TheKingEast
Senior Member
BTW, this 1 bedroom yes 1 BEDROOM house sold over asking for $635K. le sigh...
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BTW, this 1 bedroom yes 1 BEDROOM house sold over asking for $635K. le sigh...
KA1
Senior Member
Folks, I would like to make a meaningful contribution to discussions in this thread. However, this concept of Million Dollar property is beyond my imaginations. As such, I am sitting on the sidelines.
This thread is about 'Bubble'. I have been reading on this thread since 2008 that a bubble burst is just around the corner and that we should say our prayers and wait for the coming calamity. Nothing has happened as yet. If only someone could make a prediction as to when we can expect bubble to burst or spring a leak, then, I can say my 2 bits worth. Perhaps Condo George might wish to make the 1st post on the upcoming bubble burst.
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Condo George
Active Member
Condo George
Active Member
kai1 I am turning cautious in 2015, I talked about this last year
1. Oil and its impact
2. Cdn $ yes good for exp but its tanking whats the message it sends internationaly
3. condo investor sediment has shifted
4. mainland China money drying
5. 3 condo projects have changed hands recently
6. rates and BOC
I am not turning bearish but looking at the above the word best is caution for 2015
1. Oil and its impact
2. Cdn $ yes good for exp but its tanking whats the message it sends internationaly
3. condo investor sediment has shifted
4. mainland China money drying
5. 3 condo projects have changed hands recently
6. rates and BOC
I am not turning bearish but looking at the above the word best is caution for 2015
TheKingEast
Senior Member
Can you speak on the bold? I think a number of projects launching this year will be cancelled or delayed.
RZ12
Active Member
I totally agree with you. Developers greed has gotten way out of hand. Especially pricing projects at apperciated price per sq ft makes zero sense in buying pre construction. But as demand is steady things should steam whistle ahead soon.
nrb
Active Member
Most certainly speaks to the current environment of over-supply and over-building. Also, a potential sign that the whole buy condo rent it out thing is going to be unsustainable in the long run.
cdr108
Senior Member
I just looked at this project's floorplans and the other UC projects noted in the article - Epic and Edge.
it doesn't surprise me that they sold badly - poorly designed miniature units, trying to squeeze 2 small bedrooms into 600-650 sq ft and location near tracks.
Builder quietly cancels condo complex
Kingsclub becomes second condo project in last few weeks to suddenly convert to rental apartments, leaving more than 100 preconstruction buyers out in the cold.
By: Susan Pigg Business Reporter, Published on Tue Jan 27 2015
Urbancorp has quietly cancelled its Kingsclub condo complex on King St. W. and plans to build three towers of rental apartments instead.
It is the second downtown condo project in just the last few weeks to suddenly convert to rental apartments instead, leaving more than a hundred buyers of preconstruction units out in the cold.
The two back-to-back conversions are being seen as a sign that developers are growing fearful that condo interest is waning in Toronto, at the same time that rental demand shows no signs of letting up.
In Urbancorp’s case, however, purchasers put down deposits for the first tower of well-priced one- and two-bedroom condos more than three years ago. Some 181 buyers are only now being alerted that the 639-suite condo complex — still a busy construction pit on King St. W. just north of Liberty Village — is being abandoned.
Urbancorp did not return phone calls and emails from the Star, but has been telling buyers that it couldn’t get construction financing.
That came as huge shock to John Wilk, 32, who put $40,000 down on a one-bedroom plus den unit back in November of 2011.
He knew the project was far behind schedule — it was originally slated for May, 2015 occupancy and the foundation has yet to be finished — but he’d heard no rumblings of a shutdown.
Some 181 of the first 293 units sold relatively quickly, but Urbancorp had apparently registered no more sales since late 2012.
Just before Christmas, the 49-storey, 441-unit downtown condo and townhouse project, The Selby, was also converted to a rental project. No sales had actually been finalized.
The Bloor and Sherbourne Sts. project, which incorporates the historic Gooderham Mansion, has reportedly been bought by an institutional investor.
In that case, however, pre-construction sales had just been going less than a month before the decision was made to convert to rental. The developers of that project also could not be reached for comment.
These two cancellations are “a warning to all pre-construction condo buyers out there that this can happen and to read your contracts carefully,” said realtor Andrew la Fleur.
But it’s also a sign that developers are starting to see the longer-term gains and profits to be made from rental, said la Fleur, who specializes in selling pre-construction condos to investors who rent them out.
“While this is a matter of buyer beware, it’s also a good sign for the market. It means that big money (deep-pocketed developers and institutional lenders) have confidence in the Toronto condo market and are seeing what pre-construction buyers have been seeing for years, that this (owning and renting condos) is a good way to make a return.”
Both projects are still expected to be registered as condominiums. That provides tax benefits and the long-term ability for the owners to still sell the units off as condos if the market changes, says Shaun Hildebrand, vice president of condo research firm Urbanation.
Purpose-built apartment construction has been almost non-existent the last few decades across the GTA. Investor-owned rental condos now represent 99 per cent of all new rental supply, says Hildebrand.
But just last fall, Urbanation did a study comparing rental rates in newer purpose-built apartment buildings — built between 2006 and 2013 — and rental condos. Incredibly, they found people were willing to pay a premium for a professionally managed rental apartment building with long-term security of tenure.
Under the terms of a mutual release and termination agreement that Urbancorp sent to condo buyer Wilk this week, he’ll be repaid $41,085. that’s just $1,085 for three years of interest on his $40,000 deposit.
Another buyer, who spoke on condition his name not be used, said he is owed $100,000 for deposits on two units, one of which he was anxious to make his new home.
He’s been told that, under Ontario condominium law, he’s entitled to three years of interest at the Bank of Canada overnight rate — now down to three-quarters of a percent — minus 2 per cent.
He’s considering legal action. But condo law expert Denise Lash says purchase agreements usually contain clauses that allow a developer to abandon a project if they don’t make the sales needed — usually 70 to 80 per cent of the units — to qualify for construction financing.
Kingsclub buyers have been told they can purchase what’s left in the Epic or Edge projects nearby. But Wilk figures those are going to cost him far more than the $265,000 he paid back in 2011 for his 580-square-foot unit.
“I’ve basically given Urbancorp an interest-free loan for the last three years,” said a frustrated Wilk. “I would have done better if the money was in the bank.”
it doesn't surprise me that they sold badly - poorly designed miniature units, trying to squeeze 2 small bedrooms into 600-650 sq ft and location near tracks.
Builder quietly cancels condo complex
Kingsclub becomes second condo project in last few weeks to suddenly convert to rental apartments, leaving more than 100 preconstruction buyers out in the cold.
By: Susan Pigg Business Reporter, Published on Tue Jan 27 2015
Urbancorp has quietly cancelled its Kingsclub condo complex on King St. W. and plans to build three towers of rental apartments instead.
It is the second downtown condo project in just the last few weeks to suddenly convert to rental apartments instead, leaving more than a hundred buyers of preconstruction units out in the cold.
The two back-to-back conversions are being seen as a sign that developers are growing fearful that condo interest is waning in Toronto, at the same time that rental demand shows no signs of letting up.
In Urbancorp’s case, however, purchasers put down deposits for the first tower of well-priced one- and two-bedroom condos more than three years ago. Some 181 buyers are only now being alerted that the 639-suite condo complex — still a busy construction pit on King St. W. just north of Liberty Village — is being abandoned.
Urbancorp did not return phone calls and emails from the Star, but has been telling buyers that it couldn’t get construction financing.
That came as huge shock to John Wilk, 32, who put $40,000 down on a one-bedroom plus den unit back in November of 2011.
He knew the project was far behind schedule — it was originally slated for May, 2015 occupancy and the foundation has yet to be finished — but he’d heard no rumblings of a shutdown.
Some 181 of the first 293 units sold relatively quickly, but Urbancorp had apparently registered no more sales since late 2012.
Just before Christmas, the 49-storey, 441-unit downtown condo and townhouse project, The Selby, was also converted to a rental project. No sales had actually been finalized.
The Bloor and Sherbourne Sts. project, which incorporates the historic Gooderham Mansion, has reportedly been bought by an institutional investor.
In that case, however, pre-construction sales had just been going less than a month before the decision was made to convert to rental. The developers of that project also could not be reached for comment.
These two cancellations are “a warning to all pre-construction condo buyers out there that this can happen and to read your contracts carefully,” said realtor Andrew la Fleur.
But it’s also a sign that developers are starting to see the longer-term gains and profits to be made from rental, said la Fleur, who specializes in selling pre-construction condos to investors who rent them out.
“While this is a matter of buyer beware, it’s also a good sign for the market. It means that big money (deep-pocketed developers and institutional lenders) have confidence in the Toronto condo market and are seeing what pre-construction buyers have been seeing for years, that this (owning and renting condos) is a good way to make a return.”
Both projects are still expected to be registered as condominiums. That provides tax benefits and the long-term ability for the owners to still sell the units off as condos if the market changes, says Shaun Hildebrand, vice president of condo research firm Urbanation.
Purpose-built apartment construction has been almost non-existent the last few decades across the GTA. Investor-owned rental condos now represent 99 per cent of all new rental supply, says Hildebrand.
But just last fall, Urbanation did a study comparing rental rates in newer purpose-built apartment buildings — built between 2006 and 2013 — and rental condos. Incredibly, they found people were willing to pay a premium for a professionally managed rental apartment building with long-term security of tenure.
Under the terms of a mutual release and termination agreement that Urbancorp sent to condo buyer Wilk this week, he’ll be repaid $41,085. that’s just $1,085 for three years of interest on his $40,000 deposit.
Another buyer, who spoke on condition his name not be used, said he is owed $100,000 for deposits on two units, one of which he was anxious to make his new home.
He’s been told that, under Ontario condominium law, he’s entitled to three years of interest at the Bank of Canada overnight rate — now down to three-quarters of a percent — minus 2 per cent.
He’s considering legal action. But condo law expert Denise Lash says purchase agreements usually contain clauses that allow a developer to abandon a project if they don’t make the sales needed — usually 70 to 80 per cent of the units — to qualify for construction financing.
Kingsclub buyers have been told they can purchase what’s left in the Epic or Edge projects nearby. But Wilk figures those are going to cost him far more than the $265,000 he paid back in 2011 for his 580-square-foot unit.
“I’ve basically given Urbancorp an interest-free loan for the last three years,” said a frustrated Wilk. “I would have done better if the money was in the bank.”
cdr108
Senior Member
it works well for developers because they can rely on steady stream of income to ride it out when sales slow down or die.
it doesn't bode as well for individual buyers/landlords as they don't have the time, money or economies of scale to compete with a developer who has 100s or 1,000s of units that can offer incentives and attentive professional property management (hopefully).
detroitbootybass
Active Member
As long as interest rates remain historically low, that cheap money will flow mainly to the stock and real estate markets. So, for the time being, the real estate market as a whole will still have some buoyancy. The weakening Canadian economy might start to have a more notable effect in this area, but that's dependent on how 'weak' it really gets (oil prices are a huge factor).
detroitbootybass
Active Member
Statistics Canada cuts job numbers for 2014, adding to concern about economy
http://www.thestar.com/business/201...-estimated-number-of-jobs-gained-in-2014.html
"Canada’s economy created about 65,000 fewer jobs than first reported last year, according to revisions published by Statistics Canada on Wednesday.
The new data – which included an uptick in December’s unemployment rate to 6.7 per cent – also adds to concerns about the health of the Canadian economy, an economist with CIBC World Markets said."
"Canada’s economy lost more jobs in December than first reported, StatsCan said.
The new figures show that Canada shed 11,300 jobs, from a previously reported decline of 4,300. The economy added 35,000 full-time positions, down from 53,500."
KA1
Senior Member
KA1;970621 If only someone could make a prediction as to when we can expect bubble to burst or spring a leak said:
aiekon
Active Member
I am currently renting out a 1+1 unit at 21 Nelson and once we move into a pre-con townhouse in Leslieville we will likely be renting out our current 1+1 unit at 8 Charlotte. Is this the right financial strategy though? E.g. Rent them out or sell them? What worries me is the number of units that have just hit or will be hitting the market very shortly. Between the two properties there are literally thousands of units that are now or will be taking occupancy (studio, bond, pinnacle, cinema, peter St, king charlotte, etc.) and this worries me from both a rent them out or even sell them perspective.
So, is it best to hold on to them or should we perhaps look into selling in early 2016? Two years ago it took me less than 24 hours to find a tenant for my furnished 1+1 unit at 21 Nelson. Now, it took just over two months with zero increase to the rent. I can already feel with all the units out there available, that it's harder to find tenants...
Condo George
Active Member
Look for var 1.99 or lower
Analysts confident of another rate cut in March
Disappointing data from Statistics Canada that show a weaker labour market in 2014 than previously thought has increased anticipation of another cut in interest rates. With lower oil prices having an impact on inflation and concern over the global economy there has been talk of further reductions already with economists including those from TD Bank expecting the BoC to cut again when they meet in March.
Analysts confident of another rate cut in March
Disappointing data from Statistics Canada that show a weaker labour market in 2014 than previously thought has increased anticipation of another cut in interest rates. With lower oil prices having an impact on inflation and concern over the global economy there has been talk of further reductions already with economists including those from TD Bank expecting the BoC to cut again when they meet in March.
Condo George
Active Member
call me to discuss