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Renderings of the Brightwater Towns project by Port Credit West Village Partners. The company completely sold out the first 106-home phase of the 72-acre site.

Port Credit West Village Partners

As the price of housing continues to hit new highs in the Greater Toronto Area, builders of new townhouse developments are finding buyers are demanding finishes that match the price tag.

“If you think back on suburban towns, they were all the same elevation, maybe three beds and bathroom,” said Lee Koutsaris, vice-president of marketing, sales, and design at home-builder Metropia.

Ms. Koutsaris is referring to the blocks of undifferentiated townhomes built in the past 30 years you can see backing onto major roads and highways in suburban areas. Buyers could expect to pay a lower price than the local detached housing market, but also get less space, and expect carpet not hardwood, vinyl not tile and laminate counters not stone.

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“It was very much seen as an entry level for grade-related housing with a front-door. You’re seeing young families and older downsizers who don’t want a condo [apartment] because of the lack of outdoor space,” Ms. Koutsaris said. However, as Metropia noted as it prepared to start pre-sales on its Lawrence Heights project in Toronto this year, some things have changed. Now, not only is there more thoughtful design and architecture required for the exteriors, but when your starting price is above $1-million, people don’t want a “budget” product.

“As the price of the townhome has crept up … the finish has stepped up. We could have sold it standard and have an upgrade process, but the market’s not doing that,” she said. “Everyone gets an oak staircase.”

Now, 10-foot ceilings are common, custom bathrooms, hardwood floors and stone counters. The challenge is that buyers want the full HGTV upscale renovation package, but in a housing form that’s sometimes 14-feet wide.

“So, we have a U-shaped kitchen and we’re being creative to get more cabinetry space [all of it custom millwork],” she said. It’s much like the experience in high-rise condos in downtown Toronto and Vancouver, that have found ways to squeeze in high-end materials to make under 600-square-foot spaces worth paying some of the highest-per-square-foot prices for housing in Canada. Townhouses have always filled a niche in-between expensive detached houses and cheaper apartments, but overall buyers want more.

The desire for higher-end finishes in townhouses is reflected by how much more expensive these homes are now. The resale market has the most robust data, and trends there tend to inform pricing in new developments. Townhouses typically account for a little under 20 per cent of the home sales recorded by The Toronto Regional Real Estate Board (TRREB), the nation’s largest board, and are usually hundreds of thousands of dollars cheaper than detached homes.

Pre-pandemic, at the end of 2019, townhouse prices had risen more than 11 per cent in the 905 communities, averaging $657,577, and the city of Toronto saw price rises of just 0.4 per cent and from a higher average sale price of $717,369. (TRREB’s topline townhouse stats include non-condo towns and row-houses, and the latter tend to be a little pricier)

Fast forward to this year and TRREB’s market data shows about 20 per cent price year-over-year increases for townhomes in almost every month, even as the price gulf between a townhouse and a detached home has only gotten wider (2021 saw multiple months of 30- to 40-per-cent price changes in detached home prices compared to 2020).

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In July things slowed down a little, the average selling price for a Toronto townhouse was up 5 per cent year over year to $893,347 (compared to the stratospheric $1,633,649 for detached) and the average condo apartment sold for $715,977. The average townhouse price in the 905 was up 19 per cent year-over-year to $837,906 ($1.346-million for detached). The volume of sales slowed, falling below July 2020′s mark, but the overall trend is still strong: in the full year 2019 there were 14,648 townhouses sold in the GTA, but in 2021 with five months to go, 12,163 have sold.

In townhouse pre-sales things have also been red hot. Ms. Koutsaris said Metropia and its partner, Minto Communities GTA, have sold almost 600 homes, of which 464 are townhouses, at its Union Village site in Markham. In some years there might be 600 pre-sale townhouses sold in Markham, total.

Metropia has sold almost 600 townhouse units at its Union Village site in Markham, Ont.

Metropia

Christina Giannone, vice-president, planning & development with Port Credit West Village Partners, which launched the Brightwater Towns in 2021, said the company completely sold out the first 106-home phase of the 72-acre site.

Designed by Canadian architectural firm Superkul, Brightwater adds some flexibility to the needs of its buyers, not just by offering high-quality materials, but by offering a standard main-floor plan (open kitchen, living, dining space with outdoor patio access) with a variety of second- and third-floor options.

“We wanted to provide a product that felt elevated and we did a lot of market research when we were exploring developing these. We asked what was the detached market like, and what we tried to do was fill in a gap,” Ms. Gianonne said.

“We created multiple options: did they want two beds on the second floor and a primary retreat on the third floor, or did they want the primary on the second floor? How many bathrooms, how many dens or flex spaces? We gave purchasers that option to find what was right with them without any additional cost.”

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Price was a factor: ranging between $1.4-million and $1.8-million, with sizes close to 2,600 square feet, buyers in Port Credit had expectations about what that dollar would achieve. There was even the opportunity to add an elevator thinking of seniors worried about aging in a multi-level home (several buyers took that, and a few more opted for a configuration that allowed for a future elevator install).

“What was the most desired? The three-bedroom, three bathroom plus powder room, and the majority of people who purchased that incorporated a den on the second floor,” she said. Somewhat surprising were those who wanted just two bedrooms: both primaries with ensuite bathrooms on each floor. Apparently in some cases it was friends or siblings planning to share ownership in townhouse.

The other thing Superkul proposed and buyers approved of was an alternating rooftop terrace arrangement, so that every other house had the terrace either at the front or the back of the house, so buyers wouldn’t have to share their roof decks with neighbours. And there are three styles of façade to choose from, something Metropia is also experimenting with, which results in a block of homes where not every frontage looks the same.

All this architectural sophistication, high-end material and prices above a million dollars are a distinct break with the townhouse developments of the past. And as growth plan targets in Ontario communities demand more density in areas unlikely to approve of high-rise towers (such as the Kawarthas, or Barrie) they may just be a sign of things to come.

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