East York is quietly emerging as one of Toronto's most compelling real estate investment opportunities, particularly for investors seeking development potential with built-in downside protection. Along major transit corridors, detached bungalows are trading in the $750,000-$850,000 range, presenting a unique dual opportunity that's increasingly rare in Toronto's market.

Why This Opportunity Stands Out

What makes these properties exceptional is their flexibility. You're not just buying development potential—you're acquiring an asset that works whether you're an end user looking for a home, an investor pursuing a land banking strategy, or a builder ready to maximize density.

The Transit Advantage

Properties along major transit lines in East York benefit from Toronto's aggressive intensification policies. The city is actively encouraging higher-density development near rapid transit, which translates to increased zoning flexibility for multi-unit developments, strong rental demand from transit-dependent residents, long-term value appreciation as transit-oriented development continues, and reduced parking requirements that improve project economics.

Investment Strategy Breakdown

Strategy 1: Land Banking (Buy and Hold)

For investors not ready to develop immediately, these bungalows offer an intelligent holding strategy. The existing structure generates rental income while you wait for optimal market conditions or navigate the development approval process. A typical 2-3 bedroom bungalow in East York can command between $2,800 and $3,500 per month in rental income, which helps offset your carrying costs while land values appreciate in the background.

The beauty of this approach is the timeline flexibility it provides. You can hold for anywhere from two to five years while monitoring rezoning applications in the area, watching for transit expansion announcements, tracking construction cost trends, and observing market absorption rates. This gives you the luxury of choosing the optimal moment to move forward with development or simply exit with appreciation gains.

Strategy 2: Value-Add Renovations

If you're considering light renovations to maximize rental income or prepare for a flip, understanding the cost structure is essential. For a cosmetic refresh that includes paint, flooring, new fixtures, kitchen cabinet refacing, and bathroom updates, you're looking at roughly $30 to $50 per square foot. On a typical 1,200 square foot bungalow, this translates to an investment of $36,000 to $60,000.

A moderate renovation goes deeper, including new kitchen and bathrooms, updated electrical and plumbing systems, refinished hardwood floors, new trim throughout, and energy efficiency upgrades. This level of work typically costs between $75 and $125 per square foot, or $90,000 to $150,000 for that same 1,200 square foot property.

For those considering a substantial renovation that maintains the structure but essentially creates a new interior, expect costs in the range of $150 to $200 per square foot. This includes gut renovation work, all new systems and finishes, layout reconfiguration, and high-end finishes throughout. The total investment would be approximately $180,000 to $240,000 for a 1,200 square foot bungalow.

Strategy 3: Development Play

The highest and best use for these properties is often multi-unit development. Depending on your lot characteristics and local zoning, potential scenarios include converting to a duplex or triplex by adding second or third units within the existing footprint or with a modest addition. If your lot permits, you might add a laneway suite of 600 to 800 square feet as a secondary dwelling. Some lots, particularly those with 50 feet or more of frontage, may allow severance into two detached properties. In some cases, depending on zoning and lot size, you could even pursue a small condo or rental building with three to eight units.

When it comes to development costs, ground-up construction for wood-frame low-rise buildings typically runs $300 to $400 per square foot. You'll need to add another 20 to 30 percent on top of that for soft costs and fees including architectural services, engineering, permits, and development charges. The advantage here is that your land value is already established with your $750,000 to $850,000 acquisition cost.

The Numbers: A Sample Pro Forma

Let's walk through a realistic example. Imagine you acquire a detached bungalow on a 35 by 125 foot lot for $800,000. In a near-term hold strategy, you invest $75,000 in modest renovations and rent the property for $3,200 per month, generating $38,400 annually. This provides an approximate net yield of 3.5 to 4 percent while your land appreciates over time.

Looking at a medium-term development scenario over three to four years, you could pursue a three to four unit building. Development costs including soft costs would run approximately $1.2 to $1.5 million, bringing your all-in cost to $2.0 to $2.35 million. The potential value creation or rental income generation is significant, with the completed project potentially worth $2.5 to $3.0 million or generating over $10,000 per month in net rental income. This creates either built-in equity for a sale or strong cash flow generation for long-term hold.

Neighbourhood-Specific Opportunities: Carlaw to Woodbine

The corridor between Carlaw Avenue and Woodbine Avenue represents the sweet spot for these opportunities. This stretch encompasses several distinct neighbourhoods, each with its own character but united by excellent transit access and development-friendly zoning.

The Woodbine-Lumsden area, stretching from Woodbine Avenue west toward Coxwell, features predominantly detached bungalows on lots that typically range from 20 by 100 feet up to 35 by 120 feet or more. These lots often provide the depth needed for severance possibilities or substantial additions. The neighbourhood benefits from proximity to Woodbine Beach and the boardwalk, making it attractive to end users who value outdoor recreation alongside urban convenience.

Moving west, the areas around Coxwell Avenue and O'Connor Drive offer similar lot configurations with the added advantage of being walkable to Coxwell Station on the Bloor-Danforth subway line. Properties here sit within minutes of Dentonia Park Golf Course and the East York Town Centre, which provides grocery shopping, banking, and essential services. The mature residential streets are lined with established trees and well-maintained homes, creating that neighbourhood feel that's increasingly hard to find in newer development areas.

The Pape Village area, closer to Pape Avenue, presents perhaps the most compelling combination of transit access and neighbourhood amenities. With both Pape and Donlands subway stations nearby, properties here benefit from multiple rapid transit options. The commercial strip along Pape Avenue has been revitalizing steadily, with new cafes, restaurants, and independent shops joining longstanding community businesses. Taylor Creek Park provides green space and trail access, while the area's schools including Donwood Park Public School and Diefenbaker Elementary and Middle School make it attractive to families.

Throughout this corridor, lot sizes typically start at 20 by 100 feet for the narrower properties, though 25 by 110 feet and 30 by 120 feet configurations are common. The wider lots of 35 feet and beyond open up significantly more development possibilities, from duplex conversions to potential severance into two separate properties. These dimensions matter tremendously when planning your development strategy, as even five additional feet of frontage can transform what's feasible under current zoning.

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Why East York? Why Now?

East York offers something that's hard to find in raw development areas further from the core: established neighbourhood appeal. The mature tree canopy, excellent schools, and genuine community feel make these properties attractive not just as development plays but as places people actually want to live.

The transit connectivity provides direct access to downtown, making these properties highly attractive to renters and future buyers who prioritize convenience in their daily lives. This isn't just about being near transit—it's about being part of Toronto's transit-oriented future.

We're also operating in a supply-constrained market where Toronto's housing shortage shows no signs of resolving soon. Properties with development potential near transit will remain in high demand for the foreseeable future. The relative affordability at $750,000 to $850,000 makes the entry point accessible compared to similar opportunities in the core or along other subway lines where bungalow lots regularly exceed $1.5 to $2 million.

Key Considerations Before You Buy

Before committing to any property, thorough due diligence is essential. You'll want to verify the exact zoning and understand what's permitted as-of-right versus what would require rezoning. Assess the lot dimensions carefully and identify any easements that might restrict development. Review the city's Official Plan for area-specific policies that could affect your plans, and consider whether any heritage designations might restrict your development options.

Analyzing comparable recent sales and development applications in the immediate area will give you a sense of market dynamics and approval likelihood. Factor in Toronto's development charges, which currently range from $30,000 to over $60,000 per unit depending on size. Don't forget to understand the property tax implications during your hold period, as these will affect your carrying costs.

On the risk side, be realistic about development approval timelines, which typically run 12 to 24 months or longer. Construction costs remain volatile, and the current interest rate environment will significantly affect your financing costs and returns. If you're planning to generate rental income, carefully consider market absorption and whether demand will support your projected rents.

The Bottom Line

East York's detached bungalows along major transit lines represent one of Toronto's remaining opportunities where development potential doesn't mean sacrificing downside protection. Whether you're an investor comfortable with a land banking strategy, a renovation-minded holder looking to add value in the near term, or a builder ready to maximize density, the $750,000 to $850,000 entry point offers multiple paths to returns.

The key is understanding your timeline, risk tolerance, and exit strategy before committing. But with Toronto's housing crisis showing no signs of abating and the city's demonstrated commitment to transit-oriented intensification, properties that check both boxes deserve serious consideration from anyone looking at Toronto's development landscape.

This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own due diligence and consult with real estate, legal, and financial professionals before making investment decisions.

If you've been searching for a new condo in Toronto lately, you've probably noticed something: there just aren't as many options as there used to be. Fewer cranes dotting the skyline, fewer pre-construction launches, and a growing sense that the city's housing pipeline is grinding to a halt. And if you're wondering why, the answer isn't what you might think.

It's not that developers don't want to build. It's that increasingly, they simply can't make the numbers work.

The Perfect Storm Squeezing Builders

Picture this: You're a developer who wants to build a new condo tower. You've got the land, you've got the vision, and you know there are thousands of people desperate to buy. But here's the problem—the cost of actually building that tower has skyrocketed.

Construction costs have surged dramatically over the past few years. Materials cost more. Labor costs more. Everything from concrete to elevator systems has gotten more expensive. In a normal market, you'd pass some of these costs onto buyers through higher prices. But there's a ceiling to what people can afford, especially when mortgage rates remain elevated and affordability is already stretched to the limit.

The Municipal Fee Mountain

Then there's the other half of the squeeze: development charges. These are the fees that the City of Toronto charges developers to help pay for the infrastructure needed to support new development—things like roads, transit, water systems, and community facilities.

These charges have remained stubbornly high, even as the market has shifted. For a typical condo unit, development charges can add tens of thousands of dollars to the cost. When you combine elevated construction costs with these municipal fees, many projects simply don't pencil out anymore. Developers run their financial models and realize they'd be losing money on every unit sold.

So what happens? Projects get shelved. Land sits vacant. And the housing supply that Toronto desperately needs never materializes.

The Ripple Effect Nobody Talks About

Here's what makes this crisis even more urgent: when the condo market stalls, it doesn't just hurt condo buyers. It impacts the entire housing ecosystem, including freehold homes.

Think of the housing market as a ladder. Condos are typically the entry point—the first rung that helps young professionals, new families, and immigrants get into the market. When people can buy condos, they build equity, and eventually, many of them move up to townhouses and detached homes. This creates a natural flow where existing homeowners sell to move up, opening up supply at every level.

But when condo construction slows, that ladder breaks. First-time buyers can't get on the first rung. They stay as renters longer, which drives up rental prices. Those who would have bought condos and later traded up stay put, meaning fewer freehold homes come onto the market. The whole system gets congested.

In other words, a healthy condo supply isn't just good for condo buyers—it's essential for maintaining a functional freehold market too. When condos aren't being built, everyone feels the squeeze.

The Numbers Tell a Stark Story

The latest data from Urbanation paints an even more sobering picture than anyone imagined. If you thought 2024 was bad, Q1 2025 shows a market in virtual collapse:

Q1 2025 brought historic lows:

• Just 533 new condo sales in the entire GTHA—a 62% drop from last year and 88% below the 10-year average

• Only 215 sales in Toronto proper—the lowest level since 1990

• A mere 497 units started construction, plummeting 79% year-over-year and 88% below the 10-year average—the lowest quarterly total since 1996

• Only two projects launched for pre-sales in the entire quarter, totaling just 275 units

To put this in perspective: in 2024, annual sales totaled 4,590 units. In Q1 2025 alone, we're tracking at a pace that would result in barely 2,100 sales for the entire year—less than half of last year's already dismal performance.

The inventory crisis deepens: Unsold inventory now sits at 23,918 units, equal to 78 months of supply—that's more than six years' worth at current sales rates. Even more troubling, the number of completed but unsold units has more than doubled compared to a year ago, reaching its highest level since Q1 1993.

Projects are being abandoned: Since the beginning of 2024, 28 pre-sale projects totaling 5,734 units have been either put on hold, cancelled, placed in receivership, or converted to purpose-built rental—including four projects totaling 1,042 units in Q1 2025 alone.

Meanwhile, a wave of completions from the pandemic-era boom continues to flood the market. Completions are projected to total 31,396 units in 2025, before dropping sharply to an estimated 17,487 units in 2026 as the construction pipeline runs dry.

The Price Floor Problem

You might be thinking: "Why don't developers just lower their prices?" It's a fair question, but here's the reality—they can't.

When your hard costs—the actual expense of construction—are fixed at high levels, and when municipal charges add tens of thousands more per unit, there's a floor below which prices simply cannot go without builders losing money. And unlike many industries, developers can't just absorb the loss. These projects require years of planning, massive capital investment, and construction financing that demands a certain level of pre-sales before a shovel even hits the ground.

The result? Prices have dropped only about 5% from their peak, even as the market has collapsed. Not because developers are being stubborn, but because the economics literally don't work at lower price points. Meanwhile, resale condo prices have fallen 12-13%, creating a gap that makes it nearly impossible for new construction to compete.

A Path Forward: Collaboration Over Confrontation

Here's the hard truth: we can't solve this crisis by pointing fingers. Neither developers nor municipalities are solely to blame—but both need to be part of the solution.

What would meaningful collaboration look like?

Flexible development charges tied to market conditions. When the market is hot and projects pencil out easily, higher charges make sense. But when the market freezes, municipalities need mechanisms to adjust charges downward temporarily to keep supply flowing. This doesn't mean eliminating these fees—it means being smart and adaptive about when and how they're applied.

Streamlined approvals for projects that meet density and affordability targets. Time is money in development. Every month of delay adds carrying costs that ultimately get baked into prices. If we want more housing built faster, we need approval processes that reward good projects with speed and certainty.

Shared risk models for affordable housing components. What if municipalities and developers could partner on mixed-income projects, where the public sector takes on some risk in exchange for guaranteed affordable units? Creative partnerships like this could unlock projects that are currently frozen.

Honest conversations about infrastructure funding. Development charges exist for a reason—cities need to fund the infrastructure that supports growth. But if those charges are so high they prevent any growth from happening, then we're not funding infrastructure—we're preventing it from ever being needed in the first place. There has to be a middle ground where growth pays for itself without killing the projects that create that growth.

The Stakes Couldn't Be Higher

This isn't just about condos. It's about whether young families can afford to live in this city. It's about whether businesses can attract talent when housing is unaffordable. It's about whether Toronto remains a place of opportunity or becomes a playground exclusively for the wealthy.

The construction starts we're seeing today—or rather, not seeing—will determine the housing supply we have in 2026, 2027, and beyond. With starts at a 20-year low and projects being cancelled or shelved, we're setting ourselves up for an even worse housing shortage down the line.

The good news? This is fixable. We have smart people working in municipal planning departments and in development companies across the region. What we need is for them to sit down together, acknowledge the economic realities on both sides, and find creative solutions that work for everyone.

Because right now, the status quo isn't working for anyone—not for first-time buyers watching homeownership slip away, not for renters facing climbing costs, not for existing homeowners who can't find someone to buy their condo so they can move up, and not for developers sitting on land they can't profitably develop.

The condo market isn't just a luxury amenity for a city. It's a critical piece of housing infrastructure that keeps the entire system functioning. When it breaks down, everyone feels the pain.

It's time for a new approach—one built on partnership, flexibility, and a shared commitment to keeping Toronto livable and affordable for the next generation.

About Anne Lok, Broker  B. Arch, M.AAD.

Anne is a Toronto-based realtor with an architectural background, specializing in design-forward properties in historically rich neighbourhoods. She offers a customized approach for each client, helping buyers find homes that blend timeless charm with modern functionality. Anne also guides sellers in showcasing the unique appeal of their properties and assists investors in identifying opportunities with strong potential for growth.