In Toronto, a city of constantly rising real estate prices and fast-paced development, it can be difficult to analyze market conditions with a long-term perspective. The whirlwind nature of the property market can seem overwhelming, to say the least. Helping us get a better grasp of Toronto's real estate trends—particularly in the luxury market—in steps Talon International Development CEO Neil Labatte, who spoke to us about the long-term value in Toronto's luxury real estate.
While touring the penthouse suites of Trump Residences Toronto, Labatte characterizes the luxury real estate market as having "a healthy balance of demand and supply." Unlike many of Toronto's mid-market condos, Labatte explains that very high-end real estate is much less frequently sold during pre-construction, with "discerning buyers preferring to see the property first-hand." This means that financing the construction of luxury properties is somewhat more difficult, leading to "a more limited supply."
Over the last few years, Toronto has seen a modest influx of high-end residential properties come online, with hotel-condominium projects such as Living Shangri-La and the Four Seasons Hotel and Residences joining the 58-storey Trump at the pinnacle of Toronto's high-rise real estate market. According to recent reports by Sotheby's and Urbanation, however, prices for these properties have continued to rise as vacancy rates dwindle, with 86% of luxury units— valued at $800 psf or over—sold as of Q3-2015, compared to 80% in Q4-2012.
Even with a somewhat increased supply the market continues to show strength. In terms of Trump Residences, however, Labatte highlights the tower's prime Financial District location as having particularly "good long-term potential, given the increasing scarcity of this type of location." In addition, "the combination of a high-end hotel [occupying the lower floors] and condominium helps to ensure that standards will always be maintained, and public areas will regularly be refurbished to have the polished quality of a luxury hotel."
Labatte also characterizes the Trump Residences as filling the significant "gap in Toronto's luxury rental market." With a lack of new, custom-built luxury rental properties available, the rental of a luxury condominium property "to executives who are new to the city, or people who are in the process of relocating," provides an important supply of the otherwise scarce—and highly valuable—market niche.
Touring the richly-appointed 5501 penthouse suite, Labatte also notes that Toronto is becoming an increasingly attractive place for international business and residents. "The international flavour is certainly a big draw," he tells us, while "the fact that Toronto did not experience flight to the suburbs to the same degree as many American cities" has helped to maintain an increasingly desirable urban ambiance.
Our tour concludes in the 14,000 ft², three-storey 'super penthouse,' which has remained unfinished so as to be customizable by any prospective buyers. On the top, 58th floor of the tower, we look out over the city from behind the Art Deco dome that tops the building.
Additional information and renderings can be found in our dataBase file for the Trump Toronto, linked below. Want to get involved in the discussion? Check out the associated Forum threads, or leave a comment using the space provided at the bottom of this page.
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