Tag Archives: urban condos
Jason Heath – Financial Post
On average, a home in Canada costs 84% more than in the United States right now. The national averages are $372,762 at home versus $203,100 south of the 49th parallel. One might argue that something has got to give.
Comment: Why? There is no connection between their real estate market and ours. That is like saying that San Fransisco house prices are well over $1 million while Winnipeg is $228,000 so the price of cheese has to change. There is no connection whatsoever…
By analyzing housing starts in Canada, we can get a good indication of future trends in real estate. Warm weather throughout most of Canada was credited with being the catalyst for a very strong month of March in new homes. April was expected to be lacklustre, but those expectations were blown out of the water with 244,900 housing starts last month, compared to an estimate of 204,000. This was the best month in about five years, well prior to the onset of the 2008 recession. These numbers have some questioning the sustainability of starts as well as eliciting further calls for a housing bubble here in Canada.
Of particular interest was that nearly two-thirds of new homes last month were multifamily units, which includes condominiums — a 27% increase year-over-year on a seasonally adjusted basis.
Comment: Amazing, people across Canada are looking for housing density, they want to live in urban centres as opposed to sprawl. Not shocking. And with land values ever increasing, developers would better afford a small plot of land and build upwards. And prices in general are high, first time buyers can afford condos.
Canadian housing also topped a recent global list published by the Economist for 12-month price change, increasing 7%, while ranking high on a comparison of home prices to both rents and average incomes. Overall, the Economist suggests that Canadian homes are 54% overvalued relative to a 19% undervaluation in the U.S.
Comment: Because we have one of the only economies not in the toilet right now – that is a major reason. And comparing rents and incomes to prices is moot, as I say every week. Monthly carrying costs are what matter. And the average house at the average mortgage rate – in Toronto – is around $2,200/month. Go back 30 years and it was $7,100 in 2012 dollars. And $2,200 is about the average rent in Toronto for a 2-bedroom condo or apartment. Which means that housing is actually quite affordable.
So clearly it doesn’t take a statistics degree to read the numbers and unequivocally declare the Canadian housing market is overheated and in particular, the condo market, right? Wrong.
Comment: Very wrong.
First off, CMHC’s recently released annual report stated: “Clear evidence of a bubble is lacking [and we] continue to monitor very closely housing prices and underlying factors such as demographic and economic fundamentals and financial conditions across all major urban centers, including condominium markets.”
Furthermore, averages can be deceiving and may not be representative of a particular local market. A lack of supply in posh parts of the Greater Toronto Area, for example, has been driving bidding wars and pushing prices considerably higher in some neighbourhoods. Perhaps people are keen to lock in today’s low mortgage rates and are willing to buy a house in their desired neighbourhood regardless of the cost. In the short run, this drives up average prices. In the long run, does this really matter?
Comment: Not that much, prices rise forever, essentially. That is why gas is no longer $0.42/litre and chocolate bars are over a buck.
The big question based on Canada’s relatively high prices and April’s enormous inventory of new condos is whether the condo market is really experiencing a bubble? One of the key considerations for the purchase of any home has always been location. And location is one of the main reasons the condo market is not in a bubble.
Comment: Enormous inventory of condos that are 95% bought and paid for.
What are many Baby Boomers going to do in coming years? Many will be selling the two-storey houses where they raised their families and buying condos, both for lifestyle reasons and also to bank some money to fund their retirement.
Comment: Such a reasonable thought!
What are many young families going to do in coming years? If they want to live in Canada’s big, expensive cities like Vancouver, Toronto and Montreal, they’ll do what’s been done in the likes of New York, London and Tokyo for years — they’ll buy a condo.
Comment: So rational!
What are many new immigrants going to do in coming years? In recent years, about 70% of Canadian immigrants end up in the big three — Vancouver, Toronto and Montreal. And they don’t buy houses in the suburbs. They rent condos in the city, so they can be close to jobs, resources and cultural centres until they are established.
Comment: My dog, that makes so much sense!
Demographics (Baby Boomers), family finance (big city housing affordability) and global mobility (immigration to the world’s new “America”) make condos the location of choice for tomorrow’s Canadian home buyers. I live in a big house in the country, northeast of Toronto, so condos aren’t for me. Am I selling my rural house to buy a condo in the city? No. But prices of goods and services, homes included, are all about supply and demand. Therefore, my feeling is that big city condo values will continue to rise in general and that house prices in some urban areas will fall as a broad trend, with average home prices across the country potentially flat in the years to come.
Comment: Oh man, he speaketh such truth!
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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Lisa Van de Ven, National Post
It’s for those who want to be in the middle of everything.
First-time buyers who want to live in the city’s central downtown district may have to be prepared to pay slightly higher price points, depending on how close to the core they want to be. For these urban buyers, though, it’s worth it to be surrounded by the clubs and restaurants they want to visit, as well as shops and even work sometimes. They don’t want to waste their time commuting, but instead to have everything they need just outside of their front doors.
Developer Empire Communities, for one, has been seeing just those buyers at its 24-storey FLY Condominiums site at Front Street West and Spadina Avenue. The building has been successful with the first-time crowd, who like what the location has to offer.
“The location is second to none, it’s fantastic,” says Christine Brennan, Empire’s director of sales and marketing high-rise. “There’s accessibility to transportation, which is key. All of the amenities, great shops and the entertainment district are close by. It puts people literally steps from everything that the city has to offer.”
Empire offers condos specific to the first-timer, with one-bedroom and one-bedroom-plus-den units available, starting at 568 square feet and $239,900. “A lot of downtowners are looking for really great value,” Ms. Brennan says.
Those urban buyers also want to be close to their favourite things, which in the case of ICE Condominiums, located at York Street and Bremner Boulevard, means being close to the sporting teams they love. The project, by Lanterra Developments and Cadillac Fairview Development Corp., is steps from the Air Canada Centre and the Rogers Centre. Condos start at 402 sq. ft. and from the $280,000s. “We can’t imagine a better location than ICE,” says Mark Mandelbaum, chairman of Lanterra.
Though some buyers prefer food over sports. In that case, there’s Aspen Ridge’s VU, which is close to St. Lawrence Market. Construction is underway at the site, located east of downtown at Adelaide and Jarvis, with occupancy beginning in fall, 2009. One-bedroom units start at 750 sq. ft. and are priced from the mid-$300,000s. “I think they see the value of living in a great area,” says Jason Attard, vice-president of sales and marketing with Aspen Ridge. “And with interest rates being so low, it makes the decision a lot easier, especially with a project that you can move into now.”
Also in the east downtown corridor, The Daniels Corp. is offering the ability to move in quickly too, at its One Cole Condominiums site at Dundas and Parliament streets. The project is almost complete, with prices starting in the $180,000s. It has proven appealing to many a long-term renter making the move to owning for the first time, says Martin Blake, vice-president with Daniels. A gradual deposit payment plan has helped, allowing buyers to put down $3,000 to start, followed by monthly amounts of $1,000. “For a renter trying to become that first-time buyer, it’s a lot easier to afford a gradual payment plan versus coming up with 5% all at once,” Mr. Blake says.
The Pemberton Group is another first-time-friendly developer. Its new U Condominiums at Bay and Bloor feature “urban design suites” that boast four layouts of 325 to 680 sq. ft., and start at $217,000; two of the models even come furnished. First-time buyers like the 10-foot ceilings, says Marianne Paroczai, as well as finishes that include Corian countertops and pre-finished engineered wood flooring, “Usually a first-time buyer is in a situation where they have to compromise something, and I think what’s unique here is they don’t have to compromise antyhing,” says Ms. Paroczai, broker with Circle M Realty Corp., which represents U.
Finally, on the other end of downtown, Monarch’s Quay West at Tip Top offers something else entirely: lake views. The site is located at Lake Shore Boulevard and Stadium Road and has been attractive to first-timers who like living near water. The site is under construction, but first-time buyer units are available, including studio, one-bedroom and one-bedroom-plus-den designs starting from the low $200,000s and sized from 593 sq. ft. “It’s the best value for waterfront living,” says Mirella Sarrapochiello, manager of sales and marketing for Monarch Corp.’s high-rise division.
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By Lori Mcleod – Globe and Mail
House prices in almost all Canadian neighbourhoods have doubled over the past 10 years, good news for long-time homeowners but an ongoing setback for those looking to enter the real estate market.
An unprecedented 10-year boom in the real estate market, which ended earlier this year, saw the price of a two-storey detached home rise by an average of 129% in urban centres to $522,999, according to a study.
In the 10-year period ended March, 2008, the price of a similar property in the suburbs has appreciated by 110% to $334,380.
The largest national price gain of any housing type is that of an urban condo unit, which has gained 132% to an average of $284,312, the study said.
“A look back at the last 10 years in Canadian real estate growth reveals that typically, home prices in urban markets have grown faster than those in the suburbs, with both areas showing impressive appreciation,” said Phil Soper, president and chief executive at Royal LePage, in a statement.
Mature homes near subway stations in city centres, and suburban homes with large yards, have both seen large gains in the past decade, the study said.
Home sales have been cooling this year as listings far outstrip supply. In April sales fell by 6.1% year-over-year, while listings rose by 17.7% from the previous month to the highest level on record.
Thus far, however, economists are predicting that real estate prices will continue to rise slightly in 2008.
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