So in the Toy Factory Lofts, the 120-plus-year-old, character-laden luxury condominium building featuring original lofts in the heart of Toronto’s Liberty Village, an 844 square foot, listed for $799,000, just sold for $885,000, with multiple offers after less than a week on market – the first viewing within 20 minutes of listing.
You can look at that as the popularity of that particular condo project, including a focus on the maintenance fees there, which rank among the most inexpensive anywhere. But that sale is also consistent with real estate market reports for the country. In their 2019 year-end Canadians luxury real estate market report, focusing on homes over $1 million in the country’s primary markets, Engel & Völkers pointed to several factors driving a projected four per cent uptick in resale prices across the country for 2020: including a record population growth of 560,000 nationally last year, and a decrease of the unemployment rate down to 5.2 per cent, the lowest level in 15 years. Canada added 417,000 jobs from November 2018 to November 2019, the largest increase over the past ten years.
In a year-to-year study released in January, Sotheby’s International Realty Canada reported that the sale of homes across the Greater Toronto Area for over $1 million rose 23 per cent.
The impact of the coronavirus (COVID-19) on Canada’s luxury real estate market is another issue entirely – especially cuts in interest rates, and the impact on the percentage of Chinese investors, especially in markets like Vancouver and Toronto, where they have been most prevalent. Would any decreases in fixed and variable rates push people who may have been sitting on the sidelines into the market out of fear they are missing out?
We’re not sure yet if Engel & Völkers is adjusting the numbers in their market study or not. The Real Estate Investment Network released a report in February saying the Canadian real estate market would see an immediate cool down because of factors like a decline in tourism, slowdown in business sales and disruption in the industry supply chain, but there would be a long-term lift, pointing to:
- Temporary, small decrease in GDP growth
- Increase immigration
- Increased foreign capital
- Increased demand
- Leading to increased property values
All of those present a buying opportunity, especially for those investors who can look beyond sensationalized news headlines and any ensuing panic, according to REIN.
Says Don R. Campbell, Senior Real Estate Analyst for REIN: “We hope the outbreak is contained, limiting both health and economic impacts. When the situation normalizes, one can expect an influx of Chinese immigrants and capital to Canada resulting in increased demand for real estate.”
We will see. People are not going to stop buying real estate because of the coronavirus outbreak, so it’s still important to focus on other factors impacting what has been a strong market. According to the Engel & Völkers study, Toronto really found its footing in the second part of 2019, bolstering its position as a seller’s market. Iran and Russia were also referenced as the largest international buyer segments for Toronto. According to that study, Engel & Völkers expects city prices to increase at a quicker pace of 4 to 7 per cent and suburban prices to rise by 3 to 5 per cent within the Oakville market, a suburb of Toronto.
Walkability has always been one of those drivers pushing people to buy in Toronto, for example. In terms of walkability for 2020, Toronto ranks 29th among Canada, U.S. and Australia cities with a population of at least 200,000 according to Walk Score, a popular source of information from the real estate brokerage Redfin for homebuyers considering buying property in the downtown core of cities, a study rating the walkability of cities, neighbourhoods and addresses. Toronto had a Walk Score rating of 61.0, third in Canada (New York was No. 1, with 88.3, Vancouver was at 79.8, fifth on the list, and Montreal was 65.4, 22nd overall). A score of 70 to 89 points means most errands can be accomplished on foot and a score of 50 to 69 indicates that some errands can be completed on foot.
Walkability is buried deep in the basket of 24/7 lifestyle factors that more and more investors across different demographics are opting for – no more commuting, clusters of restaurants, gyms, coffee shops, parks, entertainment options and retail. It’s a big motivating factor to have every possible amenity one can think of just outside the front door of the condo.
Investors will pay a premium to live in walkable neighbourhoods, often downsizing from larger single family homes for luxury condo living, where a new lifestyle is at your feet. The One, the 85-storey luxury condo project from Mizrahi Developments currently under construction on the southwest corner of Bloor St. and Yonge St. in Toronto, is in the early stages of construction, and Mizrahi president Sam Mizrahi says walkability has been a big factor in sales there.
“When talking about the type of building and the quality of it, I expect this will be the first of many like this to come, signalling a new architectural landscape,” Mizrahi told the Globe and Mail. “These buildings will all be walkable – come out the front door with access to everything. That’s what urban living is about. It’s about the conveniences of not having to take your car, or park. You can walk anywhere. I think luxury is defined by freedom – not being burdened by having to drive to take your car somewhere. From a health standpoint, and lifestyle standpoint, more and more people are subscribing to this – to really live in the heart of a city, to really feel its soul.”
Look at what is happening on Bloor St., and all the luxury retail that is popping up, and into Yorkville Village. Toronto, a city of neighbourhoods, is not New York or Paris yet, in terms of walkability, but Toronto is well on track.
Other must-have priorities for luxury buyers, according to the Engel & Völkers study:
- Location (18.9%)
- Interior Finish (18.1%)
- Property Type (17.4%)
- Size (14.6%)
- Price (13.9%)
- Views (10.7%)
- Lot Size (6.4%)