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Baby, we got a bubble!?

TheKingEast

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Yes, the fees are a problem but I wonder how much of that is attributed to amenities. Used to think fees were directly tied to amenities but they don't seem to be. I've lived in buildings with no amenities yet the fees were sky high. You would think the newer builds need the high fees mainly due to the lack of quality construction. My building is 7 years old and already suing the developer over shoddy construction. You'll see the same situation with other condos too. But fees are a big barrier for those who refuse to down-size. Picture being 70 with a house fully paid off. Why would you down-size to a 900 soft condo? Pay land tax, pay the same amount in property tax and then tack on a $800 maintenance fee that will go up with no cap?

Condos aren't desirable enough so boomers stay in their 4 bedroom houses until they kick the bucket or have to go into a nursing home.

Factor in the fees I should easily be in a vey nice house. But I'm in a box
 

PinkLucy

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It's a lifestyle decision. In a condo, I can close the door and walk away and not worry about snow shovelling or gardening, etc.

Fees are a combination of amenities, size of the development and prudent management. I've been home hunting, and fees are all over the place, particularly for townhouses vs high rises.
 

Ex-Montreal Girl

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One of these days I'll use my math skills and come up with an algorithm along the lines of: Fees are a function of the age and condition of the building times the reserve fund requirements divided by (the number of units that divide the costs and the square footage of the units) plus the staff plus the amenities (which can vary widely) plus the energy requirements for the common elements and so on.

So, to take a hypothetical example: Two buildings, both 20 years old. Assume 200 units in each building and all units are 1000 square feet. Assume exact same amenities and staff etc.

Any change in any of the variables can result in a difference in the fees. For example, one building has always been well-maintained and its reserve fund topped up. The other not.
The latter will, eventually, have to pay the piper, via a special assessment or a sudden and drastic increase in fees.

Boards don't raise fees just because they feel like it. Costs go up, maintenance is needed. They also can't suddenly decide to install a pool (or whatever) without a vote by a majority of owners.

Also: Residents (often tenants) can be very destructive on common elements in one building while take a proprietary interest in another. In our building, where we have no short-term rentals and VERY VERY strict leasing rules (less than 5 per cent of our units are not owner occupied), people stop to pick up litter in the lobby because they see this place as their home.
 

kEiThZ

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the Conservative party in Canada has more boomer voters in it than any other party.
In the UK, the Conservatives are building HSR 2 and Crosslink. That's around CA$100 in rail investment. It's not conservatives that are the problem. It's Canadian conservatives who largely identify with a rural base.

How about instead of generational sniping, we just raise the interest rates. That's the only way prices will come down significantly.
And kill the rest of the economy? I'd prefer other tools. How about CMHC only cover entry level homes ie. less than 500 sq ft per person in a family. And they should stop their securitization of housing debt. Let the banks fully guaranteed their mortgage bonds. Watch what happens to housing, with just those two policy changes. Would do more than any interest rate change.
 

interested

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Actually average prices are up even over all of last year but falling rapidly. Essentially we are back to around Dec 2016/January 2017 pricing "on average".
However, there has been less higher end product sold so the averages are somewhat deceiving as more lower priced product results in a lower average price.
Still, that said, no denying...the market has definitely changed.

Pink Lucy, you said in other posts that you have been house hunting. Does this mean you are thinking of changing away from the condo life style or was this a comment
in general or involving a search for another family member. I ask for if you are thinking of changing from the condo life style, I am wondering what factors
may have predicated that decision (if it is not too personal). Is this a negative reflection having lived in condos in general a few years or your condominium in particular?
I ask as I always was under the impression you were a firm proponent of the condominium lifestyle experience.
 

PinkLucy

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Hi interested. we have sold and bought. The decision was based on location. We were looking for another condo but ended up falling in love with a house. We have another condo property so I will still be enjoying that lifestyle on occasion

We sold a couple of weeks ago for more than similar units sold in our building during the recent frenzy. Sold to the second person who looked.
 

CondoTenant

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And prices are still up over this time last year.
Of course but the point is that will change if this trend continues. Y/o/y price declines won't hit overnight after the huge run-up. Housing isn't liquid and sellers will hang on for months/years if the market is dropping. That's why there was a big dip in sales.

There is a 9/10 chance of interest rates going up on July 12th.
 

interested

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Agree with condotenant interest rates will go up....but I am not so sure they will do anything more than go up 1/2 of 1% and then the question will be to watch what happens.
With so much of the Ontario well being dependent on real estate (around 35% of GDP I read somewhere if correct), if this dips much, the Ontario and therefore the Canadian government revenues go down with it. Neither can afford that. As well, further strengthening of the Canadian dollar would not be good.

Anectdotally...I do not live in the City but our neighbourhood peaked at about 34 houses for sale last week. (Mainly SFH's). The week before it was 32. It is now 27. It was routinely 3 to 5 max until April. Then shot up as far as listings.
No more out of neighbourhood agents coming around. Still, there will be sales of those who have to sell. The rest will take their properties off the market if they don't get "their price".

I know 3 of my neighbours sold in Nov/Dec last year....driven to sell solely by the price and to get out equity. In other words, none of the 3 were going to sell but the runnup made them decide to move now vs. waiting. Of course, prices are still up from Nov/Dec but just barely. So they did not get the absolute peak in March but are looking good right now given trends.

Pink Lucy....congratulations on the sale and achieving such a good price.
Aren't you going to miss being on your Board....with all its aggravations and joys?
 

interested

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Hi interested. we have sold and bought. The decision was based on location. We were looking for another condo but ended up falling in love with a house. We have another condo property so I will still be enjoying that lifestyle on occasion

We sold a couple of weeks ago for more than similar units sold in our building during the recent frenzy. Sold to the second person who looked.
I believe you have described that you have a larger 2 bedroom unit and I believe those are in demand from downsizers and in relatively short supply...hence probably explains the demand.
Do you know who bought...what age demographic? I suspect maybe a "retiree" or someone thinking about retiring in a few years...or was it a younger individual / family.
 

PinkLucy

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I'm on the board at our other property :)

Where we bought, we bought the only house for sale in a radius of over 5 km. No comps going back 6 months because there hadn't been any listings. On the other hand, I have seen areas where there are plenty of for sale signs.

I agree that interest rate increases won't be drastic. Things are settling down after a bit of craziness early in the new year. I don't anticipate any big shifts but rather some adjustments such as a decrease in bidding wars and homes going for high amounts over ask.

And yes, it was a retiring couple who bought.
 

CondoTenant

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Actually average prices are up even over all of last year but falling rapidly. Essentially we are back to around Dec 2016/January 2017 pricing "on average".
However, there has been less higher end product sold so the averages are somewhat deceiving as more lower priced product results in a lower average price.
Still, that said, no denying...the market has definitely changed.
Agree that the product mix changed which impacted the averages. Here it is broken down by home type:

 

TheKingEast

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The iorny is those who were so in favor of government intervention will now have an even harder time to buy a property. I have always maintained that those who are priced out will remain priced out. Rent will be even higher. If I can't raise rent more than 1.5%, you better believe I'm going to push the rent up and will raise it automatically every year.

I said here not too long ago that I spoke with an agent during the craziness a few months ago. He gave excellent advice and predicted everything that is happening now. He told me to sell and run. Very tempting but I'm in this for the long aul. I may regret it but we'll see.

Still feel that the market would have leveled out without the government's meddling.
 

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