TrueCondos.com – The Best Source for Toronto Condos

Warning Signs in the Ultra-Luxury Market

There are some signs of cracks forming in the foundation of the ultra-luxury condo market in Toronto.

Two months ago I wrote a blog post about the Absorption Rates at some downtown condos, and how units at brand new, high-end buildings are not selling. At that time, there was a 30 month supply of inventory on the MLS for the Ritz Carlton. Today, the situation at the Ritz is actually slightly worse. There have been 2 sales in the last 60 days and there are 33 units available for sale meaning there is 33-months’ worth of inventory.

This statistic alone would not be comforting for anyone watching the luxury condo market closely, however, it gets worse. There have been 5 sales at the Ritz Carlton registered on the MLS since the building registered in the summer. The first 3 sales were in the summer and they averaged around $914 per square foot. Then a unit sold in September for $865PSF. Now just last week a unit sold for…wait for it…$728PSF! An incredible number when you consider the developer was marketing units there at $1200+PSF just 1 year ago. Also incredible when you consider ordinary buildings that do not have a 5-star International Hotel chain in them are selling for close to the same price per square foot.

Why is this happening? A few theories I have heard:

1. Toronto is fundamentally not a high-rise city, at least not yet. Those with $5M+ in assets still prefer good old Rosedale or Forest Hill over downtown. Eventually this may change, but right now it looks like it has not.
2. There is just not enough money in Toronto. All these suites at the Big-4 (Ritz, Trump, Shangri-La, Four Seasons) were sold to speculators thinking they could flip them to local buyers after completion, but there just aren’t enough buyers to go around for all 4 of these projects finishing around the same time (2o11-2012).
3. Toronto is not New York or Hong Kong. Brands like Ritz, Trump, Shangri-La have no cachet here (what about the made-in-Canada Four Seasons brand?). Hat tip to @BrianPersaud for this point.

Implications:

1. If you bought a condo at $1000+ per square foot and it is not located in Yorkville, you should be worried. If you bought a condo at $1500+ per square foot I honestly think you are in serious trouble.
2. It’s still better to buy 3 condos at $300K each for investment than it is to buy 1 at $1M.
3. If you are trying to sell a unit in one of the Big-4 this year or next year, be patient! You may be better off renting out your property for a few years until the dust settles and all 4 of the Big-4 are completed and registered. This will also allow time for the buildings to distinguish themselves from the average Toronto condo in the minds of condo buyers.
4. If you are a buyer looking in the luxury market, especially an international buyer, you this is a great time. You can pick up one of the nicest properties in Toronto for only slightly more per square foot than the average middle of the road stuff! Time to go shopping! (contact me

Questions or comments? What do you think is going on in the luxury market in Toronto? Please contact me or leave your thoughts in the comments section below.

Continue reading...

VIP Sales on Now at Yorkville Plaza

Yorkville Plaza by is a condominium conversion of the old Four Seasons by Camrost Felcorp.

Camrost has had great success selling their other big conversion project: Imperial Plaza on St Clair at Yonge, and I suppose they decided to stick with the ‘plaza’ nomenclature on this one. You won’t find the words ‘Four Seasons’ anywhere in the marketing of this project, as it is clearly NOT affiliated with the Four Seasons brand in anyway whatsoever, but they are simply converting the iconic old Four Seasons hotel building. Future plans are for a brand new tower to the south of this tower as well.

If you are looking for a new condo in the heart of Yorkville for under $400K, you basically have zero options. Enter Yorkville Plaza. There will be plenty of small suites, and the largest in the building will only be 750 sq ft. This building is perfect for:

1. The Rosedale, Forest Hill, Moore Park baby boomer or retiree who is looking for a downtown Pied a Terre residence.
2. Parents of UofT students. If your child is at UofT or will likely be studying there in the future, there are plenty of studios and 1 bedrooms that would be perfect.
3. Investors looking to get into short-term executive rentals – again, these small suites in this location are PERFECT for this type of usage. Small, furnished 1 bedrooms in Yorkville rent out for as much as $3500/month for short term rentals.

For floor plans and pricing for Yorkville Plaza, and your opportunity to purchase now before any public release, please contact me.

Continue reading...

Top-5 Things The Sale of the Four Seasons Penthouse Tells Us

In case you missed it, Menkes has confirmed that the penthouse at the Four Seasons in Yorkville has sold to an international buyer. 8000+ square feet for $28M. So what does the sale of the most expensive apartment in Canadian history tell us about the condo market in Toronto? I think it says a few key things:

1. Four Seasons is King. By setting such a massive record that will likely not be surpassed for possibly 10 years or more, The Four Seasons brand is now clearly the number one luxury condo-hotel in Toronto. I often talk about the “Big Four” of Toronto condo-hotels: The Ritz-Carlton, Shangri-La, Trump Tower, and The Four Seasons. The penthouse sale once again solidifies The Four Seasons as the most prestigious brand in this sub-market.
2. Yorkville is King. As much as there are many great streets, intersections, and neighbourhoods in Toronto, this sale reminds us that Yorkville is still #1 in the eyes of the truly elite buyers.
3. Toronto is King. This could not happen in any other city in Canada. Vancouver, for all its high-priced real estate, has (to my knowledge) never seen a condo sale north of $22M. Montreal? Forget about it. The penthouse of the Ritz in Montreal sold for $15M. Toronto is the best market in Canada to invest in real estate and we should be proud.
4. Expect other Dominoes to Fall in 2011. I have a feeling the other condos on the market in the $10M+ range will sell this year. No one likes to be the first to set a new price precedent, but once it is set, similar properties tend to move quickly. Suddenly the penthouse at Aura at 13,000 square feet is looking like a bargain at $17M…
5. No more complaining about $600 per square foot! With this property selling at over $3000 per square foot, Toronto buyers need to see this as a signpost for the future of Toronto. Those who are stuck in the mindset that anything over $600 per square foot is ‘too high’ or irrational may be right, but they need to consider the overall trajectory of the market as well.

Questions or comments? Contact me directly or leave a comment below.

Continue reading...

Is Toronto Special?

I love my overseas clients. They have such a different perspective on the Toronto condo market than we locals do. In general, they are far more optimistic and excited about the future potential of our city than we ourselves often are. They understand that the Toronto condo market is special.

I was meeting a new client yesterday at the Ritz-Carlton, and no surprise we got to talking about the market. I was somewhat surprised when this banker from Hong Kong said that he he believes Toronto is still severely undervalued. The Ritz Carlton  in Toronto is selling now at about $1100 per square foot. An equivalent property in Hong Kong would cost approximately $4000 per square foot he informed me. He remembered telling the sales people when he bought his unit for roughly $650PSF 5 years ago that they were being way too conservative with their pricing (they should have charged much more). He went on to say that luxury properties like this in Hong Kong will rent out between $10-$15 per square foot per month, versus Toronto where $3 per square foot is considered a high water mark presently.

Another thing that makes Toronto so special compared with other major world cities is that we still have a first time buyers market.  As a first time buyer on an average university graduate-type salary, you can actually buy a decent piece of real estate in Toronto and walk to King and Bay (our country’s financial heart) in 10-15 minutes. Where else in the world can you do this? In other cities like NYC or London, you buy in the outer burbs, have kids, save,  save, save, and then maybe when your kids are grown and moved out you might have enough saved up to buy your dream apartment in the city. In Toronto you can still do it when you’re 25. Amazing and rest assured, this will not be the case in Toronto forever.

I am still very bullish on Toronto. The next 10 years may have their ups and downs, but the trajectory of Toronto on the global scene to me is clear and this is a fantastic place to invest your money. I believe Toronto will continue to see tremendous growth over the long term.

If you are a non-resident of Canada and you would like to discuss investment opportunities in Toronto, please contact me.

Continue reading...

First Impressions: Residences of the Ritz Carlton

Today I had opportunity to perform the PDI (pre-delivery inspection) on behalf of an overseas client who purchased at The Residences of The Ritz Carlton. The building is the first of what I call the “Big-4″ to be undergoing occupancy in the downtown core. The Big-4 are the 4 condo/hotels backed by major international luxury brands: Ritz Carlton, Shangri-La, Trump, and the Four Seasons.

These projects are in a class all their own with all suites in the $1000+ per square foot range. When the Ritz Carlton first launched back in 2005, $1000 PSF was a sort of Manhattan-esque fantasy and most never thought we would get to this point so fast. The truth is, suites at the Ritz are now selling in the $1100+ PSF range, as nearby buildings without an internationally renowned luxury brand behind them are selling for as much as $900PSF.

Impressions on the building itself: from the exterior, the podium makes a striking statement on Wellington Street with its unique cantilevered design. Although still very much unfinished, the lobby areas of both the hotel and the residences area (separate entrances) make you instantly aware you are not in a ‘just another downtown condo’ or ‘just another downtown hotel’. The attention to detail and craftsmanship is evident on every surface. Not much else to say at this point as the work crews are still very much hard at work putting the finishing touches on the common areas of the building. The hotel is slated to open next month! The first 3 or 4 floors of the residences have started occupying, and the penthouse levels are scheduled to start occupying by April.

Impressions of the suite: best description I can come up with of the sprawling 1 bedroom suite is ‘grand Parisian apartment from the past, with all the modern conveniences of today’. Cheesy I know, but there is nothing really to compare it directly with in Toronto. The suite was in excellent condition overall and the list of deficiencies was rather short when we were finished the inspection. Some of the standout features that really make the suite a true ‘luxury’ property include:

• 10′ smooth ceilings with crown moldings
• Herringbone patterned walnut hardwood floors
• Top quality granite and marble throughout the bathrooms and kitchen
• Solid wood cabinetry (no MDF here!) in Kitchen and baths
• Sub-zero, Wolf, and Miele Integrated appliances (ever priced out a Sub-Zero or Wolf appliance?)
• Extra tall, solid-core doors with high-end hardware)
• High end fixtures (faucets, toilets, sinks, shower heads) in the Bath and Kitchen
• Large walk-in closet with built-in organizer system in master
• Gas Fireplace with concrete-cast surround

I won’t post any photos at this time as the building and suite are still in a state of construction/finishing so to do so would sell this property short. (This suite will likely be available for sale in the near future so we wouldn’t want to do that!) If you have any questions about the Residences of the Ritz Carlton, please contact me.

If you have purchased a condo in Toronto that is coming up for occupancy in 2011 but you are not located in Toronto and are wondering what your options are for performing the PDI and taking occupancy, please contact me.

Continue reading...

Coming Soon: Pears on the Avenue

Coming soon to Avenue Road and Davenport, Pears on the Avenue by Menkes. For more information on the upcoming VIP sales event for this project, please contact me.

This project will be sure to once again ignite the debate over what exactly is ‘Yorkville’ and where the boundaries of this neighbourhood end. Many developers have jumped on the Yorkville marketing train over the past few years, billing their projects in the streets adjacent to Toronto’s most prestigious locale as part of the Yorkville scene.  However anyone who has spent time in the heart of Yorkville (Bloor-Cumberland-Yorkville) will tell you that moving a block or two in any direction will put you in some very different surroundings.

Regardless of whether Avenue Road and Davenport is in Yorkville or not, there is no question it is a great location.

With prices said to start in the mid $400s for this project, I am expecting the prices per square foot to be in the $700+ range. This will almost certainly be a project aimed at end-users (as opposed to investors) particularly ‘down-sizers’ from the Yorkville/Forest Hill/Annex neighbourhoods. Expect this to be a big trend over the next couple decades – mid-size projects in Toronto’s poshest neighbourhoods aimed at getting empty-nesters and retired baby boomers out of their 2000-3000 sq ft homes and into 800 sq ft condos down the street. Ditch the maintenance of the home but keep your postal code.

Questions? Contact me.

Continue reading...

Pears on the Avenue

Description Coming Soon!

Continue reading...

What is a ‘Luxury’ Condo?

In case you haven’t heard the story that is all over the local news, there was a million dollar drug bust at a penthouse suite at a condo on Fort York Blvd. By all accounts it looks like the dealers were operating out of 219 Fort York Blvd.

I actually really like 219 Fort York. It is phase 1 of the Water Park City complex, completed in 2005. The building has great views, offers good value and decent location, and was the first tower completed in the Fort York Blvd neighbourhood.

My beef with the media’s reporting on this story is that they are referring to 219 Fort York as ‘luxury condominium’, and an ‘exclusive address’. It is not a luxury condo, and it is not very exclusive. It is clearly an entry level condo made for the masses and is particularly popular with first time buyers on a tight budget but who want to still be near the downtown scene. The building and it’s sister building (231 Fort York), also have a high percentage of tenant-occupied units.

I think it is time to retire the word ‘luxury’ from our real estate lexicon when referring to condos. The word is too vague and has lost its meaning. It was often used in the past when condos were considered to be a new and novel way of living. They were seen in the 80s and 90s as glorified apartments. Now, there are so many different types and styles of condos ranging from the very low-end right on up to the ultra-exclusive. Just because a condo has floor to ceiling windows and granite in the kitchen that doesn’t make it a luxury condo.

Continue reading...

U Condominiums: Tower 1 58% Sold

U Condominiums by Pemberton at Bay and St Mary’s is one of the projects that probably wishes they had a time machine and could launch their sales just a couple months earlier than they did. They started selling in the fall of last year, just weeks before the stock market crashed and there was a fundamental shift in the Toronto real estate market.

That being said, they are doing pretty well in terms of sales and definitely better than other projects that launched in the second half of 2008. 212 out of 366 units have been sold in the first tower to be released. That’s just under 60% sold. TD bank has told them they need to acheive 70% to secure their financing. That works out to roughly another 45 units to go. Don’t expect to see the second tower released any time soon. I wouldn’t be surprised if they don’t even release it at all in 2009.

Many of the prime units at U are now gone, and prices certainly have increased since the initial launch back in the fall, but there are many units still available. Prices for most are in the mid $600s per square foot. This number may seem high, but it is really not out of line with what is available and selling in the area. My own feeling is that over the long term, the Yorkville area centred at Bay and Bloor will remain one of the preeminent neighbourhoods in Toronto. 

For more information on U Condos, please contact me.

Links

Recent Globe and Mail article on U Condominiums

Developer’s official site

Continue reading...

The Best Penthouse in Toronto

Author’s note: This blog post series was originally published in 2008. Hence, some of this information may be out of date. For the most up-to-date information regarding the best penthouse suites in Toronto, please contact me.

The Toronto Real Estate market has been booming over the past several years. With the boom times we have started to see a new class of product enter the consumer marketplace – ultra luxury condos.

Condo living is still a relatively new idea to Torontonians, and up until very recently, condos were seen as something for young buyers, first timers, or people on a tight budget who can’t afford to buy a freehold house. Not any more. Condo living is now seen as a lifestyle of choice and the downtown core has exploded with some very exciting new condos catering to the very wealthy.

This is why I am very excited to introduce a new series of feature posts entitled “The Best Penthouse in Toronto“. The goal is for this to be the definitive online guide to the most prestigious condominiums in Canada’s biggest and most cosmopolitan city: Toronto.

Over the next several days I will be profiling some of Toronto’s most expensive condominium residences. These condos are built from top to bottom with the desires of the discerning clientele in mind. This guide will help determine what is truly “The Best Penthouse in Toronto“!.

Check back to my site in the coming days as I reveal details for the penthouse suites at the following buildings downtown:

• College Park 3: Aura – Online now
• 1 Bloor Penthouse – Online now
• The Four Seasons Penthouse in Yorkville – Online now
• Shangri-La Penthouse – Online now
• The Residences of the Ritz Carlton – Online now
• And Others (watch for updates and feel free to contact me with suggestions)

Continue reading...