How do you define luxury in the condo industry??

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MATTHEW SLUTSKY

Senior Buzzer

2299

171

How do you define luxury in the condo industry??

I just read an interesting article in the Financial Post entitled, "And for the Garnish", which had some interesting things to say about the Toronto Luxury Market.

However, it got me wondering: Is "luxury" defined by PRICE or SIZE? For example, would a 300 square-foot bachelor suite selling at $1,500 be considered a LUXURY suite? Or, would a 4,000 square-foot suite selling at $450 per square-foot be considered a luxury suite?

Personally, in the TORONTO market for it to be considered real "luxury", I think the unit must be over 2,000SF and be selling at over $1,500 per SF.

Would love to hear your thoughts for the Toronto market, and what is happening in other luxury markets around the world.

Canada / General Chit-Chat

ROY BHANDARI

Senior Buzzer

512

1 BEST REPLY

I've kind of been wrestling with this recently... I love that there is already a topic on this on here. I haven't figured it out yet but I've highlighted a few of the key areas that would be considered.

It's really difficult and I think if you ask 10 people you will get 10 different answers so the definition needs to be quite broad.

a) PRICE POINT
Is it defined by price point? If so - what is the price level? Is $1 million still considered luxury? Is it $3 million? Is it $10 million? Is it per square foot?? (Would a $10 million suite at $500 per square foot be considered any less luxury than a $10 million suite at $2,000 per square foot?)

b) SIZE
Would a luxury suite have to be a certain size?

c) BUILDING vs. SUITE
This is where things get tricky for me .... what is more important? A luxury building or a luxury suite.

What if it is a building where the majority of suites are $300,000-$500,000 but they have penthouse collections that go from $2 million + (this is quite common).

Are the Penthouses in this building any less luxury than the $2 million suites in a building that ONLY has $2 million + suites in them?

Should a certain percentage of the building be suites over a certain price point/size?

d) BUILDING AMENITIES
Many of the luxury buildings now distinguish themselves with certain higher end amenities than the standard buildings don't have. A couple of them that I've recently seen are: Spa facilities, Valet Parking and Limousine Service

e) SUITE FINISHES
Self explanatory.

f) LOCATION
Would you only consider something in certain neighbourhoods to qualify for luxury? Would a $2 million condo in Cityplace be any less luxury than a $2 million condo in Yorkville?

Depending on how far along you move the sliders in each "category" above we have have anywhere between 5-50 "luxury condominiums" in Toronto....

MARCO DIFOTI

Senior Buzzer

550

I do not think that size matters, it is all about the finishings and location, and thus the price-point per square foot. You can easily have a real-luxury pad at 500 square feet at a pied-a-terre.
Also, if you are using size as a defining tool then it is different for each city. Take a look at New York, London and Tokyo: in such places being about 1,000 square feet could be qualified as luxury.

STEPHANIE STOUTE

Buzzer

When I hear the word luxury, I first think of size then it’s a tie between location and finishes. You’ve got to assume the price for luxury is high, so that’s a given in my opinion.

I'd personally be disappointed if a unit was described as luxury and was less than about 1500 - 2000 square feet. For a home I’d think 2500+ would be a great luxury size. Now, a "bachelor pad / pied-a-terre in a luxury building", to me would be a better way of describing something that isn't as big but still has the location / building / finishes that could classify it as luxury...

Perfect example of luxury disappointment – this weekend I visited a Luxury Estate Home development site. The size was there, the location was there but the finishes were not. Unless you’ve got the EVERYTHING going for you, using the word luxury just doesn’t fit…

MARCO DIFOTI

Senior Buzzer

550

^^To be considered a "luxury suite", does the entire building have to be "luxury"? For instance, BuzzBuzzHome wrote a blog about "luxury", where they showed Aura's penthouse.
Of course, at $17,500,000, this penthouse is LUXURY. The rest of the building looks great, but the rest of the building is not "luxury" as defined above. As such, would this penthouse be considered "luxury"? Taking into account "EVERYTHING", you are not getting the super-luxury amenities such as 24-hour valet, and such.

STEPHANIE STOUTE

Buzzer

Good point. A building doesn't need to be luxury for the 17mil suite to be! Size price and finishes would do it!

STEPHEN KATZ

Buzzer

To me luxury is comfort, location and finishings. I feel like you could have a luxury condo in a run down old building as long as when you shut your door you're in a environment of top end comfort and finishings. To me price depends greatly on where it is, so yeah in Toronto it may be a threshold of 1.5 MM but in Barrie it is possible to have luxury you just won't pay the same.

MOO STASH

BabbleBee

301

To me, luxury is defined as selling for double what the average square foot sells for. So, in Toronto it would be around $1,400ish per square foot. Try it in any city, and it will be correct.

JAMIE KINCH

Buzzer

142

Well if we go by what developers think is luxury, it's just about every condo in Toronto. If I had nickel for every time a developer mentions "luxury ", "luxurious amenities", or "luxury living" I'd be rich.

The double the average psf mentioned by @Moo Stash is interesting and works.

Though features and finishes also need to be factored in when labelling a house "luxury". It could cost 1.5m, but could be a dated dump.

MRLOFTCA

NewBee

Condos.ca has a pretty Good Summary and Selection of Toronto's True Luxury Condos, Based on $ per SQFT and Location.http://condos.ca/luxury-condos

DERRICK STRIKE

Buzzer

I've seen some condos in Saskatoon advertising as "luxury" due to a heating parkade. I've always felt that is a broad term that is all relative.

MARCO DIFOTI

Senior Buzzer

550

@MrLOFTca going by PPSF is so subjective based on location. There must be a better measure, that can be applied across the board.

MRLOFTCA

NewBee

@Moo Stash I agree with using SQFT but your answer implies the Average $per SQFT in Toronto is $700 which is way higher than in reality. The Average $ per SQFT in downtown Toronto is closer to $554. The ritz carlton is only averaging $697 per SQFT based on 7 sales this year. An average above $700 per SQFT alone would put it in a Luxury category in Toronto, FYI Only the Four Season is averaging over $1400 per SQFT.

MRLOFTCA

NewBee

@Marco DiFoti That's why you use "AVG" PPSF. A buildings AVG PPSF is not subjective with a decent sample. As mentioned above the Ritz is Averaging $697 per Sqft based on 7 sales this year. what is subjective about that?