Distressed real estate sales have spiked recently and there is a reason why most of it is development land, says Colliers' Jeremiah Shamess.Across Ontario, development projects are being placed under receivership seemingly every week, and while each case has its own unique circumstances, there is one commonality that holds true for just about all of them: the mortgaged property is a piece of development land.
"The number two reason is that the revenue side of the business is basically 80% off of highs, so condos are not being sold — they're about 20% of last year's market," says Shamess. "There are a few that are rental, but generally speaking, the rental projects have been funded by pension funds so there haven't been as much issues like with the condos," says Shamess, who has been involved in several court-ordered sales in recent months.
"If you look at history, generally these cycles take a couple of years to get through," he says. "Until demand for housing turns back on, it's going to be a very difficult market."Colliers' Hart Buck & Jennifer Darling On The Uptick In Court-Ordered Sales ›The City is updating its housing targets to incorporate the provincial target and has also outlined a 3 Year Housing Action Plan.