The Real Deal New York

Shoddy construction threatens Toronto condo boom

Glass paneling has recently fallen from more than a dozen new buildings
October 19, 2014 02:00PM

Toronto is seeing an unprecedented development boom with more than 100,000 units under construction. But some worry that shoddy construction could turn the luxury condo towers of today into the slums of tomorrow.

Glass paneling has fallen from a dozen or more newly-built Toronto condos, including the luxury Shangri-La and Trump towers, according to the Financial Post. The new buildings are suffering from water leaks and poor insulation, experts say.

“Many buildings that went up during the beginning of this condo boom are already facing high repair costs and in many cases lawsuits, because they are built so shabbily,” Ted Kesik, a professor of building science at the University of Toronto, said. “The life cycle is clear. They are okay for the first five years, they gradually deteriorate by year 10 … and don’t even reach year 20 before significant remedial work needs to be done. In 50 years these buildings may well become an urban slum.”

Nevertheless, condo prices in Toronto are up 25.7 percent and the city’s rental vacancy rate is just 1.8 percent. [Financial Post] Christopher Cameron

  • Bullied and Damaged by Rent Re

    So New York rocks, does it?

    But Toronto doesn’t have rent regs and isn’t ending up in the British press constantly like New York City real estate, landlord tenant and government news is.

    “Canada’s reputation as a safe haven from global financial storms has driven condo development in Toronto and Vancouver since 2009, attracting investors at home and abroad spooked by stocks, bonds, and foreign banks at risk of failure.

    “The first reason they chose Canada is the banking system. It’s the most boring banking system on the planet, but it makes it the safest,” said Bhandari.

    Less important are the finer points of the condos, with investors primarily focused on value, location, and amenities.

    “Investors never see the suite. They buy it and sell it, and they are not flying in to micro-manage the investment,” Bhandari said.

    While there are no numbers on how many of Canada’s condos are being bought by foreign investors, estimates range from 5% to 50%. The Shangri-La in Toronto is part of a chain owned and managed by Hong Kong-based Shangri-La Hotels and Resorts, one of the world’s leading hotel companies.

    “It’s almost like the dot-com bubble, in that you have to see it coming and sell, because if not, you’ll get burned,” said building scientist Kesi”

    • Bullied and Damaged by Rent Re

      Frankly, every city is coasting on the increased value of NYC development because that image makes money which has made cities valuable regardless of job creation and worth considering as a place to park funds. All toronto has to do is copy luxury amenities et voila, they get to charge rents that I can’t get.

      It’s quieter and slower and they don’t have to be traumatized the way NYers are regularly traumatized. We need to be rewarded for our suffering. We should have a superior reputation for the value of our real estate, our efficiency and our professionalism and our government and our press.

      We deserve those Euros more than anyone else.

      • shazit

        Only the million and billionaires get to reap the rewards in this city.

        • Bullied and Damaged by Rent Re

          Toronto or NYC? NY I am very suspicious because I think the way retail moves it is actually not for money but improving the city – they move the way HK moves – building something fancy with an ice rink in a part of Kowloon that wasn’t that popular before and getting some Mainlander to buy a pricey apartment so WSJ can run a story on it.

          Even College Point Boulevard in Queens mimics HK’s airport neighborhood with the iminent outlets – there is NO reason to go to that part of Queens if Chinese people weren’t suddenly making it a place to be. It is crazy inconvenient over there.

          Unfortunately, I think the rent control of stores may actually happen and that I cannot understand. It’s not about Mom and Pop because Mom and Pop retired and Sonny Boy should have gone to college and found a white collar job that Mom and Pop could never have qualified for. Personal Retail is like contractors and restaurant kitchens – it’s for hardworking immigrants who don’t qualify for an easier office job.

          If we really wanted to be hippy dippy, we should answer that opportunity gap and let eveyone who has paid their dues in a dead end learn nothing job to get the chance to learn some new skills even if afterwards they are still back at their dead end job.

          I saw someone working at a bakery who has been doing it for a long time and other people have become caregivers. I just think we should shift the workforce around and give them a chance.

  • ralphpetrillo

    Would be great if it crashed for then there would be great buying opportunities.

  • Bullied and Damaged by Rent Re

    I met the NYC construction manager for skyscrapers in Asia – how is it the Asians are back here building Canadian (Scottish engineers!) skyscrapers (and doing a bad job of it apparently) – that’s like the Twin Towers being built with imported Japanese steel instead of first class American steel – a topic of discussion in our gift shop when the towers were being built.