Toronto, the (un)affordable
While some condominium prices are skyrocketing — a $17 million penthouse? — choose a unit in an emerging neighbourhood and the prices become very affordable
By Ian Harvey
Psst! Wanna bargain in the red-hot Toronto condo market? There’s penthouse luxury on the 75th floor at Yonge and College Sts. for a mere $1,590 a square foot, compared to similar units in Yorkville, the Ritz Carlton or Trump Tower which are commanding $2,500 a square foot.
The catch: You have to buy all 11,000 square feet at a total cost of $17.5 million.
Welcome to the crazy world of new Toronto condominiums where sales are eclipsing new single family homes by three to one, according to the Toronto Building Industry and Land Development Association (BILD). But how do you compare value when the price per square foot seems to vary so widely?
Toronto condos generally range from about $350 a square foot or less, to a seemingly outrageous $2,500 a square foot downtown, says Jeanhy Shim, president of ThinkBuild Consulting, which tracks and analyzes condominium trends. The key, though, is to figure out what you’re actually getting for that, beyond space, and how your investment will appreciate against the market average in the years ahead.
For first-time buyers, the key driver is qualifying for a mortgage and they’re happy to look at smaller units, less centrally located, often in the suburbs. Many are new Canadians for whom highrise life is the norm, far removed from the “Canadian” vision of single-family home with a white picket fence.
The more units a developer can squeeze into the building the lower the price. Conversely, if they opt for fewer units and fewer floors, the price changes proportionately. And having a unique design like that at Pier 27 – two storeys of glass and steel with a three-storey bridge across the top – on the waterfront will also drive prices up since it costs more to build and is a cut above the standard glass box, says Shim.
Add in features like subway access, pool, gym, heated parking, storage lockers, rooftop gardens, 24-hour concierge, party rooms, private theatres and it also affects the price. The biggest factor, however, is and will always be that old cliché, location.
Aura at College Park is a prime example. It has a central location, direct subway access and a planned connection to the underground PATH system of tunnels. As Rizwan Dhanji, vice-president, sales and marketing for Canderel Stoneridge Equity Group Inc. notes, the location and proximity alone ensure it commands a premium price.
It will also have the the cache of being the tallest condominium building in the country, with 75 floors and spectacular views. Factor in that the site will also offer easy access to the cultural attractions of the city, and luxury finishes in the suites and the value proposition starts to climb.
“But at $900 to $1,000 a square foot (regular penthouses) it represents great value compared to say, the $1,500 to $2,000 a square foot you’ll pay in Yorkville,” says Dhanji, adding it’s still well below what condo buyers in Vancouver are paying and a fraction of the cost in cities like Singapore, New York and Paris.
With the 930 units already 80 per cent sold, Canderel is about to release the premium penthouse units on the 72nd to 75th floors. Among those units will be a castle fit for a king – that 11,000 square feet penthouse for $17.5 million.
For the rest of us mere mortals, there’s no substitute for location, Shim says. And buyers have to decide if they’ll give up space for the right address or go a little farther out for more room.
“There just aren’t a lot of sites left directly on the subway,” Shim notes, adding that outside of the old city of Toronto boundaries one of the few areas still commanding competitive prices is the Yonge-Sheppard corridor.
Monarch Park’s Ultra at Heron’s Hill, at Don Mills Rd. and Highway 404, is an example of a mid-city project with suburban amenities like the nearby Fairview Mall and Don Mills subway station. The 38-storey-building is offering units that range in size from 517 square feet to 930 square feet and prices from $173,990 to $357,990, which is about $340 to $380 a square foot.
Similarly, Elm Sheppard Inc’s Portrait condominiums, at Bathurst and Sheppard, has great access to Highway 401 and local parks and amenities, with prices starting at $371 a square foot.
Come in a little closer, to just east of Yonge near Leslie St. and Aspen Ridge’s Scenic is targeting families with units averaging 900 square feet at between $350 and $500 a square foot. Camrost has units in the Lawrence and Don Mills area, at the newly renovated Don Mills Shopping Centre, with prices averaging $375 a square foot.
If a condo in the old city of Toronto is the dream, Shim says savvy buyers, should look at emerging neighbourhoods. And there’s more than one way to pick the next King Street West, Yorkville or Distillery neighbourhood, says Jessica Speziale, market co-ordinator at Options for Homes, a non-profit group, which develops affordable housing condos in Toronto.
Options has a project with 643 units in the Junction neighbourhood at Keele and Dundas Sts. with prices starting at $168,000, pretty much a bargain in the current Toronto condo market. It’s an up-and-coming area, which will flower as it transitions from industrial to inner city residential. The building has little in the way of amenities like a pool or gym. And because Options is non-profit, it has also engineered a process to give buyers an option to lower their mortgage with a no-interest-loan which is repaid only when the unit is sold – in addition to a percentage of any profit. Options for Homes’ next project is at Bathurst and Lawrence – see optionsforhomes.ca for details.
Private developers are also turning down-and-out areas into vibrant communities. Daniels Group, for example, Shim says, is the driving force behind the revitalization of Regent Park.
“They’re actually building One Cole (in the Dundas-Parliament area) before selling units, which is unheard of,” Shim says. “And they’ve got the grocery store and the bank going in.”
Electric City is another development in the emerging area of Davenport Village where developers Tom and Robert Falus are building homes on the site of the former General Electric and American Standard plants at Dupont St. and Lansdowne Ave.
Starting at just over $300 a square foot, it’s a value-driven offer especially given the upscale touches and finishes found in units demanding twice that. Part of that price reflects that it’s an area in transition.
It’s also, in part, because as Tom Falus says, they got the land for a decent price and can pass that on to buyers.
“This is part of 3,000 units we’re putting in the area,” Falus says. “So we have a long-term plan and want to drive sales. I plan to limit my profit and hope we get better prices as we go forward.”
The project appeals to first-time buyers looking for a home in the city, he says, near transit.
Those hesitant about moving into an unknown corner of the city need only look south to the Distillery for inspiration.
“Our first project was at the Distillery in 1998 before it was really anything but an old abandoned industrial site and barren wasteland,” Options For Homes’ Speziale says. “You could have bought a unit for $70,000.”
It’s one of those “darn, if I’d only known” moments given that the Gooderham, the third phase of condos at the historical arts enclave, now offers units starting at $257,000 for 500 square feet and rising to well over a million dollars for the 1,600-square-feet-plus units. The penthouses were slated to be released this week.
“When we started there was nothing,” says Mathew Rosenblatt, partner at Cityscape, which bought the property in 1997. “Except for the best collection of Victorian industrial architecture in North America.”
Indeed, those early years meant lots of investment before the returns started rolling in on the construction of Pure Spirit, the first phase of condos. The second phase, Clear Spirit, with 524 square feet to 1,153 square feet also sold quickly, driven mostly by the happy owners in the first phase, says Rosenblatt.
What buyers are getting, beyond the unique nature of the Distillery District, are also unobstructed views, since there aren’t any other highrises in the area and, given the proximity of the CN tracks, the Lakeshore and Gardiner Expressway, any that are built will be farther away, lessening their impact.
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