Tag Archives: condominium unit
Burgers bow to condos in the Beaches
Peter Kuitenbrouwer – National Post
Carl, a mechanic with Black & McDonald waiting in line at Toronto’s original Licks Homeburgers/Ice Cream Friday, expressed shock when he learned more condos are coming to the Beaches.
“I didn’t think they would put a condo in the Beaches,” Carl says. “I thought this was sacred.”
Not any more. Carl hadn’t noticed the big colour sign on the front of Licks: Developers plan to knock the restaurant down and build a six-storey, 29-unit condominium unit, with 27 underground parking spaces.
A red banner on the front of Licks — an institution on the corner of Kenilworth Avenue and Queen Street East since 1985 — promises, “Our homeburgers are getting a new home. New Beach location coming soon.”
Shane Fenton, 28, who with his father, Shelley Fenton, does business as Reserve Properties, bought this site two years ago. Mr. Fenton vows, “Licks is not leaving the neighbourhood. We are working with them to find a new site.”
The Beaches, or The Beach, as some prefer to call it, is among Toronto’s original genteel old-money residential neighbourhoods, a redoubt of gardeners and sailors and studied elegance: mobbed by tourists in summer and braved by dog-walkers in winter. But lately a new group has shown up: developers, buying single-family homes to assemble parcels of land, and turn them into condo projects. Many locals are not amused.
“The downtown core is expanding into these established neighbourhoods,” says Bill Burrows, owner of a business that helps people find companies via the Internet. He has lived on Kippendavie Avenue for 10 years; his front yard is Garden of Eden, resplendent with a koi-stocked pond, six varieties of Japanese maple, a twisted baby locust, rhododendrons and Japanese carpet junipers.
Recently a developer bought six houses next to Mr. Burrows and proposed an 83-unit, six-storey condominium building with an underground garage.
“Many of us understand and appreciate the need to intensify,” Mr. Burrows says. “It should be done according to the neighbourhood. The character of the Beach will change: ‘Kippendavie got it, so why can’t Beach Avenue or Silver Birch Avenue?’ ”
After a long battle, most members of the Kew Beach Residents’ Association have nearly settled with the developer, in exchange for a reduction to 60 units and the developer’s agreement to name adjacent homeowners as co-insured on its policy.
On Monday, two hold-out residents at No. 60 Kippendavie will face the developer at the Ontario Municipal Board, and Mr. Burrows notes, “We haven’t formally settled. We agreed to pospone the OMB hearing for a week so our water expert can review the city’s water report.” Basement flooding is a huge problem here.
Also Monday, Beaches residents gather at 7 p.m. at the Beaches Recreation Centre, 6 Williamson Rd., for a public meeting about the Licks condo plan.
“We expect a full house,” says Councillor Mary-Margaret McMahon (Beaches-East York). “We’re going to get development. We just want to get smart development and want to attract ethical developers who care about the neighbourhood. … We need something more small-townish feel down on the Beach.”
Even so, the Fenton family has made friends with its modest plan to leave standing the Bellefair Methodist Church (1922), at 2000 Queen E., and repurpose it into 23 condos and six townhomes, complete with parking stackers, a kind of elevator for residents’ cars. The developers have converted the sanctuary into a sales centre.
“If you come in with the right attitude and the right approach and work with the community, it can work,” says Shane Fenton, dressed casually in a checked purple shirt with the top two buttons undone, and bell-bottomed jeans. Both Ms. McMahon and Mr. Burrows say they like the Fenton approach, though Ms. McMahon wonders whether six storeys at the Licks site — where adjacent buildings are one and two stories — may be too high.
A few blocks west, there is a standoff. Queen Street East Properties has assembled all the addresses but one on the north side of Queen between Rainsford Road and Woodbine Avenue. The house at 1878 Queen St. East, home to Barber Cuts and Design Wardrobe and, in back, the Pooran family, has held out. Ruth Pooran, who lives here with her son Anthony, says the developers have approached the family “many, many, many times,” to sell the house, built in 1901, but her father refuses.
On Friday, a backhoe pawed at the rubble that was her neighbour’s house to the west (future home of a condo tower). A sign indicates the builder plans more condos to the east.
“It’s rather troublesome,” says Anthony. “I try to study and there’s constantly dust flying.”
“I’ve been to all the meetings,” says Ms. Pooran. “They are all against all the condos because it is ruining the entire Beach. This has always been this way and it shouldn’t change.”
Still, she admits, “ask me in a year when they are digging an 80-foot hole beside my house.”
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Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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Art of the build
By Garry Marr, Financial Post
It was heralded as another perk for condominium owners, but when the City of Toronto created a new rule this year that required developers to provide 12 months of free transit to buyers, Monarch Corp. saw another cost.
“It will be added on [to the price]. It’s like the cost of lumber or concrete,” says Brian Johnston, president of Monarch, whose 25-storey tower The Legacy includes a one-year Toronto Metropass for all 330 owners.
Transit passes and green roofs, which require condominium developers plant a certain amount of vegetation on their buildings, are just the latest wrinkles that cities are adding to the cost of building.
While politicians see these levies as the cost of increasing density in their urban areas, builders see them as development charges by another name.
“You add them all up and at some point a high-rise condominium unit becomes uneconomical,” Mr. Johnston says.
Then there’s public art. Publicly, developers are for it and get involved in a process that, in Toronto, means they could end up contributing 1% of their construction costs if looking for rezoning on a project.
In Vancouver, private developers requesting rezonings greater than 100,000 square feet were required in 2009 to contribute $1.81 per buildable foot to a public art process approved by the city.
And in Halifax, developers are “encouraged” to allocate 1% of capital costs to art projects for developments more than 25,000 square feet. They get their zoning if they come up with the cash.
Karen Mills is a public art consultant in Toronto and works on behalf of Monarch Corp. She has been in the field for 25 years. She says developers have a history of adding some type of art to their projects.
“It started in the late 1980s in Toronto, encouraging developers to contribute 1% of the their costs to art. But it really started in the U.S. in the 1960s. There was a reaction against stripped-down modernist buildings. The public started saying they didn’t like these empty barren plazas in front of office towers,” Ms. Mills says.
While developers are happy to participate in such programs, Ms. Mills agrees all of them see it as a cost of doing business. But there is a payback, she argues.
“Developers who have done multiple projects and been successful know if you want to increase density you have to come through some type of negotiation to get this opportunity to make more money on your development. You have to pay one way or another,” she says.
“Anything that makes a building more distinctive gives it higher recognition value,” she adds. “Public art can be a positive from that perspective, unless of course you hate the art and then it’s a negative.”
Certainly, the condo boom has been a boom for artists. On a $50-million project, 1% of construction costs would amount to an art installation worth about $500,000.
“It’s employment and it’s employment in my area of expertise. Isn’t that great?” says Barbara Astman, the artist behind a project at The Murano, a development on Bay Street, just north of Toronto’s financial district. Her project incorporates colour photographic imagery on 217 exterior windows surrounding the building.
She notes the architect told her at the condo’s opening that she had made the building even better. “That’s what you want to do, add value. You don’t want to be someone who just decorates a building. It will now be a signature for people who live in that building,” Ms. Astman says.
Jane Perdue, public art co-ordinator with the City of Toronto, says public art only affects a small percentage of rezoning applications, but the big projects are targeted. “It’s a minority of buildings, but probably the ones that have the biggest impact,” Ms. Perdue says. “Ultimately, it’s about density exchange,” she says, adding, “if the public art is interesting, the building probably is too.”
Public art may not be required on every project, but that doesn’t mean the developer seeking rezoning is off the hook. Sometimes the developer will be asked to contribute that 1% to another project in the ward where they are building.
For the condominium buyer, the public projects are not supposed to add to their long-term maintenance fees. In the case of Toronto, developers are encouraged to include a maintenance endowment as part of the 1% levy.
Mark Mandelbaum, chairman of Lanterra Developments, says Toronto developers typically want input into the art projects being added to their buildings, but probably wouldn’t participate in such projects if they were not required.
“When you have 1% of your hard costs, that’s a lot of money,” Mr. Mandelbaum says. “A developer typically looks at public art as another development charge, like cash in lieu for parks. It is a municipal charge, but at the very least if you use it wisely, you can make the building more valuable with [the money].”
Developers point to other charges — land transfer taxes, the July 1 harmonized sales tax in British Columbia and Ontario — as all contributing to rising condo prices.
“Ultimately, what prices are to the end consumer is a combination of all the costs of bringing a product to market and whatever reasonable profit expectation that developer wants, given the risk of a project,” Mr. Mandelbaum says.
Peter Simpson, chief executive of the Greater Vancouver Home Builders Association, likens some of the negotiations between cities and developers to “creative arm twisting.”
“Of course it raises prices. A builder is not like any other manufacturer of a product. If there’s a cost associated with the manufacturing process, it gets added on and the user ends up paying the bill. Art is just another thing in a long list of charges. It’s a way to extract money from an easy target. But the target is really the homebuyer.”
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Contact the Jeffrey Team for more information - 416-388-1960
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Toronto Real Estate Forecast 2010
Toronto Real Estate Market at a Glance
* MLS® sales in the GTA will hit a record high 101,000 this year. Average prices for 2010 will increase to $444,000. Both sales and price growth will begin to show significant moderation in the second half of this year and early next year.
* New home sales will jump to 42,000 in 2010 thanks to a 50% increase in high rise sales. Housing starts will rise by 34% this year to reach 36,400 units on strong single-detached construction.
* The unemployment rate in Toronto will fall slightly to an average of 9% this year. Employment gains will push the unemployment rate down further next year, providing support for homeownership demand.
Toronto Resale Market – Nearing a Turning Point
The resale market in the Greater Toronto Area (GTA) will put an exclamation point on 2010 with a record level of activity this year. Sales will reach six digits for the first time and price growth will be well above the historical average. This momentum, however, is expected to wane in the second half of the year. In fact, the market will look quite different by 2011 as sales levels converge back to their longer-term average and prices show little movement. The era of rockbottom mortgage rates is coming to an end and the red hot GTA housing market will begin to lose its steam.
A full year of record-low borrowing costs has made first-time buyers out of tens of thousands of renters and parents’ basement dwellers in the GTA. However, the primary source of stimulus fuelling this increase in homeownership is already beginning to fade. Five-year mortgage rates are on the move and will be a full percentage point higher by the end of the year. Combining higher rates with the new reality of average prices well above $400,000 will make the transition to homeownership more expensive. The erosion of affordability will cause delay for many first time buyers, who have proactively accelerated their purchasing decisions and propped up sales temporarily.
Home sales in the GTA, however, are not expected to decline dramatically and will converge to the 10-year average in 2011. More jobs, stronger income growth and higher net migration will provide support for the market. Furthermore, demand from current homeowners is expected to pick up some of the slack left by fi rst-time buyers. Owners feel the timing is right to make a move as prices for their current home climb to new highs and fi nancing costs for their next purchase still remain low. Also, price appreciation for detached homes in some desirable areas in the GTA hasn’t been as strong as the rest of the market. A higher presence of move-up buyers will further increase the appeal of established neighbourhoods, which should see above-average price growth in the coming years due to their fixed level of supply and relatively low level of turnover. With move-up buyers looking to enter the high end and down-sizing baby boomers looking for less maintenance and to liquidate assets for retirement, a high level of new listings will be a theme over the next couple years.
Investors are also expected to be active in listings their condominiums — approximately 17,000 high rise units will be completed this year with an additional 16,000 coming on stream in 2011. Those who purchased at pre-construction sales centres a couple years back will realize their completed units have gone up in value by about 20 percent. Research undertaken by CMHC reveals that approximately 20% of the condominium units registered in 2009 were listed for sale. It is likely that this share will grow as investors look to capitalize on the recent run-up in prices. Expect up to 10,000 newly completed condominiums to be put on the market over the next couple years. The added supply will lead to softer price growth for high rise units relative to low rise homes.
Existing owners on the move and listings from some condo investors will provide buyers with more selection at a time when overall demand is moderating. With fewer buyers competing for more homes, bidding wars will become less common and prices will face little upward pressure. There is a risk that prices could come down some in late 2010/early 2011. However, any declines would be minimal and short-lived. In fact it is quite difficult to call a decline in house prices that lasts longer than six months in Toronto as prices have recorded annual increases in each of the past 14 years. That streak is expected to increase to 16 years in 2011 with a balanced market producing price growth of less than two percent. Prices can be expected to remain fairly fl at over the next few years to allow income levels to catch up.
Toronto New Home Market – The Future is ‘Up’
A calmer buying environment in the resale market will lead fewer purchasers into new home sales centres. Total new home sales will trend lower in the second half of the year, particularly for singles as the HST sets in, but will nonetheless register a banner year for 2010. High rise units will take back the majority share of new home purchases this year with a record-breaking 23,500 sales. The 18,500 low rise sales will provide a boost for housing starts in 2010, but single-detached homes will soon become a drag for overall housing starts in the GTA. The construction industry will rely more on high rise development next year thanks to recent condo sales centre activity.
Although sales have heated up, high rise starts have yet to materialize. The diffi cult sales and construction financing environment lasting through most of last year will weigh on the number of projects started this year — total high rise starts will remain at the decade average of 14,000 units. All signs point to a pick up in starts in the second half of 2010 and into 2011. Lenders are making credit more available and projects that opened sales offi ces back in late 2007 and early 2008 have hit their preconstruction sales targets. Groundbreaking ceremonies are beginning at sites across the city and a ready-for-construction backlog of at least 10,000 units should be cleared by year end. The upward trend will continue in 2011 thanks to sales levels hitting new highs in late 2009 and the fi rst half of 2010 (typical sale-to-start time lag for high rise projects is approximately 18 months). Also, as the large volume of units currently under construction finish up over the next couple years, more labour, fi nancing and construction cranes will be available to start new projects. High rise starts will rise by close to 30% next year with the potential for further gains in the years ahead. Healthy unsold inventory levels will support more project launches and demand will remain stable as affordability in the GTA declines and land constraints continue to favour high density development. Expect high rise cranes to appear in 905 areas such as North Oakville, downtown Mississauga, Vaughan Metropolitan Centre and Markham Centre.
Unlike the high rise market, better times for low rise construction appear to be in the past. The upward trend for singles beginning in the second half of 2009 will be shortlived and the longer-term decline that started back in 2003 will resume. A 60% increase in detached starts in 2010 will be matched by an equivalent reduction in 2011. The “pull-forward” effect from buyers and builders looking to close on homes before the HST is introduced will result in some let down in the latter part of the year. Furthermore, interest rate increases will no doubt impact affordability and demand for the most expensive houses, and new singles in the GTA defi nitely fit the bill — prices will average $600,000 this year. But perhaps the bigger story weighing on the outlook for single detached construction relates to the scarcity of available land. Over the past seven years the number of available units at construction sites has been cut in half, resulting in the same trend for sales and starts.
Greenbelt boundaries and Provincial housing density targets are making low rise development less feasible in the GTA. As well, single detached sites are typically located outside of the built-up boundary, which can require extensive infrastructure development. Single detached project sites will continue to come online, however at this time, less than 5,000 units are ready to build according to RealNet Canada Inc. Since a developer cannot sell what they do not have, single detached starts will remain limited and the supply squeeze will continue to push prices up. Row homes, which are conducive to infill development and more affordable than singles, will take on their greatest share of low rise housing starts next year with 30%.
Mortgage Rate Outlook
The Bank of Canada cut the Target for the Overnight Rate in the earl months of 2009. The rate was 1.50% at the start of 2009 and has since fallen to 0.25%. Looking ahead, we expect that short-term interest rates will begin to rise in the second half of 2010.
With the overnight rate expected to increase in the coming months, mortgage rates have begun to rise. According to CMHC’s base case scenario, posted mortgage rates will gradually increase throughout the course of 2010, but will do so at a slow pace. For 2010, the one-year posted mortgage rate is assumed to be in the 3.6-4.8% range, while three and five-year posted mortgage rates are forecast to be in the 4.2-6.7% range. For 2011, the one year posted mortgage rate is assumed be in the 5.0-6.0% range, while three and fi ve-year posted mortgage rates are forecast to be in the 5.6-7.2% range.
Rates could, however, increase at a faster pace if the economy recovers more quickly than presently anticipated. Conversely, rate increases could be more muted if the economic recovery is more modest in nature.
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Contact the Jeffrey Team for more information - 416-388-1960
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