Over the last few years, there have been many factors that are reducing the ability for Torontonians to move. Starting with rent control, tenants with grandfathered rents are now hard-pressed to move as it could easily cost them an extra $500 per month in rent. New condo owners aren’t moving into low rise houses as the average cost in Toronto has exceeded $1 million. With all of the above plus the stress test, low inventory and many other factors, it has made any real estate move in Toronto very difficult.
Downtown Density, Addressed – Ultimately, this stagnation in real estate mobility will mean inter-generational family homes and families being raised in condos. This is normal in major cities around the world, but this is just a transitional phase that Toronto is going through now. There could be some growing pains and complaining along the way, but all of this could also mean better things ahead (from a glass half full perspective). For instance, the increased downtown density has led to 2 schools being built in the downtown core where many families are slowly moving in. There were 2 schools that opened up in the heart of CityPlace during the first week of January 2020, Jean Lumb Public School and Bishop Macdonell Catholic Elementary School. Together, they will house an approximate total of 1,000 students from junior kindergarten to grade 8. The schools are in brand new, multi-facility buildings right beside the over-sized canoe at CityPlace (geographical satellite location pictured below).
The School Factor – These much-needed schools in the downtown core are going to drive the prices up at CityPlace and the school district’s surrounding areas. If you look at the downtown core school map (reference below), you can see that there are really no schools that service the downtown core prior to the opening of these 2 new schools.
Keep in mind that there have been hundreds of condos (i.e., thousands of units) completed in the downtown core (blue area above) in the last 20 years. Combined with the stagnation in real estate mobility, many families are going to be living (or, are currently living) within that blue downtown area. As a result, this will drive up demand for nearby schools and a premium will likely be put on condo units that are in the school district of Jean Lumb or Bishop Macdonell. Here is the treasure map of condos that will likely experience that level of price appreciation.
Education Marks the Spot – You can see that ‘X’ marks the spot largely in the areas of the South Core; that is, south of Front between Bay and Bathurst. If these schools rank high after its inaugural year, expect a good appreciation for condos in the area above. Being in a school district is very important for families. I’ve seen families willing to pay significantly more for real estate just to be in a school district because there is almost 100% chance that their child will be accepted into the school. This was very true for Earl Haig Secondary School in North York, which was one of the reasons why Willowdale is now so expensive. This was also true for Unionville High School in Markham, and similarly, is the reason why the Unionville area appreciated so well. I have oversees clients who tell me that they want their child to attend this school or that school, specifically, so the property they are buying must be within the school’s district. Education clearly matters for families, and decisions based on this very factor alone happens more than you may think.
The Wrap – So if you are looking for downtown investment condos, please be conscious of the school map above. There are a few condos that I always target for investment purposes in this area, even prior to the openings of these 2 schools. However, now that these schools have opened, there is even more upside than before. If you want to know which condos I target in the map above, reach out to me at Zhen@PrimePropertiesTO.com and we’ll plan your next investment accordingly.
Until next time, happy real estate-ing,
Zhen
