This Toronto developer has pre-sold 75% of units during a condo crash. Here's how

Already, more than 75 per cent of units have pre-sold for the first phase of the Forêt Forest Hill project, clearing a required hurdle to secure construction financing, which will be led by CIBC, and includes National Bank, TD, Desjardins and Laurentian Bank.

Toronto’s condo market faces persistent headwinds, with many experts dubbing it a “condo crash” that has seen dozens of projects cancelled or delayed, with numerous developers going into receivership. Condo developers need 70 to 80 per cent of units pre-sold to secure construction financing, but with record-low new condo sales in recent months, many projects aren’t hitting that mark.

Since the start of 2024, more than 11,400 condo units were cancelled, of which over 4,000 were converted to purpose-built rental, according to an April report from real estate research firm Urbanation. 

What made this project different, according to its sales team and an expert in the industry, is the transit and amenity-rich location, a focus on a wide buyer pool and the expanded HST rebate, which can reduce up to $130,000 off the final price. 

In a turbulent condo market, what helps projects attain financing is delivering a product that people actually want to live in, said Riz Dhanji, president of RAD, which leads sales for Forêt and other condo projects across the city.

“That means bigger spaces with high-end finishes, as well as being close to transit and walkability to a busy main street.” 

A one-size-doesn’t-fit-all approach 

Construction has started on the first phase of the project, which is the below-grade parking for the entire complex, and the developer expects the middle tower to be completed sometime in 2029, said Ben Rogowski, president and chief investment officer at Canderel. 

The other two towers do not have a timeline, but the construction period should be shorter because the underground parking will be complete, he added. 

To gain sales, Canderel went back to basics, with a walk-in prototype and a focus on different sized units that could attract a wide buyer pool.

Dhanji said Canderel built a 4,000-sq.-ft. sales centre at the development site, where potential buyers could walk in and see prototypes of the units to get a feel of the home they’re about to buy — which showed ample space to put a king bed in the bedroom or large sectional in the living room, something micro-units can’t accommodate.

“People could see a full model suite and touch and feel what the finishings would be,” he said. “People are blown away by the gold fixtures, the rounded kitchen island (which is more expensive than a typical rectangle island), stone on the backsplash, Bosch appliances … they really feel the wow factor.”

Having walk-in prototypes had become uncommon, especially during the investor-led market of the previous five years, he added. 

The project is also designed for a wide buyer pool, with smaller units appealing to entry-level buyers and investors, and bigger two- or three-bedroom units attracting move-up buyers and downsizers who want to sell their single-family home. 

The average suite size is 630 sq. ft. with the largest being 2,000 sq. ft. Around 13 per cent of units are studios, with another 13 per cent being one-bedrooms, and 41 per cent one-bedroom plus den. Two-bedroom and two-bathroom units account for 25 per cent, and three-bedrooms make up seven per cent of units. 

“We launched at the tail end of 2022 when the market started to slow down,” Dhanji said. “Many projects then were geared toward the investor community, and while a portion of ours are geared toward investors, 70 to 80 per cent of our units aren’t micro-units allowing us the ability to talk to different types of buyer groups.” 

The condo towers are also a quick walk to St. Clair subway station, and Bathurst and St. Clair transit routes. There’s also a large Loblaws close to the northeast corner of the intersection. 

The location is “the best of several worlds,” said Rogowski, as midtown offers all the restaurants, cafes, and nightlife without being too close to the constant hustle and bustle of downtown, with people of all ages living in surrounding neighbourhoods. 

The addition of the public park offers “community benefit” to an intersection that for many years didn’t allow for residents to congregate, said Jasmine Young, vice-president at Zonda, a real estate data firm.

“Sometimes we get stuck on the height of the tower, but people miss the public space contribution; having seating that never used to be there … and improve connectivity from the subway, it really improves that intersection for everyone.” 

HST rebate ‘played a big role’

April, May and June brought in the biggest sales months as the expanded HST rebate “played a big role,” Dhanji said, adding that these three months saw a 50 per cent boost in sales compared to the winter months. 

On March 25, the Ontario government announced an HST rebate for all buyers of new homes for up to one year that maxes out at $130,000 for homes between $1 million and $1.5 million and gradually drops to $24,000 at the $1.85 million threshold. (That $24,000 rebate has been on the books for the past 15 years or so.)

The waiver of HST on all new home purchases started on April 1, expanding on the existing rebate introduced last fall that was only available to first-time buyers.

Having the HST rebate help lower the purchase price will ultimately attract buyers to condos, even smaller ones, said Young.

There’s high inventory of three-bedroom units because they’re quite expensive, she said, noting that pricing brings buyers in the door. 

“Condos have always been a get-your-foot-in-the-door purchase,” Young said. “And the cost of resale and new condo diverged, so the new condo market needs to meet where buyers are at.” 

With the HST rebate, pricing can go down considerably when the buyer closes on the unit, to bring the cost more in line with resale, Dhanji said. 

“Because the expanded HST ends in April next year, there’s a sense of urgency for people to take advantage,” he added.

The expanded HST rebate, which can reduce up to $130,000 off the final purchase price for select homes, also boosted sales by at least 50 per cent over the last several months, he added.