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CONDO market - ready to crash and burn???

madnezz

TRIBE Member
ok so that title was a little extreme.

I read a good article on Saturday in the Globe; one that was quite pessimistic about the outlook for condos in toronto--- primarily those around 600 sq feet. Frankly, I agree with their predictions, and am quite happy about it for my own selfish reasons. I liked this article because the Real Estate section in the Globe has been optimistic constantly for the last few months, and I think they're covering up the truth!!!!!

your thoughts and market predictions?

Here's the article link:


Globe - Toronto Section
 

Spinsah

TRIBE Member
The 'Brandon Garrett' from the article is actually a buddy of mine, and might even have an account on tribe i think...

intereseting read.
 

Spinsah

TRIBE Member
i do however think this crash (and really it was inevitable) is really going to ultimately serve to benefit the downtown core. in so many other cities (especially american ones) the lack of high rise condo complexs in urban centers results in a functional ghost town outside of the 9-5 confine.
 
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juice

TRIBE Member
Ah you can already see it in the rental market. A lot of the reason why vacancies are at some multi year high is the surplus of condos that were bought for investment purposes (to rent out) and owners aren't getting back nearly what they thought in rent, in many cases they are renting units at a loss per month. Soon enough they're going to get tired of it and try and flip the properties again on the market. I don't think there will be a huge crash just prices leveling off to where they should be and perhaps going a bit lower than that. I know mortgage rates are very low right now but at the rate that they're putting these buildings up I can't see how the demand will be there for all the units.
 

jason klaps

TRIBE Member
I think there will be a major "crash" in the condo market IF interest rates jump up a lot in the next two years. I'd be willing to bet that there are a lot of people out there that have over-extended themselves and have variable rate mortgages. Combine that with the current over supply that the article mentions and you have the right conditions.

If however, interests rates stay around the same for the next 5-10 years there will only be slight "corrections" to certain condo buildings. I guess it depends on how good a specific condo really is (space, location, condo mgmt, condo fees, etc.)

Maybe if low interest rates caused the boom, high interest rates can burst the bubble.
 

starr

TRIBE Member
i don't think there's really going to be a huge crash.

i suppose it's all about when you plan to sell.

if you are thinking about doing it in the next 2 or 3 years you're probably going to be s.o.l.

but if it's in the next 5 to 10 you should probably be okay, and maybe make a little cash from it. maybe even hold onto it for 15 years to be on the safe side.

it does make me laugh at people that buy places to sell them. but if you are buying to live somewhere for a bit you should probably be okay.

first of all, trying to sell your condo for $345/sq. ft. is a little ridiculous - especially since someone can go and buy their own and specifiy it to meet their needs. $316 is a bit more realistic.

edit: i think housing prices in toronto are starting to reflect true value, so i don't think there will be a crash in that sense. it's pretty cheap to live here when you compare it with any other major city in the world really. it's still more expensive to live in vancouver.
 
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Gunark

TRIBE Member
It's gonna happen sooner rather than later, and it's gonna be rough. Only people who bought 600 sq ft condos for $300 grand deny this. Sucks to be you :(
 

starr

TRIBE Member
who would buy a 600 sq. ft. condo for $300,000? that's riduculous, $500/sq.ft.? if they do sell condos like that, whoever bought one SHOULD lose their money.

edit: and i'm not talking about other cities, specifically toronto
 
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Gunark

TRIBE Member
Originally posted by starr
who would buy a 600 sq. ft. condo for $300,000? that's riduculous, $500/sq.ft.? if they do sell condos like that, whoever bought one SHOULD lose their money.
a certain building on Spadina & Richomnd comes to mind :eek:
 

juice

TRIBE Member
The only building I've ever seen approaching that price per sqf was the Ritz-Carlton condo. As far as I know that project has been put on hold.
 

starr

TRIBE Member
well if that's right gunark, those people are morons.

spadina and richmond is a good location, but not that good.

and you'll notice in the article that they never mention the original price the people paid for their 600 sq. ft., or when they bought them.

or if the unit that sold for less was worth less anyway - eg. right next to the garbage disposal/elevator/sucky view.

so they really aren't saying anything.
 

madnezz

TRIBE Member
that dude david matthew in the article says he never pays more than 270/sq foot.... sounds much more reasonable to me!
 

starr

TRIBE Member
yeah, for flipping places to make money i wouldn't probably try to spend less than 280/sq. ft.

but if you're going to buy, and you want to really like where you live you should probably be paying in the 285 to 315 range. or somewhere around there. i think that's where things will settle around.

if you are paying less you are usually making some concessions - which to you may not be concessions, but kind of are.
like location in the city or view or location in the building or layout, etc.
 
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KillaLadY

TRIBE Member
I have a 900sq ft condo which I own right on the Harbourfront... I am sure that this "crash" is inevitable and I don't know if I will be in the "affected" range, but the estimated value of my properly has gone up by over 50k in the last years and a half.
 

labRat

TRIBE Member
they've been saying that the crash was 'inevitable' for the past three years.

although, i do agree that when the interest rates do rise it'll happen.
 
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Boo

TRIBE Member
The housing prices in TO are incredibly cheap compared to Dublin, Ireland where I now live.

You simply can't buy a place for less than €250k = $CAN 412,500

For example - 900sq ft 2 bedroom. Not even the best part of the city - €449,000 or $741,000. Thats $823 a square foot. You can't buy a place for under $600 a square foot within 50 miles of Dublin its insane!
 

Humanjava

TRIBE Member
Gee I have only been saying this now for about two years. Funny how so many thing repeat the same cycles. Housing markets usualy follow two years or so behind the stock markets. This time it took a little longer but there just is to much surplus of new property to people making money or working for that matter.

:confused:
 

Cheer Bear

TRIBE Member
Originally posted by Boo
The housing prices in TO are incredibly cheap compared to Dublin, Ireland where I now live.

You simply can't buy a place for less than €250k = $CAN 412,500

For example - 900sq ft 2 bedroom. Not even the best part of the city - €449,000 or $741,000. Thats $823 a square foot. You can't buy a place for under $600 a square foot within 50 miles of Dublin its insane!
holy craphole!
 

Boo

TRIBE Member
Originally posted by Cheer Bear
holy craphole!
No Shit

Another one I found

441 sq ft, nice downtown loacation.... €260,000 or $429,000 for 441 sq feet!

or about $969 a square foot.

These are not exceptions, as house prices have tripled in the last 10 years. You can take out a 40 year mortgage here otherwise you'd never pay it off
 

Evil Dynovac

TRIBE Member
The problem with these new condo project is they are not nearly big enough for a couple to buy and have a kid in. Every building has nothing but bachelor pads which can (in theory) yeild a higher dollar amount per square foot.

Thing is there are not enough young singles who are wealthy enough to buy into this so the units are sitting idle for too long.

An urban centre that can house families we always be financially supported. Two incomes can pay for a condo much better than one.

Silly developers.
 
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