innsertnamehere
Superstar
Not sure I make that same connection.
Nothing is selling right now regardless of location or amenities.
- Thread starter innsertnamehere
- Start date
Nothing is selling right now regardless of location or amenities.
Chris R.
Senior Member
That's simply not true first of all, condos in highly desirable locations continue to sell, perhaps not as quickly as before waiting on interest rates, but they aren't completely stalled like Hamilton's market has. If an LRT station were adjacent to this development demand would be far greater for units that will benefit directly from that transit connection.
Additionally, this could be shifted to rental, even in just a few of the buildings and the rents would justify the cost of construction if the LRT had an impact on demand.
I'm not trying to downplay the role of interest rates, but what I am saying is that LRT would increase demand, no parking minimums would lower construction cost. The argument I'm making is that interest rates are not 100% of the reason. It could be around 50% of the reason, but the other factors that affect housing construction could be adjusted to reduce stalls like this.
TheHonestMaple
Active Member
The downturn in construction is not entirely due to high interest rates for personal mortgages. Developers have to finance the cost of construction in the same way. They are bounded by high interest rates on both sides. And this isn't something that we're even feeling the full effect of. That hike in rates will play out over the next 5 years in the residential development industry.
ZEBuilder
Active Member
I can tell you for a fact having an LRT doesn't mean anything in terms of selling units. Just use KW as an example there's an LRT and loads of high tech but absolutely nothing is selling, Zehr Group was originally planning on launching 660 Belmont this year and that hasn't happened, Momentum Developments has been trying to sell units in Q Condos since April and haven't sold anywhere near enough yet. Station Park Duo hasn't sold enough to start Tower D. Strata in Waterloo isn't selling.
Interest rates 100% play a major factor in the condo industry because most pre construction sales go to investors, if investors aren't buying nothing is going to move which is effecting every condo right now. While yes you could shift it to rental that has its own problems in terms of financing especially in today's interest rate environment.
While you might not like it IN8 has a clue on the condo market and has made a lot of money because of that, they have been a very large player in KW for years now (All the Sage buildings by the universities, DTK, TEK Tower). If they can't sell units they aren't going to build, it's as simple as that. In the case of TEK Tower 3 IN8 has applied for permits having not sold a thing, so things can still happen behind the scenes.
Chris R.
Senior Member
I've heard the developer here is already in discussion for a resubmission with fewer or no parking stalls here to reduce the cost of the redevelopment. I can't recall if the resubmission saw a different parking number, but the original project shown to the DRP had 972 parking stalls proposed. At the low end ($35,000) that would cost the development ~$34,000,000 to build all those parking stalls. On the high end ($124,000 similar to Corktown) that would cost ~$120,500,000. Reducing the parking built here could turn this from something currently on hold to something viable in the current environment.
Seeing at this was touted as a $1 billion project, reducing the cost to build by up to 12% is quite substantial and might make it possible to sell or rent the units for a profit at a lower price point that might make construction of this project feasible.
Seeing at this was touted as a $1 billion project, reducing the cost to build by up to 12% is quite substantial and might make it possible to sell or rent the units for a profit at a lower price point that might make construction of this project feasible.
Amare
Senior Member
This whole load of underwhelming crap needed to go back to the drawing board so that's good to hear. But I wont lose any sleep if the developer doesnt find a way to build this, it wouldnt be a loss.
BCTed
Active Member
Agreed.
Bright sun films, a YouTube channel covering abandoned properties, has a new video covering Hamilton City Centre mall with lots of footage depicting the current state of the interior. Also talks about the history and current status of the redevelopment project:
FF407
New Member
This is a really cool video.
Chronamut
Active Member
Great so basically due to rising high interest rates - they need to sell 400 units just to get it off the ground, and thus nothing will ever get built here - and this mall will just rot and eventually collapse - it's become what the lister block used to represent - hamiltons rot. As the video said - this project has been "put on hold indefinitely".
Maybe it's for the best - the condo idea, while nice, didn't feel like it really utilized this plot as majestically as something literally in the very center of the city should. I'd also like to see something built here much much MUCH taller (which I know is unusual for me) but I do believe that cities should have a "peak" of focus that everything else slowly peters away in height from - like the cn tower in toronto - gives it identity. Originally the city hall was the focus all around in that spot - let's build that 80 story pyramid Stinson originally proposed for the Connaught there lol.
This would be the perfect spot for an over-the-top casino. All those builds around it, give them a place to blow all their money - with a mall attached to spend said earnings? It would explode. You'd need some sorta credit check most likely to prevent people from blowing their welfare cheques of course.
Or maybe an indoor water park like niagara has - I still found that to be ingenious.
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FF407
New Member
Honestly an indoor waterpark here would have really nice potential. You could include hotel rooms in the main part of the mall or atleast part of it and put the waterpark where Eatons was.
juicebox
New Member
Correct me if I'm wrong, but I thought one of the things that helps Toronto's Eaton Center stay relatively busy is because of its connection to transit. It has subway and streetcar access on either end. Maybe integrating with the MacNab terminal with a bridge or tunnel would help draw traffic in the future?
xy3
Active Member
"High" interest rates is a bad excuse for buildings/projects stalling. There was plenty of affordable (relative to now) sprawl being built around the GTA in the 80s and 90s (when interest rates were normal and not artificially low like post 2008) exponentially more SFH being built back then than now. Real Interest rates are also still historically below average due to inflation (and negative when you account for housing costs)
The reasons are rising costs in materials/labor and government incentivizing land banking instead of incentivizing actual shovels in the ground due to excessive development charges and other anti-development policies/NIMBYism/pointless community consultations etc.
The value of raw land is also artificially inflated by monetary government policy which makes it harder to enter the market.
The reasons are rising costs in materials/labor and government incentivizing land banking instead of incentivizing actual shovels in the ground due to excessive development charges and other anti-development policies/NIMBYism/pointless community consultations etc.
The value of raw land is also artificially inflated by monetary government policy which makes it harder to enter the market.
Chris R.
Senior Member
It's all of those things plus interest rates. Units aren't selling. Having spoken to some people in the industry, units are not selling, and so they can't build. Not to mention that added costs, including things like Hamilton removing DC exemptions downtown are putting a lot of plans into the red which means either cancellation and sell, up zone, or wait on the land until the unit price allows for a profit margin that is worth it.
Hamilton isn't Toronto, and demand isn't unlimited in the same way. A 5 unit multiple thousand unit development in the current market would take half a decade to sell at the price needed to justify construction costs. They're not interested in doing it that way. They may shift to a phased approach where the 5 towers becomes 5 phases, but that has its own issues because people are buying into a construction site for the next decade.
Chronamut
Active Member
Or just build a casino and put the waterpark on top like they have in niagara - reach for the sky!
And yeah, this one's a mess. We need a bull market. The fact this has inflated to over a billion dollars to build probably hasn't helped. That and we don't often get such HUGE developments to build - what people saw of that mall was a tiny portion of what was actually contained in that space - the giant call center being one such example.
Also the "transit not being directly beside it" argument feels.. lackluster. Walk up and down james on either side and you reach a go station - it's pretty damn close. You literally can't be any closer street wise to both go stations.
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