Condo Condo Condo
(said like Marsha Marsha Marsha from Brady Bunch)
2016 was an big year for Real Estate and for Spring Realty. We had a big change in leadership, creative branding changes (more to come) and we scaled our agent count back to the original 3. We adopted the “Brand Bible” an internal document we created that defines a Spring Agent. The Spring Realty Brand Bible was able t0 put into words what I have been preaching during my decade in Real Estate: Radical Transparency – Local Intelligence – User Friendliness. In short, a Spring Realty agent isn’t an “agent to everyone, everywhere” we know more about the communities we work (local intelligence). Our marketing informs rather than sells (radical transparency). We deliver all of this simply and effectively: before, during and after the transaction (user friendliness).
Ok, so let’s get into Real Estate talk. 2016 was a YUUUUUGE year for Toronto properties. If you read our market reports you’ll see that we only report numbers South of Bloor which give you a clearer picture of what properties cost in Toronto’s urban communities. Most other market reports don’t accurately reflect the realities of our Urban markets.
Prediction – There will be more $2mm sales in most urban communities
Detached Homes in Toronto to start hitting the $2mm mark on the regular as we get deeper into 2017. Right now, you can snag most detached homes in Leslieville, Riverside, Riverdale, Roncy, West Downtown areas for under $2mm. Every media outlet is talking about the elusive detached home but I don’t get the fuss. Why should a the fact that a first time buyer or young person can’t afford a detached home be such an media worthy issue? Step back on the property ladder and work your way up. This isn’t 1950. Toronto is the talk of the World, people. The beautiful thing about Toronto is that we have dozens of industries that keep us afloat: from tech to finance.
Semi Detached Homes
Prediction – $1mm will become entry level for most urban communities
Semi’s were once the “Plan B” for those looking for detached homes. But semi’s have also approached and surpassed the million dollar mark in most communities. You can still get in on a Semi for under a million but most renovated options will cost you $890,000 to over $1.4mm in 2017 depending on the area and quality. We had buyers that couldn’t make a buying decision with budgets around $800K who now completely priced out of the freehold market. We’re not “I told you so” types. It’s tough to get someone to completely trust you when we’re in a position to benefit from the transaction, so we do our best to help clients get out of their own way.
Prediction – Freehold Towns will achieve and surpass $1mm regularly
Ah, the most desired product in Toronto right now. There are a couple types of Towns. The Condo Townhouse and the Freehold Townhouse with a common element. The Condo Town has a higher condo fee because the building envelope is paid for and maintained by the condo corp. Condo Towns are still a bit more affordable. The Freehold Town is one that only has a small common component like a driveway or something. This has a very small fee and up to 20% more expensive than the Condo Town. An entry level Town (two bed around 1000sqft) would be approximately $700K (some older ones less) but if you’re in the market for a Townhouse in 2017 you’ll be paying $700-$1.2mm. Depending on the type.
Condos aka Apartments
Prediction – Some of the most desirable family size suites will achieve $800-900/sqft
2017 is without a doubt going to be the year of the Toronto Condo. From pre-construction to resale this sector is going to blow up like the condo boom of the early 2000’s. We’ve seen condo prices increase by nearly $200 per square foot in some cases. In 2015/2016 we could get you most Toronto condos for $550-$620/sqft. Fast forward to Q3/4 2016 and as we head into early 2017 we’re seeing the same product trading at $650-800/sqft even higher in some cases. The condos that are most in demand are family sized units over 900sqft.
Larger condos are going to push the price per square foot limit. We wouldn’t be surprised if $900/sqft became a thing for some condos here in Toronto at 2017 closes out. We’ve got a strong BUY position on condos of all sizes right now for two reasons: 1. They’re usually more affordable for entry level buyers 2. We’re predicting that Condos will appreciate most aggressively in 2017 giving the greatest returns for investors.
Prediction – Two Bedroom and Freehold Rentals will be most in demand.
As folks get completely priced out of the market they’ll turn to rentals. Also, buyers will wait longer to buy and stay as renters longer putting even more pressure on rental properties. One of the best investments right now is a multi unit rental property. We’ve seen rental prices increase by up to 30% in some cases. One bedroom rentals will be $1,700 regularly, two bedrooms $2,700-3,000 and freehold 3 bed houses for $3,500-4000 regularly. We’ll see in increase in “apartment sharing” using facebook groups like BunzHomeZone to find roomies to be able to afford nicer rentals. 30% of our transactions at Spring were representing Tenants this year and we expect that to increase in 2017.
That’s it, folks! Not great news for those not yet in the market but there are still opportunities available for the optimists of the World or Generation O as I like to refer to them. You an complain about how expensive Toronto is getting but that serves no purpose no benefit no good. We’re not just getting expensive for no reason. Toronto is the talk of the World and people want to live here. The Toronto Real Estate landscape has changed forever so you can choose to jump in (a few steps lower on the property ladder if need be) or not. Detached homes will never be “affordable” again. Semi’s will soon follow but there will always be some property type that is within reach for you and that’s where you start. At least, that’s where to optimists starts. That’s where I started.