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• The average price up 3.7 per cent since last month, though still 1.2 per cent below this time last year.
• Home sales increased 20 per cent since last month and are now up almost 25 per cent since last year. 
• New listings increased 36 per cent since last month, with a total of 15,194 listings in May.
• The market remained tight, with listing supply 18.7 per cent below last year and well below the long-term average, keeping most markets in balanced or sellers-market territory.
• Listings are selling in 14 days on average — almost 20 per cent faster than last month but still 16.7 per cent slower than last year’s overheated spring market. 

Understanding the source of the supply

While still down 19 per cent compared to May 2022, the month-over-month increase in new listings was a much-needed relief to the tight supply and demand imbalance that kept sellers in a price-setting position for most of the year to date. 

Understanding the source of this supply could provide insight into how the remainder of the year plays out for Canadian real estate. If the supply was primarily driven by move-up buyers and life changes, the market could be on a road to recovery. On the other hand, if the market was driven by financial stress and offloading of investment assets, it could be evidence that the market will experience some headwinds against a recession this year. 

Further hiking from the Bank of Canada, as predicted by the financial markets for next week’s rate announcement, could exacerbate any stress-induced selling we see ahead. 

Supply velocity did seem to pick up toward the end of May — an opportunistic selling phenomenon that usually follows periods of high price velocity, which we’ve seen since the beginning of the year. Continued opportunistic selling could put an end to the spring seller’s market and, with it, price growth — although this happens annually, as average price typically falls from May until August each year. 

Where is the demand coming from?

TRREB notes in their release that strengthening demand is a continuing support for house prices in the Greater Toronto Area, and there is no shortage of headlines to support that statement: 

1. Canadian Immigration set another record in Q1 of this year, with over 150,000 permanent residents added. 
2. Canada led the world as a destination for international students, welcoming a record 551,405 international students in 2022.

Both of these demand-side supports, combined with a lagging supply side, could keep the Toronto real estate market in a state of excess demand throughout the year. The sustained pressure of interest rates and the recession that they threaten could drastically change the winds of fate in the coming months, but as it stands, Toronto’s real estate market was still a seller’s market in May. 

Daniel Foch

Daniel Foch is a real estate broker, working in the real estate industry for over 15 years with various notable organizations such as Interrent REIT, CBRE, and Hydro One. Daniel and his team have transacted over $250M in real estate across a variety of asset classes. During his academic career, Daniel was an active instructor, contributor and researcher in the University of Guelph’s Real Estate Faculty, founder of The University’s International URECC event, and was awarded for affordable housing innovation by CMHC & The University of Guelph during his tenure at the university.

Daniel is a regular contributor in the Canadian media as one of the most trusted, unbiased, and balanced sources of real estate insight. As a result, his real estate expertise has been featured in The Wall Street Journal, CBC, BNN Bloomberg, and The Globe and Mail, among others. Daniel has built a captive audience of over 100,000 real estate investors across multiple social media platforms by providing primary research and market analysis.

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Wilson is best known for the yoga pants that revolutionized athletic wear. He is, after all, the billionaire founder of Lululemon and while no longer CEO, he remains the apparel company’s single largest shareholder. The outspoken mogul aims to replicate his success in the athletic wear industry in real estate.

The burgeoning value of his sprawling Vancouver estate makes local news headlines annually, but apart from that, little is known about his billion-dollar real estate portfolio. He sat down for his first-ever interview on real estate with Daniel Foch and Nick Hill, hosts of the Canadian Real Estate Investor podcast. Wilson was joined by David Ferguson, CEO and co-founder of he and Wilson’s real estate investment, development and management company, Low Tide Properties. 

Ten years ago, Wilson says he and his family, alongside Ferguson, decided to invest 65 per cent of their wealth into real estate in three cities by 2030. The CEO explains, “Our other businesses have done so well that, you know, we haven’t reached that percentage… We’ll probably be lucky to get to 20 (per cent). And that’s buying almost as fast as we can.”

A decades-old friendship

Wilson and Ferguson were introduced through a mutual connection at a party in Calgary 38 years ago, and after both spent time in Toronto, the pair eventually reunited in Vancouver.

David Ferguson, co-found and CEO of Low Tide Properties, image via holditall.com

Wilson chuckles, “He’s very measured in what he says; I’m very unmeasured in what I say. So we were kind of a perfect combination.” 

Ferguson refers to himself as a “career real estate guy,” adding, “That’s all I’ve ever done. That’s all I’ve ever wanted to do. I love it.” After cultivating a friendship, the duo found their way into business together.

Wilson adds, “I recognized that he was probably the smartest guy in the world. And I’m maybe not as smart as Dave, but I had lots of money. So it was a perfect combination.”

Low Tide Properties 

Low Tide Properties was founded in 2011; the pair’s love for Vancouver and desire to reinvest in the local economy drives the company’s success. Ferguson explains that the region’s proximity to the mountains and Pacific Ocean and limited land supply has made it a popular destination for international immigrants and a favourable location for investment. The company purchases property in emerging neighbourhoods, not downtown, but near the city’s core, aiming to influence or be the catalyst for change in the area. 

He adds, “We know the city unbelievably well in the areas we invest. I know every single block; I’ve probably gone through half the buildings, maybe more. We’ve made offers on lots. So we really, really understand, we understand what block we want to be in. We understand what side of the street we want to be on.”

The company offers “creative office spaces,” catering mainly to smaller and local businesses. The company’s website boasts 30 properties in Vancouver alone, ranging from office space to laboratories and retail to multi-family. Wilson emphasizes the importance of understanding the target audience, focusing on what kind of lifestyle the future employees of the tenants want and appealing to them. The pair staunchly believe treating tenants well is crucial to their success.

“Your tenant is your customer. It’s your only customer, so you need to treat them really well…it’s a fantastic business. You have a customer that’s going to pay a fixed amount of money every single month for your product,” Ferguson notes.

In 2017, the founders diversified their portfolio by investing in Seattle’s multi-family rental market, aiming to avoid putting all their eggs in one basket. Wilson says they’re looking to add a third city to their portfolio, “We love places where land is constrained, and we really understand it. So we’ll probably look for somewhere like that.”

The company’s long-term investment strategy emphasizes holding onto properties for at least 25 years, with Wilson advocating for a 100-year strategy. He puts it simply, “We’re a long-term real estate investor.”

When asked about the real estate market’s tumultuous year, Wilson says, “Inside of downturns, there are opportunities, and you have to have enough cash on the sideline in order to take advantage of that.

Investment strategy

Wilson and Ferguson have built an expansive real estate portfolio with Low Tide Properties; they shared their top three investment strategies that have proven to be effective.

Location, location, location

Location is the most important factor to consider when investing in real estate. According to Ferguson, “You can change almost anything, everything about a property other than its location.” Therefore, one should look for a location where the economy is growing, jobs are being added, and there is limited real estate development. 

Boots on the ground

Conducting on-the-ground research by talking to people can provide useful insights to identify potential investment opportunities. 

Wilson suggests asking people about the top restaurants, coffee shops, and stores in the area and where they would like to see a second location of their favourite shops. This can help investors understand the demand for real estate in that area. 

Cultivate partnerships 

For investors with limited capital, partnerships can be an effective way to lower risks and increase knowledge. Wilson suggests finding partners who can bring different skill sets to the table, such as finance, property management and tenant relations. 

Through partnerships, investors can learn from each other and make more substantial investments with reduced risk. 

Investing in real estate requires building a team of experts with different skill sets. As Wilson notes, “There’s very little that you know, and your capital is limited” when you start out, but partnering with others who can complement your skills can help you achieve success.

“A leader is someone who creates a future that would otherwise not have occurred.” 

          – Chip Wilson

While Wilson and Ferguson are fiercely passionate about real estate, they recognize the importance of leaving the world a better place than they found it. 

“A leader is someone who creates a future that would otherwise not have occurred,” Wilson says. “We both believe that if we complain, we can complain a couple of times, but then we’re in action to do something about it.”

Ferguson adds that he is very conscious about what he does and focuses on enjoying his life to the fullest. “Who we do business with, who our employees are, everything is a very conscious choice to maximize the enjoyment of our lives.”

He finishes, “I think when you’re really enjoying your life and you’re happy, you will do much better than when you’re miserable.”

Listen to Foch and Hill’s full interview with Chip Wilson and David Ferguson: 

Jordana Springgay

Jordana is the editor of Real Estate Magazine. You can reach her by email. 

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