Eug
Senior Member
Buy resale.
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Baby, we got a bubble!?
- Thread starter simuls
- Start date
interested
Senior Member
Or wait for a good deal on an assignment if you want new.
KA1
Senior Member
Or sit and watch for the opportunity to go by and regret later.
TheKingEast
Senior Member
KA1
Senior Member
Open your eyes, guy. Currently, units in RoCP are selling, quickly I might add, at $ 650 sq.ft. Not enough units for sale in the building for eager buyers.
Sq. ft prices quoted by you are around $ 650 sq.ft. Hardly worth worrying about.
TheKingEast
Senior Member
KA1
Senior Member
Interested, you and I have been good 'cyber' acquaintances. I will not go far enough to call us 'cyber' friends, though. We have replied to each other's posts. More significantly, you , with all the grace, have ignored my purposesly thrown jabs at you -- with all the contempt they deserved. As such, I will give detailed answers to your questions and in the process open my private life to the public. In doing so, I will open myself to potshots from Redfirm and darts from the others. Just for you, Interested.
I did not take the plunge in buying a 'value' priced unit in Pace simply because I am a conservative investors.
As you, and perhaps others as well, know that I have bought a unit in AURA -- on the 'Executive' 59th floor. When I bought this 1142 unit @ 700 sq. ft., units on the lower floors were going for $ 550 per sq.ft. I purposly bought this expensive unit on the higher floor simply because, in the last few years of my life, I wanted to ' look down' upon others' to pay back others for 'looking down' upon me most of my life.
I have been busy saving for a maximum downpayment when the opportunity comes to close the deal. I am glad to state that I will have saved at least 50% of the cost for down payment when the time comes to close the deal.
Now that I will have saved 50% of the price as downpayment, I have second thoughts about moving there. I will be able to look down upon others but I will not be able to spit and/or throw stone at others, simply, because, at that level, there is no balcony. I am seriously thinking about being as magnanimous as Lord Jesus -- just forgive them for their ignorance -- and rent the place instead. With a 50% downpayment, I am bound to have a 'positive'cash flow. I fully expect Redfirm and, perhaps a few others as well, to tell me, on my face, that this is a stupid thing to do.
If I was not busy saving for AURA, then, I would, most likely, have considering INVESTING in a unit there -- not with 10/15 or 20% down but at least around 40% down. At that level, there will be a postive cash flow.
Earlier, someone -- who I shall not name because that person seems to have a slightly thin skin -- had made a post to the effect that Dundas and Jarvis is 'infested' with hookers and drug dealers. Hookers are human beings. It is better to have them as 'neighbours' than, say, a skunk or a racoon. Sit on the balcony and watch hookers bargain with their client. Listen to the interesting conversations.
When unit owners move into the building, hookers will move away simply because there will be no customers for them. Area will self-clean itself. Then the prices will increase. When move developments follow, prices will increase even more.
Key to the purchase decision would have been substantial downpayment -- even more than 25%. Remember one thing, keeping money in GIC is, definitely, a loosing proposition. Interest rates for upto 2 year term deposits are around 1.85%. Forget about Bank of Canada official inflation figures. Gas prices do not increase by 2% neither do the prices of food or real estate. Instead of keeping money in GIC, use it to make a hefty down payment. One step at a time, Interested. Swallow one bite before you make another bite. That's the key.
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cdr108
Senior Member
KA1
Senior Member
You are a very confused soul, TheKingEast, and, definitely, in need of redemption.
You are going all over the horizon. Earlier, you had referred to R/E in and around the city. Now you have gone to Florida. Torontonians spend too much money, I fully agree with you. Don't make enough -- I will agressively disagree with you.
The right way to live is, and now forgotton way, is to live within your means, spend less than you earn.
You could be that individuals who, unlike majority of Torontonians, does not spend money foolishly. And if the savings still are not enough, then, work extra hours, earn additional money and save for the things that you want. This way, you will stand out from other Torontonians who speed too much money. As I have said many a times before on this thread, over a long term horizon, prices will be sustainable -- unless, there is some extraordinary event. You have to be financially secure and use care in making an investment. Avoid places like City Place.
As I have said on this thread before, I purchased a unit in RoCP1 where I live now, in November 2001. There was a general slump in the real estate market. Sales offices of most pre-con condos were empty and sales persons used to pass the day by twiddling their thumbs. I bought a unit in that environment simply because I had wanted a place to live. And I was going to pay for it in full. It would not have bothered me if the prices had gone down by 15/20%. Eventually, they would have gone up. Oprerative word here is 'eventually'.
In an earlier post I have stated that I will be making a 50% downpayment when the time comes to close my unit in AURA. If the prices go below my purchase price of $ 700 sq.ft., then that won't be the end of world. Based upon my costs of low mortgage, I would still hope to have a positive cash flow. I am not at in a hurry to dispose of my investment. I am in it for the long term.
Use common sense, take care and be financially secure in making an investment. And, if need be, take a dose of 'Geritol'.You will be rewarded, eventually.
interested
Senior Member
Great post Ka1.
At least I understand your thoughts.
I was curious as to why you thought Pace was a good investment as opposed to other downtown investments. In fact, I understand your belief that Dundas and Jarvis may improve as a neighbourhood. At least there is some rationality and now I understand your reasoning.
What is interesting to me is that if I carry your logic, you would buy at these prices today if you had extra cash that you did not immediately need and could put up beyond 25% as a downpayment, hope to make even the 2% equivalent of the GIC, and then over the long run get some price appreciation. I stress long run and not short term. That is what I was trying to understand; whether you still felt it was reasonable to buy. As you said, you are a conservative investor. I would perhaps say a "rationale investor" and at the end of the day, none of knows if prices will be $800 in 2 years or $500 or just stay at $650. We can only make educated guesses.
Along the same venue, I was considering Yonge and Wellesley area. Again an area that I think will be up and coming. Again, near the subway and I believe reasonable potential for price appreciation. But that said, I think one has to look at the whole TO market and yes, I think it is long in the tooth.
Thanks for the detailed response.
KA1
Senior Member
Interested, a quick reply. This is not the time yet to invest on Wellesley going East. May be in a year or two. Don't ask me why. It is the gut feeling having read a few news items in the past.
interested
Senior Member
Thanks for that Ka1.
I appreciate your input.
I appreciate your input.
KA1
Senior Member
Cdr 108, I am replying to your post on the understanding that you will not take my comments personally.
You have to look at the individual/pesonal situation and take decisions accordingly. Forget about the average joe.
If the average joe will be poor by buying a house because of a median income of $ 55-60k, then, the simple answer is: get off your behind, work extra hours, earn extra money and get out of the median income range and afford a house.
Getting off the behind will require sacrifices. And if someone is serious enough, then, that particular individual will make sacrifices. To start with, that could mean, not wasting money on hockey apparel -- as I have seen a few individuals going around town wearing Canuck apparel --, not going to bar to watch hockey games on big screens, ordering beer by the jugs and eating all the unhealthy food -- spare ribs, coke, potato chips and, till a few years ago, inhaling cigarette smoke, directly or idirectly.
It is a question of priorities.
For the life of me, I can't understand as to what an individual achieves by, my standards, wasting money on these and other follies other than the fact that, psycholigically, an individual feels great by associating himself with a 'goon'.
As you must have read in my posts that, during day time, I am a self-employed bean counter. As a result of my hard work -- starting with studying for accounting designation, along with full time job --, I am financially comfortable to the extent that I can sit on my balcony and watch the traffic go by on Bay Street and live comfortably on my savings/OAS and CPP. However, I still work long, at times long long, hours. My income is at a level where almost all of my OAS is clawed back. This means that, beyond a certain point, every dollar that I earn, 48% goes back in taxes and claw back. This still does not make me stop working. It took lot of soul searching to say goodbye to a secure, pensionable govenment job to take a plunge into an uncertain self-employment field.
In the end, does it really matter to me as to who wins the Stanley Cup? Not a bit. Would it matter if mortgage interest go up to, say, 5 or 6%? Once again, not a bit. As I have said in earlier post, in a reply to Interested, that, in March 2008, I purposely choose to buy a unit in AURA at 'Executive' floor at $ 700 psf rather than a $ 550 psf on the lower floors. Nonsense reasons for buying a unit on 'Executive' floors -- looking down upon others -- is for jokes.
So, it is a question of choices -- personal choices, dear friend. If you want something badly, then, you have to work for it. Sitting on the behind and watching sports and other programs will not do.
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cdr108
Senior Member
i concur with you that many want everything, yet aren't willing to sacrifice anything.
but my comments was purely based on numbers on being house poor ...
lets say a working professional earning $55-60K is probably in their early-mid 30s and saved the 25% down payment.
if they were to buy an average 600sf condo (which I think would be reasonable size to expect for this person) at $650 psf, that would cost $390K.
with the 25% dp, the mortgage would be $292.5K ... let's round off to $300K because of incidentals like LTT, etc.
$300K @ 4.5% 5-yr term /25-yr amortization results in monthly mortgage = $1,660;
monthly condo fees for 600 sf = $300;
monthly property taxes = $260;
property insurance = $75
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gross monthly costs excluding utilities (ie. phone, hydro, cable, etc) = $2,295
if they earn $60K pa, then monthly gross income = $5,000
$2,295 = 45.9% of the gross income, without considering those extra costs ... to me, that's house poor
$5,000
Condo George
Active Member
May sales numbers will be weak, look for price apprecation over last year, listings also seem to be gaining, balanced summer, strong fall is my guess.