(Source: National Post)
“What we’re seeing now is a real crisis of confidence. There’s so much uncertainty.”
So says Mimi Ng, vice-president of marketing for Menkes Developments, co-developer – with Lifetime Urban Development and Halcyon Ventures – of the Four Seasons Private Residences in Yorkville. There’s no doubt the luxury condominium market has changed, she says, just as other parts of Toronto’s housing market have changed. With tighter construction financing, many buyers in the luxury market want to be reassured a project will go ahead before they put their money down – and these days, that assurance may come from purchasing a suite in a building where construction has already started.
“From a consumer perspective, it makes a lot of sense because you’ve got the reassurance that the project is underway and it’s real,” Ms. Ng says.
Fortunately, there are plenty of sites under construction in Toronto for buyers who want to see more than the building plans. The Four Seasons Hotel and Private Residences, for instance, is under construction, with work currently underway on its below-ground levels and occupancy scheduled for the end of 2011. Construction has also started at Diamante Development’s Davenport and Bay site, the Florian, and at the condo-hotel Living Shangri-La, which has sold 70% of its units and is slated for a mid-2012 occupancy.
In these economic times, some buyers may be happy that they can see progress, but also that an occupancy date is still a few years away.
The trade-off, of course, is that buyers who purchase once a site is under construction will likely pay more than the early-birds did, and they don’t have the same choice of suites. But that doesn’t mean there’s no choice at all, says Tina Amato, vice-president with Baker Real Estate, sales agents for the Residences at the Ritz-Carlton at Wellington and Simcoe streets. Now well into construction, with the tower built up to the 24th of 52 floors, there are still one-bedroom, two-bedroom, two-bedroom-plus-den and three-bedroom units available at the Ritz. The progression of the site is so visible that Ms. Amato says buyers are satisfied about the project being finished on schedule. Occupancy is slated for mid-2010.
In the end, it’s that “seeing is believing” attitude that gives buyers confidence. Not only do they know financing has gone through, they have a visual reminder that a project is a go.