Save Transit City

Here is a great infographic from the Toronto Environmental Alliance on the bang for buck of transit dollars.

Access to transit is an absolute necessity for real estate values to grow in a city. For examples, of what not to do, go visit cities in the States where barriers because of poor transit and poor urban planning cause massive ghettos where people are forced to live in an area because of poverty.

I blogged about this previously here. It's sad to see that Toronto is following down the path of many major cities where the rich live close to transit and the poor do not (see recent work from Dr Hulchanski from U of T here). If this trend continues, you will see property values neighborhood drop.



Tell Rob Ford and Toronto City Council we want Transit City. Sign and Retweet!

http://t.co/KXFKvOQ

REal Experts GTA Condo Report: August

Project Developer District #Units Sold $/PSF
Bisha Lifetime King/Spadina 334 100 $743
Chaz on Charles Edenshaw Yonge/Bloor 324 77 $663
Ventus 2 Metrogate Tridel Kennedy/401 314 56 $430

In July there were 861 sales (down 33.4% year over year)
Year to Date 2010 - 12,193 sales (up 78.4% from last year)
Unsold Inventory - 14,657 units (down 3.5% last year)

Observations

• Significant drop is sales from July 2010 and August 2009 (HST?)
• YTD sales still much higher than last year. This is still a fantastic year and ranks only behind 2007 in volume
  
• Index pricing up 9.4% this year and up 50% over the past five years
  
• Opening month is not going as well as previous years. Bisha at #1 sold 29% of its units.
  
• Tridel doing a great job working the broker channel selling Ventus II
  
• Big drop off from the top selling project to the 5th best selling project
• Developers have stepped up market efforts and doing a great job with being innovative
• Lots of broker anticipation for Tableau and Backstage this month should cause a sales uptick for October. After November, real estate agents and buyers historically start slowing down
  

Conclusions same from last month:

• 29+ launches set for fall, REal Experts expects to see sales fall and incentives to go up

Source: Real Net and the Lyon Report, pic from UrbanToronto (taken by udo)

Debt Loads in Canada a Cause for Concern

Latest TD report: Canadian Household debt a cause for concern indicates that Canadian household debt has tripled from 50% to 150% from the mid-1980's and has reached US levels.

How has this happened:

• Bank of Canada decline in interest rates to combat inflation
• People feeling secure and confident to take on debt because of prosperity and job creation (created for the most part by low interest rates)
• Home ownership rates higher
  
• Culture of now: buy today even if you can't afford it.
• Credit availability to younger Canadians (consider Tuition fees in Ontario have 207% since 1991 to 2007)
• Credit availability in general (Canada does have securitization of debt instruments and Banks know that line of credits are "sticky" products.)
  

TD feels that Canada won't reach a US style housing collapse but are concerned carrying higher debt loads will cause difficulty for many people to weather the storm of a double-dip in the economy.

Why retail at the base of condos in Toronto are not successful

Anyone who has a little knowledge on the Toronto condo market knows that our city loves towers with podiums. The thinking is that with the space at podium will make the street scape more lively (differing uses will keep the people traffic high throughout the day).

Developers have long complained to the city that this not the best use of land and this is why the store fronts are vacant. Retailers, in turn, say the developers need to start building quality product and the tenants will come.

What retailers know, and residential developers haven't fully understood yet, storefronts need a different approach. All too often developers build residential style condo store fronts. This leads to the following:

• inefficient loading and delivery capability
• hard to store garbage
• low signage height (need 16')
• residents not liking certain uses (bars and restaurants)
• too many columns within the space
• not environmentally friendly to keep costs down (i.e. LEED certification)
• low ceiling heights
• not enough parking
  

Fixing these problems adds considerably to construction costs for residential developers. Smart builders have to look at retail as an opportunity.


Take Lanterra joint venturing with Cadillac Fairview to add office, a hotel, restaurants, retail shopping and a grocery store to Maple Leaf Square. The differing demands caused significant construction overruns, which they have now learned to deal with for the future, but has made the development successful.


With the Peter Freed and Minto project coming up at Bathurst and Front starting with attracting quality retail in mind, its evident that developers are starting to catch on.

Look for Target to open urban stores in Toronto

At the recent International Council of Shopping Centres event in Toronto, Target announced its plans for its 200 store push into Canada.


Like many other cities, Torontonians loathe big box stores (see: Wal-Mart Leslieville). If Target's past history in the States are indications of what we are going to see in Canada, we will no doubt see more retail locations coming into downtown's of cities across Canada.

Target has has 35 multi-level stores in the US. Some of these stores have underground parking, and has one in Brooklyn that has no parking. I expect this to be a growing trend of condo developers partnering with Target and other retailers in the style of Queen and Portland.

With the success at Longo's at Maple Leaf Square, this will be a pretty cool for residents.

Development Charges for Pre-construction Condos and Townhomes

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Want to know why condo prices are going up to crazy levels?

• Land prices up: yes
• Lots of well financed developers: yes
• Lots of willing buyers: Yes
• Construction costs up: Yes
• City and Provinces taxes up: YES AND YES
  

Development charges are charged by regions and municipality to recoup costs for providing services for new developments (transit, water, sewage, gas and hydro). According to Building and Land Development Association, from 2001 to 2008 Development charges have increased 342%. During this time, most would argue that services haven't kept pace

As a case study, the Altus Group provided an insight into City of Toronto and provincial charges that go towards condo buyers bottom line:


Studio/1 Bed
Land Transfer Tax $1,200
Parkland dedication $4,000
City Development Charges $4,731
School Board charges $544
Realty taxes in construction $300
Section 37 $3,000
Building Permit $1,250
Misc Fees 500


HST on sales $15,000

Total $30,525 or 10% of the sales price



2 Bedroom or bigger

Land Transfer Tax $1,700
Parkland dedication $5,750
City Development Charges $7,613
School Board Charges $544
Realty taxes in construction $400
Section 37 $3,000
BuildingPermit $1,700
Misc Fees 500


HST on sales $22,000

Total $43,207 or 10% of the sales price


Townhouses

Land Transfer Tax $1,250
Parkland dedication $4,100
City Development Charges $9,340
School Board Charges $544
Realty taxes in construction $300
Section 37 $3,000
Building Permit $2,600
Misc Fees 500


HST on sales $43,000

Total $64,624 or 13% of the sales price.

With the new taxes, hidden as metropass requirements and green roof requirements, expect prices to increase further.

Markham has got it right...Brampton you suck

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For many readers of this blog know that I love writing about how more lively neighborhoods make real estate more valuable. Well a recent study by CMHC has statistical proof on why. The New urbanism movement is a subdivision planned around:

• Better access to daily destinations, such as public open space, institutional and commercial/retail destinations
• More pedestrian routes and connectivity
• More housing choice
• Less land per housing unit
• Less car use for weekday urban travel
• More walking and bike use for daily destinations
• Greater use of public transit

In the CMHC study, the conclusion is that people living in a new urbanism community are happier than living in a traditional subdivision.

The study reported that people are happier for the following reasons:

• Very happy with the physical design of streets, landscapes and facades of in their neighborhoods
  
• Very safe and pleasant for walking
• Very convenient to walk or bike to amenities
• More social interaction with neighbors
• More likely to use public and green space
  

So while Markham is well on its way in building downtown Markham....Brampton is plugging away with the old model in Castlemore and along along Countryside (remember when we thought Steeles was too far?)