100 new condo buildings – insights from an industry expert

The Toronto housing market has undergone significant transformation in the past few decades. With periods of booming sales to years of uncertainty and recovery. In a recent “Toronto Under Construction” podcast interview with Linda Mitchell Young, a seasoned expert with more than four decades of experience in the highrise development industry, Mitchell Young shared her insights into the dynamic evolution of the housing market in Toronto based on her experience in launching 100 new condo projects.

THE EARLY DAYS: A NEW AVENUE FOR MONARCH

Mitchell Young’s journey in the highrise development industry began when she was tasked by Monarch President John Latimer in 1995 to research the condominium business’s potential. Monarch had primarily focused on single-family home building until then. In 1996, the company launched its first condominium project in Scarborough, with suites starting at just $165 per sq. ft. (psf).

THE INFLUENCE OF NEW CANADIANS

In the late 1990s, many soon-to-be Canadians fled Hong Kong due to the turmoil surrounding the end of colonial rule and the transfer of sovereignty to China, which boosted the Scarborough market. This influx of buyers gave an early indication of the growing demand for highrise living. New Canadians who were used to high-density housing were the first to buy into the concept of ownership apartments.

FOREIGN BUYERS AND MARKET DYNAMICS

The Toronto Census Metropolitan Area (CMA) witnessed a surge in condominium apartment construction starts coming out of the early 1990s recession, growing from just 2,300 in 1996 to more than 12,700 in 2001. This period also marked the influx of foreign buyers into the market, leading to discussions about whether this was a potential issue (even back then). With her extensive experience, says foreign buyers never concerned her, attributing it to a healthy market dynamic.

THE INVESTOR MARKET AND CHANGING BUYER GROUPS

In 2007, more than 22,000 new condos were sold in the GTA, with average pricing hovering around $425 to $500 psf. This phase marked a change in the buyer groups, with the “downtown lifestyle” becoming increasingly attractive, and a spike in investor activity was evident.

FINANCIAL CRISIS AND MARKET RESILIENCE

The global financial crisis in 2008-09 disrupted new condo sales for about six to seven months. Project financing, product evolution and buyer sentiment faced unique challenges during this period. The crisis led to changes in financing requirements, with lenders requiring that developers sell more than 80 per cent of the revenue in the building.

MARKET FEARS AND REALITIES

Then 2011 and 2012 marked another boom in the GTA’s condo market. However, there were constant fears of an impending “U.S.-Style” meltdown. Mitchell Young believes that these concerns of “oversupply” and buyers being “over-leveraged” were overblown. The market bounced back following periods of softness in 2009, 2013 and 2017 and will likely do the same following this year’s mini price correction.

THE RESILIENCE OF TORONTO’S HOUSING MARKET

Mitchell Young’s insights offer a unique perspective on the evolution of the GTA’s high-density housing market. The pre-construction new condo market in Toronto has demonstrated remarkable resilience and adaptability from its early days to the present.

It is a challenging time to make a buying decision. Still, it is best to think long-term, and nothing is on the horizon suggesting that Toronto will oversupply the market any time soon. Demand will continue to outpace supply, and look for prices and rents to rise when forecasting the Toronto market over the next decade. Good luck.