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Tag Archives: high rises

Drop in Toronto condo sales shows market balancing out, industry group say

Garry Marr – Financial Post

Toronto builders call it stability but their latest statistics show condominium sales are down 20.2% this year and now prices are falling.

The Building Industry and Land Development Association says there were 7,047 high-rises purchased over the first four months of the year, down from 8,833 for the same period a year earlier. The average high-rise apartment sold for $431,800 in April, off 3.5% from a year earlier.

Comment: Down 3.5% from the best year ever, remember.

The builders say home sales are in line with more typical periods during this boom and comparisons against 2011 are against a record-breaking year.

“We try to use a five-year average,” says Bryan Tuckey, chief executive of BILD, in talking about comparisons. “It’s very positive in that it’s balancing the market. You look at trends and forecasts and actual sales, it’s very seldom a straight line but these [results] are balanced to the way things have been going the past four or five years.”

The exceptions have been 2008 and 2009, years affected by the recession, and the record-breaking pace of 2011, he says. “You have to remember 2011 really was a banner year,” says Mr. Tuckey, adding he doesn’t see downward price pressure because of the demand created from people moving to Toronto.

The drop in sales didn’t come as a huge surprise to CIBC deputy economist Benjamin Tal, who says a 20% drop in sales and 10% decline in prices is what he’s been expecting — something he says will be good for the condo market. “It’s exactly what we expected.”

Comment: But it is not going to happen. Taking one month’s 3.5% drop and equating it to a 10% predicted drop is stretching it pretty far. Sounds like a psychic trying to make events fit their prophecies.

One factor that could also be impacting the market is the increase in interest rates earlier this year. Rates have crept back up after dropping to a record low of 2.99% on a five-year, fixed closed-rate mortgage. Royal Bank of Canada lowered the posted rate on its five-year fixed closed mortgage by 10 basis points Wednesday to 5.34%.

Comment: But brokers’ best rates are now 2.94% for 5 years, lower than the 2.99% lows. Posted rates are bunk, everyone knows that.

Not everybody is convinced the condo market is sinking. Urbanation Inc., which also tracks condominium sales, says the first quarter was the highest quarter on record. Urbanation’s stats are not out for April.

Comment: And they are the default experts on the Toronto condo market. I trust what they say over and above anyone else.

“It looks like what happened after the first quarter is that a few sites might not have done as well after their opening,” says Ben Myers, executive vice-president of Urbanation. “Our numbers don’t reflect that and it is the first time we have seen that in a long time.”

Comment: So taking one month out of context means nothing. One month does not negate the results of the previous quarter.

Like BILD, Mr. Myers wonders whether expectations are a little high because of 2011. “The new standard is lot different than the past standard. In 2007-2008, if somebody sold 30% of their units in the first three months after launch they would be happy. Now it’s more like 50% to 60%,” he says.

His own data indicates that GTA condo prices are relatively flat with the average sale price in the resale condo market $396 a square foot in the first quarter, down from $400 a year earlier. It was the first time since the recession in 2009 that the market had recorded a quarter over quarter decline.

Comment: Let’s not get too excited about a 1% difference.

George Carras, president of RealNet Canada Inc., which compiles the data for BILD, says price comparisons are difficult because condo units have shrunk.

“What has driven the price decline is size,” says Mr. Carras. “We’ve lost about 130 square feet in the index size of a condo. You are seeing prices go down. The reason is you are getting less space for less money.”

Comment: Which is why we need to measure condos on a per-square-foot basis. We also need to exclude parking spots and lockers to be sure we are comparing only apples.

Mortgage Broker Vince Gaetano, of Monster Mortgage, wonders whether all the negativity about the condo sector has fuelled the decline. “The negative press doesn’t help,” says Mr. Gaetano, adding tougher mortgage regulations, especially a crackdown on rules for self-employed individuals, may be impacting sales.

Comment: Or, we wait another quarter or two before we start picking new trends.

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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.

—————————————————————————————————–

Toronto Real Estate Neighbourhoods

Toronto is often called “the city of neigh­bour­hoods” because of the strength and vital­ity of its many com­mu­ni­ties. The city has upwards of 240 dis­tinct neigh­bour­hoods within its bound­aries. Before 1998, Toronto was a much smaller munic­i­pal­ity and formed part of Met­ro­pol­i­tan Toronto. When the city amal­ga­mated that year, Toronto grew to encom­pass the for­mer munic­i­pal­i­ties of York, East York, North York, Eto­bi­coke, and Scar­bor­ough. Each of these for­mer munic­i­pal­i­ties still main­tains, to a cer­tain degree, its own dis­tinct iden­tity, and the names of these munic­i­pal­i­ties are still used by their res­i­dents. The area known as Toronto before the amal­ga­ma­tion is some­times called the “old” City of Toronto, “Toronto proper”, the Cen­tral Dis­trict or sim­ply “Downtown”.

The “for­mer” City of Toronto is, by far, the most pop­u­lous and dense part of the city. It is also the busi­ness and admin­is­tra­tive cen­tre of the city. The uniquely Toron­ton­ian bay-and-gable hous­ing style is com­mon through­out the for­mer city.

The Old Toronto refers to the City of Toronto and its bound­aries from 1967 to 1997. It is some­times referred to as the “South” or “Cen­tral” dis­trict, and includes the “down­town core”. Some of these names such as “The Fash­ion Dis­trict” are (or were) used as mar­ket­ing for the areas or by BIAs; this area is actu­ally called “King-Spadina” by locals. Another exam­ple is the “Old Town of York”, known also as “King and Parliament”.

The “inner ring” sub­urbs of York and East York are older, pre­dom­i­nantly middle-income areas, and eth­ni­cally diverse. Much of the hous­ing stock in these areas con­sists of old pre-war single-family houses and post-war high-rises. Many of the neigh­bour­hoods in these areas were built up as street­car sub­urbs and con­tain many dense and mixed-use streets. Mostly they share many char­ac­ter­is­tics with sec­tions of the “old” city, out­side of the down­town core.

East Toronto, Ontario (Incor­po­rated 1888, annexed by Toronto in 1908) was an incor­po­rated com­mu­nity in what is today a part of the city of Toronto, Canada. It cov­ered much of what is today the Upper Beaches neigh­bour­hood, stretch­ing up to Dan­forth Avenue in the north. The cen­tral street in the com­mu­nity was Main Street, run­ning south from Dan­forth to Kingston Road. The main com­mer­cial cen­tre of the town was located at the inter­sec­tion of Main and Lake View (now Main and Ger­rard). As Toronto’s true main street was named Yonge, the name Main Street was main­tained even after amal­ga­ma­tion with the city of Toronto. This explains why Toronto’s “Main Street” is far from the city centre.

East York, located north of Dan­forth Avenue between the Don River and Vic­to­ria Park Avenue, devel­oped con­tem­po­ra­ne­ously with the West End of the old City of Toronto, and is sim­i­lar in form and char­ac­ter. It is cur­rently admin­is­tered as part of old Toronto. How­ever, until 1997, it was an autonomous urban borough.

The “outer ring” sub­urbs of Eto­bi­coke, Scar­bor­ough, and North York are much more sub­ur­ban in nature (although these bor­oughs are devel­op­ing urban cen­tres of their own, such as North York Cen­tre around Mel Last­man Square).

For admin­is­tra­tive pur­poses, the City of Toronto divides the city into 140 neigh­bour­hoods. These divi­sions are used for inter­nal plan­ning pur­poses. The bound­aries and names often do not con­form to the usage of the gen­eral pop­u­la­tion or des­ig­nated busi­ness improve­ment areas. A num­ber of neigh­bour­hood maps of Toronto do exist, some pro­duced by real estate firms and some by inter­net por­tals. A project to map the neigh­bour­hoods accord­ing to the com­mon usage of the res­i­dents was done by the Toronto Star news­pa­per. Based on feed­back from Star read­ers, it has pro­duced the most com­pre­hen­sive, albeit infor­mal, Toronto neigh­bour­hood map.

After the update of Toronto Mul­ti­ple list­ing ser­vice (MLS) on July 5, 2011, the Toronto Real Estate Board (TREB) intro­duced a new search­ing mech­a­nism for the Toronto MLS, used by real estate agents oper­at­ing in the region. MLS searches can now be refined at three lev­els and MLS users can search houses by area, then by munic­i­pal­ity, and then by neigh­bour­hood or com­mu­nity. It uses Bing Maps. This was the first change of this mag­ni­tude in about 50 years of Toronto MLS his­tory. Even if many are upset by the name of the area they live in!

The change was designed to elim­i­nate the obso­lete cod­ing sys­tems whereby Greater Toronto was divided into 86 arti­fi­cial dis­tricts denom­i­nated by alphanu­meric codes. Due to the grow­ing pop­u­la­tion in the city and the increas­ing dif­fi­culty of brows­ing the code-based sys­tem, TREB made this rad­i­cal change which is intended to sim­plify the use of MLS for real estate agents as well as home buy­ers.

Because Toronto is an enor­mous munic­i­pal­ity of its own, the core city area will con­tinue to be split into coded dis­tricts, although each of the dis­tricts will in turn con­tain neigh­bour­hoods. Hence, the City will be eas­ily search­able as well.

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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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  • Toronto’s luxury condo prices rival New York’s

    A view of Central Park, however, is not included

    Erica Alini – Macleans

    Imagine you had $4 million to spend on a new downtown home. In New York, one of the world’s great cities, you could buy a three-bedroom, 2½-bathroom apartment on the edge of Central Park. If you were feeling more frugal you could move a couple of blocks away and snatch up a penthouse with a full view of the park for less than half the price, $1.5 million.

    Or you could spend the money on a three-bedroom, four-bathroom suite at the Residences at the Ritz-Carlton with a full view of… Toronto. A two-bedroom, two-bathroom suite in the same building costs as much as that New York penthouse, and a survey of the Multiple Listing Service shows over 100 condos in Toronto selling for $1.5 million or more (134 to be exact, I checked).

    Comment: And what are the sizes of the units? How current are the finishings? How about averages? Or are you just cherry-picking a couple to make a point that is not quite right? You need to compare apples to apples, cost per square foot and similar aged buildings. Then you know how they stack up. This comparison is flawed to begin with.

    The multi-million-dollar New York price tags for some condos in Canada’s biggest city speak to a dangerously overheated market, say some observers. In Ontario, construction of multiple urban units (which mostly means condo buildings) was up a staggering 50% in March from the previous month. In Toronto alone, there are nearly 48,000 units under construction. In 2011, the city counted 132 residential high-rises under construction—more than New York, Chicago, Miami, Boston and Dallas combined. Later this year, that number is expected to reach 189, according to housing market analyst Ben Rabidoux.

    Comment: Because we have 4,000sf condos with prices over $1.5 million, that makes us over heated? How does the cost of 100 condos related in any way to the number of units in total being built? You are just throwing random numbers around trying to scare pe0ple.

    For some, the cranes that have taken over parts of the city skyline are a sign of a large unmet demand for housing, driven by a growing population and urban policies meant to constrain the city’s horizontal development in favour of building upward. Others, though, see a bubble market that is headed for a bust.

    Comment: Yeah, because 4% per year is INSANE. After inflation, resale condos are going up 1.5%. How is that even remotely like a bubble?

    In the first three months of this year, resale prices for condominium apartments have fallen for the first time since 2009, says Rabidoux, adding: “It’s potentially a disaster waiting to unfold.” If that happens, a few buyers will no doubt regret spending New York prices for a Toronto condo. But at least they’ll have the bragging rights of a Ritz-Carlton address—and plenty of bathrooms.

    Comment: Uh, no, condo prices did not fall. In April they were 4% higher than 2011. Not sure where they got that from…

    —————————————————————————————————–
    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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