New Condo Incentives?

[rbt]

When someone buy a place as an investment, they always choose longer amortization terms, like 35 years combined with variable rates...

Not always. People don't invest for the same reason or expect to sell at the same time. Folks in it for the mid term (10 to 15 year) might try something shorter to build significant equity in the property. Principal paid on the property is income too -- easily extracted during mortgage renewal (essentially any time for variable) or with a 2nd mortgage added.

Many banks will give clients with very good credit a 2nd mortgage for the same terms and duration as the first, expiring on the same day. Essentially it becomes a top-up of the 1st mortgage.

Investors who are on the edge, cannot afford to top up principal for mortgage payments, will certainly do their best to minimize the principal contribution and interest rates; possibly to the detriment to building their equity depending on the duration they intended to hold the property for.

 

[cabbagetowner]

Not always. People don't invest for the same reason or expect to sell at the same time. Folks in it for the mid term (10 to 15 year) might try something shorter to build significant equity in the property. Principal paid on the property is income too -- easily extracted during mortgage renewal (essentially any time for variable) or with a 2nd mortgage added.

Many banks will give clients with very good credit a 2nd mortgage for the same terms and duration as the first, expiring on the same day. Essentially it becomes a top-up of the 1st mortgage.

Investors who are on the edge, cannot afford to top up principal for mortgage payments, will certainly do their best to minimize the principal contribution and interest rates; possibly to the detriment to building their equity depending on the duration they intended to hold the property for.

and if it's for a commercial property such a long amort. might not even be an option...

 

[rbt]

and if it's for a commercial property such a long amort. might not even be an option...

0 down certainly isn't either.

Since the value of the property is pretty much directly proportional to profit (or capable profit) a bad manager can easily kill the value. If you're not hiring professional management to take care of the property, you really need to be able to sell yourself to the bank to get a 75% LTV mortgage.

If the bank is at all skittish, as it would be in todays economic climate, you might find it hard to get a mortgage for 50% LTV.

 

[cdr108]

sent from Charlie

INTERESTING ... they're upping the anty to get rid of inventory similar to Freed.

$ PSF is still well over $450 ... Freed was doing $400 for some of his projects slightly further in King West.

 

[AKS]

aren't these prices the same as VIP prices?

 

[The Condo Observer]

I am being bombarded by emails offering all sort of incentives, as developers try to move unsold units. So far I can confirm that the following projects are offering noteworthy incentives: West Harbour City, X condo, Other Plazacorp projects, Fly. My feeling is that sales have ground to a halt in the past two months.

 

[cdr108]

I am being bombarded by emails offering all sort of incentives, as developers try to move unsold units. So far I can confirm that the following projects are offering noteworthy incentives: West Harbour City, X condo, Other Plazacorp projects, Fly. My feeling is that sales have ground to a halt in the past two months.

You can say that again.

I receive weekly emails from Plazacorp for King West and some older projects like West harbour City and 900 Mt. Pleasant;
almost bi-weekly from Great Gulf for X condos and Charlie;
bi-weekly ADVERTORIALS from 'the desk of Brad J. Lamb' for his various projects like Parc, Flat Iron Lofts, East, Leslieville Lofts, Ninety, etc.;
bi-weekly from Tridel for various projects like 300 Front, Park Nuvo, and the new one at Yonge/Sheppard;
Freed Development for his projects in King West.

The only one that seemed somewhat pro-active/aggressive in their pricing was Freed selling select units at $400 psf for his projects.

 

[alafleur]

Freed is offering $400 psf on several units, but they are mostly 2-storey loft style units with uninspiring layouts IMO.

Great Gulf's Charlie is starting to get a little more aggressive with buyers. Client of mine just picked up a corner unit with 10' ceilings for about $456 per square foot. As someone eluded to, some suites are selling at prices similar to the VIP stage from Spring '08.