Outlook 2016: Condo Activity Moves Back Downtown

The GTA saw just over 4,000 new condo units sold in the third quarter of 2015, down 13 percent fr

The GTA saw just over 4,000 new condo units sold in the third quarter of 2015, down 13 percent from a year earlier but directly in line with the region’s 10-year average, according to Urbanation Inc.

And if the market research firm’s projections hold, the GTA will notch about 19,000 condo sales total for 2015.

That’s among the best condo sales years on record, Urbanation market research director Pauline Lierman tells Epoch Times, and one that was notable for the geographic diversity of the launches.

“Unlike in 2014, where there was a huge surge in Yonge Street-oriented projects, we had a lot more of a spreading out of launches in 2015,” she says, citing developments in the Bayview Village area, and in the north-midtown/Yonge and Eglinton node, “a busy hotspot” as Crosstown LRT construction progresses.

With 2016 upon us, however, Lierman expects the condo market momentum to shift back downtown. Which is key, given unsold inventory in the city centre is at its lowest point in more than four years. “It’s down to about 7,200 units,” she says.

Major downtown projects to watch include The One, Mizrahi Developments’ proposed 80-storey tower at Yonge and Bloor; and Mirvish + Gehry Toronto, Projectore’s redevelopment of the Princess of Wales theatre site. Sales at both are anticipated to launch in 2016.

Lierman’s also got her eye on 88 Queen, the first phase of an extensive project being launched this month by St. Thomas Developments that will finally make something of a mammoth parking lot bordered by Queen, Shuter, Dalhousie, and Mutual streets.

“It’s going to be one of the bigger projects of the year,” Lierman notes.

There’ll be action along the Bay Street corridor in 2016, too, where Lifetime Developments is launching 10 St Mary Street Condos, a tower proposed at 42 storeys with 255 units. Lifetime will also be moving forward on redevelopment of the former World’s Biggest Bookstore site, with plans for a 35-storey tower with 630 suites and ground-level retail.

Just because downtown will be condo central in 2016 doesn’t mean the suburbs will be sleepy. There’ll be continuing development around burgeoning Vaughan Metropolitan Centre, where the impending arrival of the TTC subway line extension has spurred a plethora of projects.

Liberty Development is launching Cosmos Condos, a mixed-use community with 1,300 residential units on Highway 7 and Maplecrete Rd. Also on Highway 7 (at Jane St), Plaza Corp in February will unveil The Met, a 35-storey tower with 531 units. Both projects will be big boons for York University, whose population is vastly under-served when it comes to accommodation options.

Speaking of student housing, farther afield in Oshawa, Building Capital and Podium Developments are set to launch the first condo the Shwa’s seen in a long time: University Studios, an eight-storey, 300-unit building adjacent to the campuses of Durham College and the University of Ontario Institute of Technology.

“Student housing is a big, ongoing trend,” says Lierman. “We’re seeing a number of companies doing this now.”

There are projects underway in Ottawa, Kingston, London, Guelph, and Waterloo, as well as downtown Toronto, where Knightstone Capital Management is building University Place, a 25-storey tower at College and Spadina for 900 students (University of Toronto is a partner). In Scarborough, the firm is joint-venturing with Centennial College on a student housing complex that includes a culinary arts centre.

Lierman recalls students of yesteryear would typically take space in divided-up old houses that were close to campus. Today’s students, though, want “nicer things… they don’t tend to rough it like we used to.” (Besides, she points out, many old triplexes are now being reclaimed as single-family homes and sold off at a premium.)

On the other side of the lake, watch for growing momentum along the Burlington waterfront in 2016. Adi Developments is launching Nautique Lakefront Residences, its fourth project in the city. Other waterfront developments include New Horizon Homes’ Bridgewater Residences on the Lake, Landform Development Group’s The Saxony Condos, and Roman Home Builders’ Romance by the Lake Condos.

“Burlington’s waterfront has come into its own,” says Lierman. “It’s been redone with a vibrant retail streetscape, and premiums are being made on these buildings.”

Among other trends to watch for in 2016: purpose-built rental apartment projects, which are at the highest point in decades, with 6,500 units under construction in the GTA in Q3, according to Urbanation. New developments include Rockport Group’s Montgomery Square on Yonge just north of Eglinton; Shiplake Properties’ Balliol Park Urban Rentals at 99 Davisville Ave., and a 25-storey rental building that Daniels Corp is building at its Erin Mills master-planned community, in partnership with Sun Life Financial.

“We’ve definitely been seeing an incremental increase in purpose-built rental,” says Lierman. “On our end, there’s been a lot more developers trying to determine if a site can work financially or not.”

Urbanation is also forecasting an increase in infill neighbourhood development, especially with six-storey woodframe buildings now allowed under new provincial rules (previously the limit was four floors).

So far, two six-storey woodframe projects are planned: Cabin Toronto, by Curated Properties, on Dovercourt Road; and Heartwood the Beach, by Fieldgate Urban, at Queen and Woodbine.

“These are smaller-scale buildings with larger units,” Lierman points out. “They’re tapping into a market where not only are there downsizers looking to maximize the equity in their homes right now, but also people who can’t get into the single-family market and are looking for a slightly larger unit.

“It’s a growing trend,” she adds. “It’s just a matter of finding properties for it—and making the financials work.”

Ryan Starr is a Toronto-based freelance journalist.

Source: The Epoch Times