News   Nov 04, 2024
 500     0 
News   Nov 04, 2024
 744     5 
News   Nov 04, 2024
 929     1 

City of mass construction: Toronto’s unstoppable condos show no signs of slowing down

You have to take just about anything about real estate that's coming out of Vancouver with a grain of salt. And by grain i mean that these stories are somewhere between propoganda and bold faced lies. Vancouver's a speculative, hysterical disaster waiting to happen.

That said, the relative absence of foreign investors in Toronto means that things are somewhat safer here.

Truer words were never spoken. Sales in the April plunged a whopping 24% from last year which in 99% of the planet would mean falling prices but there was a one month increase of 2.4%. Prices are up 17% over last year and the average price of a home in Vancouver is now over $1 million. The condo reffered to in the article in Burnaby had 95% of the buyers from China. Building houses for locals is an after thought. People here are getting REALLY pissed off by this whole mania knowing that their children will never be able to come remotely close to being able to buy property within 50km of their own community. Realtors have set up shops in China and now are offering charter flights to Vancouver for people who want to buy properties on mass.
One realtor here actually was quoted as saying that real estate in Metro Vancouver could rise as much as 50% in the next 2 years. Things are so manic that there is total disassociation between the local economy and real estate prices. Now many Chinese buyers are buying multiple properties in areas like Burnaby and White Rock/South Surrey and prices are up 11% in the last 3 months!
It is beyond the point of speculation is now just lunacy. Count yourself fortunate that you can get any condo under $500 a square foot as that would be impossible within 30km of Vancouver.
 
Speculators, foreign investors, betting on Toronto condo market

Who in their right mind would invest in something that loses money every month? The answer just might be future Toronto condominium buyers.

Toronto is the largest condominium market in North American with 18,000 suites selling annually over the past five years, according to research firm Urbanation Inc. The problem is rent for those units is not climbing much, stuck at $2.09 per square foot in the first quarter of 2011 versus $2.09 per square foot a year earlier.

Rental rates are relevant because Toronto’s condominium market has quickly become an investor market with Urbanation saying more than half of the units in the city are now being bought by people who have no plans to live in them.

What it could mean is negative cash flow for anybody buying in the future and hoping to rent. Ben Myers, executive vice-president of Urbanation ran down the numbers for new buildings being sold now which are asking as much as $550 a square foot.

Take a 750 square unit. If you are going to buy the unit for $550 per square foot, that’s $413,000. You put 25% down and you have a mortgage of $310,000. Based on variable rate mortgage at 3% with a 25-year amortization, your monthly payment is $1,475. Add monthly fees of $345 for condo maintenance and $345 for property taxes and you are up to $2,200 in costs.

Newer buildings in Toronto are generating $2.26 per square foot but even at that rate, it only generates about $1,700 per month. Your unit will lose $500 or $6,000 per year, though you would knock of about $45,000 in principal over five years.

More.....http://www.financialpost.com/news/S...tting+Toronto+condo+market/4817203/story.html
 
Wow..out of control:cool:
Condos, condos everywhere! Sales reach record in April

There's a new condo being sold every 13 minutes in this city, and frankly if you look at the time that the sales offices are actually open, it's probably one being sold every five minutes in terms of when you actually go in and put your money down."

More...http://www.680news.com/news/local/a...condos-everywhere-sales-reach-record-in-april
 
Toronto Prosperity Initiative report needs a big tweak
By Stephen Dupuis..the Toronto Star

I broke one of my own rules last week by commenting on a report which had been described to me but which I had not read myself.

When the print reporter called to tell me the Toronto Prosperity Initiative was recommending a 33 to 50 per cent reduction in development approval timelines, I said that was “music to my ears.”

Preparing for a subsequent cable television call-in show, I read the report — Toronto Prosperity Initiative: Establishing the Path to Growth — from cover to cover. Much to my chagrin, I discovered that the streamlining recommendation appears to pertain only to non-residential development. Does that mean that residential development will get in line behind the offices and industrial buildings? Forget that!

With all due respect to the members of the committee who produced the report, I simply have to say that any streamlining of the development approvals process has to be across the board.

Here’s why: the residential construction industry in the 416 area of the GTA is an $8.2 billion industry which will spin off 75,000 jobs this year while paying out $3.9 billion in wages and more than $2 billion in taxes to the federal and provincial governments, not to mention development charges and a rich, long-term assessment base to the City of Toronto.

Toronto is the largest highrise housing market in North America by far, and the city is the envy of municipal leaders around the world for the wonderful way in which it has emerged as a place to live, work and play.

No doubt, the authors of the report were thinking about employing people and providing workplaces in the City of Toronto — and that’s fair — but they should be looking at condo construction cranes as factories unto themselves.

I’m sure if the authors were to consult with the local restaurants and service companies surrounding recently occupied condo buildings, they would hear about the instant impact those new residents represent.

Among the things I do appreciate about the report is the way in which it shines a light on the approvals process, which I sometimes feel has become an end in itself rather than a means to an end. I really like that the report also recognizes that streamlining will require a cultural shift over and above process engineering. The call for a regional economic competitiveness strategy and implementation plan is great because it’s coming from Toronto itself, as is the recommendation to systematically review regulations, procedures and permits to remove barriers to job creation and investment.

Another recommendation to expedite the approval process and funding to accelerate development and densification of the waterfront is to use the 2015 Pan/Parapan American Games as a catalyst. Well, guess what? One of the biggest projects within that entire redevelopment scheme will be the housing for the athletes. Given the development approvals pending for that massive project, combined with the regular application flow from the development industry, streamlining is emerging as critical.

I can’t let this topic go without mentioning that developers pay very hefty fees for city planning and legal staff to review their proposals, and for building staff to review the drawings and inspect the work in progress.

We have sent the message to the city’s Economic Development Committee that both residential and non-residential buildings go hand-in-hand to contribute to city building. The report of the Toronto Prosperity Initiative needs one great big tweak to recognize that point.

http://www.thestar.com/article/1004...rosperity-initiative-report-needs-a-big-tweak
 
At the pace we're going and with no sign of stopping in sight I'm beginning to think we're actually going to have a skyline that rivals Chicago in couple of decades. Insane number of proposals.
 
Read it where?

From here. Metro likely isn't the best source of information, but any news should be noticed.

http://www.metronews.ca/edmonton/life/article/883793--condos-as-an-investment

Toronto is currently the dominant North American condo market, with more than 18,000 units being sold annually over the past five years, according to findings by Urbanation, the Toronto-based condominium market research firm, and a great number of the buyers have no intention of living in them.

The study found that “With many downtown condominium projects selling more than 70 per cent of their units to investors, developers need to keep a keen eye on index price movement and rental transaction activity.”



Not good news at all. I'd imagine that the majority of investors are buying in the Entertainment District.
 
Last edited:
I'd imagine that the majority of investors are buying in the Entertainment District.

Not really, from what i understand, there are already many investors in line for the release of...Casa-2, 40-Scott, Quartz-2, 9-Grenville....and these are proposed developments without official renders and sales office. Figure it.:confused:
I would assume investors are more inlined to buy into the downtown core of the city... and as east/west and north goes, the precentage must drop.
 
Stephen Dupuis is a shill. When he read the report from 'cover to cover' he must have missed this point......

"Industrial, commercial and institutional developments create quality jobs for Establishing a Path to Growth.Toronto residents. These types of development also pay more in municipal
property taxes than they consume in city services and thus make a net positive contribution to the City’s finances.".

It is implicit that when a government cannot run a surplus or deficit, that when one class is paying more for services the other is a net recipient. IOW the residential class is subsidised. Increased residential development puts further strain a a government that already has a massive structural deficit.
 
Glen, luckly no one will be living in these towers to use up city services. Just overseas chinese investors paying property tax to carry empty units...it's like an idiot farm! Idiot farms generate way higher returns then industrial or commercial ;)
 
I read that 70 percent of the condos going up downtown are snatched up by investors.

A real estate broker representing Concord Cityplace also told to me that 70% of their sales are from investors and he wasn't afraid to say it either.
With rising real estate prices, high demand for rentals, land becoming more scarce, relatively affordable prices (compared to other big cities), and developments taking 2-4+ years to build, these are very favorable conditions for investors, especially foreign investors.

Unfortunately it is really making it more and more difficult for people who are buying to live in, and developments are more and more designed to be geared to be rented or flipped (smaller units, generic finishes, lack of customization, etc.). It's impossible to find a large 1-bedroom unit with 800 or more sq.ft. these days as developers are squeezing 2 or even 3 bedrooms in the same amount of space to appeal to investors/future landlords.
 

Back
Top