grey said:
Yeah, but what did they cost pre-construction?

I think you're comparing apples to not-quite-ripe apples.
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You're right I'm not comparing apples to apples, the point is that units nearing completion are generally less expensive than new construction units, not $60,000 more!

The pre-construction prices for the 345 sf unit at London was $120,000 in March of 2005 - making purchasers of that unit $100,000 gross profit ($70,000 net profit with 25% down).

If you put 25% down on the $160,000 FLY unit ($40,000) and lets assume Fly gets built and registered in 4 years and prices remain fairly stagnant (a stretch on both assumptions). You could sell the unit in 4 years for more than the London unit, so around $250,000 - resulting in a profit of approximatley $90,000.

That is why it is such a great deal.

Sorry moderators, Real Estate section - don't get mad at me.
 
But this is what I think will happen: You buy that tiny unit at fly for $160k, and 4 years from now you could sell it for a tidy loss at $99,000.:p

(And btw, what has Empire essentially done? They've come to their senses, and in doing so, have priced every single bachelor pad condo in Toronto at $160k or so. So this is bad news to those banking on profits that bought condos in the past 2-3 years. I suspect those finished London condos are now worth only $170k max.)
 
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If you put 25% down on the $160,000 FLY unit ($40,000) and lets assume Fly gets built and registered in 4 years and prices remain fairly stagnant (a stretch on both assumptions). You could sell the unit in 4 years for more than the London unit, so around $250,000 - resulting in a profit of approximatley $90,000.
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When you say a stretch on both assumptions I hope you're considering a drop in price for the latter.


My dad loves to talk about his buddy who bought four, one bedroom investment condos for a cool million around 1990 on Bay St. The guy was forced to sell them at a considerable loss but, if he had kept them, he'd probably finally be able to sell them for the amount he paid for them. I guess my point is, anyone currently buying or has bought in the last year will be lucky to sell at their purchase price. Approximately $90,000 profit is downright hilarious.
 
maestro said:
I guess my point is, anyone currently buying or has bought in the last year will be lucky to sell at their purchase price. Approximately $90,000 profit is downright hilarious.
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You may be right on some points but on others I think you are way off. Was their a major crash in the 1990's, yes, but we have a much different market now and we won't see the same kind of price correction as was witnessed then.

You may be totally correct in saying that people who bought into projects that were released at the peak of the market (assuming these projects get built), Hullmark Centre, 300 Front, ICE, U Condos, etc. may not witness any price appreciation come registration, but if they are not investors and plan on living in their units, they will make a profit in 2 or 3 years after that, but most new projects in the market are not priced as high as those ones.

In terms of a $90,000 profit being laughable, it is a reality for a lot of purchasers, look at some recent building registrations:

Zip at Liberty Village, launched at $310, resales selling at $420, profit for 700 sf unit = $77,000

Encore at the Met, launched at $325, resales selling at $430, profit for 700 sf unit = $73,500

900 Mt Pleasant, launched at $355, resales selling at $470, profit for 700 sf unit = $80,500

Toy Factory Lofts, launched at $325, resales selling at $485, profit for 700 sf unit = $112,000.

This is a simplified approach but you can see that there is an opportunity to make a big profit. Resales have fallen about $20 psf on average since the market fell off in the fall of 2008 ($14,000 for a 700 sf unit) so you make $50,000 instead of $65,000 - still a pretty good return.
 
BMyers said:
You may be right on some points but on others I think you are way off. Was their a major crash in the 1990's, yes, but we have a much different market now and we won't see the same kind of price correction as was witnessed then.

You may be totally correct in saying that people who bought into projects that were released at the peak of the market (assuming these projects get built), Hullmark Centre, 300 Front, ICE, U Condos, etc. may not witness any price appreciation come registration, but if they are not investors and plan on living in their units, they will make a profit in 2 or 3 years after that, but most new projects in the market are not priced as high as those ones.

In terms of a $90,000 profit being laughable, it is a reality for a lot of purchasers, look at some recent building registrations:

Zip at Liberty Village, launched at $310, resales selling at $420, profit for 700 sf unit = $77,000

Encore at the Met, launched at $325, resales selling at $430, profit for 700 sf unit = $73,500

900 Mt Pleasant, launched at $355, resales selling at $470, profit for 700 sf unit = $80,500

Toy Factory Lofts, launched at $325, resales selling at $485, profit for 700 sf unit = $112,000.

This is a simplified approach but you can see that there is an opportunity to make a big profit. Resales have fallen about $20 psf on average since the market fell off in the fall of 2008 ($14,000 for a 700 sf unit) so you make $50,000 instead of $65,000 - still a pretty good return.
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But in your example for Fly, it is a 400 SF unit for $160,000 = $400 PSF;
to be able to sell it for $250,000 = $625 PSF in 8 years, 56.25% appreciation.

That means ~8% compounded per annum (c.p.a.) (double historical value) over 8 years;
or if the market stagnates the next 4 years, then 12% c.p.a. (TRIPLE historical value) for 4 years thereafter !!!

Doesn't that seem odd and improbable to you ???
Even in the past decade, which many in the industry acknowledge was unprecedented, the average annual appreciation was ~7.2%.

In 4 years, I say buyers would be lucky if they broke even at $160K but more likely it'll be worth $140K, not as bad as UD's $99K. :p
But then again, with all the inventory this city will have, maybe $120K might be more appropriate. :D
 
Full 2 page spread in today's Toronto Star. Here are some updated renders from the website. I'm glad they at least left the lobby alone.

"An arresting architectural composition in glass, stone and pre-cast." Love it.

fly1.jpg


fly2.jpg


fly3.jpg


fly4.jpg
 
do we get to laugh at you when your predictions of doom don't come true?
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Sure thing

We may not be experiencing stagflation this time around but anyone who wholeheartly believes in the shift towards downtown living is anything but a trend driven by investors is living a pipe dream.

Re-sale prices are dropping and corporate housing is being hit HARD. I don't know but I'd say it's a good time to pull out and cut you're loses before another 40,000 condos and hotel suites are completed.
 
maestro said:
We may not be experiencing stagflation this time around but anyone who wholeheartedly believes that the shift towards downtown living is anything but a trend driven by investors is living a pipe dream.

Re-sale prices are dropping and corporate housing is being hit HARD. I don't know but I'd say it's a good time to pull out and cut you're losses before another 40,000 condos and hotel suites are completed.
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- Corrected grammar and spelling mistakes, sorry.

While I don't disagree that all the condos in the pipeline create the real risk of further deterioration in condo prices over the next 3 years (although i believe that will be limited only condo's under $350 000, under 700 sq ft, and a further 10-20% drop), the shift to downtown living IS anything but a trend driven by investors.

In Liberty Village, for example, the number of investor bought units - in any of the developments - is phenomenally low. Zip just closed this month and as far as all my sources have been able to tell me, investor units totalled less than 5-10%.

While Maple Leaf, etc. might have a higher proportion of investors, most of these units will find renters - who are also people who desire to live downtown. If they don't, the prices will drop and people will buy them - again, to live downtown.

This most recent condo surge is completely unlike the condo surge in the 1990's and it seems like some people on this board who were around then are unable to distinguish the difference. In the 1990's, it was affordability that drove people to condo's. House prices were simply too much for the average downtown Torontonian, so they grudgingly bought a condo, but were a bit embarassed by it.

This is not the case anymore. As this condo surge built up, anything bought pre-2007 was mostly bought by end users and a condo has not only become a good way to get into the market because of high house prices (same reason as the 1990's), but a desirable, aesthetically pleasing, and for a large percentage of owner's a better alternative to owning a home.

In other words, a massive sea-change in attitudes towards condo living has happened - partly as a result of evolving environmental attitudes, desire for free time/access to amenities that only an urban centre can provide/freedom from the constraints of an automobile, and increased immigration. Most major urban populations on this planet - from London to Paris, New York to Sydney, Moscow to Johannesburg live and own CONDO's, not houses. It's a preferred means of living, not to mention the only sustainable way of living. Toronto has simply caught up.

To stay on the issue of FLY however, I was in their sales office the other day and liked the interiors I saw - they had a high quality of standard finish. The $159900 suites are 400 sq ft and priced about $50 ft less than any other suite they are offering. The exterior however is just another boring box with offset balconies and is nothing to write home about.
 
Price example in the immediate area... I bought in Matrix in 2005 for $381/s.f. Sold in 2008 for $522/s.f.
 
^what's your point? That a 10% increase year over year is remotely sustainable?

In other words, a massive sea-change in attitudes towards condo living has happened - partly as a result of evolving environmental attitudes, desire for free time/access to amenities that only an urban centre can provide/freedom from the constraints of an automobile, and increased immigration. Most major urban populations on this planet - from London to Paris, New York to Sydney, Moscow to Johannesburg live and own CONDO's, not houses. It's a preferred means of living, not to mention the only sustainable way of living. Toronto has simply caught up.
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You can't be serious!!!!

Toronto is at the forefront of condo ownership ever since the act was passed in 1968. There are nearly 2000 registered corporations boasting over 200,000 units.

Condo markets are in shambles from Sydney to Moscow to Miami to Vancouver.

Houses continue to be the prefered choice of the masses.

They're called APARTMENTS!


P.S. Forget 1990. I'm sure the same was said in the seventies when the first big boom in highrise condos occured.
 
On another topic: that's an amazing lobby! I wonder if Michael Snow gets royalties on the use of the birds?

I think, in a generally bleak condo market, these guys have found a way to make themselves stand out from the crowd. Let's see what happens.
 
Observer Walt said:
On another topic: that's an amazing lobby! I wonder if Michael Snow gets royalties on the use of the birds?

I think, in a generally bleak condo market, these guys have found a way to make themselves stand out from the crowd. Let's see what happens.
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well, they definitely will get the attention of anyone looking to buy 400SF units ...

as someone else noted, they just lowered the max price for 400SF bachelors to $160K in one swift move!
 
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