Toronto Couture The Condominium | ?m | 42s | Philmor | Graziani + Corazza

Solaris said:
some problems (poor sales, financing) in particular for Monarch ??
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The Great Gulf project is not going to launch in the foreseeable future (They still have units in X that are moving very slowly despite offering a number of incentives) and poor sales isn't an issue with just Monarch (for the record Couture is over 60% sold) - the bottom has fallen out of the GTA condo market in the last 6 weeks. Projects that haven't started pre-sales are going to be delayed as virtually no one wants to open in this market. Toronto has a huge unsold inventory problem right now that needs to be resolved, so many developers are going to pull back on launching any new projects to take care of the inventory problems (19,000 unsold supply, which is at an all time high and forecasts for sales next year range from as low as 8,000 to 12k or 13k). The other issue for projects that are in pre-sales and haven't yet started construction is that they just aren't getting the sales... some projects are having decent launches, but once the sales offices are up and running for a couple months the traffic is dead - this is a problem across the board and there are a number of projects that are going to be cancelled in the first quarter of 2009.
 
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Interesting, though, that "the bottom falling out" of the market will still mean a floor of about 8,000 sales next year, probably more (I recall predictions from the likes of Jeanhy Shim being more like 12k, as you note). That's still an extraordinary number, and will clear the unsold inventory pretty fast. The boom is over (although most of its products are still under construction) but I think the condo market is going to be relatively robust for a long time to come.

For the city's sake, though, there's a few parking lots I am hoping get dealt with sooner rather than later.
 
Do you have any inside information on the larger projects we're all waiting on i.e.

1 Bloor / Auroa .... So on.

What about projects by tridel, are even they not secure in this market - I'm referring to 300 Front, the one in NYCC ?

Mike in TO said:
The Great Gulf project is not going to launch in the foreseeable future (They still have units in X that are moving very slowly despite offering a number of incentives) and poor sales isn't an issue with just Monarch (for the record Couture is over 60% sold) - the bottom has fallen out of the GTA condo market in the last 6 weeks. Projects that haven't started pre-sales are going to be delayed as virtually no one wants to open in this market. Toronto has a huge unsold inventory problem right now that needs to be resolved, so many developers are going to pull back on launching any new projects to take care of the inventory problems (19,000 unsold supply, which is at an all time high and forecasts for sales next year range from as low as 8,000 to 12k or 13k). The other issue for projects that are in pre-sales and haven't yet started construction is that they just aren't getting the sales... some projects are having decent launches, but once the sales offices are up and running for a couple months the traffic is dead - this is a problem across the board and there are a number of projects that are going to be cancelled in the first quarter of 2009.
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Hmm - are you asking an insider to divulge or speculate on information that might get him fired if he made it public? What kind of incentive do you offer for Mike to do such a thing?

42
 
You're right, I didn't mean that.

I should have phrased it along these lines:

Do you have any information regarding the larger projects yet to commence that you can divulge ... something you'd be allowed to share with the public.

Thanks for pointing that out interchange.
 
Mike in TO said:
The Great Gulf project is not going to launch in the foreseeable future (They still have units in X that are moving very slowly despite offering a number of incentives) and poor sales isn't an issue with just Monarch (for the record Couture is over 60% sold) - the bottom has fallen out of the GTA condo market in the last 6 weeks. Projects that haven't started pre-sales are going to be delayed as virtually no one wants to open in this market. Toronto has a huge unsold inventory problem right now that needs to be resolved, so many developers are going to pull back on launching any new projects to take care of the inventory problems (19,000 unsold supply, which is at an all time high and forecasts for sales next year range from as low as 8,000 to 12k or 13k). The other issue for projects that are in pre-sales and haven't yet started construction is that they just aren't getting the sales... some projects are having decent launches, but once the sales offices are up and running for a couple months the traffic is dead - this is a problem across the board and there are a number of projects that are going to be cancelled in the first quarter of 2009.
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Well that is good news with projects being cancelled since oversupply would be more detrimental to TO residential pricing.
Look to FL to see the result of overbuilding (+ crazy $$$ appreciation) - RE prices have been cut in half.

Based on the figures of 19,000 unsold supply vs. forecast of 8-12K sales in 2009, that would be equivalent to 1.5 to 2.5 years of future sales !!!
Thats a big concern.
 
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I am hoping / hopeful not too many people will back out of pre-sale units because:

(1) they will loose all their deposits
(2) TO will lose some good looking proposed buildings
(3) that would trigger a mega RE market mud-slide
 
I also hope it doesn't happen too much but if someone gets laid off they probably won't have much choice. It seems Toronto is one of the last places to feel the impact from current troubles.
 
I don't think people will back out of a sale until a building is near completion and the occupancy date.

By then, one can judge if the market value has changed dramatically from their purchase price, the current RE cycle, market rents vs. costs, etc.

I was at several presentation centers (by different developers, etc) and talked to the sales reps regarding what % of suites are sold to investors.
Given that a purchaser may or may not disclose their actual usage, it sounded like at least 25% of sales were made to investors.
 
cdr108 said:
I don't think people will back out of a sale until a building is near completion and the occupancy date.

By then, one can judge if the market value has changed dramatically from their purchase price, the current RE cycle, market rents vs. costs, etc.

I was at several presentation centers (by different developers, etc) and talked to the sales reps regarding what % of suites are sold to investors.
Given that a purchaser may or may not disclose their actual usage, it sounded like at least 25% of sales were made to investors.
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I think the opposite....people back out of sales during the 10 day cooling period, and perhaps (but not likely) after the initial 2.5% or 5% deposit. Usually builders require about 15% of your hard earned money before closing with another 5% due upon the occupancy of the unit. So all in all, it is highly unlikely that anyone would walk away from thousands of $$$'s near the completion date. I am refering to the average buyer here and not speculative purchasers...
 
Mike in TO said:
The Great Gulf project is not going to launch in the foreseeable future (They still have units in X that are moving very slowly despite offering a number of incentives) and poor sales isn't an issue with just Monarch (for the record Couture is over 60% sold) - the bottom has fallen out of the GTA condo market in the last 6 weeks. Projects that haven't started pre-sales are going to be delayed as virtually no one wants to open in this market. Toronto has a huge unsold inventory problem right now that needs to be resolved, so many developers are going to pull back on launching any new projects to take care of the inventory problems (19,000 unsold supply, which is at an all time high and forecasts for sales next year range from as low as 8,000 to 12k or 13k). The other issue for projects that are in pre-sales and haven't yet started construction is that they just aren't getting the sales... some projects are having decent launches, but once the sales offices are up and running for a couple months the traffic is dead - this is a problem across the board and there are a number of projects that are going to be cancelled in the first quarter of 2009.
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I spoke with the X sales ppl and take it with a grain of salt but they have 30 units remaining of suites available for sale. I believe there are a handfull of units that have not been released. Overall sales have been very solid, 90%+ but I'm glad to see that the project south of it is not going forward. I also heard that once X hits ground level that Couture will start building so that should be imminent.
 
interchange42 said:
Hmm - are you asking an insider to divulge or speculate on information that might get him fired if he made it public? What kind of incentive do you offer for Mike to do such a thing?
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I offer him a thick wad of Canadian Tire money and a pen-cup full of very nice rollerballs (slightly chewed). How's that?
 
condoboy said:
I think the opposite....people back out of sales during the 10 day cooling period, and perhaps (but not likely) after the initial 2.5% or 5% deposit. Usually builders require about 15% of your hard earned money before closing with another 5% due upon the occupancy of the unit. So all in all, it is highly unlikely that anyone would walk away from thousands of $$$'s near the completion date. I am refering to the average buyer here and not speculative purchasers...
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Since we are discussing losing deposits, I will have to assume it has passed the 10 day cooling period.

Deposit structure varies but tends to be initial deposit with remaining 5% down in 30 days; another 5% @ 90 days; 5% @ 180 days; 5% @ 1 year; 5% @ occupancy.

With nothing I have seen selling for under $200K, the first 5% deposit would be at least $10K in the first 30 days. That's already a big chunk of $$$ to be walking away from before the ground has been broken (if ever it is) given that deposits are held 'in trust' should a project fail; and could be waiting about 5 years from the beginning of sales to completion.

As Mike in TO noted, some projects in 2009 Q1 will be cancelled.
Based on the figures of 19,000 unsold supply vs. forecast of 8-12K sales in 2009, that's already 1.5 to 2.5 years of future sales!

There was an article in the Globe and Mail quoting the president of some buidling association in GTA and he stated there is more than enough work lined up for the trades from projects that are already sufficiently sold, financed and waiting to begin construction so we're not going to have a bunch of unemployed construction workers.

We don't need the over-building that occurred in several states in the US.
 
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