Cost Breakdown for Toronto Condos - Developer Profit

2024 GTA Municipal Study Report -

New Builds Lag Population Growth In GTA

Home Renos and Teardowns Contributed to Skyrocketing In Toronto

It is predicted that the Bank of Canada will most likely announce further interest rate cut in next meeting on Octobter 23, 2024. The two new significant mortgage policies will be effective from Dec 15, 2024 regarding the increase of price cap for insured mortgage to 1.5M and the expansion of 30-year mortgage amortizations. The potential buyers now hesitate if it is the good timing to get off the sidelines and enter into the market now. Are the current market prices at the lowest?

 

Apart from the favourable interest rate condition, property price is dynamic depending on the neighbourhood, the supply and demand in near future, the construction costs and building timelines. The motivation for purchase the own use property can meet the buyers' needs and will improve the life quality under the own acceptable cirucmstance.

 

Below are the information about the trend of low-rise and high-rise construction costs, supply and the latest Municipal Benchmarking Study from the Building Industry and Land Development Association (BILD).

INTERESTING TOPIC : WHERE THE CONDO MONEY GOES

  • The Star spoke to developers and consulted studies to break down where the condo money goes. Overall, condo prices include land costs; “hard” construction costs such as labour and materials; “soft” construction costs such as architects’ and lawyers’ fees; government charges; and developer profits.

  • Developers aim to profit 15 per cent of the sale price of a new condo, but margins can range from 12 to 17 per cent, said Matt Young, president and CEO of Republic Developments. “It largely depends on the size and timeline of the project,” said Young

GTA housing study: Region on the doorstep of compounding housing crisis.

 
2024 GTA Municipal Benchmarking Study

The Building Industry and Land Development Association (BILD) Asked for GTA municipalities to speed up approval times and reduce fees for new developments as new builds lag population growth. Canada's total population reached 41.3 million by July 1, 2024, growing by 250,229 people during the second quarter—a 0.6 per cent increase experiencing a bit slowdown in growth

“The study shows that the gap between housing stock and population growth in the GTA is the widest it has been in over 50 years,” said David Wilkes, President and CEO of BILD. “This a bright red warning light on dashboard for all levels of governments. Without bold steps, the housing crisis in the GTA is going to get far worse in the years ahead.”

New home construction has not kept pace with overall population growth in Ontario and the GTA

Application submissions have fallen significantly since peaking in 2021

Accounting for annual property taxes paid on vacant land, cost escalation and opportunity cost of holding land vacant can add between $2,673 and $5,576 per month, per unit, to the cost of producing housing. The total length of a single application can add cost of between $43,000 to $90,000 per unit, per application. 

The municipalities are ranked based on lowest (lower fees, approval timelines and needs less improvement on planning features) to highest (highest fees, approval timelines and needs most improvement in planning features). We may know why the property prices always keep at higher levels in some areas due to long approval timelines + high municipal fees.

Scarcity in Canada's most expensive markets expected to play a significant role in future values as single-detached homes become housing's new unicorn

 

The average price of a detached home has climbed by almost 35 per cent in the GTA between December 2019 and December 2023, rising from $1.05 million to $1.4 million.

The 2024 Re/Max Canada “Changing Landscapes” report examined the evolution of housing stock and trends impacting values in Canada’s two largest real estate markets, Toronto and Vancouver, in recent years. 

 

Between 2019 and 2023, the national increase in renovation spending, including additions, alterations, upgrades and equipment, approached an estimated $300 billion, an 8 per cent increase over the previous five-year period. 

The value of residential building permits issued for single-family dwellings in the Toronto and Vancouver census metropolitan areas (CMAs) between January 2019 and December 2023 sat at just over $27 billion, according to Statistics Canada — down almost 24 per cent from the previous five-year period.

 

In contrast, the value of multi-family building permits was up 60 per cent between January 2019 and December 2023, compared to the previous five-year period, meaning there’s more being invested in multi-family development, as developers focus on high-density housing in an effort to maximize land.

Please contact our team 647-298-1234 for any property services including purchase, sale, new pre-constructions projects /assignment sales, free property evaluation service and other property related services.

Christina Leung, Broker of MEhome Realty (Ontario) Inc 9120 Leslie Street #101, Richmond Hill, ON, Canada
+16472981234

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