News   Mar 28, 2024
 252     0 
News   Mar 28, 2024
 320     1 
News   Mar 28, 2024
 683     0 

Baby, we got a bubble!?

from last week's National Post:


http://life.nationalpost.com/2012/03/06/for-sale-upgraded-suite-has-chefs-kitchen/#more-55968

For Sale: Upgraded suite has chef’s kitchen offers 1,500 square feet of living space and has a double balcony, floor-to-ceiling wrap-around windows and lake and city views. The suite includes one parking space and a locker.

375 King St. W. #2703 (King Street and Spadina Avenue) - it's M5V building
Asking price: $799,900
Taxes: $5,063 (2012)
Monthly fee: $786
Bedrooms: 2+2
Bathrooms: 2


$799,900 for 1,500 sqft with 1 parking + locker = $533.33 psf (parking + locker included on a high floor - 27th)
 
I must admit that I am surprised by this. Seems very reasonable given that this has just been completed. I am thinking when M5V was started in sales, was it not at around the $500/sq.ft. mark?
 
^^^
cdr:
I note on the mls that the floor above and below show the footage to be 1358 sq.ft. Therefore I think this is "poetic license" on the part of the realtor. $799,000/1358 works out to $588/sq.ft. still cheap but not $533.
I wonder if they priced aggressively as one can have the 26, 27 and the 28th floor with this same model. Perhaps they have an obstructed view or something or maybe it is just co-incidence.
 
^^^
cdr:
I note on the mls that the floor above and below show the footage to be 1358 sq.ft. Therefore I think this is "poetic license" on the part of the realtor. $799,000/1358 works out to $588/sq.ft. still cheap but not $533.
I wonder if they priced aggressively as one can have the 26, 27 and the 28th floor with this same model. Perhaps they have an obstructed view or something or maybe it is just co-incidence.


i didn't search mls for the info, so thanks interested.

as you said, the realtor probably took creative license and included the balcony's sq ft into the 'living space'.

what are the 26th and 28th floor units asking?

one has to wonder if they are pricing it aggressively to create interest/bidding war, or looking to unload quickly.
if it's priced under the other 2 units and does sell for around asking, then it will set a ceiling, if it's underpriced relative to others in the building/area.
 
^^^
2803: $879,900 the listing says prime locker and parking available....not sure if that means included in the price.. Interestingly, they quote $566/sq.ft. There is a 195 sq.ft. balcony but this is just sheer desceipt as one does not include the balcony in the footage when figuring out a Price/sq.ft. (based on 1358 sq.ft. the price/foot including locker and parking assuming it is included is $648/sq.ft. Personally, I feel realtors who blatantly misrepresent the facts to buyers not only waste buyers time but I feel border on committing fraud for misrepresentation. I doubt a blanket disclaimer: measurements are believed to be accurate would stand in a court of law where there is clearly a blatant attempt to mislead. At least RECO should do something to patrol this but clearly they act on behalf of the realtors for the realtors benefit.
2603: $920,000 Parking and locker included.

Actually going on mls.ca site and typing in the address will bring up the listings. View actually looks non obstructed: SE direction.


One additional fact: the furniture looks very minimalistic to me. Leads me to 1 of 2 conclusions...perhaps this is very modern and "the look" one is attempting to achieve or alternatively the seller is stretched and trying to unload. Of course as you say cdr, they may be trying to create a buzz and a bidding war. This is not much higher than resale prices for a comparable floor. Maybe one of the realtors if/when it sells will post what it went for and we can decide whether or not it was a "bargoon" or not.
 
Last edited:
^ ^ ^

i must be slow today. i just realized that the realtor for 2703, the advertised unit in FP, works for: M5V Realty !?!

is that associated with the builder ?!? trying to unload old inventory ?

indeed, if that is the case that the builder is offering it for less than re-sellers ???
 
Often developers offer a good price on their last remaining units to be done with a project. I don't know if M5V Realty is related to the builder or not.
one other possibility: maybe the original owner could not close, he has the deposit and is just working to get it sold as quickly as possible and is minimizing his losses as required by law(if it is the builder).

Googling the site it appears M5V is a full brokerage real estate office so I don't think it is the builder. Rather someone who named a brokerage after the postal code area I think.
 
BTW, with that last purchase, we're three for three now... In a supposedly hawt market, the three properties our family has purchased in the last 5 years have all been more than 5% under asking.

I guess if you look hard enough you can find the motivated sellers. In all three cases, the properties were listed a bit high and then sat for a while, +/- had other factors. I'd like to say we were business savvy, but probably most of it was just that we were lucky. However, one thing we did do for all three offers was to make them extremely clean, and firm but reasonable. The sellers really seem to like those clean offers. I know I would. If I was selling my hypothetical condo, I'd take a clean $360000 offer over an offer of $370000 conditional on sale of an existing home any day.

Mind you, for all three purchases, we did lose out on other places before we bought... but that's OK because some of those went for prices higher than what we would have paid anyway or else weren't necessarily our best choices.
 
Last edited:
^^^
Condos have never been as good an investment as single family houses for price appreciation. That said, for an investor, a single family house comes with a lot more work to rent out. If one is looking for price appreciation alone, it is hard to make an investment that will come to fruition 3-5 years later and hence the time frame on which to make the money work is considerably shortened.
I believe this explains the reason of gravitation towards condos.
As well, again unless one can find a "subdivision" of new houses in the City, as opposed to $50K down, one is investing in the $100's of Thousands of dollars.

In fact, as opposed to single family houses in the core at least but also in most of the suburbs I would imagine, condos like new houses escalate mainly in the first 2-4 years and then plateau and increase with the market in general. Given the ability to build many more condo units what is being seen is simply supply and demand. At the present, there is a shortage of listings and of product in the Single Family Home department compared to condos and since the supply of condos can be ramped up, this keeps the prices somewhat in check for the condos.

Do you mean people like to invest in condos simply because it is easier to rent condos out?
 
Home ownership becoming more affordable

Housing affordability is improving in Canada as home prices soften, while low interest rates through this year should continue to keep costs at bay.

A national measure shows housing became more affordable in the fourth quarter of last year, the second improvement in a row, Royal Bank of Canada’s quarterly release showed Wednesday. It found all housing categories became more affordable, led by the two-storey home category.

At this point, housing in Canada is as affordable as it was a year ago, and “only slightly” less affordable on average than it has been over the long term, Mr. Wright noted.

The bank’s affordability measure tracks the proportion of pre-tax household income that would be needed to service the costs of owning a home at current market values.


EDIT:

Dammit, you beat me by 1 minute. :p
 
Home ownership becoming more affordable

Housing affordability is improving in Canada as home prices soften, while low interest rates through this year should continue to keep costs at bay.

A national measure shows housing became more affordable in the fourth quarter of last year, the second improvement in a row, Royal Bank of Canada’s quarterly release showed Wednesday. It found all housing categories became more affordable, led by the two-storey home category.

At this point, housing in Canada is as affordable as it was a year ago, and “only slightly†less affordable on average than it has been over the long term, Mr. Wright noted.

The bank’s affordability measure tracks the proportion of pre-tax household income that would be needed to service the costs of owning a home at current market values.


EDIT:

Dammit, you beat me by 1 minute. :p

;)
 
Here is the report http://www.rbc.com/economics/market/pdf/house.pdf

The affordability measure is based upon the following:
25% down payment
includes property taxes & utilities
25 yr amortization on a fixed posted 5 yr rate
House size of 900/1200/1500 sf for condo/bungalow/detached
pre-tax gross median household income

Things excluded
condo fees
initial transaction costs
CMHC fees (due to 20% deposit)
provincial property tax credits
decreased downpayment %'s due to higher prices
transaction costs on resale before the end of the 25 yr mortgage term

The index references an Canadian affordability ratio of 28%/42%/48% for Condos/Bungalows/Detached, and an recomended max of 32%.


For Toronto the report states:
Affordability still slightly on the difficult side
Housing affordability continues to be slightly on the difficult side in the Toronto area market, although less so following some improvement in the latest period (the RBC affordability measures eased between 0.1 and 0.5 percentage points). Owning a two-storey home or a detached bungalow at market price in the area still would have taken up a higher than average share of a typical Toronto household income in the fourth quarter (61.3% and 52.2%, respectively), but this did not seem to unnerve homebuyers. Resale activity continued to advance at a brisk pace that even exceeded the availability of homes put up for sale. It is true that this strong activity is increasingly taking place in the more affordable condo segment (now representing about onequarter of the market), where the affordability measure (33.9%) is still very close to the historical norm. Conditions in the Toronto-area market are slightly more favourable to sellers presently. This will make further affordability improvement difficult in the near term.
 
Last edited:

Back
Top