As Toronto’s condo crash deepens, developers are privately selling large blocks of unsold units to investment firms at steep discounts — deals that can be nearly impossible for ordinary buyers to access.
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buyers → deepen → discounts
A new service is allowing individuals to access these secret sales for the first time.
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individuals → allow → time
These bulk sales are not listed on public markets in an effort to avoid affecting listed condo sales.
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sales → list → sales
Such transactions accounted for about 30 per cent of new-condo sales recorded in the second quarter in the Greater Toronto and Hamilton Area, according to real estate data firm Urbanation.
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transactions → account → Urbanation
Until now, the discounts have been exclusively available to those with enough money to buy dozens of units at once.
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discounts → buy → units
Dubbed QuietMarket, the platform matches buyers with discounted units based on their budget, preferred neighbourhood and housing needs.
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platform → dub → needs
Buyers can view floor plans and pricing information without initially being told the building’s name or address, but they must verify their identity and sign a nondisclosure agreement (NDA) to learn the exact location and developer.
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they → view → location
The company completed almost 20 sales during its initial, largely word-of-mouth launch this past spring, with co-founder Cara Hirsch reporting average savings of 45 per cent off original asking prices when the properties were initially put up for sale.
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properties → complete → sale
“We wanted to come up with a retail solution for a one-off buyer,” said Hirsch, who has worked in the new-home development industry for nearly 17 years.
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who → want → years
She said the platform is designed to help individual buyers find deals while giving developers a way to sell unsold inventory without publicly cutting prices.
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buyers → say → prices
“The reality is there’s just a lot of inventory out there right now.
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reality → ’ → inventory
Hopefully this can help the market get back to a healthy place.”
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market → help → place
QuietMarket taps into a tension in Toronto’s condo market: Bulk deals can help developers move unsold units and reduce the cost of carrying them, but the discounts have also been a source of controversy because they are often negotiated privately.
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they → tap → controversy
That means investment firms can secure prices that individual buyers may struggle to access, tightening the supply, and the lower prices are often not reflected in public listings.
Hirsch said developers are looking for ways to move inventory without accepting the deeper discounts that can come with bulk sales.
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that → mean → sales
QuietMarket requires an NDA, Hirsch says, as it’s a condition developers require to protect pricing and previous purchasers who paid more for units in the same building.
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who → require → building
“If a builder is trying to close out units or they have past purchasers who have bought and closed, it’s almost penalizing them for keeping up with their contract and closing on their suite,” she said.
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she → try → suite
QuietMarket’s pitch comes as Toronto’s new-condo market struggles with weak demand and a growing pool of unsold homes.
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market → come → homes
In the Greater Toronto and Hamilton Area, seven bulk purchases involving at least five units each accounted for 204 of the 702 new-condo sales recorded in the second quarter — about 30 per cent of the total, according to Urbanation data provided by Shaun Hildebrand.
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purchases → involve → Hildebrand
Although new-condo sales rose 52 per cent year-over-year, they remained 86 per cent below the 10-year average for the quarter.
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they → rise → quarter
Bulk deals came at lower prices than individual sales.
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deals → come → sales
In the second quarter, bulk purchases averaged $773 per square foot, compared with $1,008 for new condos sold individually and $830 for resale units in recently registered buildings, Hildebrand said.
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Hildebrand → average → buildings
The figures illustrate the discounts available to buyers taking on multiple units, although they do not establish how much any individual buyer could save on a comparable condo.
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buyer → illustrate → condo
The company, founded by Hirsch and partners Ford Shirriff and Reagan Zuzarte, vets the properties it lists, considering developers’ reputations and project quality.
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it → found → reputations
Hirsch said it accepts about eight per cent of the inventory brought to it.
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it → say → it
Users answer four multiple choice questions about their budget, preferred neighbourhood and the type of home they want, then QuietMarket matches them with available units.
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QuietMarket → answer → units
The platform is free for buyers, who can review a unit’s original asking price, QuietMarket’s recommended price, comparable resale values and estimated monthly costs before deciding whether to pursue it.
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who → review → it
The building and developer remain anonymous until buyers verify their identity and sign a nondisclosure agreement.
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buyers → remain → agreement
QuietMarket earns money through payments from developers when it brings them a buyer who reaches an agreement to purchase a unit.
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who → earn → unit
Buyers pay nothing to use the platform, and Hirsch said the company does not add its fee or charge a commission on the listed price.
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company → pay → price
Toronto real estate broker John Pasalis said bulk deals can give institutional investors access to prices unavailable to individual buyers, raising questions about who benefits when developers sell off unsold condos at a discount.
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developers → say → discount
“We have all of these units that consumers can’t afford that companies are getting a privileged price (for),” he said.
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he → have → price
“So it’s basically a price that’s not available to the end user.
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that → ’ → user
While Pasalis said he could not comment on QuietMarket directly, he cautioned buyers to distinguish between a discount off a developer’s original asking price compared to what comparable condos are selling for today.
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condos → say → what
A unit originally listed at $1,500 per square foot and discounted to $1,200 may still be overpriced if similar resale units are selling for $1,000, he said.
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he → list → 1,000
He also said keeping discounts private raises questions about how individual buyers can determine what a condo is really worth when some transactions remain hidden from public view.
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transactions → say → view
“The price that builders built at and need to sell at, even just to break even, forget making a profit, is for the most part well above what people can buy an existing condo for,” he said.
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he → build → condo
On the developers’ side, Matt Young, the president and CEO of Toronto-based Republic Developments, which is not affiliated with QuietMarket, said once a project is complete, developers need to close sales to repay construction loans and investors, and each additional month unsold units sit on the books costs money.
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units → base → money
“They’re rightly doing an analysis and deciding if some money today is better than more money tomorrow,” Young said.
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Young → do → money
Young, however, said bulk transactions should be understood differently from individual condo sales.
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transactions → say → sales
Buyers taking on large amounts of inventory provide developers with immediate liquidity, he said, and can negotiate deeper discounts in return.
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he → take → return
…and 1 more, not listed.
The Aporia
