I attended a very informative and interesting seminar last night at the Market Wharf sales office. The event was put on by Context (the developer behind Market Wharf, Spire, Radio City) and was billed as a ‘Buying a Condo Seminar’. It was open to anyone who is on Context’s marketing email list. Normally I avoid events like these like the plague because they are blatant bait-and-switch sales events designed to lure uneducated consumers into buying a condo at a development they know nothing about. However, this one offered something different and I’m glad I attended.
The questions that the speakers attempted to answer were the questions that I am asked every day by my clients and people I meet through this website:
- What is happening in the condo market?
- Where is the best location to buy?
- Is a condo a good investment?
- Will the condo market crash?
The speakers at the event included the president of Context, a mortgage manager from Scotia Bank, the president of Baker Real Estate (a well-known brokerage for new condo sales in Toronto), a representative from CMHC, and Jane Renwick- Executive VP of Urbanation.
The room was totally packed out and all eyes and ears were on Jane Renwick who spoke last. Why? Sure, Jan is a good looking gal, but the main reason was because Jane has something that every condo investor, real estate agent, and developer in the city would just about kill to get their hands on - sales data for new condos. You see, there is no MLS-type system for new homes and condos. No one really knows how many condos are selling, where they are selling, and for how much they are selling…except Urbanation.
Urbanation tracks this data exclusively and sells reports to the devlopment and real estate industry. People pay big bucks to get their hands on this data and rightfully so.
Jane revealed a few slides of this precious data to the crowd and it was illuminating, however, probably not what everyone wanted to see because the data only included the first 2 quarters of 2008. Everyone wanted to know what is happening now, as we are in the middle of a global financial crisis (for the media tells us so).
The basic conclusion was this: after a stunning, record-breaking year in 2007, we are returning to ‘normality’. New condo sales in 2007 were about 22,000. The forecast for this year is that we will probably do more like 16,000 in the GTA - more in line with 2005-2006 numbers. Prices increased at 6.8% in 2008 so far over the same time period in 2007. According to Jane - a sustainable growth rate moving forward and good news for condo buyers. Average price per square foot for a new condo in Toronto is about $461. The West-downtown still dominates in terms of number of sales and price per square foot, but the downtown east corridor is gaining speed and represents good long-term investment potential.
If you want to chat about the condo market in Toronto, I’m always up for it. Leave me a comment or drop me an email.
So, how does this look for the condos about to be built for Yonge and Sheppard? Hullmark, Gibson, Emerald, etc.
The Hullmark one in particular seems to be relatively pricey in comparison to others. It’s a nice concept, but do you think that one is worth it? For a 2 bedroom unit, it looks like it costs $100,000 more than others. Everything is only still a concept. I understand they’re probably going for the more high end market, but does such a market exist in the Yonge and Sheppard area. This looks like something we would normally see downtown?
Good question Allison.
Personally I think that Hullmark Centre is a little over priced. Yonge and Sheppard has a lot going for it these days and this project has the potential to really change the area for the better, but I’m not sold on the idea the notion that the area can command prices that we are still seeing in prime downtown projects right now.
Gibson Square is a little more in line with pricing I would expect at Yonge and Sheppard.
Now given that situation, which one do you think can rent out for a better price? Do you think Hullmark can reap in greater rental profits as oppose to Gibson Square? Which one do you think has greater potential in terms of resale value and rental profits combined? In terms of just the resale value, I completely agree with what you have said in the above. And even though the date of occupancy isn’t here until 4 years from now, the current economic situation does bother me to some extent.
It’s interesting to see the upcoming changes in the Yonge-Sheppard area and its effects.
I don’t think there is going to be much of a difference in what units in these two buildings will rent for.
Rental rates are not usually determined building by building, they are more determined by geographic area, neighbourhood.
Both buildings will have direct subway access and access to shopping and restaurants. Both will have similar levels of amenities. In the eyes of a renter, they will be very similar. I don’t think you’ll see any more than 5-10% difference in rental rates between the two buildings.