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House prices shot up more than 40% in these three GTA cities

The GTA real estate market has reached historic highs over the past year, with house prices in outer-lying cities seeing unprecedented surges in interest.

As homebuyers searched for larger spaces in more suburban areas of the GTA during the pandemic, it drove demand and, consequently, home prices through the roof.

A new report from RE/MAX found that detached homes in three unexpected GTA cities saw unbelievable growth between 2020 and 2021, rising over 40% in value.

Uxbridge experienced the largest growth, with detached home prices there increasing a whopping 46.4% to a new high of $1,365,983. It was closely followed by Scugog — directly to the east of Uxbridge — where prices jumped 43.9% to a new high of $986,878.

King, located just north of Vaughan, saw house prices rise from an average of $1,555,302 to $2,179,739 — a change of 40.2%.

Other outer-lying GTA cities like Brock, Pickering, Clarington, Oshawa, Caledon, East Gwillimbury, Whitby, Banbury-Don Mills, and Milton all saw substantial increases in detached home prices, each rising 34-40%.

This upswing in prices came alongside an upswing in the number of sales, the report says.

“Halfway into 2021 and the Greater Toronto housing market continues to fire on all cylinders,” said Christopher Alexander, senior vice president of RE/MAX Canada. “Overall home sales topped 70,000 between January and June, the strongest first half in the history of the Toronto Regional Real Estate Board, while values smashed through record levels set in previous years.”

With interest rates falling to a historic low during the pandemic, aspiring homebuyers raced to these once-more-affordable communities and pushed up the prices. In 2019, 28 GTA communities had average detached home prices under $1,000,000. In 2020, that number fell to 18. This year, there are only six.

“More transit options and hybrid work schedules have made relocation to the city’s outlying areas even more attractive,” said Alexander. “First-time buyers are feeling the squeeze but are still determined to become homeowners, with many happily travelling further afield to make it happen while working from home. The beneficiaries of the trend have been suburban communities in Durham, Peel, Dufferin County and the most northern part of York Region.”

And with low inventory levels not changing anytime soon, the trend of rapidly rising prices likely won’t either.

“Without a serious influx of new listings to ease the upward pressure on pricing in the coming months, the market will likely continue on this upward trajectory,” Alexander said.

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Why real estate investors shouldn’t worry about inflation

Rising inflation is a growing concern, but real estate investors can rest assured that their investments are, at least for the time being, inflation-proof.

“Real estate has been protected from inflation since the 1970s but it won’t work if there’s anything extreme, if we go back to a 15% benchmark interest rate,” said Patrice Groleau, owner of McGill Real Estate and of Engel & Völkers’ rights to the Quebec market.

However, even if rates somehow surged into the double digits, the value of real estate is mostly tied to the value of land and the cost of construction, namely materials and labour, which rise commensurately with inflation.

After the subprime mortgage fiasco that led to the Great Recession, real estate in major cities like Miami and New York quickly returned to their base values, which Groleau noted is why investors always pounce on properties in the immediate aftermath of economic downturns. Nevertheless, under normal economic conditions, inflation increases slowly and is always matched by rents, offering property investors a measure of protection.

“Rents adjust to inflation. In Quebec, every time you have a rental increase, the government looks at inflation to justify that increase, and if the price of rent goes up, the value of the building obviously goes up too,” said Groleau. “The problem with monetary policy in Canada is most decisions are all based on inflation—the biggest concern for the government is always inflation, inflation, inflation, so as soon as inflation rises, you see a direct link to real estate. It’s not perfect but if you look at all other options, there’s almost nothing better than that. Stocks don’t even match inflation the way real estate does, unless they’re blue chips.”

Groleau added that two-thirds of a downtown property’s value is tied up in the land, with the remainder determined by material costs, while it’s the opposite in suburban markets.

It is highly unlikely that interest rates reach the double digits, at least any time soon. In Japan, for example, interest rates have been near the basement since the aughties and Groleau suggests that, with Canada following suit—many advanced economies have had declining interest rates for over two decades—real estate is one of the safest investments today.

“As Andrew Carnegie said, ‘90% of all millionaires became so through owning real estate,’” said Groleau. “It has a stable core value over time because everybody needs somewhere to live, and every study and financial professional I’ve spoken to says we will follow the Japanese model. People don’t think rates can stay low forever, but in Japan they’ve been low since the early 2000s and inflation is under control.”

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Prime prices exceed mainstream for first time since pandemic

Prime prices across 46 cities increased at an average rate of 8.2% in the year to June 2021, up from 4.6% in March.

What’s happened?

Until now, the pandemic-fuelled house prime boom was most evident in the mainstream market but the prime sector has now surged ahead.

The mainstream market now lags behind with prices across 150 cities increased by 7.3% on average in the year to Q1 2021 (latest data available).

The Prime Global Cities Index is a valuation-based index tracking the movement in prime residential prices across 45+ cities worldwide using data from our global research network. The index tracks nominal prices in local currency.

Toronto leads this quarter’s results recording annual prime price growth of 27%, driven by strong buyer appetite and low inventory levels. Despite a recent raft of cooling measures, the next three rankings are occupied by key Asian cities – Shanghai (21%), Guangzhou (20%) and Seoul (20%). Miami (19%) completes the top five this quarter.

Interestingly, the proportion of cities registering prime price growth has increased only marginally to 76%, instead it’s the scale of growth amongst the top-performing cities that is behind the index’s acceleration.

Last quarter, the top-performing city recorded annual prime price growth of 19%, three months on four cities exceed this threshold.

Other hotspots include Canadian and US cities which, on average, registered annual price growth of 16% over the 12-month period.

What’s driving prices higher?

Housing markets are undergoing the most unusual of recoveries. An easing of travel rules in some markets, a surge in safe haven purchases by domestic buyers, a flurry of activity ahead of the tapering of stamp duty holidays, and an overall reassessment of lifestyles and commuting patterns, all set against a backdrop of low interest rates.

Where next?

Talk of housing bubbles are grabbing headlines worldwide but we expect the prospect of rising interest rates, government intervention and the withdrawal of stimulus measures to rein in the market’s exuberance in the second half of 2021.

Expect more cooling measures as policymakers grapple with the affordability conundrum. The Chinese mainland’s long debated national property tax now looks more likely.

We expect to see London, New York, Paris and Dubai move up the rankings in Q3 as travel restrictions ease and international buyers start to recognise the relative value in these cities.

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Toronto neighbourhood could be totally transformed over the next decades

A Toronto neighbourhood could see massive changes over the next few decades.

More than 500 acres around Downsview Airport and Downsview Park are part of a planning process to develop residential and non-residential property called id8 Downsview.

Just as neighbourhoods around #Downsview were built over time, this plan will likely take 30+ years to fully implement. Our thoughtful, step-by-step approach prioritizes collaboration so decisions continue to be informed by priorities of the community, stakeholders & the City.

— id8Downsview (@id8Downsview) July 28, 2021
Northcrest Developments and Canada Lands, have named the planning process id8 (ideate) Downsview “because we know a lot of ideas will be shared and discussed between a lot of people to plan a future for these lands.”

The process began when Bombardier sold the Downsview Airport property to the Public Sector Pension Investment Board (PSP Investments – a federal Crown corporation that manages funds for the pension plans of the federal Public Service, the Royal Canadian Mounted Police, the Canadian Armed Forces, and the Reserve Force) in 2018.

Northcrest Developments was established a short time later to create a master plan and develop the Downsview Airport lands on behalf of PSP Investments. Downsview Airport is slated to close in 2023.

They hit a snag with some disagreement over rezoning employment lands as residential. Plans now state there will be a minimum 12 million square feet of non-residential space – including a recently announced film and television production facility.

Now id8 Downsview is preparing a proposal for the City of Toronto and is asking for feedback on plans for the property.

Developing this area will take 30+ years. We want this space to serve the community in the interim as well as in the future. What could we do with this space while planning is underway? Share your thoughts on our survey

— id8Downsview (@id8Downsview) July 27, 2021
An early vision for the property includes three new mixed-use neighbourhoods anchored by Downsview Park and the airport. Mid-rise buildings and taller buildings near transit are mentioned in the plans.

Planning this big area will take time and collaboration with the public, stakeholders & City. The early focus will be on 3 new, mixed-use neighbourhoods, anchored by #DownsviewPark and the runway. This will enable us to start close to transit and support the creation of new jobs.

— id8Downsview (@id8Downsview) July 24, 2021
Downsview Park won’t be cut.

“The size of the Park will not change and there will be additional green spaces added as we develop the neighbourhoods,”

There are also suggestions to include new parks, re-use heritage buildings, celebrate Indigenous people and reimagine the airport runway.

With the departure of Bombardier and the availability of the airport lands along with a TTC subway extension and GO service expansion — there is a potential for development.

This is just the first step in what is likely a multi-decade process of “re-imagining this area of Toronto.”

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The rental housing market is heating up again – a worrying sign for affordability

Activity is heating up in rental housing markets across Canada, a troubling sign for affordability in cities with a chronic shortage of available units.

For years before COVID-19, markets from Vancouver to Prince Edward Island suffered from an unrelenting mix of weak rental construction, raging demand and rising rates. Bidding wars were not uncommon, echoing the buyer’s market.

The pandemic offered a slight reprieve in many cities as vacancies climbed and asking rates fell, owing partly to a drastic slowdown in population growth as immigration waned.

But the reprieve is proving short-lived. The average monthly rent for units listed on Rentals.ca was $1,721 in June, an increase of 2.7 per cent from April, though still lower than before COVID-19. Rents rose 2.5 per cent in May, the largest 12-month gain since early 2020, according to inflation data from Statistics Canada. During the six months prior, the average annual gain was just 0.8 per cent.

The coming months should see strong demand, as the country is poised for an influx of new immigrants, part of the federal government’s push to make up lost ground. And with universities set to resume in-person classes, more students are signing leases.

In effect, many cities are hurtling back to tight market conditions with meagre vacancies, putting a strain on tenants’ finances.

“We’re having an affordability crisis across the country, but especially in large urban centres,” said Ricardo Tranjan, a political economist at the Canadian Centre for Policy Alternatives.

In the country’s largest rental market, dynamics are shifting.

The average rent for available purpose-built rental units in the Greater Toronto Area was $2,289 in the second quarter, down 5 per cent from a year earlier, but up 1.9 per cent from the first quarter, according to real estate consulting firm Urbanation, which focuses on apartments completed since 2005. It was the first rent increase since the start of the pandemic.

In the condo market – a major source of Toronto’s rental supply – activity is hotter than ever. Over the past four quarters, there were 50,000 condo lease transactions in the region, up 58 per cent from the previous peak. Leasing is particularly strong in the downtown core.

“The [urban] exodus story is completely overblown,” said Shaun Hildebrand, president at Urbanation. “Now that things are reopening again, everybody’s coming back in.”

The GTA is on track to have vacancy rates and rents back to prepandemic levels by early next year, Mr. Hildebrand said. “Units are starting to lease in multiple-offer situations again. Rents are rising very quickly. There’s been a very dramatic reduction in available supply, just in the last several weeks. And the market is becoming very competitive.”

To lure new tenants in the pandemic, Canada’s major landlords ramped up their use of incentives, such as one month’s free rent, gift cards and signing bonuses. This allowed them to recruit tenants without lowering rates.

The use of incentives is still prevalent in the GTA. But in some other places, it’s waning. Boardwalk Real Estate Investment Trust said in May that it was pulling back on incentives in Saskatchewan, and was nearing that point in Alberta, owing to higher occupancy.

“As we head into our strong summer rental season, the occupancy and revenue trend for all our markets is positive,” chief executive officer Sam Kolias told analysts on a call.

The demand side should continue to strengthen. Immigration levels have perked up in recent months, and the federal Liberals aim to admit more than 1.2 million permanent residents between 2021 and 2023, ensuring a steady flow of new renters for years to come.

Given tight conditions and favourable demographics, Canadian apartment buildings have become an increasingly attractive asset class, sought after by global players in billion-dollar acquisitions. Development is quickly growing, too: Around 60,000 purpose-built units were completed last year, the highest since at least 1990, according to the Canada Mortgage and Housing Corp.

The trouble is that supply isn’t growing nearly enough, industry executives say.

“We’re calling for increased immigration numbers – unprecedented, never-seen-before immigration numbers – going forward. So the fundamentals are just incredible,” Mark Kenney, CEO of Canadian Apartment Properties REIT, told analysts on a May earnings call.

“Without meaningful housing policy to accelerate the development of rental, I think that we’re going to find ourselves in this supply-constrained environment,” he added.

The pandemic didn’t necessarily bring relief to many renters, the CCPA’s Mr. Tranjan noted. Most tenants stayed in their units, and likely saw their rents hold steady or rise slightly. And while asking rates often fell, a tenant’s new unit might still be pricier than before.

“To call it a renter’s market was a long, long stretch, and fairly inaccurate,” he said.

For renters, the other option is home ownership. But on that front, affordability has deteriorated. Fuelled by rock-bottom interest rates, buyers have purchased homes in record quantities and driven up prices. The average national sales price was around $680,000 in June, a 26-per-cent gain from a year earlier. Six-figure price increases have not only taken hold in major markets, but in bedroom communities and rural areas.

“The rental market is going to become increasingly more important as ownership affordability continues to erode,” Mr. Hildebrand said. “That’s just going to shut out more first-time homebuyers in the future and put further pressure on the rental market.”

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Are condos a good investment in Toronto?

Condo prices in the Greater Toronto Area are on an upsurge, rising 44% since the 2017 housing peak, driven by the segment’s relative accessibility compared to other property types, recent data from tech-enabled brokerage Properly has revealed.

“This past year, condo sales were hit the hardest by the pandemic,” said Anshul Ruparell, co-founder and chief executive officer of Properly. “While sales are now back up to pre-pandemic levels, it’s relieving for condo owners to know that their investments have appreciated significantly over time. Moving forward, it’s forecasted that solid growth in condo sales will continue as pandemic restrictions ease.”

For perspective, the historical average condo appreciation rate in Toronto before the coronavirus outbreak was between 4% and 5% annually.

A separate analysis by Zoocasa, meanwhile, found that month-over-month price growth was strongest in the 905 area, with Simcoe County (56%), Durham Region (46%), and Halton Region (26%) posting the largest gains. Average condo prices in the city of Toronto stood at $716,976 in May, representing a 17% jump from the previous month.

Zoocasa attributed the increase in condo values to Canada’s march towards a full economic reopening and May’s 170% annual spike in sales activity.

“As vaccines roll out and pandemic restrictions ease, it’s clear buyers are once again interested in high-density living at the heart of it all,” the real estate and brokerage website said.

Why are Toronto condo investments a good idea?
This price surge, along with a combination of the abovementioned factors, is what makes condo investments, particularly in the 416 area, sensible in an “economical point of view,” according to Toronto-based real estate agent Pierre Capaterian.

“When it comes to investing in Toronto real estate, the condo market is where the biggest gains are. Toronto condo prices have gone up an average of 13% per year since 2015,” he wrote in a blog post. “With Toronto’s average 10-year historical growth rate of 5% a year and the most recent years averaging over 10% a year, investing in the Toronto condo market in 2021 means you’ll get in at today’s rates.”

Capaterian added that Toronto has become an “evolving world-class city,” joining the likes of New York, San Francisco, and London, but with property values still way below those cities.

He then laid down three reasons why it is a good idea to invest in Toronto condos:

1. Equity gains
Access to high equity gains is among the biggest reasons why Toronto is a prime location for condo investment, according to Capaterian. He cited the Toronto Regional Real Estate Board’s (TRREB) February 2021 data, which showed condo prices in the 416 area rising by 52% since 2015.

“To put that in perspective, if you had purchased a condo in 2015 for $400,000, you would have made over $200,000 (or $50,000 per year) just by living there,” Capaterian wrote, adding that while investing in Toronto real estate “can be very fruitful, it requires a ‘proper investment strategy’.”

2. Stable rental demand
While the pandemic has dampened rental demand in the city, Capaterian believes that the impact is temporary and the demand for rentals remains stable.

“With college students returning to school and immigration expected to reach record-breaking levels, we anticipate stable but increasing demand for rental inventory,” he wrote. He added that major developments, such as the East Harbour, and the growing number of high-profile tech companies “choosing to set up shop” in Toronto will push up demand further.

“Pair that with Toronto’s record high rental rates – one-bedroom condos currently rent for about $2,225 per month – and your tenant can help pay down your mortgage,” he wrote.

3. Stringent lending practices
Toronto’s delinquency rate – mortgage left unpaid of 60 days or more – is also considerably low, according to Capaterian. In the past year, the figure has dropped to 0.56%, indicating how property buyers in the city are “well-funded.” He added that the government’s recent raising of the stress test threshold can help ensure that buyers “are not overleveraged to the point where changes in rates or the market causes them to have to dump their assets and take a loss.”

What are the keys to finding the best condo investment?

“It’s not about buying one thing; it’s about buying the right thing,” Capaterian wrote. He listed several signs that a condo is a good investment, including:

  • Units that are priced below what other properties in the area are trading for
  • Units located in gentrifying neighbourhoods where prices are low but are on the rise
  • Future developments or transit infrastructure that will add value in the years to come
  • Resale condos that are known to perform well in the market

Capaterian also emphasized the importance of buying strategically.

“Don’t be misguided by condo developments that seem juicy because they’re along the waterfront,” he wrote. “You’re looking for condos with the best margins and they can be found both in the resale condo market as well as the pre-construction market.”

 

He also noted the value of working with an experienced real estate agent, adding “when it comes to the resale market, having an agent who knows which buildings and floor plans yield the better ROI [is an advantage]. With regards to pre-construction, you need an agent who has platinum access to projects throughout the city. This gives you preferential access to the best floor plans and the lowest pricing available.”

 

Capaterian added that the best condos in Toronto often never reach the open market as seasoned agents and their clients snap them up during the platinum phases. This is the reason why working with an agent who has deep knowledge of the developments in the city is a must in securing the best investment property.

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Resubmission Proposes Residential Additions to East Harbour Plan

Recent documents submitted to the City of Toronto have revealed the latest plans for East Harbour, a massive development on the site of the former Unilever Soap Factory where the Don River meets Lake Shore Boulevard. The most striking change from previous versions is the addition of nine residential towers to the mix, which would bring approximately 4,300 units to an area otherwise dedicated to employment.

That change has ruffled some feathers. The former industrial site sits within one of 29 “provincially significant employment zones” in Ontario, and its current zoning does not allow for residential uses. Employment zones are intended to protect important centres of employment from encroachment by other uses which might represent more lucrative development opportunities.

 

The prior master-plan, put together before previous owners First Gulf sold the land to Cadillac Fairview, was—along with an extensive public realm—exclusively employment-focused. That plan was approved by City Council in Summer 2018.

It is not clear yet whether the Province of Ontario will use a Minister’s Zoning Ordinance (MZO) to bypass municipal zoning rules, as they have recently—and controversially—done for other nearby developments. What is clear is that they are prepared to work with Cadillac Fairview to build a “complete community” with “a diverse range of commercial space, residential space, retail, food, cultural uses, and outdoor space”—something that will likely require Provincial involvement in some capacity.

And indeed, the most recent plan by Adamson Associates Architects and OJB Landscape Architecture includes all of those things. There are now planned to be a total of eighteen towers, with heights ranging from 75m to 214m, and encompassing 926,000 m² of commercial space, 302,000 m² of residential space, and 15,000 m² of open space—including an additional 4,700 m² of parkland over previous plans.

This massive programme would be split into four quadrants delineated by the site’s two major axes: an extension of Broadview Avenue running north-south, and a new street called East Harbour Boulevard running east-west. Density would be concentrated in the two northern quadrants, with height stepping down towards the south and the east.

 

Each quadrant would be developed as its own phase, bringing the total number of planned phases up from three to four.

Quadrant 1, in the north-west corner and closest to the planned East Harbour transit hub, is planned to include the district’s signature office building and open space. East Harbour Plaza—formerly Soap Factory Plaza—would connect the transit hub to the rest of the site, and is envisioned as a focal point for the new neighbourhood.

Quadrant 2 would feature a similarly tall (214m) office tower, as well as another “transit plaza.” A pedestrian network would connect this northern area to both the residential towers on the site’s periphery as well as the neighbourhood’s southern half.

 

Quadrants 3 and 4 would each feature office towers on Broadview, with residential towers behind.

 

In addition to the privately-owned public plazas scattered across the four quadrants, three parks are also planned for the neighbourhood. East Harbour Park, planned as a destination on the west side of the site closest to the Don River, remains substantially unchanged from the previous master plan, but it has now been joined by two new parks: a Community Park and a Neighbourhood Park. Planned for the eastern, more residential side of the new neighbourhood, these parks are intended to serve the local community more specifically.

 

All of the new parkland, as distinct from the plazas mentioned earlier, would be conveyed to the City, becoming publicly-owned.

One more significant change to the plan is conspicuous by its absence; the Soap Factory building, which would have been a centrepiece of the previous master plan, is no longer planned to be preserved.

It should be emphasized that details will undoubtedly continue to change as the planning process continues. In several key ways the current plan is hardly recognizable from the master plan approved three years ago. Whether it will more closely resemble what is eventually built remains to be seen. Whatever the end result, there is little doubt that East Harbour will have an incredible impact on Toronto’s East End, and the city as a whole.

You can learn more from our Database file for the project, linked below. If you’d like to, you can join in on the conversation in the associated Project Forum thread, or leave a comment in the space provided on this page.

 

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Value of GTA condos nearly doubles in four years

Condos in the Greater Toronto Area appreciated by 44% between their April 2017 peak and June 2021, says realty brokerage Properly.

Interestingly, condos in the GTA struggled through most of 2020, save for before the COVID-19 pandemic and the very end of the year, but they nevertheless managed to subsequently surge in value again.

“This past year, condo sales were hit the hardest by the pandemic. While sales are now back up to pre-pandemic levels, it’s relieving for condo owners to know that their investments have appreciated significantly over time,” said Anshul Ruparell, co-founder and CEO of Properly. “Moving forward, it’s forecasted that solid growth in condo sales will continue as pandemic restrictions ease. I anticipate we’ll see people coming back to the city centre and back to our incredible city that offers world-class dining, entertainment, and liveability.”

There’s a host of reasons for rapid appreciation in the condo market, beginning with the price spread between low- and high-rise housing growing too wide beyond most homebuyers’ means. That, in effect, spurred such strong demand for condominiums that there were too few units available for purchase.

“There was a lag in condo pricing for the couple of years prior to 2017, and with that and the slow appreciation from 2014-2017, condos were due to jump in price,” said Alex J. Wilson, broker of record and owner of RE/MAX Wealth Builders Real Estate in Toronto. “You had a growing gap between the freehold and condo markets and the tipping point was affordability.”

The preponderant reason for supply constraints in the condo market is the timetable for developments. Wilson noted that, from the time a project is conceived to delivery, eight to 10 years could pass. Coupled with extremely robust demand for precious few units, values skyrocketed. Additionally, assignments appreciate in the years between their purchase and delivery, and as a result buyers often flip them, which further adds to condos’ surging valuations.
“You can’t just build condos tomorrow; from the launch period, it takes three to five years, but you have to go through zoning and approvals before that,” said Wilson.

The other reason for surging appreciation is most condos are developed in very close proximity to the strongest market fundamentals, namely transit and entertainment amenities. There aren’t any low-rise subdivisions built in downtown Toronto, but there are myriad condo units on subway lines, close to Scotiabank Arena, bars, restaurants, and the highway network. Wilson anticipates that, in H2-2021 or early 2022 when more people return to the city, the chasm between detached homes and condos will grow even wider, pushing the value of condos higher.

“The best market fundamentals drive appreciation and downtown Toronto has amenities, and people will want to live near work so that they can walk there, especially now that the end of the pandemic is near,” said Wilson. “The convenience and lifestyle factors that condos have to offer are they’re relatively maintenance-free, meaning you only have to worry about what goes on inside the unit, not outside.”

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74% of Ontarians 18-34 don’t think they can buy home: survey

A survey of Ontarians revealed that three-quarters of respondents aged 18-34 don’t believe they will be able to afford a home in their city or town.

“Having worked in this industry for 35 years now, I have seen one group [among the aforementioned cohort] able to get into the market, and that’s thanks to assistance from parents who are able to do it, and certainly low-interest rates don’t hurt, but you do have to have a good job,” said John Lusink, president of Right at Home Realty, which conducted the survey with Maru/Blue. “It’s challenging all around. If it’s their first time purchasing, and with mortgage qualification rules tightening up yet again, it is discouraging and tough for young folks, so I empathize greatly with them.”

The anxiety isn’t just felt by buyers aged 18-34, says Erica Mary Smith, broker of record at Stomp Realty in Toronto.

“Every time I talk to my older clientele who have kids, the first thing they always say is, ‘I don’t know how my kids will ever afford a home,’” she said. “Now I’m seeing a lot of gift money from parents, and parents are transferring existing homes, namely condos into their kids’ names so that they’ll automatically be in the market at some point and they won’t have to deal with taxes. There’s a lot of parental help right now.”

Asked if easing mortgage qualification rules, including rescinding the 200 basis point stress altogether, for younger buyers might help them get a foothold in the housing market, Lusink noted that the rules exist for a reason, and as a parent himself he’s glad they do.

“As a parent, I’d be concerned about seeing my kids get into mortgages that are in the $600,000-800,000 range if they didn’t have the jobs and incomes to support that,” he said. “I am in favour of having stricter rules in place so these guys don’t get into trouble.”

Right at Home Realty and Maru/Blue’s survey also found that 47% of respondents aged 35-54, and 37% over 55, did not believe they could buy homes where they live.

Additionally, 42% said moving away from larger cities could hurt their career advancement while a majority working from home weren’t willing to move further away in case they’re called back to the office post-pandemic.

Eighteen percent of Ontarians would consider selling their homes to move to a smaller community, which Lusink says is evidence that the exodus from major cities in 2020 may have been media hype.

“While the pandemic necessitated working from home, what it has done is increase people’s desires for bigger space, some backyard space, but I think that because only 18% would move out of the city to smaller space means it’s not an exodus, as has been put forward in the media.”

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Hamilton’s ‘hidden gem’ properties

To say COVID-19 has been bad for small businesses would be an understatement, but mixed-use properties that will invariably hit the market because of the economically calamitous nature of the pandemic could help boost housing supply.

“There’s a hidden gem: mixed-use commercial properties in downtown Hamilton that might be able to be converted into residential properties,” said Sandy MacKay, founder and CEO of MacKay Realty Network. “A lot of business owners own small mixed-use properties that aren’t excited about working from their offices or they’re shutting their businesses, or going fully remote, and those properties have potential for residential conversion.”

The only hurdle to overcome, in addition to actually finding such properties, is Hamilton’s slow rezoning approvals process—not out of character for the region. Still, MacKay says it would be a worthwhile endeavour.

MacKay Realty Network works with investors around the GTA, although it favours Hamilton, to find cash-flowing properties primarily in the multifamily residential sector. MacKay says that properties with at least two units carry easily, but the sweet spot is properties with five to 50 units.

“The last number of years, Hamilton’s downtown core has been booming and such a great area to be investing in, especially with a lot of renovation projects that are happening there,” he said. “There’s been a great commercial push there in the last five-plus years, although not so much in the last year because of the pandemic—but that’s not unique to Hamilton; it’s happened all around the world—and multifamily residential is our bread and butter because it’s the area in which we see the most potential. We see a lot of opportunities in the bigger buildings that have over five units, even up to a 100 units, which are harder to find. If you can navigate the difficult tenant situations that come with larger buildings, it’s a great payoff, and fortunately, our property management company, Executive Properties, can help with that.”

The rules governing Ontario rentals, including the Landlord and Tenant Board, favour renters, and the COVID-19 pandemic has been particularly arduous for investors stuck with problem tenants they’re legally prohibited from evicting. Moreover, when evictions are no longer proscribed, there will be a massive backlog to contend with.

“Landlord problems can turn into a great opportunity for the right person,” said MacKay, adding that MacKay Realty Network leverages its vast contact list to help its clients find those properties.“It’s definitely harder to find right now, and not all that realistic to find, but if you get a duplex and triplex, or a building with even more units, you will definitely find properties that carry themselves and mortgages and other expenses associated with the properties.”

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Home sales fell again in May, but don’t get used to this

Sales in the Greater Toronto Area moderated for a second straight month in May, indicating that a semblance of normalcy is beginning to return to the housing market. However, it could be short-lived.

There were 11,951 sales in the GTA last month, according to the latest data from the Toronto Regional Real Estate Board (TRREB), down from 13,650 in April and 15,646 in March, when activity peaked. The number of transactions last month was shy of the May record, which was 12,789 in 2016.

“There has been strong demand for ownership housing in all parts of the GTA for both ground-oriented home types and condominium apartments. This was fuelled by confidence in economic recovery and low borrowing costs. However, in the absence of a normal pace of population growth, we saw a pullback in sales over the past two months relative to the March peak,” said Lisa Patel, president of TRREB.

But despite buying activity decelerating in May, the average selling price still crept up by 1.1% month-over-month to reach a record $1,108,453, which TRREB’s analysis attributed to new listings decreasing to 18,586 from 20,825 in April.

There were 5,718 detached home sales in the GTA in May that averaged $1,415,698, while semi-detached sales totalled 1,233 and averaged $1,064,361. The GTA’s townhouse segment saw 2,182 transactions for which the average price was $866,349, and the condo segment of the market had 2,710 sales for an average price of $682,280.

The slight softening in purchasing activity might also suggest buyer fatigue, says mortgage broker Elan Weintraub, but he doesn’t expect that to last for long, thanks in large part to the rising rate of inoculated Torontonians.

“The COVID-19 vaccines are starting to really come out, and by fall and beyond, downtown businesses and most of Bay St. will start opening up, maybe not to the extent of before the pandemic, but bars and restaurants will start reopening and there will be more demand for real estate as people come back to the city,” said Weintraub, co-founder and director at Mortgageoutlet.ca. “Maybe not this year, but certainly early next year immigration will resume and a lot of people will want to come to Canada.”

Even with a slight reduction in transactions, prices still managed to rise and Weintraub doesn’t anticipate that stopping.

“Even though the market is still hot, the next three to 12 months are when the market will get hotter. Even though volume is down, I think that prices are going to remain strong. Those two things don’t work hand-in-hand; we will see prices continue increasing once immigration, universities, businesses and bars open up.”

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Economic update with Benjamin Tal – get ready for the second half of this year

Benjamin Tal — CIBC’s Deputy Chief Economist — is seemingly everywhere. And earlier today, he was delivering an annual economic update at an online event hosted by Brattys LLP (our condo lawyers) in partnership with CIBC. Below are a handful of slides that I found interesting and that I tweeted out during the event.

 

All of our personal risk curves changed during this pandemic. When the first wave hit, we all had no idea how bad this was going to be and what to expect. And so we all stayed home and washed our hands and our groceries. That changed with each subsequent wave. And now we’re all ready and anxious to be done with this.

Tal referred to this as one of the most unequal recessions we’ve ever seen. If you had a high paying job, you probably kept it. And after you stopped spending money on eating out, entertainment, travel, and watching the Leafs lose in person, you likely had a meaningfully higher savings rate. That has created some $100 billion of “excess cash” sitting on the sidelines.

This cash wants to be spent and I think we’re going to see it flying out the door in the second half of this year. Much of it will also flow into services, which should help to prop up the hardest hit segments of the economy. So while there has been some real pain, many are expecting the economy to snap back pretty quickly. Get ready for some euphoria in the second half of this year.

This last slide is particularly relevant to the kind of things we often talk about on this blog. It is essentially showing the increased demand for housing outside of the city during this pandemic (as of Q4 2020).

A flatter line (Vancouver, Calgary) indicates that year-over-year price growth was less affected by “distance from the city center.” On the other hand, a steeper line (Toronto, Ottawa) indicates that price growth was stronger the more you moved outward from the core. In the case of Toronto, it was nearly 20% YoY when you got about 60-70 kilometers out of the city.

But it’s important to keep in mind that the core of Toronto still grew at about 5% year-over-year. About the same as in Vancouver. And in the case of Ottawa, the number looks to be about 17.5% in the city center. These are meaningful numbers and not the kind of symptoms you would expect to see from downtowns in the middle of a death spiral.

I would argue, as I have many times before, that this last chart is the result of short-term phenomena. I bet we’ll see a number of these pitches reverse by the time Q4 2021 arrives.

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New map charts Toronto rent prices by TTC subway station

Living within walking distance of a subway station is absolutely clutch for anyone in Toronto who needs to commute, but doesn’t have their own car and / or the patience to sit in gridlock traffic every afternoon at rush hour.

Sure, the TTC isn’t perfect, but its subway system will generally take you farther across the city, much faster and cheaper than any other mode of transportation.

Developers and landlords know this, hence the premium values put on rental units with easy access to public transit (and in particular, to major subway lines.)

A new infographic from the moving resource platform MovingWaldo.com shows how much you can expect to pay, on average, for a one- or two-bedroom apartment near every single one of Toronto’s TTC subway stations right now.

Using data from Zumper, which includes the exact distance from public transit lines on all of its listings, MovingWaldo calculated the average cost of rent for condos and apartments in the “near” (less than a mile) vicinity of each station.

Bay Station was found to be the most expensive subway stop to live near, which shouldn’t come as much of a surprise given its prime location in ritzy Yorkville, smack dab in the middle of the Line 2, between the east and west halves of Line 1.

“If you like living in the city, Bay Station has everything you would want nearby; restaurants, bars and pubs, stores and much more,” writes MovingWaldo. “Of course that comes at an expensive price.”

A one-bedroom within walking distance of Bay will set you back $2,356 per month on average, according to the analysis, while a two-bedroom in the same zone is approximately $3,383.

In terms of the most affordable subway station to live by, Dundas West comes in at first place with an average one-bedroom rent price of just $1,356. A two bedroom in the zone, which is located near High Park, costs roughly $2,849.

You can see the full breakdown below, but do keep in mind that rent prices are in flux all across the city right now; today’s inexpensive gem of a neighbourhood could be tomorrow’s hottest commodity, and something that seems unaffordable now might come into budget a few months down the line.

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April 2021 TRREB Report: Home Sales Dip From March, Though Up Strongly From Pandemic Pit

The April numbers for the Greater Toronto Area are out, and while they show a stark contrast from last year’s activity – during what was the depths of the first lockdown – sales and price growth are up strongly from pre-pandemic levels as well.

The Toronto Regional Real Estate Board (TRREB) reports 13,665 sales occurred last month, a more-than-quadruped increase of 362.1% year over year. That has set a new record for the month of April, and is also up 51% from 2019 levels, and 36.6% over the 10-year average.

Pandemic Buying May Have Peaked
However, there is evidence that the frantic buying activity that has defined the pandemic-era market may be starting to wind down, as sales come in -12.7% below March numbers. New listings, though up triple-fold from April 2020, are also down -8.4% month over month, with 20,825 homes brought to market across the GTA. Typically the opposite is true this time of year, as sellers and buyers come off the sidelines for the busy spring market.

The average home price was also flat compared to March, though is still well elevated from a historical perspective at $1,090,992, a 33% year-over-year increase. The Home Price Index Benchmark – a measure of the value of the most commonly-sold homes – rose by 17.8% year over year, though the pace of price growth is starting to slow.

TRREB President Lisa Patel says that the factors that have driven buyers thus far during the pandemic – such as a desire to upgrade to larger housing in more affordable markets – may be starting to decline as they’re not based on market fundamentals such as population growth.

“While sales remained very strong last month, many REALTORS® noted a marked slowing in both the number of transactions and the number of new listings. It makes sense that we had a pullback in market activity compared to March,” she writes in TRREB’s April release.

“We’ve experienced a torrid pace of home sales since the summer of 2020 while seeing little in the way of population growth. We may be starting to exhaust the pool of potential buyers within the existing GTA population. Over the long term, sustained growth in sales requires sustained growth in population.”

Home Prices to Continue Upward Trajectory
However, while the pace of price growth may be slowing, TRREB doesn’t believe it’ll change course. As the Bank of Canada has kept mortgage rates low, and as the impact of widespread vaccinations roll back lockdown measures, buyer interest will remain high, outpacing that of supply. States TRREB Chief Market Analyst Jason Mercer, “Despite a modest slowing in market activity in April compared to March, selling prices for all major home types remained very high. Low borrowing costs during COVID-19 clearly had an impact on the demand for and price of ownership housing. While the pace of price growth could moderate in the coming months, home prices will likely continue on the upward trend. Renewed population growth over the next year coupled with a persistent lack of new inventory will underpin home price appreciation.”

GTA Remains in Sellers’ Market
Overall, the sales-to-new-listings ratio for the GTA was 65% in April, indicating sellers’ market conditions. This ratio is a measure used by the Canadian Real Estate Association to determine the level of competition in the housing market by dividing the number of home sales by new listings over the month. A ratio between 40 – 60% indicates a balanced market, with a percentage above or below that threshold indicating sellers’ or buyers’ markets, respectively.

Detached houses continue to lead the market in terms of volume of homes sold and price growth: there were 6,516 transactions across the GTA (+365.1%) at an average price of $1,387,629 (+41.3%). This is hardly surprising, given buyers’ desire for properties that can accommodate lockdown requirements such as working from home, virtual school, and increased green space.

However, the condo segment experienced the largest year-over-year increase in sales – a total of 3,290 sold in the GTA, up 394.7% at an average price of $691,791 (+19.6%). This was especially concentrated in the 905 markets where sales jumped by 450.5%. This shows demand is starting to return for high-rise living, which had stumbled in the immediate months of the pandemic.

Check out the infographics below to see how sales and average prices changed by home type for TRREB and the City of Toronto in April.

 

 

 

 

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Toronto’s Downtown Condo Market Bounces Back to Pre-Pandemic Levels

After months of lagging sales, Toronto’s downtown condo market bounced back in Q1-2021, after nearly 3,000 condo units sold, thanks to low borrowing costs, renewed optimism in the market, and rising suburban home prices, according to Urbanation’s Q1-2021 Condominium Market Survey.

Released Monday, the survey said 2,886 new condominium units sold in the former City of Toronto in Q1-2021, which was more than 2.5 times higher than the quarterly average between Q2- and Q4-2020 and above the pre-pandemic level of 2,829 sales in Q1-2020.

During this quarter, 5,385 new condo units sold in the Greater Toronto Area (GTA), coming within close range (-4%) of pre-pandemic sales of 5,593 units in Q1-2020 and surpassing the 10-year average of 4,924 sales.

Though, the 2020 theme of 905 region market dominance shifted during the first quarter, as momentum swung back to downtown Toronto.

Shaun Hildebrand, President of Urbanation, says, “The downtown Toronto condo market turned the corner in the first quarter of the year on low borrowing costs and renewed optimism regarding the outlook, but also partly due to chain reaction after suburban home prices soared 30% over the past year and put the spotlight back on urban properties.”

According to the survey, a 76% share of new condominiums launched for presale in Q1 were sold by the end of the quarter — the highest level of opening quarter absorption since the market high in 2017.

New units that launched for presale in the GTA during Q1 sold at a record high average sale price of $1,261-psf ($817,000 for 648-sq.ft), up 8.8% from new units launched in Q1-2020 averaging $1,159-psf ($770,00 for 664-sq.ft).

New launch activity was driven by a number of successful new openings in downtown Toronto that sold on average for $1,419-psf ($856,000 for 603-sq.ft) — 5.7% higher than the average in Q1-2020 at $1,343-psf ($798,000 for 594-sq.ft).

During Q1-2021, unsold inventory across the GTA declined 11% year-over-year to 11,956 units — a 10-quarter low. Though, at the end of Q1-2021, average prices for unsold units available across the GTA increased 7.7% from a year ago to a record-high $1,178-psf.

As inventory wound down, developers quickly increased prices at the end of the quarter by an average of $45-psf (+4%) compared to the end of Q4-2020, with several builders raising prices by over $100-psf.

Urbanation says the new condominium market began heating up as the resale market broke new records during the first quarter, with total sales for GTA condominium apartment resales increasing 74% year-over-year in Q1-2021.

In the former City of Toronto, activity was up 104% from its pre-pandemic level in Q1-2020. Resale inventory in the former City of Toronto fell to only one month of supply in the first quarter, representing a “dramatic” decline from the five months of supply recorded two quarters earlier in Q3-2020.

While resale prices in the former City of Toronto during Q1-2021 remained 4.7% lower than last year, they still managed to surge 6% from the previous quarter in Q4-2020 to reach an average of $1,018-psf ($750,000 for 736-sq.ft).

In terms of future supply, Urbanation says the total inventory of condo units under construction across the GTA reached a record 83,497 units in Q1-2021, up 10% from 76,145 units in Q1-2020.

However, the downtown condo market represented the lowest share of GTA construction activity underway on record at 44% (36,997 units), while the 905 regions of the GTA represented a record high share at 32% (19,497 units).

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New condo sales totaled 5,385 units last quarter

Urbanation released its Q1-2021 quarterly condo market update for the Greater Toronto Area at the end of last month. And there’s some good stuff in it. New condo sales totaled 5,385 units in the first quarter of this year, which is higher than the 10-year average of 4,924 units and only slightly below sales from a year ago (Q1-2020). By and large, the numbers are starting to feel a bit pre-pandemic-like.

If you remember what happened back in the second quarter of last year, there was a quick shift in demand toward the suburbs and outskirts of Toronto. Part of this was driven by affordability. But I guess part of this was also driven by the fact that some people seemed to think that our cities had never before experienced a health crisis and were going to somehow die. Or perhaps it was because Zoom is so much fun (and not at all exhausting) and that this time was destined to be different. Either way, I never understood this.

Fast forward a year and the core is not surprisingly coming back. The oldest part of the city (former City of Toronto) saw 2,886 new condo sales in the first quarter of this year. This is actually higher than sales in Q1-2020. New condo openings in downtown Toronto sold for an average price of $1,419 per square foot. And overall absorption was about 76% in the quarter, which is the highest it has been since 2017.

Some of you may be looking at these numbers and thinking WTF. But when developers look at the costs in their pro forma, as well as what’s on the horizon — ahem, inclusionary zoning — it’s usually that same feeling. So it’s hard to imagine average prices and rents going anywhere but up.

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The hidden housing bubble

If there is a housing bubble in Canada, it’s probably not where you think.

In the wake of the COVID-19 pandemic, Torontonians fled the dense urban core for arcadia and scooped up cottages in droves with the intention of living in them year-round. However, according to Bradley Watson, a broker with Sutton Group – Summit Realty Inc. in Toronto, the cottage segment of the housing market is niche in nature and does not usually experience such a rush of demand as it has in the last year, which indicates an aberration occurred.

“If a price drop could happen by 20% in the housing market, it would be in the cottage segment,” Watson told CREW. “If there’s a point of concern in our market, it would be cottages. Demand has been so high because people have the expectation that there’s no need to return to Toronto when the pandemic is over.”

Part of the problem is prospective buyers, both cottage country locals and Torontonians, are bidding blindly on cottages and driving prices skyward. But unlike more common housing segments, like condominiums and detached houses, there isn’t a wide swath of buyers for them to begin with, save for the recent surge that’s divorced from market fundamentals. In fact, demand could become depleted in the very near future.

“A lot of demand that would have been in cottage country throughout the next five years has been pushed forward into 2020 and 2021, and the spring market frontloaded,” said Watson. “The demand that exists for cottages is not going to hold long-term, so you can expect a bit of a lull. The demand they’ve experienced in the last three to four months will not continue.

“There was such a high level of demand for such a short period of time. In the next year or two, in my mind, you will not see the same level of out-migration from Toronto to Muskoka. For those people who were involved in multiple offers and paid way too much, the demand will evaporate with no race upwards, so you may see people get caught because they purchased at a level that the market says is too high.”

Watson is sure that a chunk of the cohort who left Toronto will return because the city offers things that few other places in Canada can. And as several of his clients have told him, assuming maintenance of one’s own property is especially rankling and time consuming after years spent living in condos.

“These decisions aren’t yet being made because of reversals of work-from-home policies. The people who left early really miss living downtown, they miss living in a lively city, and on the other side, some people are tired of maintaining larger properties themselves.”

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Canadian home prices just recorded largest annual gain since 2017: Teranet

A widely-watched Canadian home price index shot up nearly 11 percent annually in March as major markets across the country continue to experience exceptional levels of sales activity.

Released earlier this week, the latest reading from the Teranet-National Bank House Price Index represented the strongest 12-month gain since September 2017 and marked the eighth-straight acceleration in annual home price gains.

Eleven major housing markets spread across the country are tracked by the index, which is regarded as the gold standard for measuring Canadian home price appreciation. March’s reading had Halifax, Hamilton and Ottawa-Gatineau recording the highest annual gains in the country, with Montreal, Toronto and Victoria also posting double-digit percentage growth.

Halifax came out on top with a 22.5 percent annual gain, while Victoria only recorded a 10.5 percent 12-month gain. The remaining markets that make up the index — Quebec City, Vancouver, Winnipeg, Edmonton and Calgary — all saw annual price growth, ranging from the low single-digits for the Alberta cities to just over eight percent for the Quebec capital city.

The index measured price increases in all 11 markets on a monthly basis too.

The Teranet-National Bank index is known to lag behind other widely used home price tracking tools, including the monthly average home sale prices published by the Canadian Real Estate Association (CREA) and local boards.

This is because the index is compiled using a repeat sales methodology that works by tracking the price change between the two most recent sales of the same property. The index uses prices entered into public land registries in the Canadian markets it tracks. These often are slower to respond to market changes because sale price data is not added to land registries as quickly as it’s entered into the MLS systems used by real estate boards.

While the overall index and its composite markets continue to record healthy appreciation, there are signs on the horizon that a price growth slowdown is looming.

Recent commentary from housing market observers has highlighted the potential impact of proposed changes to Canada’s stress test for uninsured mortgages on home prices. The new rules proposed by the country’s financial regulator, OSFI, would increase the stress test’s qualifying rate for uninsured mortgages to 5.25 percent, or two percentage points above the posted rate.

These changes are likely to be rolled out by June 1st, but the immediate impact could end up being quite mild.

“The proposed rise in the uninsured mortgage qualifying rate could take some of the heat out of the market, but we continue to anticipate further gains in house prices this year,” Capital Economics’ Stephen Brown wrote this week following the release of the new home price data.

Instead, Brown believes home prices are most vulnerable to interest rate hikes.

“[T]he clear risk is that [home prices] will become increasingly vulnerable to interest rate hikes further down the line,” he added.

The chief concern is that rising rates could negatively impact over-leveraged homeowners who will then struggle to make their monthly mortgage payments. This is an especially troublesome prospect following the major home price run-up and frenzied pace of buying that markets across the country have been experiencing.

An interest rate hike could also impact home prices by taking potential buyers out of the market at a time when supply is increasing, leading to price declines.

The Bank of Canada, which is responsible for setting the mortgage market-influencing overnight rate, has previously stated that rate hikes are a long way off. However, in an announcement yesterday it appeared to move up its potential timeline for increasing rates on the heels of a more upbeat economic outlook for the country.

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New CentreCourt condo draws downtown-loving under-40s to Jarvis and Dundas

Bader Elkhatib, the vice-president of CentreCourt, specializes in urban high-rises. Yet, the developer isn’t unnerved by pandemic Toronto’s quiet city streets or the trend that has seen more urbanites settling in the suburbs and the sticks.

“Wait until the weather is 14 degrees, like it was two weeks ago. The downtown was bumping,” says Elkhatib. “We are the second-largest financial hub in North America. Look at New York or San Francisco or London, England – everyone is clamouring to be in these areas,” he says. “Toronto is up there, too.”

He believes urbanites want the convenience of being within walking distance – of the Financial District, Ryerson University, transit, cultural venues, restaurants and bars, even if the trade-off is living in tighter quarters, he says.

In 2016, CentreCourt launched Core Condos, the first of six downtown east projects clustered within blocks of each other. The fifth, the 595-unit 8 Wellesley, sold out in 10 days earlier this year. The developer has approximately 3,000 units completed or under development in the area.

Prime, the latest offering built in partnership with Centrestone Urban Developments, at the corner of Jarvis and Dundas, replaces a rundown Comfort Inn, and will be ready for residents in 2024. Suites range from 300 to 800 square feet; prices start in the high $400,000s.

Designed by the architects at IBI Group, the 45-storey 595-unit tower is sharp and contemporary. Its three-storey stone and glass podium will be sheathed in charcoal metal laid in a staggered grid, accented by gold detailing. Outside the entrance, a cedar-lined overhang is a warm detail that leads to a lobby layered in Versace furnishings.

“First impressions matter, whether you’re a prospective renter or a buyer, so we always try to switch it up in each of our buildings,” says Elkhatib. (At 199 Church, lobby furnishings were Fendi.)

The interiors, designed by the firm Figure3, are intended to impart luxury. “As soon as you walk in, you see this grand gold light fixture. It’s like a five-star hotel lobby.”

“We’ve even had a scent curated for the lobby. It sounds silly, but it makes a massive difference to the experience once the building is up and running and people are coming in and out,” he says. “It doesn’t smell like Uber Eats. It smells like a spa.”

And automated package storage means piles of Amazon boxes won’t harsh the vibe. “The idea is to keep it clean and sleek,” he explains.

He has also “doubled down” on the gym and in co-working spaces, which he discovered was a game-changer in previous projects.

While bowling alleys and gimmicky amenities in general sound fun on paper, they’re not practical because they’re rarely used, he says. Elkhatib wants his buildings to truly reflect how people live – people who, like himself (he’s 31) and his colleagues, match the under-40 demographic that tend to populate his projects, he says.

To meet their needs, Prime has a 4,000-square-foot indoor/outdoor co-working space on level two, complete with modern glass breakout rooms and study pods in an open-concept setting.

As for the suites, Elkhatib says they will be efficient, to keep costs down. “When people look to buy, [they] naturally focus on size: ‘How big is the unit?’ I think, the better question is, ‘Am I paying for a corridor I’m not using? Do I need a 100-square-foot entryway?’ That’s very expensive and isn’t useable space.”

The units are compact and clean-lined, including a useable kitchen and a comfortable bedroom. In Elkhatib’s words, they’re “an attainable home” in the downtown core.

“We believe in the story of urbanization. It’s short-sighted to think that people’s living preferences change over time.”

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Toronto residential tower boom shows no signs of slowing

Toronto had 125 cranes actively working on multiresidential towers in March, according to the RLB Crane Index, dwarfing the total of any other North American city.

“The urban density story for our city has clearly not stalled during the pandemic,” Terry Olynyk, president and managing director of Multiplex in Canada, said in introducing a recent webinar presented by Urban Land Institute Toronto chapter.

Multiplex, an international construction contractor founded in Australia in 1962 and owned by Brookfield Asset Management, was the lead sponsor of the event that looked at the role and future of multiresidential towers in Toronto.

Consulting firm BTY director Robyn Player — who has provided construction phase monitoring services for more than a billion square feet of high-rise, multifamily, commercial and mixed-use assets — moderated a panel of executives from three development companies.

They spoke about their current major projects and answered Player’s questions about the high-rise market.

 

 

Metropia

Metropia vice-president of sales, marketing and design Lee Koutsaris spoke about 11YV, a condominium it’s developing in partnership with RioCan Living and Capital Developments near Yorkville Avenue and Yonge Street.

The 62-storey, 593-unit tower will have 81 rental replacement units, including 20 offering affordable rents.

It will have 43,000 square feet of retail space at the bottom and a new mid-block park connecting Yorkville Avenue and Cumberland Street is part of the project.

It will have 16,521 square feet of indoor amenities, including a swimming pool, a wine-tasting room, a fitness studio, a family area, a theatre, a business centre, a lounge and a piano bar. There will also be 8,353 square feet of outdoor amenities on a third-floor outdoor terrace.

Sales for 11YV launched in the fall of 2019 and continued through the pandemic, and only a handful of suites are still available. Any concerns about living in high-rise towers brought about by COVID-19 should be gone by the time they’re ready for occupancy in five years, according to Koutsaris.

“We have not seen any major shifts or changes in demand for suite sizes or bedroom types,” she said. “The demand for quality, well-designed units in tall buildings has remained.”

However, developers are now looking at more flexible designs and incorporating home office and study areas into units or amenity spaces. Balconies, outdoor amenities and access to fresh air have also become a growing consideration.

Koutaris said there has been an increase in demand for units to accommodate multi-generational families, where older parents move in with their adult children.

Koutsaris also emphasized the importance of recognizing the role developers play in promoting inclusivity within the built environment.

She talked about how Metropia and Context have created a $3.5-million fund for Toronto Community Housing (TCHC) residents to provide scholarships and training programs to help them become tradespeople and get jobs on construction sites as part of their The New Lawrence Heights development.

In conjunction with their AYC development at 181 Bedford Rd., Koutsaris said Metropia and DiamondCorp have created a social equity fund for residents of a TCHC building at 250 Davenport to help them apply for scholarships and training programs.

Pinnacle International

Pinnacle International sales and marketing VP Anson Kwok spoke about The Prestige At Pinnacle One Yonge, which will eventually feature multiresidential towers of 65, 80 and 95 storeys and 80,000 square feet of indoor and outdoor amenities for residents.

“We have to design buildings in a timeless way,” said Kwok. “We spend a lot of time on layouts and I think it’s important for us to have something that works for everyone.”

Kwok is also seeing more multi-generational purchases, including families buying all four corner units of a floor in a condo in order to be close to each other without living together.

Kwok said Torontonians love towers and appreciate there are plenty of new ones being built in different heights and styles. They also appreciate what these tall buildings are generally surrounded by, he added.

“A really key component of living in an urban community is all the amenities that are around you, not just the ones that you’re building and providing to your local community, whether it’s parks, community centres, schools, great restaurants or great retail within walking distance.”

A certain number of unit pre-sales are usually needed to launch a condo project. Pinnacle originated in Vancouver, where Kwok said units are generally bigger than in Toronto, and the company has tried to carry that over as much as possible in Ontario’s capital.

“That doesn’t always correlate to the financing model that we have in the city, so we’re forced to be patient on those units and sell the smaller units at the beginning.”

Slate Asset Management

Slate Asset Management managing director of development Brandon Donnelly spoke about One Delisle, near Yonge Street and St. Clair Avenue. It’s the first project in Canada by architect Jeanne Gang, founder and partner of Chicago-based Studio Gang.

The 47-storey condo will have 383 residential units and rise from its square base with retail space to a 16-sided circular tower with balconies and large terraces. More than 80 per cent of the building has an outdoor space and the adjacent Delisle Park will be expanded by 50 per cent as part of the project.

“It’s about livability within the actual building and the residences, but it’s also about thinking of the broader urban context and how this project fits in with that,” said Donnelly.

Slate hasn’t begun leasing One Delisle’s retail component, but Donnelly said there will be food and beverage options, including patios.

“Our plan is to own the retail here forever. It’s all about curating the right experience in this node with a long-term view on it.”

One Delisle will also have approximately 20,000 square feet of private amenities, including a fitness centre, a wellness spa and a wine and cocktail lounge.

Slate has been working on the project, which will launch this spring, for more than four years.

“It’s really part of a broader city-building and place-making effort,” said Donnelly. “We have been investing in the Yonge and St. Clair neighbourhood since 2013.

“We own 10 buildings, including all four corners, and since 2013 we’ve been working on everything from large-scale public art to streetscape improvements to new retail, investing in existing office buildings and renovating them.”

Slate’s extensive ownership in the area has allowed it to do more than it would have been able to do had One Delisle been merely a one-off development, according to Donnelly. This includes doubling the width of sidewalks surrounding the project.

The pandemic brought on an aura of pessimism about people wanting to live in towers in major cities, but Donnelly said that’s already turned around.

“Cities are incredibly resilient and tall buildings form part of that,” said Donnelly. “Cities have always bounced back and the reality is that we are incredibly social beings.

“We also realize that we are more productive and more innovative when we cluster together.”

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