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There has been more interest recently in condos from buyers who are priced out of single-family houses. Condominium development in the Liberty Village area of Toronto on June 25, 2013. A potential storm is brewing in Toronto as proposed increases to development fees look to increase revenue for the city, but threaten to increase downloaded costs to the consumer. (Peter Power/The Globe and Mail)

Peter Power/The Globe and Mail

Prospective house buyers in Toronto's real estate market are often frustrated by their search: Those stolid old brick houses that line the streets are hard to find for less than $600,000, and buyers usually need to compete to get them. High-rise condo units have been steadily shrinking, and the suites coming to market today are often not much bigger than a standard hotel room.

As the high-rise condo segment appears to falter and single-family house prices keep soaring, builders are seeking out little parcels of land and under-used brownfields that allow them to cater to an in-between group of urban dwellers. More projects of limited size and scale are filling in neglected pockets of the city.

Paul Johnston of Right at Home Realty Inc. specializes in marketing the smaller, modern projects that some developers are turning towards. These developments fit in with the goal of increasing urban density, he says.

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"There is a growing number of people who are looking for something closer to the ground, be it newly-built, newly-crafted or newly-converted."

Seven weeks ago, he helped to launch Duke condos in the Junction. The mid-rise project with 90 units is about 50 per cent sold-out, he says. Mr. Johnston says he's pleased with that rate of sales in the current market.

Condo developers are seeing softening demand from the domestic and overseas purchasers who buy units as an investment. But Mr. Johnston says there has been a rise in interest from buyers who are priced out of single-family houses. Those buyers can't afford a detached or semi-detached house, but they prefer an interesting neighbourhood to a cluster of high-rises.

In other cases, people don't want the upkeep of a house, but they do want an intimate building in an established neighbourhood where they might be able to walk to the pub or browse a chocolate maker's shop or an antiques store.

In this case, he says, approximately 80 per cent of the buyers plan to live in the building.

"This is not a building that has been crafted for investors," he says.

The Junction also co-mingles a blue-collar past with the studios and workshops of artists who have migrated west. Founded near the junction of four railway lines, the former village had a concentration of foundries, mills, wire factories and storage yards.

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"I hope it never forgets its heritage," says Mr. Johnston. "There's a great sense of the crafted and a fascination with industrial that remains to this day. There's not a lot of difference between Indie Ale House and the steel workers who used to go there," he says of a craft brew pub on Dundas Street West.

He also points to Bloordale, near Bloor and Dufferin, where Lanehouse on Bartlett will transform an old yarn factory into 13 "lofthouses" and three flats.

"It's adaptive re-use of a great, old character building."

The neighbourhood, he says, is "very urban in every way," with galleries, a repertory cinema, and the Dufferin Grove Organic Farmers' Market in the park.

Another development, called Core Modern Homes, will create seven dwellings from a former dentists' office near Eglinton and Bayview.

"That's one that's super cool because we haven't done a contemporary infill project in midtown. This is an aesthetic from downtown that a growing number of people are looking for and it's coming uptown."

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Mr. Johnston says many of the buyers in projects like these are looking for genuine neighbourhoods with shops, schools, parks and a mix of housing stock.

Real estate agent Christopher Bibby of Sutton Group Associates says agents have had to work much harder to sell units in high-rise condos in recent months.

"The negotiations are epic," he says, as buyers come to the table with offers well below asking price. "I'm on the phone a lot more – convincing other agents why I priced it that way and why their client should be in the building."

When he lists units for sale, he has to spend more time and money on photography, virtual tours and advertising, because there is so much competition from other sellers.

"If I'm one of 10 in a building, how do I stand out?"

By comparison, says Mr. Bibby, the rivalry never rises to that level in low-rise buildings or a well-located row of townhouses. Turnover tends to be lighter and multiple offers are still common.

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"Lofts have always done well because they're one of a kind."

He points to the Robert Watson Loft on Sorauren Avenue near Dundas Street West as an example.

"If a place went for sale this week it would get multiple offers."

People want the smaller boutiques, butcher shops and hardware stores of a street such as Roncesvalles.

Nearby, a smaller-scale new development is coming to 383 Sorauren. The project's architect, Peter Clewes, describes it as completing a 19th century bank of warehouse buildings that divides the CN Rail Corridor from the residential streets of Parkdale and Roncesvalles Village.

Mr. Bibby says the project appeals to people who want to live there, along with some investors. Some of the buyers are people who have been waiting for an opportunity to buy in the Robert Watson building.

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"They're getting people who want to be part of the community. You're on a park. In the building next door, nothing is selling. Nobody wants to move."

Farther west, on Lakeshore Boulevard West near Brown's Line, Minto Longbranch is a project which recently opened its sales centre.

Minto Group director of marketing Natascha Pieper says there is an increasing demand for this type of low-rise development, which will bring 440 townhouses to the north side of Lakeshore.

The units will have nine-foot high ceilings, parking underground and rooftop decks.

"The huge draw to this community is these rooftop terraces," says Ms. Pieper.

She expects many of the purchasers to be first-time buyers in their twenties and thirties.

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Townhouses are popular, she says, and the land prices in Long Branch are much less expensive than in the downtown. Units will sell in the range of $340 a square foot, compared with $600 and higher in the city core.

She says Minto will likely do more such projects.

"This is a building form that we like."

Meanwhile, she says, lots of builders are buying up pieces of land in Longbranch, which has long been overlooked.

"Everybody's quickly trying to get out here."

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