The Process Behind Why Condos In Toronto Cost So Much.
Amid the housing affordability crisis in the Greater Toronto Area, have you ever wondered why condos in Toronto are so expensive? However, new pre-construction condos in Toronto are a special case. Just kidding, but here is guide to the entire process in case you want to know everything there is to know about the steps in the process of building a condo in Toronto.
A condominium is initially just a dream of an ambitious home builder. For the truly starry-eyed, the dream may begin very high (perhaps eighty stories or more), but gradually descends to earth. In Toronto, there are both large, well-known builders and smaller, “newcomer” builders who are trying to succeed. Check out the builder’s track record before purchasing a brand-new condo in Toronto that is still under construction. Even though delays in construction are unavoidable, a builder with a long history of them or one with none at all is a red flag.
The first step in the process is known as “land assembly,” and it happens when a builder goes from ambition to action. Because it takes several pieces of land to create a practical building footprint in a place like downtown Toronto, land does not typically come ready-made for the construction of condos. When a builder is “herding cats” and attempting to track down a “greedy” or absent landowner, the land assembly process can alternately be tedious and exhilarating. It can be exciting when the bigger picture begins to come together.
It’s important to keep in mind the current cost of land in the Greater Toronto Area. Most people do not have millions of dollars in liquid assets on hand to invest in a risky project, and those who do know it makes no sense to put their own money up. So-called “AAA” land, on which condos are frequently built, is astronomically expensive. Therefore, financing (i.e. At this point, the primary concern shifts to loans from banks or private lenders.
Designing the structure and requesting approval is the following step in the construction process. Developers complain that the construction process is stalled at this point and that this has caused homes to become more expensive. In Ontario, it might take several years for a municipality to approve an application. A new pre-construction condo development must undergo a thorough review by municipal staff, the local council, and other public institutions before it can be approved. These parties are looking out for things like the development’s potential effects on the environment. A building permit can take two full years to obtain in Toronto, and development approvals are different from them.
More and more people now concur that the development process is moving too slowly at this point in the process, and it is in this context that Doug Ford’s majority government has proposed legislation to address what they see as the delays brought on by an overly complicated approval process. Others disagree and believe that all the approvals, permits, and reviews are required to stifle unchecked development. Whatever your viewpoint, the chances are good that the development process will now go more smoothly for those attempting to build new pre-construction condos in Toronto. All things considered, it is becoming more challenging to do so for other reasons that this article will discuss, and the more significant result of the Ford government’s legislation is the construction of many new single family homes in outlying areas.
Returning to the construction procedure, though. The regulatory, permitting, and review processes for builders are at the provincial, regional, and municipal levels. There is a general plan with targets for the best locations for growth at the provincial level, which is the level of government with the most influence, thus Doug Ford’s changes. 25 different urban areas were chosen as growth priority locations under the Places to Grow Act of 2005. The official plan for each urban center must take into account both local and provincial regulations, as this plan was designed to act as a framework for municipal land planning.
As you can see, there are numerous pitfalls involved in the design and approval process. Builders frequently gripe about the needless repetition of approvals, pointless reviews, and unnecessary process delays. The contributions of the general public haven’t even been touched upon. Oh dear, local residents’ associations are notorious for voicing grievances regarding any new construction and frequently have the chance to do so at various hearings and meetings. At this point, the eighty-story dream height of the home builder is frequently scaled back. But even if a builder manages to obtain all the necessary permits, we haven’t even discussed how to actually construct the building!
We are currently experiencing inflation, which is problematic because construction is not an exception. It’s getting harder and harder to find labor, especially skilled labor. The cost of building materials has increased significantly (remember the significant increases in lumber prices in 2021). Furthermore, the cost of building a brand-new condo under construction is high. The cost of labor, materials, and engineering in many areas of Toronto, particularly downtown Toronto’s core, can amount to untold millions of dollars. Are you beginning to understand why condos could be a bit pricey?
Following “foundations and concrete slabs” is the stage known as “excavation.”. Basically, you need to prepare a base that can support the weight of a massive tower by digging a hole first. The next step is fenestration and exterior cladding. You’ve never seen an overhead electric wire connecting to a condo have you? That’s not to mention accounting for all the necessary infrastructure that feeds into a major development. After completing this stage, the structure will take shape, and you can now personalize the interior of your brand-new condo unit that is still under construction. Hopefully, you’ve recovered from “sticker shock” by this point. Connect With Us to register for the latest news on forthcoming developments.