The million-dollar view from this 28th floor corner condo at the Ritz-Carlton Hotel and Residences is beyond one of a kind.
The CN Tower is so close you can almost touch it from the kitchen table and the setting sun lights up the living room’s wall of west-facing windows.
But for a very long time, no one was buying.
This “mansion in the sky” took 180 days to sell. And it’s far from alone.
Some 29 of The Ritz’s 161 granite-and-glass clad condos have been for sale for months now on MLS. And that’s not counting 12 units the developer is still marketing in the 52-storey project, the first of four five-star hotel-condo developments to hit the Toronto market.
That, combined with the sizable number of Trump International condos investors have been trying to unload in the underground “assignment” market, is boosting buzz about how fierce the competition could get when Trump officially opens its doors Jan. 31, followed by the Shangri-La and Four Seasons residences later this year.
“I think we’re seeing already with the Ritz that there’s not a lot of demand for resale (condos) in this price range,” says realtor John Pasalis, who has been watching this sector closely and is concerned about an oversupply of luxury condos.
“In some ways this (the number of Ritz and Trump units now for sale) is the sign of a market that was very speculative and is reaching a point where investors are starting to realize that just because they bought (early) doesn’t mean they are going to make an easy buck.”
That 2-bedroom, 28th-floor condo, for instance, was first listed back in July for $1.85 million — about $950 a square foot. Its maintenance fees alone are $1,800 a month.
It was later reduced to almost $1.6 million or about $825 a square foot. It sold conditionally this week for an undisclosed amount.
There’s no doubt it went for substantially less than the $1,100 per square foot the developer is asking for their 12 remaining units.
Condos sold in the pre-construction phase of The Ritz averaged $925 per square foot, says condominium research firm Urbanation. But a few went for as little as $700 or $750 per square foot says realtor Barbara Lawlor of Baker Realty who is overseeing sales for Ritz developers Graywood Developments and Cadillac-Fairview.
“Some people invested believing they would make great profits and now they’re trying to realize that,” which explains why there are so many units now listed on MLS, says Lawlor.
One investor, she noted, paid less than $2 million for their 2,400 square-foot two-bedroom condo and is now asking almost $3 million. It’s still for sale.
Five units have sold since July on MLS and their owners have pocketed $300,000 to $440,000, she said. Three more deals are pending.
“The developer would prefer if they (lower priced units) were not for sale on the MLS,” she added, “but there’s not much we can do.”
The Ritz has a “huge advantage,” says Lawlor, being the first of the five-stars to be opened to the public by dignified doormen last February on Wellington St., steps from Toronto’s entertainment district.
The 379-unit Trump International opens next week in the financial district, followed by the Living Shangri-La on University Ave. and the Four Seasons residences in Yorkville later this year.
While all the projects appear to be at least 80 per cent sold out, some Trump investors have already tried to back out of contracts or “assign” their units to new buyers through realtor word of mouth since they can’t be listed on MLS until the building actually opens and they take possession.
Dozens more condos are expected to hit the market as the remaining five-star projects open, although few listings are expected at the Four Seasons, the favourite, it seems, of Toronto’s downsizing rich.
But Lawlor says she expects any resales will be consistent with the 18 to 20 per cent of listings she routinely sees when a new condo project gets built as buyers try to cash out or find their personal situation has changed during the three to five years of construction.
The great unknown here, housing experts say, is whether there are enough buyers able to cough up a million dollars plus for all those luxe condos.
“The market will find its level, but the next year will be interesting because never before has there been so much luxury product come into the market at the same time,” says Lawlor.
“I believe there will be buyers in the Toronto market for these listings.”
So does realtor Andy Taylor, senior vice president of sales for Sotheby’s International, who is working with two potential Ritz buyers right now.
“It’s partly because this is new to the city — five-star living is in it’s infancy in Toronto. I think the minute people experience what it’s like to walk through those doors, we will find more buyers.”