The Brampton Condo Market is getting Crushed in today’s top 3 Condo investment markets

The trifecta of economic and political factors that have occurred to create an unusual opportunity to invest in the Brampton condo market. Further RIOCAN, the Master mall builders of Southern Ontario, are devising a Residential development plan in Uptown Brampton that will take the Region by storm.

Massive Mixed-Use Proposal for Shoppers World Brampton | UrbanToronto
Courtesy of UrbanToronto Click here for more info

Covid has taken the Greater Toronto Area real estate market by storm

In the Covid era there are a few pillars to understand:

  1. Houses with backyards and parking are in very high demand.
  2. Builders have been hit with a flurry of demand.
  3. City Council for all GTA cities have been too busy dealing with Covid health demands to shift.

How Covid has affected Brampton Real Estate

Brampton is a city known for its melting-pot starter home community that allowed many first-time buyers to get into the market.  Brampton has benefited by its unusually wide suburban sprawl of detaches, which Pre-Covid were selling in the 700,000s have now cracked One Million Dollars.

According to real estate brokerage Zolo, as of March 10, 2021 the Average Price is $1,023,973 with a median days on market of 7 days. This represents a 23.3% year-over-year increase in property value. Click here to read the stats.

Covid started with a lull in activity then the Builder’s had a problem

Builders at the beginning of Covid closed doors to keep staff safe and they knew construction deadlines would be stretched as construction crews stayed home to stay safe.  Sales stopped.  Then something strange happened.  Buyer after buyer started to call the Sales Centre seeking homes to buy.  The interest escalated over the Christmas holidays and reached a Crescendo in February, 2021. 

According to TD Economics, In February 2021, Canadian home sales rose by 6.6% month-on-month, building on January’s 2.5% gain. On a year-over-year basis, sales were up a massive 43%. Click here for details.

City council didn’t know what hit them during Covid

While cities have been dealing with crisis after crisis with Covid prevention in public places and managing the health crisis in hospitals, city councils in the GTA have taken their eye off new home building permits and new development plans.  This includes major metropolises like Vaughan, Brampton, and Mississauga.

INVESTMENT HINT: The opportunity is to buy Post-Covid at Pre-Covid prices.  City planning activities stopped by City Council therefore the deals that were coming in the pipeline are now delayed in a Post-Covid world.

Brampton has reached a Trifecta of an Investment Opportunity

  1. Delayed City Council approvals thus a blocked pipeline for years,
  2. Delayed construction activity thus slowing delivery in the next 12 months, and
  3. New affluent detach home owner as result of the Covid boom from current sales and refinancing activity.

Case-in-point: Shopper World in Brampton’s 2040 Vision

Brampton's 2040 Vision depends on it – Peel Region Review

Click here to access Brampton’s 2040 Vision. Its is an aggressive plan that Brampton is pursuing. One of the areas labelled as UPTOWN is working with participation of one the largest and most influential real estate REITs in Canadian History, RIOCAN. 

Wasn’t RIOCAN hurt by the Retail fallout of the Pandemic? 

Yes, but its leader, Ed Sonshine, had already steered the company in another direction-  Multi-unit residential construction and thousands of units already in the pipeline across Southern Ontario.  Further, the “Covid shift” in retail at Shopper’s World at Steeles and Hurontario will accelerate development of the City of Brampton’s Utopian vision of a “Sustainable, walkable and transit-oriented community” come to life.

RIOCAN’S VISION FOR SHOPPER’S WORLD

Riocan's plan for an integrated mixed-use community at Shoppers World  Brampton | The Pointer

The property has 4.5 million square feet of future excess density, which will be formed by the construction of four new streets to house approximately 5000 new housing units with green spaces, cycle paths and the much-needed affordable housing.

Why’s Haven’t we seen any Recent updates?

What’s causing RIOCAN to tread lightly?  The already 140 existing retailers with varying leases and 3000 parking spots providing shopping for a diverse diaspora of Bramptonians.  This is where Heritage, Culture and Functionality meet Economics, Finance and Construction through multiple phases that could take decades to come to full fruition. Not to mention the city is fighting a Pandemic which has forced Peel Region into Lockdown for almost a year.

WHAT IS THE INVESTMENT OPPORTUNITY?

My favourite quote from the World’s Greatest Investor is be “fearful when others are greedy, and greedy when others are fearful.”- Warren Buffet

While Pandemic fear drive’s sales of detaches, look at what’s being avoided.  What is that?  High rise condos!!!

Condominiums pose the great return Post-COVID more than any other real estate type

Condo values took a beating during 2020 with a drop of almost 25% in prices traded on MLS and Off-market assignments downtown Toronto.  Brampton has always had a lukewarm attitude to condos because the attitude was “Why do we need condos when houses are still so affordable?”  Well that question became a stupid one in 2020 as affordability completely eroded in Brampton for low-rise.  As a result condos have become the only affordable home in Brampton. Can you say “deal”?

So where have condos not taken off?

What’s currently happening at the Steeles and Hurontario corner? A small local builder is taking “first-mover advantage” and developing 290 units to be delivered in 2023.  This builder built the townhomes already completed south of Steeles.  Preconstruction sales launched in March 2021 are about $700 per sqft.  Compared to $1000 per sqft at Square One Mississauga at EX2 (Click here for more info), and looking at downtown Toronto selling preconstruction in the $1300 per sqft range, its obvious where the better value is.  Want to understand more about the development potential of Brampton and more specifically Uptown Brampton?  Well there is some research and street-smarts required in looking at deals, which include understanding the builder, the local area expansion and population trends in the area. Uptown Brampton possess some amazing upside to investigate further!

About the Author: Randy Ramadhin is a condo expert, authoring a Wiley Published booked titled “Investing in Condominiums, Strategies, Tips and Expert Advice for the Canadian Real Estate Investor” and has been advising investors in the GTA real estate market for over 20 years.  Randy is a graduate of the Rotman School of Business at U of T, Seneca College and UBC’s Sauder’s School of Business with a Real Estate Broker’s License, Mortgage Brokers’ License, a former member of the Appraisal Institute of Canada.  Randy has recently completed the Proficiency in the Exempt Market Dealer course mandated by the Ontario Securities Commission.

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