Buying New vs Resale

[fencejack]

Hi all,

I was wondering what the extra costs of buy new vs resale are?

For example, if I were to buy a new unit that is priced at $270k or a resale at the same price, what would roughly be the final price of each?

I'm aware that both will have their closing costs such as lawyer fees etc. but does the new unit include GST already or do I still have to add that on? So a new unit priced at $270k is actually ~$283k?

Thanks.

 

[simuls]

Almost all new units have the GST included in the price. Some builders have even adjusted their prices to include the new HST as well.

 

[cdr108]

new will have alot of development charges on closing in addition to the lawyer's fee that re-sale aren't subjected to.

there is no GST on the purchase price of re-sale; however, there is GST on the services used to buy (ie. realtor commission, lawyer's fee, etc).

if you're buying new for end-user purposes, then the GST is included and rebated to the developer.
if you're buying new for rental investment, then you may have to pay the extra amount to the developer since it won't qualify for GST rebate. although an investor may get some of it back via some other program.

 

[andrejeffry]

There's more extra cost in buying new than buying in resale.

1. If you're still renting, rent payments can add up (till the unit is ready) Delay in new construction can be between 6 months - 24 months. Especially in this market, new units don't go as fast as they used to be.

2. Phantom rents. Even after you move in, you still have to pay phantom rents till your unit is registered. You can expect to pay phantom rent on average between 3 months to 1 year.

3. Currently new condos are overpriced. You'd get better value or square feet for your bucks in resale

I consider myself pretty knowledgeable in condo market, having bought/sold 2 units from new developments in the past 5 years, in my opinion, in this market condition, you should exhaust all options in resale before considering buying new condos. Look at new condos only as last resort.

 

[fencejack]

thanks for the input.

I plan to exhaust my resale option first considering the ''shape'' of the market and the fact I locked in at a low rate. However, some of these asking prices still seem quite high considering how the economy is. For example, A ~590 sq. ft. 1+1 condo w/ parking is going for $295k-299k at cityplace. Is that reasonable or am I correct to think that it's way over priced?

 

[Johnzz]

$500/sqft does sound expensive for cityplace...

 

[simuls]

That sounds about $50 000 overpriced for cityplace.

 

[andrejeffry]

it is overpriced. but don't give up on resale.

interest rate is at the lowest, you may not get this kind of rate if you opt for new development

 

[fencejack]

Again, thanks for the input guys.

I'm going to continue looking at resale because of my low mortgage rate.

When you guys look at price per square foot, how do you calculate it? with or without parking included?

Also, could you provide some feed back on these units...

This one is without parking but i'm thinking of just renting parking if I got it, is parking really worth the extra $30k-35k?
http://www.realtor.ca/propertyDetails.aspx?propertyId=8462006

There's a unit similar to this one but facing west and is on the 5th floor...
http://www.realtor.ca/propertyDetails.aspx?propertyId=8452155
their agent said they can move down to $285k. I still feel that is a little over priced considering for about 10k more you can get a higher floor (~30th) with a view of the CN tower.

Let me know what you think...

 

[simuls]

I always include parking and locker just so my brain has an equal playing field.

I like the second one a lot more as it seems to have less wasted space and more light, but I'd have to see a floorplan and the actual square footage. 10k is a great deal to move up 25 floors, but again it depends on your preference, which way it's facing, what is in your view or might be built into your view, etc. Personally I only buy west facing properties as I dislike light in the morning but love sunsets in the evening.

It can be harder to sell a property without parking, but that is slowly changing. However at 30-35k, don't expect to see any appreciation for the next several years and remember you'll pay property taxes and condo fees on that space as well.

 

[fencejack]

I assume to include parking and locker as well but it's hard to make comparisons without knowing if others' have included it as well.

You're right, $10k for 25 floors higher is a deal. But if you're looking at it the other way... only $10k off for 25 floors lower doesn't seem that great at all. Also, there are plans for buildings to be built that will most likely cover the west view of that lower (5th floor) unit. So I think they're crazy to be asking $285k for that. Only way they will sell it at that price is if they convince the buyer that no buildings will be built to block their view. I really like the layout as it seems very efficient for a 590 sq ft unit. But i can't bring myself to pay that much.

I'm considering purchasing a unit without parking to keep the mortgage low, however, I would have to rent parking. After 3-4 years I may consider moving into a bigger place and either rent or sell the unit I get now.

Any thoughts about Cityplace area vs fort york (malibu condo possibly)? pros and cons...

 

[cdr108]

I'm considering purchasing a unit without parking to keep the mortgage low, however, I would have to rent parking. After 3-4 years I may consider moving into a bigger place and either rent or sell the unit I get now....

buy the parking spot if you're considering renting anyways ... it comes out to be the same cost in the long run.

if there's only $10K difference for 25 floors, get the higher unit if all things being equal (ie. floorplan, exposure, etc) ... finishes you or pot'l buyer could always upgrade.
however, $295K for 590 SF + prking seems expensive for cityplace.

 

[simuls]

buy the parking spot if you're considering renting anyways ... it comes out to be the same cost in the long run.

I don't think that's the case as the mortgage cost on 30-35k = $180/month, plus an average of $60/month for condo fee plus property taxes = $20/month = $260/month and you should be able to rent for no more than $150/month. Over 3 years, that's a $3900 difference and I can't see the parking space appreciating that much over the next few years.

 

[cdr108]

I don't think that's the case as the mortgage cost on 30-35k = $180/month, plus an average of $60/month for condo fee plus property taxes = $20/month = $260/month and you should be able to rent for no more than $150/month. Over 3 years, that's a $3900 difference and I can't see the parking space appreciating that much over the next few years.

if it was a new pre-construction project, i would agree on the price.

however, for CP and Malibu, i don't think they are worth more than $20-25K; so mortgage and taxes would be about $140.

i didn't know the condo fee for parking was so high ... can you confirm if its like that for all projects?

 

[AKS]

if it was a new pre-construction project, i would agree on the price.

however, for CP and Malibu, i don't think they are worth more than $20-25K; so mortgage and taxes would be about $140.

i didn't know the condo fee for parking was so high ... can you confirm if its like that for all projects?

CP pre-construction parking prices are 35k now. Most of the other projects are 40k