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Affordable Waterfront

Toronto's new and older waterfront condos appeal to buyers of all ages and price ranges Suites are a bargain here, compared to other big North American cities

By: Tracy Hanes for the Toronto Star

If you're scouring major cities across the continent in search of a waterfront condominium, Toronto has a bargain for you.

According to Jeanhy Shim, editor of Urbanation, the quarterly publication tracking the GTA condo market, the city's new waterfront condos, priced at $410 to $412 per square foot, represent a bargain among big North American metropolises. A suite in a similar location would run you $600 per square foot in Chicago, $1,000 in Manhattan and $700 in Boston. Vancouver is one of the most expensive waterfront markets, at $1,500 per square foot. One example is the Fairmont Pacific Rim condo hotel in Vancouver, where prices for the "estate" suites start at $2 to $2.5 million.

"The prices in Toronto are nowhere near the levels of major U.S. cities," says Shim. "Our market hasn't seen the increases U.S. cities have, where it's more a speculative market. Waterfront here is still a great deal." Shim says one reason Toronto prices are considered a deal is because the city's condo market is driven by affordability, so a lot of suites are being built for young, first-time buyers. As well, she says, projects are being built to cater to a wider market, from young people all the way through to empty nesters and retirees.

"The great thing is that everybody loves the waterfront," she says. "It has appeal for every type of buyer." Shim believes this mix of buyers "makes our waterfront more interesting."
She says the Toronto market also offers a lot of small suites, which many other cities don't.
Linda Mitchell, vice-president of sales and marketing for the Monarch Corp., which has just opened Quay West at Tip Top on the waterfront, agrees.

"I think right now, Toronto has more product on the market than any other city, which keeps prices in check," she says. Mitchell points out that during the last boom of the late '80s, there were less than 100 condo projects on the market, while now there are about 250. Mitchell says there's a real push on from condo developers to maintain affordability, as the majority of buyers are "average people with average salaries" who can afford to spend between $180,000 and $280,000.

What's unusual about the Toronto market is that unlike other major cities, its waterfront is not the most expensive area in the city. That honour goes to the Yorkville neighbourhood, with its array of glitzy designer stores and trendy restaurants. "In a lot of cities, waterfront is only for the rich, but here, it's affordable to a range of buyers," Mitchell says. "What a great value Toronto's waterfront is."

Monarch's Quay West suites start at $139,900. "That's for a 360-square-foot studio, which is fine for someone who just needs a place to sleep. The most inexpensive units are smaller and not in the prime location in the building," says Mitchell, adding that the average price of units in Quay West is in the high $200,000s. When the project opened in mid-August, 152 of 364 units in the modern, glass, 23-storey building sold on the first weekend. The site is next to two waterfront parks, connected by the Martin Goodman Trail and will provide views of Coronation Park to the west and Queen's Quay marina to the east.

Even Quay West's pricier units would be considered a deal on the global market. "People in Europe see our prices as a joke because they are so low," says Nestor Repetski, senior partner at Winick Realty Corp., sales and marketing agents for Plazacorp's West Harbour City, another new project, on the site of the former Molson Brewery on Fleet St., just a stone's throw from Lake Ontario.

"Vancouver's pricey, Boston's pricey, L.A.'s pricey, close to double what our prices are," says Repetski. "Our prices are low because of the general proliferation of condo sites downtown. There is so much choice," he explains. "You can charge a premium, but you have to remain competitive."

Phase one of West Harbour City is virtually sold out and phase two has been launched, with prices starting at $222,990 for a 703-square-foot unit, and up to $332,990 for a two-bedroom-plus-den suite. The project is on the western edge of the downtown waterfront and Repetski says there is no more waterfront land available for condo development to the west until Etobicoke.

To the east, there is land at the foot of Yonge St. and farther east, which will likely come on stream soon, he says, as the area becomes further de-industrialized. That industrial image has been another reason why Toronto prices have lagged behind other major cities. "Torontonians have always taken the lakefront for granted," he says. "For years, it was abandoned and for generations, perceived to be an industrial, not a residential area. We turned our back on the lake."

The first downtown waterfront condo was developed by the Campeau Corp. about 30 years ago, Repetski says, next door to the hotel that's now the Westin Harbour Castle. The waterfront market began in earnest about 20 years ago, until the bust of the early '90s and started to revive 10 years ago.

Repetski says 20 years ago, one of the big issues was the insufficient infrastructure for everyday needs for local residents, though there were plenty of tourist amenities. Now, he says, "all the infrastructure in the world" exists along the waterfront and even more is coming, with a Great Canadian Superstore going in at the corner of Fleet and Bathurst Sts.

Projects like 500 Queens Quay W., Atrium on Queens Quay, 1 York Quay and the Waterclub are among those that have transformed the city's waterfront lands from industrial to residential over the past two decades. But Repetski says there's still not a full appreciation for the waterfront as a desirable residential area, even though condos there have proven to be a good investment.

(For example, he says a 400-square-foot bachelor suite in the Atrium on Queens Quay, which sold for $89,000 in 1996, would be worth more than $200,000 now.) He gives the analogy of people who live in a neighbourhood with a 300-year-old oak tree, who don't take note until the local historical society puts a plaque on the tree and plans events to commemorate it.

"All of a sudden, everybody notices the tree and goes, `Isn't that great!' All of a sudden, people woke up and went, `There's a waterfront here!'" But, he adds, "the Toronto waterfront is still undervalued and underappreciated and that's going to shift.

"There's only so much waterfront in the core of the city used for residential development and, once that's done, values are going to accelerate," he predicts.
Posted on Monday, September 4, 2006 at 02:50PM by Registered CommenterElaine in | CommentsPost a Comment

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