Why Does Toronto Have *So Many* Proposed Buildings?

[Steely Dan]

Originally Posted by Nite

Average cost of a Highrise Condo in Toronto $580,000 (1 bedroom)
Average cost of a Highrise Condo in Toronto $690,000 (2 bedrooms)
Average cost of a Highrise Condo in Toronto $570,000 (3 bedrooms)

How is the average cost of a 3 bedroom less than a one bedroom?

That seems completely counterintuitive to me.

[Nite]

Originally Posted by Steely Dan

How is the average cost of a 3 bedroom less than a one bedroom?

That seems completely counterintuitive to me.

location and maintenance cost. the maintenane cost of an older 3 bedroom condo could be $1,000 a month compared to a brand new 2 bedroom condo at around $200 a month.
also i suspect a large portion of the 3 bedroom condos are further out in less desirable neighbourhoods compared to the stock of 2 bedroom condos

[Acajack]

Originally Posted by shappy

Pardon the nitpick but the Annex would still be considered among the high-end neighbourhoods. More realistic lower end would look more like this.

Thanks you're right.

Though I notice that on this thread we're playing a bit fast and loose with the definition of SFH. One that is not necessarily synonymous with "detached".

[Doady]

I think to get the full picture of what is going on in Toronto, we can't look at just Toronto, there are also hundreds of high-rises in Mississauga, Brampton, Richmond Hill, Vaughan, Markham, Oakville. And most of those buildings were built in the 60s, 70s, and 80s. Like, according to SSP, 29 of Mississauga's 300 high-rises were built in the 60s, 90 were built in the 70s, 59 were built in the 80s. There are more old buildings than new ones.

So a culture of high-rise living has been a big part of not just Toronto but also its suburbs for many decades, almost the entire post-war era. Places like Thorncliffe Park and Flemingdon Park began construction the 50s. To treat high-rise construction as something new and exclusive Toronto is not seeing the big picture. To treat it as merely the consequence of immigration and foreign investment is just ignorant.

[Acajack]

Originally Posted by Crawford

I think the SFH question speaks to some of the transnational differences, and why it's difficult for some Americans to understand the Canadian demand factors.

In NY, almost all highrise construction in prime neighborhoods is family-oriented, and has been for decades. The buildings with hundreds of units don't pencil out anymore. There are new buildings with hundreds of smaller units, for the 20- and 30-something single professionals, but along the Jersey side, and in Queens, not really in Manhattan. Manhattan buildings tend to be 2-5 bedrooms, and often really big (3,000 sq. ft.+) spaces, especially in the traditional residential neighborhoods. Developers also find it cheaper to overestimate family demand, because it's cheaper to split up big units than to combine smaller units.
.

This is actually a very European trait. A floor or several floors in a large building that is occupied by a single family and is considered their "house".

You don't really have that anywhere in Canada. Not even in Montreal which is the oldest big city and somewhere you might expect that housing typology to have developed.

In Montreal you do have tons of buildings like these where the footprint of each floor is decent-sized, and you might have one family with kids occupying each floor. In some cases a family might reconfigure it and take over two floors for themselves and rent out the other. Or even take all three floors for themselves.

https://www.google.com/maps/@45.5511...7i16384!8i8192

But enough about Montreal. This thread is about Toronto.

[suburbanite]

Originally Posted by Steely Dan

How is the average cost of a 3 bedroom less than a one bedroom?

That seems completely counterintuitive to me.

Not sure how accurate the price is, but my guess would be no one builds 3 bedrooms now (which is a problem in if itself) so it's all older product.

[hipster duck]

Originally Posted by Acajack

In Montreal you do have tons of buildings like these where the footprint of each floor is decent-sized, and you might have one family with kids occupying each floor. In some cases a family might reconfigure it and take over two floors for themselves and rent out the other. Or even take all three floors for themselves.

https://www.google.com/maps/@45.5511...7i16384!8i8192

But enough about Montreal. This thread is about Toronto.

How often does that happen though? Buying a whole triplex costs about $1.2 million and then you have your family roaming around 3 separate apartments with things like superfluous crappy rental kitchens and no internal staircases.

For that money you can buy a nicely-renovated townhouse.

[Acajack]

Originally Posted by hipster duck

How often does that happen though? Buying a whole triplex costs about $1.2 million and then you have your family roaming around 3 separate apartments with things like superfluous crappy rental kitchens and no internal staircases.

For that money you can buy a nicely-renovated townhouse.

I gather it's more common than one might think. (Though far from the majority of them, of course.)

[Acajack]

Originally Posted by JManc

You guys are just polite Americans with healthcare who eat french fries with lumpy gravy.

Poutine isn't even "theirs"!

[Steely Dan]

Originally Posted by hipster duck

How often does that happen though? Buying a whole triplex costs about $1.2 million and then you have your family roaming around 3 separate apartments with things like superfluous crappy rental kitchens and no internal staircases.

deconverting 2-flats into SFHs has definitely become a thing among the wealthy in chicago's trendier neighborhoods. it's actually becoming a problem because the removal of "missing middle" housing makes our ever-increasing societal stratification that much worse. i wish there was a way for the city to impose extremely onerous fees for housing density reduction to help discourage the practice, particularly in transit rich areas.

but it's not nearly as common of a trend with 3-flats (the chicago equivalent of a montreal triplex).

[Nite]

Originally Posted by suburbanite

Not sure how accurate the price is, but my guess would be no one builds 3 bedrooms now (which is a problem in if itself) so it's all older product.

there is very little demand for new 3 bedroom condo's that's why very few gets built. developer will always build if there is a demand for something.

[JManc]

Originally Posted by Acajack

Poutine isn't even "theirs"!

Shots fired.

As for you guys...Québécois are basically French who are good at hockey.

[MonkeyRonin]

Originally Posted by Nite

there is very little demand for new 3 bedroom condo's that's why very few gets built. developer will always build if there is a demand for something.

As mentioned earlier, because the market is so heavily geared towards investors and not the end users, it's not necessarily a true reflection of demand. Easier for the developers to build a bunch of 1-bedroom & studio units that'll just end up being Airbnb'ed and then sell the rare 3-bedrooms at marked up prices.

Given that single family houses are priced out of reach for most families, and that new 3-bedroom units rarely go for under a million as well, I'd assume that there is a fair bit more demand than is being met.

[Acajack]

Originally Posted by JManc

Shots fired.

As for you guys...Québécois are basically French who are good at hockey.

LOL. I have been insulted with far worse!

[Nite]

Originally Posted by MonkeyRonin

As mentioned earlier, because the market is so heavily geared towards investors and not the end users, it's not necessarily a true reflection of demand. Easier for the developers to build a bunch of 1-bedroom & studio units that'll just end up being Airbnb'ed and then sell the rare 3-bedrooms at marked up prices.

Given that single family houses are priced out of reach for most families, and that new 3-bedroom units rarely go for under a million as well, I'd assume that there is a fair bit more demand than is being met.

Ask yourself this, why would investors not want to invest in 3 bedroom units?
the answer is that they are harder to sell because their is little demand for them


developers don want to build 3 bedroom condos because their is no demand for those.
investor don't buy 3 bedroom condos because there is no demand for those.
3 bedroom condos don't get built because there is no demand for those

[MonkeyRonin]

Originally Posted by Nite

Ask yourself this, why would investors not want to invest in 3 bedroom units?
the answer is that they are harder to sell because their is little demand for them


developers don want to build 3 bedroom condos because their is no demand for those.
investor don't buy 3 bedroom condos because there is no demand for those.
3 bedroom condos don't get built because there is no demand for those

Most investors are amateurs with limited assets - it's easier (and more profitable for them) to buy a studio for say, $400,000, Airbnb it for a while, and then sell it for $500,000 a few years later than it would be to buy a $1.2 million 3-bedroom and then turn it around for $1.3 million.

I challenge you to find me a 3-bedroom condo for sale in inner Toronto right for under a million - if there were truly no demand then why would they command such a premium? This in turn is also why so few people will be willing to buy them (you could buy a 3-bedroom house for that price).

[JManc]

Originally Posted by MonkeyRonin

Most investors are amateurs with limited assets - it's easier (and more profitable for them) to buy a studio for say, $400,000, Airbnb it for a while, and then sell it for $500,000 a few years later than it would be to buy a $1.2 million 3-bedroom and then turn it around for $1.3 million.

I challenge you to find me a 3-bedroom condo for sale in inner Toronto right for under a million - if there were truly no demand then why would they command such a premium? This in turn is also why so few people will be willing to buy them (you could buy a 3-bedroom house for that price).

Wouldn't an older three bedroom with higher fees be less attractive to investors even if there was still a demand. Perhaps less interest from equity firms and more from affluent families who plan on sticking around a while?

[PFloyd]

Here is a sample of 3BR units in relatively newer buildings (and a couple of older ones also) on sale right now; as I said before, they ain't cheap. Take note of the monthly maintenance (US assessment) fees:

https://www.realtor.ca/real-estate/2...ale-moore-park

https://www.realtor.ca/real-estate/2...-toronto-annex

https://www.realtor.ca/real-estate/2...-toronto-annex

https://www.realtor.ca/real-estate/2...-toronto-annex

https://www.realtor.ca/real-estate/2...-toronto-annex

https://www.realtor.ca/real-estate/2...-toronto-annex

https://www.realtor.ca/real-estate/2...ale-moore-park

https://www.realtor.ca/real-estate/2...-toronto-annex

https://www.realtor.ca/real-estate/2...communities-c8

This one is an older Co-Op in Rosedale:
https://www.realtor.ca/real-estate/2...ale-moore-park

https://www.realtor.ca/real-estate/2...ale-moore-park

https://www.realtor.ca/real-estate/2...treet-corridor

https://www.realtor.ca/real-estate/2...-toronto-annex

https://www.realtor.ca/real-estate/2...communities-c1

https://www.realtor.ca/real-estate/2...treet-corridor


As I have been telling friends for quite a while, one of the things I criticize the most about the highrise boom of the last 20+ years, is the lack of sufficient family sized units. But I also understand that supply follows the demand of the market we are in. Obviously, this context, economic, social, urban, shapes what developers build. The only way to change it is for the City to force them to do it. But if they build it, would they come?

Contrary to the island of Manhattan, where there are practically no single family detached homes, here in the 416 area, there are many.

Yeah, and I obviously agree with the view that investors only care/are able to purchase the cheaper units, which are the easiest to offload when the time comes...

[begratto]

Originally Posted by hipster duck

How often does that happen though? Buying a whole triplex costs about $1.2 million and then you have your family roaming around 3 separate apartments with things like superfluous crappy rental kitchens and no internal staircases.

For that money you can buy a nicely-renovated townhouse.

It's quite common. I live in a converted plex myself, in a 1920's streetcar suburb. We joined 3 separate appartments into one - there was one bigger one on the main floor, and two smaller ones on the second floor. We had to build an interior staircase, remove the extra kitchens and convert them into bedrooms, basically strip down everything and build a new house from the inside. So it's a new house in an old shell. We know the previous owners of the house : they were telling us that in the 1960's, 16 people lived in the same space now occupied by my family of 5.

A few of our friends did something similar. But what we have in common is that we bought our plexes 15 years ago, when prices were much more affordable - they have since tripled/quadrupled. It's (was?) a great way to have almost all the benefits of a suburban home, but in a central neighbourhood.

[Innsertnamehere]

Originally Posted by Northern Light

Disproportionately, the HNW set live in SFH housing. Typically in Rosedale, Moore Park, Forest Hill, Lawrence Park, High Park, the Annex and a smattering in the Beach area. (not to omit the Bridle Path area, home to Drake, amongst others, near Lawrence/Bayview)

But there are certainly luxury hirise buildings that have singles/couples and small families living in them.

The Mayor, for instance, is a very affluent individual and he and his wife living in a Condo on Bloor, right by the University.

But they are well past the point of the kids being at home; and at the stage of grandkids coming by.

One could name several other high end buildings, but most residents will be singles/couples with a small number who have younger, typically small families.

The mayor (John Tory) lives in a 5,000sf condo with 2,000sf terrace from my understanding. He combined two penthouse units from my understanding.

They live in a condo, but it's very unusual for someone like that with a very high net worth. You do get some HNW households living in large condos in Yorkville, but the vast majority are in SFHs along the Yonge St corridor.

Investors avoid 3 bed units since condos are usually sold on a per square foot basis, but rented on a # of bedrooms basis. The rent to square footage ratio is higher on smaller properties, making the return greater.

The investor special is small 1 bed units. enough to qualify as a 1 bed unit for renters searching, but small enough to have lower rents than other units.