Mississauga real estate prices surpass much of Toronto in December

The average sale price for real estate in Mississauga exceeded prices in much of Toronto in the final month of 2019.

The Toronto Real Estate Board (TREB) released its December monthly market tracking report on Jan. 6 with Mississauga registering an average sale price of $799,593 for all types of dwellings compared to $785,494 in Toronto west and $753,468 in Toronto east.

Only Toronto’s central region outpaced Mississauga last month, registering an average sale price of $1,011,199 for all types of dwellings in December.

TREB’s Toronto central area is bordered by Dufferin Street and Allen Road to the west, Steeles Avenue to the north and Victoria Park Avenue and the Don Valley Parkway to the east.

Detached homes in Mississauga sold for an average of $1,221,652 in the final month of 2019, compared to $1,155,189 in Toronto West, $944,621 in Toronto East and $2,157,650 closer the downtown core in the central area of the city.

Toronto still outpaced its neighbour to the west in the semi-detached segment of the market, with all three areas of the city’s regions exceeding Mississauga’s December average of $772,374.

Mississauga’s condominium market registered an average $513,331, marking the third straight month the average price for an apartment-style condo exceeded $500,000. That outpaced the average of $476,795 registered in Toronto’s east end but was less than the $544,255 average seen in the city’s west end and $733,828 December average in the city’s central region.

“We certainly saw a recovery in sales activity in 2019, particularly in the second half of the year. As anticipated, many home buyers who were initially on the sidelines moved back into the market place starting in the spring,” wrote TREB president Michael Collins in his monthly market analysis.

“Buyer confidence was buoyed by a strong regional economy and declining contract mortgage rates over the course of the year,” he added.

/by

Zillow Offers now partnering with homebuilders

Zillow has announced partnerships with several homebuilders in the United States which will extend the reach of its Zillow Offers service.

For buyers of new homes from selected builders, Zillow will offer to buy their existing home from them directly and enjoy an extended closing period between 7 days and 8 months so they can move seamlessly to their new home.

“Many new construction buyers are also trying to sell their current home at the same time as buying, which is stressful,” said Lucy Wohltman, Vice President of New Construction at Zillow. “Not only are these buyers trying to prepare for open houses and align timelines, they can be struggling with the daunting reality of owning two homes at once. At its core, Zillow Offers was designed to alleviate these pain points by giving homeowners a quick and efficient way to sell their home in time to purchase their next.”

The partnerships are in select US markets including The Providence Group in Atlanta, NewStyle Communities in Charlotte, N.C., Kindred Homes in Dallas and San Antonio, Saratoga Homes in Houston, Avex Homes in Orlando, Fla., Woodbridge Pacific Group in Riverside, Calif., Caviness & Cates, Drees Homes and Stanley Martin Homes in Raleigh, N.C., and Minto Communities in Florida.

The homes that are part of the agreement will be clearly marked on Zillow listings.

/by

There was a surge in construction workers last month

Canada’s employment increased by 46,200 in December compared to the previous month.

ADP Canada National Employment Report shows that construction added the most jobs last month at 11,300, while others in the goods producing sectors lost jobs: manufacturing declined by 1,400 and natural resources and mining by 2,500.

Services providing sectors were generally higher including strong gains for education and health care (13,000) and trade/transportation and utilities (8,200).

The finance/real estate sector declined by 4,500.

“December’s labour market finished the year in a strong position, with 9 of the 14 industries posting job gains,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “The payroll increase was largely reflective of employment growth in trade, transportation and utilities, as well as construction and public administration. However, manufacturing and natural resources and mining experienced a decline.”

The November total of jobs added was revised down from 30,900 to 27,600.

 

 

/by

Toronto to see “significant” rise in rental housing

Six new rental housing buildings will be built in Toronto to boost the availability of affordable rental housing.

The federal government and City of Toronto will provide 916 new units in the project which will be developed by Westbank Corp. and Peterson Group.

The project is receiving $200 million in financing through CMHC’s Rental Construction Financing initiative (RCFi), a National Housing Strategy program delivered by CMHC.

Of the 916 units, 366 will be provided at rents at or below 30% of median household income with 100 of those secured at 80% of Average Market Rent for the City of Toronto, as published by CMHC.

“This funding for the Mirvish Village will help us preserve a historic and vibrant community in our city,” said Mayor John Tory. “Honest Ed’s was a beloved part of our city and by creating affordable housing on this vacant land we are able to address the housing challenges our city faces. I want to thank the federal government for providing this important funding. This $200 million commitment demonstrates the importance of all levels of government working together to address issues that impact Torontonians.”

/by

Toronto condo apartment sales gained at the end of 2019

There were 5,367 condominium apartment sales in the Greater Toronto Area in the fourth quarter of 2019.

The total reported by the Toronto Real Estate Board represents a 3.8% increase year-over-year while new listings were down 11.9% over the same period.

“The condominium apartment market segment continued to perform well in 2019, with strong growth in sales and average price. Condominium apartments provide a relatively affordable entry point into the home ownership market for first-time buyers, who account for a substantial portion of demand each year,” said Mr. Collins.

The average price of a condo sold by Greater Toronto Area Realtors increased 10.4% year-over-year to $616,591; in the City of Toronto, which accounted for 71% of transactions in the quarter, the average price increase was 10.3% year-over-year.

“Tighter market conditions in the GTA condo market translated into increased competition between buyers and an accelerated pace of price growth. TREB continues to urge policy makers to develop strategies to bring more ownership and rental supply online, so that balanced market conditions and a moderate pace of price growth can be sustained over the long term,” said Jason Mercer, TREB’s Chief Market Analyst.

/by

Highway 401 expansion project includes more than just traffic control challenges

The construction consortium working on a major expansion of Highway 401 from Mississauga to Milton has more than traffic and motorists to contend with.

Part of the $640-million project also involves building wildlife crossing features at several locations and mitigating the impact of construction on four species at risk.

“Three structures within the project limits accommodate wildlife passage that facilitates and improves wildlife connectivity across Highway 401,” explains Ryan Bissonnette, spokesman for West Corridor Constructors (WCC), the consortium that’s working on the 18-kilometre route over the next three years.

Wildlife crossing passages will be incorporated under the Credit River and two Oakville Creek East bridges for white-tailed deer, striped skunks, raccoons, coyotes and other mammals. The passages will be four metres high and four metres wide on each side of the watercourse. Gentle slopes will be used to guide wildlife to the passage. Steep slopes will be incorporated to discourage wildlife from climbing to the highway.

“Wildlife fencing will be installed along the highway to keep wildlife off the highway and re-direct them towards the wildlife passages,” explains Bissonnette. “Escape ramps will also be implemented so that animals can safely exit the highway right-of-way should they become trapped.”

Four species at risk have been identified within the project boundaries, including the redside dace, a type of minnow that feeds on flying insects, and American eels, whose numbers have dwindled due to hydro dam builds. Screens will be used for water intakes or outlet pipes to prevent entrainment or impingement of fish and workers will not be permitted to work at certain times near watercourse areas.

Two species of bats — the little brown myotis and eastern small-footed myotis — also reside in the corridor. To minimize the impact on them, construction activities within 30 metres of known cavity trees will be restricted to daylight hours when possible. Workers will participate in special training and as little vegetation as possible will be removed. Bat boxes will be installed to compensate for habitat removal.

Machinery to be used in an area where species are at risk will also have to arrive on-site in clean condition and must be free of fluid leaks, invasive species and noxious weeds. The equipment will also have to be washed and serviced away from watercourses.

The restrictions are outlined in an environmental assessment study done by the Ministry of Transportation and in other documents related to the project.

The ribbon of highway is being widened from the Credit River in Mississauga to Regional Road 25 in Milton and includes reconstruction of bridges as well as upgrades to support facilities and other features.

Approximately 250,000 vehicles travel on Highway 401 in the Peel and Halton regions on a daily basis. Drivers can expect to use the expanded highway by 2022.

Once completed, the expanded highway will have 12 lanes from Credit River to Winston Churchill Boulevard, 10 lanes from Winston Churchill to the Highway 407/401 interchange, 12 lanes from the 407/401 interchange to James Snow Parkway, and 10 lanes from the Parkway to Regional Road 25 at Milton, as well as HOV lanes and new or improved support features such as drainage, lighting, signage and carpool lots.

The project is being delivered through a design, build and finance, public-private partnership model, which transfers risks associated with design, construction and financing to the private sector. Using the design-build approach allows the designer and constructor to work together collaboratively, say project stakeholders.

Preliminary designs for the project were completed in 2013. Two years later, the design was completed for three of the structures in the corridor — Regional Road 25, Fifth Line and Oakville Creek West structures. Construction of those three structures has already been completed.

In spring 2019, WCC was selected as the consortium to design and build the expansion project. The consortium is comprised of Aecon Infrastructure Management Inc., Parsons Inc., and Amico Design Build Inc.

A key part of the expansion involves modifications to existing infrastructure to accommodate additional lanes on Highway 401, including nine new, replaced or widened bridges, five bridge rehabilitations, retaining wall rehabilitation and seven culvert replacements, extensions or rehabilitations.

Other structural work includes replacement and extension of culverts and construction of retaining walls.

Construction crews are currently working on an embankment in the area west of Creditview Road in Mississauga to facilitate the widened highway and expansion of bridges.

Bissonnettee says design and construction of the project are proceeding on schedule. Once major work has been initiated, construction will take place concurrently on various segments of the thoroughfare. At peak of construction, there will be approximately 200 to 250 unionized trades on the project.

Because it’s such a busy stretch of highway, Bissonnette says the largest challenge on the project will be managing traffic.

“WCC will maintain three lanes of traffic in each direction on Highway 401 during peak hours to minimize traffic impacts. All construction projects of this magnitude experience challenges. We have an experienced team in place to deliver this project on time and within budget.

“The consortium is pleased to be working on such an important project, one that will provide the travelling public with an expanded highway that will decrease travel times across the GTA.”

/by

Square One District a record mixed-use development

Oxford Properties Group and Alberta Investment Management Corporation (AIMCo) have announced what is being called the largest mixed-use development in Canadian history, the 18-million-square-foot Square One District to be built on 130 acres around Mississauga’s Square One Shopping Centre.

Plans unveiled Jan. 21 call for 18,000 residential units, a transit mobility hub connected to the Hurontario LRT, community buildings and office and retail spaces. The first office building will go to market in April and the partners are working with Daniels Corporation on the first two residential towers of 36 and 48 storeys, to contain 402 rental apartments and 575 condominium suites. Construction of The Rental Residences and The Condominiums of Square One District will commence this summer.

“This is not some distant goal or pipe dream,” Oxford Properties executive vice-president Eric Plesman told a large crowd of stakeholders, guests and media assembled at the mall.

“With the first phase of construction starting this summer, Square One District will start to become a reality this year.”

Mississauga Mayor Bonnie Crombie said the project would be “transformative” for the city, with the new community part of an expected spike in Mississauga’s population of 120,000 citizens over the next 21 years. At that point it’s estimated the city will reach 920,000 residents.

Noting that Oxford Properties has committed to allotting over half of the housing component to rentals, Crombie said, “Oxford has stepped up.”

The boundaries of the new development will be Burnhamthorpe Road, Confederation Parkway, Highway 403 and City Centre Drive. The 18,000 residential units will be capable of accommodating 35,000 residents.

After the first two towers are built in phase one, it is expected another 5,000 units will be launched over the next five to seven years. In total there will be 37 towers built.

It is expected the first phase will generate 3,500 construction jobs. Occupancy of the condominiums is being targeted for 2024.

Member of Parliament for Mississauga Centre Omar Alghabra noted in his address that the Square One District project would spell the end of Mississauga’s reputation as a suburban, bedroom community.

“We are witnessing before our eyes the transformation of the city of Mississauga,” he said.

Mississauga is already a net importer of jobs, and it’s expected that over the life of the Square One District master plan 35,000 direct jobs will be created.

Plesman said in an interview Oxford Properties is confident the market will be able to absorb the project’s new residential units at a quick pace.

He noted the developer is already in discussions with the City of Mississauga’s planning department on site plan approval of the next three residential phases with a total unit count of almost 3,500 units.

“With the influx of immigrants, just with all the great things happening with the city of Toronto, we feel very confident about the ability to absorb a lot of this,” he said. “Our first phase, which is just under 1,000 units, we feel will be very well received by the market. We have already seen some tremendous interest with two other developments nearby where they went quicker than expected and some of the rental options were well subscribed for, so we have a lot of confidence in our ability to have that absorbed into the market.”

Master planning for the community was done by Harari Pontarini Architects in collaboration with the 60-member Oxford Properties planning team, Plesman said.

IBI Group is designing the interiors of the first-phase residences for Daniels while DTAH is responsible for the landscaping.

The office component is said to be the first new commercial development in the city centre district in a generation.

Oxford Properties has spent more than $500 million on improvements to the Square One Shopping Centre in the past five years and thus the new District project is being presented as a live-work-play community.

“This new community will support employment with world-class office space to help businesses grow while maximizing the positive impact of new transit being developed in Mississauga. It will be a place where business, life and leisure can come together as one,” said Plesman.

One of the focal points of Square One District is The Strand, touted as a pedestrian-friendly civic space anchored by the transit hub and a community park. The new district will be connected to both the Hurontario LRT and Rapid Bus Transit.

“The sustainability component is going to be achieved both in our approach to the construction but also the fact that we have the Hurontario LRT and this multi-modal mobility hub,” said Plesman. “That helps reinforce some of the sustainability components to it.”

Major construction on the Hurontario LRT begins this year. There will be an LRT stop in the Mississauga City Centre.

/by

We’re building a lot of housing, so we must be building enough housing. True?

We’re building a lot of housing, so we must be building enough housing. True?

We’re in a building boom and prices are still going up, so supply must not be the answer. True?

We’re building more housing than we ever have in the Toronto CMA. True?

Chances are you’re never going to change your mind as it relates to the first two questions, you have your priors and nothing I say or anyone else says is going to change that. Data be damned, it just feels like it!
However, I just wanted to comment on #3 in the above.
Between 1990 and 2019, the Toronto CMA has built just under 32,000 new housing units on average per year based on completions data from CMHC. The CMA has topped that long-run average in 4 of the last 5 years.

Over the past five years the CMA has delivered about 37,000 units per year. However, between 2002 and 2006, the Toronto CMA completed 40,170 units per year.
The completions are pretty close right? BUT, analyzing supply by units is very unreliable because a dwelling can range dramatically from a 275 sf studio apartment with no balcony to a 9,000 sf, 8 bedroom single-detached property on a two acre lot.
If you have a family of five, the fact that the GTA is delivering lots of studio units is irrelevant, the fact that Toronto has the most “cranes” is irrelevant, the fact that Toronto has lots of units under construction is irrelevant (that has more to do with construction time).
The primary concern for someone looking for a home is suitability: location, size and number of bedrooms.

It is important to understand what type of homes got built.

We know the market has fundamentally shifted from low-rise or ground-related housing to apartments.

This change in the composition of units is very important, as units are not all created equal. Here is data from BuzzBuzzHome on the median size of popular new homes by property type in the GTA since 2018. Single-family houses are more than 3 times as large as condo apartments.

I don’t need to provide the chart for this one, but the median single-family home has 4 bedrooms, the median townhouse has three bedrooms, and the median condo apartment has 2 bedrooms.

If we take the data in the above chart & the bedroom data, we can view supply differently.
If we take the units sizes as constant over time. Single-family at 2,800 sf, towns at 1,850 sf & apartments at 850 sf and apply that to the completions we get an estimated for total square footage completed. Very different look now.

The Toronto CMA has only surpassed the long-run average of 59,000,000 sf of new housing completed in three of the last 11 years, and not by much in each of those three years.

The 41 million sf completed in 2019 was the lowest amount of housing supply delivered since 1996.
Since 1990, the Toronto CMA has been adding about 95,000 new bedrooms per year. The CMA has topped the long-run average in only 4 of the last 11 years.

In 2019, developers built just under 73,000 bedrooms. In 2002, developers built 148,000 bedrooms, more than twice last year’s total.

The we’re “building more than we ever have” crowd is IGNORANT and doesn’t look deeper than the most superficial data in the market: CRANES!
Between 2002 and 2006, Toronto CMA developers built 82.7 million sf of new housing on average. Between 2015 and 2019, developers built 55.6 million sf, a 33% decline.

Bedrooms built per year, 2002-2006: 130,000.
Bedrooms built per year, 2015-2019: 98,000 – a 25% decline.
We can only ask people to sacrifice so much space when their families get larger. They will continue to bid up housing that is suitable for them.

And guess what they’re not going to buy 1,200 sf new condo apartment for $1.5 million that will be completed in 2024.
We’ve shifted the market away from new homes on cheaper suburban lands with wood-frame construction to expensive urban lands with concrete construction that takes 3+ years to deliver. We’re building less supply and what we are building is much more expensive to deliver.
We’d need to build 30% more housing just to catch up to the 2002-2006 level, which probably wasn’t enough at the time either.
We need more housing of all kinds, tenures, sizes, and locations both urban and suburban. Supply is the best long-term solution and always will be.
The worst part about wasting my time on this thread is it will likely get about 3 retweets and some clickbait article on Toronto’s impending crash due to oversupply will get shared 1,000 times. Welcome to the new world we live in.

/by

Ontario Housing Market Update

Year over year unit sales have again surpassed last year’s numbers in Ontario for the 9th consecutive month. Driven by buyer’s confidence and short supply, Ontario was showing strong price gains to finish out 2019.

We areexpecting this confidence to continue into 2020. Ontario’s new listing again came in lower in December dropping 14% from December 2018. All areas are at or near record lows for active inventory.

Condo Rentals 2019 Record 30,727 Condo’s rented last year, 11% above 2018 Condo rents grew by 6.7%, slowest pace in 4 years Vacancy rate Purpose-Built 1.5%, Condo rentals 0.8% Construction of Purpose-Built rental units at 40 year high of 12,367 units Total purpose built under construction or proposed at 69,564, which is 4.5 times as many as 2005

/by
,

Four Eleven King Submitted for Site Plan Approval

Plans to redevelop an LCBO location at King and Spadina in Downtown Toronto resurfaced last year, with renderings appearing for a 42-storey Great Gulf and Terracap-developed project known as Four Eleven King Condominiums, and designed by KPMB Architects and Quadrangle. In the months since this new plan appeared, planning for the project has progressed, most recently with an end of 2019 submission seeking Site Plan Approval (SPA) for what is now proposed as a 45-storey mixed-use tower containing condominium units, along with ground floor retail and hotel uses.

The plan proposes 44,205 m² of gross floor area consisting of 26,582.7 m² of residential space, 100.6 m² of retail space, and 17,522 m² of hotel and associated restaurant space. The newly revealed hotel component—joining a lengthening list of hotels proposed or under construction in Toronto—would occupy the majority of the building’s 12-storey podium, including a set of amenities shared between hotel guests and condominium residents on the lower levels.

Above the mixed use podium, 435 condominium units are proposed on tower floors in a mix of 336 one-bedrooms, 55 two-bedrooms, and 44 three-bedrooms.

Four underground levels include a B1 and B2 level consisting of hotel amenities and back of house services, and then two levels of parking below with a total of 38 spots. 28 spaces would serve the condos, and 10 for the hotel. 472 bicycle parking spaces would offset the lack of vehicle parking, with 392 long-term and 80 short-term spots proposed. Streetcars ply both streets the building would face, with Streetcar priority on King Street, and dedicated lanes on Spadina. An Ontario Line station is planned within walking distance at Queen and Spadina.

A heritage impact statement from heritage specialists GBCA Architects details plans for a limited retention and restoration for the King Street facade of the existing four and six-storey buildings on site, constructed in 1904 and 1913.

Similar to another condo-hotel complex with retained heritage facades in the neighbourhood—King Blue Condos—the surrounding new build sections of the podium would include a dark brick treatment that references the heritage component without attempting to compete with its aesthetic. Detailed podium renderings also show how the design has changed to incorporate darker finishes that better frame the heritage building, with the podium exterior designed separately by B+H Architects.

The tower levels above would be clad in a window wall system framed in a projecting grid. The rendering released last year (at the top of this page) depicts a bronze-tinted finish for this design element, while the new images accompanying the SPA application focus on the podium levels and their relationship to the heritage elements, with only massing models and diagrams of the current plan included in the submission. The actual colour of the tower finishes have been left unspecified in the latest documents.

/by

New Report Reveals TTC’s $4.6 Billion Plan to Improve Toronto Transit

a report from the TTC reveals staff have requested an additional $4.56 billion in funding for new capital investments, including the Bloor-Yonge expansion and new streetcars, subway cars, and buses.

The TTC’s 2020-2029 Key Capital Investment Priorities report, which was released Wednesday, also recommends the TTC should put this money toward repairing and upgrading transit infrastructure to ensure it’s in a “state of good repair.”

Mayor John Tory says this budget includes “the most significant investment in upgrading our transit system in the city’s history.” If approved, Tory said the plan will make the needed investments in subway trains, buses, streetcars, and the state-of-good-repair for the city’s transit system.

According to the report, the $4.56 billion comes from the increase in the City Building Fund levy that was announced on December 17, 2019, when city council approved the incremental tax levy dedicated to providing sustainable funding for community housing and transit.

The TTC said if the budget is approved it plans to allocate the funding to different projects, including $500 million to the city’s share of the Bloor-Yonge expansion, $3.1 billion to critical subway infrastructure, including Line 1 and Line 2 state of good repair and capacity improvements, and $1.14 billion to new vehicles, including 60 new streetcars, 62 trains for Line 2, and 614 new buses.

The report comes as riders continue to deal with constant service shutdowns due to infrastructure issues, including the partial train derailment on Line 2 that caused commuter chaos on Wednesday morning.

Councillor Jaye Robinson, the chair of the TTC board, released a statement on the report on Wednesday, saying the “landmark investment” from the City of Toronto would go a long way to ensure the city’s transit network continues to meet the needs of the Toronto’s growing population.

“A majority of the additional capital funds must be committed to the maintenance, repair and improvement projects required to keep our subway running, ” said Robinson.

“While it’s not glamorous, this work — replacing cables, repairing tunnels, rehabilitating tracks, and asbestos removal — is critical to the safe operation of our subway network.”

Robinson also commented on Wednesday’s service shutdown on Line 2, saying “issues with our subway infrastructure can lead to significant delays for riders who rely on our system to get where they need to go.”

“This funding from the City will be used to finance a once-in-a-generation, transformative subway infrastructure program. Investing in critical state of good repair and capacity improvement projects on our core subway lines is the responsible thing to do,” said Robinson.

“Our professional TTC staff have made it clear that failure to invest now will have disastrous consequences for our transit service in the future,” said Robinson, adding, Torontonians will begin observing major service impacts as soon as 2026.

Mayor Tory said he will work “non-stop” to negotiate the funding needed from both the provincial and federal governments in order to carry out the vision in the report.

“We must buy new subway trains, new buses, and new streetcars but we cannot make these purchases alone,” said the mayor in his statement.

The report will be considered by the TTC commission board next week.

/by

Tallest Residential Building In The World Reveals New Details—Including 100th-Floor Amenity Level Overlooking New York City

It has been 15 years in the making and now we’re finally getting close to the finish line for what has become the most expensive condo development in the United States.

With a portfolio of lenders providing $1.1 billion in financing, Central Park Tower is expected to bring 179 luxury units near New York’s Billionaire’s Row by the fourth quarter of this year. Developed by Extell Development Company, the tower will rise 1,550 feet in the air and can make the claim as being the tallest residential building in the world since the majority of its volume will be devoted to privately-owned condos. (The Burj Khalifa building in Dubai surpasses the height of this by several hundred feet, but has much of its space designated for office, retail and tourist destinations in addition to the residences.)

It will join fellow supertalls in the city like 432 Park Avenue where not only did Jennifer Lopez and Alex Rodriguez list a unit for $17.5 million, but the developer also hung a huge banner on the side of the building to announce his own upcoming wedding. Another contender for almost the tallest building in the world is the 111 West 57th Street building where a 7,000 square foot penthouse is on the market. At the time it required the tallest freestanding crane ever used in New York to reach its top.

Central Park Tower has announced one ground level retail tenant already open to the public—a flagship seven-story Nordstrom (a company that was also instrumental in making this project financially feasible).

The building is coming to completion at a time when New York’s high-end real estate is facing headwinds and, as president of Extell, Gary Barnett, has said their prices are about 15% less than nearby luxury tower 220 Central Park. Yet Extell hasn’t yielded too much to the surrounding market trends. For example, they are sticking with their plan to keep the top three floors a triplex penthouse (measuring approximately 17,500 square feet) instead of dividing the floors into multiple units.

For the listings that have been released so far the combined asking prices still exceed $4 billion, with prices starting at $6.9 million for a 2,114-square-foot 2-bed, 2.5 bath up to a $63 million for a 5-bed, 5.5 bath unit measuring 7,074 square feet. Prices for the triplex penthouse have not been released.

The building is coming to completion at a time when New York’s high-end real estate is facing headwinds and, as president of Extell, Gary Barnett, has said their prices are about 15% less than nearby luxury tower 220 Central Park. Yet Extell hasn’t yielded too much to the surrounding market trends. For example, they are sticking with their plan to keep the top three floors a triplex penthouse (measuring approximately 17,500 square feet) instead of dividing the floors into multiple units.

For the listings that have been released so far the combined asking prices still exceed $4 billion, with prices starting at $6.9 million for a 2,114-square-foot 2-bed, 2.5 bath up to a $63 million for a 5-bed, 5.5 bath unit measuring 7,074 square feet. Prices for the triplex penthouse have not been released.

Developers have planned for the 100th floor of the building to be 8,300 square feet of amenity space, said to be the highest private residents’ club in the world. The 100th floor will include a private ballroom, wine and cigar lounges, dining room, bar and full-service kitchen. The renderings for these amenity spaces are being revealed for the first time here.

Michelin-starred chefs and a not-yet-disclosed but “renowned” lifestyle specialist will be part of the staff to curate events in the space. Rottet Studio, the same team behind the residential interior designs, also designed the private club level so that it could contain both large entertaining spaces and smaller, intimate meeting rooms.

“Our building represents life at the top, and what better way to celebrate it than a 100th Floor Central Park Club?” said Joaquin F. Stearns, senior vice president of Extell Development Company. “From a rotating roster of the world’s best chefs to views that stretch dozens of miles in every direction, this special amenity exemplifies the sophistication of the world’s highest residential building.”

A total of 50,000 square feet throughout the building is reserved for lifestyle activities, with floors 14 to 16 housing the pools, cabanas, private screening room, children’s playground, and spa and fitness centers. Below is a rendering of the 63-foot indoor pool.

The building reached its top last fall but isn’t expected to be complete until late this year. Developers plan to release more details and units for sale over the coming months, so keep an eye on the sales page for more information. Below is one image they have released for the first time—a rendering of the dining room for one of the duplex units.

 

/by
,

Canadian economy added 35,000 jobs in December

There was an increase in the number of Canadian jobs in December with a net increase of 35,000 (0.2%).

In the 12 months to December, there was a 1.7% increase in the number of jobs – a total of 320,000 – and this was mainly the result of a 1.9% increase in full-time jobs (283,000).

Statistics Canada also reported that the unemployment rate was down 0.3 percentage points in December to 5.6%.

By province, Ontario (25,000 / +0.3%), Quebec (21,000 /+0.5%), Manitoba (2,800 / +0.4%) and Prince Edward Island (+1.4%) posted increases in jobs while a decline was recorded in Newfoundland and Labrador (5,000 / -2.2%).

Nationwide, there were 57,000 (0.5%) more employees in the private sector, following a decline of a similar size in November.

Most of the increase came from accommodation and food services (25,000 / +2.0%) driven by Quebec; and in construction (17,000 / 1.2%) led by British Columbia and Ontario. There was little change in employment in manufacturing.

The annual rise in full-time jobs was driven by Ontario (+227,000 / +3.8%).

Sherry Cooper, chief economist at Dominion Lending Centres, told the Canadian Press that the report confirms the view of the Bank of Canada that the economy is resilient and further interest rate hikes are unnecessary.

“This assessment can change on a dime in today’s uncertain world, but for now, the central bank is likely to remain on hold,” she said.

Manulife Investment Management’s chief economist Frances Donald said that the December stats show that the November decline was a blip but added that there is still concern around the deceleration of jobs growth and weak wage growth.

November jobs dip was a ‘data blip’ not a ‘canary in the coal mine’: Manulife’s Frances Donald on Canada’s December jobs recovery pic.twitter.com/7uIIBYFfk1

— BNN Bloomberg (@BNNBloomberg) January 10, 2020

/by
,

Toronto condo investment to experience massive shift in a few years

In less than five years, investment in Toronto’s condos will experience a significant upheaval as condo costs keep climbing and tenants veer ever closer to the brink.

At present, the asset class is among the market’s most dominant: Condos currently account for fully 20% of Toronto’s rental housing.

Moreover, as much as 30,000 new units are expected to enter the supply chain this year, compared to the 20,000 completed in 2019.

However, Urbanation president Shaun Hildebrand warned that this virtuous cycle of sustained demand impelling further market growth has an upper limit, as rent will eventually be unable to cover monthly carrying costs.

“There is a tipping point,” the executive told the Toronto Star. “We’re seeing a big shift in demand for micro-units, small studios that are really the only type of unit in today’s market that’s priced under $2,000 a month. You’re starting to see some migration from the downtown markets into the 905 where it’s cheaper; renters are gravitating to older buildings.”

By 2023-24, Hildebrand estimated that condo investors will need a steep $4,000 a month to carry units, assuming a 25% down payment and a 3.5% interest rate.

This is the point where Hildebrand expects the market to hit a snag, as it’s unlikely that tenants will be willing to put up with costs fully 60% higher than the current rent average of $2,500.

“I’m not sure that condo investors that have been active recently in buying pre-construction units fully appreciate how much supply is underway in the condo sector and what that will do for their assumptions for returns,” he said.

“For a little while it’s going to feel like we’re building enough rentals because there’s going to be a lot of investor-held units coming into the market, but it’s going to be temporary.”

/by
,

Toronto and Vancouver lead Canada’s top-tier housing recovery

The usual suspects are at it again: Toronto and Vancouver led the country’s high-end market in both home prices and sales activity, according to the latest report from Sotheby’s International Realty Canada. The two largest top-tier real estate markets in Canada rallied at the end of 2019 after a slow start to the year, largely due to each region’s strong population and economic growth, as well as their strong labour markets.

Montreal continues its bid to be included among the top luxury real estate markets in Canada, having set new records in top-tier market performance. Residential sales over $1 million saw a 13% increase from 2018 levels, while $4 million-plus luxury sales soared 64% year-over-year. In 2019, Montreal’s luxury condominium market surpassed previous year’s records as the construction and completion of high-end high-rises reshaped the skyline. For the first time in the city’s history, top-tier condominiums comprised 22% of residential real estate sales volume over $1 million. As the city continued to raise its profile as a major Canadian luxury condominium market, sales of condominiums over $1 million set a new record with a 39% year-over-year gain.

Part of the rise of the luxury condominium market in Montreal has to do with a dearth of single-family homes available for sale. Don Kottick, president and CEO of Sotheby’s International Realty Canada, said that if there were more single-family homes on the market, he thinks the detached numbers would be higher. But, he added, condo growth can also be attributed to a cultural shift that’s taken place in Montreal over the past few years.

“We’ve seen some fantastic developments come into play and I think it’s now acceptable; people want to live closer to where they work, they don’t want the [long] commute times,” Kottick said. He also added that the true buying power of millennials are starting to come into play.

“Some of these individuals are used to community living, particularly if they’ve come from cities such as Vancouver or Toronto, where it’s been this way a lot longer. So the whole community living aspect of condominium living is more acceptable now in Montreal moreso than it ever has been.”

Montreal is also experiencing low levels up unemployment and a burgeoning technology sector as well as being a higher education hub, all of which contribute to it becoming a global destination—along with the fact that there aren’t any foreign buyer taxes. Rather than building out, Kottick said, it’s more likely that developers will build up as well as create more luxury spaces as the Montreal buyer increases their purchasing power.

The return of confidence to the $1 million-plus real estate market in Vancouver was a welcome departure from the regulatory concerns and uncertainty that plagued the market over the past few years. Overall $1 million-plus residential real estate sales in Vancouver were down 6% in 2019 from 2018 levels, while sales over $4 million declined 25%. However, activity in the last half of 2019 reflected a strengthening top-tier market as sales over $1 million increased 37% year-over-year, led by gains in the city’s single family and attached home segments.

As prices moderated somewhat, single family homes once again became preferable to condominium and attached home options for top-tier buyers, driving new activity. As a result, $1 million-plus single-family home sales, which had fallen 16%, 20% and 35% from 2015–2016, 2016–2017 and 2017–2018 respectively, increased 5% from 2018-2019. Market recovery was most evident in the latter half of 2019, when sales over $1 million rose 39% from the same period in 2018, while $4 million-plus luxury sales contracted a mild 12%.

Toronto and the rest of the GTA (Durham, Halton, Peel, and York), saw an incredibly robust top-tier market at the end of 2019, also having rebounded from the market contraction following the implementation of tighter mortgage lending policies shortly after the 2017 introduction of the Ontario Fair Housing plan. Residential real estate sales over $1 million increased 23% year over year across all housing types, and the City of Toronto saw sales over $1 million increasing 20%.

Record-setting population gains in Canada’s largest urban areas were key drivers of all housing segments, absorbing inventory and expanding the long-term foundation for local housing demand. Furthermore, the decade-long financial bull market and its bouts of recent unpredictability are growing influences on the Canadian top-tier real estate market. Underlying consumer anxiety regarding future financial market performance has increased demand for top-tier real estate as an asset to diversify portfolios, hedge against inflation, and buffer against risk.

Even though affordability has dominated much of the Canadian mortgage and real estate conversation, Kottick says that housing is a continuum, and all areas of the housing market matter in different ways.

“If you’re not satisfying the different housing units in each one of these groups, it doesn’t allow people to naturally progress to where they are at that stage in their life,” Kottick said. “It really doesn’t matter where you are; the biggest problem in a lot of our major centers is the lack of diversified product at all levels of the spectrum. . . .you’ve got to have product in each category in the housing continuum to make sure that we have a really functioning market, and we don’t have that right now. The lack of supply is the number one issue, and until that gets met, the government can put all kinds of restrictions and regulations on the demand side, but it’s not going to fix the problem.”

Despite improvements in the market for real estate under $500,000, Calgary’s uneven economic performance and political turbulence dampened a top-tier market already burdened with supply. Unlike Toronto, Vancouver, and Montreal, which all experienced a slow start to the year followed by a strong second half, Calgary’s top-tier market faltered with building economic and political anxiety leading up to and following the provincial and federal elections. Residential real estate sales over $1 million decreased 15% from 2018 levels overall; however, sales in the latter half of the year reflected a milder 7% decline from the same period in 2018.

/by
,

Real estate appreciation rate to accelerate in 2020 – report

Modest home-price growth in the nation’s largest 100 housing markets will continue throughout 2020, according to Veros Real Estate Solutions.

Data from the latest VeroFORECAST projected that the appreciation rate for residential real estate would jump 3.9% in 2020, slightly up from the 3.7% rate predicted in the first three quarters of 2019.

“VeroFORECAST reveals an average increase of 3.9% by the fourth quarter of 2020,” said Eric Fox, Veros vice president of statistical and economic modeling. “The sound fundamentals of the economy, low interest rates and strong levels of employment should result in moderate home-price appreciation with very few geographic pockets of weakness.”

The 10 markets forecasted to see the most increase between Q4 2019 and Q4 2020 are located in the Pacific Northeast (Washington, Oregon, and Idaho), the West (Arizona and Utah), and one in Georgia. With very low housing supply, home prices rise faster in the strongest markets.

The markets with home-price drops are almost non-existent compared to previous quarters. The VeroFORECAST anticipates that home prices in Monroe, La., will decline. Metros in Connecticut, Illinois, California, and Alabama rounded out the 10 least-performing markets.

 

/by

Toronto’s high-rise development is among the continent’s most active

A sustained skyscraper construction boom is pushing Toronto towards being the most active high-rise development hub in North America.

Data from the Council on Tall Buildings and Urban Habitat showed that the city is benefiting from a strong building trend that currently has 31 skyscrapers under construction, as well as 59 proposed.

This will be on top of the 67 high-rises at least 150 metres tall already in place in Toronto.

The figure considerably outstrips second-placer Chicago, which has 126 skyscrapers and another 19 under construction or proposed.

“The good times are also reflected by the amount of tower cranes dotting the skyline, with Toronto boasting the most among 13 major cities surveyed by consulting firm Rider Levett Bucknall Ltd.,” Bloomberg reported.

Toronto’s dominance was already apparent as far back as the second quarter of 2018, which saw a then-unprecedented peak of 97 cranes working on high-rise projects at the time.

“The high crane count could continue to rise as well, since another 400 projects are proposed,” adding to the 97 cranes already up in Toronto as of the second quarter, Rider Levett Bucknall stated back then.

Residential towers accounted for fully 86% of the Toronto projects at the time, largely due to immigration and population growth propelling sustained demand for units.

/by
,

Condo buyers facing rising costs, challenging affordability

A 26-storey condominium in Abbotsford, BC has been rocked by astronomical increases to its insurance premiums—a 780% increase from its rates last year.

BFL, which insures the aforementioned Mahogany Tower, raised the property’s rates from $66,000 in 2019 to $588,000 in 2020.

Mike Pauls, president of the building’s strata council, said that the increase will affect condo owners in the form of a one-time tax of $3,000 per unit. This does not include the additional monthly costs of $600. The insurer explained that the increase was due to fewer insurance entrepreneurs willing to share the risk of insuring the high-rise building, which is valued at $79 million. The insurer has since offered a lower premium of $241,000—but with reduced coverage.

Condo insurance prices all over Canada are experiencing significant leaps in rates thanks to severe weather events in recent years. Industry stakeholders and experts cautioned that if this issue persists, the costs may soon be unsustainable.

As single family home prices continue to rise in much of the country, condos have stepped up as the more affordable option, and that demand shows no sign of slowing anytime soon. Affordability has always been an issue for homebuyers, but investors are also becoming concerned as to how this will impact their bottom line. Pauline Tonkin, mortgage advisor with DLC’s Blue Tree Mortgage in Vancouver, has been contacted by both buyers and investors regarding the issue.

“I definitely see that it is going to be an issue,” she said. “In conjunction with the mortgage rule changes and rates, there are so many factors that we have to review for clients to make it affordable, and strata fees are a number that’s included in the debt servicing ratio. So if that goes up, it automatically reduces their ability to qualify. The more it goes up, the more it impacts them.”

Climate-related weather events are driving up insurance premiums for condominium owners across Canada. A condo complex in Ottawa found that its insurance premiums had climbed by 730% because of wind and fire damage. Some Alberta condos are facing insurance premiums of up to 700%. And Tony Gioventu, executive director of the Condominium Homeowners Association, said that condos in British Columbia are facing premium hikes up to 300%.

Not all condo corporations, however are seeing these huge increases. Rob de Pruis is the director of consumer and industry relations, Western region, for the Insurance Bureau of Canada and he says that claims frequency, repair and maintenance procedures and schedules, changes in coverage, and increase in replacement cost all play into evaluating costs.

“We do see a number of areas, especially in B.C., where the rebuild costs on these properties have been growing fairly significantly over the last couple of years,” he said. “Every property is assessed on its individual risk merits. Anything that the corporation can be doing and unit owners can be doing to reduce that risk and prevent claims is going to be very helpful over the long term.”

Strata unit owners are being advised that if their strata corporation is faced with a substantial increase in insurance rates, the cost will be reflected in the annual budget that determines annual strata fees, according to the Insurance Brokers Association of B.C. (IBABC).

If the deductible is dramatically increased to $100,000, for example, any claims under that new limit aren’t covered by insurance and, subject to bylaws, each owner is likely responsible for damages to their strata lot with the strata corporation responsible for common property.

“The result is many of the repair and replacement costs that have been covered by the policy of insurance taken out by the strata corporation will now be downloaded onto the affected owners in the event of a claim,” IBABC writes in a memo addressing the issue.

“Unfortunately, a large swath of the population is never going to be able to afford a detached house, so they’re going to be in a condo one way or another,” said Iain Macfadyen, a mortgage broker in Vancouver.

For those people who are right at their financial limit, it will bring their budget down, but Macfadyen said it’s also the feeling is that a strata fee is simply lost money, whereas people feel as if they’re getting more from a mortgage payment.

It’s unclear how much of an impact this will have on affordability and demand for buyers, investors, and even builders is unclear. Tonkin says that these increases don’t’ just affect buyer qualification now, but the affordability of the property in the future.

“We may not see too much of a hit right away, but it’s going to come, and I really think it’s about after they move in. [Buyers] need to really need to be aware of including that in their budget, and that’s where working with good mortgage professionals will go through that with them.”

Like other financial instruments such as interest rates, insurance rates are constantly being revised in reaction to market forces and emerging trends. This is the current scenario with commercial insurance in general and strata building insurance in particular, according to the IBABC.

/by

Ontario’s rental vacancy rate is starting 2020 at a near record low

New year, no vacancy. Renters in cities across Ontario will spend another year struggling to find rental housing as prices continue to rise in the face of tight market conditions.

In 2019, the vacancy rate was 1.6 percent and it will likely drop further through 2020 to a near record low of 1.5 percent, according to Central 1 Credit Union economist Edgard Navarrete. For context, the vacancy rate for Ontario’s rental market averaged 2.6 percent between 1991 and 2018.

In his 2019-2022 housing forecast published at the end of 2019, Navarrete noted that the province has seen a substantial uptick in completed new rental units over the last three years. Through the same 1991 to 2018 period, the average number of new rental units added to the market was 1,500. From 2017 to 2019, the average increased to 7,000 units.

The trouble is that increase still doesn’t satisfy the demand for rentals in some of the province’s most competitive markets, especially Toronto, which is said to have the worst rental supply deficit in Canada.

“Government investments in rental housing will continue to add to the rental universe but expect [the province’s] rental vacancy rate to remain stubbornly lower than the long-term average due to continued strong demand from immigrants settling in Ontario and existing renters opting to remain in rental longer until they have a sufficient down payment to qualify for a mortgage loan,” wrote Navarrete in the Central 1 Housing Forecast.

Unfortunately, the main takeaway here for Ontario renters is monthly rents will continue to climb above inflation as long as this sharp disparity exists between rental supply and persistent demand. Navarrete singles out Toronto, Ottawa-Gatineau, London, Kitchener-Cambridge-Waterloo and Hamilton as markets where rental prices will log especially steep increases and bidding wars will keep intensifying. These cities will feel the strain on their rental markets particularly acutely because they are set to absorb the most new residents to the province.

There is hope for a rental unit supply uptick in the next few years, but for those looking for a new rental this year, it’s unlikely to offer much relief. The provincial government under Premier Doug Ford rolled back the rent control measures introduced by the Wynne Liberal government just a couple years earlier. With more flexibility to price rental units in response to market demand, investors are more likely to see condos as a solid long-term moneymaker and purchase units to add to the rental market.

These investor-owned condos are known as the “secondary rental market” since they are not built for the sole purpose of being added to the rental pool. Purpose-built rental units are known as the primary rental market.

The caveat is that the positive market changes this policy shift from the Ford government intended to inspire won’t be felt for at least a few years.

“If we see a large number of investors entering the market today, with the average completion time of high-density housing such as condo apartments anywhere from two to three years from the time shovels hit the ground, it wouldn’t be until after 2022 when the increased rental market supply will alleviate some of the pressures from the primary rental market,” wrote Navarrete.

/by
,

Supply pressure to impel intensified home price growth in 2020

The lack of housing supply, especially in the Greater Toronto Area, will aggravate Canadian home price growth this year, amid already acute pressure from investors and speculators.

Coming off the heels of at least nine consecutive months of sales growth on a national level, it can been seen that the moderating effect of mortgage stress testing first implemented in 2018 was not sufficient to prevent demand from overtaking inventory, according to a recent analysis by real estate information portal Zoocasa.

“While factors such as foreign and domestic investment have also contributed to too-hot-to-handle price growth, that there have been too few homes to satiate demand, particularly in the GTA markets, set the stage for bidding wars and a stratospheric rise in home values over the course of 2016,” Zoocasa explained.

“That infamously led to the implementation of the Ontario Fair Housing Plan, which included a number of measures including a foreign buyers’ tax and rent controls, to cool the demand end of the market.”

And while such measures helped cut down demand noticeably, “Canadian real estate as a whole could be considered a sellers’ market in November, with a sales-to-new-listings ratio of 66.3%, as new supply shrank by -2.7% year-over-year.”

The total months of inventory are also at their lowest since 2007, at a mere 4.7 months.

Toronto’s consistently intense levels of demand are a stark microcosm of the national situation, if statements from the city’s real estate board are any indication.

“Strong population growth in the GTA coupled with declining negotiated mortgage rates resulted in sales accounting for a greater share of listings in November and throughout the second half of 2019,” TREB chief market analyst Jason Mercer said.

By the end of last year, the sales-to-new-listings ration in the region stood at an alarming 81%.

“Increased competition between buyers has resulted in an acceleration in price growth. Expect the rate of price growth to increase further if we see no relief on the listings supply front.”

/by