From today's Star....


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Demographic shifts mean steady demand for condos


JEANHY SHIM
SPECIAL TO THE STAR

I have 30-something friends in Washington, D.C. — both first-time homebuyers — who have been looking for more than a year to buy something in a downtown neighbourhood.

However, the few reasonable quality condos they found were either out of their price range or subject to intense bidding wars with other young first-time buyers. They ended up leaving downtown and now commute daily back to their jobs in the city.

If they were in Toronto, it's likely they would have been able to find a new condo suite with quality finishes in their price range, in a modern building with security and great amenities, and in a downtown neighbourhood close to work, restaurants, shopping and nightlife.

Prospective first-time home buyers here have an unprecedented amount of choice in terms of location, building type, amenities and quality of finishes. Moreover, there's something out there to fit everyone's pocketbook and lifestyle.

Competition has been a good thing — it has made Toronto's new condominium industry among the best in North America in delivering quality product in great locations and in keeping prices both competitive and affordable. The biggest winners have been young, first-time homebuyers, who have been the real driving force behind condo sales over the past several years.

However, somewhere along the line, competition became the proverbial "bad guy" and some people started reporting that "the condo market bubble is about to burst" because there are "too many condos being built."

However, nothing could be further from the truth, according to my publication Urbanation, a quarterly report that has been providing in-depth analysis on Toronto's condo market since 1981.

The condo market has been off to a great start this year. Sales in the first six months were 28 per cent ahead of the same period last year; prices have remained virtually unchanged compared to last year (despite the inclusion of incentives); and unsold supply has continued to fall even as developers have brought new projects to the market. Simply put, demand is up and unsold supply is falling, yet prices have been remarkably stable because sales are being driven by affordability, not speculation — hardly the characteristics of a "bubble."

Yes, there are many new condominiums on the market now. According to Urbanation, there are 171 projects on the market in the Toronto Census Metropolitan Area, 120 of them under construction and 51 in pre-construction. However, nearly 80 per cent of the units under construction and more than 40 per cent of those in pre-construction had been sold by the end of the second quarter, which indicates that developers must be doing a good job in giving consumers what they want. No one can predict what will happen to condo prices in the future; however, there are several reasons to believe that the long-term outlook is positive.

Condos are now an integral part of the housing market in Toronto, representing more than 25 per cent of the housing stock, and changing demographics and strong population growth will continue to fuel new condo demand. As long as there are parents becoming empty nesters, young adults wanting to move out of the family home, and renters dreaming of buying their own home, there will always be demand for condos. These demographic shifts and population growth have already started to have an impact on the condo market: the strong sales in 2003 and 2004 have been driven almost exclusively by "end users" (buyers who intend to live in their suites), including young, first-time buyers, move-up professionals and move-down empty nesters.

The participation of investors (buyers who intend to rent out their suites) in the market actually peaked in 2002 when several high-profile condo projects opened in popular investor locations, such as downtown, Harbourfront and North York City Centre. Certain projects in these locations attracted a large number of investor-type buyers, but overall, the market was still primarily driven by end users, even in 2002.

The appeal of condos today is broadly based across age groups and nationalities, and they are spread across the 416 and 905 regions more evenly than ever before, rather than being concentrated in downtown Toronto. Due to this broadening of market demand, Urbanation is predicting 11,000 to 12,000 new condominium sales for 2004 — down from the record 15,500 sales in 2002, but up from the 10,000 to 11,000 sales recorded every year in 2000, 2001 and 2003.

Buying a new home is one of life's biggest financial decisions. Don't be influenced, however, by those who tend to view condos as a short-term investment. View it instead as a longer-term commitment to building home equity.


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KGB

So, in short, woo!

Not too shabby!

Where are the hotspots? Do we have stats of where condos are going up? I am sure downtown W and Sheppard E are the obvious leaders right now, but I'm still a little curious.

scarborough centre
humber bay shores
etobicoke centre
north york centre
(former) city of toronto

Scarborough center has changed so much in the past few years.

I'm a big condo fan, but I WISH they would improve the transportation infructure as they build all these new condos! The Scarborough RT is very often extremely overcrowded (its busier then the Shepphard Line, yet has half the capacity), and is due a facelift, the condo developers should pay a levy to help increase its capacity!!!

^ They already do - it's called development charges - which Toronto just increased by over 100% just over a month ago.

Another example of city hall mismanagement I suppose. When are they going to turf that Howard Moscoe anyways, :P

I heard that the Scarborough RT technology is obsolete and therefore can't be upgraded or expanded. So we're stuck with it.

Thats awesome! good job t.o

"I heard that the Scarborough RT technology is obsolete and therefore can't be upgraded or expanded. So we're stuck with it."


Those particular vehicles are....Bombardier now owns the rights to that technology (previously UTDC). Upgrading the line to handle Bombardier's "Mark II" vehicles would cost $120 million and require a 2-year shutdown. And we would still be stuck with too small a capacity, and a bad transfer.

It would be much better in the long run to just spend the $500 million to just extending the B/D line. They could also take a slightly better route, which would allow the RT to continue running while they built it...no interuption of service.






KGB

How come the last TTC report (ridership growth) did not mention that idea??... I mean it clearly much better than anything else, and even if it might be a tad expensive they can save money by running the subway above ground along the GO transit lines just like the RT. It would be a little crummy but at least it could be realistically built for under 400 million probably. And then you can start talking about extensions to malvern or farther east.

"How come the last TTC report (ridership growth) did not mention that idea??... "


Because RT vehicles have a 30 year lifespan...they don't need replacing until 2015. In the meantime, they will just have to suppliment the rush hour capacity problems with buses. They have bigger fish to fry until this can happen.






KGB

Sorry KGB... I meant why didn't the report propose to extend the BD line instead of buying Mark II vehicles from Bombardier as the report did suggest. Isn't the TTC thinking about the booming ridership on the line and the limited life that Mark II vehicles will provide??

Or, they could run streetcars on the line - Part of an LRT explosion in the GTA!
Too sensible, I know.

^spending more than half a billion to change the gauge of the track and the station's platforms for the current rolling stock or to buy new vechicles ultimately for lower line capacity doesn't make a whole lot of sense.

Or, they could run streetcars on the line - Part of an LRT explosion in the GTA!
Too sensible, I know.

OMG.. What a great idea! Let's run LRT on that line. It's a perfect idea because it's already Advanced LRT and the replacement being proposed is Advanced LRT so it'll be easy to convince them. We're European! WOO!

How come the last TTC report (ridership growth) did not mention that idea??

Actually, it does. It's the last of the "Group 2" investments, and will likely take place closer to 2012 -- shortly after a Sheppard subway extension is "hoped" to be started.

See Attachment C:
http://www.ttc.ca/postings/gso-comrpt/documents/report/f2170/_conv.htm

Figure 2:
http://www.ttc.ca/postings/gso-comrpt/documents/report/f1927/_conv.htm

Guys I meant the idea of extending the BD line?? why hasn't the TTC thought of it? why are we still talking in terms of replacing the RT vehicles.

^spending more than half a billion to change the gauge of the track and the station's platforms for the current rolling stock or to buy new vechicles ultimately for lower line capacity doesn't make a whole lot of sense.
Hmm- at 10 million/km costs, it seems that quite a bit of money can be made by simply laying streetcar track on an existing right of way.

Guys I meant the idea of extending the BD line?? why hasn't the TTC thought of it? why are we still talking in terms of replacing the RT vehicles.

The TTC believes a large enough chunk of the ridership is going to the Yonge line, and their new signal system would allow capacity of the Yonge line to be boosted by around 25% in a few years.

So.. if you have 300k riders/day go via Sheppard, and 150k riders/day go via the SRT (Mark II is larger than the Mark I and frequency could be increased to 90 second intervals from 3.5 minute if they could buy the stock), they'll have tapped out Scarborough ridership for several decades.

BD will goto the SCC when the concrete from the SRT needs a full rebuild -- somewhere around the 50's or 60's -- probably shortly after the Eglinton line reaches Kennedy ;)

Hmm- at 10 million/km costs, it seems that quite a bit of money can be made by simply laying streetcar track on an existing right of way.

Frankly I don't see why they do this. The streetcar is versatile enough to adjust for usage frequency which, if I remember, is precisely the most seen on this line. It makes a lot of sense especially because by the time the ICTS has reached its age the new streetcars will be ready. Oh, and it will take less time to become operational, that's for sure.

For the sake of practicality, I see the replacement for RT as either being more T-1 subway or combining it with whatever the streetcars get replaced with. That way the in-house maintanence and parts department is much easier to manage.

Remember...the TTC was origionally going to extend the subway...but not all the way to STC...Scarborough bitched because they were planning their new "downtown"...the cost of extending the subway to STC and beyond was too high, so they decided on a streetcar-based line instead.....then Queen's Park wanted to fob it's new idea of mag-lev vehicles...then when the German company involved went out of business, it instead went with their linear induction technology. They wanted to sell this new technology, so the best bet was to "convince" the TTC to buy this new technology instead. And since when has Queen's Park NOT gotten it's way? They also managed to talk Vancouver and Detroit into buying this as well.

The rest is history.







KGB

What was the route of the original plan to extend the subway into scarborough?

At this time, they were approving the extension to Kennedy (from Warden). Scarborough wanted the subway all the way to STC....the TTC said it was way too expensive, and instead looked into a streetcar right-of-way line. It was only 40% of the cost of subway...they even talked about extending it to malvern...and even Pickering!!

Then the province stepped in.




http://transit.toronto.on.ca/images/subway-5107-11.gif


http://transit.toronto.on.ca/images/subway-5107-02.jpg






KGB