'Why we build,' and other important questions

Goderichsignalstar.com
April 9, 2019
Martin Slofstra

In our pages, we spend a lot of time educating home buyers about issues related to buying a
new home or condo.

It’s worth highlighting BILD’s latest initiative, a new public awareness campaign called Building Answers.

From my point of view, and having attended the launch event on Friday, March 29 in downtown Toronto, here is a great learning opportunity.

And I found the builders on hand -- Empire Communities, Daniels Corp., Cortel Group, Menkes Developments, Geranium Homes, Diamond Corp. -- were remarkably candid about the challenges they are facing.

One question that came up had to do with condo projects that get cancelled, and while there are no guarantees, we were told 97 to 98 per cent do go through and assurance from one of
the builders in the room.  “If we launch a project, we are going to deliver.”

Another question had to do with how much profit builders and developers make on a project  and the answer may surprise you. In general, profits tend to be lower than most people believe, and can be significantly less than other industries.

For high-rise residential for sale, this is approximately 8-13%. For single-family homes, this is approximately 7-12%.

Also, of note, the profit resulting from land development and housing construction is hard to predict due to the many associated risks and the scale of upfront investment required.

It was a good frank and open conversation, and a welcome sign that most builders and  developers are open and willing to be transparent in their business practices.

Seeing is believing, and so in the afternoon, we were invited to take one of two
tours, either at The Well at King and Spadina, or The Vaughan Metropolitan Centre, hosted by the Cortel Group.

I chose to visit Vaughan where Cortel is developing a five-building (including the 60-storey CG Tower) called Expo City which will one day be home to 5,000 residents.
It’s an example of how good development can be done --including a vital downtown area, brand new subway station and mixed-use, high-density development -- if it is planned properly.

Do check out the web site at www.buildinganswers.