Toronto condos: 2014 to be the year of The Big Move

Original article By: Susan Pigg Business Reporter, Published on Tue Dec 31 2013

 

An estimated $25 billion worth of condominiums are under construction across the GTA. A record number of units — development research firm RealNet estimates close to 20,000 — are slated to be completed in 2014.

Currently 63,909 new condo units are under construction across the GTA as of the end of October, according to RealNet.

“Exactly how many units we’re actually going to see occupy (in 2014) is really hard to predict because we’re entering a phase that is uncharted in history. We’re completing more units than we’ve ever completed because more units were sold in 2011 than have ever been sold in history,” says RealNet president George Carras.

“If 2011 was the strong takeoff year (for new condo sales), in 2014 they are all coming in for a landing.”

Well, not quite all of them.

More than 28,000 condos sold in the preconstruction phase in 2011, the most by far in a single year. Many are unlikely to be completed for another year or so because of construction bottlenecks — a shortage of skilled trades and equipment — that have limited completions to about 16,000 units a year.

But so many are already well underway, Carras believes we could see closer to 20,000 new units open for the first time in one year. And that’s left developers scrambling to make sure all goes smoothly, not only with The Big Move but, more importantly, with The Big Close.

Developers, and federal finance minister Jim Flaherty, will be watching closely to see how many condo buyers struggle or fail to close on units they bought in the preconstruction phase two or three years ago with meagre down payments, before tighter mortgage lending rules and last year’s slight bump up in interest rates made finalizing deals more difficult.

In the past few months, mortgage brokers, realtors and developers have seen a surge in people, especially the self-employed, “scrambling” to get final financing from institutions that have not only toughened lending requirements, but grown more leery of the condo sector.

Already, some buyers have had to walk away from deposits or borrow from family or secondary lenders at higher rates. Others have sought developer approval to put their units up for sale on the so-called “assignment market” as the project was just coming to completion, in hopes they could find a new buyer before final payments were due.

Veteran condo developer Scott McLellan of Plaza, whose company has an unprecedented 2,511 new units coming to completion in 2014, on top of more than 1,100 that closed in Liberty Village in late 2013, acknowledges the coming surge of closings is being watched closely.

“There is a concern in the industry,” acknowledges Plaza’s senior vice president. “There are a lot of bigger projects closing” in 2014.

But McLellan believes the closings at Plaza’s King West Condominiums in Liberty Village are a sign that all will be fine in 2014.

Of the 1,141 King West units sold in the preconstruction phase over the last two to three years, just two buyers did not close. One died and the other could not be located.

About 100 units were sold on the assignment market before final payments were due and all the new buyers have closed, he says. He estimates that 40 per cent of the project is owned by investors, and most are leasing out their suites for hefty rents rather than flipping the suites for a profit: Just 36 (or three per cent) of the units have been sold on MLS so far and another 21 units are up for sale.

McLellan believes the biggest issue for Toronto’s condo industry in 2014 won’t be finalizing closings as much as “getting sales back.”

Condo realtor turned developer Brad Lamb believes “the great Toronto development boom is over” and that condo sales, which averaged about 19,425 units a year from 2010 to 2013, will slip to an average of 12,000 a year as developers continue to hold back on new project launches.

(Lamb, who claims an essentially unblemished record of accurate predictions over the years, expects condo prices to “rise meaningfully” and rent to climb by mid-2016 as the “ample supply” of units begins to dwindle.)

Veteran development consultant Barry Lyon believes sales will average 12,000 to 15,000 units a year going forward, more in line with demographic demand. He sees 2014 as the year of incentives — from free parking or lockers to breaks on maintenance fees — as a way for developers to entice buyers back to their showrooms.

“Developers will be trying to win over markets they’ve been ignoring for the past several years, particularly first-time buyers and the end-user market,” says Lyon.

“I think developers are going through withdrawal pains from their addiction to investors. They are going to have to wean themselves off their dependency.”

That should mean more of a focus on small or midrise condo projects where owner-occupants actually care about the look, size and feel of the unit because they plan to live in them, rather than own them as investments and rent them out.

“The new sweet spot will be buildings with 100 to 150 units” along main streets just outside the downtown core, Lyon believes.


Home Buyer Checklist

Some home buyers have been sitting on the fence waiting to see what will happen to the Mississauga real estate market ever since the Federal government implemented tighter lending rules.  It’s been about a year now and what we have seen are buyers who took the plunge were rewarded with year over year growth in their property values.  For those who waited now have to pay more as opposed to paying less like they were hoping for.  That said it’s still a good time to buy real estate in Mississauga as interest rates remain historically low and there are plenty of options to choose from including condos, town’s, semi’s and detached houses. 

Consult a real estate agent for advice regarding home ownership. 

Buying a new home especially for a first time home buyer can be challenging.  Realtors can make the process easier as that is what they are trained to do.  The buyer should certainly seek a professional with experience helping buyers find real estate in the area and neighborhood’s they are looking to live in.

Get pre-approved for a mortgage.

Being pre-approved for a mortgage means the buyer is more serious and really able to make a serious financial commitment.  Many deals fall apart when the client was not pre-approved, but still made an offer and later finds out they really couldn’t get a mortgage in the first place.  Believe me, save yourself, your realtor and the seller and their agent from wasting their time, energy and money by making sure you are financially ready first.

Think about LOCATION!

There’s an old saying that goes…Location, location, location.  Where your home is located will affect many aspect of your life including your commute to work and the school your children will attend.  Think about if you want a city lifestyle or a country one.  If you are probably going to sell this property sometime in the future, how desirable is the location to others?

What type of home do you want?

Think about the type of home you can afford and try to buy the best possible for your situation.  Condo vs. town homes or semi vs. detached?  Do you desire a breath taking view or maybe a big backyard?  Can you buy a fixer-upper and do renovations or do you want a home that is ready to live in just the way you want it.  Make a list of must haves and order them by importance.  Your real estate agent will help you find a desirable house meeting most if not all of your requirements assuming you’ve been realistic.

Go on showings.

The internet is the biggest revolution to the real estate market.  It’s so easy for anyone to simply go online and start to window shop for that perfect next home to buy.  But, remember people spend lots of money on having professional pictures to make their homes look better than what they are.  Always go see the houses for yourself.  Your realtor will assist you to see the one’s you want to see as well can also show you ones you may not have thought of.  If you go to an open house or to a pre-construction condo sales room, remember to always say you have official representation as its important the selling party knows you have a realtor.

Have an open mind.

Often really good real estate is passed up on because the home owners may not have chosen the right décor and colour of paint.  It’s a fact that some people have a hard time seeing passed the superficial and understanding the house has “good bones”.  Try to see the space and the potential every house has.  Once you move in you can change anything you want and make it yours.

Plan B

If you like a condo or a house enough to want to put in an offer, there might be someone else who thinks the same.  There is no guarantee your offer is accepted based on price, terms or issues that may come up during a inspection or status certificate review.  Have a backup plan as an alternative so you are not 100% emotionally dependent on plan A.

Get informed.

Your agent can help you know about how your targeted house compares to previously sold homes and other homes which are currently for sale.  Having a CMA or a Comparative Market Analysis done by your real estate agent will help you understand the relative value of the properties, thus preparing you for making an offer to buy and also setting up how negotiations can play out.

It can help to do some research.

Take some time to research at city hall about permits that may or may not exist especially if there were big renovations done to any of the critical systems or structure of the house.   If you are planning to do changes to grading or making any significant alterations after purchasing the home, maybe check with the city before you buy to see if what you are trying to is permissible.

Building inspection uncovered a list of problems…don’t panic.

The job of the inspector is to find everything they can that is wrong with the property.  Usually there are lots of minor issues that are things you would probably overlook.  Even more major things are found that require a fix, find out from an expert an estimate and either negotiate a price reduction or have the seller fix it.  Your real estate agent will help you with any potential amendments to the agreement that needs to be put into place to protect your interests.  But remember this…there is no problem too big or small that money can fix.


Top 5 Renovations

renovated condo

    Working as a real estate agent in Mississauga is a real joy for me.  I’m often showing a condo to a buying client and I get a chance to study their reactions to the condo I’m showing.  Sometimes they can be really excited, other times they are indifferent and on occasion they are repulsed.  Let’s focus on the renovation’s that gets a buyer excited about making an offer for a Mississauga condo.

1.  Lighting

    Lighting can be vague as a description, but generally people want a small boxed space to feel open and aerie.  Lighting of the space both natural and artificial is crucial to achieving this effect.  The choice of window coverings is usually governed to some extent by the condominium rules, however blinds, drapes and shutters of the highest quality and in tasteful colours (usually neutral) makes a good impression.

California Shutters when closed can block out much of the sunlight during the day which is good for people wanting absolute darkness for sleeping or even privacy, while when opened fully can reveal the full glory of the condos view of the city.  Automated window coverings that open and close with the touch of a button takes things to the next level of impressiveness.

Modern lighting (such as chandeliers and pot lights) made of glass, crystal, stainless steel, brushed nickel or fabric can set the mood for showings.  Buyers not only want to be able to see the space, but also appreciate if the light fixtures have been upgraded from the 1980’s ceiling ball or brass coloured fixtures.

2.  Smart Storage Solutions

    Imagine you have lived in a detached house and then were to move into a condo with a livable area that equates to half of what you were used to.  Downsizing is inevitable, but not always practical.  Certain space is reserved as storage in a Mississauga condo.  Finding ways of maximizing this storage spaces potential is huge plus for potential buyers. 

Closet dividers and custom made organizers or ones you can find at places such as Ikea can make your condo stand out from the rest.   Buyers will see the value added to your condo versus the competition.  Also, a well-organized condo that is neat and clean will always give a good impression that the owner has probably kept the good care of the place. Typical places of upgrading storage are the walk in closets, bedroom closets, linen closets, laundry room, kitchen pantry and coat closets.  Also, if you kind spare un-used space adding extra storage to bedrooms, kitchens, bathrooms and living rooms will also catch the buyer’s eye.

3.  Hardwood Flooring

    Hardwood flooring throughout the condo is becoming pretty much a norm now for buyer’s expectations.  It’s easier to clean and also is better for people with allergies.  It also looks superior to the old fashioned shag carpet of the 70’s and early 80’s.  It’s more durable than broadloom, looks better than the parquet that might be the original flooring and is real, not fake such as engineered hardwood or laminate which is so common in the new build Mississauga condos.  Colour choice will depend on your overall interior design scheme, but make sure you get at least 4” width, as anything smaller looks cheap.

4.  Bathrooms

    Many older Mississauga condos are in dire need of upgrading the bathrooms.  This in definitely one of the places the condo buyers get repulsed at.  Often over time owners have neglected to do basic maintenance so things like mildew form, tiles work gets cracked or falling off, drywall may be bubbling, toilets look as though you are at a truck stop, doors are falling off the hinge, flooring is outdated or dirty.   Upgrading the sinks, lighting, mirrors, fixtures, cabinets, toilets, bathtubs, walk in’s and tile work…basically the whole enchilada.  Buyers know bathrooms are expensive and that’s why they want to see at the very least a well maintained clean and organized bathroom.  What they really want is a modernly upgraded bathroom with materials like granite for the countertops and nice clean lines and neutral colours for the tile work.

5. Kitchens

    Both men and women are at home at the kitchen these days.  So it stands to reason that upgrading this one space which will probably benefit either of the sexes is a good place to put your money.  Large tiling for the floors, hard durable granite for the counter tops, custom cabinetry with easy closing drawers and lighting under the cabinets.  Stainless steel appliance and combination range hood with microwave is smart to keep countertops open.

 


Annual Elementary School Rankings Released for 2011-2012 School Year

 

Where you go to school can have a big impact on the quality of education you receive, a new report on the province’s elementary schools finds.

The Fraser Institute Elementary School Report Card for 2013 suggests that provincial test results vary widely by school, even when external factors such as family income and the gender ratio of students is taken into account.

 

The report, which was released Sunday morning, ranked 2,714 public, Catholic and francophone elementary schools on the basis of provincial test scores in reading, writing and math in Grades 3 and 6.  Download your copy here

 

The report found that in some schools more than 70 per cent of students tested below the provincial average while at the top schools less than five per cent did.

The number one ranked school was Hillmount Public School near McNicoll Avenue and Don Mills Road, where just 0.8 per cent of students tested below the provincial average.

 

“Even when we take into account factors such as the students’ family background—which some believe dictate the degree of academic success that students can enjoy in school—some schools do better than others. This finding confirms the results of research carried out in other countries,” the report states. “Indeed, it will come as no great surprise to experienced parents and educators that the data consistently suggest that what goes on in the schools makes a difference to academic results and that some schools make a greater difference than others.”

Schools within the Toronto District School Board were given an average grade of 6.4 out of 10 in the rankings while schools within the York Region District School Board recieved an average grade of 7.2, which put that school board amongst the highest scoring boards in the province. Schools in Durham, Peel and Halton regions scored an average of 5.8, 6.3 and 6.8 respectively.

 

On average 28.4 per cent of provincial test results studied for the purpose of the rankings were below the provincial average, suggesting that Ontario schools still have a ways to go.

The report urged those schools with low or deteriorating test results to use the data as an "opportunity for improvement,” but at least one school board official says the data doesn’t paint a full picture and is of limited use to schools and parents alike.

 

“To rank the schools in this way gives a false image of our education system. It tends to encourage parents to withdraw their kids from schools that are low and try to enroll them in schools that are high and it can skew the results,” Toronto District School Board Trustee Howard Kaplan told CP24 Sunday morning.

The Fraser Institute report is based on data from the Education Quality and Accountability Office tests given to students across the province each year.

Speaking with CP24, Kaplan said the data was not intended to be used to rank schools.

“The standardized testing was never meant to be used to rank schools and if you look at it on a school-by-school basis it is not entirely accurate,” he said. “Just a few gifted children in Grade 3 or Grade 6 can skew the results up or a few kids with learning disabilities could skew the results down.

 

Some schools making big strides

In addition to providing an overall ranking of schools, the report also provided a list of the 20 fastest improving schools in the province.

That list included six Toronto schools, including number one ranked Stella Maris Catholic School and number two ranked Heron Park Junior Public School.

"Our report shows that all schools are capable of improvement, regardless of the personal or family challenges their students might face. If educators want to help students learn and improve, they should be talking to these schools,” Fraser Institute Director of School Performance Studies Peter Cowley said in a press release. “"By pinpointing the subject areas in which individual schools are improving or declining and how their academic performance compares to that of other Ontario schools over the past five years, our report helps parents and educators prioritize learning challenges in their schools.”

 


Migration To The Suburbs

 

   The reasons to abandon the overcrowded, overpriced, not-so-livable city are beginning to outnumber the reasons to stay. More and more of us are tempted by the 905 and beyond. Screw Jane Jacobs. We’re outta here

By Philip Preville | Photography by Stephanie Noritz

 

The New Suburbanites

 

   Brian Porter and Carrie Low thought they’d hatched the perfect plan to avoid the eight-lane gridlock they faced every week on their drive to the family cottage in the Kawarthas. Porter, a soft-spoken 41-year-old Toronto firefighter, would arrange his work schedule to be home on Friday. He’d pack the car at noon and pick up his daughters, Lily and Amelia, from daycare shortly after lunch. Then, rather than head from their home in the Beach to pick up Low downtown, he’d drive to a strategic pit stop in Oshawa. Low, a slim 41-year-old redhead, works as a lawyer with RBC in the financial district, her days and nights packed, respectively, with meetings and paperwork. Her role in the escape plan was to get off work early and catch the GO train to Oshawa Station. Often, she’d end up working a pressure-packed day until 5 p.m. anyway, leaving Porter and the girls waiting at the station for hours. In the end they never gained that much time—it could still be a challenge to get to the cottage before nightfall. But at least they’d avoided the worst hours on the DVP and the 401.

 

   Porter and Low’s weekend escape strategy was symptomatic of their over-engineered city lives. To juggle all their needs and obligations—two careers, mortgage payments, bills, kid drop-offs and pickups, groceries, meals—they had built a life that resembled a Rube Goldberg machine, and any misstep threatened to collapse the entire contraption. Grandparents were often called in to shuttle the kids to lessons and play dates and birthday parties. “My mother-in-law would phone me at work and ask, ‘Where is Amelia’s dance outfit?’ and my stress level would go through the roof, ” recalls Low. “I’d say, ‘Why are you calling me at work for this? It’s in the house somewhere. Don’t ask me, ask Brian.’ ”

   Porter’s more flexible hours allowed him to handle most of the household duties (he typically works seven 24-hour shifts every four weeks), while Low would often leave the house at 7 a.m. and return 12 hours later. When Porter was on shift Low would pick up the slack, but the moment he returned she’d play catch-up at work. They didn’t realize, at first, that the routine was taking a toll on their marriage. “Sometimes I’d come home from a shift and she’d hand me the baton and head out the door,” Porter recalls. “I’d barely be able to stand up, but I’d feed the girls and send them off on their day. Carrie and I were like two ships passing in the night.” You might even say they were behaving like an already-divorced couple sharing care of the kids. “If we kept it up, I could not be sure that we would still care about one another five or 10 years down the road,” says Low.

   The problem, they decided, was not each other or their careers or their kids, but the city itself—a surprising diagnosis given that they had both grown up in Toronto, happily, in the Beach. They bought their 1,600-square-foot detached home on Benlamond because they wanted to raise their family there, too. “The Beach tends to keep people,” says Porter. “I can walk along Queen East any day of the week and meet friends from high school who run businesses on that street.” But living in the city required too many contortions. They decided to divorce it.

   They spent months searching for a new home, pushing the outer boundaries of the GTA as they went. Low was adamant: “I didn’t want a suburban house.” In the end they moved as far away from Toronto as they possibly could for a couple whose livelihoods still depended upon the city: Cobourg, the Lake Ontario town with its own lovely beach and boardwalk, just this side of Prince Edward County. The only thing separating the gigantic walkout basement of their new, 2,700-square-foot detached house from the Lake Ontario waterfront is a municipal park. And the cottage run is a one-hour scenic drive along quiet secondary highways.