In the story of the Toronto housing market, there are multiple plot lines that hint at the complexities and the intricacies that merge together to create current conditions. Welcome to Part Two of urbaneer’s Fall Forecast. This is an excerpt, but you can read the full forecast (parts one and two) in their entirety at urbaneer.com.
Urbaneer has long contended that if any vulnerability were to topple the Toronto market, it would rest fairly squarely at the feet of the Condominium market. Fortunately, housing starts are down now which portends a balance of this segment of the market, although it should be noted Toronto still has a jaw-dropping 56,000 suites under construction.
Condominiums have been major draw for international investors, which can be problematic. Absentee landlords have different motivations from those who purchase and occupy their suites. There remains the possibility that, if conditions turn, and multiple investors liquidate at the same time, prices could fall rapidly.
There is wide anecdotal belief that these foreign investors are buying much of the stock of ubiquitous point tower condos. These towers are less appealing for local buyers for a number of reasons, partly because there is a risk that comes with sameness. If you are looking to preserve and grow your asset value in the condominium market, you are best served to have unique qualities, finishes and space plan. If you’re a condominium buyer, please be aware our expertise at urbaneer.com includes a speciality in unique urban spaces while keeping our fingers on the pulse, including those buildings which are problematic.
There is a growing concern of the quality of the workmanship as well in these mass produced developments. The thinking is that they are not built to last, and that in the quest to ride the market wave right now, developers are cashing in by cutting corners. Owners down the road may be facing large repair costs- either in their own units or with the buildings themselves. These towers, literally, are beginning to show cracks in the market.
In areas where there is massive development, we are also seeing less appreciation in prices, in part because of saturation of stock in these rapidly expanding high-density locations. Furthermore, we are also seeing less movement in the sub $450,000 new construction market, where some sellers in those same areas of development are only realizing a resale price similar or less than what they paid the developer four years prior.
Despite some of the financial challenges associated with purchasing in the urban core, more and more people are citing the pedestrian lifestyle afforded by urban living is of paramount importance, and are willing to sacrifice an awful lot in order to get it. This marked movement away from the suburbs is not the only lifestyle change that is evolving as a consequence of the housing market. In fact the whole profile and psyche of home ownership is changing drastically.
The property ladder used to take a fairly common shape for most people. Home ownership was a rite of passage of sorts, followed by a series of other rites of passage as you worked your way up – and then back down as your life changed. Not so anymore. For starters, home buyers are waiting longer to buy. This is in part due a lack of stock in some areas, but is also due to the rising house prices that require a larger down payment- or higher mortgage payments. It takes time to accumulate the wealth to support that. There’s no question the property ladder is changing.
Then there is the whole issue of emotion. It used to be that the emotion in a house hunt centred on falling in love with a property and nervousness around the gravity of the purchase, especially for first timers.
Now, in an intense market like that seen in the City of Toronto, it entails an entirely different dynamic. There is panic, despair, regret – tempered with huge shoots of euphoria when you finally crack that wall around home ownership. There is also a sense of urgency. What if I can’t get in the market right now? How will I ever get in?
At urbaneer, we consider where the market is going, based on where it has been and where it is currently. This is the product of decades of experience and thorough research, coupled with a proactive awareness of market trends that help us connect people with properties and to guide sellers towards top dollar.
It takes a bit of an iron will, vision, faith and incredible patience to endure the house hunt, depending on where you are looking. It also takes a great deal more strategic planning. This underscores, among other things the value and need of having help, support, kindness and educated direction on your house hunt – which is precisely what we do at urbaneer. As one of Bosley’s consistent Top Ten Producers, please know my team and I are here to help!
~ Steven and the urbaneer team
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