With property prices in the GTA skyrocketing, 50% of condos are now sold to first-time buyers. How 700 square feet has changed a generation

By Leanne Delap – Toronto Life

John Downs, a 29-year-old reporter at AM640 Toronto Radio, and his girlfriend, Domini Clark, a 26-year-old food editor at The Globe and Mail, met one night in 1999 at Whiskey Saigon while dancing to ’80s nostalgia. They became friends, and a few months later, Downs asked Clark over to his place to watch TV. “I was stoked because he had cable,” says Clark, “so I put on fishnets and sexy boots.” It was love during Who Wants to Be a Millionaire. “I didn’t know what was turning me on more, the boots or the fact that she knew all the answers,” he says. After three years of dating, it was pretty clear they were in it for the long haul. Downs worked out what his folks were dropping on his sister’s wedding and concocted a plan: “I decided to ask if they’d just give me the money to use as a down payment. A home is more important to us than a party.”

Clark and Downs scoured the city for properties and fell in love with Radio City—the townhouses and towers then proposed for Mutual Street south of Wellesley, on the site of the old CBC building. As journalists, they dug that it was all new but that the heritage buildings were going to be preserved. They responded to the feel of the artist’s renderings (boho and orderly at the same time) and got chills in the sales centre. But they couldn’t quite afford Radio City: for the 677-square-foot unit they coveted, on sale for $206,000, the developer wanted some $40,000 down. Undeterred, they wheedled a special deal to pay in instalments, and a 20th-floor suite was theirs. Standing beside a mock-up in the showroom when it all became official, Clark was overwhelmed. “They put the bought sticker on the unit,” she says, “and I started crying.”

The couple expected the building to be ready 18 months after the September 2002 purchase, but construction delays turned that into three years, time they spent cruising other loft projects to keep that new-home buzz going (“We’re addicted to sales centres,” Downs says). They loved the idea of creating their unit, tile by tile, each upgrade carefully assessed, cost versus benefit. They even spent four months stalking the perfect kitchen faucet: in an open space, every detail counts.

Now, several months after they moved in, they’re hopelessly house-proud in this, the first flush of ownership. Lifting the bed to show off how cleverly they’ve stored the board games beneath, Clark dislodges Mae, one of their two cats. Lowering the bed, she carefully smooths down the duvet. “We’re so excited to have a second room,” Downs adds, pointing to the den–slash–guest space, “but we don’t really know what to do with it.”

“The nicest thing is the ceiling,” says Clark, looking up at the bare concrete finish. “I didn’t want stucco. That’s a waste of the nine-and-a-half-foot ceilings! Can you believe they made us pay $600 extra to leave it the way it was?” Downs and Clark wanted the most they could get out of their little box in the sky. And they aren’t alone.

Toronto has become condo city. Almost four of every 10 new homes sold in 2004 were condominiums, up 13% since 2003. Affordability is the fuel for this red-hot market, with interest rates still tempting and prices dropping from the intense competition. According to the Greater Toronto Home Builders’ Association, the average price for a new condominium in the GTA is $288,587 versus $387,369 for low-rise homes.

First-time buyers used to acquire older homes with the intention of fixing them up. But now it’s hard to find a decent fixer-upper for $300,000. According to a recent Century 21 Canada study on first-time homebuyers, this generation is shying away from costly renovations. Even if they can find something cheap and unique, how many 28-year-olds have an extra $75,000 kicking around to redo the kitchen, knock down a few walls and prop up a sagging foundation?

Condos offer choice in their price range: there are 50,000 units in development throughout the GTA, representing more than 235 projects, some still at the drawing board stage, some nearing completion. And for the design-conscious and consumer-savvy condo generation, there’s a unit for every customer. Buildings today are personality statements.

Condos have made the most obvious intrusion downtown—the corridor running from the lakeshore to just below Bloor, from Cabbagetown to the Exhibition. These units attract a new breed of city dweller: young women and men (or, as marketers like to say, those who see themselves as young) who are single and professional (they tend to have interesting and creative careers), rarely own a car and marry late, if at all. They’re self-starters; they take risks, have freedom and mobility, and aren’t suffering from too-much-stuff disease—at least from what you can see (many have gnarly storage lockers).

They want to be in the action; they groove on reclaimed urban areas (as opposed to the sterile park-underground units along Bay Street). They go out and use the city, mixing with like-minded consumers: there is a growing café society around Queen West and King and Spadina in particular, where restaurants and nightclubs are within walking distance of prime loft zones. Galleries and hole-in-the-wall bars are supporting players. Condos also breed second-hand stores, avant-garde boutiques and dog groomers.

The designers, marketers and builders know how to pitch that white-wall-and-Eames-chair fantasy, and they know exactly who will swallow it. Each project is its own microcosm. From the outside, buyers may seem similar, but they categorize themselves into tiny subsets where little details mean a great deal. I like Prada, you like punk, the guy down the road has eyeglasses with too much personality. These first-timers are doing what they have been programmed to do: they are buying brands.

It seems as if we’ve been surrounded by lofty living forever, but the phenomenon is actually quite new. The branding of condos grew out of the Toronto condo boom-bust experience. Back in the mid-’70s, when Harbourfront’s transformation into a wall of glassed-in towers began, individual buildings differentiated themselves by offering finishing upgrades. In the ’80s, when granite counters, brass bathroom fixtures and state-of-the-art appliances became standard, bigger, better, brag-worthy amenities started to appear as the next sales focus. Gyms went mega; some places installed driving ranges and offered concierge service. Then consumers realized the prices were becoming inflated for gewgaws they’d never use.

For a few years after the market crash in 1987, people still thought property was a safe bet, so speculators continued to buy. As with the day-trader phenomenon, sales had been dominated by amateurs flipping units. Then, finally, in the early ’90s, the condo market bottomed out. Interest rates soared. Investors lost their shirts, condos went on fire sale, developers teetered, and banks lost their taste for handing out fat mortgages.

In 1991 and 1992, developers were forced to put down their hard hats. David Feldman of Camrost-Felcorp was a big player at the time, having completed the Marina Del Rey in Etobicoke in 1989. “I had 1,000 units on my hands,” he says, referring to buildings like 10 Yonge Street and 10 Queens Quay West. “It was not pretty.” Other ambitious projects of the yuppie era suffered the same fate, and condos sat empty. Swaths of industrial and commercially zoned lands remained boarded up. Then the artists came to squat. Back when the Jeff Stobers of the world were inflating the high-tech bubble, artists hid their showers and hot plates and used communal bathrooms on Queen West. I remember friends—artists and bartenders and PR girls—living in illegal lofts around that time. They flouted law and convention and threw big after-hours parties.

In 1995, in regions like Scarborough and North York, condos started to be marketed to Asian buyers in anticipation of Hong Kong’s handover. Chinese immigrants and investors, planning against an uncertain future in Asia, began scooping up presale units across the 905. Meanwhile, downtown developers pressured the city to allow experimental boutique lofts. In 1996, then mayor Barbara Hall changed the zoning laws on industrial spaces and legalized loft living. Developers began to talk about selling the romance of Paris- or New York–style lofts. They were marketing Prohibition-era glamour. It worked for the same reason speakeasies work: everyone loves to be a scofflaw.

The predominant condo design at the time was the wedding cake, the tiered and terraced units you see at Harbourfront, or the stiff box-like constructions along Bay Street. One of the first projects to break that mould was 20 Niagara, completed in 1998. Niagara was a modernist vision of clean lines and simple shapes, employing industrial architecture to make a new kind of residential space. That sounds like a cliché now that everyone is doing raw piping and high ceilings, but back then it was radical. Buyers willing to live in that new ultra-urban environment made out like bandits: the penthouse at 20 Niagara sold for $360,000 in 1996; it went for $937,500 in April of last year. (The units in the building are still highly sought after—most never hit the open market because buyers line up in advance.)

A boarded-up building at Queen and Strachan soon followed. It was marketed as the Candy Factory, which started the local tradition of playing up industrial histories. Now there’s the Merchandise Building Lofts, the Toy Factory Lofts, Gooderham & Worts, the Massey Harris Lofts, the Tip Top Tailor Lofts. But there are only so many warehouses to gut and retrofit. To cash in on industrial chic, developers built entirely new, from-the-ground-up projects with the aura of a conversion (known in the industry as “soft lofts“). Others used cutesy names like DNA (for “downtown’s next address”) or hard-to-swallow ones that evoke other locales, like the Malibu (hovering over the not-so-scenic Strachan streetcar dead end at the Ex) or French Quarter (on a bleak stretch of Jarvis).

Brad Lamb, the tall, bald reigning downtown condo king, is a fixture—both on garbage can advertisements and in restaurants along King Street, his main strike zone. Now 44, he earned his realtor’s licence in ’88 and weathered the crash of the early ’90s. He leads a team of 18 agents who, he claims, sell $700 million worth of condos each year, some 1,800 units. “Toronto is on fire,” he tells me, wearing a skinny suit (no tie, slick), standing on King West and looking out at his kingdom. Lamb says he likes having the young, hip first-timers as clients, because they generally grow with him. “We get them single,” he says. “We get them when they move in with someone. Then we get them when the relationship breaks up.”

“The very best thing about living here is Olivier at Clafouti,” says Jane Tattersall, the 34-year-old general manager of AddVICE Marketing, a company that promotes such bands as Franz Ferdinand, Metric and Death Cab for Cutie, and hip clothing lines such as G-SUS Industries. She’s talking about the cute pastry shop on Queen Street, where Olivier mans the steamer. “He’s so pretty to look at. What a nice way to start the day, and you get a cappuccino, too.”

When Tattersall hit 30, she decided she should get a grown-up place. She was living with several girlfriends in a sprawling house on Dovercourt, a post-grad hangout that suited raucous parties. “I had an overwhelming job, and I needed my life at home to be more peaceful.” (She also deejays at Teatro restaurant once a month.)

Fiercely independent, unsinkable right down to her ’70s-in-Gstaad ski bomber, she wasn’t going to wait for marriage to get herself set up properly in life. “I called my bank’s mortgage guy and he came right to my house,” she says of her sudden home-buying burst. “I wanted two floors, which is hard to find in a 700-square-foot loft.” And she wanted Queen West, too. She looked at a few places, then a friend called to say she was selling her place in the Trinity Park Lofts, which she had lived in for only a few months. “It was brand new, right across from Trinity Bellwoods Park, and all ready to go; basically, all I had to do was paint.”

She bought for $240,000 two years ago and loves it. “A lot of models and actresses live here,” she says. “It’s pretty safe these days, not like a loft in a more warehouse-y part of town.” In fact, it’s almost totally gentrified, but neighbourhood reputations die hard. Opposite the park, there’s a groovy bike store and romantic guitar repair shop; across the way is Oyster Boy and the Swan, the feeder stations for other nearby condos and lofts.

In the den off her bedroom, she has constructed an iTunes zone, where she has been burning her vast collection of CDs. A giant candle adds a spicy patchouli fragrance to the room; her bedroom windows are hung with generous loops of red fabric. “And the closet! I can fit all my shoes, for the first time in my life.”

Still, she has a few things left to do. “Furniture shopping is hard since I don’t want to buy the wrong thing. I’ve been looking for a coffee table for two years. The space feels big, but there isn’t a lot of room to juggle. That’s the thing about lofts. You think it’s going to be a box to fill. But it looks best when it looks empty.”

Hence the success of the interior design firm Cecconi Simone, the city’s leading condo designers for the downtown projects. In charge of everything from research to marketing to model suite dressing, and lobby and floor plan design, Elaine Cecconi and Anna Simone are the Brian Gluckstein of small spaces. They have some 15 projects under construction, and another eight on drawing boards due to begin in the spring.

Responding to the clean, streamlined lofter’s dream, they used white pleather for their soft furnishings. Most of the hard pieces are based on a simple cube that you can use in multiples, adding or subtracting. “It is totally a scale issue,” says Cecconi. “In less than 700 square feet, everything must be functional.” Plus, old things don’t work. “You can’t very well have a shabby-chic couch in a crisp loft,” Simone added. “And Canadian pine looks totally wrong.” Another thing they understand is the way young people use space. “Many people don’t need a dining room. They don’t use it. They eat in bed with their laptops. They need a tray.”

Three years ago, the duo opened a retail outlet below their design offices—on Dundas West near Ossington—called Oni One. Little Portugal seemed an unlikely destination for shoppers looking for sleek new furniture for their condos, but when the soaring white showroom rose out of the down-market row of wedding halls, dollar stores and caipirinha purveyors, the Mini Cooper set with brand new pads to furnish followed. They stuffed their hatches with modern plastic-crystal chandeliers, a monastery’s worth of candles, stacking trays and bright orange throws. “Some 95% of people who come to our store buy,” says Simone. “Our average sale is $7,500.”

Their slogan is “My life is bigger than 624 square feet,” and it hangs on a large, orange-print banner just below their boardroom. There, Cecconi and Simone throw around the term “psychographics”—whereby crafty marketers try to sort consumers into little lifestyle cubbies, human specimens neatly labelled by their consumption preferences. Essentially, it means they imagine every possible detail about a customer before creating a product. “We have learned that each block in this city, each side of each block, has a different identity,” says Cecconi. “People identify themselves with a district, then with a street within that district, then with a doorway on that street.”

To wit: people who buy at 20 Stewart wear Yohji and Prada, are members of the Spoke Club and eat at Lee. Prospective purchasers at Vü, where the Jarvis and Adelaide Goodwill used to be, ride bikes or take transit. They love being east of Yonge, used to shop for vintage clothes at the Goodwill; now they buy labels like Ben Sherman from Delphic on Queen West. They are avid gallery-goers and don’t do mainstream. They read I.D. Magazine and Wired and would like a Vespa. The buyer at The Boutique on Adelaide is a lawyer open to a career shift; he—and it’s almost always a he—likes to paint, and so there is a little studio off the bedroom in the model suite. He travels a lot, uses the building’s dry-cleaning and dog-walking services, and likes the idea of a private bar on the roof (no riff-raff here). He goes to Ultra Supper Club and drives a 911 and is divorced with three kids. It sounds like extreme stereotyping, but Simone claims 80% of all buyers fit their preconceived psychographic client profile.

The firm now employs 35 designers and has devotees across the country (they’re opening a second store in Vancouver) and beyond. They’re particularly popular in comparably sized U.S. cities, where developers have only recently caught on to the idea of urban densification. The Cecconi Simone firm has been commissioned by developers to design Toronto-like lofts all over the States: Florida, New Jersey, Georgia, Oregon and Illinois. Because Torontonians have spent the past decade getting accustomed to the idea of creating homes in high-rises, we have valuable lessons to teach other cities about lush living in tiny spaces. Cecconi Simone has even been hired to work on projects going up in Turks and Caicos, Dubai and China. “The loft thing is so huge,” Simone says. “Toronto is ahead of everywhere else in the world on this.”

Young condo owners often have flex hours and work at home, which changes their relationship to the city. Nolan Dubeau, a soft-spoken 29-year-old, runs his own interactive business from home (graphic design and Web sites) and subcontracts to others who do the same. He used to live in the east end, then two years ago bought a $316,000 two-storey unit in the Tecumseth Lofts on King West, a classic retrofit building that has just 28 units, each slightly different from the others. Now he sits on the building’s board of directors. He knows he won’t be on Tecumseth forever and is very conscious of resale. In fact, thinking ahead is one reason he chose the building: “When I bought the loft, I figured there would be better resale in a project with such individual character.”

The suite is 1,200 square feet, with industrial-style railed stairs to the second floor and a catwalk between bedroom and bathroom. His main floor is open, with his office right across from his couch—evidence that he works long hours. But even the most wired among us need some time away from the siren song of the Apple. Dubeau escapes his keyboard two or three times a day by frequenting local bars, cafés and restaurants like the Drake, the Beaconsfield and Czehoski. “This area is terrific,” he says, and the condo is perfect for him. He’ll stay as long as he can, probably until he decides to have kids. Then he’d like to buy a house, ideally somewhere downtown. But if necessary, he’ll stay put for a while, even with a family. A loft with a baby, he believes, is probably “doable for a year or two.”

Other members of Dubeau’s demographic are clearly thinking along the same lines; they’re an acquisitive bunch. Royal LePage predicts that the rate of condo purchases among first-time buyers will double in the next three years. Maybe this is a sign that we’re maturing as a city, becoming more like New York, Rome or Paris, where living in apartments your whole life is considered normal.

When 39-year-old Sidney McCain, a senior manager at V2 Records, moved from Manhattan to Toronto to live with her boyfriend, Mike D’Abramo, she thought she’d be able to buy a house and was excited by the prospect. “Toronto is so strange to a New Yorker—all the lawns, all the three-storey single-family houses downtown.”

Mike D’Abramo is a 33-year-old manager of account services at Youthography, a company that studies trends in the tween and teen markets. McCain met him when she flew into town in 2002 to promote Spiritualized, what she calls “an epic stoner band from the U.K.” Now the couple are the entertainers of their circle, hosting all major holidays, awards shows, even the Kentucky Derby. “If there’s an occasion,” she says, “we’ll find it.”

At first, they rented a 1,000-square-foot wide-open single room in the Kensington Market Lofts, right in the heart of the market. But all their friends were buying, and buying is contagious; it spreads through groups of friends the way marriage and babies do. “We were paying $1,700 a month, and we figured we could get a mortgage for less,” says McCain. They hit the pavement looking at houses but were disappointed with the variety in their price range.

Then they found a condo unit for sale at 150 Beverley, next to the Italian Consulate, a partial conversion (the façade was the only part preserved) from the mid-’80s. It cost $299,000 and was unloved. “Things were pretty rundown,” says D’Abramo. “The skylight had a big hole in it, and the walls were painted brown.” But it was relatively big—900 square feet—and the rooms were more “traditional,” as in they had walls. “We wanted that,” he adds. “The open-concept Kensington Market Loft was a little extreme for our lives.” When you come from somewhere else, friends and family come to stay, and an open-concept loft is not the most comfortable space to share with Aunt Ida.

Their favourite feature was the 700-square-foot patio—the kind of space almost never found in newer buildings. “We could have the outdoors, too!” says D’Abramo. “We were planning parties there before we even put in an offer!” So, like dreamy renovators everywhere, they signed on the dotted line and dove in.

Given the last condo bust, when speculators lost their shirts, it’s hard to believe all this won’t end badly. In the GTA, there were approximately 16,000 condo unit sales in 2005, up some 25% from 2004. No other city in North America has the volume of sales that we do. But with so much of the market driven by first-time buyers, demand could dissipate. When the young condo buyers start having kids, they’ll need more space. Even large lofts aren’t conducive to raising a family: the light will wake the baby, and while it might seem thrillingly unconventional to let your toddler tricycle around indoors, when you have kids, you want somewhere to hide.

And yet Jeanhy Shim, the editor of Urbanation, an industry quarterly that tracks the Toronto condo market, isn’t worried. When those lofters move out, others will move in. She believes there’s no reason to expect an early ’90s–style crash. Because speculators fuelled the market then, units flipped several times before anyone pulled up with their U-Haul. Shim estimates that only about one-fifth of units are now purchased for investment purposes. The rest are sold to “real” buyers, who want to live in their condos. In the last boom, 50% of supply was unsold; today the number of unsold units on the market hovers around 22%. Another difference is that though unit prices are rising, they’re doing so moderately: only 24% in five years. You might even say that there are bargains out there: in 1989, at the height of the last boom, square footage sale prices were $425; today they are firm at $330.

Julie Di Lorenzo, president of the Greater Toronto Home Builders’ Association, is equally optimistic. She started out as a construction contractor when she was 18 and is now a partner at Diamante Development Corp. (the company that built 1 Balmoral, 2 Roxborough and the Royalton at Bay and College, and is now working on 1 City Hall, which will be ready for occupancy in June). “With immigration rising, land is going to run out,” she says. “There is so much competition that buying a condo within the city of Toronto is the opportunity of a generation.” Looks like the generation is listening.

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