The Patz McMillan Team

These are the types of questions to ask now, so you have choices if the worst happens. This approach also ensures you are ready to take advantage of every situation in between. The answers lie in shifts in everything from ownership and taxation to population dynamics-data which is tracked and increasingly more available to consumers thanks to the internet:

Among the data Stephen Dupuis, Executive Vice President of the Greater Toronto Home Builders' Association (http://www.gthba.ca), analyzes are CMHC housing starts, New Home Sales information and figures from RealNet Canada Inc., which independently tracks monthly activity at the building site level. The GTHBA's 1400 members include land developers, home builders, professional renovation contractors, sub-contractors and financial firms.

Dupuis says the greatest shift over the years, with respect to GTHBA membership, may be traditional low-rise builders moving into the condominium market. From Great Gulf Homes to Fernbrook Homes and Greenpark Homes, developers who earned solid reputations building single-family homes have entered the condominium market.

"Builders are famous for trying to get market intelligence," said Dupuis, explaining that these professionals monitor market signals and adjust their development activity accordingly. With 800 low-rise and high-rise projects on the books across the GTA, it's obvious that competitive strategies and pricing are essential.

"The thing that has kept the GTA market so strong, so long, is that prices have been steady," said Dupuis. "By and large, if you look at affordability and demand--people can carry the houses as prices haven't spiked up like the '80s. They have increased on a cost-push model as builders' costs go up - prices must."

Since forecasts project real estate market changes as 'up' or 'down,' we must ask, "What is normal?"

"In the late 80's, early 90's, we did less than 10,000 homes in one year and then 15,000, 18,000 and then almost 40,000 for 7 years -- one year (1986) at 45,000 and now 7 consecutive years -- is that the new normal?," said Dupuis. "I'm not sure how sustainable that is, but we'll not go back to the days of 10,000 and 15,000. We're more likely to see a shift in the product the government is trying to encourage and promote."

In Ontario, the government recently announced housing policy that dictates intensified development to levels of 40 percent in every community to reduce urban sprawl. Reportedly, 80 percent of current intensification -- in the form of condominium development -- is centred in the GTA. It will take time or incentives, or both, before equivalent levels are present across the province although condominium development is increasing in suburban areas like Mississauga and Markham.

"That will help sustain the [condominium] market," said Dupuis. "Typically, the product proposed is more affordable. This may not be people's absolute preference, but it's affordable. If you want to get into the market, your choice is a condo, so that's your starting point. Or drive 'til you qualify, if you want a single-family home. If you want location, you will compromise on product and closeness to the core."


Written by PJ Wade