By Michel R\u00e9my<\/p>\n
The results of decisions made by Ontario provincial ministers in 2005 when they decided to intensify housing in Toronto\u2019s downtown core are only becoming visible now.<\/p>\n
\u201cThe Growth Plan for the GTA is intensification, which means taking a grow-up-not-out approach to development. Everyone can see the growth in what we\u2019re shifting to through high rise development but the problem is no one ever really talks about the decline in low rise development and what we are shifting away from,\u201d says George Carras, the president of RealNet Canada Inc. \u201cA proper understanding of the condominium market requires the context within the total housing market. A decade ago consumer new home choices were three low rise options for every one high-rise, today it\u2019s a total inverse.<\/p>\n
As low rise homes became scarce, their prices increased and they are continuing to increase by 14.5% a year now. The prices of condos have decreased slightly but mostly because the unit sizes have decreased.<\/p>\n
\u201cThe trend started when HST was introduced in 2009 and builders had to keep costs down,\u201d said Carras. \u201cThe index size of a new condo is about 120 sq. ft. smaller today than it was in 2009 \u2013 that\u2019s a ten by twelve room that has been removed from the average condo today vs three years ago\u201d<\/p>\n
As a result of this shift in housing form, the price gap between a new condo and a new low-rise home has more than doubled from $78,000 a few years ago to $177,000 today.<\/p>\n
For more natural and geographic reasons, Vancouver has been experiencing the impacts of intensification for over two decade and in both markets, condominium development has filled the need for rental housing created by the lack of purpose-built rental units.<\/p>\n
\u201cWhen you compare downtown Vancouver and downtown Toronto from an end price perspective, and you factor in parking, those markets are now similarly priced in terms of price per square foot,\u201d says Carras. \u201cThe difference is the land price. The land price in Vancouver is approximately double that of Toronto. In Vancouver, the price declines that have been coming out recently are not borne out of the condo space, they are borne out of the rapid rise in the low density resale homes. That rapid run up is now retreating. The condo market in general has been running stable.\u201d<\/p>\n
Note: This article appeared on p 68 of Canada’s Leading Real Estate Forum Magazine, Toronto, Winter 2012<\/p>\n","protected":false},"excerpt":{"rendered":"
The Shift Hits the Fan in the housing market By Michel R\u00e9my The results of decisions made by Ontario provincial ministers in 2005 when they decided to intensify housing in Toronto\u2019s downtown core are only becoming visible now. \u201cThe Growth Plan for the GTA is intensification, which means taking a grow-up-not-out approach to development. Everyone […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wp_convertkit_post_meta":{"form":"-1","landing_page":"0","tag":"0","restrict_content":"0"},"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_hide_featured_image":false,"_jetpack_featured_image_duplicate_dismissed":0,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[5],"tags":[],"class_list":["post-1936","post","type-post","status-publish","format-standard","hentry","category-cultural-identity","post-wrapper","thrv_wrapper"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p2buQs-ve","jetpack-related-posts":[{"id":1874,"url":"https:\/\/traceyarial.com\/blog\/en\/olympicvillage\/","url_meta":{"origin":1936,"position":0},"title":"Olympic Village Purchase Demonstrates High Performing Asset Class","author":"Tracey Arial","date":"November 29, 2012","format":false,"excerpt":"Trading at record low cap rates means stability and income stream predictability When Canadian\u00a0Apartment Properties Real Estate Investment Trust (CAPREIT) finalized their purchase of the 980-apartment Olympic Village in Montreal on November 1, 2012, the company achieved their goal to become more geographically-diversified across Canada, while ensuring stable, predictable rental\u2026","rel":"","context":"In "Hundred Mile Circle"","block_context":{"text":"Hundred Mile Circle","link":"https:\/\/traceyarial.com\/blog\/en\/category\/canada\/hundredmilecircle\/"},"img":{"alt_text":"Olympic Village","src":"https:\/\/i0.wp.com\/traceyarial.com\/blog\/wp-content\/uploads\/OlympicVillage.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1882,"url":"https:\/\/traceyarial.com\/blog\/en\/mid-size-market-opportunities\/","url_meta":{"origin":1936,"position":1},"title":"Mid-size Market Opportunities via growth, creativity and services","author":"Tracey Arial","date":"November 29, 2012","format":false,"excerpt":"Many of the assets in our market have potential to add more density, as planners become more open to the infilling concept says Manitoban real estate expert Mid-size markets in the west are growing briskly, says Sandy Shindleman, president of Shindico Group, a commercial-based real estate investor based in Winnipeg.\u2026","rel":"","context":"In "Canada"","block_context":{"text":"Canada","link":"https:\/\/traceyarial.com\/blog\/en\/category\/canada\/"},"img":{"alt_text":"Shindleman headshot","src":"https:\/\/i0.wp.com\/traceyarial.com\/blog\/wp-content\/uploads\/Shindleman.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":15675,"url":"https:\/\/traceyarial.com\/blog\/en\/commercial_real-estate\/","url_meta":{"origin":1936,"position":2},"title":"Canadian Commerical Real Estate Mostly Healthy","author":"Tracey Arial","date":"May 12, 2014","format":false,"excerpt":"Other than potential saturations in the office markets in Toronto, Edmonton and perhaps Montreal, the fundamentals for commercial real estate in Canada are strong. So says Michael Dal Bello, an investment partner at Pritzker Group Private Capital. The fundamentals are very good in Edmonton, in terms of industrial, retail, and\u2026","rel":"","context":"In "Canada"","block_context":{"text":"Canada","link":"https:\/\/traceyarial.com\/blog\/en\/category\/canada\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1592,"url":"https:\/\/traceyarial.com\/blog\/en\/mark_renzoni\/","url_meta":{"origin":1936,"position":3},"title":"Steady as she goes","author":"Tracey Arial","date":"May 7, 2013","format":false,"excerpt":"Stable markets, continued low interest rates and strong capital markets will offset possible slow-downs in residential construction and jobs in the coming year for a cautiously optimistic overlook overall. \u201cThere\u2019s going to be a steady real estate market for all of Canada, especially for the major markets of Vancouver, Calgary\u2026","rel":"","context":"In "Canada"","block_context":{"text":"Canada","link":"https:\/\/traceyarial.com\/blog\/en\/category\/canada\/"},"img":{"alt_text":"COO of CBRE","src":"https:\/\/i0.wp.com\/traceyarial.com\/blog\/wp-content\/uploads\/Renzoni.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":15680,"url":"https:\/\/traceyarial.com\/blog\/en\/canadian-reits-due-recover\/","url_meta":{"origin":1936,"position":4},"title":"Canadian REITs Due to Recover","author":"Tracey Arial","date":"May 19, 2014","format":false,"excerpt":"Real Estate Investment Trusts should recover some of their capital in the second half of 2014 as investors realize current market prices account for rising interest rates. So says a banker from the only Canadian company that led a REIT purchase deal in the early part of 2014. Recovery in\u2026","rel":"","context":"In "Canada"","block_context":{"text":"Canada","link":"https:\/\/traceyarial.com\/blog\/en\/category\/canada\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1864,"url":"https:\/\/traceyarial.com\/blog\/en\/midmarket-canada-investment\/","url_meta":{"origin":1936,"position":5},"title":"Midmarket Acquisitions Offer Stable, Balanced Growth","author":"Tracey Arial","date":"November 29, 2012","format":false,"excerpt":"The top five midmarket cities in Atlantic Canada show growth rates above the national average, says Don Clow, president and CEO of Crombie REIT, the company that owns St. John\u2019s largest shopping centre and other commercial properties across Canada. Atlantic Canada mid-markets also tend to be low risk, he says.\u2026","rel":"","context":"In "Canada"","block_context":{"text":"Canada","link":"https:\/\/traceyarial.com\/blog\/en\/category\/canada\/"},"img":{"alt_text":"ClowHeadshot","src":"https:\/\/i0.wp.com\/traceyarial.com\/blog\/wp-content\/uploads\/DonClow.jpg?resize=350%2C200","width":350,"height":200},"classes":[]}],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/traceyarial.com\/blog\/wp-json\/wp\/v2\/posts\/1936","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/traceyarial.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/traceyarial.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/traceyarial.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/traceyarial.com\/blog\/wp-json\/wp\/v2\/comments?post=1936"}],"version-history":[{"count":3,"href":"https:\/\/traceyarial.com\/blog\/wp-json\/wp\/v2\/posts\/1936\/revisions"}],"predecessor-version":[{"id":1939,"href":"https:\/\/traceyarial.com\/blog\/wp-json\/wp\/v2\/posts\/1936\/revisions\/1939"}],"wp:attachment":[{"href":"https:\/\/traceyarial.com\/blog\/wp-json\/wp\/v2\/media?parent=1936"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/traceyarial.com\/blog\/wp-json\/wp\/v2\/categories?post=1936"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/traceyarial.com\/blog\/wp-json\/wp\/v2\/tags?post=1936"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}