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Guest Column: Sobering Thoughts for the Holidays

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Today we present another guest post from Dean Macaskill, Senior Vice President at Lennard Commercial Realty. Dean has worked as a commercial realtor since 1980 and has years of industry insight into the Toronto real estate market. Having been through three cycles in the business, he has seen the highs and lows. He shares some of his insider information and insights with UrbanToronto on a semi-regular basis.

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As the cold and snow have been threatening us since the end of the 3rd quarter, I thought it a good time to reflect on where we sit in the 4th quarter with respect to high rise land sector sales before we batten down the hatches for the year.

As a bit of a refresher, in my 3rd quarter report, I sounded the alarm bells as only 19 properties traded hands in the high rise land sector between July 1 and September 30. This was a record low level of transactions in a sector that normally posts between 45 and 55 sales over $1 million. In as much as a recession is calculated by 3 to 6 months of negative economic results, this same metric could be used in assessing the health of the commercial real estate market or at least a subset within that set.

 Sobering Thoughts for the HolidaysDevelopment in Toronto, image by Forum contributor skycandy

So where do we sit today with three weeks left to go in the quarter? To date, there have been 28 high rise land sales since October 1, a great improvement over Q3. Three of those trades have been substantial, over $50 million each compared to a high in Q3 of just over $40 million. So that’s the good news and maybe you wipe the sweat off your brow and say we dodged a bullet. Yet 28 sales are still down on the norm, almost by half if you use 50 trades per quarter as your marker. Before we run for cover, there are a few weeks left and the number of trades that tend to occur in the last week of the year can be substantial. So it might be best to have some concern but maybe not enough to put off holiday purchases.

What is troublesome is the decline in high rise unit sales. New unit condominium sales were just over 4,000 units last quarter while year to date sales were around 14,000. Compared to 2017, unit sales by the end of the third quarter were an astounding 25,839, based upon Urbanation’s 3rd Quarter report. The Bank of Canada held firm on interest rates this week but a ¼ point rise the last time around didn’t add to buyer confidence. I’m also following insolvency stats and noting that some developers are going down, suffocating from too much debt while some less scrupulous mortgage funds are going under and taking your parent’s retirement funds with them.

Counter to these concerns, the Ford government lifted rent controls on new-build apartment buildings, so that should put the wind back in the sails of developers that may have been sitting on the fence with whether to continue with apartment development or sell the units.  I’m on the side of the ledger that believes in lifting controls so that you encourage development. I was taught basic economics in high school that preached the gospel of supply and demand and I still believe in it. For those hoping for rent relief, if the rules of economics apply and knowing how many developers flock to build the new “thing”, we should see an oversupply of units that will work toward equilibrium and maybe an oversupply that could reduce rents. At the moment, we are in catch up mode. A seminar put on by Urbanation a week ago outlined where we stood in keeping pace with the market for rental product. They indicated that the market needs, approximately, 20,000 new units a year to meet demand. Currently, we are falling short of that but a rather large margin. They estimated that, approximately, 3,000 units were being added to the yearly inventory by condo unit investors and about 10,000 units were purpose built. One can hope that supply will, at the very least, eventually catch up to demand and potentially exceed it.

So good news on the rental front but now let’s temper that with the ever-changing world of city planning. I just read a recent report on Midtown, specifically Yonge and Eglinton, which might be a template for other, rapidly developing nodes. King West comes to mind as I write this. One line that I read in the report indicated a required setback between buildings of 30 metres. So when you have a market that is running out of development options and you’re assembling postage stamp sites, you might have to stand back and question if that’s such a good move as that little, 10,000 square foot site may not allow you to develop the property if you must maintain a 30 metre distance from your neighbour. That piece of dirt will likely remain a single family home or become a park dedication for a larger development nearby.

So, if you’re still not dissuaded from buying, despite all of the arrows being flung at you, let’s add mom and pop owners to the mix. If you’re in the know, then you likely have a good idea as to what you can pay for a site after reviewing recent approvals in the area, shadow effects of the site within the neighbourhood, the time to gain approvals and, most importantly, a guess on how LPAT will view your proposal since the OMB isn’t around anymore to settle the matter. Armed with this information, you approach the owners at their kitchen table and they kick you to the curb because you’re insulting them with your offer. Such offer is not really an insult, it’s based upon a factual calculation of what the site can yield but this owner likely has no knowledge of the planning process, senses you’re a slick developer or is using a slick agent, to rob them of their retirement funds. I have lived this brain damage that you go through trying to educate some owners as to the worth of their property. With ever-increasing barriers being erected to make it even harder to develop a site, values likely should be trending down as opposed to up.

So, I truly sense we are hitting that imaginary “wall” where unapproved sites will tend to sit while there will always be strong demand for shovel-ready developments. Construction costs continue to escalate, affordable units are to be included in virtually every new development and taxes have reached close to 25% of the cost of a unit. Yet we have a housing shortage despite the number of construction cranes in every corner of this city and we still can’t keep up with the demand for new housing.

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UrbanToronto has a new way you can track projects through the planning process on a daily basis. Sign up for a free trial of our New Development Insider here.


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The cost of renovating your bathroom in Toronto in 2021

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Home renovations can be a big task, especially bathroom renovations where you have to work with either an awkwardly shaped space, or one with lots of pipework and very little natural light.

Nonetheless, getting a bathroom renovation by Easy Renovation to change your existing bathroom layout, improve the ambience or add more natural skylights can be worth all the trouble. But determining how much a bathroom renovation would cost is important while setting a budget.

The pandemic has changed a lot of things with social distancing rules, working from home, and for some, being made redundant. Therefore, having a complete grasp of the financial implication of a bathroom innovation is very important.

Owning your dream bathroom can be made a reality and the good thing is, regardless of your financial situation, there are always available options. If you also decide to put up your property for sale in the future, a bathroom upgrade would be a great investment—as it would add significant value to the property. Your bathroom renovation project, like every home renovation, can either be very affordable or extravagant, but one thing is certain, you’re bound to have a more refreshed, stylish and modernistic space.  

Looking through detailed sketches of luxurious and expensive bathrooms can be quite tempting, especially when you’re on a budget. However, your bathroom can be equally transformed into something that looks just as modern, stylish and refreshing but without the heavy price tag.

Conducting a partial bathroom renovation means you only have to change a little part of your existing bathroom rather than tearing it down and starting from scratch. If you intend to carry out this type of bathroom renovation in Toronto, depending on the size of your bathroom, you can spend between $1,000 – $5,000. With a partial bathroom renovation, you can save money by tackling smaller problems that exist in your present bathroom—or you can just upgrade a few of its features.

Partial bathroom renovations are quite affordable and would leave your bathroom feeling new and stylish without being time-consuming or a financial burden—which is important considering the economic impact of the pandemic. Repainting the bathroom walls, replacing the tiles on the floor and in the shower area are examples of partial bathroom renovations which is the cheapest to accomplish.

A more expensive and popular bathroom renovation is the standard 3- or 4-piece renovation. This renovation type involves a lot more services that are not covered by a partial renovation budget. To execute a standard bathroom renovation in Toronto you need a budget of about $10,000 – $15,000.

Unlike with a partial renovation, you would have to make a lot more changes to various elements of your bathroom without the hassle of changing the overall design. You can easily restore your current bathroom into a modernistic and classy space that fits your existing style. Making changes to more aspects of your bathroom is quite easy since there is more room in your budget to accommodate it.

A standard 3- or 4-piece renovation includes everything in a partial renovation plus extras such as revamped baseboards, installing a new bathroom mirror, buying new lights, installing a new vanity, changing the toilet, and buying new shower fixtures.

If you’re one of those looking to make a complete overhaul of your existing bathroom, then the option of a complete bathroom remodel is for you.

Unlike a bathroom renovation, remodelling means a complete change of your current bathroom design and layout for one that is newer and completely unrecognizable. The possibilities when remodelling a bathroom are endless especially when you have a large budget of over $15,000. That way, you can get the opportunity to create the perfect bathroom for yourself.

In addition to all that’s available with a standard bathroom renovation, bathroom remodelling allows you to make bathtub to shower conversion, relocation of plumbing, relocation of the toilet, reframing the bathroom and even relocating the shower.

In conclusion, a bathroom renovation can be a very important upgrade to your home and depending on the features that you decide to include, in addition to the size of your bathroom, this would influence the total cost of the project.

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7 Tips For First-Time Home Buyers In Calgary

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Buying a house for the first time can be overwhelming to say the least. If you’re wondering what neighbourhood to go with, what you can afford, or even how to just get started on the process, let us take some stress off your hands! We’ve teamed up with Hopewell Residential to give you 7 tips to ensure the home you end up with is everything you dreamed of.

Hopewell Residential is a five-time Developer of the Year award winner, so their expertise is second-to-none in Calgary and beyond. Who better to learn home-buying tips from than the homebuilders themselves?

Create a checklist of needs & wants

This is a biggie. When you’re buying your very first home, you’ll want to weigh your needs vs. your wants. Ensuring you have what you love in your first home is a big, big deal.

What should you do? Easy. Set up a list of needs and a list of wants, but be pretty strict with yourself, and make sure you take your lifestyle into consideration. With the increase in remote work over the past year, it’s important to keep in mind that a home office or flex room might just be the key to maximizing at home happiness. Especially if you’re thinking you might be expanding your family later on, spare rooms and extra space is key (but more on that later!).

Or for instance, you might need a home in an area with a high walkability score, but you want to be close to certain amenities. Set yourself up with the right level of compromise and the number of homes that actually fit your ‘perfect’ idea will skyrocket.

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‘Don’t give up’: Ottawa Valley realtors share statistics, tips for homebuyers in ‘extreme’ sellers market

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The real estate market in the Ottawa Valley can be summed up this way: people from far and wide are in a buying frenzy, but there’s hardly anything to buy at the “store,” and the limited inventory is overpriced.

This “stampede” — as one realtor described it — will affect rural towns as residents grapple with finding affordable housing and agonize over their inability to purchase homes in their price range.

“We are seeing a lack of inventory in all price ranges,” said Laura Keller, a real estate agent from Carleton Place.

Helen Vincent, a Renfrew realtor, said she’s never seen a market like this in her 36 years of practice. “We postpone offers for four to five days in order to get all the buyers,” she said.

Multiple offers — between seven and 10 — became the norm, with cash offers and no conditions, as buyers faced bidding wars. “In Ottawa, they have up to 50 (offers),” she added.

“It’s very stressful. You’re going to get nine (people) ticked off, and one happy. So many people are disappointed,” Vincent said.

Terry Stavenow, an Arnprior realtor for 40 years, said that “the pent-up need took over with inventory going low. It made a stampede on everything that was available.“

“Brand new housing — it’s very much gone. Several building developers are rushing to get inventory. They usually don’t do construction in the winter months,” said Stavenow.

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