Condo trouble in Toronto
By Kate Lunau - Wednesday, January 26, 2011 - 4 Comments
Housing starts are way down
Last week, Canada Mortgage and Housing Corporation reported that the annual rate of housing starts was 171,500 units in December, down from 198,200 the month before—roughly a 13 per cent drop. “It was really the apartment sector that dragged the numbers lower,” says Ted Tsiakopoulos, CMHC’s Ontario regional economist. And in November, building permits dropped 11.2 per cent, according to Statistics Canada. A drop in multi-family dwellings in B.C. was cited as one of the main reasons.
If condo developments are declining in Ontario and in B.C., though, Toronto is a puzzling outlier: it seems like there’s a new condo going up on every block. “The trillion-dollar question is, who’s buying them all?” says Derek Holt, vice-president at Scotia Capital Economics. “The stock of unsold condos overhanging the marketplace is at its highest since the 1990s.” According to George Carras, president of the real estate information firm RealNet Canada Inc., 19,710 new condo units had been sold in the Greater Toronto Area as of Nov. 30, with 15,727 remaining in 2010’s active inventory.
Stephen Dupuis, president and CEO of the Building Industry and Land Development Association of Toronto, calls the city “the envy of North America.” Toronto’s population is growing, he notes, and “our real estate market is strong by historical standards.” Foreign buyers have taken note, buying up condos to rent them out, he says. But housing starts in the condo market are notoriously volatile, Carras says: developers filing for building permits on a 300-unit project, for example, file permits for all 300 units, which creates major statistical variations from one month to the next. Both he and Dupuis say sales are a better indicator and, according to Carras, October was the second-highest month of new condo sales in the GTA since 1998.
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Attack of the condo craters
By Jason Kirby - Wednesday, March 4, 2009 at 5:30 PM - 17 Comments
If projects fail, will our cities be left with huge holes to fill?
Update: In a story published in this week’s issue of Maclean’s (and on the Web below) we look at the plague of condo holes afflicting Canada’s once-hot real estate markets. With several construction projects halted, and rumours flying around many others, we thought we’d found a bright spot with Vancouver’s Ritz Carlton condominium development. The project was put on hold last year. Then earlier this month several backhoes returned to the site and resumed moving dirt. The developer didn’t return calls confirming whether the Ritz was back on or not, but we decided to give them the benefit of the doubt. We did so too soon. On Wednesday the Vancouver Sun reported the luxury condo project has officially been killed.It’s worth noting the location of the Ritz project is a particularly sensitive one for Vancouver’s bruised real estate ego. When the last bubble burst in the 1990s, a half-built concrete tower was abandoned there. For years it was an ugly reminder of the excesses the city’s real estate developers, investors and buyers are prone to. Now a six storey-deep hole in the exact same spot could prove to be an eyesore for months, even years, to come.
