Toronto Real Estate Blog

Good job market and attractive interest rates are contributing to affordability

Excerpt from an article by Theresa Boyle, Real Estate Reporter, Toronto Star

The GTA condominium market continues to be buoyant, despite increasing concerns of a housing market slowdown in the United States and slumping low-rise sales in Canada and the Greater Toronto Area.

Affordability is allowing the GTA condo market to buck the trend.

Condominiums continue popping up at the expense of new low-rise housing, including detached and semi-detached houses and townhouses.

Condos are making up a greater proportion of the new development market share in the GTA. And for the month of June alone, they broke a record by comprising the majority of all new residential developments.

“I think the condo market in Toronto is remarkable. There is nothing like it in North America,” says Desi Auciello, president of the Greater Toronto Home Builders’ Association.

“Within the last two years, condos took basically all of the first-time buyers out of the low-rise sector. Still believing that ownership is the way to go, they moved into affordable small condominiums,” he adds.

The high price of low-rise houses is driving many out of that market and into more affordable condos. The GTA new home price index in July stood at $392,138 for low-rise homes and $312,966 for highrise apartments, according to the GTHBA.

There have been 11,071 highrise condominium units sold in the GTA so far this year, compared to 10,854 at the same time last year, for a 2% increase, according to the GTHBA.

While the Canada Mortgage and Housing Corp. reports that construction of new condos is down 8% so far this year, the federal housing agency predicts the numbers will pick up by year end.

Heading in the opposite direction are sales of single-family detached houses, semi-detached houses and townhouses. So far this year, 15,536 low-rise homes have been sold in the GTA. That compares to 13,766 last year, for a drop of 13%.

While highrise sales made up 41% of the market share at this time last year, they now comprise 45%.

“Fewer and fewer first-time buyers can get into that kind of housing so they do turn to that condo apartment market,” says Jason Mercer, senior market analyst with the CMHA.

As of the end of July, there were a whopping 255 new condo projects on the market in the GTA, according to Urbanation, a GTA condo market research firm.

Housing start figures tell the same story. The CMHC forecasts that construction will start on 40,400 low-rise and highrise homes in the GTA this year. That’s down 3% from last year. Still, the number of highrise condo starts is expected to continue increasing, with 15,500 to 16,000 permits forecast to be issued this year, up from 14,376 last year.

Auciello says the provincial government’s restriction on building on the greenbelt surrounding Toronto is driving up the price of land and forcing many purchasers into condos rather than low-rise homes.

In contrast, someone can afford a condo, in a great location, on a modest salary, Shim argues.

A household salary of $63,000 can get you an average new, two-bedroom, 700-square-foot, $231,000 condo in the GTA, she says. (This presupposes a 25% down payment and a five-year fixed rate mortgage amortized over 25 years.)

For example, you can buy a 516-square-foot studio in VU, at Adelaide and Jarvis Sts. for $158,990. A 400-square-foot studio at the Residences of Maple Leaf Square, adjacent to the Air Canada Centre, can be had for $197,900.

A good job market and attractive interest rates are contributing to the affordability of condos, she says.

The increasing number of highrise condo developments is changing the face of the GTA, from Toronto’s waterfront to the 905.

More than 101,000 condominium units and 627 new buildings have been erected in the GTA in the past decade, according to Urbanation.

Shim says Toronto’s skyline is one of the most impressive in the world, thanks in a large part to new condo developments.

“Residential condominium apartment developments have really played a key role in transforming our skyline … Most of the new buildings in our skyline are residential condominium buildings,” she says.

Over the last decade alone, some 3,600 new condo units have been created along Queens Quay, according to Urbanation. With an average of 1.5 residents per household, that’s an additional 5,400 people living on the waterfront.

“None of these new grocery stores would have appeared had it not been for new condominium residents moving into these areas and naturally requiring new retail services,” Shim remarks.

“Wherever there are new condominium projects, there are new full-time residents requiring services such as grocery shopping, dry cleaners, restaurants and cafes. Only condominium apartments can introduce the critical mass of people needed for new businesses to move into a neighbourhood,” Shim says.

In the 905, new “suburban downtowns” have been created, thanks to condo developments. These include central Mississauga where the highly touted Marilyn Monroe building is going up, and the massive development in York region known as “Downtown Markham.”

The GTHBA says the “great condo craze” took on a new dimension in July as sales of highrise condo suites skyrocketed in the 905. While highrise unit sales were up 9% across the GTA in July compared to the same time last year, they increased by 260% in Peel region and 215% in York region.

“The City of Toronto will continue to represent the solid core of the condo market, particularly as the waterfront lands come on stream, However, the 905 regions are coming on strong,” he adds.

“We are seeing the demand for condominium apartments as the children of the baby boomers move out of the family home and as the baby boomers themselves start to age. Given that most of the new job growth in the past 10 years has occurred in the 905 areas, it is not surprising that younger buyers, in particular, are choosing to stay in the 905 areas, closer to work and family,” she explains.

As for where the condo market is going, observers say it will remain strong but likely won’t keep pace with recent record highs.

“A shrinking but healthy pool of first-time buyers looking for less expensive homes, combined with provincial government efforts to promote higher density construction, suggest condominium apartments will remain in demand,” states the report, which goes on to forecast that multiple starts for the province will fall slightly to 37,500 next year from a projected level of 39,500 in 2006.

“Things are tapering off and moving closer to the 10-year average,” says, the CMHC’s Mercer, noting that construction has started on an average of 8,989 condo apartments in the GTA in the last decade.

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Site reflects eclectic spirit of neighbourhood
Packages take stress out of finish selection

Excerpt from an article by Shelly Sanders Greer – Toronto Star

Baywood Homes is bringing back a bit of that hip, artsy feeling with its new condominium project on Queen St. West, aptly named Bohemian Embassy.

Queen St. West has always been an eclectic neighbourhood with unusual boutiques and specialty shops mixed in with Victorian and industrial buildings. Bohemian Embassy has been designed almost as a piece of art, which adds to the existing architecture.

The Bohemian Embassy will have 345 suites, including a number of flats and two-storey lofts.

They were designed by II by IV Design and range from 475-square-foot, one-bedroom units to large, 940-square-foot, two-bedroom-plus-den, two-storey lofts.

Prices start at $159,900 and go to the mid-$400,000s.

Pieper explains that purchasers can choose from four standard packages with various colours and tones. The finishes are high-end, with natural quartz stone countertops, vessel sinks and laminate floors throughout.

Since the Bohemian Embassy opened for sales on Sept. 20, hundreds of people have been through, with 400 appointments booked on one Saturday alone.

“Our demographics include first-time buyers and well established people who work in the financial district,” says Pieper. “This is an up-and-coming community, the cultural capital with many venues here used during the Toronto Film Festival.”

Local artists and artisans were recruited by Baywood Homes to help with the design and decoration of the pavilion.

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New approach eliminates the need for hard-sell
Purchasers can go online and calculate costs

Excerpt from an article by Shelly Sanders Greer – Toronto Star

Websites for condo developments have become critical marketing tools that are changing the way suites are being sold.

Instead of traditional online ads, offering minimum information to lure potential purchasers to sales offices, many sites now provide an interactive experience mimicking the feel of the upcoming community.

Christene DeGasperis, marketing manager for Aspen Ridge, explains that this new approach eliminates the need for a hard-sell in the sales office.

At Aspen Ridge’s new website for the condo project VU, three-dimensional technology was used to depict buildings and to show where suites will be located.

Tas Design Build is also taking advantage of new technology to develop a highly interactive website for M5V Condominiums.

“The M5V site takes consumers to a new level,” says Mazyar Mortazavi, a principle at Tas Design Build.

“There is information on developing a bathroom or a kitchen and then questions are asked to help the consumer make decisions to design the space for their needs. Purchasers are actually creating a custom condominium.

“Just because you live in a condo doesn’t mean you shouldn’t have a say in the design.”

M5V will provide a three-tiered buying process. People can buy a condo designed by Tas Design Build, or choose architectural finishes for the kitchen and bathrooms, or purchase a shell and design the suite from scratch.

“At another of our developments, DIA, purchasers can go online and calculate costs before they even come into the sales office.In the future, developers see websites becoming even more important. Barry Fenton is president and CEO, Lanterra Developments, which won an award from the Greater Toronto Housing Association in 2004 for the best website for The Toy Factory Lofts. He feels web pages offer more value than traditional advertising.

Sulpizi agrees, and says the use of web blogs, which ask for comments from web users, will be a big part of future websites.”In the very near future, blogs will be part of the cycle of a project,” he says.

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Pier 1 Imports has undergone a radical makeover with the introduction of a new line of streamlined, contemporary furnishings and accessories.When Pier 1 revealed its fresh face, it displayed merchandise designed to appeal to changing consumer tastes.

One of North America’s largest retailers of imported decorative home furnishings, Pier 1 supplants the characteristic handicraft-style merchandise for which it’s been known with a product lineup featuring furniture, accessories and decorative items with clean lines, architectural shapes, larger-scale proportions and a more sophisticated colour palette, according to a company news release.

“We’re not abandoning wicker or unique stemware,” stresses company spokesperson Misty Otto. “We’re offering an updated, fresher look but it still has a specialty feel, that hand-touched international look.”

The Texas-based firm will continue the practice of changing up to three-quarters of store merchandise annually, says Otto, and its 1,300 outlets will have fresh Modern Craftsman-style pieces every season.

Its research showed that because consumers lead increasingly hectic lives they’re looking for products that help simplify their surroundings at home.”They want (to create) a haven at home so it’s less cluttered, more organized and, therefore, more relaxing,” she explains.

Jay Jacobs, the company’s executive vice-president of merchandising, says one way people can de-clutter is by replacing a multitude of less-important decorative items with one or two statement pieces that make a dramatic change in their living spaces.

Pier 1 lost its traditional niche as competition intensified in recent years. Retailers such as Wal-Mart came on the market with similar products at a lower price point, for example, while Pottery Barn also introduced higher-priced merchandise in comparable styles.

In an effort to offer customers something unique, Pier 1 staffers collaborated with vendors in 50 countries to develop one-of-a-kind merchandise under the Modern Craftsman umbrella, Otto says.

The new merchandise includes cubic white dinnerware, camelback sofas, upholstered slipper chairs in “neo-retro” fabrics and wicker fashioned into modern shapes for indoor and outdoor use.

Jacobs says the Pier 1 stores have also been revamped to be more streamlined and reflect the Modern Craftsman no-clutter look. Aisles are wider, displays offer fewer but more focused collections and co-ordinated vignettes show customers how pieces might look in their homes.

Whether you’re moving into your first home and have chosen to start off with a brand new condo or downtown loft, or you’re downsizing from a larger family home to a chic uptown suite, you’re on the threshold of an exiting new beginning. And what better way to celebrate than with a selection of fresh, upbeat and affordable furniture that can be designed to fit your own personal space and lifestyle.

Many new condo owners face the same situation — what to do with the thoughtful floor plan to maintain the integrity of design and also allow for the assortment of personal belongings everyone has — be it a prized book collection, Venetian art glass, or an assembly of family photos too precious to hide away. The designers at Neoset Canada will come to your rescue with a variety of ideas to integrate your present furnishings and decor pieces with custom-made as well as readily available items to create just the right look for you.

When it comes to total home furnishing solutions, Neoset has options for every room in your condo. For instance, maybe you’re starting out in a small bachelor pad where you hope to conserve space and still maintain comfort and appearance. In this case, a bed with built-in storage like the Alba bed is ideal. Equally efficient is the Flexi Table that converts from a coffee table to a dining table.

Perhaps you have an expansive loft-style wall that calls out for an extensive system of shelves and display niches. For this luxurious dilemma there are unlimited solutions and design concepts.

Will you be setting up a home office in your new condo? Plot out ahead of time the static considerations such as where you prefer the drawers on your desk, left or right. How much shelving do you need? How much worktop space? Consulting with a Neoset designer will also help you configure a work area into a pleasing environment in which to spend quality time. With the computer hutch unit you can slide down the cover when you’re through work for the day, and you have another sleek contemporary home furnishing solution.

When it comes to children and their personal space, something you may not have thought about is whether cupboards should be connected to the bed of a rambunctious toddler. Or not! Again, this is the sort of decision that an experienced professional can help guide you through.

As you sit with a Neoset designer you’ll be prompted to examine what is important to you in your new condo: where you want to conceal storage areas; how large an entertainment centre you can accommodate, and how you can showcase all of your new electronics wisely; and what you can do to maximize your space to become not just practical, but a true expression of your own style.

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