Panel Discussion on Condos featuring Peter Clewes, Brad Lamb

[Lewurban]

Wednesday March 29th
ULI (Urban Land Institute) Toronto Young Leaders Group for those under 35 will be hosting Insiders' Guide to Condos. A condo as a home or a condo as an investment: what do I need to know if I’m buying, selling or planning a condo in Toronto? The condo has proven to be both an outstanding investment and, for many a preferred lifestyle choice over the long term, but it is a unique asset class with its own opportunities and challenges. Here’s an opportunity to have a conversation with the leading experts in condo market trends, sales, architecture, design, and development, whether you’re a buyer, seller or planner.

Guest Speakers include: Alan Vihant; Vice President Development, Concord Adex, Brad Lamb; Brad J. Lamb Realty Inc., Jeanhy Shim; President and Editor, Urbanation, Peter Clewes; Partner, Architects Alliance.

Go to www.toronto.uli.org to pre-register -- should be a great event

 

[bizorky]

Re: Panel Discussion on Condos featuring Peter Clewes, Brad

I find Brad Lamb entertaining in Glengarry Glen Ross kinda way.

 

[3Dementia]

Re: Panel Discussion on Condos featuring Peter Clewes, Brad

I find Brad interesting in a "Silence of the Lambs" kinda way.

 

[shawnmicallef]

Re: Panel Discussion on Condos featuring Peter Clewes, Brad

It was nice to see the begining of Glengarry GR on TVO last night, but i had to go out after the opening rant.

 

[building babel]

Re: Panel Discussion on Condos featuring Peter Clewes, Brad

The sheep on those Brad Lamb billboards look decidedly nervous.

 

[shawnmicallef]

Re: Panel Discussion on Condos featuring Peter Clewes, Brad

I would like to see that sheep recite foul-mouthed David Mamet lines.

That, would be something.

 

[bizorky]

Re: Panel Discussion on Condos featuring Peter Clewes, Brad

I heard a rumour that all B. Lamb employees must own black BMW's. Nothing about pet sheep, though. I assume they are the customers.

Lamb as the wolf in sheep's clothing.





Hmm, are they sheep or lambs?

 

[3Dementia]

Re: Panel Discussion on Condos featuring Peter Clewes, Brad

I'm sure Brad would tell you that all condo purchasers are sheep. He's been fleecing them for years. Let the baaa...d jokes continue. There's way to many erudite posts on this forum anyway and I'm not bilingual so I tend to skim them.

 

[realestatejunkie]

Re: Panel Discussion on Condos featuring Peter Clewes, Brad

The condo has proven to be both an outstanding investment

By what metric? Typical rhetoric from a panel featuring blatantly confliced 'experts' with agendas outlandishly contrary to the investment buying public.

Concord Adex- thanks for litering our skyline with a vacuous vertical subdivision sure to become a rotting urban ghetto. Poor city planning at its finest.

Lamb- takes a % cut whether prices are up/down. Zero credibility/objectivity. Can't be trusted. No ethics.

Shim- more objective but will not bite the hand that feeds her.

Clewes- a fantastic designer but not necessarily the authority on investment analysis.

Above all, the real profit from these projects flows to the developers & brokers. The flock of lemmings foolish enough to risk their capital in illiquid pre-construction developments at a point well past the peak are deserving of the staggering loss of equity that they will inevitably experience once these over-marketed projects reach completion or worse get shelved due to cost over-runs or lacklustre sales. The loose monetary policy of the bank of canada bailed out the market for only so long. Now that it must rely on strong job growth and better-than-expected population growth there is little reason to expect any kind of price growth in these severly over-built market. 30,000 condos a year under construction in toronto- enough for essentially each family entering the region. Are none of these new canadians buying houses? Where will the renters come from? I defy anyone to paint a picture of how pricing can improve. Speculation will be topple the market shortly until the massive over-supply is absorbed.

 

[rbtaylor]

Re: Panel Discussion on Condos featuring Peter Clewes, Brad

By what metric?

Short term flip. Put down your 10% (some developers let you get in pretty cheap, with the remainder on closing) and get an assignment clause for a low fee.

Wait 3 to 6 months and flip the contract for about $15g above the contract price -- now below the current selling prices by the vendor. Congrats, on making 50% on your investment.


I've not tried this but there are a number of people who have several times. Now they're playing exclusively with profits. Even if they take a loss on the units now, they will still be ahead over the last 5 years.

 

[realestatejunkie]

Re: Panel Discussion on Condos featuring Peter Clewes, Brad

Walt-

Thank you for your response. You've made some valid points. Allow me to dissect a few:

I see little evidence of an "oversupply". New projects don't get built until they are at least 60% sold.

I submit that in a great many of the monster projects currently under development (cityplace, waterpark, mls, college park, etc.) a huge portion of that presale number eminates from the speculative buyer, particularly the foreign and typically offshore 'speculator refugee' who has been led to toronto by the clever brokerage firms who market these projects in places like asia and europe. IMO this is not REAL demand and merely creates an enormous potential to flood the market with either resales or rentals upon completion. With the huge bulge in completions slated for the second half of 2006 watch for the acceleration of this trend.

As far as population growth, the GTA continues to get 35-40% of Canada's immigration, and the federal govt. (both past and present) have not indicated that immigration will be reduced. We also benefit to some extent from internal migration within Canada, as some rural parts of the country remain stagnant or even experience population declines, while the cities grow. Toronto's economy is large, and diversified, and it would take a truly serious recession across many economic segments to set the city back significantly.

There is little doubt that the gta is the preferred destination of the bulk of new canadians. However, that is not a new trend and the population growth (approximately 75,000-100,000 people/year) has not come close to keeping up with the blistering pace of new condo construction. Furthermore, the buyers that may be priced out of the central toronto single-family market are being pushed into the 905 region- not back into the city core. Again, this is merely broker rhetoric suggesting that real demand exists for their product when in fact it is simply not the case. The bulk of the REAL buyers of these suites are existing renters in their mid-late 20's. A young family of 4 looking for a home to raise their children is not settling for a 600 sq. ft. 1+ den suite by the skydome.

To be sure, I am very bullish on the long term prospects for the city of toronto and in particular for the toronto real estate market. I would wager that in the very least toronto real estate should keep up with inflation over an extended period. Notwithstanding, however, I find the pace of new construction in this region alarming and cannot foresee how a near term over-supply driven price correction is not inevitable.

 

[Observer Walt]

Re: Panel Discussion on Condos featuring Peter Clewes, Brad

realestatejunkie: Welcome to the forum. I think you make a good point or two, particularly with regard to City Place. Unlike some others, I have not been overly impressed with this district. It seems barren and windswept to me, without much of a "neighbourhood" feel. I admit this may change as development proceeds, and particularly if they manage to get some more retail outlets, restaurants, etc. into the area. (Apparently some changes are also coming at the SkyDome oops Rogers Centre, which may help the area).

Having said that, I think you are overly pessimistic about the state of the condo market. I see little evidence of an "oversupply". New projects don't get built until they are at least 60% sold. This represents real sales, with a signed and enforceable Agreement of Purchase and Sale and with a substantial down payment sitting in the bank. Things are no longer being built on spec, as they were prior to the crash in the early 90s. The best of the new projects are selling in 6 months or less (eg., North tower of Maple Leaf Square virtually sold out in 4 months, with most prices >$450 / sq. ft.). If demand declines, new projects simply won't go ahead. The market will correct fairly quickly, before any significant oversupply develops. In this case a few developers may take a hit, particularly those trying to market less well-thought-out projects, but the market overall will still be fairly stable.

The big change in the real estate market over the past few years has been affordability. The typical purchaser can't afford a detached or semi-detached home in the central city any longer. The main option remaining for those wanting a central location is a condo townhouse or apartment.

As far as population growth, the GTA continues to get 35-40% of Canada's immigration, and the federal govt. (both past and present) have not indicated that immigration will be reduced. We also benefit to some extent from internal migration within Canada, as some rural parts of the country remain stagnant or even experience population declines, while the cities grow. Toronto's economy is large, and diversified, and it would take a truly serious recession across many economic segments to set the city back significantly.

Bottom line: the market may cool a bit (already has in some segments), but a crash is not in the cards.

 

[realestatejunkie]

Re: Panel Discussion on Condos featuring Peter Clewes, Brad

Short term flip. Put down your 10% (some developers let you get in pretty cheap, with the remainder on closing) and get an assignment clause for a low fee.

This sort of investment behavior is tantamount to rolling the dice at the craps table in las vegas. Our friends at the Bank of Canada gave the market a very generous but short-term gift by dropping borrowing costs to historic lows. Now that the trend has reversed don't expect a rise in condo values upon completion. Interest rates need not rise dramatically for this to occur- they simply have to stop falling. Look to the staggering slowdown south of the border for further evidence of such a fallout. Furthermore, the average new condo price has barely budged over the past several years. I supsect that it has actually fallen but due to clever disounting and incentives (ie free upgrades, years of free maintenance, etc.) the industry has managed to keep sticker prices up marginally.

 

[thx1038]

Re: Panel Discussion on Condos featuring Peter Clewes, Brad

shot i missed this event. how did it go?

 

[AlchemisTO]

Re: Panel Discussion on Condos featuring Peter Clewes, Brad

Just bought the new Final Fantasy album yesterday and it's got a song on it called "This Lamb sells Condos". Owen Pallett continues to be brilliant.

Here's a sample lyric:

Look! Over the treetops!
Newly conjured erections are making him a killing
And Richmond street is illing, so the graduates are williing
To buy into the pillage, now there is no hope for the village.