Yonge and Bloor: Crosshairs of Insanity

I think it's simply a sign that people in Toronto appreciate the idea of living in tall buildings, something that are in short supply in the stunted skyline of the city. Toronto is a top-ten city in terms of overall number of highrises, but they tend to mostly be in the 25-35 story range. In New York, Chicago Miami and even Vegas you can find many options for living well above the 40th floor. Toronto has more condos than any of these cities but lacks very tall residential condos (1 King being a hotel-condo does not count). Build an 80 storey condo and you unleash that pent-up demand.

Too bad the city is too hamstrung to allow more tall buildings along the subway and instead goes around lopping floors off developments like the Minto towers at Yonge and Eglinton. (Thanks Michael Walker! You're just super-good at your job!)

no one else smelled 'publicity stunt'? I did.

@ barold

Good call. I should have smelled it too. But how much planning went into this? Did they orchestrate the whole thing from weeks ago until now, or did they try to start a riot by "encouraging" line jumpers after they saw the potential? Either way, utter death threats makes for a good slogan:

1 Bloor - You'll kill for a unit

The majority of condo units in this city are held by investors not owners. Right now a condo in Toronto in a great location is seen as a hot commodity. But what happens when all these investors start selling off? Will prices drop? What happens if all these condos are built and investors then try to sell off the condos in an attempt to flip them for more money? We've been hearing the condo market is going to bust for years now and it hasn't happened. Maybe real estate in Toronto is one step closer to Manhattan. One thing's for sure. it's the investors that are keeping the condo market so high. If brokers are scooping these up, how are normal people supposed to compete?
We keep trying to buy a condo and every time we want to put an offer in (sometimes the same day it goes up), one of two things happen:
1. It's already sold. Gone.
2. There's another competing offer that's the same as ours and do we want to go higher than asking price? We've heard of phantom offers and so we say no we'll take our chances and within a couple of days (not the same day), the unit sells over asking (probably to a guy bidding against himself.)

I am generally against a land transfer tax but would have a lot less of a problem with a tax on property sold less than 6-12 months after acquisition. The exact period could be worked out in order to catch flippers (who are paying interest every day of those six months) as opposed to renovators of old houses with a view to resale.

Anna C, I call your bluff - "The majority of condo units in this city are held by investors not owners"? Love to see some data on that. Toronto is actually unusual because unlike New York, where condos are a premium product for the rich, or Miami / Vegas, where condos are vacation homes, most condos in Toronto are starter homes for those who can't afford houses.

"most condos in Toronto are starter homes for those who can't afford houses."

Um, what?!

Is it just me, or is this uSkyscraper guy sounding like a publicity stunt too? Realtor plant? I think he might be. He's way too condo gung-ho. NO ONE loves condos THAT much.

The Toronto condo market is totally inflated. A few years ago the trend was to sell 500 square foot condos for over $300,000. (Hello, One City Hall!) No one wanted them. Trump had to knock off a whole whack of floors because no one wanted to buy in his building. And trust me they tried. I know one person who got on the "list" and absolutely was hounded for months by Trump's people to buy a place there.
I suspect when this developer noticed Trump wasn't selling, they pushed harder by trying these gimmicks.
It's all going to bust.

Oh silly me. I forgot the main selling point for these condos. I've always wanted to live beside the brass rail and here's my chance for a cool $3 mil.

On a completely separate note, bubbles usually require one last manic push (the proverbial straw) to reach popping state. Real or not, the title is right - it's insanity.

As if this whole thing wasn't crazy enough, the developer only released 100 units for sale at yesterday's events. Doing the math, that means out of the 200 agents in line, about 150-160 of them went home with NOTHING (agents were allowed 3 sales each).

Anna C, why do you say that "The majority of condo units in this city are held by investors not owners". Really? I'm not convinced.

Beth/Chris/FC...if normal people aren't living in $300K one bedroom condos, then who is? The original point was that, in other cities, condos are exclusively the purvey of the wealthy. You don't have to be wealthy to afford a $300K condo in Toronto.

Yes, most condos are owned by investors.
That is the case in my building.

This is from the Globe & Mail:

In the case of One Bloor, many committed and potential buyers are likely investors from other countries, said a real estate professional who asked not to be named.

"They are looking for a good safe investment in a good safe country ... and this is one of the best-known corners in Toronto, right at the edge of Yorkville," he said.

These are strong selling points for speculative buyers who may be inclined to sell their units well before they are completed in 2011 if they appreciate enough in price, the real estate professional said.

All I'm saying is that I would like to see some data on who owns units in the Toronto condo market because I think the city has a healthier than average percentage of live-ins vs investors. My experience, and the experience of all of my friends, was to save up and then buy a small condo so we could move out of our parent's houses, which were unaffordable to us. This is different than New York, where young people rent and then if lucky move to a co-op (condos are far too expensive at $1200-2000 psf)

And no, Beth, I'm not a plant. I'm actually an ex-pat who lives in New York, so I have zero stake in what happens to the Toronto condo market. (I sold my old place in the Merchandise Building years ago). My main interest is in seeing the city prosper and keep up with its resurgent American rivals, and one way to do that is to build up underdeveloped sections of the city. Do I like tall buildings? Guilty. But if there was ever a place for one, or four, it is Yonge + Bloor.

uSkyscraper,

Here are some facts from the Toronto Star regarding investors:

Re/Max says "investors have also jumped into the fray, now representing a sizable segment of the downtown market" with a significant 60 to 85 per cent of sales in new condominium developments involving investors this year, up from below 50 per cent last year.

Wow, interesting if true (I'm very suspicious of anything that comes from brokers). I was thinking investors were still less than half the market. Thanks for the info.

I have heard this sentiment rumbling around-that investors and speculators are now a larger group than end-user buyers.

Unfortunately, we don't have any reliable stats to back this up.

Be careful of any numbers quoted from a real estate brokerage or real estate company.

What does 60 to 85% even mean? It's not a useful stat.

I don't know what kind of world you all live in, but among me and my friends we can't just live with our parents indefinitely until we can afford a three hundred thousand dollar condo (which, by the way, is still not exactly affordable for those of us with student loans, credit card debt and entry level jobs).
And I'm pretty sick of seeing market comparisons between American cities and Toronto. Guess what? Toronto ain't the U.S. We've got a completly different economic system and culture over here. Things are never going to be all that directly comparable, just look at what's going on with the whole sub-prime thing. It's actually boosting our economy at the moment.
And Skyscraper dude, you're still not exactly convincing me you're not a shill.

I just can't understand why ANYONE would pay $500,000 (for a 500 square foot box) to $8 million to live on a street full of bargain shops, fast food joints, and army surplus stores.

Why do we keep approving buildings with such mediocre architecture? Kyle Rae and David Miller are just sucking up to developers, grateful to get their money, and approving these pathetic, mediocre projects. Where is the architectural review panel for 1 Bloor East? This design is simply NOT GOOD ENOUGH for this important intersection. It's the kind of crap that you see being built on the cheap in Dubai or in the former republics of the Soviet Union (where Bazis, the developer has most of it's buildings).

Yes, that corner is disgusting, but this glassy, boring condo box is only slightly better than the ugly buildings that currently occupy the site. At least we can tear those down, but once this ugly thing is built, we are not going to be able to tear it down any time soon.

Our politicians are just too provinicial and greedy to fight for really spectacular architecture that would benefit Toronto for generations to come.

I am continually disappointed by the decisions of our idiotic politicians and embarrassed to be a resident of this city.

"Be careful of any numbers quoted from a real estate brokerage or real estate company."

Andrew, what are you saying about the company you work for? Do you not work for a Real Estate Company/Brokerage? Your fellow RE agents must have loved that one!

Hilarious. I'm going to be laughing at all these idiots paying ridiculous money for a shoebox when the whole market collapses and they're stuck with a mortgage that's higher than what their condo is worth. What a bunch of sheep. Real Estate is going to implode, the prices are insanity. Condos in Toronto are already massively overbuilt, and with the banks tightening up on credit, who are they going to sell to? Zero mortgages and over building is going to cause an awful lot of foreclosures, this is the late 80's all over again.

Enjoy being packed like lemmings in your 1/4 million dollar hamster cages. The Real estate market is going to crash and crash bigtime.

I'd trust the Re/max numbers in this case; admitting to the amount of speculative activity isn't something brokers usually like to admit to.
As for "I don't know what kind of world you all live in, but among me and my friends we can't just live with our parents indefinitely until we can afford a three hundred thousand dollar condo (which, by the way, is still not exactly affordable for those of us with student loans, credit card debt and entry level jobs).
And I'm pretty sick of seeing market comparisons between American cities and Toronto. Guess what? Toronto ain't the U.S. We've got a completly different economic system and culture over here. Things are never going to be all that directly comparable, just look at what's going on with the whole sub-prime thing. It's actually boosting our economy at the moment.
And Skyscraper dude, you're still not exactly convincing me you're not a shill."
Enjoy your entry level job. If you want to get promoted, learn more about economics, and that yes, our economy is very much tied into the U.S. We just lag behind them, and our banks are also losing money. The sub-prime thing is a red-herring - the real disaster are all the hedge funds. And Canada is NOT benefiting - take a look at the last CIBC earnings, kiddo. It's also plain stupid to take out a mortgage of over 200K - that's a THOUSAND a month in interest alone, if you get a good rate. It's cheaper to rent.