Five Condos (Graywood Developments, Mod Developments) - Real Estate -

[interested]

interested...the $200 is incorrect and skews your analysis. Don't know if you're talking about Scarborough! I'm just talking about the Yonge corridor around Bloor. I was in 18 Yorkville around 2002 or so and it was well over $300 sq ft. Prices were fairly flat for a while there. In 2005, CASA opened around $375 sq ft.

I bought on paper in 2001 summer for $175-180/sq. ft in downtown.(University/Richmond area). Yorkville was more expensive and 18 Yorkville was expensive at the time (which i believe was late 2002 or in 2003). But let's agree to split the difference and say it was $250/sq. ft. for downtown (not Yorkville). It makes it a 4 fold increase as opposed to 5 fold. Still very hefty.

 

[luxome]

FIVE is definitely the lowest of U, St. Nicholas and of course 1 Bloor...very well priced...i did my hwk before i signed on the dotted line..=P For those who are interested in 511sqft or any other suites...i may still be able to find you one...just gota ask my investor colleagues who purchased multiple units...anyways, PM if u would like details...don't want to get the realtors on the board mad, lol.

 

[myfive]

I bought on paper in 2001 summer for $175-180/sq. ft in downtown.(University/Richmond area). Yorkville was more expensive and 18 Yorkville was expensive at the time (which i believe was late 2002 or in 2003). But let's agree to split the difference and say it was $250/sq. ft. for downtown (not Yorkville). It makes it a 4 fold increase as opposed to 5 fold. Still very hefty.

Interested...i'm not talking about all of downtown though. I kind of thought you were throwing other areas into the mix. I'm just focused on the Yonge/Bloor area with my analysis. I wouldn't say the same about downtown. Part of my thinking is that there has been a price distortion where the downtown prices are very similar to some of these projects at Yonge and bloor, and i believe that will correct itself over time. I just think Y/B is destined to perform much better than the downtown in general. I'm hearing Maple leaf sq. is selling for $600 sq ft, which is the same price as for example CASA....and this will not last i believe, in terms of them being the same price point. Not a knock on the downtown projects, but it ain't Y/B.

I would take the money and run from some of these downtown areas. I think your analysis may be fairly close for this area. But it's not Y/B. All those buildings downtown are not going to $1000 sq ft anytime i can see into the future, that's for darn sure. Definately looking at $300+ for Y/B around 2002, which would put it at a double in 8 years. Very conservative growth IMO, but i believe it is due to this price distortion, but as i say, i'm expecting that to change. If you go with $900 sq ft for Y/B by 2016 (to keep the math simple) your looking at a triple in 14 years. These are not unreasonable growth rates, and nothing like the U.S. market which you say tripled in 6 years. Yeah, that was the Fraud market to be sure.

But as i said earlier, this is a real good scenerio that may not play out, but isn't beyond the realm of possibility.

 

[cdr108]

interested....yes, there is always the risk of the house of cards coming tumbling down. I like your timeframes here. I'm very comfortable until the US elections in 2012. I think we will go up until then. Thereafter is the more difficult call to make. But we will be sitting at higher prices then. Let's call the the CIBC prediction the $600 sq ft prediction in terms of putting a start price on it. $600 because X2 and Five are selling for about $600 sq ft, and you can get a decent resale now at CASA for about the same $600. So let's see where we go from here. I'm projecting $750 sq ft by 2012. So even if we dropped a whopping 20% from that , it would bring us back to the $600 price range again....so we'd have to get a pretty hefty drop to lose money.

There is a really good long term cycle prognosticator i follow and he sees U.S. real estate bottoming in 2012 and moving up for the next 3 to 4 years thereafter. So if that were to actually happen, then it's reasonable to assume we would carry on up with them over this time frame. This would put the price per sq ft in the $900 to $1000 range as a best case scenerio into 2015/16. I'm not saying this is going to happen, but it's a consideration that helped me pull the trigger. And remember, nobody wants the masses to think like this, as you can imagine the speculation would really get out of hand. But the possibility exists.

So i kind of see the worst case scenerio a breakeven one over the next 5 years until the project is completed, and perhaps a small loss if we tumble a lot. But the upside based on the numbers i've quoted could be quite exciting as well.

Definately looking at $300+ for Y/B around 2002, which would put it at a double in 8 years. Very conservative growth IMO, but i believe it is due to this price distortion, but as i say, i'm expecting that to change. If you go with $900 sq ft for Y/B by 2016 (to keep the math simple) your looking at a triple in 14 years. These are not unreasonable growth rates, and nothing like the U.S. market which you say tripled in 6 years. Yeah, that was the Fraud market to be sure.

25% appreciation in 2 years; 50-66% increase in 5 years; doubling in 8 years and tripling in 14 years is conservative growth ?!?!?

what are you basing this on besides the tripling of the US markets in 6 years that you referred to?

everything i've read shows historical appreciation of 3.5-4.0% cpa (excluding the past decade), so values double every 15-18 years.

 

[interested]

Interested...i'm not talking about all of downtown though. I kind of thought you were throwing other areas into the mix. I'm just focused on the Yonge/Bloor area with my analysis. I wouldn't say the same about downtown. Part of my thinking is that there has been a price distortion where the downtown prices are very similar to some of these projects at Yonge and bloor, and i believe that will correct itself over time. I just think Y/B is destined to perform much better than the downtown in general. I'm hearing Maple leaf sq. is selling for $600 sq ft, which is the same price as for example CASA....and this will not last i believe, in terms of them being the same price point. Not a knock on the downtown projects, but it ain't Y/B.

I would take the money and run from some of these downtown areas. I think your analysis may be fairly close for this area. But it's not Y/B. All those buildings downtown are not going to $1000 sq ft anytime i can see into the future, that's for darn sure. Definately looking at $300+ for Y/B around 2002, which would put it at a double in 8 years. Very conservative growth IMO, but i believe it is due to this price distortion, but as i say, i'm expecting that to change. If you go with $900 sq ft for Y/B by 2016 (to keep the math simple) your looking at a triple in 14 years. These are not unreasonable growth rates, and nothing like the U.S. market which you say tripled in 6 years. Yeah, that was the Fraud market to be sure.

But as i said earlier, this is a real good scenerio that may not play out, but isn't beyond the realm of possibility.

Yonge and Bloor is not the same as Yorkville. I agree it may be more valuable than downtown or time will tell. Shangrila, Trump and Ritz are all downtown and hardly laggards for high end projects but that said I recall seeing somewhere that the most expensive project is the Four Seasons and then something else in Yorkville, followed by Shangrila as #3 or 4. Anyhow, I think lumping Casa's location(which I think is great by the way) together with Yorkville is not quite fair as comparisons.

As well, as cdr 108 points out, I think even a tripling if I accept your math is quite a bloated figure. But time will tell.

 

[Ric]

Anyone who thinks a tripling of prices in 14 years is sustainable is in for a rude awakening. Having said that "the market can remain irrational longer than you can stay solvent". My advice is simple. If you are buying with the intent of flipping in 3 years time, be very careful. You are not investing, your gambling and will most likely get burnt. When every Tom, Dick and Harry is buying condos to flip, it's time to start worrying. If your condo investment cannot generate some form of +ve cash flow (95% of current pre-construction condos wont) when you do the math, stay away.

Your thought process when investing in pre-construction condos should be:

1. How much will it rent for if the market turns in 3 years and I cannot sell? If the rent will cover all your expenses then you are on the right track.
2. Will my investment appreciate enough in 3 yrs to cover the transaction costs associated with disposal of property? (Based on market projections for the next couple of years, I doubt it will).

Don't get caught up in the hype; due deligence is a must in these times.

I tell my "investor" Clients to avoid pre-construction condos. At $600+/ sq.ft in the downtown core, none of these will generate any +ve cash flow (from rental). And if it wont generate +ve cash flow then you're left with hoping it will appreciate in price (not a very good gamble). There are other better real estate investments around. Also, don't feel bad if you're not following the herd (to the slaughter). Sometimes the best investment is sitting on your cash and doing nothing. "Get your popcorn ready, it's almost show-time".

 

[carturo15]

If you are looking for an investment you should not buy anything over $475 psf or $500 max (that is the limit that allows you to rent the property and cover all the expenses). I you are looking for your dreams home and your primary residence, then it is fine, you could go up to $600 psf depending on the project. But those guys buying condos at $600 ps ft, expecting to flip it in 3 or 4 years, will feel the pain

 

[JayBee]

I wonder if people who bought at St. Nicholas(was never impressed with this project) are regretting their purchase after the launch of Five? It also bothers me that people are paying $600psf for a bachelor with the intentions to flip/rent out. I've been to a few VIP launches and hearing the conversations are funny. "Sure, you'll be able to rent out this 600psf bachelor and cover your carrying costs". A lot of misinformed people out there. The days of making money off real estate are gone for the most part. Builders want a piece of the action now.

 

[myfive]

I wonder if people who bought at St. Nicholas(was never impressed with this project) are regretting their purchase after the launch of Five? It also bothers me that people are paying $600psf for a bachelor with the intentions to flip/rent out. I've been to a few VIP launches and hearing the conversations are funny. "Sure, you'll be able to rent out this 600psf bachelor and cover your carrying costs". A lot of misinformed people out there. The days of making money off real estate are gone for the most part. Builders want a piece of the action now.

Or moreso 1 Bloor at 800 to 900 sq ft. I'm sure they'll all be happy in the the end with the appreciation, but that's very expensive. i thought the Nicholas project was very expensive at the time i went in. The best unit, SE corner sold out very quickly. Most of the others i think will take a while for them to sell. There are so many buildings around it though, you can't get a good view unless you go very high, or face East. I love the street though. I wish i had gotten into that project earlier and picked up one of the one bedrooms down around street level, and in the original bulding there that is about 3 stories high or so. I really liked those units and they were reasonably priced, and no floor premiums....but they were gone before i got in there.

 

[T.O.Condo]

IMO FIVE is not a bad decision. I'm not saying this because I purchased a unit . I have looked into $450psf range condos in downtown but don't like the neighborhoods. Some reasons i chose this:
1) Y/B is the center of downtown, therefore even during down times it's easy to rent out.
2) Condos surrounding FIVE are selling at approximately $25psf more.
3) Very stylish building preserving heritage
4) Population in Toronto is expected to be around 5,283K in 2015.
5) Easy access to any district.
6) Decent alternative to Bloor 1
7) Did I mention Yonge and Bloor!!!

People always think/predict prices will drop for house/condos yet it has always risen in long run. We may have a hicup for few months but in the end people will get used to paying 600-700psf prices.

 

[myfive]

IMO FIVE is not a bad decision. I'm not saying this because I purchased a unit . I have looked into $450psf range condos in downtown but don't like the neighborhoods. Some reasons i chose this:
1) Y/B is the center of downtown, therefore even during down times it's easy to rent out.
2) Condos surrounding FIVE are selling at approximately $25psf more.
3) Very stylish building preserving heritage
4) Population in Toronto is expected to be around 5,283K in 2015.
5) Easy access to any district.
6) Decent alternative to Bloor 1
7) Did I mention Yonge and Bloor!!!

People always think/predict prices will drop for house/condos yet it has always risen in long run. We may have a hicup for few months but in the end people will get used to paying 600-700psf prices.

yes, these are good positives. I would add;

-St Joseph street runs west right into Queens park, nice for taking a walk or jogging (i saw lots fo joggers there the othe day)
-Finishes are very very nice
-The builder, Graywood developments also built the Ritz Carlton. This gives me a lot of comfort. I was never comfortable with Great Gulf building one bloor. Great gulf hasn't done anything special yet in the condo market, so it remains to see whether they can pull it off
-the amenities look very kool! No pool, but all kinds of other stuff there for entertainment
-they are running out of options in terms of bulding condos so close to Y/B. I'm sure we'll see some others go up in the area, but more likely they will start to get futher away

...i think there are more as well, but what i could think of off the top that i considered before buying.

 

[T.O.Condo]

yes, these are good positives. I would add;

-St Joseph street runs west right into Queens park, nice for taking a walk or jogging (i saw lots fo joggers there the othe day)
-Finishes are very very nice
-The builder, Graywood developments also built the Ritz Carlton. This gives me a lot of comfort. I was never comfortable with Great Gulf building one bloor. Great gulf hasn't done anything special yet in the condo market, so it remains to see whether they can pull it off
-the amenities look very kool! No pool, but all kinds of other stuff there for entertainment
-they are running out of options in terms of bulding condos so close to Y/B. I'm sure we'll see some others go up in the area, but more likely they will start to get futher away

...i think there are more as well, but what i could think of off the top that i considered before buying.

I agree. I was quite impressed with the show room. myfive, looks like we'll be vertical neighbors lol.

 

[myfive]

I agree. I was quite impressed with the show room. myfive, looks like we'll be vertical neighbors lol.

lol...only the waiting game now. they are saying Dec 2014 and these are always a year late, so i'm going to try to foget about it for a while. I think we well be very happy with these purchases by the time the bulding is completed.

 

[JayBee]

Well, I lived in hat area for 3 years and it's a great area. I don't think anyone will be disappointed with the area....you're close to everything. This building reminds me of a poor man's 1 bloor and that's a compliment. You could even say that it looks nicer.

 

[Ric]

People always think/predict prices will drop for house/condos yet it has always risen in long run. We may have a hicup for few months but in the end people will get used to paying 600-700psf prices.

In that case, we all should go out and buy because house/condos always rise in the long run.

The "smart money" buys low (or close to the mean) and sells high (outskirts of trend line close to bubble territory) while the herd buys at the top of the market (bubble territory)

If you're buying a home to live in and don't plan on moving for awhile then by all means buy now.( Even if prices drop and you're moving, the place ur moving to would also have declined so it's kind of a wash). If you're buying on speculation that your $500-$800/sq.ft condo will worth $700-$1000/sq.ft in 3 yrs; good luck.