16 February 2022 ~ 0 Comments

Renovation costs have increased drastically, and pre con construction has hit a new stratosphere

It seems of late that everything has become more expensive. Yes, inflation is running at levels not seen in decades and most likely is worse than our government is telling us.

Many of us have come to accept that due to covid ravishing our economies over the past few years, things are not going anywhere near normal (is pre covid the reference for normal?) anytime soon. And probably never will.

Supply chain issues aside for goods, let’s be open and honest about this. Is that the real reason everything has become more expensive? 

The renovation market seems to have jumped massively over the past 2 years, almost doubling in cost. Granted, this is gathered from a rather limited amount of clients of mine who are carrying out projects throughout the GTA. $500-$600 per square foot seems to be the going rate of late.

Labour makes up a big part of these costs, so I can see increases in the cost of living portion. And yes, supply and demand is what dictates the amount contractors can charge. But left alone, this could become a major issue on property values so be careful when considering a major renovation.

But it’s not just reno costs that have lept up. Property taxes, Insurance, Utilities, Grocery, Take Out. Everything is becoming more expensive. And incomes have not kept up. So when interest rates start to rise, and they will, what will happen? 

Recently I received a VIP invite to a condo opening in the downtown neighbourhood that isn’t too far away from where I live. I get about five of these a week, and most of you may know, It’s been a long while since I’ve advocated for the purchase of pre construction in Toronto. Keep reading to see why this is so. 

Well this particular project sent out an invite to get in early at pricing that is set at $1500/sq ft, not including parking or a locker, which are waitlisted. Parking will set you back an additional $110,000-$125,000 if you are lucky enough to buy. Yet, you can currently buy in 3 year old buildings or newer in the area for $1100/sq ft. You do the math. Oh yeah, this new project has 681 units ranging in size 293 sq.ft to 721 sq.ft. 

I remember hearing that the gas station that sold across the road from this new condo development late last year was rumoured to have sold to Graywood Developments for a whopping $73 million! I was like, wtf? And if you are thinking, Mike, chill, this is just downtown real estate baby, Toronto style!

Well chew on this, Couche-Tard paid $4.6 million in 2016 for the site. I wonder what those units will need to be marketed at for the project to make sense?

As always, I would love to hear your thoughts, so feel free to reach out.

Leave a Reply