Condo game has changed for investors

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For real estate investors who haven’t had much luck deploying their money in the GTA, nearby Burlington is an intriguing option

Real estate investors haven’t had much luck deploying their money in Toronto of late, but there appears to be a solution in nearby Burlington.

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Nautique Waterfront Residences is a 26-storey, 254-unit, tower along Lake Ontario in downtown Burlington, and because it was registered in May 2024, investors have found its turnkey nature appealing.

According to Tariq Adi, CEO of Adi Developments, these investors haven’t the intention to flip the property and drive up its price; rather, they’re providing long-term rental housing in a city mostly comprised of single-family dwellings.

“These investors aren’t parking their money in preconstruction, waiting to bank on appreciation. We’re seeing a different kind of investor who understands the market has made an adjustment,” Adi said.

There are 30-odd regular units and about 26 penthouse suites remaining. And with prices around $1,100 per square foot, one-bedroom units are selling in the mid-to-high $500,000s, while two-bedroom suites are in the $700,000 to $800,000 range.

“The game, or the strategy, has changed for investors,” Adi continued. “It’s buy, hold and rent as opposed to wait and flip.”

Nautique has also proven extremely popular among first-time homebuyers, many of whom are priced out of the GTA as far west as Oakville, but who have found affordability even further afield.

That young professionals are flocking to the development en masse, especially as renters, doesn’t surprise Alex Balikoti, a broker with Balikoti Real Estate Group. He points out that, during the COVID-19 pandemic, companies small and large moved out of Toronto and into its suburbs.

“Burlington became a big centre for employment, and all those companies that moved to the city are still there,” he said. “That’s bringing new developments like Nautique to cities where the employers went, like Burlington.”

He added that prices aren’t necessarily lower in these areas because people prefer living close to work, however, most of the housing stock is pricey ground-related houses.

Nautique is also popular with empty nesters, who typically prefer remaining in the same communities they raised their families. Burlington has an aging population, which could be the reason Adi Developments chose to build Nautique near the city’s waterfront.

“They’re what I’d call the 55-plus, active adult demographic who are selling their larger homes and moving into Nautique,” Adi said.

Daniel Johanis, owner of Pekoe Mortgages, also anticipates more high-rise developments will sprout in Burlington because its aging population is spurring robust demand from empty nesters.

“The people buying those condos are boomers and retiring boomers who are full of cash,” Johanis said.

“They want to downsize and remain in Burlington, and they’re the ones who will be more willing to pay higher prices just to be able to stay in the city, because there aren’t many condo options there like there are in Toronto.”

Their only other option would be a retirement home, he added, which tend to be “hit or miss.”

“There’s something to be said about the quality of life in a great neighbourhood and enjoying autonomy as you age after working hard your whole life.”