July 21, 2021Tight Supply Drives Condo Values
By Barbara Lawlor
CEO Baker Real Estate Ltd.
Don’t talk to Barbara Lawlor about condominium apartment investments that have negative cash flow or don’t pay for themselves with rent. She said that doesn’t mean the boom is anywhere near over. The chief executive of Baker Real Estate, which has sold more than 100,000 condos since 1983 and is perhaps greater Toronto’s most prominent broker in the presale business, said demand could keep going, based on a formula that bets on appreciation. We are definitely in a market where demand is exceeding supply,” Lawlor said in an interview, adding investor appetite is driven by a belief that capital appreciation will grow even as rents slowed during the pandemic. ”Prices will continue on the upward trend,” she said. In truth, condo prices in Toronto have been disconnected from income since well before the pandemic, based on a belief there will always be another buyer, which critics claim is pure speculation. Lawlor pointed to demand drivers such as increased immigration and family money backing purchases by young adults, with developers unable to keep up.
Baker Real Estate is the broker of record on the M4 project in Mississauga, Ontario. (Baker Real Estate)
Seen It Before
Lawlor since the 1990s has worked for Baker Real Estate, founded by Pat Baker in 1993. That’s a tenure spanning the Great Recession, and she points out she has experienced a significant market correction. “Everybody took their toys and sat around, and then they came back,” said Lawlor, who added that these days record immigration to Canada expected under a federal Liberal government can do nothing but put pressure on the market. Lawlor said about 70% of a building is typically presold before a developer can even get construction She said the federal government’s 1% annual tax on foreign owners of vacant residential real estate is not hurting sales.
Baker Real Estate Inc.
Project Sales and Marketing
For over 20 years, Baker Real Estate has set the benchmark in Canadian real estate – providing exemplary services to a broad range of clients with integrity, expertise and passion. With nearly 2 billion dollars in annual new home and condominium sales, Baker is one of Canada’s most successful real estate companies, specializing in project marketing and sales of new home and condominium communities, including condominiums, townhouses and single-family homes as well as hotel condominiums and resort properties.
The company provides pre-construction sales and marketing expertise to prestigious projects throughout Canada and the United States and has particular expertise in turning around challenging projects.
Baker has incorporated their vision of global breadth with local depth into the international real estate market as well. Today, the company’s e-sales offices around the world offer up-to-the-minute sales and client information that is unparalleled in the industry.
“We saw some impact in Vancouver [from municipal and provincial tax measures] but not anymore,” said the Dublin-born executive. “First of all, what are foreign buyers? Mostly we are talking about multicultural buyers. International buyers make up 4% to 6% of our buyers, and that’s looking back over many years of data.” The Canadian Real Estate Association’s most recent statistics show the average house sold for $688,000 in May, up 38.4% from a year earlier.
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Peerage Realty Partners is a subsidiary of Peerage Capital Group.