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currently renting in the GTA will purchase a home within a few years.

Investor componentThe other group that has been driving demand in the Toronto condo market is, well, investors. According to CMHC’s estimates, about half of the condos in the construction or pre-construction stage of development are purchased by investors. Half of all of those units are then sold, while the other half are put up for rent.

Toronto remains a solid choice for many domestic investors, but it’s also becoming a hotspot for international investors, too. Canada’s ability to weather the recession, Hildebrand says, has given foreign buyers confidence that the country, and in particular Toronto, is a stable market to invest in.

“We don’t know specifically how many investors are coming from outside of the country, but anecdotal evidence suggests it’s quite high and has been rising particularly over the last few years,” Hildebrand says.

A lot of the international buyers also do have a connection with Toronto, whether it’s through family members living in the city or a child attending a Toronto university.

Demand still softGiven these underlying economic fundamentals in the Toronto condo market, real estate activity should pick back up soon, even though sales remain soft.

The Toronto condo market experienced some prolonged volatility starting after Ottawa made some tweaks to the country’s mortgage rules, the provincial government introduced the harmonized sales tax (HST) and the Bank of Canada hiked its key interest rate three times, bringing it to 1%.

The unintended consequences of these policy changes produced some weakness in the city’s sales numbers.

In April 2010, apartment condo sales in the GTA finished at 2,468 transactions, 43% more than those recorded in the same month during 2009, according to the Toronto Real Estate Board (TREB). But by May, sales had fallen to just 3% on

Investors looking for the next up-and-coming area in Toronto should pay close attention to developments in Mimico.

The dream of making this beautiful waterfront location into Toronto’s next condo hub may soon be a reality, as local developer Davies Smith Developments prepares to build a nine-storey condominium-apartment building on Superior Avenue.

Toronto Coun. Mark Grimes, who has spearheaded efforts to revitalize the area, says stakeholders and residents have met numerous times to chart the future of this historic neighbourhood, as part of the Mimico 20/20 revitalization action plan, which the city formed to look at development opportunities in the area. Grimes says the area is ripe for redevelopment.

“It’s a bad use of land. I call it the great wall of Mimico, and I don’t know whether our planners were thinking way back then,” he says.

“Anybody who looks at it says it doesn’t make sense. This is probably one of the most valuable pieces of waterfront in Toronto that’s underdeveloped. Everyone says the same thing that I talked to, ‘Well, it’s not going to be like that forever.’ You know it is until we really talk about the issues and get them on the table.”

To move forward, the city has hired consultant company Urban Strategy Inc. to assess the area and present a report to the planning committee outlining the city’s options for development.

Part of that plan also includes completing the boardwalk, a cycling and walking path that runs from Scarborough Bluffs all the way to Marina Del Ray and then stops before starting again at Superior Avenue.

The city bought what land it could along the Mimico waterfront to complete the boardwalk and expropriated the rest. Construction on the project will begin in July.

Graham Chalmers, co-owner of Davies Smith, said he wasn’t even interested in Mimico until he took on a project to redesign Amos Waites Park.

“I spent five or six months on and off redoing the park and really got to know the neighbourhood. And I realized how gorgeous it is down by the water,” Chalmers recalls.

Davies Smith project, 11 Superior, will be the first large condo development in the area. That’s why the company has chosen only to develop a nine-storey, 132-unit building with a brown-brick facade that complements the surrounding buildings, Chalmers says.

“The reason it’s not super tall is because we wanted to do a little bit more of a boutique condo project. We didn’t want to put up a monster building,” he says.

Davies Smith has not begun construction on the project yet, and is awaiting rezoning approval from the city to approve its applications to build a nine- rather than a seven-storey building on the commercially zoned land.

Davies Smith is pre-selling condos ranging from $410 to $430 a square foot, and as of mid-March, the company had already sold 35 units.

Other Toronto developers are also eyeing the neighbourhood, Chalmers says, since it’s along the waterfront and has access to TTC streetcar routes, which can bring riders to the downtown core in about 20 minutes.

“Developers tend to sit on the sidelines and watch, but as soon as they see success they dive on it like vultures.”

With time, Chalmers believes the area could become Toronto’s next Leslieville, a downtown location that has already undergone the gentrification process.

CASE STUDY

Mimico on the cusp

Super condos

Condo Report | toronto

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