[JayBee]

I understand that prices coudl drop even more. But what about high demand areas? Bay Street, Yorkville, King Street West, etc... Is it safe to say that some units will still go up regarless of how bad the market gets?

I can easily see a 1 bedroom unit at Casa going for 300K in the next 5 years.

 

[Eug]

I understand that prices coudl drop even more. But what about high demand areas? Bay Street, Yorkville, King Street West, etc... Is it safe to say that some units will still go up regarless of how bad the market gets?

No, it is not safe to say that. Bay Street and King Street West have already dropped. Not by much, but they've dropped, and could drop some more. In fact, I'm assuming they will continue to drop, albeit nowhere near as much as a few here seem to think. I don't really follow Yorkville pricing, but I'm sure someone will be able to give you a heads up on that area.

Remember also that in real estate downturns, it's often the luxury market that gets hit harder than others.

 

[JayBee]

No, it is not safe to say that. Bay Street and King Street West have already dropped. Not by much, but they've dropped, and could drop some more. In fact, I'm assuming they will continue to drop, albeit nowhere near as much as a few here seem to think. I don't really follow Yorkville pricing, but I'm sure someone will be able to give you a heads up on that area.

Remember also that in real estate downturns, it's often the luxury market that gets hit harder than others.

I think the prices are so heavily inflated in those areas that even if they do drop a bit they'll still be heavily overpriced.

1 bedrooms for 325K at College Park seems to be the norm right now. Say it drops down to 300K, it's still a pretty good investment if you purchased new construction. Murano...units purchased at 150K are selling for almost double now....lets say they sell for 10% less, that's still quite a good investment.

Now, people whou bought resale over the last couple years may be screwed...I'm not disagreeing with you... If I buy a place for 180K pre construction a few years ago. It's now worth 300K. 2 years later it depreciates and is now worth 280K. Is it really all that bad?

I guess the bigger units will see the biggest loss though.

Sorry for the rambling

 

[Eug]

Now, people whou bought resale over the last couple years may be screwed...I'm not disagreeing with you... If I buy a place for 180K pre construction a few years ago. It's now worth 300K. 2 years later it depreciates and is now worth 280K. Is it really all that bad?

180000 (pre-construction) --> 300000 (post construction) in say 3 years?

Where?

That means you would have had to have bought that $180000 unit in say spring 2006. If that place got built and is now worth $225000 in spring 2009 then you're already doing well IMO. That's already a 7.7% rate of return. If it really is worth $300000 now, then you made a killer deal, even if it drops back say $30000 to $270000 by 2011.

2006-2009 $180000 --> $300000 = 67% appreciation in 3 years, or 18.6% per year.
2006-2011 $180000 --> $270000 = 50% appreciation in 5 years, or 8.5% per year.

 

[JayBee]

180000 (pre-construction) --> 300000 (post construction) in say 3 years?

Where?

That means you would have had to have bought that $180000 unit in say spring 2006. If that place got built and is now worth $225000 in spring 2009 then you're already doing well IMO. That's already a 7.7% rate of return. If it really is worth $300000 now, then you made a killer deal, even if it drops back say $30000 to $270000 by 2011.

2006-2009 $180000 --> $300000 = 67% appreciation in 3 years, or 18.6% per year.
2006-2011 $180000 --> $270000 = 50% appreciation in 5 years, or 8.5% per year.

A few condos come to mind.

96 St Patrick, Murano....1 bedrooms are selling for significantly more than the pre-construction prices.

I'd show you some MLS prices but I'm just too lazy.

 

[Eug]

A few condos come to mind.

96 St Patrick, Murano....1 bedrooms are selling for significantly more than the pre-construction prices.

I'd show you some MLS prices but I'm just too lazy.

How much more and what are the dates and actual resale prices for identical units?

 

[dt_toronto_geek]

It has guest suites? Didn't know that. When I went condo shopping (way back when), I specifically looked for places that had no guest suites and no pool to save some bucks, not only in terms of the sale price but also for condo fees.

Eug, I could be wrong about the guest suites at Opera Place. I still have the sales materials, purchase & sale agreement etc. but it's in my locker. I know for sure it has a gym and party room, I used them both.
The two blocks along Bay & Wellesley Sts. originally had a terrific masterplan by Goldlist with a very progressive list of amenities and outdoor spaces for the time, but it never came to be.
Don't you think guest suites can be an advantage and a convenience? Once the BoD get's settled and sets rules and rates, the guest suite(s) can become a decent source of income for the corporation over a fiscal year.

 

[Monaco]

180000 (pre-construction) --> 300000 (post construction) in say 3 years?

Where?

That means you would have had to have bought that $180000 unit in say spring 2006. If that place got built and is now worth $225000 in spring 2009 then you're already doing well IMO. That's already a 7.7% rate of return. If it really is worth $300000 now, then you made a killer deal, even if it drops back say $30000 to $270000 by 2011.

2006-2009 $180000 --> $300000 = 67% appreciation in 3 years, or 18.6% per year.
2006-2011 $180000 --> $270000 = 50% appreciation in 5 years, or 8.5% per year.

When I was looking around earlier in the spring, there were some assignments at Murano. I don't understand the whole process (and it seemed too complicated for me to want to participate) but some sellers walked away with a respectable profit if they managed to sell.

Buying via assignment requires a lot of money upfront. Here is what I remember in re: to payment to the seller = 25% down payment + $50,000 - 100,000 for their "profit" depending on if it was a 1-bdr or 1+1 and how quickly they wanted to sell. Then as the buyer you'd pay occupancy fees monthly until you got your mortgage upon registration to cover the remaining 75% owing to the developer plus closing costs.

Some units were adding an additional $35,000 for parking even though they had purchased the parking for less (maybe $10,000 or even thrown in for free?) and $1000 for each floor + extra for corner units.

I'm sure somehow this is an acceptable deal for some buyers, but I immediately ruled out the idea when I heard I would need to cover the seller's down payment and profit immediately upon purchasing the assignment. Apparently you can get a LOC to cover this, though.

The units that were willing to accept less "profit" sold quite quickly.

**NOTE: I do not fully understand selling on assignment, and this is just based on what a realtor told me and my interpretation of that. I fully realize that I probably misunderstood some things - so I apologize in advance.

 

[Eug]

Don't you think guest suites can be an advantage and a convenience?

They're definitely convenient for those who would make use of them, but in my case my family/friends just stay over at my place (since it doesn't cost anything). Guest suites aren't free (but are inexpensive).

Similarly, pools are very convenient for those who would use them. I wouldn't be one of them, so I didn't feel the need to pay for one.

I prefer to have gym space though. At my previous condo, we bought the equipment over a period of time, and we on the gym committee tended to guide the purchases to stuff we liked.

Once the BoD get's settled and sets rules and rates, the guest suite(s) can become a decent source of income for the corporation over a fiscal year.

Well, maybe, except my understanding is that most guest suites are empty most of the time. (Or at least they used to be.) Thus, the cost outweighs the revenue. Plus it adds to the up front purchase cost, although if it's a big enough complex, it won't add that much.

 

[Nebakenezer]

I don't think toronto prices will drop very much. The reason being that the price increases in toronto started way later then the rest of the world. Some places around the world appreciated 300 percent or more, not here, we doubled max. And also most people that bought in 2004-2006 are still sitting pretty. Even if the market drops 10-20 percent, they'll still have a property thats appreciated. So nobody is in a desperation to sell. They can take a 20-30% hit and still be in the black, and continue to wait for the market to bounce back if need be.

This lack of re-supply will make the prices in toronto stay roughly where they are.

Also new construction also seems to have slowed down. draining supply also.

Prices may drop 10-15% if economic news gets worse, but most will not sell at that price, so the supply will get even lower. Short of an economic meltdown, I dont see prices dropping very much if at all.

Thats not to say I'm bullish either... I don't think prices will increase much either for some time.

 

[JayBee]

When I was looking around earlier in the spring, there were some assignments at Murano. I don't understand the whole process (and it seemed too complicated for me to want to participate) but some sellers walked away with a respectable profit if they managed to sell.

Buying via assignment requires a lot of money upfront. Here is what I remember in re: to payment to the seller = 25% down payment + $50,000 - 100,000 for their "profit" depending on if it was a 1-bdr or 1+1 and how quickly they wanted to sell. Then as the buyer you'd pay occupancy fees monthly until you got your mortgage upon registration to cover the remaining 75% owing to the developer plus closing costs.

Some units were adding an additional $35,000 for parking even though they had purchased the parking for less (maybe $10,000 or even thrown in for free?) and $1000 for each floor + extra for corner units.

I'm sure somehow this is an acceptable deal for some buyers, but I immediately ruled out the idea when I heard I would need to cover the seller's down payment and profit immediately upon purchasing the assignment. Apparently you can get a LOC to cover this, though.

The units that were willing to accept less "profit" sold quite quickly.

**NOTE: I do not fully understand selling on assignment, and this is just based on what a realtor told me and my interpretation of that. I fully realize that I probably misunderstood some things - so I apologize in advance.

You pretty much covered it. People were making a killing selling those assignments. Even for a bachelor, sellers were requesting a good 100K up front. I thought it was absolutely ridiculous which is why I never went forward with it. There were a few units that just wanted a small amount of money up front and then the rest at closing. Those places sold quickly.

You're absolutely right though, people were adding $$ for everything..

Stainless steel = add 5K
floor = add 1K per floor
Granite counter = ??K
marble bath = ??K
upgraded kitchen = ??K
9 ft ceilings = 10K
crappy laminate floors in the bedroom = 3K
locker = 3K
parking = 30K

It was quite comical. I was seeing some bare bones units (laminate counters, carpet, white appliances) going for quite a bit.

http://www.realtor.ca/PropertyDetai...rt=2&of=1&ps=10&o=A&Mode=0&PropertyID=8318715

http://www.realtor.ca/PropertyDetai...rt=2&of=1&ps=10&o=A&Mode=0&PropertyID=8340095

http://www.realtor.ca/PropertyDetai...rt=2&of=1&ps=10&o=A&Mode=0&PropertyID=8314585

http://www.realtor.ca/PropertyDetai...rt=2&of=1&ps=10&o=A&Mode=0&PropertyID=8339848

 

[JayBee]

How much more and what are the dates and actual resale prices for identical units?

Murano 1+1

http://www.realtor.ca/PropertyDetai...rt=2&of=1&ps=10&o=A&Mode=0&PropertyID=8339848

The two 96 st patrick units I was talking about sold FAST (on the market for about a wwek).

Here's a new listing:
http://www.realtor.ca/PropertyDetai...rt=2&of=1&ps=10&o=A&Mode=0&PropertyID=8343969

Neither seller paid anywhere near what these places were going for 2-3 years ago.

 

[Monaco]

Murano 1+1

http://www.realtor.ca/PropertyDetai...rt=2&of=1&ps=10&o=A&Mode=0&PropertyID=8339848

I'm the first one to admit that I am relatively ignorant about real estate. But good lord, this won't actually sell for that price, right? I guess people can always list property for whatever price they want though.

From the listing info:
Brand New, Never Lived In Luxurios Condominum. Excellent Location, Rooftop Terrace, 657Sq Ft 1+1. Extra $2689.04 Upgrades. 9' Ceilings.

I don't care if it is on the 44th floor. Would this have gone for $450,000+ resale during the past "hot" market? This is probably an assignment? You'd still have to pay occupancy fees and closing costs!

Please - someone show me how they came up with this listing price (for an assignment, I assume)!

EDIT: I know it's probably the height premium, and perhaps it is on the top floor....but really? For 657 sq.ft for that building?
EDIT2: Okay, so maybe there will be little to no occupancy fees since it is at the top and the building will be ready to be registered by the time the unit is finished. After thinking about it, I understand how they came up with the listing price, but it really is quite shocking (to me) for such a little space.

 

[Eug]

Heh. $694 per square foot. Bargoon. Nah, that's just nuts. What's so great about that building anyway?

It will be interesting to see what the real prices will be in 2010/2011, once the place is actually built.

EDIT:

It says it has a rooftop terrace, which I guess means it's a "penthouse"? However, assuming it is a private rooftop terraced "penthouse" then I can understand a significant price premium, given the height of the building. If that were the case though, the pre-construction price would likely have been pretty high too.

 

[JayBee]

I'm the first one to admit that I am relatively ignorant about real estate. But good lord, this won't actually sell for that price, right? I guess people can always list property for whatever price they want though.

From the listing info:
Brand New, Never Lived In Luxurios Condominum. Excellent Location, Rooftop Terrace, 657Sq Ft 1+1. Extra $2689.04 Upgrades. 9' Ceilings.

I don't care if it is on the 44th floor. Would this have gone for $450,000+ resale during the past "hot" market? This is probably an assignment? You'd still have to pay occupancy fees and closing costs!

Please - someone show me how they came up with this listing price (for an assignment, I assume)!

EDIT: I know it's probably the height premium, and perhaps it is on the top floor....but really? For 657 sq.ft for that building?
EDIT2: Okay, so maybe there will be little to no occupancy fees since it is at the top and the building will be ready to be registered by the time the unit is finished. After thinking about it, I understand how they came up with the listing price, but it really is quite shocking (to me) for such a little space.

Price is out of control. I'm not sure what the upgrades are but I can tell you they're not that special. The building's nice, but the interior is nothing special at all to be commanding that kind of price.

You can get a 1 bed den in Glas, 96 St. Patrick, The Met, The Hudson (all of which have nicer finishes) for 100K+ less.

I like the building but sellers seem to think that because it's on Bay Street they can charge whatever they want.