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Fort York Neighbourhood: Boom or Bust?

From 10,000 feet, the Fort York neighbourhood is booming. Hard to believe that 10 years ago if you went to the corner of Bathurst and Lakeshore, you wouldn’t see a single condo abutting that intersection. Now there are several completed buildings like 219 and 231 Fort York, 600 Fleet Street, and the nearby 38 Dan Leckie Way (Panorama), and Tip Top Lofts (637 Lake Shore). Under construction and nearly complete are phase 1 and 2 of West Harbour City (628 and 630 Fleet Street), Neptune (640 Fleet), and Quay West at Tip Top. Construction is underway for LTD, and construction will be starting probably late this year on Library District and Garrison at the Yards. If you are counting that is at least 12 major buildings either built or underway.

Obviously the area is very attractive to many people and investors who bought years ago for under $300 per square foot in some cases are doing the “I told you so dance” to those who were skeptical about this area. However, the area has been criticized for having a dearth of amenities and lacking a neighbourhood ‘feel’. What does the future hold for Fort York?

The area has long been one that I’ve proposed to clients and investors who want to own downtown but were squeamish at the thought of paying prime downtown prices for areas like Bay Street, King West or the St Lawrence Market. Fort York is ‘off centre’ in the sense that is downtown, but the Gardiner expressway and the Rail Lands to the north can make the area feel cut off from the action of the city. Retail shops, restaurants, dry cleaners etc. are very scarce. You have to have a car to live in this neighbourhood, or you need be comfortable with long walks or spending a lot of time on the streetcar to get to where you are going.

My opinion is that this area will never be seen as one of the best downtown neighbourhoods, but it will improve as more amenities are added. It will continue to be a good alternative for those wanting to be in the core without paying premium prices. Also it’s great for people commuting to Mississauga. A game changer for the area would be if Loblaw does something exciting or ground-breaking with their building on the north east corner of Bathurst and Lake Shore.

Interested in buying or selling in the Fort York Neighbourhood? Contact me today.

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Buyers: Avoid Bidding Wars in the Assignment Market

Buyers looking to avoid multiple offer situations should consider the assignment market. With several condo buildings coming on-line in the downtown core this winter and spring, many sellers will be looking to sell before registration. Buying by assignment gives you the opportunity to avoid the bidding wars that are rampant in the resale market.

Nearly all listings on the resale market downtown priced under $350K are generating multiple offers. The lower the price, the more activity on the listing, the more showings, the more offers. Every day I have buyers calling me and emailing me who are looking to buy a condo downtown for under $250K. The market is hot, everyone wants a piece of it, and suddenly anyone with a few extra dollars in the bank considers themselves a real estate investor.

My advice is to consider buying an assignment at a building that is about to take occupancy or is in the occupancy period but not yet registered. For example, my colleague has a Junior 1 bedroom suite (525 sq ft) at West Harbour City with an asking price of $249,000. Occupancy is slated for March. A great starter condo or investment unit in what will likely be an excellent building. If this unit were on the resale market, it would likely be priced at something more like $269,000. Assignments like this give buyers the chance to save a little money and a little sanity.

Make sure you are working with a Realtor and a lawyer who understands assignments! Most do not and will only cause severe frustration for you. Questions? Contact me today.

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Inventory Relief Coming Soon

The biggest story in the Toronto condo market over the past 6 months has been the disparity between supply and demand. Simply put, inventory (condos available for sale) is at an all time low, and demand is at an all time high. This has been a recipe for rapid price appreciation, frenzied buying, and sellers very much in control of negotiations.

2010 promises  to bring change. Several high-profile condo projects downtown are coming to completion this year and whenever this happens, huge numbers of units are put on the market by investors looking to cash-out their investments.

Specifically over the next few months, buildings that will likely be registering include London on the Esplanade (just registered), Murano (North Tower to be registered this month), VU (Jarvis and Adelaide), 550 Wellington, West Harbour City, Boutique, Glass House, CASA, Bloor Street Neighbourhood, and the list goes on…

Most of these are buildings that were selling during the heady days of 2005-2007 and 2010-2011 will see all of these projects come ‘online’ and they will be added to the inventory for the downtown market.

Buyers should soon be able to breathe a sigh of relief as all this product coming on to the market in time for the spring should make things a little easier on them, however, prices will likely continue to rise as demand will remaind strong for at least the next 2 quarters.

In about six months two key events will take place that will likely shape the real estate market for the following 6-12 months – the Bank of Canada will be raising interest rates, the HST will kick in.  There is a great deal of uncertainty surrounding these two events, however, many are predicting that they will have a negative impact on prices heading into the final half of 2010. Personally I believe there are too many variables at play to make any accurate predictions of what the market will do beyond the next 6 months.

Thoughts or comments? Leave them below or email me directly.

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