When it comes to the condo market in 2010, relationships and values will play a key role. Neighbourhood and project identities or “brands” will figure prominently and builders and buyers will take more steps towards sustainable building and living.
Those are some of the coming trends identified by a panel of five industry experts, including real estate broker Hunter Milborne, architect Charles Gane, marketing and branding professional Ishan Ghosh, designer Enza Checchia and public relations consultant Danny Roth, during a recent roundtable discussion at the Toronto Star.
All were optimistic about the prospects for the 2010 market, especially after the real estate meltdown of late 2008/early 2009.
“If there is really such a thing as normal, we are returning to it,” said Milborne. “2010 should be an excellent year.”
Milborne said the resale market is undersupplied and people aren’t really getting what they want in resale, so they are looking to new. Also, low interest rates and capped mortgage rates bode well.
“I think it’s time to exhale, I think the confidence is there,” said Checchia.
The market slump of early 2009 had some positive ramifications, they said. For one, it will spawn a “back to basics” sales approach, meaning that sales will be generated more by cultivating relationships with potential buyers.
“It was a bit of a breath that all of us were able to take and recalibrate our values,” said Roth. “That pause allowed us to rethink the industry a bit … developers recognized they had to come back to basics and value; it wasn’t about quick profits and flipping units.”
“It has changed mindsets about why people are buying and what they are going to be buying in future,” agreed Ghosh, saying that price will not be the only factor in people’s buying decisions.
That’s why “branding” will be popular, to create condos that have unique identities or attributes.
“Toronto was never an urban city like New York or London and the whole condo concept is really young here,” Ghosh said. “Up to now, it was almost like the highrise was treated like a commodity. Now you really have to brand them, like the L Tower or Ice. People want more than just a place to live.”
The Daniel Libeskind-designed L is associated with arts and culture as it will incorporate the Sony Centre for the Performing Arts; Ice is inspired by modern Scandinavian design.
“The trend is toward telling stories, toward building a profile and letting buyers understand what a project or developer is about,” said Roth.
Not just projects will have identities – neighbourhoods will too.
“People’s identities will be in line with their choices, in location and architecture,” said Roth. “It’s about living where your life is, such as the Distillery District or King St. West. Those residential areas say a lot about who you are.”
“An area is a brand in itself,” added Checchia.
“Marketing approaches will be more interactive,” said Ghosh. “Purchasers will want more information, want to be on top of game, want to know what’s happening. Facebook and Twitter are being integrated into marketing campaigns now.”
Milborne sees a trend to more transparency for buyers, “rather than holding things back and forcing people to come to sales office to find out what they want to know.”
When it comes to architecture, the city will further embrace contemporary buildings.
“What’s coming up is a whole generation of modernists,” said Gane. “These kids live in modern buildings and are used to glass, 10-foot ceilings, balconies. What happens when they move – they don’t want to go into their parents’ house, they don’t want a little Victorian house. All these modern schooled kids will completely change architecture in Toronto.”
“I think there is a lot of blending going on,” said Ghosh. “The generation of kids today are blending their views with that of their parents.”
Gane predicted we’ll see more of what he calls “hybrid” townhouses and townhouses with modern design, such as a project he’s doing at Richmond and Stafford Sts., which is clad in charcoal brick and Ipe wood with floor-to-ceiling windows. It combines a condo-inspired interior and townhouse exterior.
“Sooner or later, all those cool condo kids will want a modernist house to live in, so this could be the start of it,” said Gane.
The boom in small suites will continue, mainly due to affordability.
Checchia said designs will have to become more clever, incorporating multi-function pieces and compact European appliances.
Checchia said “lesstravagance” or understated elegance will be a trend, with suites reflecting eco-themed luxury. “The worn-out look is also very big, juxtaposing old fabrics with modern, sleek furniture or juxtaposing a rough textured wall with a beautiful velvet chair,” she said. “It’s a combination of ecological and luxury.”
A new buzz word will be “hypernature,” which is transporting a sense of nature into big city condos. Fresh colours will be paired with smoggy greys.
More builders will be adopting “green” measures, said the panel.
“I think the impact of the LEED (Leadership in Energy and Environmental Design) buildings will become more prevalent; certainly in one to five years almost mandatory for builders to do it to compete,” said Milborne, adding that buyers are realizing that while suites in LEED buildings may initially cost more, their carrying costs will be lower.
“A condo by nature is very energy efficient compared to a single family house; it is two to three times more efficient,” said Gane. “Builders are doing LEED because they know down the road it will sell – it will be worth more in the future.”
Affordably priced condos will continue to lead sales, said Milborne.
“I think 90 per cent of sales will be between $200,000 to $450,000,” he said.
“The reason most people buy a condo is because it’s less expensive than a townhouse or single house. It allows single people or investors to purchase. That price range represents 80 to 90 per cent of the market.”
The Harmonized Sales Tax (which takes effect July 1) will impact condo sales, as units priced at more than $400,000 will be hardest hit. (Units below that price point will be subject to rebates.)
“You won’t see a lot of condos priced between $450,000 and $600,000 because of the HST,” said Milborne. “It’s going to distort the market. There may be a hole in what gets delivered in terms of new product or it may make resales in buildings more popular.”
December 26, 2009
Tracy Hanes
TORONTO STAR
http://www.yourhome.ca/homes/realestate/article/742091–real-estate-trends-things-are-looking-up-for-2010
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