Toronto Condo and Real Estate Blog

By Roma Luciw - Globe and Mail

There is widespread agreement that the pace of new-home construction will ease next year, but the housing market will get some support from a demographic wave that is coming of age.

Born between 1980 and into the late 1990’s, the children of the baby boomers have been dubbed the “echo” generation. It is a large and growing group — Statistics Canada estimates they account for 8.9 million of nearly 33 million Canadians. The oldest of the echo cohort are now in their mid-20’s, entering the workforce and looking to spend money on a home.

Toronto-Dominion Bank economist David Tulk said the echo generation will comprise a “large pool of first time buyers, which when combined with continued immigration, will provide further support to this mature stage in the housing cycle.”

The pace of new-home construction defied expectations and edged higher in November, led by strength in condos and apartments. Canada Mortgage and Housing Corporation said Friday that housing starts climbed less than 1% to 225,000 units from 223,200 units in October. Economists were expecting a rise of 220,000.

For the second straight month, the gains were driven by multiunit starts, a volatile segment that gets knocked about by the start of construction on large-scale apartment buildings, and also includes semi-detached homes, townhouses and condos. Urban multifamily-unit starts jumped 5.7% to 105,600 units, after surging 23% in October.

The gains in the multiunit category offset declines in the construction of detached single-family homes, the bellwether component of the new homes report. Urban single-family housing starts, the bellwether component of the new homes report, dipped 4.2% to 87,900 units in November.

Mr. Tulk said multiple-unit starts were bolstered by increasingly scarce land in urban centres like Vancouver and Toronto, as well as declining affordability for detached homes in cities like Calgary. He expects growth in multiple unit projects will remain robust as Canada’s cities continue to attract new immigrants, while “single unit starts will likely feel the brunt of the cooling housing market.”

Mr. Tulk forecast housing starts will remain solid at 205,000 next year and 195,000 in 2008, on the heels of this year’s projected tally of 228,000.

Adrienne Warren, a senior economist with Scotiabank, also believes the echo generation will support the housing market over the next decade, although to a small extent.

“We are seeing more of a cyclical downturn in the housing market but now you have the support of this demographic trend,” she said. The echo wave will most likely gravitate towards multi-unit dwellings like condos, which will be more affordable given how much housing prices have risen.

Ms. Warren noted that new immigrants, averaging 250,000 a year, will also boost demand for housing, particularly in Canada’s largest cities.

To date this year, Canada’s housing market has defied expectations and avoided the sharp downturn unfolding in the U.S. Canadian building permits surged to their second-highest level on record in October, according to a report released earlier this week, despite a consensus forecast predicting a drop.

November’s CHMC housing data did reflect some huge regional divisions at the moment, with bustling activity in the Prairie and Atlantic regions while the rest of Canada retreated.

Urban starts dropped 11.7% in Quebec, 7.9% in British Columbia and 3.8% in Ontario. Gains in the Atlantic and Prairie regions left urban starts up 21.4% and 26%, respectively.

Most economists agree that the strength will wane next year.

“With a slight dip in both economic and employment growth forecast for the coming year, housing starts in both the singles and multiples segments are expected to moderate,” sad CHMC economist Bob Dugan.

Jacqui Douglas, an economic strategist with TD Securities, also agreed that an easing is in the cards. “We expect to see the Canadian housing market make a gradual downward shift, as the economy slows and higher interest rates have an effect.”

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Contact the Jeffrey Team for more information

By Derek Raymaker - Globe and Mail

This could be described as the year that condominium builders and buyers started to venture into unknown territory.

Economists and housing analysts have been predicting for five years now that oversupply and rising interest rates would lead to a slowdown in condominium sales throughout the Greater Toronto Area. Well, it hasn’t happened, mainly because of an influx of new kinds of buyers into the market.

More than half of all condominium buyers are still purchasing for the first time, but now a full quarter are considered to be empty-nesters or people downsizing.

What’s more, government conservation efforts have sharply curtailed the development of new low-rise housing, which has led to higher new-home prices for such dwellings, especially in Vaughan, Richmond Hill, Mississauga and Oakville. That has added another segment to the condo market — young families who have been priced out of the low-rise market.

This new diversity of condo buyers has not only made for sustained demand, but also a greater diversity in the types of condos available — in terms of size, luxury, design sensibility and location. Builders have responded to these imperatives, some in memorable fashion.

One of the most interesting launches of the year was the latest phase of Mississauga’s Absolute project: two dramatic, undulating glass towers — 50 and 56 storeys — that will strike a soothing elliptical chord on Mississauga’s skyline. (Three smaller buildings designed by Burka Varacalli Architects are under construction and a fourth is being planned.)

The latest towers at Absolute, spearheaded by Cityzen Development Group and Fernbrook Homes, are the creations of Beijing architect Yansong Ma, and they have certainly raised the bar for architectural design in the GTA. (Standard suite sizes will be between 600 and 1,200 square feet, with prices ranging from $183,000 to $457,000.) If these towers’ lasting legacy is to make builders (and buyers) break free of the standard boxy façades, it will have been worth it.

Another growing 905 municipality, Markham, has taken major strides in evolving into a diverse and mature condominium market. Buyers seem to have warmed up to the idea that this York Region city has the potential to become a more urbanized community.

The first phase of the massive $3-billion Downtown Markham development, called Rouge Bijou, hit the market this summer. The 187 suites in the first two mid-rise buildings were sold out in the first weekend.

When all is said and done, Remington Group’s Downtown Markham will be nicely integrated with the regional transit systems’ Viva express buses and the GO train. It will also include a ritzy commercial and entertainment component. But Rouge Bijou, boasting a battery of environmentally sustainable and energy-conservation features, is also considered a hit with eco-friendly buyers.

In downtown Toronto, the launches continued to come at a fast and furious pace, with 8,500 new suites going on sale between January and October. The big news here is how builders are pinning their fortunes on two vastly different markets: first-time and budget-conscious buyers, many of whom are single professionals who have busy lifestyles, and millionaires who demand the latest in luxury appointments and finishes as well as brands that reflect their status.

On the affordable side, the corridors along Wellesley Avenue East, College Street between Yonge Street and University Avenue, and the area surrounding the St. Lawrence Market have proven popular, thanks to their proximity to the subway and the white-collar cubicle jungle.

The Residences of the Ritz Carlton on Wellington Street West, and One Bedford in the Annex, set new standards in price and luxury. Suites at the Ritz, by Graywood Development, start at $1.2-million and top out at $13-million for more than 10,000 square feet. Sales, we are told, have been going well.

One Bedford, by Lanterra and MCE Developments, will reinvent the western boundary of Yorkville when it gets under way, with suites ranging from $333,000 to more than $2-million in a 32-storey luxury project.

Prices have remained very stable over 2006, however, especially with the influx of luxury suites that cost four or five times what an average high-rise suite fetches. The average cost of a high-rise suite stood at $350 a square foot in September, up 11.5% from September of 2005, according to RealNet Data Services. This makes Toronto a very affordable condominium market compared with Canada’s condo capital, Vancouver, where the average cost is more than $500.

Remaining inventory (unsold units) across the GTA in September was 12,433 suites, up slightly from 11,808 a year earlier. But there were 13,804 sales between January and September, 2006, compared with 13,388 in the same period last year.

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Contact the Jeffrey Team for more information

By Sydnia Yu - Globe and Mail

With about 70% of the suites in the Trump International Hotel and Tower already sold, groundbreaking at the site in Toronto’s financial district is scheduled for spring, with construction expected to start in the summer.

“There’s no turning back,” says Barry Landsberg, Toronto director of marketing for Trump International, a joint venture between property tycoon Donald Trump and Talon International Development Inc.

It is expected that the luxury hotel/condominium — Mr. Trump’s first development in Canada — will be completed in 2010.

When completed, the 70-storey tower at 325 Bay Street will be the tallest residential building in Canada. It will contain a five-star hotel with 291 suites and, above them, 147 luxury condominium units.

Plans for the residential suites range from one to three levels and measure 1,299 to 7,375 square feet; the average price is between $2-million and $3-million.

For frequent travellers, hotel suites can also be purchased, starting at $784,000 for a 574-square-foot studio. These rooms will be fully furnished and eligible for inclusion in the hotel’s rental program when vacant.

“You own that suite outright, so you earn all the revenue from that suite,” Mr. Landsberg explains, minus administration and operating fees. “If it’s rented out for $650, you may earn $500 of that.”

As for amenities, the set-up will be similar to that of the Trump International Hotel and Tower in New York, which is Mr. Trump’s flagship development.

“[The Trump Organization] has that experience in managing that Manhattan lifestyle living, and that’s what they’ll bring to the development [in Toronto],” Mr. Landsberg says, adding: “[Purchasers] like the availability of all the services and amenities of the hotel.”

For example, facilities in Toronto will be oriented toward business people. There will be a high-tech business centre with meeting rooms, as well as restaurants, a bar and an 18,000-square-foot health club and spa, complete with a gym and pool.

Residents also will have access to hotel services such as housekeeping and valet parking, as well as exclusive use of two chauffeured, S-class Mercedes.

The site is close to many urban attractions, such up-scale restaurants, theatres and major concert and sports venues. “It’s all within walking distance, and much of [the walking is] underground… through the PATH system,” Mr. Landsberg says.

“There’s a level of discretion and intimacy in the building,” he continues, pointing out that there will be two to six residential units on each floor, separate service entrances for some suites, and private elevator access from the Sky Lobby on the 33rd floor.

“Whether you’re in a 6,000-square-foot suite or 1,300-square foot suite, we’ve maintained the 10-foot-plus ceiling heights and the same quality of fixtures and finishes,” he adds.

They include hardwood and natural stone materials, and coffered ceilings in some areas. There will be stainless-steel appliances and electric fireplaces.

Most plans include formal living and dining rooms, and eat-in kitchens with floor-to-ceiling windows overlooking the city and lake. Some models have terraces, libraries or gallery-style foyers, and penthouse units have great rooms.