High-rise construction in Toronto is on, well, the rise. According to data from the Council on Tall Buildings and Urban Habitat, the city had 31 skyscrapers under construction and 59 proposed in 2019.
Mortgage Broker News reports those figures are on top of 67 high-rises already in place in Toronto.
Compared to other cities, Toronto has a significant lead. Chicago, the city with the second-largest number of high-rises, has 126 skyscrapers and another 19 under construction proposed.
This is a growing opportunity for mortgage professionals. BILD GTA reported that in 2019, there were 26,948 condominium apartments sold, up 27% from 2018.
Toronto Storeys writes that in 2020 alone, there will be 30,000 condos completed with as many as 10,000 new condos ready for occupancy in the first quarter.
According to the National Bank Housing Affordability Monitor, in Q4 of 2019, condos were significantly more affordable compared to non-condo units in Toronto. The Bank reported that the price of the representative condo in the market was $572,948 (vs. $934,902 for the price of the representative home). In addition, the representative condo needed an annual household income of $120,778 to afford it, vs. $193,550 for the representative home, and 47 months to save for a down payment (at a saving rate of 10%) vs. 100 months.
Opportunities in the High-Rise Market — and Challenges
The high-rise developments in Toronto and beyond are creating more opportunities for homeowners, particularly as an entry-point to the market.
Urbanation Inc. reported that new condo activity surged in the final quarter of 2019, with 8,044 units sold in the Greater Toronto Area (up 38% from the year before). In contrast, unsold condos decreased by 4.8% to 13,373 units at the end of 2019, remaining below the 10-year average of 15,907.
However, some note that there are challenges involved, too.
Better Dwelling recently reported that Toronto condo inventory has fallen to the lowest level in at least 10 years. While more high-rise developments are being built, they are also selling fast — and often in pre-construction.
Another challenge comes for investors looking to rent condos out, as Toronto tenants may be “hitting a wall” when it comes to how much they can pay in rent, according to Toronto Storeys. If an investor purchases a condo intending it as an income property, but cannot find a tenant, it could cause issues.
How to Find More High-Rise Leads
However, some solutions can help find high-rise opportunities more efficiently – such as property data tools from Purview.
For instance, mortgage brokers and lenders can use the Property Details Report to quickly review the property’s legal description, size, address, and homeowners, even for condos and high-rise developments.
The Comparable Sales Report can help find neighbourhood comparables to see where residential towers are having the most activity.
Other tools, such as Fraud Check, can mitigate risk quickly when a deal comes through so that you can be sure it is viable from the start.
You can also target pre-construction buildings by estimating available equity and assess other properties that developers own.
As development picks up, and housing supply diversifies, the high-rise development phase appears to be here to stay.
Access these Purview solutions and more today. Call 1-855-787-8439 or visit www.purview.ca.