As the condo crash drags on, more developers are looking for ways to reach new buyers — and in North York, one builder sees bigger, fewer units as a possible path forward.
At York Mills, between Lawrence Park and Highway 401, the Gupta Group is reducing the number of units planned at a two-tower luxury development from 700 to 500 and making over 60 per cent of them two- and three-bedroom homes.
“We feel that people are looking for more livability,” said founder and chairman Steve Gupta, who added they made the decision to cut nearly 30 per cent of units last summer.
“They want a space that is more comfortable and a space where they can have a proper bedroom.”
The change comes amid a collapse in Toronto’s new condo industry, which relied on investors buying up pre-built units often to rent out or resell at a profit, with some selling the contract even before the home was built, as values during the pandemic hit dizzying heights.
But with recent price drops, investor demand has dried up, and some developers have cancelled projects as sales dwindled (condo developers need 70 to 80 per cent of units pre-sold before they can get financing). Others have switched to building rentals as a way to salvage buildings.
Gupta said they felt condos were still the way forward because of the location near some of Toronto’s most expensive neighbourhoods, high-end finishes and amenities such as a golf simulator.
Prices run from $1.5 million to $5 million with a few penthouses in the $10-million range. The two-bedrooms are on average 1,129 square feet, and the three-bedrooms on average 1,410 square feet.
The process of reducing the units, Gupta said, took about six months because it required redesigning the whole building, paying attention to things like the distance to the stairwells to meet fire codes.
Occupancy is expected in 2028.
Gupta said almost 35 per cent are pre-sold, and there was an increase in sales activity when the larger units were made available. The buyers so far, he added, are downsizers from the nearby area and those purchasing for family members, noting the connection to York Mills subway station.
It’s not the first recent example of a luxury building using this kind of strategy.
A new project by Devron Developments and Dorsay Development Corp. near Rosedale and Summerhill, called the 1 Marlborough, is also marketing larger units for buyers who want to live comfortably, instead of being squeezed into a shoebox.
And at 737 Bathurst Street in Mirvish Village, roughly half of the homes in a proposed 40-storey rental tower are planned as two and three bedrooms, pending city approval.
Gupta said more developers may embrace this model. But it depends on the location and the demand in the area.
Tyeshia Redden, an assistant professor of urban planning at the University of Toronto, said developers are testing the waters to see what’s viable.
“I think what has happened is developers have felt the pain of that condo crash,” she said.
During the height of condo development in the city “we were seeing a lot of the profits being made before the condos were even constructed, just from flipping the contract.”
While the few recent local examples of buildings with larger two and three bedrooms for both sale and rent are “what we’ve been clamouring for,” Redden said, it will take more than just private developers to deliver this kind of housing.
It requires “a serious conversation about social housing,” and rent control, she said.
The people who have $1.5 million to buy a condo will always be fine, she added.
“That’s not for the average Toronto family.”
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