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The Toronto skyline is a testament to ambition and growth, with new cranes constantly appearing, promising the next great place to live and invest. For savvy investors, pre-construction condos offer a powerful opportunity to build wealth. You can secure a brand-new property at today's prices, benefit from modern layouts, and watch your investment appreciate long before you even get the keys.

However, the path to pre-construction success is paved with complexities that can trip up the unprepared. Construction delays, confusing cost structures, and intricate legal contracts can quickly turn a dream investment into a financial headache.

As a real estate professional deeply embedded in Toronto's pre-construction market, my role is not just to get you "platinum access" to the hottest projects. It's to empower you with a sophisticated due diligence process that protects your capital and maximizes your returns.

This is your ultimate checklist. Use it to navigate the pre-construction landscape like a pro and make your next investment your best one yet.

Part 1: Invest in the Builder, Not Just the Building

A glossy brochure and stunning renderings can be captivating, but the single most important factor in any pre-construction project is the developer behind it. Think of them as your long-term business partner. Their track record, financial stability, and reputation for quality are paramount.

Your Due Diligence Checklist:

• Track Record is Everything: Has the developer completed past projects on time? Search for news articles or online forums discussing their history with delays or cancellations.

• Quality Control: Visit their previous buildings. How have they held up? Are the common areas well-maintained? If possible, speak to residents about their experience.

• Reputation Check: What do third-party rating organizations say? Check their standing with the Better Business Bureau (BBB) and their Tarion warranty record for any major claims.

• Legal Scrutiny: A quick search can reveal if the developer is facing any significant lawsuits or liens that could signal financial instability.

Part 2: Location, Location, Future-Location

You're not investing in the neighbourhood as it is today; you're betting on what it will become in 3-5 years when your condo is ready. A deep dive into the area's future growth drivers is non-negotiable.

Your Market Analysis Checklist:

• Follow the Growth: Look at the City of Toronto's official plans. Are there major infrastructure projects planned, like new subway lines (e.g., the Ontario Line) or GO Train expansions? These are magnets for future demand.

• Job Market Hubs: Is the location near growing employment centres like tech hubs, hospitals, or university campuses? A strong local job market ensures a steady stream of potential tenants.

• Lifestyle & Livability: Proximity to grocery stores, parks, restaurants, and good schools is crucial for attracting high-quality, long-term tenants.

• Rental Market Health: I'll provide you with data on current rental rates and vacancy levels in the area to project your potential cash flow with confidence.

Part 3: Uncovering the True Cost of Your Investment

The purchase price is just the beginning. A common mistake for first-time pre-construction investors is underestimating the full spectrum of costs. Let's create a comprehensive budget to ensure you're financially prepared for the entire journey.

Your Full Cost-Breakdown Checklist:

• Deposit Structure: Understand the detailed payment schedule. It's typically spread out, but you need to be ready for each installment.

• Closing Costs Uncovered: Beyond legal fees, you'll have development levies and land transfer taxes. It is crucial to have your Agreement of Purchase and Sale reviewed to see if these levies are capped.

• The Investor HST Obligation: For an investment property, you will be required to pay the HST portion upfront on closing. However, you can apply for the HST New Residential Rental Property (NRRP) Rebate if you have a one-year lease in place. This is a critical cash flow consideration.

• Interim Occupancy Fees: This is the period where you can occupy the unit (or rent it out with the builder's permission) but don't yet own it. You'll pay a monthly fee to the builder that covers interest on the outstanding balance of the purchase price, estimated property taxes, and condo fees.

• Financial Stress Test: I always recommend speaking with a mortgage broker who specializes in pre-construction to plan for potential interest rate changes between signing and closing.

Part 4: Decoding the Fine Print: Your Legal Shield

A pre-construction Agreement of Purchase and Sale is written by the developer's lawyers, for the developer's benefit. It's vital to have an experienced real estate lawyer review it during your 10-day cooling-off period.

Your Legal Review Checklist:

• The Assignment Clause: This clause dictates if, when, and how you can sell your contract to another buyer before the final closing. This is a key potential exit strategy and the terms must be crystal clear.

• Builder's Right to Change: The contract will give the builder the right to make "material changes." Understand what they can alter, from floor plans to finishes.

• Delay and Occupancy Dates: Note the "outside occupancy date." This is the latest date the builder can deliver the unit without penalty, providing you with a clearer timeline.

• Tarion Warranty: Your investment is protected by the Tarion warranty. Understand the one, two, and seven-year coverage to protect yourself from defects.

Part 5: Aligning Your Investment with Your Life Goals

Finally, why are you making this investment? Your end goal will shape every decision we make, from the type of unit you buy to your long-term strategy.

Your Strategic Planning Checklist:

• Define Your Goal: Are you looking for a quick profit via an assignment sale, or are you aiming for long-term rental income and appreciation?

• Tenant-Focused Design: If it's a rental, we need to analyze the floor plan's efficiency. Does it have a good layout, desirable exposure (e.g., south-facing), and features that appeal to tenants?

• Cash Flow Projections: Let's forecast your carrying costs (mortgage, condo fees, property taxes) against potential rental income to understand your monthly cash flow.

• Exit Strategy: Plan your exit from day one. Will you hold for five years and then refinance? Sell after ten? Having a clear plan brings discipline to your investment.

Ready to Invest with Confidence?

Navigating the Toronto pre-construction market requires more than just access—it demands expertise, foresight, and meticulous attention to detail. By using this checklist, you're already ahead of the curve.

If you're ready to explore pre-construction opportunities and want a trusted advisor to guide you through every step of this process, let's talk.

In May 2023, Toronto City Council made a pivotal move by amending zoning laws and policies to encourage housing development. This change was part of the broader 2023 Housing Action Plan aimed at fostering inclusive, sustainable communities throughout the city. However, despite the green light for these projects, the real estate industry faces challenges, including high borrowing costs, slow municipal adoption, and a lack of knowledge on how to fully benefit from these changes. With interest rates finally beginning to drop, there’s renewed optimism, and a critical question arises: have we found the missing middle?

What is the “Missing Middle”?

The concept of the “missing middle” refers to a gap in housing types between high-rise condos and single-family homes. Multiplex development could be the key to filling this void. Unlike large-scale developments, multiplexes are smaller multi-unit properties that are constructed more quickly and efficiently. With new zoning regulations in place, these projects are gaining traction as an effective solution to Toronto’s housing shortage.

Advantages for Homeowners and Landlords

For homeowners, multiplex development offers an opportunity to maximize the use of their property. As property taxes and living costs rise, many homeowners are looking for ways to generate extra income. Building a multiplex, such as a triplex, can provide additional rental units, creating a steady revenue stream. Moreover, it opens up possibilities for intergenerational living, allowing families to build separate units for elderly parents or adult children, all while staying close to home.

The Developer’s Advantage

For developers, the shift towards multiplex projects offers a unique opportunity in a market that has seen condominium development slow down. With Canada facing a housing deficit projected to reach 658,000 units by 2030, smaller-scale developments like multiplexes are becoming more critical than ever. Toronto’s new policies allow these developments in residential neighborhoods, opening up new possibilities for developers. The speed of construction, supported by streamlined permitting processes, makes multiplexes an appealing option for developers looking for quicker returns on investment.

Lending and Investment Opportunities

While larger financial institutions are cautious about funding smaller projects, multiplex development presents an opening for alternative lenders to step in. These lenders can support mid-sized developers, helping bring necessary housing to market. For investors, multiplexes are becoming a more accessible option, offering an affordable alternative to high-risk condo investments. With favorable tax structures and shorter development timelines, multiplex properties are emerging as a compelling investment strategy for 2025.

Conclusion

Multiplex development offers a promising solution to Toronto’s housing crisis. With the right mix of small- to mid-sized developers, lenders, and investors, this type of housing could help bridge the gap between high-rise condos and single-family homes, solving part of the city’s pressing housing needs.

In today’s unpredictable commercial real estate landscape, Canadian investors are facing a range of challenges, from rising construction costs to shifting political dynamics. The CBRE Capital Lenders’ Forum, held on February 25^th in Toronto, brought together key players in the industry to discuss the effects of global tariffs, particularly those levied by the Trump Administration, and their potential impact on Canada’s real estate market. While panelists acknowledged the difficulty in predicting the outcome of these changes, they also highlighted several emerging opportunities for savvy investors.

The New Reality of Tariffs and Their Impact on Development Costs

Discussions focused on the uncertainty of how tariffs on U.S. imports, particularly construction materials, would affect the Canadian commercial real estate market. Many experts expressed concern that retaliatory tariffs from Canada could increase the cost of essential building materials, including steel, appliances, and HVAC systems. This could lead to a rise in development costs, especially in the residential sector. For developers, this could result in a 4% increase in overall development expenses, a figure that, while concerning, is not insurmountable.

However, industry leaders remained optimistic about Canada’s future in the real estate sector and focused on the importance of maintaining a pro-growth agenda in Canada, regardless of external factors like tariffs, highlighting the potential for internal reform to counteract some of the negative effects of global trade disruptions.

The Office Market: Repositioning and Reimagining Spaces

While many sectors of the real estate market are adapting to shifting economic conditions, the office market is also undergoing transformation. One notable success story is KingSett Capital’s repositioning of Scotia Plaza, a high-profile office tower in Toronto. With significant vacancies following Scotiabank’s relocation, KingSett and its partners invested heavily in the building’s renovation, transforming it into Canada’s first Zero Carbon Performance-certified office tower. The result? Full occupancy, with all of Scotia Plaza’s once-vacant office space now leased.

This success demonstrates the potential for investors to breathe new life into underperforming office assets through strategic repositioning and modernization. By focusing on sustainability, premium amenities, and high-quality service, investors can transform older office buildings into sought-after spaces for tenants, even in a challenging market.

Looking Ahead: A Bright Future for Canadian Real Estate

Despite the challenges presented by tariffs, rising construction costs, and geopolitical uncertainty, real estate investors in Canada remain optimistic about the long-term prospects of the market. While it’s crucial to stay informed and flexible, the Canadian market offers numerous opportunities for those willing to take a strategic approach. Whether through multifamily housing, affordable housing development, or repositioning office spaces, there is ample potential for growth.

In conclusion, Canada’s real estate sector may be navigating a period of uncertainty, but for those who take a long-term view and remain adaptable, the next decade could prove to be a lucrative one. For real estate investors, now is the time to act.

The Toronto office market is poised for significant growth in 2025, creating a unique opportunity for real estate investors. While vacancy rates are expected to remain high early in the year, industry experts predict a shift towards large lease deals and a flight to premium office spaces.

One of the most notable trends is the early lease renewals and expansions, as institutional employers regain confidence in the post-pandemic office landscape. For example, EY Canada recently renewed its lease at the EY Tower and expanded by 50,000 square feet. This deal, the largest of 2024 in Toronto, signals the beginning of a broader trend expected to gain momentum in 2025.

Experts predict that the office market will stabilize as the supply of premium spaces is gradually absorbed. The key to success for real estate investors lies in understanding the growing demand for high-quality office spaces in prime locations that are expected to outperform other properties. Companies are increasing their focus on modern amenities, sustainability, and flexible workspaces to provide a top-tier employee experience.

The EY Tower in downtown Toronto exemplifies this shift. Redeveloped into a 40-storey building with high-performance energy systems and luxurious amenities, it has remained at full occupancy. Its success highlights how well located, well-designed, and amenity-rich buildings are attracting long-term tenants. With demand for quality office space set to increase, investors with properties in desirable locations are likely to benefit.

While vacancy rates in downtown Toronto are still relatively high, the market is starting to stabilize. By the second half of 2025, leasing activity is expected to rise, driven by companies committing to longer-term leases after years of opting for flexibility. For investors, this means that the Toronto office market is heading toward healthier conditions, with more secure and predictable rental income streams.

In conclusion, 2025 presents a promising horizon for those investing in office space in the GTA. The ongoing flight to quality, combined with a stronger economic outlook and improved leasing conditions, positions investors for success. Now is the time to assess your portfolio and explore opportunities in Toronto’s premium office spaces.

A new townhome development in Ajax has been approved in just five weeks, drastically cutting down the typical approval timeline of up to 2 years. This quick approval will allow the 81-unit townhome project to be completed by 2026, rather than 2028, saving future homebuyers approximately $20,000 per unit.

The development, named “Time,” is being led by developer Marshall Homes and will feature three-storey stacked townhomes located near Rossland Road West and Harkins Drive. The site is just a short drive from the Ajax GO Station and close to the Greenwood Conservation Area, as well as nearby dining, shopping, and entertainment spots.

The land for this project has been vacant for decades. Previously, it was part of a development by Ajax Meadows, which fell into receivership after the original developers faced financial difficulties. Marshall Homes has stepped in with plans to build 81 units, a huge increase from the original proposal of just 27. The new homes will be priced in the low $600,000s, significantly more affordable than the area’s average price of $851,733 for attached homes.

The reason the approval process moved so quickly comes down to collaboration between the developers and the local government. After an initial meeting in August, Ajax’s Mayor Shaun Collier and planning staff worked with Marshall Homes to fast-track the zoning and development approvals. The project also faced little opposition from the community, with the only concern being potential traffic increases, which the developers are addressing with a traffic study.

One of the biggest benefits of this rapid approval is the cost savings. By bypassing unnecessary zoning requirements and reducing the approval timeline, the developers were able to avoid extra costs like interest fees, which would have been accumulated if the project had been delayed. As a result, future buyers will pay less for their homes, with an estimated $20,000 saved per unit.

Marshall Homes is now looking to build more projects in Ajax, hoping that this model of expedited approval can be replicated in other municipalities across Ontario. The success of the “Time” development shows that with the right planning and cooperation, new homes can be built faster and more affordably.

Mayor Collier emphasized the importance of projects like this, stating that they demonstrate how working together can lead to solutions for the housing shortage. By streamlining the approval process and removing unnecessary barriers, more homes can be built to meet the growing demand in Ajax and beyond.

Toronto has firmly established itself as one of the top cities for tech talent in North America, ranking 4th in a recent report by CBRE. Over the past five years, the city has experienced remarkable growth in tech jobs, with a particular boost from the growing demand for artificial intelligence (AI) skills. From 2018 to 2023, Toronto added nearly 96,000 tech jobs, marking a 44% increase. This surge has helped Toronto climb one spot in the rankings, now sitting just behind the San Francisco Bay Area, Seattle, and New York.

A major driver behind Toronto’s success is the increasing demand for AI expertise. AI skills are no longer exclusive to tech companies—businesses across all sectors, including finance, law, and manufacturing, are hiring tech talent to stay competitive. Colin Yasukochi, executive director at CBRE’s tech insights centre, highlighted that, for the first time in over a decade, more tech talent is being hired by non-tech companies than by traditional tech firms. This shift underscores how integral technology, and especially AI, has become across industries.

Toronto has also become a hub for AI research and development, attracting top talent from around the globe. Liz Nucci, CBRE’s senior vice president, explained that both local AI startups and major tech companies are expanding their footprints in downtown Toronto. Some businesses are even doubling their office space to accommodate the rapid growth of the tech sector. This influx of AI professionals is further solidifying Toronto’s position as a leading tech city.

One reason for this growth is the lower operational costs in Toronto compared to other major U.S. tech hubs. Office and labor costs in Toronto are nearly half those in San Francisco, making the city an attractive destination for businesses looking to expand without the hefty price tag of other tech capitals. Toronto’s cost-effectiveness, combined with its growing tech ecosystem, has made it an appealing location for both startups and established tech giants.

While Toronto’s tech scene is thriving, there are challenges, particularly in the housing market. Rental prices in the Greater Toronto Area (GTA) have risen by 34% over the past five years, and the cost of homeownership remains high. This could potentially hinder talent retention, as many workers factor housing affordability into their decisions about where to live and work. Nucci emphasized the importance of addressing housing challenges to remain competitive in attracting and keeping top talent.

The report also notes the growing role of Canadian cities in the tech sector. Ottawa moved up one spot to rank 10th in North America, and Calgary jumped to 17th. In contrast, cities like Vancouver, Montreal, and Waterloo saw declines in their rankings, reflecting the shifting dynamics of the tech industry across Canada. The availability of immigration-friendly policies in Canada, particularly in comparison to the U.S., has been a significant factor in attracting skilled tech workers. These policies, including more accessible visa options, make Canadian cities like Toronto an appealing choice for international talent looking to establish their careers.

In conclusion, Toronto’s tech sector is booming, with AI driving much of the growth. The city’s combination of a skilled talent pool, growing number of tech job opportunities, and lower operational costs compared to other North American tech hubs has made it a key player in the global tech industry. However, to maintain its competitive edge and continue attracting top talent, addressing housing affordability will be crucial for the city’s long-term success.