New realities change the condo landscape

[jetsme]

small is the new black.

Small is the new big too apparently!

 

[Urban Shocker]

What's Sham Shui Po - a small, faux version of Shui Po?

 

[AKS]

What's Sham Shui Po - a small, faux version of Shui Po?

It's a district in HK. http://en.wikipedia.org/wiki/Sham_Shui_Po

 

[TKTKTK]

What's Sham Shui Po - a small, faux version of Shui Po?

No, it's the frilly part of Shui Po.


I think its silly to invoke the rest of the world when talking about condo/apartment sizes. Toronto doesn't have the same space constraints that most other major cities have. We shouldn't be so comfortable with real estate that treats space as a rapidly dwindling commodity - yet. In the meantime - there's tons of space to build in the city!

 

[Urban Shocker]

Real estate is an industry that treats space as a source of profit and not much else, so parcelling it up in tiny bits and rationing it makes sense. During the heady, boom years entire buildings were built and marketed based on unloading spaces that were just large enough to be plausibly sold or rented out to the odd human being with a Canadian sense of personal space. Offshore Flipper, coming from an economy apparently inhabited by bantams, would naturally be thrilled by these tiny spaces and see them as desirable - all the more so because "real estate in Toronto is undervalued". "Investment property" as a viable concept also thrived in an environment of low interest rates, mortgages requiring miniscule downpayments, and ( for a while ) 40 year amortisations.

 

[AKS]

I think it's not the population that's creating such a small space. It's the cost of living that's driving it. The land costs a lot of money to purchase. The government wants a piece of the profits too. The builders want to earn a lot of money as well. The costs of materials and labour is going up because they're in demand and can ask for high prices. If the builders sell big spaces, they would need to charge more. People don't have the money to pay for such prices. So they build smaller spaces to sell off easier. Also with costs of maintenance fees and hydro going up, if the spaces were larger, the monthly fees would be much higher as well. If you paid around $300 for a 600 sq ft. new building. You would have to pay over $500 monthly maintenance for over 1000 sq ft. Every year almost maintenance fees goes up. I noticed some of the older condo with 2000 sq ft cost over $1000 in maintenance per month.

 

[cdr108]

I think it's not the population that's creating such a small space. It's the cost of living that's driving it. The land costs a lot of money to purchase. The government wants a piece of the profits too. The builders want to earn a lot of money as well. The costs of materials and labour is going up because they're in demand and can ask for high prices. If the builders sell big spaces, they would need to charge more. People don't have the money to pay for such prices. So they build smaller spaces to sell off easier. Also with costs of maintenance fees and hydro going up, if the spaces were larger, the monthly fees would be much higher as well. If you paid around $300 for a 600 sq ft. new building. You would have to pay over $500 monthly maintenance for over 1000 sq ft. Every year almost maintenance fees goes up. I noticed some of the older condo with 2000 sq ft cost over $1000 in maintenance per month.

$0.50 PSF for maintenance fees is pretty much the REALISTIC norm from what I hear; and not the fabricated $0.37 PSF developers use for their sales.

If you talk to a bunch of owners of new condos after the first year, you will hear that their fees increased dramatically!

Cost of land, materials, labour, etc were inflated by the speculative boom ... it becomes cyclical.

In reality, land isn't that expensive when you consider the gross square footage most of the developers propose and end up building.
As an example, the lands across from DNA (@ King/Shaw) which used to be a Chrysler dealership was bought for ~$30 PSF based on the planning proposal.

With the recession comes lower commodity prices and that will lower material costs; help alleviate the labour shortage and hopefully bring projects back to reasonable timelines.

 

[AKS]

With the recession comes lower commodity prices and that will lower material costs; help alleviate the labour shortage and hopefully bring projects back to reasonable timelines.

hopefully. But I noticed a month ago my hydro bill went up from 5 cents/kwh to 5.6 cents/kwh.

 

[BMyers]

Press Release on the Condo Market

NEWS RELEASE

Contact: David Eisenstadt/Beth Merrick
The Communications Group Inc.
416.696.9900 ext. 36 or ext. 40
deisenstadt@tcgpr.com/bmerrick@tcgpr.com





DOWN FROM THE RECORD BREAKING 2007,
THE TORONTO CMA CONDOMINIUM MARKET CONTRACTED IN 2008, ACCORDING TO
URBANATION’S Q4/08 CONDO REPORT

TORONTO, Feb. 4/09…According to Urbanation, the latest figures for the Toronto Census Metropolitan Area (CMA) show 14,469 new condominium apartment sales for 2008. Compared to 2007’s record of 22,654 new condominium sales, this is a decrease of 36 per cent; however, 2008 represents the 4th highest annual sales total in Toronto’s history.

Said Jane Renwick, Urbanation Executive Vice President and Editor, “the U.S. economy’s housing market problems sparked the global financial and economic downturn, which began to affect Toronto condo buyers in the Fourth Quarter of 2008â€.

The economic downturn resulted in a decline in consumer confidence and Q4-2008 sales fell to just 2,082 as a result, less than half of the Q4-2007 total. However, the 16 new projects launched in the quarter performed well, selling an average of 84 units per project.

Despite the slowdown, the average price per square foot (psf) increased 1.9 per cent from Q3-2008 to Q4-2008, from $406 psf to $414 psf in the Toronto CMA.

Ms. Renwick added, “purchasing a new unit in 2009 will be advantageous for first time buyers with interest rates being historically low and developers offering aggressive incentive programsâ€.

The CMA condominium resale market has been similarly challenged by the new economic climate. Of the over 170,000 condominium apartments tracked by Urbanation, 12,718 resold in 2008. This was 19 per cent below the 15,652 resales in 2007, and marks the first resale market decline in the CMA since 1995.

The major drop in 2008 resales occurred in the final quarter of 2008, as the chill from the global downturn finally took hold. Only 2,081 units were resold in Q4-2008, a 44 per cent decrease from Q4-2007’s 3,696 resale units.

Resale pricing also dropped modestly, as resale buyers became more difficult for sellers to attract. The average resale price per square foot (psf) dropped 4.1 per cent from Q3-2008 to Q4-2008, from $328 psf to $314 psf. This translates into an average selling price of $283,000 for a 900 sf unit.

Government stimulation of the Canadian economy will take some time to work its way from Ottawa to the streets of Toronto. The positives that are still in place include the relative affordability of new and resale units, continuing migration to Toronto, and an expected decline in construction costs, as costs are bid down to deal with the new economic realities.

“Urbanation expects as many as 11,000 new condominiums to come to market in 2009, with the proviso that the actual number will be heavily dependent on sales absorptions and pricing trends during the course of the year,†said Ms. Renwick.



ABOUT URBANATION

Urbanation is Canada's leading condominium market research company. Since 1981, Urbanation has analyzed the Toronto condominium market, publishing the “industry bible†– Urbanation’s Condominium Market Survey. This quarterly Report tracks new, resale and future condominium projects. Urbanation also provides the development community with essential consulting services, which include site and topic specific market studies and surveys.

 

[lordmandeep]

14,000 is not bad however the last quarter clearly shows we will struggle to reach 10,000 this year.

It shows that there will be projects that will open and still sell many units.

What we have seen is many builders having many problems securing the money for construction.


Even still I think we still have have one of the most active condo markets in NA.

 

[Admiral Beez]

compared to the condos in HK or Japan, toronto sizes fare pretty well. it's all in the layout.

Considering that we're both taller and wider than the average HK or Japan resident, I'm not sure that's a good comparison.

I want to know how the size of our condos compares to those in other North American cities with populations near Toronto's 2.5 million, such as Chicago and Houston.

And yes, yes.... the surburbs outside of most city's boundaries can double or triple the actual city population, but let's stick to Toronto proper for now.

 

[cabbagetowner]

just kidding ...i know there nothing average about akebono

 

[TKTKTK]

just kidding ...i know there nothing average about akebono

I guess you'd have to see beneath his mawashi to tell.