Toronto Condo and Real Estate Blog

If you have a big lineup outside, you let the people in first who keep coming back

They lined up in the cold for days just to get a chance at buying into one of Toronto’s hottest condominium buildings, located in the centre of the city where its two major subway lines meet. But all the buyers literally fighting for a spot in the queue for the 80-storey tower known as One Bloor Street East were really at the end of line.

About a week earlier, the developers held a posh party in a nice warm sales office for the home run hitters among Toronto’s real estate agents. About 24 hours later, those agents and their clients got first dibs at buying into Kazahkstan-based Bazis International’s new tower where prices started at about $750-a-square-foot.

Call it a pecking order or a Darwinian approach to real estate but this is how most condos are sold in Toronto and, to a lesser degree, other Canadian markets. And it’s exactly how it should be, say many people in the industry.

“It’s like owning a night club. If you have a big lineup outside, you let the people in first who keep coming back,” says Brad Lamb. “The regulars get to come in because they are the ones who continually support your business.”

The condominium market has become big business in Canada. It is largely credited for the fact new construction is expected to top 200,000 units for six straight years with a seventh forecast by Canada Mortgage and Housing Corp. in 2008.

The epicentre for Canada’s condo boom is Toronto. The city, which includes its broader census area, is forecast to have 21,000 condo sales this year. It is a record, according to research firm Urbanation. Toronto, where the average condo unit is 700 square feet or just over 25 feet by 25 feet, is now far and away North America’s condo king, outselling New York City by a margin of two-to-one.

Lineups to buy-in are becoming more commonplace, making the right to get in early at a cheaper price a distinct advantage. The first people who get to buy into any condominium are the VIPs - friends and business associates of the developer and anyone else involved with the project such as an architect. “It’s only fair that they should be first because they have supported the company,” said Mr. Lamb.

After the friends and family, come the superstar agents. The reason they are superstars is developers known those agents can deliver customers with almost no questions asked. Many times those customers are offshore investors but for the most part they are money in the bank. The agents are rewarded with commissions of about 4%, on average.

Ultimately, a project needs to have guaranteed customers out of the gate early and that means people willing to buy into a project early, sometimes just based on very preliminary drawings with a construction completion date set way into the future.

“Developers take a very large chance. They buy a piece of property and put up millions of dollars. They spend millions designing and marketing it. They don’t want to take any chances that the project won’t happen,” says Mr. Lamb.

The other key factor for developers is getting buyers who will not rescind their offers. There is a 10-day cooling off period when you buy a condo and ultimately that can mean lost sales when it comes to the general public. Top real estate agents and their clients rarely pull out of deals.

Nobody wants to say it but the agents paying people to line up in the cold for a chance to buy into One Bloor Street East were really just average sellers - not on anybody’s A-list.

“Everybody knows there is ranking list of agents in the city,” said one real estate insider. “It’s informal but the developers know who is on the list. They want those agents because they know if they sell them 10 units, they won’t get ten recisions ten days later. There is nothing worse than that.”

Pat Baker’s company Baker Real Estate Corp. is handling the One Bloor Street East sale and is behind many other major projects in the city like the The Residences at The Ritz-Carlton, Toronto. While not acknowledging any sort of list, she agrees some “agents are known as being sophisticated in this business. Toronto condos have become big business.”

“Toronto condos are different than the housing market,” says Ms. Baker. “Builders have to sell a building before they can start construction. Houses are really one at a time. You can’t phase-in an 80-storey building.”

Banks will not provide financing to a project until at least 65% to 70% of it is sold. “You need to have those presales,” says Ms. Baker. In the end, she says One Bloor Street East was not much different than any other condo sell, even if there were a few fights in line among the ordinary Joe agents. “You get those types of things at a rock concert too,” she says.

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

By Lori Mcleod - Globe and Mail

Luxury homeowners are making a list but it’s us everyday Joes who’ll be checking it twice when we see what the wealthy are wishing for to kit out their homes this Christmas.

Forget pedestrian desires like walk-in closets and multiple-car garages; indoor car washes and walk-in refrigerators are the new rage, according to a top 10 list compiled by a leading real estate brokerage.

Accessorizing the property with the hottest must-haves is a natural extension of the luxury lifestyle and a way to stand out from the crowd.

Tops of the list for most sought-after luxury home accessories are an elevator car lift and indoor car wash to pamper the BMW or Mercedes-Benz. Total price tag? $2,500 to $6,500 for the lift and $30,000 for the car wash. For avid car collectors in the city the elevator lift is a way to expand garage capacity on a property of limited size.

Number two on the list is a walk-in refrigerator, while multiple ovens, sinks and dishwashers are also becoming de rigueur for even the novice cook. Price tag? $7,000 to $20,000 depending on the finishing.

No luxury home is complete without a spa, gym and a yoga and Pilates studio designed as a “complete health and wellness” facility. It’ll set you back at least $50,000, depending on the finishes and equipment.

Wine cellars and tasting rooms are spreading from the tony neighbourhoods of Rosedale, Westmount and Forest Hill into the home of the everyday connoisseur. The price ranges from $60,000 to $150,000 at the upper end.

On the fifth day of wishing and not exhausted yet, million-dollar homeowners are looking for concierge services to take care of those nasty chores like making dinner reservations, picking up dry cleaning and purchasing opera tickets. The cost of your live-out butler will range from $50 to $75 per hour, with some companies requesting a minimum buy of 50 hours per client.

For $50,000-plus, wealthy homeowners can furnish number six on the list: a media room that rivals the local movie theatre with a huge screen, surround-sound and plush seating to accommodate large groups.

Number seven is a relative steal, a room dedicated to hobbies such as sewing or gift wrapping, at a price of $5,000 or more depending on finishing.

Wireless and remotely controlled homes offer luxury residences entertainment options, light setting and security that can be accessed with the click of a button. Property owners can also arrange to remotely control their vacation properties and second homes and remotely monitor all of their residences. The cost? $25,000-plus.

It’s not just the car that needs a lift. With homes growing in size, an elevator is “becoming an accessory of convenience as well as necessity,” according to the luxury wish list. Equipment and installation will set you back $30,000, the cost of construction is extra.

After the weekend’s dumping of snow, who could blame a wealthy homeowner for this final request, a heated driveway, walkway and garage that instantly melt away those troublesome white flakes? The equipment for a 600 square foot driveway is $5,000, installation is extra, and the absence of pain in your arms and lower back - pure luxury.

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

By Kathy Flaxman - Globe and Mail

On Sumach Street in the picturesque Cabbagetown enclave of Don Vale, the home of Rollo Myers and Linda Schultz is a feast for the eyes, with its lavish gingerbread trim and carefully preserved brickwork.

The house is among Toronto’s enviable stock of heritage properties, some of them officially designated as such and others simply listed as architecturally or historically significant. It is estimated that there are more than 8,000 structures in the two categories, including private homes, commercial buildings and landmarks such as Old City Hall.

Searching out these properties and going through the heritage-designation process is highly rewarding for some. Mr. Myers, for instance, has done it several times, and his experiences eventually prompted him to take a permanent job in the building preservation field. But for anyone who gains heritage status for their home, there are serious restrictions on what you can do to them. And a designation or listing may reduce the pool of potential buyers when it comes time to sell.

If a property is designated, it has a legal status that is part of the title. Simply listing a house does not carry quite the same legal implications. In both cases, however, should the owner wish to make alterations, the building permit application will be flagged and then reviewed by the city’s preservation staff. Renovations or changes must be appropriate to a property’s character, and demolitions are almost never allowed.

Catherine Nasmith, president of the Architectural Conservancy of Ontario, is a lawyer who specializes in heritage properties. She takes on a number of unpaid and time-consuming roles to ensure that the city’s heritage buildings do not wind up as a pile of rubble in a landfill.

“A city can’t be treated as disposable,” Ms. Nasmith stresses. “There seems to be a notion that we have the right to demolish. But buildings should not be treated as garbage. People should keep in mind that a 20-foot [wide] building two or three stories high in a landfill is the equivalent of three million pop cans!”

The process of getting a house designated is initiated by the owner, or perhaps a member of the historical society or the city’s preservation staff. Grant money is often available for renovations once a home is given that status, a strong motivating factor for many owners to start the designation process. Although there is no money in Toronto’s coffers for these grants at the moment, new money will be available in 2008. (Houses that are only listed as architecturally significant are not eligible for grants.)

Mr. Myers’s experiences as an owner of historically important properties seem to indicate the process can be addictive. When he bought a house on Amelia Street in the 1960s, had it designated as a heritage property and then renovated it, he became fascinated with its architecture and design details. Other homes followed, culminating in he and his wife’s current showpiece.

His interest led him to take a job with the Architectural Conservancy of Ontario, where he is currently manager of its central office.

“I didn’t purposely set out to restore heritage homes,” he says. “I just had an amazing old house to work on. I then bought another home — a bigger, massive project. I saw what others were doing and I got advice on historical buildings.

“Old buildings can look dirty and unappealing, but once you begin to take away the grime and restore some of the beautiful features, the value of the work becomes clear. I did a lot of the work on my properties myself and I didn’t restore things to museum-like state, but I enjoyed delighting myself and my neighbours. I just wanted to do a nice job.”

While many agree that a heritage designation or listing make a property more valuable, some say these homes may be harder to sell.

“Being historically designated adds value to a property,” Marlene Auspitz of Royal LePage Real Estate Services Ltd. says.

“People, at least in downtown Toronto where my partner Shantoo Patel and I work, are proud of a heritage designation,” Ms. Auspitz says. “It contributes to the betterment of a neighbourhood as well, especially if there are a number of surrounding houses with a historical label. More care is taken in restorations, and owners do not fear that someone will renovate or build a monstrosity.”

Ms. Nasmith concurs: “Heritage designation increases property values, stabilizes communities and ensures people make only positive changes.”

Not everyone totally agrees. Karen Davis, an agent with Sutton Group-Bayview Realty Inc., says: “Historical designation can detract from the value of a property as there are usually many restrictions on what you can do to renovate the property. You must be willing to get preapproval from the governing body for your home-improvement plans. Usually the best buyer for these homes is someone who wants to keep the original character intact. It does limit the number of appropriate buyers.”

But for people such as Mr. Myers, protecting heritage properties is a labour of love, and in his case, a calling. These days, he is not only championing Cabbagetown homes, but Old Fort York and Toronto’s Old Town (home of the first parliament buildings), to name just two of his causes.

And he’s passed this love on to his daughter, Amelia, who with her husband, Matt Cheval, is renovating an 1894 cottage blocks away from the Cathedral Church of St. James on Morse Street.

“This property was once a boys’ shelter,” Mr. Cheval notes. “Because I have a design/build business, we can take on a project like this.

“Both Amelia and I grew up in places that were old, needed fixing up and had a character you won’t find in any suburban new home.”Mr. Patel adds: “It is my feeling that heritage- or historical-designated properties act like a lamp post shedding light to many, and reminding us of what the pioneers and the people who came after the pioneers had gone through, whether hardships or opulence. These designations create a good base of appreciation and pride.”

Heritage websites

The internet is an excellent place to investigate what’s involved in buying, owning or ogling a heritage property. Some good websites include:

www.toronto.ca/heritage-preservation (city of Toronto heritage preservation services)

www.culture.gov.on.ca/ (Ontario Ministry of Culture)

www.cabbagetownpa.ca (Cabbagetown Preservation Association)

www.arconserv.ca/preservation_works (The Architectural Conservancy of Ontario)

www.builtheritagenews.ca (Built Heritage News, published by Catherine Nasmith Architect)

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