Toronto Homes Listed for $7 Million Set to Be Demolished for Controversial Condo Development

Toronto Homes Listed for $7 Million Set to Be Demolished for Controversial Condo Development

Despite an underwhelming condo market that’s seen investors taking financial hits, the push for urban densification under Mayor Olivia Chow’s new zoning regulations has created opportunities for mid-rise development projects. Still, this doesn’t seem to be enough to overcome investor hesitation.

Take, for instance, the situation surrounding two houses on Kingston Road in Toronto’s Beaches neighborhood. These properties, located at 558-562 Kingston Rd., have been listed for sale as a “mid-rise development opportunity.” However, what may seem like an enticing investment is proving to be a complicated gamble.

Price Drop Reflects Investor Wariness

Originally listed in January 2024 for a hefty $7 million, the properties remained unsold for over 100 days, prompting a price drop of more than $1 million. Now, at $5,788,000, one would expect a surge of interest from potential investors. Yet the lack of enthusiasm reflects deeper issues at play, beyond just price concerns.

The Development Opportunity and Its Complications

Situated on a lot measuring 91 by 150 feet, the two homes are indeed in a prime location for a mid-rise condo project. TGC and ARD, two established developers, have even put forward a pre-approved plan for an eight-storey residential building with 49 condo units and eight rental units. The architectural design by Icon Architects adds further appeal to the project.

However, the properties currently house eight fully rented two-bedroom units, generating a combined annual gross income of $184,272. While that might sound promising, each unit is renting for around $1,919 per month, significantly below the market average of $3,091 for a similar two-bedroom apartment in Toronto. This discrepancy dampens the attractiveness of the investment.

The fact that the properties are fully tenanted introduces significant challenges for any new investor. According to Toronto’s rental demolition policies, evicting tenants isn’t straightforward:

  1. Notice Period: Investors must provide tenants with 120 days’ notice of any plans to demolish the homes.
  2. Tenant Compensation: Because the properties have more than five residential units, the landlord may need to pay compensation, which can be up to three months’ rent, for the disruption caused.
  3. Rental Unit Replacement: The proposed building must include eight rental units to replace the existing ones, further complicating profitability.

While these regulations are beneficial for preserving affordable rental housing in a city grappling with a housing crisis, they cut significantly into the profit margins of any would-be developer.

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Profitability Concerns Amid Market Struggles

Given these hurdles, it’s not surprising that investors remain cautious. The project’s long-term benefits may not outweigh the short-term financial and logistical headaches. The requirements to replace rental units and the current below-market rents make it challenging to recoup initial investment costs.

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The Bigger Picture: Toronto’s Housing Crisis

As Toronto struggles with housing shortages and affordability issues, the lack of urgency from developers in jumping on these opportunities is worrying. Even with the push for more density and new regulations aiming to spur development, the complexities of current projects like 558-562 Kingston Rd. highlight why condo construction is at a standstill. Without significant financial incentives or policy adjustments, it seems unlikely that investors will enthusiastically rush to the rescue.


Toronto’s real estate market remains in a precarious state, where opportunities are marred by regulatory hurdles and financial pitfalls. As the city balances the need for new housing with tenant protections, only time will tell if the tides will turn in favor of accelerated condo development.

About Sophie Wilson 718 Articles
Sophie Wilson is a finance professional with a strong academic background, having studied at the University of Toronto. Her expertise in finance is complemented by a solid foundation in analytical and strategic thinking, making her a valuable asset in the financial sector.

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