As founder and President of Mizrahi Developments, Sam Mizrahi has been an innovator in real estate development for over two decades. Through many changes in the marketplace, Mizrahi has maintained his focus on developing high-quality, luxury condominiums in Ontario. He’s carried over this principle of surpassing expectations for clients from his work building ambitious custom homes in the Forest Hill, Lytton Park, Port Mcnicoll, and Richmond Hill neighbourhoods. Mizrahi’s ability to deliver suburban comforts to downtown developments has made him a leader in multi-story luxury condominiums.
We sat down with Sam Mizrahi to discuss the options Canadians face today as they look at the high costs of the housing market. Drawing on his 25 years in the industry, Mizrahi shares some sage advice about weathering and capitalizing on housing trends.
Q: The current housing market is seeing more of a trend toward Canadians renting versus buying a property. What changes are occurring in the marketplace that caused this shift?
Sam Mizrahi: Property values have gone up, and in recent years mortgage rates have pushed a lot of people out of the ‘buying’ conversation. For example, Canadian fixed mortgage rates went from 3.77 percent in 2020 to 5.91 percent in 2023 on average. But costs aside, there is a shift happening in the priorities of young professionals. More and more people are wanting to travel, and being tied down by a mortgage isn’t necessarily appealing. Today’s remote work environment has led to a lot more people moving to new places. With more global resources available people are staying in one place less.
Q: Rental rates are also rising, but what are the pros and cons of renting longer?
Sam Mizrahi: There are pros and cons to both renting and buying. Renting can be much cheaper than buying. Monthly rental fees are usually lower than mortgage payments and can even include the cost of utilities like hydro, water and gas. For instance, the rent on a one-bedroom apartment in Toronto averages $2,620 dollars compared to the average condo price, which is $718,698 dollars. Meanwhile, the average house costs $1,106,617. Renting also gives people more flexibility when it comes to where they live, with short-term leases making it easier to relocate when you need to.
The other benefit to renting is that when something needs to be fixed you can call your landlord or building management team. This can take a lot of stress off people knowing they do not need to be directly involved when it comes to maintenance. Of course, there are some downsides to renting. Renting long-term prevents you from building credit, which depending on your financial goals might be a big concern. You are also at the mercy of a landlord or management company, meaning you may need approval to make changes to the property.
Q: Do rising mortgage rates and longer renting periods change the way you develop properties?
Sam Mizrahi: No matter what market we find ourselves in, people need places to live. We are seeing an issue with the housing supply right now. For instance, in 2021 there was a pre-existing shortage of 471,500 homes. It’s estimated that over one million homes will need to be built to keep up with population growth over a ten year period.
One of the solutions to this is to continue to build more properties at an accelerating pace. Mizrahi Developments takes sustainability very seriously and this is reflected in all of our developments. This can help minimize costs for owners and renters long term. By installing smart home features and energy-efficient management systems during a build, we can help consumers cut costs on energy, water, and gas.
Q: What advice do you have for prospective homebuyers in 2024?
Sam Mizrahi: I think buying a home is a very personalized process. Some advice that I think all potential homeowners should take into consideration is to get pre-approved with a lender. If you don’t have a mortgage rate locked in then you risk a hike in rates. Sometimes finding the right property for you can take a good deal of time. If you are waiting for the rates to drop now you may need to wait a very long time. If your goal is to buy within the next few years, I would suggest taking that leap.
Q: Do you have any advice for property owners who are looking to rent out their spaces?
Sam Mizrahi: For individual landlords, I would recommend looking into technology that can help you manage your properties. At Mizrahi Developments we have a whole division that focuses on property management for our developments. It can be a big task to take on for just one person, especially if you have a full-time job and other priorities. There’s some great technology out there today that will make both a landlord’s and tenant’s experience more streamlined. Some of these technologies include Smoobu, Entrata, or RealSage Convert. Check those three out and figure out which one feels right for your situation.
