Analysts have predicted Toronto’s real-estate apocalypse every year for the past six years. Nevertheless, here are our five predictions for 2012.
As we turn the page on another year in Toronto real estate, experts are trying to forecast what 2012 will bring. It’s easier said than done and nobody has a crystal ball—analysts have predicted Toronto’s real-estate apocalypse every year for the past six years (eventually they’ll get it right, no?). Nevertheless, here are my five predictions for the new year.
Very busy spring.
The fall market is usually more sluggish than spring, but this past fall was especially slow. Some people believe that buyers were out in full force in April and May of 2011 and, therefore, there was nobody left to purchase in September and October. But I believe there was a serious lack of quality housing on the market, and many buyers held off instead of settling for a sub-par property. I think the spring 2012 housing market is going to take off like a rocket as soon as March Break is over, and I expect the downtown condo market will be busy as soon as our New Year’s Eve hangovers begin to clear.
Stagnant growth.
Housing prices soared in 2011. In November, the average sale price of a home was 10 per cent higher than a year earlier. My colleagues might kill me for saying this, but I don’t think we’re going to see those double-digit percentage price increases we’ve grown accustomed to. I don’t expect prices to fall either, but I wouldn’t be surprised to see them rise one to two per cent overall. Mortgage rates are still low and there will be transactions aplenty, but I think the Toronto market needs to catch its breath for a year.
Condo developers in trouble.
It has to happen eventually, right? Sooner or later, one of the fly-by-night condo developers that throw up sales centres, take deposits and build poorly constructed condos after years of delays will end up in a class-action lawsuit. In 2011, we started to see some media attention aimed at the falling glass from Lanterra Developments’ buildings, the ongoing lawsuit against Concord Adex, as well as some human-interest stories about people who were screwed by developers that delivered less than they expected (and contracted for). But as the number-one critic of pre-construction condos in Toronto, I think the backlash from consumers has just begun. For every reputable, responsible developer (e.g., Tridel), there are dozens of miserable developers that aren’t concerned with long-term customer satisfaction. Sooner or later, they’ll be held accountable, and I don’t think that day is far off.
Continued rise of Leslieville and Riverdale.
Leslieville has been labelled as “up-and-coming” for years. But I still think it’s an undervalued neighbourhood, and I expect prices in Leslieville and neighbouring Riverdale to outpace the average in 2012. Leslieville is a quick jaunt to the downtown core, and Queen Street East is booming with new retail and dining hot spots. Just south of the ever-popular Danforth strip, Riverdale offers a family environment at substantially lower prices than the communities in North Toronto. If I were to buy a house tomorrow, it would be in one of these two locales.
Premium on outdoor condo space.
High ceilings will never make up for the lack of outdoor space, and the soft-lofts of the mid-2000s, with floor-to-ceiling windows but no outdoor space, have fallen out of favour in the past couple of years. Buyers are paying huge premiums for large terraces (400 square feet and up), where they can throw a Canada Day barbecue for 20 of their closest friends. Condo owners with 1,200-plus square-foot patios are spending $50,000 to $100,000 to create urban oases. Hey, it’s Toronto—if people are going to endure the cold, snowy winters, they’re going to want to live it up when the weather is good.
