Toronto Condo and Real Estate Blog

Young buyers willing to raise family in condos, but want green features

Sheila Brady, The Ottawa Citizen

Rising housing prices in Vancouver and Toronto are prompting more Canadians to buy condos, with some younger buyers predicting they would be willing to raise a family in these vertical neighbourhoods, according to a survey for TD Canada Trust.

Nine out of 10 respondents to the on-line survey also rated green or environmentally friendly and energy efficient buildings very important when deciding to buy, according to the annual condo survey conducted by Ipsos Reid for TD Canada Trust which was released earlier this week.

Eighty per cent also indicated proximity to public transportation was also key when deciding where to buy, says the online survey which polled 725 adults 18 and older living in Toronto, Vancouver, Montreal, Calgary and Halifax between March 1 and March 5.

Ottawa was not part of the survey, but would likely have a similar response to Montreal, says Joan Dal Bianco, vice president, Real Estate Secured Lending for TD Canada Trust.

Condos are a more popular housing choice in Vancouver and Toronto because of high housing prices and the high price of land, says Dal Bianco, adding a majority of respondents did not want to spend more than $400,000 for a condo.

Between 15 and 20 per cent of all new homes sold across Ottawa are condos, traditionally appealing to baby boomers trading their family homes for an urban address and for young professionals buying their first home.

Toronto condos are also getting bigger, meaning they provide better housing options to raise a family, says the banker, adding it is now not a given that couples automatically sell their condo and move to the suburbs when they start a family.

High prices are a contributing factor, but there is also a desire to stay in the urban core.

“More people are now more comfortable living in the city with children. There is the convenience of living close to work, she says.

The proportion who would consider raising a family in a condominium has increased significantly to 30 per cent from 20 per cent a year ago,.

The survey also found that respondents valued security when looking for a condo and low monthly condo fees.

The green issue is also becoming increasingly important because people are more aware, there is a government focus and more media attention, says Dal Bianco.

Surprisingly, it was older respondents who valued the green factor higher, she says, adding boomers realized the energy savings when going green.

In Toronto, Minto is building energy-efficient condos and in Ottawa, Windmill and the Westeinde family is behind construction of the Currents, an eco-condo on Wellington Street that will also be the new home of the Great Canadian Theatre Company.

The TD is also considering launching green financing, giving preferential rates to buyers of eco homes, says Dal Bianco. “Stay tuned. There could possibly be a program announced in the spring. It is a busy period.”

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Garry Marr, Financial Post

One of the largest mortgage insurance companies in Canada has looked into the future of real estate and it’s dominated by a small box in a high rise.

The condominium market is not slowing in the country’s six largest cities, says a new study prepared by Genworth Financial Canada and the Conference Board of Canada. If anything, condominium apartments are becoming the standard for housing stock in Canada.

“People want the condo lifestyle. As they get older they want the lock-and-go condo lifestyle as opposed to cutting the grass,” said Peter Vukanovich, president of Genworth Financial, which controls 30% of the mortgage insurance market in Canada.

The study found that in Montreal, Ottawa, Toronto, Calgary, Edmonton and Vancouver sales of condominiums have been growing annually in the range of 9% to 20% from 1996 to 2005.

In some key markets, condo sales are soon expected to account for 75% of the new housing stock. Almost every city shows the condominium market share rising rapidly.

“It’s a much cheaper lifestyle than a single-detached home,” said Mr. Vukanovich, in explaining part of the reason for the preference. The average price of a condominium tends to be much lower than a detached home.

About the only cloud that continues to hang over the sector is this vague concept that the condo market is somehow headed for a crash, said Mr. Vukanovich, noting that people see these condos being built and they figure this all has to end.

“We have a report coming out on renters and the No. 1 concern they have is a fear of the price of what they are going to buy is going to come down,” he said.

Those fears appear to be unfounded based on the study, which shows prices rising by 3% to 5% annually well into 2011 across the six cities studied.

Alberta is the lone exception. Calgary and Edmonton are expected to see double-digit price increases.

On a city-by-city basis, Vancouver has become the condo capital of Canada. Dating back to 2001, Vancouver condos accounted for about 35% of all new construction. Condos are expected to have grabbed 75% of the annual residential construction market by 2011.

The study says pent-up demand from the 1990s, when housing in Vancouver slumped, has driven the market the past five years. Condominiums have become an attractive alternative in the city where bungalows routinely sell for $750,000.

The Conference Board says the average price of a condo, just $214,031 in 2004, will climb to $364,689 by 2011. Genworth says there is something about the city’s makeup that has led to residents embracing condo life.

“You can’t underestimate the Asian influence and they are very comfortable with the condo lifestyle, whether they are living in Hong Kong or Shanghai,” said Mr. Vukanovich. “They are coming here and buying condos.”

Toronto and Ottawa-Gatineau are the only markets where the condo share of overall construction seems to be levelling off. But despite that, condos account for almost 40% of new house sales in Toronto and 20% in Ottawa- Gatineau.

“It sure looks like everybody is going to be in condos. This is definitely not going aw ay,” said Mr. Vukanovich.

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TORONTO – An innovative partnership has been forged in the Queen West Triangle between Artscape, the City of Toronto, Westside Lofts (Urbancorp) and Active 18 that will see the creation of a 56,000 square feet artist live/work project within the Westside Lofts development at 150 Sudbury Street.

The development of affordable artist live/work units within a condominium complex is a first for Toronto. The deal also represents a new self-financing model for affordable housing development that requires only a nominal public investment.

“Developers, community activists, and the City have a strong shared interested in making the Triangle as creative and dynamic as possible” said Artscape President and CEO, Tim Jones. “There is no reason why this model cannot be replicated across the city to address the decades-old problem of the displacement of artists through gentrification.”

The value of the project has been independently appraised at $19 million. Artscape will purchase the units for $8.4 million, a price that includes the cost of construction but not architectural and other soft costs, land value contributed by the City in the form of free density, or profit.

Artscape plans to create up to 70 affordable ownership and rental units. Monthly rent for a one bedroom rental unit is targeted at $725 or roughly 80% of Canadian Mortgage and Housing Corporation’s average market rent for Toronto. Unit sizes and mix will be determined after consultation with potential purchasers and renters. Construction on the project will begin in January 2008 with completion projected for early 2010.

Celebrating its 20th Anniversary this year, Artscape is a not-for-profit enterprise engaged in culture-led regeneration. Its work includes anchoring creative communities within affordable spaces and building authentic and dynamic places by connecting creative and cultural resources. Artscape has played a catalytic role in the regeneration of some of Toronto’s most important creative communities including: The Distillery Historic District, Queen Street West, Liberty Village and Toronto Island. www.torontoartscape.on.ca

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Contact the Jeffrey Team for more information - 416-388-1960