MULTIPLEX HOUSING AROUND THE CORNER
CITY OF TORONTO
Toronto is expected to grow by a minimum of 700,000 people by 2051 - how these new Torontonians are housed will shape the City for decades to come. In recent years, the City's growth has been focused on transit rich areas such as the Downtown, Centres, and along Avenues, where the supply of apartments has increased significantly. Conversely, the supply of low-rise housing has not kept up with demand and in some cases, the City's low-rise Neighbourhoods have lost population. The City can choose to adopt a more equitable approach to growth across Toronto that sees Neighbourhoods adapting to change, remaining vibrant, and providing more Torontonians the option to live within one of our low-rise communities.
By 2051, if current trends continue, Toronto could have a deficit of over 42,000 ground-related units, such as single and semi-detached homes, townhouses, and multiplexes. The City's low-rise Neighbourhoods, which make up 35% of its land area, present a unique opportunity to accommodate more of this scale of housing. This report supports City Planning staff's opinion that multiplex housing should be permitted in residential areas throughout the City of Toronto and requests direction to continue consultation on the implementation of this approach.
"By 2051, if current trends continue, Toronto could have a deficit of over 42,000 ground- related units, such as single and semi-detached homes, townhouses, and multiplexes."
Multiplex housing means low-rise homes containing two, three, or four residential units built at a similar scale to single unit homes. Multiplex housing can help increase the supply of residential units, support neighbourhood vitality and add sustainable, gentle density to Toronto's existing low-rise neighbourhoods. The Multiplex study is part of the Expanding Housing Options in Neighbourhoods (EHON) initiative, intended to increase both the variety and type of housing available in these areas. In future phases, the Multiplex study will continue a focused consideration of low-rise apartment buildings up to four storeys in appropriate locations.
This study responds to a number of City and Provincial policy objectives to provide a full range of housing options to Torontonians, in a form that makes efficient use of land, infrastructure, and existing services. Allowing for additional units in low-rise housing forms of a similar scale, is generally compatible with the Official Plan's objective that physical change in Neighbourhoods will be sensitive, gradual, and fit the existing context.
Toronto is expected to grow by a minimum of 700,000 people by 2051 - how these new Torontonians are housed will shape the City for decades to come. In recent years, the City's growth has been focused on transit rich areas such as the Downtown, Centres, and along Avenues, where the supply of apartments has increased significantly. The City's low-rise Neighbourhoods, which make up 35% of its land area, present a unique opportunity to accommodate more of this scale of housing. This report supports City Planning staff's opinion that multiplex housing should be permitted in residential areas throughout the City of Toronto and requests direction to continue consultation on
the implementation of this approach.
This study responds to a number of City and Provincial policy objectives to provide a full range of housing options to Torontonians, in a form that makes efficient use of land, infrastructure, and existing services. Allowing for additional units in low-rise housing forms of a similar scale, is generally compatible with the Official Plan's objective that physical change in Neighbourhoods will be sensitive, gradual, and fit the existing context.
This report presents a draft Official Plan Amendment to permit duplexes, triplexes, and fourplexes in residential areas across the city. The legalization of these housing types
city-wide will help meet the needs of both current and future Torontonians by adding ground-related units. The report also presents proposed zoning directions to implement these policy changes. Consultation is proposed for the remainder of 2022, after which both the Official Plan and Zoning By-Law Amendments will be brought together to Planning and Housing Committee for consideration in the first quarter of 2023.
https://secure.toronto.ca/council/agenda-item.do?item=2022.PH35.3
YOU NEED HOW MUCH TO BUY A HOUSE?
GLOBE AND MAIL
Despite home prices lowering across much of the country, Canadians will still need to earn more to be able to buy a home than compared to last year, according to a new report from RateHub. The report shows that homebuyers will need an annual income of $217,000 in Toronto as of March 2023 to afford to buy a $1,118,500 home. That’s a $6,250 increase in income compared to March 2022, even though the average home price fell by more than $200,000 in the city in that time, according to RateHub.
You will also need to earn over $200,000 in Vancouver to afford a home, while the rest of the country requires between $75,000 and $170,000.
RateHub co-CEO James Laird told Global News that Canadians now need to earn more to buy a home because interest rates have increased to over five per cent from closer to three per cent last year. “There’s never been a harder time to purchase a home in Canada,” he said. Laird said that unless the homebuyer is an extremely high earner, they will need a partner to qualify for the average home in Canada. The increase in mortgage rates also pushes up the required income needed to pass the stress test to be approved for a loan, the report says.
The report found that for nine of 10 cities in Canada, homebuyers need to earn between $5,650 and $21,360 more in annual income to afford a home than they did last year, a trend that is expected to worsen. “With supply of new listings tight and some home buyers returning to the market, don’t expect home affordability to improve in the coming months,” Laird said.
Halifax requires close to $105,000 in income, Montreal is over $107,000, Winnipeg is over $75,000, and Ottawa is under $130,000. Calgary is the one outlier on home values, where the average home price rose modestly. Calgary requires a little over $110,000 in income to fetch the average-priced home. Hamilton was the only city on the report’s list to require less income, with $4,460 less needed year-over-year to afford a home there.
Laird said that the income requirement posed by most banks means that some may need to rent longer or rely on their parents for help either with the downpayment or co-sign to boost their income level. He recommends for homebuyers to consider small cities, where they may find a better deal.
“Home prices vary a lot in this country,” Laird said. “It’s probably why we’re seeing a lot of young people move out to the Prairies and Alberta — homes are relatively affordable versus Toronto and Vancouver.”
CANADAS POPULATION RISES
REM - Emma Caplan
Immigration push: tight supply and overwhelming demand fuel rising home prices in Canada’s most in-demand cities. According to a recent report from Statistics Canada, Canada’s population grew by a record one million people in 2022, with almost all of the growth attributed to international migration. With the federal government’s plan to welcome an additional 1.5 million immigrants by 2025, there is concern about how the increased demand will impact the country’s already-strained housing market.
Statistics Canada notes how the influx of newcomers “also represent additional challenges for some regions of the country related to housing, infrastructure and transportation…”
There are several reasons for the immigration push, though, namely the need to fill ever-growing job vacancies and welcome refugees fleeing countries devastated by natural disasters and war. The BC Real Estate Association’s Chief Economist, Brendon Ogmundson, explains, “We don’t have adequate supply because of the relentless level of demand from huge immigration and population growth, aside from the millennials who have been here.
Pasalis notes, “We’re seeing the effect of this mismatch between housing demand and supply and rapidly rising home prices, but also rapidly rising rents.” However, in 2022, according to Canada Mortgage and Housing Corporation, Toronto had the highest level of housing starts since 2012. The region concluded 2022 at 45,109 units, a 7.6 per cent jump year-over-year. But the GTA’s market continues to be characterized as tight, with March supply levels down 44.3 per cent compared to March 2022.
Some Canadian jurisdictions have lofty goals to fill the supply gap. For instance, Ontario plans to build 1.5 million new homes by 2031, which many are concerned is too aggressive due to a shortage of skilled workers— the construction industry may struggle to keep up.
But, like many others, Pasalis is skeptical. “In the past 10 (years), I think we built 650 (thousand homes). You cannot triple or double completions overnight— the construction sector is running at full capacity. What we’re actually seeing on the ground is our builders slowing down with new launches. Construction starts will actually trend down over the next year, not increase.”
It seems the best solution for the future is creating more affordable, dense housing with multi-unit zoning – which is certainly a big goal.
RECENT APARTMENT SALES
38 DIXINGTON CRESCENT - ETOBICOKE - $30,500,000 / $275,000 PER SUITE
This is the sale of a single 111 suite rental apartment building siting on 3.2 acres of land. This a 10 storey concrete building with brick exterior, balconies, flat tar and grave roof with both surface and underground parking. The building was constructed in 1963 and has on site laundry, storage lockers and 2 elevators. There is a combination of one, two and three bedroom suites with the average size being around 750 square feet. It appears that this is a direct deal and the purchaser was Pulis Investments.
709 KENNEDY ROAD - SCARBOROUGH - $20,000,000 / $253,165 PER SUITE / 4.25% CAP RATE
This is a rental apartment investment that was sold as part of a 7 building portfolio. This is a 6 storey free standing rental apartment building and containing 79 suites. Built in 1958, this concrete building has been held by the same family for decades. It has a hot water gas fired heating system and rents include all utilities. There is on site laundry and surface parking for 70 cars. The building had substantial rental upside and most of the suites were in original condition. The property was fully marketed and sold to a private apartment investor who owns many similar buildings in the city.
246 COSBURN AVENUE - EAST YORK - $10,630,000 / $265,750 PER SUITE / 4.00% CAP RATE
This is the sale of a 40 suite rental apartment building dating from the 1950's. It has a brick exterior, double windows, flat roof and is of concrete construction. There are mostly one and bedrooms. The asset is well maintained and well located. The building was heated by a gas fired radiant system (boilers replaced 2013) and there is 22 parking spaces. This property was fully occupied with over 90% rental upside. The property was fully marketed and sold to a private investor.
MARKET COMMENTARY
There not have been many sales in the past 8 months given the rise in interest rates. The sales above are the first few which have now occurred in the 416 during this "new normal". Kennedy and Cosburn were both fully marketed and exposed to all the Buyers out there. They are also of the scale that would appeal to many Buyers who are active out there in this market. The fact that these assets sold to private investors speaks volumes to who is purchasing in this market. The Etobicoke sale was purchased by a known and active Buyer but the fact that this assets was not gobbled up by the larger players given the land component here also speaks volumes. The cap rates too are north of 4%. This is new territory for the GTA. The Cosburn property with 90% upside and its location would have sold in the low 3% range 12 months ago. That said these are only two deals and will see what the lay of the land is once some more deals occurr.
THE APARTMENT GROUP
Together the team has completed over 1,500 transactions and has sold over $7.0 billion in apartments and development land. Put us to work for you and see the results. NO ONE has sold more buildings than our group. Experience, knowledge and professionalism will insure you get the right deal or the highest price if you are selling.
The Apartment Group is a dedicated team of professionals specializing in the sale of multi-residential investment properties. With over 40 years of combined experience, the team brings together their strengths including strong negotiation and sales skills along with highly technical market analysis and appraisal methods.
We are a boutique Brokerage but have the capabilities of the larger houses without the overhead. We have: an internal database of over 10,500 active apartment and land Buyers; a list of all apartment building owners in the Greater Toronto Area; our web site gets over 50,000 hits a month; we highlight properties for sale through our newsletter which reaches 10,000 investors monthly.
MITCHELL CHANG
President & Owner,
Salesperson
Direct: 416-219-0436
mchang@cfrealty.ca
LORENZO DIGIANFELICE, AACI
Broker of Record, Owner
Direct 416-417-9098
ldigianfelice@cfrealty.ca
JAKE RINGWALD
Salesperson
Direct 416-996-7713
jringwald@cfrealty.ca