While investors have grown frustrated by Toronto’s condominium market, a slew of new projects over the coming decade could change that—and the catalyst is a major transit plan.
The Eglinton light rail transit plan, scheduled for completion in 2021, will be composed of 25 stations, and with thousands upon thousands of condo units being built around it over the next decade, yields should be good.
‘Ditch the day job – make real estate your big gig with CREW’
“First and foremost, there’s a significant amount of intensification happening along the Eglinton Corridor right now, mainly condominiums and townhome developments,” said REMAX Realtron General Manager and broker Cameron Forbes. “The biggest area of change will be the Don Mills-Eglinton area—there will be 10,000 units built over the next five to 10 years. There’s a Superstore in one corner, it has the Ontario Science Centre on another. On the southeast it’s a condo and townhouse. They’re building offices and retail in those condos.
“Thousands of people will be associated with that retail, and it’s a great example because there are huge services at that intersection right now.”
According to REMAX Realtron, a considerable number of units are being purchased by investors with designs both long- and short-term.
“The estimate of investors purchasing condominium units both for long-term capital appreciation and cash flow purposes is 30-40%,” he said. “We have a significant number of clients who have purchased both preconstruction and during construction along that line, purchased from Black Creek to Warden Station. Another intersection, Leslie and Eglinton, is being presold and investors have purchased 30-40% of those units in the preconstruction phase.”
The LRT won’t just augment values for properties in its immediate surroundings. Scarborough experienced a population boom in the 1980s, in large part because promises were made to develop transit. While those promises were shortly thereafter broken, the pent up demand in tandem with the LRT—which will be below-grade for portions—should have an immediate impact.
“I think Scarborough is going to go up in price,” said Anita Springate-Renaud, Engel & Völkers Toronto Central’s broker of record. “Scarborough’s biggest problem was it was hard to get to work from there, and that’s been the biggest problem they’ve had for decades. A lot of people moved from East York in the ‘80s to Scarborough because properties were bigger and they were promised transit, but only now is it going out there. Property values went up there, but not as significantly as they did in the downtown core. I think you’ll see an uptick in the price of real estate out in Scarborough and even along Eglinton.”
Rush hour congestion to and from Scarborough may only diminish ever so slightly, but the other benefits that come with public transit will certainly boost property values.
“It’s the same as owning property close to the Danforth on the Bloor-Danforth line,” said Springate-Renaud. “Property around there has always been worth money because people always want to be close to transit. With the cost of real estate—you add a car and insurance on top of that because it’s so difficult to navigate in the city and parking downtown is crazy—it’s so much cheaper to take transit now.”
Zoning could be key to funding downtown relief line
Making the case for one big city's subway extension
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate