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Just What are We Getting Into? The Impacts of the GTA Condo Boom
Presentation to Lambda Alpha Simcoe ChapterFebruary 25th, 2008
Presented by: N. Barry LyonPresident and Senior Partner
N. Barry Lyon Consultants Ltd.
2007 A Landmark Year for New High Density Sales
Source: RealNet Canada Inc.
High Density Sales Outpace Low Density
Source: RealNet Canada Inc.
Former City of Toronto Dominates Market
Source: RealNet Canada Inc.
North Yonge Corridor
Scarborough City Centre
Yonge & Bay Corridors/Waterfront
King West/Liberty Village/CityPlace
Mississauga City Centre
Etobicoke Waterfront
Investor Activity Linked to Transit Accessibility
Affordability DecliningAffordability Calculation - Required Income for a Condominium Apartment Unit
Greater Toronto Area - 2003 to 2007
Year 2003 2004 2005 2006 2007
Avg. Unit Size (sq.ft.) 850 850 850 850 850
Avg. $PSF $292 $305 $333 $353 $387
Maintenance Fee @ $0.35 psf $298 $298 $298 $298 $298
Monthly Taxes @ 1.25% p.a. $259 $270 $295 $313 $343
Purchase Price $248,200 $259,250 $283,050 $300,050 $328,950
Downpayment % 20% 20% 20% 20% 20%
Downpayment Amount $49,640 $51,850 $56,610 $60,010 $65,790
CMHC Premium % 2.50% 2.50% 2.50% 2.50% 2.50%
CMHC Premium Amount $4,964 $5,185 $5,661 $6,001 $6,579
Total Mortgage Required* $203,524 $212,585 $232,101 $246,041 $269,739
5 yr rate** discounted 0.50% 5.95% 5.55% 5.80% 5.95% 7.04%
Mortgage Payment*** $1,244 $1,259 $1,433 $1,550 $1,882
Total Occupancy Cost $1,900 $1,927 $2,125 $2,260 $2,622
Required Income (32% GDS) $65,677 $66,674 $74,115 $79,175 $92,758* includes any applicable CMHC premiums ** Bank of Canada 5-year rates 6.45%, 6.05%, 6.30%, 6.45% and 7.54%
***Amortized over 30 years
Source: N. Barry Lyon Consultants Limited
Source: RealNet Canada Inc.
Pioneering the Empty-Nester Market
Market Square Condominiums, St. Lawrence Neighbourhood
Emergence of Super Luxury Market
Four Seasons East & West Towers
5-Star Hotel/Condos$1,238 & $1,579 PSF
77 Charles$1,162 PSF
Residences at the Ritz-Carlton5-Star Hotel/Condos
$989 PSF
Emergence of Super Luxury Market
Shangri-La5-Star Hotel/Condos 65-Storeys
$1,100 PSF
MuseumHouse$1,541 PSF
The St. Thomas$1,000+ PSF
Conversions
Clockwise from Left: One Benvenuto; Wrigley and Garment Factory Lofts; Printing Factory Lofts
New Office Development
First Waterfront PlaceQueens’ Quay at Jarvis Slip8-StoreysTEDCO and City of Toronto Co-DevelopersLead Tenant: Corus Entertainment500,000 Sq. Ft. Office & Broadcast CentreLEED Gold
New Office Development
Telus TowerYork Street at Bremner Boulevard30-StoreysMenkes Development, Hospital of Ontario Pension Plan (HOOPP), Halcyon Partners FundLead Tenant: Telus780,000 Sq. Ft. OfficeLEED Silver
New Office DevelopmentRBC CentreWellington West at Simcoe Street42-StoreysCadillac Fairview and Graywood DevelopmentsLead Tenant: RBC1.5 Million Sq. Ft. OfficeLEED Silver
Maple Leaf SquareSoutheast Corner York Street at Bremner Boulevard44 and 40-StoreysLanterra Development, Maple Leaf Sports & Entertainment and Cadillac Fairview230,000 Sq. Ft. Office in Podium ComponentLEED Silver
New Office Development
Bay-Adelaide CentreNortheast Corner of Bay Street and Adelaide Street EastBrookfield PropertiesLead Tenant (Phase 1) – KPMG, Goodmans LLP1.1 Million Sq. Ft. Office – Phase 1 West TowerLEED Gold
New Transit Lines
Source: Toronto Transit Commission
Proposed Waterfront Transit Lines
City of Toronto Waterfront Proposed Transit Lines
Source: Waterfront Toronto, Toronto Transit Commission
New Grocery Retail
Future Development
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Future Development
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Suburban Intensification
Proposed Master-planned Community, Duke of York Boulevard, Mississauga City Centre
Suburban Intensification
Holiday Drive, The West Mall and Rathburn Road, Etobicoke
Parking Lots A Dying Breed
Parking Lot, Church and Colborne Streets
Mixed Use Developments
Mixed Retail-ResidentialVancouverHome Depot with Condos Above
Approved Mixed Retail-ResidentialQueen Street at PortlandHome Depot with Condos Above
Family Housing in the City
Rendering of Blocks 32 & 36, Railway Lands, Toronto Community and Housing Corporation
Family Housing in the City
Overview of Future Regent Park
The West Donlands – A Largely Condominium Community
Aerial View of West Don Lands
• Toronto arrives as an international destination, place to live, work, visit
• Immigration, economic stability & aging Boomers/ Zoomers drive condo demand
• International investors continue to see Toronto as a safe haven
• Housing affordability continues to decline in Central City
• Continued largest condo market share to City of Toronto
• Downtown & waterfront increase market share
Looking Ahead
• New condo neighbourhoods mature, enhance infrastructure
• Balanced growth Downtown—offices, hotels, retail, institutional, residential
• Shift from small condo units to upsizing & families
• Height resistance mellows outside of traditional neighbourhoods • Neighbourhoods continue to confront change
• Closer live/work relationships across GTA – commuting loses favour with $1.50 to $2.00/litre gas
Looking Ahead
• Growth of 905 sub-centres/downtowns
• Suburban transit network becomes increasingly functional
• City, TTC continue to fail to designate higher densities around transit stations
• Toronto’s employment retention policies continue to ignore functional obsolescence
• Toronto’s main street redevelopment policies fail to deliver development
Looking Ahead
• Urban Toronto loses gap-toothed streetscapes as parking goes underground
• Entertainment District shrinks
• Toronto’s residential taxes climb to 905 levels
Looking Ahead