Sep 3 | Posted by Barry Cohen

It appears that the GTA could easily become the condo capital of Canada as more high-rise towers are slated to be built in the second quarter of the year.  As the hottest real estate market in the country there appears to be no evidence of a slow down any time soon.  While other markets, especially in the oil patch are experiencing a turndown and dropping property values, the GTA steams ahead with record breaking sales and prices.

Residential land prices reached new highs in the second quarter of this year, and residential land purchases accounted for 27 percent of the $3.6 billion spent on all property transactions eclipsing other categories like industrial, retail and office space. Of the record breaking 143 deals done in April May and June of this year alone, totaling $856 million, high-rise condominium projects account for $420 million – almost half!  The average condo lot sale price in the same period jumped to $64 per buildable square foot, a far cry from the $30 that was the going rate just 10 years ago. Gone are the days when you could buy a bare parking lot and start construction, now you have to assemble land and that comes with a hefty price tag.  It seems that developers are flush with cash right now and they are investing in land now to ensure that they have a future in five to seven years time.

As prices escalate, property size shrinks as developers squeeze density wherever they can to make prices palatable.  There was a time, not long ago, when the standard was set at building 4 houses per acre, now we are experiencing 8 or 9 in the same space.   Homebuilders are able to support their increased prices by pitting their brand new homes against the soaring prices of existing homes, which just recently climbed to over $1 million for a detached model in the city.  

Driven mostly by a massive condo tower deal in Yorkville (the priciest neighbourhood for real estate in Toronto) prices for condo lots have hit record highs. The average price per acre for residential low-rise homes was $637,000 and while that is actually down from a year ago, the number is deceptive since developers are forced to source land farther into the suburbs where prices are still cheaper.  This bargain land price in the suburbs is expected to soar by the end of the year thanks to 4 developers and their  $400 million Markham golf course purchase. (I did the math – that’s 1.4 million per acre.)

If you are thinking of buying, investing or selling in the GTA working with an experienced professional realtor has never been so important.  I would be happy to meet with you to discuss my services, answer your questions and share my expertise.