story by Marc Huminilowycz ❧ illustration by Robert Carter
Does the current seller’s market in the region apply to new home sales? What types of new homes are today’s buyers looking for? How much does the success of development projects depend on the current real estate boom in the GTA? Does the Growth Plan for the Greater Golden Horseshoe impact Southern Georgian Bay?
On The Bay spoke with two representatives from the non-profit Georgian Triangle Development Institute (GTDI) to get their insights into the current state of residential developments in the region: president Andrew Hill, who is senior director of architecture and construction with Starwood Hotels and Resorts Worldwide, and director Christine Brennan, president of Windstone Real Estate, a brokerage specializing in residential development sales and marketing.
How is the current seller’s market impacting new home sales?
“We are experiencing the tightest seller’s market in 10 years,” says Christine Brennan. “This is the best time for developers to capitalize on the opportunity by finding the ‘sweet spot’ and customizing finishes.” That being said, Andrew Hill cautions that the development community, faced with the challenge of absorption, is resisting building too much inventory without sales in place.
“The GTDI works closely with area municipalities to advocate for good development policies and costs – our industry’s most significant challenges to meeting the demands of the current strong buyer market,” says Hill. “Our members have experienced long and costly approvals, high development costs and outdated planning policies. Much needs to change. Thankfully, we are now seeing positive efforts to improve municipal policies and attitudes.”
What are buyers looking for in new homes in our region?
According to Brennan, the types of homes being built vary according to demographics. “For example, we are experiencing a huge migration of empty-nesters from the GTA who are transitioning and right-sizing,” she says. “Embodying lifestyle is paramount here. There is a lot of time and effort being put into developing a product that caters to the diverse market.”
Hill agrees. “Lifestyle, amenities and features are the focus and target for new home development here,” he says. “In order for developers to deliver the right product, price points are being driven up. This reality is sustainable for the long-term prospects of new home development in our region.”
Is the Southern Georgian Bay new home market married to the GTA?
Not necessarily, says Hill, who believes that our market, while significantly influenced by the GTA, is not completely dependent on it. “A seller’s profit from their GTA home sale can position a buyer relocating here to spend more on their purchase,” Hill explains. “This will continue to drive our new home prices up.”
Brennan agrees. “Because we draw from such a diverse population, from young families to active empty-nesters, we are not dependent on one market segment,” she says. “As prices in the GTA go up, the trend will continue to drive demand here, and we will follow. We have to continue delivering the product.”
But what if the GTA bubble should burst, as some real estate experts are predicting? Will people still keep coming? “If this should happen, market prices here will likely see moderate softening, but in my opinion our lifestyle assets will continue to be attractive and drive sales,” Hill says. “We are working with local municipalities to help us be prepared for changes in economic cycles. I believe that we will continue to grow. The real estate bubble may burst in the GTA, but not here.”
Noting the “massive price difference” between average home prices in Southern Georgian Bay ($335,000) compared to the GTA ($622,000), Brennan believes that our region will continue to attract GTA buyers because of the relative affordability of new homes here, combined with all of the lifestyle amenities that our region has to offer.
The Growth Plan for the Greater Golden Horseshoe is mandating higher-density development with mixed housing types. How does that impact new developments here?
The time-honoured single family home on a large lot may be a thing of the past in the GTA – and, for that matter, in the Town of Collingwood. While some Collingwood developers were previously approved for single-family communities, new projects in town must abide by the Growth Plan requirements. A case in point: the Linskview subdivision approved by council last December for 600 units including semi-detached homes, townhomes, single family homes and a 190-unit apartment building. “Some local municipalities are trying to implement density policies, but mixed-use development may not apply to our region because we are rural and therefore not the norm,” says Hill. “It’s a question of economics. High development costs and a long approval process may necessitate higher density development, with more condos becoming an economic reality. But there is a risk that this type of development may not be targeted to the demands of buyers here,” he says.
Brennan adds that demand for single-family homes could wane in the near future, making way for more condo developments in the region. Citing the quick sell-out of the Collingwood Library condo conversion as an example, she notes that many retirees are looking for convenience and want to be near amenities.
From single-family homes to townhomes and condominiums, Southern Georgian Bay developers are fine-tuning their residential offerings to deliver the right products that cater to a broad and diverse range of buyers – primarily from the GTA, but from other parts of Southern Ontario as well. With a red-hot GTA real estate market and a seller’s market here, demand for new housing – and its price tag – will likely continue to increase in the coming year.
