Three quick and unrelated things for today's post:

1.

A handful of years ago, before the pandemic, Bullpen Consulting, Slate Asset Management, and AD HOC STUDIO started a somewhat irregular basketball meetup for Toronto's development industry called City Builder Ball. It, of course, fell off the rails during the pandemic, but as of this month we are officially back at it! We played over the weekend and I can't tell you how much fun it was to run around a gym for an hour and play basketball very poorly -- so much fun. The next meetup will be in January and if you'd like to join, drop Ben Myers of Bullpen an email to get on the mailing list. It is open to all.

2.

A few months ago I wrote about a passion project that I am working on with a friend, called Unlyst. The idea is to see if there is a way to leverage the "wisdom of crowds" to determine the current market value of housing. And the way it works is that we feature a home on the website, people (or the crowd) get 14 days to input what they think it's worth, and then we come up with something we are calling an "unlysted value." There's a lot of evidence of this sort of thing working exceptionally well for other markets, so we're very curious to see if it can work for housing. If you're interested in contributing your home and/or just seeing how it works, check out unlyst.com.

3.

World Cup Finals. What a game! A huge congratulations to Argentina and, of course, Messi. I should, however, come clean and say that I know virtually nothing about football, I don't know why the field is so big, and that my overall impression of the game used to be mostly consistent with this Simpsons' take (albeit with more sensationalized flopping by men with faux hawks). But since Canada qualified this year, I felt it was my duty to watch -- at least some bits and until we got eliminated. And since the finals are the finals, and since I have an open crush on France, I figured this would also be a good game to watch. Turns out I was right. And now, I am fairly certain that it has turned me into a true fan -- or at the very least a "I could watch a finals game every 4 years" kind of fan. Who knew that soccer, I mean football, could be so thrilling?

Photo by Florian Wehde on Unsplash

Bullpen Consulting just released its latest land insights reports for the Greater Toronto Area. For the period of Q2-2022, Ben Myers and the team identified 46 high-density residential land transactions with an average price of $95 per buildable square foot. This is down from $112 pbsf in Q1.

In the core of the city (former City of Toronto), the average price for Q2-2022 was $135 pbsf. In North York it was $103 pbsf. And in Scarborough it was $50 pbsf. Overall land prices are down about 15% from last quarter (though it's important to note that quarterly transactions can represent a relatively small sample size).

We have spoken before about how land prices tend to be fairly sticky in the face of changing cost structures. But what we are seeing right now is a bit of a perfect storm:

• Development charges (here in Toronto) are set to increase by 49%

• Hard costs have seen double digit increases (with some inputs increasing by 30-40%)

• Inclusionary zoning is on the horizon and will add another additional cost to new housing

• And rising interest rates are both increasing project costs (higher interest charges) and slowing the macro economy

All of this is naturally causing developers to be more cautious when it comes buying new land. And we are seeing that in the above pricing. But at the same time, this dip in pricing is not going to be enough to absorb all of the additional costs that new housing projects now face in today's market.

If you'd like to download a full copy of Bullpen's report, click here.

Ben Myers of Bullpen Research & Consulting was recently interviewed by Newinhomes.com about the state of Toronto's new housing market. Ben is always interesting. And these are the sorts of things that I read in my spare time. So here's an excerpt:

The average price of popular new condo floor plans in the City of Toronto in October 2019 was approximately $1,275 per-square-foot (psf) and with growth of 3% a year, prices would hit $1,475 psf in 2024. I wouldn't be surprised to see annual average growth of 4%, which would get you to $1,625 psf in five years in Toronto.

This data was taken from BuzzBuzzHome and -- by "popular new condo floor plans" -- I believe he means that these are the floor plans that buyers tend to click on and review when they visit the site. So it's a good indication of buyer demand.

Here's another quote that stuck out:

Part of the reason that price growth has spiked is a rise in construction costs, development charges, and land prices - this cost-push inflation is passed on to consumers.

That sounds right. And I have been writing about this phenomenon all year. Most of us can probably remember when $1,000+ psf was a high water mark for new construction condos. Now it's pretty much a floor.

Three quick and unrelated things for today's post:

1.

A handful of years ago, before the pandemic, Bullpen Consulting, Slate Asset Management, and AD HOC STUDIO started a somewhat irregular basketball meetup for Toronto's development industry called City Builder Ball. It, of course, fell off the rails during the pandemic, but as of this month we are officially back at it! We played over the weekend and I can't tell you how much fun it was to run around a gym for an hour and play basketball very poorly -- so much fun. The next meetup will be in January and if you'd like to join, drop Ben Myers of Bullpen an email to get on the mailing list. It is open to all.

2.

A few months ago I wrote about a passion project that I am working on with a friend, called Unlyst. The idea is to see if there is a way to leverage the "wisdom of crowds" to determine the current market value of housing. And the way it works is that we feature a home on the website, people (or the crowd) get 14 days to input what they think it's worth, and then we come up with something we are calling an "unlysted value." There's a lot of evidence of this sort of thing working exceptionally well for other markets, so we're very curious to see if it can work for housing. If you're interested in contributing your home and/or just seeing how it works, check out unlyst.com.

3.

World Cup Finals. What a game! A huge congratulations to Argentina and, of course, Messi. I should, however, come clean and say that I know virtually nothing about football, I don't know why the field is so big, and that my overall impression of the game used to be mostly consistent with this Simpsons' take (albeit with more sensationalized flopping by men with faux hawks). But since Canada qualified this year, I felt it was my duty to watch -- at least some bits and until we got eliminated. And since the finals are the finals, and since I have an open crush on France, I figured this would also be a good game to watch. Turns out I was right. And now, I am fairly certain that it has turned me into a true fan -- or at the very least a "I could watch a finals game every 4 years" kind of fan. Who knew that soccer, I mean football, could be so thrilling?

Photo by Florian Wehde on Unsplash

Bullpen Consulting just released its latest land insights reports for the Greater Toronto Area. For the period of Q2-2022, Ben Myers and the team identified 46 high-density residential land transactions with an average price of $95 per buildable square foot. This is down from $112 pbsf in Q1.

In the core of the city (former City of Toronto), the average price for Q2-2022 was $135 pbsf. In North York it was $103 pbsf. And in Scarborough it was $50 pbsf. Overall land prices are down about 15% from last quarter (though it's important to note that quarterly transactions can represent a relatively small sample size).

We have spoken before about how land prices tend to be fairly sticky in the face of changing cost structures. But what we are seeing right now is a bit of a perfect storm:

• Development charges (here in Toronto) are set to increase by 49%

• Hard costs have seen double digit increases (with some inputs increasing by 30-40%)

• Inclusionary zoning is on the horizon and will add another additional cost to new housing

• And rising interest rates are both increasing project costs (higher interest charges) and slowing the macro economy

All of this is naturally causing developers to be more cautious when it comes buying new land. And we are seeing that in the above pricing. But at the same time, this dip in pricing is not going to be enough to absorb all of the additional costs that new housing projects now face in today's market.

If you'd like to download a full copy of Bullpen's report, click here.

Ben Myers of Bullpen Research & Consulting was recently interviewed by Newinhomes.com about the state of Toronto's new housing market. Ben is always interesting. And these are the sorts of things that I read in my spare time. So here's an excerpt:

The average price of popular new condo floor plans in the City of Toronto in October 2019 was approximately $1,275 per-square-foot (psf) and with growth of 3% a year, prices would hit $1,475 psf in 2024. I wouldn't be surprised to see annual average growth of 4%, which would get you to $1,625 psf in five years in Toronto.

This data was taken from BuzzBuzzHome and -- by "popular new condo floor plans" -- I believe he means that these are the floor plans that buyers tend to click on and review when they visit the site. So it's a good indication of buyer demand.

Here's another quote that stuck out:

Part of the reason that price growth has spiked is a rise in construction costs, development charges, and land prices - this cost-push inflation is passed on to consumers.

That sounds right. And I have been writing about this phenomenon all year. Most of us can probably remember when $1,000+ psf was a high water mark for new construction condos. Now it's pretty much a floor.