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Top-5 New Launches to Watch

It’s been a very busy year for new condo launches. Here are my top-5 projects that I’ll be watching for investment over the last few months of 2010:

1. Bisha. This one could be special, but it certainly won’t be cheap. I’m hearing pricing will start in the high $600s and go up from there. I’ve also heard that the lifestyle component of the building will be something unique in Toronto.
2. One Park West. I’ve already seen some of the plans for this newest release in the Regent Park redevelopment by Daniels coming up in September and it looks very interesting. One unique aspect are the stacked townhomes that are probably the best floor plans for stacked towns I’ve ever seen.
3. River City Phase 2. Phase 1 launched late November of last year. At last check they were well over 70% sold. Those who doubted this development because of its location will likely have to strongly consider investing in phase 2 after the success of phase 1.
4. Studio on Richmond. Not many details available yet on this project but great location in the heart of the Entertainment district and the developer (Aspen Ridge) has offered good value to investors in the past with projects like VU on Adelaide Street East.
5. Post House. Right next to the VU site will be Post House by Alterra. The proximity to the booming St Lawrence Market ‘hood has many of my clients drooling with anticipation. This one has just released floor plans and pricing for the VIP event. Contact me for details!

Other projects on my radar screen for the next 3-6 months include:

• Plazacorp’s site at Yonge and Wellesley (project name TBA, location very intriguing)
• Imperial Plaza (office building conversion at Avenue and St Clair by Camfrost Felcorp)
• Cityzen’s “Name this condo” site at Yonge and Esplanade
• Brad Lamb’s Theatre Park site (what height/form will be approved?)
• Daniels Cinema Tower (follow up to Festival Tower)

Wondering how to keep track of the latest and greatest condo projects downtown? Hire me as your downtown condo expert today.

The Market Has Peaked

Some of my colleagues may not want to believe it, but we are now in a new market reality. The extremely bullish market we have been experiencing for the past 12 months, at times accelerating at a break neck pace, has ended. Top-10 anecdotal signs that the market has already peaked:

1. ‘Fake’ developer websites for new developments are at an all-time high. These are websites set up by Realtors looking to capture buyers when a new development launches. Many of these sites are designed to mimic the developer’s official websites / registration forms. We saw this trend emerge right before the market dipped in mid 2008.
2. Developers are starting to LOWER their commission offerings to agents. Lower commissions can only mean one thing: Developers believe it’s too easy to sell condos in Toronto right now.
3. Positive cash-flow is now a complete impossibility at just about every new development or resale condo downtown. Investors with a traditional investment mindset are heading for other markets.
4. One Bloor has about 700 units to sell, and the minimum up front investment is $100K. Demanding so much cash up front from buyers means the banks are restricting the cash flow to developers.
5. Developers have been practically encouraging ‘flippers’ by offering $0 assignments during the first 90 days of buying into a new development.
6. Resale sellers are holding off on offers, not getting an offers, then raising their asking prices in response. Buyers are moving on to other properties.
7. Listings for the GTA are up 48% for the first half of April compared to this time last year.
8. Listings are at an all time high for my company – Re/Max Condos Plus – one of the biggest players in the downtown condo market.
9. Interest rates have risen almost a full 1% over the past few months and (most likely) will continue to rise.
10. Government + the banking industry appear to be consorting to stifle demand for fear of creating a housing bubble.

Questions? Comments? Got your own anecdotes or stats to add to this list? Think I’ve totally lost my mind?  Contact me.

Two New Condo Projects Rejected Based on Height

The City’s love/hate affair with tall buildings continues. Toronto is one of most high-rise friendly cities in the world, with more projects proposed, under construction, or recently completed than just about every city in the developed world. Still, developers face an uphill battle when looking to build ‘up’. Last week, two condo project proposals were rejected based primarily on the fact that the proposed towers were too tall.

Giraffe Condos at Bloor and Dundas (27 Storeys, TAS DesignBuild) had their project rejected at the OMB, and Theatre Park at King and University (45 Storeys, Brad Lamb) had their project rejected by City Hall. Both decisions were focused on the height of the buildings making them ‘out of context’ for the area they would occupy.

On the surface, the news for Giraffe is potentially worse than for Theatre Park, as once a project is rejected at the OMB level, there is no higher authority for developers to appeal the decision in front of. Brad Lamb can and likely will take their case directly to the OMB as the city is unlikely to concede what they are seeking (45 storeys).

No word yet on what will happen to purchasers at Giraffe, or whether TAS will appeal the OMB’s decision. The future of what would have been a landmark condo tower and potential neighbourhood changer is definitely in doubt. Giraffe has been selling units for about 2 years. Theatre Park has not opened a sales office or started marketing the project in any way, but word on the street is they have been selling units to insiders since the fall.

While I am by definition in favour of more high-rise development downtown, and especially on the subway lines, I believe there is a case to be made for ensuring our condo towers fit into the context of their surroundings and do not adversely affect the street life at the ground level.

To follow some of the discussions on Giraffe or Theatre Park, check out the UrbanToronto.ca message boards.

Questions or comments on these projects? Leave a comment or email me directly.

New Mortgage Rules Aimed at Cooling the Condo Market

Federal Finance Minister Jim Flaherty announced changes to the way mortgages are given out in this country today that are said to help prevent a housing bubble from forming. The keyword being prevent, meaning the government is very clear that they do not believe a housing bubble exists. I would have to agree with the sentiment in this city, however, I would add as I have been saying on this blog for months, the current pace we are at is not sustainable.

Personally I am not a fan of government intervention in the markets in this way, however, I don’t think these new rules will dramatically affect the market in any significant way. It seems more than anything, the moves today are meant to send a message to Toronto condo buyers in particular that condo flipping is not cool and real estate investing is not the same thing as speculation. Flaherty even mentioned “multiple-condo markets” in his statements to the press. Hmmm…I wonder what cities he is referring to?

My thoughts on the 3 key points in the release:

• Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.

Many lenders already do this by my understanding, so no big change here – if you want a 35 year amortization variable rate mortgage, you can get it, you just have to qualify for the mortgage funds at a 25 year fixed rate mortgage.

• Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.

This change is so marginal that I don’t know why they did it other than to send a message that borrowing money against your home is just about always a really bad idea financially.

• Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.

This one is aimed at all those looking to buy with 5% down and flip in a year for a profit. Flaherty is looking right at you crazy capitalists and saying don’t even think about it.

For the full statement by the government of Canada after the jump. Questions or thoughts on this? I’d love to hear them – leave a comment or email me.

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Toronto’s First Car-Free Condo

To my amazement, Tribute Communities has been given the go ahead to build a 42-storey condo tower on University Avenue, just south of Dundas with no parking spots. The City of Toronto’s decision to allow this represents a major shift in philosophy for City Hall with respect to how this city is being planned and what types of developments are encouraged and discouraged.

On the surface, it would seem to make sense that the city would want to encourage the development of condos without parking spots. After all, we are trying to be a ‘green city’, and a dense city, so encouraging a car-free lifestyle in the heart of downtown sounds logical. But the fact is many of the decision makers are City Hall are still stuck in the 1970s version of Toronto where the car is king, and anyone who rides a bicycle is not to be trusted.

This decision will certainly open up the floodgates for further projects without parking spots all over the city. Afterall, from a developer’s perspective, building a 3 or 4 level parking garage is hugely expensive and time consuming. Building a condo without parking should allow developers to offer more competitive prices and faster completion times – two things that every condo buyer wants.

One concern in building a condo tower like this is that all the units will be 1 bedroom, or 1+dens and the residents will be a homogeneous mix of students, singles, and couples. City Hall wants to encourage more 2 and 3 bedroom condo units in the downtown core, so it will be interesting to see how many larger units out of the whole project Tribute Communities allocates for 2+dens and 3 bedrooms.

If you are interested in this project, please contact me.

Does This Mean I Can’t Text & Drive Anymore?

On October 26, the ban on using hand-held devices while driving takes effect in Ontario. Real estate agents including myself who have grown used to ‘creative multi-tasking’ while driving will soon have to start adjusting their habits.

The downtown condo market is very fast paced, and many times I have had experiences with clients where the difference between getting a property sold, or putting in the winning bid comes down to something as simple as a single phone call, email or text message received at the right moment. I just might have to hire an assistant to drive around town with me and answer all my calls, texts, emails as well as operate my GPS while on the road. Interested? Apply within.

For the complete press release from the Toronto Real Estate Board on this announcement, click ‘continue reading’ below.

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Glas Condominiums – Now Registered!

Glas Condominiums (25 Oxley Street) is now registered. Congrats to all unit owners and investors who bought in the building several years ago and now you officially own your units.

I’ve spent a lot of time in the building lately as I have a couple of clients who are keen on the building. The suites are impressive and already Glas is commanding one of the highest price-per-square foot values in the area (King and Spadina). I expect resales to be in the mid $500s for most suites in the weeks ahead.

Today there are already about a half-dozen suites that have hit the MLS system as standard resale properties (building is registered, owners can sell and advertise at will).

This building is the first completed project under Brad Lamb’s development company.  Features like 9′ exposed concrete ceilings, extra large balconies (on some units) with gas lines, stainless steel appliances including gas cooking, granite counters, sliding barn-style doors, laminate floors throughout, floor to ceiling glass-wall construction, and ultra-modern design details – these are all features buyers of Brad Lamb’s projects have become accustomed to.

If you are a unit owner at Glas and are thinking about selling, or if you are a buyer interested in the building, contact me here.

Coming Soon: Victory Condos Penthouse Suites

I had lunch this week with a few developers at an exclusive VIP broker’s reception in Liberty Village. These ’schmooze-fests’ are generally just for mutual ego stroking, but they are also a great way to find out what is happening in the downtown condo scene. These are people who are ‘running things’ in Toronto.

In chatting with some of the folks behind Victory Condos I was informed that the penthouse suites at Victory will soon be released for the first time. The suites sound like they will be amazing. They will take the already great standard finishes and features of Victory up a notch. For example, 10′ ceilings instead of 9′ and full size appliances instead of ‘condo size’.

Each unit will have it’s own private rooftop terrace above each suite including a glassed in ’skybox’ which will let natural light down into the unit. This feature will really set these penthouses apart from others downtown and will make the units feel like modern townhomes in the sky. If you are looking for an upscale residence in the King and Spadina neighbourhood, consider the penthouses at Victory.

Victory Condos at King and Spadina by BLVD Developments is over 80% sold. Construction is underway. There are only about 25 units still available. Contact me for more information.

Giraffe Condos: Building Redesigned and Prices Lowered

Giraffe condos launched with significant fanfare and acclaim almost exactly 1 year ago. It was about one month later that the real estate market in Toronto all but collapsed. Sales at Giraffe were less than spectacular and like many Toronto developments, they had to react to what the market was telling them.

I’m pleased to announce that Giraffe has significantly lowered their prices across the board, introduced new suites, and kept nearly all the distinctives of the project in place that made it so appealing in the first place.

Prices are now starting as low as $360 per square foot. Prices have essentially been reduced as much as $50-60K for some units. 565 sq ft 1 bedrooms from $212,000, 612 sq ft 1+dens from $224,000, and 833 sq ft 2 bedrooms from just $302,000.

The major changes to the building are these:

• Eliminated the roof-top garden/patio area resulting in significant construction and maintenance savings
• Ceiling heights on lower half of building reduced to 8′ instead of 9′
• Depth of balconies reduced from 6′ to 5′ (but will still have gas lines on them)

Deposit structure is 15% in 180 days + 5% at occupancy (standard). Parking spots are $28K (very reasonable). Maintenance fees are $0.45/sq ft.

Giraffe is a LEED designed building by Teeple Architects.

All these changes have come about with little to no advertising on the part of the developer. Despite this, suites are selling fast with over 30 units sold in the past few weeks. Don’t wait for the mainstream media marketing hype (radio ads, newspaper ads etc) to tell you this is a great opportunity! This project is a great investment NOW. If you are thinking about buying at Giraffe, contact me today.

Queen and Portland: More 1 Bedroom Units Coming Soon

Anyone who has been shopping for a 1 bedroom or 1+den condo in downtown Toronto recently knows one thing for sure: Inventory is VERY tight. This is both on the resale side and the new construction side. Some developers are splittling up larger units into multiple smaller units to accommodate the seemingly endless demand.

Queen and Portland by Tribute Communities is a boutique building with only 90 units in total and will be a mixed-use building in the heart of Queen St West. The building will feature a massive rooftop garden/patio area over looking the action on Queen street, as well as a Loblaws, Joe Fresh, and a Winners in the retail levels of the building.

I have received word that some additional floor plans are being added to accommodate the demand for more smaller units. They have not released the information yet on the new suite designs and what their prices will be, but I am anticipating a half-dozen units or so in the $300K range. Keep checking back here for updates, or contact me if you would like to be notified as soon as they are released.