West Line Condos
Klondike for investors
I want to tell you about a great new investment project we'll be launching for sale in the second half of August, but first, a few words about the condo market overall. The condo market has fully recovered from the 2020 downturn - prices started climbing back in February this year, and over the first 7 months of 2021, prices rose by an average of 12%. All of the excess inventory that had built up on the resale market at the end of last year has now been fully sold off. Rental rates are also quickly clawing back last year's decline. They're still somewhat below what we saw before the pandemic, but with the border fully reopening in September and a huge wave of people set to arrive in Toronto, I have no doubt rental prices will not only reach their previous peak in the near future, but move past it. I don't see any indicators suggesting that price growth for condos will even level off in the foreseeable future.
During the pandemic, prices for detached homes shot through the roof, while condo prices, by contrast, stayed flat - and now, with the detached home market clearly in a stagnation phase, condos are having their moment. In my view, we're going to see steady growth in this segment of the market over the next couple of years.
Getting back to the West Line project I mentioned at the start of this piece, let's start with where it's going to be built. This is one of the most promising areas in Toronto. Two years ago, we sold two projects in the Downsview Park area that are now under construction and moving full steam ahead. Back then, having received preliminary development plans from the city, I wrote in detail about the changes coming to this area. I believe this entire district is nothing short of a goldmine for investors buying pre-construction condos. Those who bought into the Downsview Park and Kelley Condos projects we were selling at the time have already seen excellent appreciation - but the most interesting part is still ahead.
Two years ago, the changes planned for this area existed only as city plans. Today, some of those projects have already been fully approved, while others are in the final stages of the approvals process, and there's no doubt that within the next two years this area will see what can only be called "the construction project of the century" - and investors who get in at the very start of that build-out stand to earn outstanding returns down the road. As this massive construction program unfolds, every project launched in this area will come to market at a higher price than the last. Downsview Park spans 1,000 acres, land that once housed an airport. Two and a half years ago, it was sold to PSP Investments, a major institutional investment fund managing billions of dollars. PSP, in turn, entered into partnership with several of Toronto's largest developers, and large-scale construction is about to get underway here.
The Downsview Park development is the largest master-planned community ever built in Canada. For comparison, consider what's already been built elsewhere: Cityplace downtown covers 44 acres, Regent Park 69 acres, Transit City in Vaughan 100 acres, Square One in Mississauga 130 acres, and Downtown Markham 243 acres. Master-planned communities are in especially high demand among buyers today. We ran an analysis of how much more property appreciates when it's located within a large, centrally planned development, and found that over a 4-5 year construction period, properties within such developments appreciate 11% more than comparable standalone complexes.
The scale of the Downsview Park development is equivalent to a substantial chunk of downtown Toronto. To picture what 1,000 acres actually looks like, imagine a square bounded by Spadina Avenue to Yonge Street running east-west, and by Front Street to Bloor Street running south-north. That's roughly the footprint of this development.
In other words, we're talking about a construction project of unprecedented scale. Within the development, 291 acres will be preserved as parkland, while the remaining land - split between a large parcel called Northcrest at 520 acres, and two smaller parcels, the Sheppard Chesswood Revitalization at 120 acres and the Allen Revitalization at 70 acres - will be built out with residential, office, and retail space. In effect, an entire mini-city will be built here, offering everything needed for a genuinely comfortable life alongside a huge number of jobs. A whole roster of major tech companies is planning to open offices here, meaning the average income of people living in this area will be well above the Toronto average. I have no doubt that rental rates in this mini-city will eventually rank among the highest in Toronto, right alongside the best downtown neighbourhoods. The new mini-city is projected to be home to 45,000 residents, with 12 million square feet of commercial space that will bring more than 25,000 new jobs to the area.
Transit access to the area is similarly unique: two subway stations, Sheppard West and Downsview Park, are both a five-minute walk away. Downsview Park station is also a transit hub where the subway line meets the GO train line. By public transit, it will take about half an hour to reach Union Station in downtown Toronto from this area. York University is just two subway stops away, where 7,000 people currently work and more than 55,000 students study. Proximity to major highways also makes it easy to reach any point in the GTA quickly. Experts have already rated this area's transit accessibility as maximum.
The West Line project is the very first building in this area. It will be a 14-storey condominium with 424 units, ranging in size from compact 1-bedroom suites to spacious 3-bedroom units. In my view, the Downsview Park area is entering the stage where investing in pre-construction units here is practically guaranteed to succeed. I have no doubt this area will move into the ultra-premium category in the very near future, with prices climbing through the roof.
The project will be built by one of Toronto's largest and most reliable developers, CentreCourt, and will launch for sale in the second half of August. We'll be holding an online presentation of this project shortly - register on the West Line Condos project page on our portal, www.newGTAcondos.com, and you'll be among the first to learn all the details about the project before official sales begin. We have VIP access to this project, and our clients will be able to purchase units at a discount and with special contract terms. Don't miss your chance to be first.