The news cycle is replete with stories about the Greater Toronto Area housing market being in the doldrums, but upon closer inspection a voracious appetite for well-located developments still exists.
Granted, the Toronto Regional Real Estate Board’s (TRREB) latest statistics reveal sales in the GTA declined by 49.1% year-over-year in October, while new listings decreased on both yearly and monthly bases.
However, 8 Elm, a 69-storey, 819-unit condominium being built near Yonge-Dundas Square has sold over 80 per cent of the units released to market at an average of $1,775 per square foot. That is substantially higher than what the market averaged even before the Bank of Canada began hiking its overnight lending rate and caused buying activity to decelerate.
He added the Elm Street project offers respite from the square’s bright lights and bustling activity.
“We have a very good suite mix with very efficient units that are well-received by the market. We hired Cecconi Simone for the suite design and they’re well-received designs.
"Sometimes, to fit a condo building in, you have to compromise on suite design and layout, but we didn’t have to on this building.
"Buyers are seeing higher use of space.”
Yonge-Dundas Square is considered the epicentre of Toronto, perhaps unsurprising considering its eponymous intersection is not only the busiest in the city but in all of Canada.
It isn’t simply amenity-rich, either; Yonge-Dundas Square provides seamless access to the Financial District, hospital row, Yorkville and Union Station – the country’s busiest multi-modal transportation hub.
Forma condos in demand
Another major downtown Toronto condominium project just happens to be, arguably, the most hyped in years, and something of a homecoming for 93-year-old architectural luminary Frank Gehry.
Although Gehry’s typically resplendent building design is enough of a selling feature in and of itself, Mitchell Cohen, chief operating officer of Westdale Properties, says the location is irresistible to buyers.
Moreover, sales for the first 72-storey phase, which began in January, have been so robust demolition began a couple of weeks ago and construction is slated for spring.
“This really is the most iconic project in North America because they’re twin towers, and (the 84-storey second phase) will be Frank Gehry’s tallest residential building in the world,” Cohen said.
“It’s part of the Entertainment District, immediately adjacent to the financial core. You could not find a better location and better architect, so in combining those two, this has been a success.”
Paolo Ferrari, another heavy-hitting native son, has been tapped to design Forma’s interiors, which Cohen says will set Forma apart from other downtown condo units.
“We’re headlining him. When you look at the outside and inside, you think, ‘Wow, Frank Gehry and Paolo Ferrari!’ This is a powerful duo and it’s an investment,” he said.
“People now are recognizing that they don’t want to live in a filing cabinet in the sky. I always say, ‘Why buy a piece of art when you can live in a piece of art?’ ”
Building at Yonge and Sheppard
Investors are just as fastidious about well-situated investment properties as end users, and according to Cohen, that doesn’t mean they need to be downtown.
He credits the late Mel Lastman, former mayor of North York and later Toronto, for catalyzing development around Yonge and Sheppard. Cohen said investors are bullish on the neighbourhood because it’s sandwiched between two subway stations, and Highway 401 and a GO terminal are both nearby.
Moreover, Canada has been increasing its immigration quotas for the last couple of years, with the federal government announcing early this month it will welcome 500,000 newcomers per annum beginning in 2023. With a severe housing crunch in the country’s major cities, immigration is driving investor activity in the real estate market.
Citing Northcore Condos, which Westdale Properties is developing in tandem with Fieldgate Urban on Sheppard Ave., one block west of Yonge St., Cohen said the units are investor-friendly. Floor plans are functional and finishes are modern – in contrast to the area’s decades-old purpose-built rental stock – while the suites are small enough to keep prices below $1 million.
With the Sheppard-Yonge subway station mere steps away, sales are bucking the housing sector's doom-and-gloom narrative.
“Not everybody wants to be downtown; there are other really good sub-sectors and North York is one of them,” Cohen said. “If you look at the macro fundamentals in Canada, we are going to continue to grow.
"The GTA has a shortage of housing coming down the pipeline and the provincial government is doing what they can to speed it up.
"People are seeing that and saying, ‘If I buy a condominium today, I’m making an investment for the future.’ It’s not like they’re buying and taking possession next week.”
Strong amenity packages
Another factor Timpano said drives condo sales to investors is amenity packages.
In addition to its location in the beating heart of the city, 8 Elm is one of the most amenitized condominiums in Toronto, with around 30,000 square feet of space dedicated to its residents.
That, Timpano says, makes the building attractive to end users and investors alike, the latter especially because they compete with myriad other landlords to secure tenancies, and their ability to increase rent is heavily stifled by the rent control regime, ergo, if they can command above-market rents, they sit pretty longer.
“I think better amenities 100 per cent can (result in higher rental income),” Timpano said. “Amenity matters in the long term and it matters especially for rental.
"Yes, vacancy is low now and will always be low, (but) I do believe you can charge a premium for very high quality. I’d certainly pay a premium to live in a building with higher-quality amenities.”