With a changing market, there’s demand for well-designed midrise and lowrise projects in beloved neighbourhoods
Some interesting trends are emerging as the Greater Toronto Area real estate market transitions from years of red-hot sales fuelled largely by the highrise condo boom.
According to the Toronto MLS system, sales were down 11.5 per cent in the first half of March compared to a year before, although the average selling price was up by almost six per cent to $532,102. In February, sales of new detached, semis and townhomes in the GTA outperformed new condominium sales for the first time in months, according to the RealNet Canada Inc. The 1,078 lowrise sales added up to the second-lowest February on record, despite outperforming the highrise market with 952 sales.
Paul Johnston of Right at Home Realty Inc., who specializes in unique urban homes, says the market “is coming back to earth” and rather by being dominated by investors, it is being driven by “real people who buy real homes.”
This could spawn the development of more midrise and lowrise projects in the city, which will always resonate with buyers, he believes. “There is a move towards much smaller-scaled projects and by that, I don’t mean 205-square-foot suites in a highrise. I’m talking about five, six or seven storey midrise buildings and three-storey townhouses, which are much more humanly scaled. Demand is strong, strong, strong and it remains a very good market but gets muddled in with the highrise market.”
He says while the real estate market has been guided by consumer confidence “and that confidence has been mistakenly eroded by the correction in the highrise market,” it hasn’t had a salient effect on single family housing or the market for midrise buildings designed specifically for non-investors.
Mr. Johnston predicts a greater number of these smaller projects will be coming to some of the city’s best loved neighbourhoods.
“Little Italy, Trinity Bellwoods and Ossington are already established neighbourhoods and a growing number of developers are trying to gauge how to recalibrate their business to attract buyers who want more modestly scaled buildings,” says Mr. Johnston. “A growing number of people in the city want to live in iconic buildings and we can create small icons. There is an opportunity to insert more modestly scaled buildings that are precious gems, into the neighbourhoods we really love.”
While some buyers do appreciate the conveniences of the condo lifestyle, they don’t necessarily want to live in a tower, he says.
“No one wants to be on third floor of a 90 storey building, but they do want to be on the third floor of a six-storey building,” he says, adding that Toronto is finally responding to that segment of the market that wants to live in well-designed, smaller scaled developments in neighbourhoods outside the city core, which is dominated by highrises.
He says many people want to live in buildings with 40 or 80 residents, where the setting is more intimate and they can get to know their neighbours. He says these small buildings don’t have elaborate amenities such as gyms and pools like large highrise projects do, but that’s fine with buyers.
“When you put in a small-scale building, you are in an already vibrant neighbourhood, so why put in all that stuff?” asks Mr. Johnston, pointing out that another advantage is that condo fees are much less expensive in small buildings without a large roster of amenities.
He cites the Ossington neighbourhood as an up-and-coming area for modestly scaled condo or loft projects. One example is 109 Oz, a six-storey condo in the heart of Ossington Village set in an area of established restaurants, shops and hardware stores.
“Around the corner you have Abacus, which is even more modest with 40 lofts, but the building is architecturally very distinctive,” Mr. Johnston says. “This is a place where you can find something to do at 2 in the afternoon or at midnight.”
He says prices for single homes are rising in the Ossington neighbourhood, citing a recent $1.25 million sale, “and if you want to live in that neighbourhood, single family houses may be out of reach financially, but maybe a modestly scaled condo or loft building will fit the bill.”
Despite the general lacklustre performance of the market, Mr. Johnston knows one thing to be true.
“There is a huge appetite for great properties in great neighbourhoods,” he says.