Three Questions

[ecsider]

Here's a little info: I'm on the hunt for a condo (not for investment-but to live). I've done some research but I would love to hear some of your thoughts to my questions. I'm leaning towards a resale unit.

1. I keep hearing about the benchmark price of $350 sq. ft for a condo unit. Can someone pls tell me the basis for this benchmark. Are there are different benchmarks for different parts of the city?

2. if you have all the time in the world to buy a condo unit, would you buy now or would you wait until 2007 on the assumption the new supply of units will bring average prices down next year?

3. Nevermind the location of the unit, but what do you think has better resale potential, a 1+1 or 2-bdrm unit?

These questions may be broad so I can clarify if necessary

many thanks

 

[thx1038]

2.5 answers...

1. I can't naswer this one.

2. I don't think its supply that will bring prices down. mostly interest rates.

3. theres seems to be a ton of 1 bedrooms. to the most part 2 bedders are have better potential.

just my opinion...

1038

 

[Observer Walt]

As a rough and ready benchmark, for one-bedroom units in the downtown area (about 550 to 600 sq. ft.), expect to pay in a range of $325 to $350 per square foot, on lower floors of "typical" newer buildings. A premium is usually added for units on higher levels. Sometimes this is justified (if there is a decent view), other times, IMO, it is not, where there is no view and being on a higher floor means mainly spending more time on the elevator.

Location does matter, and benchmarks are lower in areas away from downtown, with the exception of Willowdale along the subway. "Verve" at Sherbourne and Wellesley was selling 1 BR units a few months ago at $311 per sq. ft. for a 575-sq. ft. unit. "Viva", a mid-rise building on Bathurst near Sheppard, was selling a 605-sq.ft. unit at $304 per sq. ft. about a year ago. "Nuvo 2", in the Tridel complex at Dundas and Kipling, was selling a 557-sq.ft. 1 BR unit a few months ago at $298 per sq. ft. Phase 2 of "One Sherway", adjacent to Sherway Gardens, was selling a 583-sq.ft. 1BR unit at $287 per sq. ft. Most of these prices are from within the past nine months.

Several buildings on the market within the past year in the Mississauga City Centre area have had 1 BR units in a range of $290 to $320 per sq. ft., although there are also some which have been higher.

Of course units in quite luxurious buildings, or those which would like to portray themselves as such (hello, "Uptown"!) can be substantially more.

Question 2: I wouldn't wait; I see no evidence that the supply / demand balance will be much different a year from now than it is now. Likewise I don't see much change in interest rates over the next year. Commentaries I have seen indicate that current economic conditions in Canada do not seem to be pushing rates either higher or lower. The string of increases over the last couple of years seems to have ended, for now at least.

Question 3: Sorry, I really don't know.

 

[ecsider]

thanks for your input

 

[shmoopie nhi]

1. I like Walt's answer to #1

2. I would buy now as well. Something I think people tend to forget with the supply/demand argument is that if interest rates go up, fewer builders will build as well. You would start to see projects get cancelled if they can't be sold, before they ever hit the resale market.

3. I think this depends on layout - room dimensions are very important. I've seen 2 bedroom suites that are really 1+1, and 1+1s that could be 2 bedrooms. The only difference is that a 2 bedroom unit will have a closet, whereas most dens won't, and this extra storage space could be a selling feature.

 

[maxy505]

I'd wait. Although Toronto's real estate market isn't in a huge bubble like much of the US, over the past 10 years so many people have been buying that prices are significantly up. Also there aren't a lot of people ready to jump into the market if interest rates fall, so in the event that rates fall I don't think you will see the typical corresponding rise in prices.

To top it off -- I expect a recession and real estate downturn in the US will cause prices in Toronto to fall, even though we're not truly part of their bubble.

On the other hand I'll be buying as soon as all this happens, so if you want to get in there now and heat up the market a bit, go for it!