Disclaimer: Read this post at own risk, the content posted here is intended for entertainment only, not for providing information for transacting purposes and certainly not as an investment advice. Consult a legal professional. Investors, Buyers and Sellers should all consult a real-estate professional in person and discuss their wishes fully and thoroughly with him or her. Call Yossi at 416.441.2888 x 678 for a free one-on-one consultation.
Part Five: The Developers’ Dilemma
In this series, I was discussing the shockwave to follow the great blast of the sub-prime crisis. Have we not felt anything yet in Canada? oh yes we have and we are, and if you are not aware of this you’re blind to reality. Here is a short re-cap of what we’ve learned so far (the complete series is in VIP section, under Articles):
Part 3 – 10-point prediction (so far it seems I’m on the right track, btw)
But I think there is Part 5… I’ve seen it in the last few weeks and I can tell you that from my own experience of dealing with buyers, sellers and developers on a daily basis, this is not over yet… it’s actually far from over. Read carefully, but make your own conclusions.
The two main issues I’ve been discussing recently are inventory levels and prices. Like any market, the Real Estate market is made of products, Buyers and Sellers. In a perfect world there is a an equilibrium and everyone’s happy ever after, but in Toronto there is chaos of condos at various completion stages, picky buyers, reluctant sellers and developers. This makes life for me as a Realtor very interesting and sometimes stressful, but that’s why I picked this occupation. You won’t find this complexity and challenges elsewhere.
So lets get into the The Developers’ Dilemma.
In his ground-breaking book The Innovator’s Dilemma: When new technologies cause great firms to fail, Clayton M. Christensen speaks about change and how failure to adapt to it results in terrible things to companies who can’t move on. For example, Kodak needs to adapt to 100% digital photography world, the music industry needs to adapt to digital downloads (few have, iTunes made it for Apple), and our fuel hungry society needs to adapt to living without fossil fuels.
Ignoring the future is futile. You’ll be destroyed if you can’t adapt. As a Realtor, I have avoided cheesy marketing and focused on writing quality content articles that cannot be found elsewhere, because the game of Real Estate is now driven by younger and younger people who want to know more about purchasing and investing, and they want to make smart decisions with their money.
But did the industry adapt? lets examine:
(1) Greening of buildings – more and more buildings are built with “green features” or LEED certifications. is this enough? ask Mr. Suzuki.
(2) Community areas – living in the urban centres makes social life very difficult. There is little chance to met new people and introduce yourself. Community areas, in my opinion, are key to societal longevity, but they are missing from most of the buildings we see today. I am a great supporter of community roof-tops, and I don’t like buildings that sell the entie rooftop for expensive penthouses. Why? b/c if you’re looking for a long-term condo investment, you should look for a bit of privacy and open air.
(3) Bicycle and Electric Vehicle Charging stations – if you wanted to buy a simple electric scooter, like this e-bike, you’ll find no place in your underground garage to plug it in. Since over 80% of the downtown lives in condos, that renders the electric scooter option useless. Builders should dedicate a parking spot with charging options for these vehicles, and older buildings should convert unused spaces to allow for charging.
(4) Autoshare and Zipcar parking – we see them around, but I believe they should be in eacha nd every building. If you don;t have a car and need to rent one to go to Ikea, you should have this option right in your building. I think it’s a great selling point as well.
(5) Improved security – from planning to implementation, condo security needs to be improved and utilize the latest technologies available to protect the residents. Again, a great selling point.
The list goes on, but you get my point: in order to create a great place to live, it is not enough to build a good lookin’ building. It must serve the residents beyond appreciation of value, and provide a great place to live for years to come. Will the developers answer to the call? nesxt time you are shopping for a new building, we’ll ask them what the communal features they are planning on providing.
Summary: from now on, more and more buildings will be sold based on quality of living, and not on appreciation, styled kitchens or finishes. Demand the best – the value of your investment will depend on it.
Looking forward to your calls and emails,
Yossi Kaplan, MBA
Sales Representative, Your Choice Realty Corp
885 Don Mills Rd suite 104
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