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Enclosed for your evening (or early morning!) read are the UrbanAction reports for Kingly, The One and Panda. Additional UrbanActions will continue to follow up until the holidays.
· Kingly Condos is a joint venture by Allied Properties and RioCan Living at 620 King Street West, west of Portland Street in the Downtown West submarket. The 16-storey under construction tower with 133 units was originally conceived as a purpose-built rental apartment development. Suites range in size from 424 sf to 1,779 sf with end-selling prices from $389,900 to $1.920 million. Parking is an additional $65,000 and one locker is included in the purchase price. Opened to strong broker demand in mid-October, the development is 92% (123 units) sold at an average launch index price of $936 psf.
· The OneCondos will be the tallest mixed use new condominium apartment development launched to-date in the GTA and Canada. The85-storey tower at 1 Bloor Street West at Yonge Street along the Mink Mile in the Bloor-Yorkville submarket has also already started construction. Mizrahi Developments is offering 416 units ranging in size from 591 sf to 6,037 sf with prices between$779,900 and $16,899,900. Parking is offered exclusively through a valet service for $500 per month and one locker is included in the purchase price. The average index price at launch was $1,866 psf with 70% (291 units) of units sold to-date after launching to brokers in late October.
· Panda Condos is situated at 20 Edward Street, west of Yonge Street just north of Yonge-Dundas Square and the Eaton Centre in the Downtown Core submarket. The 30-storey tower on the site of the former World’s Biggest Bookstore from Lifetime Developments will feature 540 units ranging from 356 sf to 1,035 sf. End-selling prices range from $376,900 to $1,264,900 with parking an additional $80,000. The project was launched to brokers at the end of October at an average index price of $1,156 psf. A total of 378 units, or 70%, have been sold.
BROUGHT TO YOU by URBANACTION
Collins Condos News
Toronto is seriously lacking in purpose-built rental, according to Scotiabank Senior Economist Adrienne Warren.
“For a large cohort of millennials establishing their own households, renting may be the only option if they choose to reside in Canada’s highest-cost urban centres,” writes Warren in a recent note. “In Toronto, the vacancy rate for purpose-built rentals fell to 1.4 per cent last year, the lowest level in 15 years.”
The number of Canadian households choosing to rent has risen by almost 80,000 annually between 2011 and 2016, double the speed of the previous five years. Renting is outpacing home ownership for the first time since the 1970s.
According to the note, a 1.0 per cent decrease in the national homeownership rate would require roughly 140,000 new rental units to be added to the market.
Warren writes that while many Canadian cities appear to be keeping up with the rising demand for rental, Toronto is falling behind.
“Purpose-built rental construction in the GTA has picked up since 2014, but has added only marginally to the overall stock of rental units,” she writes. “A total of 2,386 purpose-built rental units were completed last year, or just 3.8 units per 10,000 population.”
According to Urbanation senior VP Shaun Hildebrand, Ontario’s expanded rent control has had a cooling effect on purpose-built rental construction in the GTA.
Part of Ontario’s 16-point Fair Housing Plan announced in April, virtually all rental units in the province are now subject to limits on annual rent increases.
A report commissioned by the Federation of Rental-housing Providers of Ontario found that 20,000 of more than 28,000 planned purpose built rental units in the GTA were under review as a result of the policy change, while more than 1,000 planned purpose-built rental units have been converted to condos since the provincial policy came into effect.
“While the supply pipeline for purpose-built rentals [in the GTA] increased from 10,000 units in early 2016 to almost 30,000 units by mid-2017, after rent control was announced, that levelled out,” Hildebrand said in a recent episode of BuzzBuzzNews’ weekly Facebook live broadcast.
Hildebrand said it was troubling to see a slowing of the purpose-built rental market, given the demand for rental housing in the GTA.
“For the first time in a long time we were seeing the supply pipeline moving in the right direction,” he said. “Now I think we’re going to see very low vacancy rates, a very notable gap between rental demand and supply, and at least a four-to-five per cent annual raise of rents.”
Condo rentals make up 20 per cent of Toronto’s rental stock. Hildebrand says that rent control will likely mean a levelling out of the condo rental market.
“For a condo investor, you’re likely going to see your costs increase at a greater rate than your rent,” he said. “The concern is that you’re going to see investors choosing to sell their units quicker, which could have the effect of levelling out the number of condos available for rent, or even decreasing it.”
This sentiment is echoed by Warren in her note. “The supply of condominium rentals is vulnerable to shifts in investor sentiment,” she writes. “Units can be more easily converted back to owner-occupancy.”
Warren’s bottom line is that Toronto needs more purpose-built rental, and soon.
“For renting to be a viable and affordable option for a greater number of households, a further ramping up in the pace of rental construction is needed,” she writes.
Posted in Toronto Real Estate
Thanks to a rebound in existing home sales in the Greater Toronto Area (GTA), national home sales emerged from a slump in August.
“After four months of declines, August saw signs of life return to Canadian housing markets. This was all a GTA story, which was up 13.6 per cent while activity was largely flat across the rest of the country,” writes Michael Dolega, senior economist at TD Bank, in a statement.
According to the Canadian Real Estate Association’s (CREA) latest data release, published today, Canadian home sales rose 1.3 per cent last month compared to July but are still roughly 14 per cent below the record set in March.
It’s too soon to say if a national rebound has begun, as more time is needed to observe the markets after the Bank of Canada hiked interest rates last week.
For a second time in 2017, the central bank increased its overnight rate, which influences the mortgage market, by 25 basis points. The overnight rate is now one per cent, up from 0.5 per cent earlier this year.
“The picture will become clearer once mortgages that were pre-approved prior to recent interest rate hikes expire,” says Gregory Klump, CREA’s Chief Economist.
It has also been four months since the GTA saw a monthly increase in sales and activity remains well below highs seen earlier this year. Transactions are down 36 per cent from March and 35 per cent year-over-year.
Sales started to slide in the GTA in April after the Ontario government rolled out its Fair Housing Plan, which introduced a 15 per cent foreign-buyer tax for the Greater Golden Horseshoe, a region that includes the GTA.
Similar to Greater Vancouver, where a foreign-buyer tax was implemented in August 2016 to cool its hot market, the GTA saw a slowdown in activity immediately following the introduction of the levy. However, the most recent data indicates the market is on the rebound.
“We’ll wait to see what the coming months bring, but the worst may be behind Toronto following the Ontario policy changes,” says BMO Senior Economist Benjamin Reitzes, in a note about CREA’s release.
Meantime, sales activity in Vancouver continues to remain stable, up 7.3 per cent in August from July and 21.3 per cent from a year ago.
Year-over-year, national sales were down roughly 10 per cent in August and sales declined on an annual basis in about 60 per cent of all local markets, led by the GTA.
For a third straight month, newly listed homes dropped across the nation, falling roughly 4 per cent in August. The decline was primarily driven by a decrease in newly listed homes in the GTA, Hamilton-Burlington, London-St. Thomas, Kitchener-Waterloo and the Fraser Valley.
In August, the national housing market shifted toward a sellers’ market, with the national sales-to-new listings ratio rising to 57 per cent compared to 54 per cent in July.
According to CREA, a ratio between 40 per cent and 60 per cent typically indicates a balanced market and if levels are below and above this range it signals a buyers’ or sellers’ market, respectively.
Last month, the national average price of a home was $472,247, up 3.6 per cent from a year ago.
The MLS Home Price Index (HPI) increased by 11.2 per cent on an annual basis in August, representing further declines in annual gains since April, says CREA.
The increase in national prices was driven by year-over year price upticks in Ontario and BC markets, including the GTA (14.3 per cent), Guelph (19.5 per cent), Greater Vancouver (9.4 per cent) and Victoria (16 per cent).
Even though GTA home prices saw an annual gain last month, BMO’s Reitzes notes this level is still well below the 31 per cent rise seen in April.
As Calgary slowly recovers from its recession, the market remains in good standing, as prices increased 0.8 per cent year-over-year in August.
Reitzes says it’s unclear what’s to come for the Canadian housing market for the remainder of the year, but another rate hike before the end of the year could alter the market’s course.
“The Bank of Canada’s rate hikes should help contain any renewed exuberance, but if things do heat up again, expect policymakers to step in before too long,” says Reitzes.