08 Jan Building a livable city
For Brian Brown, 2012 started off with a smashing success. The vice-president of Lifetime Developments presided over the launch of INDX, a 54-storey tower on Temparance St. that became the top-selling condo project in the first quarter of 2012, with an eye-popping 642 units sold. The impressive performance of INDX—which Lifetime is developing in partnership with CentreCourt Developments— had a lot to do with it being a unique offering for that neighbourhood.
“It filled a void,” Brown says. “It’s the only pure residential building in an area of all office towers. So it really catered to the people who worked in the Financial District.” Lifetime went on to sell out INDX — around 1,000 units — by the end of the year. All in all a pretty good year for the Toronto builder, considering the difficulties the local development industry faced as the condo market came back down to earth.
“The biggest challenges came as a result of changes to government policy, such as the federal government’s decision to change the mortgage rules in July,” notes Bryan Tuckey, president of the Building, Industry and Land Development Association (BILD). “We saw consumer confidence diminish in the months following that change.” And as it became clear that 2012 new-home sales weren’t keeping pace with a record 2011 — 31,766 homes were sold as of Nov. 30, compared with 44,393 by the same time in 2011, according to RealNet Canada — the ensuing “sky is falling” media coverage only made things worse for developers. Although 2012 condo sales looked weaker on a year-over-year basis — with 18,103 condos sold in the first 11 months of 2012, versus 27,659 in 2011— RealNet says 2012 is actually on pace to be the fourth strongest year on record for condo sales. “The market had been so powerful and so strong for so long that what we’re experiencing right now isn’t a slowdown,” Brown says. “What we’re seeing is a return to normalcy. And normalcy is a good thing. You couldn’t sustain what we had.”
Despite all the negative sentiment swirling around at the end of 2012, there was certainly no evidence of a condo market in crisis when Tridel launched Ten York, a 65-storey glass tower at York and Harbour Sts. The builder sold 532 of the project’s available 600 units within the first two weeks, making it the most successful launch of the fall. “There seems to be an affinity for tall buildings that are architecturally pleasing in triple A locations,” says Jim Ritchie, Tridel’s senior vice-president of sales and marketing. “I think we were able to demonstrate that regardless of market sentiment, if a product comes to the marketplace that people like, they make the buying decision.” Paul Golini echoes that sentiment. Empire Communities’ executive vice-president notes that purchasers were attracted to his company’s latest project, Eau Du Soleil, largely because of its prime location on the Etobicoke waterfront.
By the end of 2012, Empire had sold more than 450 of the 750 available units at Eau Du Soleil. “It speaks to the fact that there are still buyers out there,” he says. “This year was an adjustment year compared to 2011,” he says. “ We’ve seen fewer launches and we’ve seen buyers take more time to make a decision. Success will not come in the short timeline, like the blow them- out-the-door-type scenarios we’ve seen over the past few years.”
Which isn’t a bad thing, says Gary Switzer, saying that everybody in the industry should take a deep breath. Plus, not having as many projects released last year over the previous years is a good thing, says the president of MOD Developments, whose Massey Tower at
Yonge and Queen Sts. was another of 2012’s best-selling condos. MOD sold 486 of Massey’s 698 units in the first quarter of the year, before new mortgage rules took effect and consumer confidence took adive. “Our timing was good,” Switzer says. The most successful projects of 2012 weren’t just downtown. Liberty Development’s Centro Squar — a two-tower, 800-unit condo project at Highway 7 and Weston Rd. in Vaughan — proved to be the 905’s hottest launch of the year, with 70 per cent of the 300 units released selling within the first two weeks. Liberty senior vice president Marco Filice notes that sales were driven by strong demand from local purchasers in search of alternatives to pricey single family homes or townhouses. “There’s a lack of highrise choices for them in the area,” he says. “When you come in with a choice that didn’t exist before, there’ll be a lot more attention.”
OUTLOOK 2013, If 2012 represented a return to more normal conditions in the Toronto condo market, what do the developers see in their crystal balls for 2013? “I think we’ll continue pretty much the way that we’ve been going,” says Switzer. “The good projects in the good locations will continue to sell. But I think that certain areas of the city are saturated, which is why some projects have not been selling as well.” “Developers are going to start to look for opportunities in less obvious locations,” adds Brown. Golini predicts fewer projects will come to market in 2013, “which is representative of the industry self-regulating,” he says. “And I see buyers still being cautious, but still buying because they need to live somewhere.”