How does a condo attract end-users?

By: Sam Reiss

The Toronto Dominion bank is warning that Canada is moderately “overbuilt.” TD Economist Francis Fong says the current pace of construction “well north” of the average rate of household formation; he says nation-wide it isn’t a problem, but it cities like ours (and Vancouver — the dastardly duo most cited by the Canadian housing pundits), we’re averaging 12,000 more new units than new households, in Toronto and 5,000 more in Vancouver.

“The issue itself is not that there are not enough buyers for these units,” says Fong according to the Globe. “In fact, the large majority of these condo units must be pre-sold before the building can be completed. The concern is that, over the medium term, if these units were not bought by end-users, but by investors, that they will be put up for sale in a market where interest rates are rising, households are pulling back and there will be a large number of sellers competing for a relatively small pool of buyers.”

With perhaps a majority of our downtown high-rises being snapped up of late by investors, we could very well be on the cusp of the price cooling now predicted ever since the bottom fell out of the U.S. market.

I’m ambivalent. It’s not good news for investors or for builders, and frankly, I like money and I like business, so that’s not a great thing. It takes builders and investors and other business-minded folk to keep a capitalist economy thrumming. I don’t begrudge rich people their money as long as they earn it. As an old friend of mine used to say, “Anyone can make a ton of money. All it takes is a lifetime of devotion.”

On the other hand, I would like to see more projects that encourage end-user purchases. It’s generally end-users more than renters who take the best care of the communal areas, and who are the real community-builders. I’m not knocking renters — honest — but there’s a feeling of transience that changes when you own a home. Being able to say, “This building is full of end-users” has become a valuable sales tool for condo builders.

So why do some buildings attract primarily investors and others end-users? Certainly location and infrastructure are factors, but what are builders doing in the buildings themselves to attract end-users? (Or discourage them, as the case may be.) Size springs to mind — bigger units will help attract end-users. Amenities that are attractive to families? Dog-friendly parks? Swimming pools?

Curiosity aroused, I went to Google and tried every phrase I could think of to help me find out what end-users are looking for, and didn’t come up with much.

So, I’ll ask you — what do you think are the most important features a condo needs to attract end-users?

(Interestingly, while I still don’t have a complete answer, Googling phrases such as “what makes a condo attractive to end-users?” and variations thereon resulted in a lot of results centering on the Toronto market. Seems our condo boom has taken over Google!)

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Toronto’s perhaps-imminent casino made a lot of news this week. The project, part of a proposed $3-billion overhaul of the Metro Toronto Convention Centre, is the brainchild of Oxford Properties Group; it includes a 2.2-hectare park over the railway tracks lined with cafés and shops, three floors of high end-ish retail (think Eaton Centre), an updated convention centre and a ballroom, plus some office towers and potentially condos, but a rep for Oxford says without the casino inclusion, the deal is dead.

Putting aside the politics (our illustrious mayor thinks a casino should go on city land), I find myself hoping this project flies. More accurately, I hope this or another large-scale shake-up-the-core project flies, and I hope it includes a casino.

I did a little research for a column a while back about whether casinos lowers property values, and found they usually don’t, and I think a big downtown entertainment complex of sorts would be a shot in the arm for ol’ T.O.

It’s clear we are a Big City now, and we may as well start acting like it. Forget Toronto The Good. Why not Toronto The Captivating? Toronto The Inimitably Interesting? Toronto The Naughty, Even?

While we seem to enjoy a modicum of the world’s respect as a nice city, crayons are nice. Let’s be vibrant and dynamic. Let’s be memorable.

Let’s throw in some interesting architecture, quirky public art spaces, food trucks of all stripes, street markets — let’s have some fun in Hogtown.

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The Municipal Property Assessment corporation (MPAC) is sending out its every-four-years assessments to help determine property taxes, and it’s good news for home values in the 905. Property values are up as much 31% in some parts of York Region, and 17% in Durham.

It’s not good news for all, though. Basically, if your assessment is in line with average increases in your area, your taxes won’t change. If your home’s value (based on local sales, property size, outdoor improvements, fireplaces, age, and other factors) has risen more than the area average, your taxes will increase; similarly, a home with less than average value for the area might see a decrease in taxes.

One friend is planning to appeal her Brooklin (just north of Whitby) assessment because, she says, “Owners of slightly smaller, less finished homes in some neighbourhoods get an artificially inflated assessment.” Generally, buying the smallest, cheapest house in a great neighbourhood is a sound financial strategy, but I guess everything has a downside.