When the second great wave of condominium construction got under way in the late 1990s, the intensity and size of the construction soon had market-watchers wondering if the makings of a glut was in the works.
By 2003, some bank economists were sounding the gong of doom: There were too many condominiums under construction in Toronto, and the growth in supply could not possibly match demand. There was a bubble, and it was about to burst.
Well, it hasn't worked out that way, which kind of tells you a lot about how to take the prognostications of bank economists.
One thing the doomsayers didn't take into account was that there is a big difference between condo suites for sale and under construction. One industry standard remains intact for many builders: Construction financing will be available only when 40 to 50 per cent of all the planned suites are sold.
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Sales continue to register at a brisk pace, even though construction can often lag badly, leaving buyers waiting two years or longer before occupancy.
Projects that sell quickly get built quickly. The one factor that always produces quick sales is good location. You can have clever marketing materials with flashy websites targeting your preferred buyer with laser-like efficiency, but if you're not where they want to be, it's going to be a slog, especially for a standard-issue high-rise condominium appealing to first-time buyers or single professionals.
Condominium projects located along a major mass transit thoroughfare, like the subway, GO Train or York Region's VIVA rapid transit bus line, are pretty sure bets to appeal to busy condo dwellers.
The downtown core in Toronto and, increasingly Mississauga, are immediately attractive sites for obvious reasons. Lifestyle-oriented sites, such as the Beaches or the Etobicoke lakeshore west of the Humber River, are a bit more of a gamble, but not much. There is an identifiable, large and growing market for these dwellings, especially among empty-nesters.
A bigger gamble lies off these beaten paths. It's possible to launch a successful condominium project in these areas, but the developer must put a lot more work into one of two factors: Establishing an attractive price point that undercuts similar suites in prime locations; or loading up on features like extra parking spots, multiple appliances and top-notch finishes.
Not surprisingly, price is most often the factor that drives buyers to areas such as South Etobicoke's Mimico and the Weston area between Jane and Bathurst streets.
Daniels Corp. has been especially focused on affordable condominiums in Etobicoke, Mississauga and downtown's Regent Park neighbourhood. Daniels began construction of Wave Lakeshore West in April in partnership with the provincial and federal governments. More than 80 per cent of the suites are now sold.
Wave received just over $1.6-million in federal-provincial funding under the Canada-Ontario Affordable Housing Program Agreement. This program allows qualified buyers financial assistance to cover 5 per cent of their down payment. Daniels is offering these qualified buyers loans covering another 5 per cent in down payment, repayable after five years at a low interest rate.
Located at Lake Shore Boulevard and 12th Street in Mimico, Wave will be a 13-storey building targeting lower-income buyers with one- and two-bedroom suites starting at $186,400 and topping out at $213,400, and three-bedroom condo townhouses starting at $317,900.
Just off Keele Street, north of St. Clair Avenue, is GenerX Corp.'s Solara Condominiums, a recently built 11-storey, glass-faced conversion of an office building, with a couple of extra floors added.
The 182 suites in Solara are all between 690 and 700 square feet, but many have unique triangular floor plans, which, along with the glass exterior, gives the impression of a much larger suite.
Solara is sold out thanks to very affordable pricing, ranging from $160,000 to $180,000.
Next week, we'll look at some successful condominium projects off the beaten path on the east side of Toronto and in the 905 suburbs.
Special to The Globe and Mail
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