Toronto Condo and Real Estate Blog

New condos selling like hotcakes in Toronto

In a year of firsts for the Toronto new condo market, another record was set in November as sales of new condos exceeded the 20,000 unit threshold for the first time ever, Bob Finnigan, president of the Building Industry and Land Development Association revealed today.

With another 2,243 high-rise condos sold in November (up 35% over November, 2006), new condo sales for the first 11 months of 2007 have reached 22,059 units and BILD is projecting approximately 23,000 sales to year end, smashing the previous record of 17,561 units sold in 2005.

“New condos are basically selling like hotcakes, it’s as simple as that,” said Finnigan. Condo sales are up 32% through the first eleven months of 2007, driving a 14% increase in total new home sales. “The year 2007 will go down as the year of the condo,” Finnigan declared.

“This year also marks the first-time that high-rise housing sales have outstripped low-rise (single-detached, semi-detached, town-home), with an astounding 52% of all sales being high-rise in form,” Finnigan added.

Finnigan attributed the market transformation primarily to the relative affordability of condos compared to low-rise homes. “The RealNet new home price index for new low-rise homes rose 6.8% in the last year and currently sits at $430,000 while the high-rise price index rose 8.6% to $347,000.”The $83,000 price advantage for condominiums goes a long towards explaining the strength of the high-rise housing market,” he said.

With respect to the year over year price increases, Finnigan felt they were healthy enough to reward buyers and investors but modest enough when transaction costs are taken into account to preclude speculation.

With more than 1,500 members, BILD, formed through the merger of the Greater Toronto Home Builders’ Association and Urban Development Institute/Ontario is the voice of the land development, home building and professional renovation industry in the Greater Toronto Area. BILD is proudly affiliated with the Ontario and Canadian Home Builders’ Associations.

————————————————————————————————–———-

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

CBC News

Home buyers in Toronto can no longer dodge a new land transfer tax, as the deadline came and went Monday for exemption from the city-imposed fee.

The controversial tax, valued at 0.5 per cent to two per cent of the sale price, can add thousands of dollars to the final cost of homes in the city.

The tax will take effect on Feb. 1, but purchasers had until Dec. 31 to buy a home to be exempt from it, with the closing date to be no later than Feb. 1.

Sales made to first-time home buyers under $400,000 are also exempt from the new fee.

The land transfer tax is one of two new taxes approved by Toronto city council in October as part of its response to a $500-million budget shortfall.

Since the vote, Toronto real estate agents observed a rush by many homeowners to sell their homes before Dec. 31, in the hope of avoiding the tax. Agents have predicted a slowdown in the city’s real estate market this year.

Combined, the land transfer tax and a vehicle registration tax are expected to raise about $175 million this year for the city, as well as about $300 million in subsequent years. The $60 per vehicle registration tax takes into effect later this year.

————————————————————————————————–———-

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

By Derek Raymaker - Globe and Mail

The eastern suburbs of Durham Region have never suffered from being too much in demand.

From their birth in the post-Second World War period right up until the present day, these areas have been viewed as second choices in terms of location by new-home buyers. That reputation has been reinforced by the drawbacks of congested highway connections and unfortunate landmarks such as the two nuclear generating stations. The areas also largely lacked any sense of history. Even Brampton, Mississauga and Oakville have historic town centres.

Because of this, the main urban municipalities of Durham Region - Ajax, Whitby, Oshawa and Pickering - have held a distinct advantage over the rest of Greater Toronto when it comes to affordability.

Until very recently, Durham Region was by far the most affordable market for new single-family, detached housing in Greater Toronto. It also had a fairly large stock of land for new residential housing to keep the volume of new housing steady and builder’s land costs low.

Durham Region is still relatively affordable when it comes to new detached housing in the rest of Greater Toronto, but prices have spiked significantly since 2004, when the provincial government implemented legislation restricting municipalities from expanding their urban boundaries. Along with its effort to create a Southern Ontario greenbelt, the province significantly limited the perceived supply of residential land almost overnight.

Besides a sudden price hike in new detached housing, the realities of the province’s move to steer the 905 suburbs toward development intensification also resulted in a sudden interest in townhouse and condominium development in Durham Region, of all places.

Some builders have been making the most of it by launching condo projects aimed at older buyers from the area. San Francisco by the Bay, a two-tower project on Pickering’s lakefront released earlier this year by Chestnut Hill Homes, has done well in what is a very underdeveloped condo market. That won’t change the fact that the new-housing market is largely driven by young families making their first or second purchase, and, with all else being equal, a new detached home is what they desire most.

Oshawa and Whitby remain the most affordable markets for buyers seeking single-family, detached homes. In the first 10 months of 2007, the average prices of newly sold detached houses were $310,511 and $343,486, respectively, well below the Durham Region average of $366,440 for such residences, according to Canada Mortgage and Housing Corp.

On the other side of the affordability scale is Ajax and Pickering, with average prices for single detached houses of $436,865 and $476,005, respectively, for the January-to-October period of 2007.

Ajax reported the largest increase - 20.6% from $362,330 - from the same period last year. Not surprisingly, Ajax also registered the biggest drop in starts for detached houses from January to October - 62% to 404 from 1,059 in the year-earlier period.

Pickering had the next largest price increase for single-family, detached housing, up 8.3% from $439,388 in the first 10 months of 2006, while price increases remained under 3% in Oshawa and Whitby.

Pickering has emerged as one of the most interesting submarkets in Durham. Its close proximity to Toronto along with protected natural areas in its northern reaches have pushed housing there into a higher price range.

One new project that appears to define that newfound affluence is the Ravines of Buckingham Gate, launched last May by Glen Rouge Homes, just south of the Seaton Golf and Country Club at Brock and Rossland roads.

Prices at Buckingham Gate range from $533,000 to $745,000 for between 1,659 and 4,170 square feet of living space. It should be noted that these homes are on large 48-, 50- and 60-foot-wide lots, with many homes backing on to conservation land.

While the price point here is a cut above the Pickering average, houses of this size - with features such as direct access to conservation land, granite countertops, walk-in pantries and oak staircases - would be significantly more expensive in most other submarkets, even in the 905 suburbs.

————————————————————————————————–———-

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