April 24, 2014
April 14, 2014
Movers and Starters: Neven Zeremski of Dubb
April 8, 2014
Pop-up Startup
April 1, 2014
Movers and Starters: Mallorie Brodie and Lauren Hasegawa of Bridgit
December 16, 2013
Movers and Starters: Chris Gory
December 11, 2013
Canada Post Says Goodbye to Door-To-Door Delivery in Urban Areas
Is the Toronto Condo Bubble About to Burst? Tell Me, Condo, Condo, Condo
Toronto is in the midst of a luxe real estate facelift, but the city's downtown condo market may be headed for bubble trouble

Toronto is in the midst of a luxe real estate face-lift, but the city’s downtown condo market may be headed for bubble trouble.

The first results of the 2011 census show certain downtown pockets are exploding due to vertical growth. At the same time, the city is adding four new five-star hotel and opulent condo complexes to its famed skyline over the course of 18 months. Even existing hotels, like the famed Bay-Wellesley Sutton Place is converting to luxury condos to snag a piece of that lucrative market.

But, with Trump Tower’s soft opening in January, and the 65-storey Shangri-La set for an opening this summer, concerns linger over how long this luxury condo boom can last. After all, earlier this year, the Toronto Star reported the five-diamond Ritz-Carlton, which opened last February, has yet to sell 29 of its 161 permanent units. And — this was before the high rising competition. Yet, for every Ritz-Carlton, there’s a Cinema Tower. The sister unit to the TIFF Bell Lightbox-adjacent Festival Tower is set to open in 2013, and has already sold 80 per cent of its units.

This lavish market saturation mirrors the Toronto condo surge, though it only represents a small percentage of the market share. At the moment, Toronto has more skyscrapers and high-rises under construction than any city in North America, including three times as many as New York. But as more Torontonians are moving downtown, experts do not expect this demand for urban condos in hot areas like King West and Liberty Village to last long.

“For now, for another year or two years, we should be fine” says Brian Yu, a Century 21 real estate agent. “I think the housing market is still fine, and people are buying condos downtown; King West is popular. [People are] buying condos for the lifestyle.”

Buying downtown for lifestyle is something Brenda Clark, the on-site real estate broker for both Festival Tower and Cinema Tower, sees as being more than a trend. Clark says added incentives, like proximity to a bustling nightlife or entertainment complex like the TIFF Bell Lightbox, make the new Toronto condo scene attractive to buyers in spite of higher-than-normal prices and more new, swank units to choose from. 

“It’s becoming more like New York,” says Clark. “Younger people love to be downtown, they want to be able to walk, and they are giving up their cars.”

Toronto real estate prices, in particular condo prices, have risen steadily in the past year, while interest rates have remained low, making it the ideal market for both buyers and sellers. In other words, the downtown condo market could not be hotter, but the longevity of this growth hardly seems sustainable.

Experts, like analyst and writer Andrew Hepburn, say there is some indication that many of the people buying condos expect the rapid pace price of appreciation to continue, but they will be sorely mistaken. According to Hepburn, buying a condo now could be a high-risk investment.

“In certain areas, prices could crash,” says Hepburn. “It’s understandable that the Sutton Place hotel wants to [convert to condos], but it’s far more dangerous for the potential buyers if they wanted to buy that condo.”

Still, Clark has faith that international investment opportunities will continue to support both the booming Toronto condo market and luxury expansion, even if it suffers from momentary dips in popularity.

“We do have a lot of outside investors because of the recent problems in the US,” says Clark. “People overseas, especially in places like China and Singapore have felt more comfortable investing in the Canadian market because we’ve proven to be more stable.”

While living the high-life downtown may be worth the investment, buyers should approach inflated prices with caution.


Joanna Adams writes the Morning Cable, and lots more, for Toronto Standard. Follow her on Twitter at ‏ @nowstarringTO.

For more, follow us on Twitter at @TorontoStandard and subscribe to our newsletter.

By Igor Bonifacic
April 17th, 2014
Industry Movers and Starters: Ian Carnevale of Fora
Read More
By Igor Bonifacic
April 28th, 2014
Industry Movers and Starters: Richard Liang of Preo
Read More
By Igor Bonifacic
April 22nd, 2014
Uncategorized Test post
Read More
By Igor Bonifacic
April 8th, 2014
Editors Pick Pop-up Startup
Read More
  • No article found.
  • By TS Editors
    March 10th, 2014
    Culture Revolutionizing the Beer Drinking Experience with the Sam Can (Sponsored)
    Read More
    By Jordan Sowunmi
    December 27th, 2013
    The Sprawl DO MAKE SAY HEAR: Five Things to Do in The City This Weekend
    Read More
    By Jordan Sowunmi
    December 26th, 2013
    The Sprawl Over 50,000 Torontonians Still Sitting in the Dark
    Read More
    By Jordan Sowunmi
    December 20th, 2013
    The Sprawl Supreme Court of Canada Deems Prostitution Laws Unconstitutional
    Read More


    Society Snaps: Eric S. Margolis Foundation Launch

    Kristin Davis moved Toronto's philanthroists to tears ... then sent them all home with a baby elephant - Read More