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Condos in Toronto

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Toronto Real Estate

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Tag Archives: Toronto condominiums

Condos become the preferred choice

Neil Sharma – QMI Agency

Ever wonder what factors drive Toronto’s high-rise condominium market?

Location figures into nearly every real estate adage imaginable, and for good reason. Why? Well, in congested Toronto, living near public transportation, primarily subways, is a far greater privilege than being canonized. Secondary transportation like buses and streetcars figure into the equation, too.

Comment: Some of the reasons downtown living is taking preference over the suburbs for many people, especially Millennials.

“Any location that is next to, close by or walking distance to a subway station is number one,” said Barbara Lawlor, CEO & president of Baker Real Estate Inc. “People love to be in the thick of things, people have to be able to get to work easily, people love if they can get to cultural events like movies, theatre, art galleries. They don’t want to have to go too far.”

Toronto condos
And, according to Paul Golini, co-founder and executive vice-president of Empire Communities, LRTs are equally important, particularly along Eglinton Ave. where the track will be submerged from Mount Dennis to Don Mills. Buoyant external amenities and high walk scores also drive interest in location.

“Projects along the existing and soon-to-be LRTs and subways are still experiencing traffic and good response in terms of sales,” he said. “Developers are having success across Eglinton because of the LRT. People don’t realize the LRT will be buried in that part of the city, so it’s going to feel like a subway.”

Comment: Watch prices rise along Eglinton as the LRT finishes. And then condos will be built along the route, much like Sheppard filled in after the new subway track was completed.

As condos slowly but surely supplant houses as the housing of choice — condominiums accounted for 55% of new construction in the GTA in 2014 — adequate living space becomes increasingly important.

“A lot of young families are priced out of the low-rise market, and they do want brand new,” said Lawlor. “Condominiums are starting to appeal to young families. It isn’t just affordability; families want to be in the middle of cultural venues, of transportation, of heartlands and being able to walk to amenities. We’ll see this trend grow. There’s already been pressure on builders to build three-bedroom units.

Comment: Not a lot of pressure. And more from politicians and pundits than from consumers. But we will get there, it takes time and the buyers have to start to demand it.

“We’re becoming more and more like international cities, like New York, where it’s commonplace for families to live in apartments.”

End-users aren’t the only buyers paying attention to family-sized units, either. Investors, typically bulk purchasers of bachelor-sized units, have started diversifying their portfolios with larger units.

Comment: Are they? Do you have proof or is that just an assumption? With around 3% of new condos bought by foreign investors, they just don’t make up enough of the market to be buying small units in such vast quantities. Many are bought by those who don’t need more space, who can’t afford more space or those who want to make the smallest impact on the environment.

Erudite in the ways of the market, they, too, have observed sprouting demand from families.

Amenities are a staple of any condominium building. However, where once developers raced to outdo each other by dressing buildings to the nines in amenities, they now adhere to a ‘less is more’ ethos. Building amenities might be fewer, but they’re top notch.

“It’s about picking a couple of key amenities and making them great rather than numerous,” said Golini. “Amenities speak to condo fees and there’s an issue of affordability, so if we can keep condo fees in check by not burdening projects with amenities then that’s a way to go with affordable alternatives.”

Comment: Now, if we can just get developers to put solar panels on every condo roof, wind turbines, grey water recycling, etc. How about a cell tower on the roof (Rogers pays handsomely to rent that space). Public spaces on the first few floors, something municipal like a library and a school. Get those condo fees down and create amenity spaces that can be shared by the residents and public alike. Connect the buildings to the public space.

While party rooms and gyms are practically omnipresent throughout the condos market, outdoor space is also in high demand. Both Lawlor and Golini said buyers flock to projects with outdoor lounges, BBQ areas and green space.

Toronto’s condo boom can partly be attributed to an historic low in the mortgage rates set by banks, and with speculation of the so-called bubble bursting existing in perpetuity, buyers are taking the plunge.

Comment: People aren’t buying real estate because they are afraid of a non-existent bubble bursting.

“There’s no denying the fact that historic low-interest rates are a big part of why people are saying it’s time to invest in a condo and get out of rentals or mom’s basement,” said Golini. “Rates are only going to go up.”

Comment: Funny, people have been saying that for years. And rates have fallen from 4.75% 5 years ago to 2.79% today. Don’t assume they will stay low or drop further. But don’t assume they will jump to 10% tomorrow either.

Toronto’s downtown east side, long an industrial wasteland, is slated to become the city’s next hot market segment. The 80-acre CIBC Pan Am/Parapan Am Athletes’ Village near the Don River has renewed interest in the area, and a plethora of affordable family housing is expected to ensue.

Comment: I have been saying that for years.

“The east side will come into focus in 2015,” said Lawlor. “I know there are fabulous developments coming up and they’re more affordable than products on the west side.”

Added Golini, “Post-Pan Am Games, people are going to discover the east side of the city, around the East Bayfront. It’s going to be big.”

As the transit system continues expanding, expect high-rise residential development to follow suit.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.

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