains strong.
I did suggest to Tim Hudak that we should abolish the Toronto Land Transfer Tax and instead increase property taxes across the GTA to offset the revenue loss and add the toll to the Gardiner Expressway as pay-for-use tax. To me, this would open housing inventory as people may choose to sell and buy a new property as the transaction costs would not be so daunting when you buy the new house. Tim said Toronto City Council would never agree to it as they are way too dependent on the LTT revenue and it would be politically unpalatable to raise everyone’s taxes (in other words political suicide to do an across the board property tax increase).
Tim Hudak also mentioned there are changes coming to the Real Estate and Business Brokers Act (REBBA) to protect the consumers. The details can be found on rebbareform.ca
- Builders will need licensed sales people to work at their offices stopping the builder loophole
- Remove licenses of any fraudulent real estate sales representative
- Increase fines for real estate representatives and brokerages that break the REBBA or RECO acts
- Prosecute unlicensed operators
- Ensure the mandatory update courses for licensed sales representatives rather that the current online continuing education
- Allow realtors to incorporate to receive fair tax treatment
- The one the got the most news….Allow sellers the option for a transparent bidding process that would disclose such details as price, deposit, close and other details. (I personally don’t think it would change the ultimate sale prices, however I do feel it would make buyers a little more comfortable with the process)
Tim closed his comments by telling us about a website that provides information about how to make homes more affordable to first time buyers. He really wants to see a more generous first time buyer Land Transfer Tax break. For further details on OREA’s work to help first time home buyers go to keepthedreamalive.ca
Joe Oliver, Chairman of Echelon Wealth Partners, spoke quite controversially about Canada in a Trumpian Era. He had some interesting points about the economic benefits Trump has brought to the US despite his abrasive personality. He is a little worried that Canada should not antagonize the US President as he is extremely sensitive and it could be to our detriment. Joe felt we squeezed through the trade discussions ok, thankfully, but there were a few things buried that he was concerned with, particularly the fact that the 25% steel and 10% aluminum tariffs were not removed. He did say he was not happy with Chrystia Freeland’s line, “No deal was better than a bad deal,” as if it would have been catastrophic had we not come to an agreement. Oliver feels we have a real problem in terms of our oil and gas exports. We currently only ship to the US and the US then ships at higher prices to the rest of the world. Canada is currently subsidizing this industry for the US.
What became quite controversial were Oliver’s comments about the Carbon Tax. He had done the math and felt the benefit to the planet with this Carbon Tax implementation was insignificant to the big picture. Chris Kapches had a great point that Canadians have a moral compass that trumps the fact that the benefit is so small. We should do our part to help the planet. Oliver did remind us that the bulk of the bad emissions are in the developing world as they are using coal for energy. It is really too bad the developed world cannot provide some innovation to the developing world to prevent history repeating itself elsewhere. We have virtually abolished coal plants in Canada and “smog days” are essentially a thing of the past.
One of the most interesting speakers was Kerry Harris, Principal of Reboot, who gave us the lowdown on branding. It was quite interesting and gave me some insights into how I should work on my brand. It is very hard to separate yourself in this competitive world of real estate, and she had some great ideas.
All for now!
Helen Braithwaite, Real Estate Representative Chestnut Park Real Estate Limited.