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Absorption Rates

I wanted to dig a little deeper for today’s blog post and take a look at absorption rates in various condos. Looking at Festival Tower got me thinking about this subject. Festival Tower has a plethora of units available for sale, but hardly anything is actually selling. The building is stunning. The amenities are amazing, and the film festival that just finished put this tower in the international spotlight for a full 2 weeks. The building has been fully registered and finished for a few months now. I am at a loss as to why units are not moving here. There was so much hype about this building for the last 5 years, and now that it is finally finished, no one is buying?

Let’s compare Festival Tower with other buildings downtown. I took a random sample of various buildings, all completed in the last 12 months. I tried to pick a few buildings to somewhat represent the whole spectrum of the downtown market from the lowest end to the highest end. Take a look at what I found:

Only 3 units have sold in the last 60 days at Festival Tower, and there are currently 42 units available for sale. At this rate, it would take 28 months to sell all available units! Similar story at The Ritz Carlton, where only 2 units have sold in the last 60 days and there are 30 units on the market (actually more since the developer has a few unsold that are not on MLS).

Compare this to a building like Parade in Cityplace, a known area for heavily investor-owned buildings. While there are a lot of units on the market in the building (36 currently), they are moving fast (18 sold in last 60 days)!

Obviously price point has a lot to do with this. There are far more buyers looking for condos in the $300K range than the $800K range. However, I am really starting to rethink the high-end of the market and wondering if there really is a market in this town for condos in the $800 per square foot and above price point.

You could possibly point to a building like Crystal Blu where the absorption rate is quite good and say there is a market but only in one area: Yorkville. One theory I have is people with money to burn on a condo will live in Yorkville, but anywhere else it’s not worth the premium to get a high-end unit.

The point of this blog post is really not to say I have an answer to this question about where are all the high-end buyers, but rather I would like to start a conversation with my readers and clients on the matter. So let me know your thoughts. Contact me or leave a comment.

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Parade Two: Park View Residences

VIP sales are starting now for Parade Two: Park View Residences. Contact me for more information.

The Park View residences are floors 12-21 of the West tower of Parade. The south units will be overlooking the newly opened and yet to be named Cityplace Park. Go to Cityplace.ca to view a promotional video.

Units are now available for booking to VIP agents such as myself for the sales event which will be taking place on November 5th. The incentives for purchasers now is $10,000 off for 1 bedroom and 1+den units and $20,000 off for 2 bedroom units. Prices for VIP purchasers will be starting in the $520 per square foot range for the lowest floors.

Standard suite features at Parade 2 include Miele kitchen appliances, European style cabinets, laminate flooring, and stone counter tops. The amenities at Parade will be second to none, and will include a pet spa, daycare, children’s indoor and outdoor play areas, 25m lap pool, state-of-the-art gym etc. Occupancy is estimated at September 2012.

Click here to download floor plans.

Click here to download deposit structure, features, price sheet etc.

Want to hear about opportunities like this before everyone else? Sign up for my new service and Put Us on Your Radar today!

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Cityplace Offers 20% Off Units*

*I had to put an asterisk right in the title of this post because of course there are plenty of stipulations on this promotion from Concord Adex. It may sound too good to be true…but it’s not entirely.

It’s starting to feel like 2007 all over again as would-be buyers have been lined up at Concord’s sales office near Front and Spadina for a few days now to take advantage of this sales event happening this Saturday at 12 noon. It is in celebration of Concord’s 20th anniversary in Canada.

The conditions:

• 20% off is applied as a cash rebate at final closing (so you pay $300K for the unit and Concord promises to rebate  you $60K at final closing)
• Only applies to the first 20 purchasers in line on Saturday March 28th at noon (First unit purchased will receive the 20% cash-back, any subsequent units purchased by the same person will get 15% cash-back)
• Only applies to units at Parade Tower 1 for Cityplace, and for buildings A,B and D at Park Place (Concord’s other mega-development at Leslie and Sheppard)
• Subsequent purchasers who buy units on March 28 will receive a 15% cash rebate – not a bad consolation prize

The first 20 spots are already locked up by people who have been camping out at the sales centre, but if you are an investor or first time buyer looking to get a good deal, the 15% off could be a great opportunity. As long as you are not too picky about what suite you purchase, because most of the prime suites are long gone from Parade 1.

If you would like more information on this promotion from Concord feel free to contact me.

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