An annual real estate trend analysis conducted by PricewaterhouseCoopers and the non-profit Urban Land Institute, stated that urban living has become the “new normal.”
“Younger workers in particular — though not exclusively — continue to flock to the urban core, preferring to work where they live, rather than take on long commutes,” the report says.
The report suggests that two age demographics in particular are attracted to downtown, condo living. The young, first-time homebuyer who is willing to sacrifice the space that would have been afforded to them in suburbia, for the convenience and affordability of owning a condo downtown. As well the retirement generation, who now have empty nests and wish to live in space that’s smaller, and more easily maintained. PriceWaterhouseCooper believes that it is this “urban living” trend that has fueled the exponential development of condominium projects in Toronto’s downtown core specifically.
But others have their own theories and evidence to point to when trying to account for Toronto’s condo development boom. Chris Kaynes, a guest columnist for The Toronto Sun refers to a 2013 Statistics Canada finding that suggests that one in eight households in Toronto live in a condo. He suggests that, with the city projecting to double in population size within the next twenty years, the Ontario Municipal Board (an independent organization appointed by the government) has been particularly loose about approving new developments, as well as their oversight. This has resulted in what Kaynes believes is an over-production of cheaply made units in order to expedite the construction process. In his pessimistic vision of the future, these buildings were ultimately serve as the foundation for future high-rise “projects” that fall into disrepair.
Michael Babad of The Globe and Mail, offered his views on the insights revealed in the last Urbanation study (an organization that tracks the city’s condo market), which stated that both sales and prices of new condo units within Toronto increased in Q3 2014. The number of units sold rose to 4,753, a 53% increase from the same time last year (which was an exceptionally low year). Urbanation attributed this increase to a number of “successful new project launches” during the quarter. The share of condos in development that have already been sold, rose to a staggering 84%, totalling 104,000 units.
New research from RealNet Canada Inc. suggests that new, and particularly first-time condo buyers, are seeking out larger spaces, preferring to go with two-bedroom units over 800 square feet, as opposed to one bedroom units. Susan Pigg of The Toronto Star attributes this trend to the fact that condos make for a less-expensive alternative to low-rise housing, which she claims, has escalated to an average price of $700,000. Figures provided by RealNet seem to correspond with the trends identified with Urbanation, with sales of pre-construction condos in the city up 39% year-over-year in September, with 2,262 units sold compared to 1,393 this time last year. The average price of a new condo in the GTA, which, for all intents and purposes, is widely recognized as the most “affordable” housing option left in the big city, was estimated at $450,014 as of the end of September. The same report stated that the number of two-bedroom condos for sale jumped to 41% of total units up for sale this year, up by 10% since 2011.