Toronto is indisputably Canada’s most cosmopolitan city, ethnically and economically diverse, alive and active with "world-class" theatre, dining, shopping, entertainment and professional sports. Many parallel Toronto’s financial core to Manhattan and justifiably so, in every way but property values.

With Manhattan condos running in the neighborhood of US$800 - $1,000 per square foot, Toronto’s CDN$400 per square foot constitutes a sizeable difference in these two financial "epicenters".

So the question of the day is "do I see Toronto condo prices rising". My answer, a resounding "YES". In this article I’m going to try to address the undercurrents that impact the market and affect price change.

Certainly real estate is a tangible commodity and there is an argument that "there simply is no more land" however, in the condo market there is a never ending possibility of sites for downtown "core area" residential condo sites.

Unlike our American "brothers" (as President Bush was recently imposed upon to address our countries as) have a very different perspective on urban growth than we Canadians. The success of gated communities in the "suburbs" resulted in urban sprawl (an issue that many major urban centers in America is struggling with). The downtown "core" properties having been abandoned with new shopping, entertainment and enjoyment venues chasing the sprawl, many American core areas have become blighted.

We Canadians have proven to be quite astute when it comes to our urban planning (in some ways although the traffic congestion problems facing the city(ies) is challenging this perspective - see my article "It’s A War Zone Out There").

The condo market reflects a classic "supply and demand" commodity and it is safe to say today that demand remains very strong with Toronto developers doing an admirable job of developing quality sites into mixed use and/or strictly residential buildings upon the dwindling number of parking lots scattered through out the city core.

With the introduction of the concept of lofts, those conceptually intriguing life-style choices formed within exotic old warehouses with huge timbers and exposed brick and massive windows catapulting brilliant arrays of light into our living space, so came the opportunity for Canadian entrepreneurs and developers to buy up dilapidated old industrial buildings in the core or Toronto and convert them into contemporary living alternatives.

Inherently when digging into the concept a little deeper, purchasers seem to realize that there is a conflict between the concept and the reality. Things like location quickly become an issue as industrial buildings are conventionally located in a more run down area of the city. The "artsy" concept is frequently shattered when the neighborhood is investigated. When you realize that for the same money they can get into a "true luxury" building, another aspect of reality appears to set in. For example, you can buy into the Tip Top Lofts, which in my estimate is the city’s premiere loft development, at approximately $425 per square foot. I purchased a number of units in Park Avenue, potentially one of the top five "true luxury" Condominium Addresses in the city at approximately $325 per square foot!

The Park Avenue is located on St. Clair at Yonge amidst many of the cities already established premier addresses (33 Jackes, 70 Rosehill, etc.) It is true that Tip Top Lofts offer some excellent unobstructed lake views and that the area has seen the introduction of another new upscale development in South Beach Condominiums, the reality remains that a substantial community of city-assisted housing projects form a substantial proportion of the overall neighborhood.

The fact that there are so many new condo, loft and townhome developments presently under way in Toronto attests to where the market is and where it is going. So, to get back on topic, if supply and demand are in a heated race, does that destabilize pricing? When supply outdoes demand ("buyer’s market") we know prices become destabilized downward and when demand exceeds supply ("seller’s market") prices destabilize upward. The recent bidding wars in Toronto condos over the past three months (which has come back to reality) is evidence of this supply and demand balancing act. So what happens when supply and demand are running neck and neck? The only practical answer is a whole lot of uniformed purchasing which ultimately leads to unsatisfied purchasers getting what they see as less than what they purchased. I am still amazed (after over two decades in the marketing and sales of luxury condominiums) to see unsuspecting consumers stumbling into new condo sales sites without their own agent and calling seller’s agents from newspaper ads!

Forget supply and demand when you decide to spend the afternoon visiting various condo sales sites. And you say you don’t gamble! "Never been to a casino"! "Don’t even play bingo"! Having worked on the sales floor of many of the city’s more prestigious luxury residential condo developments (starting back in the early 1980’s with the Reichmann Family’s flagship mixed use development on the harbour "Queen’s Quay Terminal") I can assure you that you may be better served trying your luck at blackjack as playing the condo game using the house’s dealer, the house’s rules, and the house’s deck.

Through the use of tactics learned at professional sales training facilities over many years, I could literally "walk you into buying a condo . . . even if you didn’t want to". When I worked a sales floor my philosophy was simple . . . "you came to the site to buy one and buy one you shall". Many customers went home and cancelled. That was their right under the law (you always have a 10 day "Rescission" period during which you can cancel a new condo purchase without reason or cause). I didn’t take that personally either. My job was to sell them and sell them I did! Since "going straight" (becoming a buyer’s agent - applying my negotiations skills and knowledge to getting buyer’s the best condo and the best price, terms and conditions) I now level the playing field for novices and experience condo buying "Clients" to whom I owe the absolute same commitment of integrity, full disclosure, confidentiality and fiduciary obligations comparable those that selling agents undertake with their clients. I do not list properties for sale on the site insuring that I have no vested interest in one property over another.

With this brief understanding of the rudimentary influence on price introduced by supply and demand it becomes easier to see the built in frustration of trying to find the right condo on your own. With so much pent up anxiety from buyers and so much demand for the product it should not confuse any of you to become aware of the "Shell Game" that condo selling actually is. Check out "Someone has to Buy The Dog Suites" to look into this Shell Game a little further.

It is important to point out that prices are just now adjusting to prices set in the early stages of the late 1980’s and early 1990’s. So, you thought prices have gone up? When the crash of the late 1980’s was on the horizon I developed the first interactive multimedia presentation of Toronto on a DOS CD-ROM which I took to Hong Kong. The CD-ROM was fundamentally what you are becoming familiar with as my web site today simplycondos.com but in 1989 it was an absolute "rush" to be the producer of such "cutting edge" technology. Actually with all of the "hype" of the internet pretty well desecrating CD-ROM’s the reality is that the show was actually (artistically) more satisfying on CD-ROM.

The single-most-significant factor that is driving prices up today (and always) is purchaser ignorance! That’s right . . . you unsuspecting consumers who actually think that sales sites are built and manned by pleasant sales associates for the developer simply to make your purchase an easy and enjoyable event. Sales sites are manned by professionally trained commissioned sales people who income is derived from selling as many units as possible as quickly as possible. The law regulates their conduct and quite clearly sets out that their only obligation to the public is to not lye or misrepresent to them BUT ALL OBLIGATION AND LOYALTY IS LEGALLY OWED TO THE SELLER!

The reason that prices are shooting up is that "everything sells". Do you actually think that every building offers all GOOD suites. Do you know the difference between a good suite and a not so good suites, a good or bad developer or what constitutes one, a good or bad location? Do you have time to conduct an area study to learn what buildings might change, what parking lots may become buildings and/or how high these buildings? Do you know how to read a floorplan and then take the information that you have gathered therein and juxtapose that "space" into a vacant lot sufficient to know that you have not selected the unit that has the garbage chute immediately across from your front door or that you look out over the area where the garbage is picked up?

Again . . . the single-most-significant factor driving Toronto condo prices up is your willingness to expose yourselves to a highly trained industry that generates billions of dollars a year for space above the ground. We are just now, in 2002 getting back to where prices were back in 1990. I sold Minto Plaza back then at approximately $400 per square foot and it still sells for less than that today! New condos are coming on at $400+ per square foot today.

Smart money tells you that buying presale (before the building is even started) is the way to buy. Of course this only works if you are in the position to wait a couple/few years and face the uncertainty of taking on the promises and representations of a developer that you don’t know. Done right, this literally is where the money is made in this condos.

I said earlier that it is incredible to me to visit sites and see the same old hustle being employed and the public still falling for the same old games (they literally have not changed in almost 30 years). Yet, visit a site and out of every 10 people visiting, only one or maybe two (a long shot) are being represented by their own agent and of those, frequently their agent is a friend or relative with little or no real background in Toronto condos. This is a "niche" market with only a few condo specialty Realtor’s and to my knowledge ONLY ONE EXCLUSIVE CONDO BUYER’S AGENTS.

Worst yet, you go out there willing to pay "Asking" which means you somehow got the understanding that there was no negotiation room is presales (you may want to read Konietzko’s article) to get a clearer picture on this topic. Bottom line, I’m paid to get the best for my clients and frequently developers will negotiate upgrades and/or price adjustments if required to. In this instance, the developers have been "conditioned" by a receptive buyer’s audience into believing that their product is a retail commodity and not subject to negotiations. Think again!

Prices will continue to escalate until buyer’s become more informed. This is extremely difficult to do as your sources of information are decided limited to biased publications. The Developers' art department or ad agency prepares the pages and submits them for publication. Most articles are written for the developers, by the developers with little or no consideration to journalistic integrity. Developers boast plethora’s of Annual Awards neglecting to state that these awards are for advertising placement, advertising design, etc., always carrying the implication that they reflect on the integrity and/or merits of the developer.

The Real Estate News is the advertising medium of choice of Realtors but unfortunately many of the advertising Realtors are simply advertising other Realtor’s listings in the hope of finding a buyer for another property. This leads to repeat ads for the same property that, when sold, results in frustration and/or waste of time and resources by purchaser’s trying to track down their own condo to purchase. It is very important to know that every Realtor advertising their listings is obligated to represent ONLY the seller’s best interest and, as you are not the seller, but rather the buyer it is important that you have your own professional representation. At present Buyer Agency is FREE to the Purchaser. For more details read Agency Explained and Why Use A Buyer’s Agent.

I am assembling the Simplycondos.com Buyer’s Group that will negotiate purchases on future buildings on future sites. This Buyer’s Group will enable serious purchaser’s the opportunity to keep prices in line through a "benefit of scale" approach.

I will soon be posting all quality up-and-coming sites (developments that have applied for zoning and/or permits but which have not even been approved). Buyer’s interested in each location will register and as a group we will negotiate preferred rates through insuring the developer of his foundational sales (potentially sufficient for his bank financing).