The latest episode of the Livabl Launch Podcast features an insightful interview with Cara Hirsch, founder and CEO of Hirsch + Associates.
Cara is a real estate aficionado with over a decade of experience helping some of the GTA’s most notable builders successfully bring their projects to the market. Leveraging expertise honed by growing up in a real estate family, Cara built on her formative years by establishing a company defined by passion, collaboration and a hands-on approach.
Tune in as Cara and Matt chat all things real estate investment – from Calgary’s hot market to some of the challenges facing investors and developers in Ontario.
Here are some highlights from the episode:
On the pre-pandemic condo launch lineups:
“I don’t think that frenzy is normal – from a salesperson who has launched and had those lineups. So, it is a little bit concerning in a sense that it wasn’t normal in a normal market. However, I think what happens is people are very much influenced by what others do, whether it’s the media talking about it, whether it’s their friends, and I believe that real estate is a long-term play. So, you’ve got to buy it and you’ve got to make sure it works for you. Buying it to just assume that you’re going to flip it into three years – that’s where a lot of people are getting into trouble now.”
On what would bring investors back to the market:
“I think what’s going to bring investors back is a few things. One is the difference. There’s a huge gap between resale and preconstruction pricing right now. It’s massive. I think that needs to come down to be close to our levels of price point, for an investor to really feel that it makes sense. And I think in order to do that, we need to talk about why our preconstruction prices are so high. It’s because land costs are really high, construction costs are high – they’re starting to go down a bit, but the moment development starts going up again, we know it’s going to go back up. And the biggest thing is government taxes. Over 30% of that cost of your condo is government taxes. And a lot of consumers don’t know that. So, if we could start reducing those that could help bring down prices substantially.”
“I don’t think I don’t think one rate cut is going to do it. I think we need to see multiple rate cuts to see people coming back because we need to get that Bank of Canada rate down to three, three and a half percent, I think I do think that we need to look at this holistically as there’s multiple other factors that are causing affordability issues.”
On why Calgary is such a hot market right now:
“The best way to describe Calgary is the Florida or Texas of Canada. When we talk about you know, taxes from the government, they’re next to nothing in Calgary. There’s no developer closing costs. You’re not paying the massive fees we’re paying in Ontario with development, which means that your prices are lower. And the biggest thing about why Calgary is so hot is they’re seeing a massive number of people from Ontario and from BC migrating to Alberta, and most of them are landing in Calgary.”
“A lot of these people, if they’re coming from Toronto for example and they have a condo that’s worth a million dollars – they can go buy a house, a white picket fence Canadian dream house for $400-600,000. Even now if it’s $700,000 they’re still paying a cash. They’re not even taking mortgages. So, it’s that affordability.”
