The American Dream is Dead
By Ben Myers, Senior Vice President, Market Research and Analysis, Fortress Real Developments
In October I had the honour of being one of the keynote speakers at the prestigious Emerging Trends event hosted by PWC Canada and ULI Toronto. I spoke about the new residential market in key metropolitan areas across Canada, shared my thoughts on the current market conditions, and summarized the opinions of other top real estate analysts on the prospects for 2015.
After the presentation, there was a question and answer period featuring the three speakers, and I was asked about the continuing urbanization trend occurring in major markets across Canada. I started off by proclaiming that my firm is one of the most bullish firms regarding the ‘return to downtown’ movement, as we have urban condominium apartment projects in Calgary, Edmonton, Regina, Winnipeg, Toronto, and Ottawa. Quite off-the-cuff, when asked about affordability and constantly shrinking unit sizes, I declared that the American Dream is dead. Let me explain that rather a blunt statement. The desire among young people for a single-detached home in a quiet neighborhood with a white picket fence and a small back yard has been subsiding; the new dream for first-time buyers is a condominium with hardwood floors, 9 ft ceilings, granite countertops and modern finishes, something like the ‘Stainless Steel’ dream.
Just as important as the interior suite finish of a condominium, is the neighborhood in which it resides. It is so important for this generation of buyers to be connected in more ways than one. Are they connected to their friends by living close by, are they connected to work by having transit within walking distance, and most importantly, are they connected to their phones? These buyers don’t want to sit in traffic to get anywhere, that would be a waste of time, and that would mean they are disconnected.
How does a real estate investor take advantage of these trends? How can you ensure the building you buy into will meet the needs of your prospective tenants over the long-term?
In the future, I predict that resale listings for condominium apartments will include the building’s download speeds, as this desire for instant connectivity grows, and the need for additional bandwidth widens. Imagine watching Netflix or Hulu on your TV, surfing the web on your tablet, responding to emails on your phone, and controlling the blinds, stove, lighting, coffee maker and other appliances on your Wi-Fi universal remote. Sounds futuristic, but it is probably not too far off.
Can older buildings accommodate this condo of the future? New buildings with new wiring, the best broadband, better project amenities and suite amenities, green features, and direct transit access will likely be the condos that satisfy the demand for connectivity and the ‘Stainless Steel’ dream. The advantages of buying a new condominium become more apparent when you have an eye to the future of living among our nation’s youth.
Affordability, adaptability, connectivity, and shareability are buzzwords that you will continue to hear this decade. Ensure that your investment strategy considers these key emerging trends. Think just as much about the neighborhood and the area’s potential as you do the actual suite itself.
Fortress Real Developments partners with residential and commercial builders across Canada, and Ben assists in evaluating both the market conditions and projects that Fortress is active in. Follow his blog posts and commentary on the Canadian Housing Market at www.fortressrealdevelopments.com/news or follow him on twitter at @BenMyers29