lead82
Senior Member
It’s mostly just not feasible. A lot of these buildings will fall to demolition sooner than later or convert to hotels.
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Admiral Beez
Superstar
I don’t think any high rise condo tower has ever been demolished in Toronto. I expect the current inventory will be here for 100 years.
toaster29
Active Member
What do they become? The current old buildings at least have architectural charm, and are quite large. In 50, or even 20 years from now, a lot of these buildings will become "slums".. some would say places like ICE condos are already there.
Admiral Beez
Superstar
The big issue will be with the floor to ceiling window condos. The half life of the argon filled seals is only about 15 years, after that the seals fail, the insulation values plummet and then every unit owner is hit with a special assessment to replace all the windows, which can cost millions $ per building. This was a known problem over a decade ago, but we kept building them.
lead82
Senior Member
Not yet but we may see poorly built condos fail and of the owners can’t pay the special assessments they will sell and the building may fall into disrepair. The older buildings built ~ pre-2010 are much better quality.
Admiral Beez
Superstar
I don't think I've ever seen footage of a glass clad condo being demolished. I would assume all the exterior of the condo would need to be stripped.
lead82
Senior Member
It’s too early. We may see mass glass facade replacements or other major exterior repairs. Demolition will be a last resort if the owners can’t cough up the funds to repair.
Admiral Beez
Superstar
I wonder if we’ll see facade conversions on 25 year condos from curtain/window walls to punched windows.
rdaner
Senior Member
I have a question: will the likely rate cut next week have a noticeable effect on the real estate market? Is it enough or are more needed?
TheKingEast
Senior Member
Nope. And that's if they decide to cut instead of stand pat.
Admiral Beez
Superstar
Toronto’s new condo sales plunge 57%, hit 27-year low in ‘catastrophic’ drop
The 3,159 new units sold in the GTHA in the first half of 2024 represent a 72 per cent decline compared to the 10-year average, according to a report.
www.thestar.com
I'll say it again. Make a product your customer base both wants and can afford. Instead developers are making condos for a market of micro-investor units and million $ luxury multi-bedroom units that largely no longer exists. This is nuts, when what the market wants and can afford is 2-3 bedroom units for either rent or purchase below $500k for middle income families in well-planned communities integrated with parks, transit and walkable schools (that are open to new enrollment). And stop referring to dens/nooks as "bedrooms" in your listings - if it doesn't have a door and a window to the outside, it's not a bedroom. And keep the monthly condo maintenance fees to a minimum by limiting or omitting the pool, gym, hobby rooms, sports courts, in-house theatre and other unnecessary amenities.
Make $500k (or less) condos with 2-3 bedroom units to house the hundreds of thousands of new families emigrating to Toronto each year. That's what the market wants and can afford. With a $50k down payment, according to the government mortgage calculator, a $450k 25-year mortgage at the current 6.6% would have a monthly payment of about $3k. Of course rates will go up and down over the term, but we must not assume a return to the free money of the condo boom.
Meanwhile, on realtor.ca there are only fifty units with 3 bedrooms below $500k. So, how can developers make a profit making 2-3 bedroom units people can both want and afford to buy or rent?
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afransen
Senior Member
2-3 bedroom units would be 800-1000 sqft. To hit $500k that means a cost psf of $500-$600. When preconstruction units are going for 2.5 to 3x that amount. What happens when the demand side and supply side are too far apart? Volume collapses, which is what we are seeing.
Admiral Beez
Superstar
But are they going for that amount now, or sitting “ungone”, unsold? Developers can address the demand side of the volume collapse by offering the market what it wants and can afford. If the market wants and can afford $500 psf then if you want to remain in the mass condo market that’s what you need to make. Perhaps we’ll see developers decide they cannot and leave the market?
afransen
Senior Member
Seeing as developers don't have 60% margins, I don't think they could profitably offer $500 psf developments. So they won't.
Admiral Beez
Superstar
Well, developers and their customers losing their shirts maybe costs and fees faced by developers will need to come down.