Downtown condo sales bounce back
July 16, 2021
2 Burrard condos, downtown Vancouver. | Reliance Properties
The anticipated boomerang of buyers back into the downtowns of major cities has started—led by buyers in Toronto and Vancouver—according to real estate data.
During the pandemic, there was a marked migration from central urban areas to suburban and even rural locales by buyers seeking more space and work-from-home opportunities. However, as mass vaccinations continue and cities reopen, it appears this migration is starting to reverse.
In the first quarter of 2021, condo sales in the Greater Toronto Area (GTA) shifted from the 905 region (outside of the city of Toronto) back to downtown Toronto, according to Urbanation, which tracks the GTA housing market.
“The downtown Toronto condo market turned the corner in the first quarter of the year on low borrowing costs and renewed optimism regarding the outlook, but also partly due to chain reaction after suburban home prices soared 30 per cent over the past year and put the spotlight back on urban properties,” said Urbanation president Shaun Hildebrand.
In the latest TD study, Toronto benchmark condo prices were up 10.6 per cent from 2020—the strongest gain since 2018 says TD economist Rishi Sondhi.
Properly, an online real estate brokerage, recently studied how all home prices in the GTA have appreciated since that last peak and found that condos have gained the most.
Condo prices in the GTA have climbed 44 per cent since 2017, while semi-detached homes have gained 27 per cent and detached houses 21 per cent.
In Vancouver, after zero successful launches of pre-sale condo projects in the downtown over the past three years, the only pre-sale tower on the market saw 100 units sell in a two-day blitz in June 2021.
The sudden resurgence has persuaded developer Amacon to launch pre-sales at the Block—a hotel-anchored, 160-unit condo tower in the 100 block of Robson Street. Other stalled core projects are expected to restart.
“Downtown demand is about to surge,” said Ryan Lalonde, with the market research team at MLA Canada.
Pattison Group and Reliance Properties kicked off sales of 2 Burrard Place in late June 2021 and sold more than 100 condos (out of 239 offered) in the first two days.
Urban Analytics said the early success of 2 Burrard Place is being watched by developers whose projects have been in limbo.
“Downtown Vancouver felt the brunt of government housing policies and taxes introduced in 2018, resulting in zero successful condo launches in the core since,” said Dillon Sangha, market and advisory manager at Urban Analytics. “Developers tried to launch, but cancelled or delayed plans after failing to achieve sufficient sales.”
Those housing policies and taxes include Vancouver’s vacant home tax, which increased this year to 3 per cent of a home’s assessed value; the B.C. speculation tax, which ranges from 0.5 per cent to 2 per cent of the property’s value; and, an increase in the provincial foreign-homebuyer tax to 20 per cent.
Sangha said swift sales at 2 Burrard Place can be partly attributed to a unique mix of units that include “convertible” floor plans.
“The project offers smaller homes with living rooms that can convert to bedrooms at night, something that, to our knowledge, is a first for downtown,” said Sangha.
The smallest units in 2 Burrard Place are 435 square feet, but Jon Stovell, president and CEO of Reliance Properties, said smaller space does not equate to lower luxury standards.
2 Burrard Place residents will have an in-home control panel that gives them on-demand access to a butler, personal chef, and wine specialist, along with 30,000 square feet of comprehensive amenities like health and wellness spa facilities, a full-size lap pool, and yoga space.
Prices at 2 Burrard Place start at $539,000, or about $1,240 per square foot. The larger units in the 36-storey tower are about 1,800 square feet.
“Downtown will always be a great investment,” said Stovell. “It is the hub for commercial, social and cultural activity, the heart of the city.”