This Toronto parking spot costs $100,000 a year

Youre not a world class city, it seems, unless your parking spot costs more than your car. So Toronto, get set for the $100,000 parking spot.
5e960499449ea5c88e98154554e1.jpegParking at new condominium projects has risen steadily in the city, quietly hitting a new high-water mark with the slate of ultra-luxury condominium projects.

The new $100,000 price point, almost certainly the highest in Canada, has caught the attention of the real estate community. It has also underlined the dramatically increasing cost of parking downtown.

I guess youve got to put your Ferrari or Aston Martin somewhere, said developer George Wong of Magnum Projects Ltd. And if youre in that income bracket youre willing to pay the price.

A scarcity of building sites, demand for residential space downtown, and an influx of super high-end luxury buildings have created stratospheric prices for spots in the city.

In downtown Toronto, parking would cost from about $35,000 and up in the current market, according to market research firm Urbanation. That is far more than the cost of an average new car in Canada, at around $26,000.

For luxury properties, parking would be considerably more.

At the Florian in Yorkville, it would be $60,000. At One Bloor it would be $55,000 according to figures by Urbanation.

But at the Four Seasons, parking will set you back a jaw dropping $100,000.

Its certainly setting a new price point. We have a lot of luxury projects on the market today that we didnt have before, and I think this signals that Toronto is joining that world stage, said Mimi Ng, a vice-president of Menkes Developments Ltd., the developer of the Four Seasons project.

Five years ago, $25,000 for parking downtown was likely considered the upper end of the range, says Ng, a former real estate analyst. Now weve gone way beyond that.

In relative terms, $100,000 might seem like pocket change. At least for the buyer of The Four Seasons penthouse who paid $28 millionthe most expensive in Canada. When sales started in 2008 parking was $75,000, before creeping up to the $100,000 level today.

Our purchasers typically have a small collection of automobiles, and they would likely have both a winter car and a summer car, said Ng. In terms of cost, the price of the parking is in line with the pricing of the unit.

Two parking spots are included with units in the west tower, while the east tower, with smaller units, has one parking spot included. Additional spots are extra.

However, not all luxury buyers are happy with the steep cost of entry.

I think its a little ridiculous, actually, said Marcelo Lopez, an accountant who purchased a 1,865 square foot unit in the Four Seasons east tower.

Lopez drives a Porsche 911, while his wife drives a Mercedes SUV.

After depreciation, the cars arent even worth the parking spot. I could rent a Ferrari on weekends in the summer and still come out on top.

Lopez, who has only purchased the one spot that comes with his unit, says he is still considering what to do about his second car when they move into their building next year. But the pricing doesnt seem to have affected sales. The two towers are more than 80 per cent sold.

The $100,000 benchmark is significant not just for the Toronto market, but for the Canadian market as well.

That price tops many high end developments in Vancouver, the countrys most expensive city.

Vancouver-based realtor Wong says average prices for homes are higher on the east coast, while parking spot prices tend to be lower.

Toronto downtown is a different dynamic than Vancouver downtown. Toronto is still the financial centre and Bay St., and office towers, and they command more of a premium for parking, said Wong.

Wong sold an 8,000 square foot penthouse condo in Vancouver during the Olympics for a then record $22.3 million. While the suite came with its own enclosed parking spots, an extra spot was available to the purchasers at the time for a mere $40,000. That would be considered reasonable by Toronto standards.

Meanwhile, all that condo building on former parking lots in Toronto means it now cost more for everyone else to park downtowna median $336.25 monthly for commercial lots, according to Colliers International.

At other luxury sites downtown such as the Trump Hotel and Residences in the citys financial district, there are no deeded lots. Developers expect residents to pay about $500 monthly for valet parking for each car, which would work out to $6,000 annually. Most residents would likely have two cars, paying a $12,000 hit annually.

Despite the steep pricing for luxury developments, the average developer typically doesnt make money from underground parking because it is expensive to build.

Its actually a bit of a loss leader for us, says developer Jason Attard, a vice president of Aspen Ridge Homes, which is constructing a condo in the citys entertainment district.

Attard sells his parking for $35,000, but figures it costs him closer to $40,000 per space.

Its land value, and its extremely expensive to build once you start going underground, said Attard. But without parking, its much harder to sell units because buyers expect it.

Once you move out of the city core, the cost of additional parking drops dramatically. The best values seem to be in Scarborough, where you can get an extra spot for as low as $10,000.

But now that parking lot values have outstripped the costs of the average car, some consumers will likely wonder whether it makes sense to drive at all, even if the developer throws in a free car.

During the 2008 recession, as housing markets stalled briefly, at least one developer was giving away an economy car worth about $10,000 plus taxes with every suite sold, said Allen Schwartz, a Toronto real estate investor who has purchased several units over the years.

You could have probably bought ten cars for what it costs to buy a spot, which seems kind of silly, said Schwartz. But I guess the point is you wouldnt be living at the Four Seasons.
Menkes Developments Ltd.
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