Tag Archives: former railway lands
By Derek Raymaker – Globe and Mail
Every year for the past five years, the same question has cropped up about the forecast for the Greater Toronto Area’s high-rise condominium market: Is this the year sales will finally decline?
It’s hard to believe, but there was a time when the experts thought the GTA couldn’t possibly sustain 250 to 300 new condo launches a year. Conventional wisdom was that the only thing pushing condominium sales ever higher in the early 2000s were historically low interest rates and a pent-up demand among first-time buyers.
If either of these two components changed, so the experts thought, developers who were late to the game would be in for a rude awakening.
If Toronto’s condominium market trends prove anything, it’s that conventional wisdom does not apply. In 2005, the city recorded 17,693 new condo sales, crushing the 2004 mark of 13,750 sales, according to data collected by RealNet Canada.
A year ago, as the winds of January blew bitter and frosty, no one thought that 2006′s sales could possibly come close to the record-breaking condo sales of 2005 – not even the notoriously optimistic developers who were putting up the suites.
But demand continued strong, fuelled by affordable pricing, strong launches of attractive mixed-use projects in suburban “city centres” such as Markham and Mississauga, growing interest from empty-nesters, and skyrocketing low-rise prices that essentially pushed many young couples and families out of that market. The final numbers aren’t in yet, but sales from January to November of last year were 16,948, so the final total will easily top 17,000 for the year.
Condo watchers are understandably reticent to predict sales trends this year, but they are universally bullish on what areas will see a lot of activity from both developers and buyers, and most of them are not in downtown Toronto.
Sheppard Avenue East will see an eruption of high-rise units this year, according to veteran marketing consultant Barry Lyon. “The Sheppard corridor will boom this year, and we’ll finally be making sense out of the investment in that subway line,” he said, referring to the controversial subway spur off the Yonge Street line completed five years ago.
Mr. Lyon said major multiphase developments are in the works for nearly every subway station between Yonge Street and Victoria Park Avenue. But there will be a huge one at the corner of Leslie Street and Sheppard, on the current site of the Canadian Tire distribution centre.
Vancouver developer Concord Adex Investments purchased the nearly 40-acre site for about $150-million last fall and plans to build a 20-tower community with more than 4,000 suites. Residents will have easy access to the subway, TTC buses, GO Train and Highway 401.
Following the successful launch of Markham City Centre’s condominium component â€” four buildings that sold out in very short order last year â€” there are plans to redevelop Vaughan’s city centre at Jane Street and Highway 7. Current proposals call for about 2,000 suites to be built in a mixed-use complex of four or five buildings. The development will be nicely situated at the end of a planned subway line extension to York University.
“I think developers are trying to include more mixed-use components in the 905 region as an added bonus to make it more of a community,” said Pat Baker, who handles sales for Markham City Centre and several other new projects around Toronto.
Most market watchers agree that Vaughan has lagged behind in condo projects, and needs to do some catching up.
The long-awaited redevelopment of the West Donlands will move a step closer to reality this year.
Toronto Waterfront Revitalization Corp. is expected to issue a call for proposals, with the first development to be built near King East and River Streets. The funky and popular Distillery District nearby has already made it a much-anticipated project.
Another high-profile redevelopment, the once poverty- and violence-plagued Regent Park on Dundas Street East, also kicks into high gear this year.
It’s no longer just downtown first-timers who buy; high rises move to the suburbs
By Derek Raymaker – The Globe and Mail
It shouldn’t come as any surprise that just over 6,600 condo suites were launched into the market in the first six months of 2006.
And it might surprise others that even though new condos are coming on the market faster than at any time since the late 1980s, buyers remain in abundance, and they’re less likely to be young, single, entry-level purchasers.
While 2005 saw the industry beginning to steer away from creating ever smaller boxes, 2006 witnessed strong demand and greater supply of upscale and super-luxury condominium projects, such as the newly launched One Bedford project on Bloor Street where the Annex meets Yorkville.
The 34-storey high-rise launched in May by Lanterra Developments and MCE Developments has a number of one-bedrooms starting at $316,000. But about half of its suites will cost $700,000 and up, topping out at $1.2-million for a two-bedroom-plus-den-and-family-room condo with more than 2,000 square feet.
The steady flow of luxury condos onto the market is a departure from a long-standing reluctance by builders and developers to take risks with expensive suites and luxurious amenities. The thinking used be that if buyers had a million dollars to spend, why would they buy a condo when they could buy a house?
“About 100,000 condos have been built over the past 10 years, but less than 5% could be considered luxury units,” said Jeanhy Shim, the editor and president of Urbanation, a publication that tracks the marketing efforts and sales of high-density housing.
The recent wave of condo launches featuring splashy units with price tags over $500,000 is partly related to catching up with the demands of an underserved niche market. But it has even more to do with large numbers of well-off empty nesters liquidating their valuable detached homes for some maintenance-free lifestyle options.
The granddaddies of downtown Toronto’s superluxury class of suites are Cadillac-Fairview Corp. and Graywood Developments’ Residence at The Ritz-Carlton and Trump International’s Toronto Tower, both launched last year. The Toronto Trump Tower, which clocks in at $1,059 a square foot (more than three times the Greater Toronto average) has sold 44 of its 109 suites, while the Ritz-Carlton has sold 43 of its 137 suites, at $811 a square foot, including a $12-million, 11,000-square-foot penthouse.
“There’s no longer just one type of buyer,” Ms. Shim added. “The market is always expanding to include more ages, more ethnic groups, more geographic locations.”
More than prices and sales, the key piece of data that developers and brokers keep their eye on is remaining inventory, which tracks the number of unsold new registered condo suites. (Though since many condos are put on the market long before they’re built, the number doesn’t usually translate into empty units.) Throughout Greater Toronto, the remaining inventory stood at 13,360 in May, according to RealNet Canada, up 10% from the 12,114 units remaining unsold the same month in 2005.
This accounts for 22% of all new condo suites released within the past year, which is a pretty safe zone for remaining inventory. That’s down from 24% of total new units two years ago.
More good news for buyers is that even with the influx of about 1,500 new condos with $1-million-plus price tags, the average price has gone up only 12% since May, 2005, to $344 a square foot from $307. This indicates the core of the new condo market is still guided by affordability.
The most active area in Toronto for new condo sales is downtown west of University Avenue, with year-to-date sales of 1,544 in 42 locations, focused on the former railway lands west of the Rogers Centre and the redevelopment of Liberty Village south of King Street.
The area also reported the most dramatic rise in average price, up 23% to $408 a square foot two months ago, from $330 in May, 2005.
The most expensive condo pocket radiates from Yonge Street and St. Clair Avenue, which includes Forest Hill and Rosedale, with an average price of $623 a square foot. The average price is skewed somewhat by the relatively small number of new suites for sale, a total of 412.