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Is the condo market saturated in GTA?

Uzo

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Jul 30, 2002
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Looking to purchase another investment condo but its been a few years since I've decided to do this...

I have been out of the country for a few years and its been hard to focus on the local trends in the GTA but what are the latest projects (pre-construction) releases that are catcahing some positive buzz?

I am looking for a starter condo but maybe in an area that is in demand so I can flip for a smaller return in a short period (want to sell before its fully built).

Some condo projects in downtown seem to be holding some vacant units direct from the builder while others are trying to sell private for higher, is this happening GTA-wide or is is localized to those supersaturated areas??
 

Svend

New member
Feb 10, 2005
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No one really knows.
Personally I wouldn't get in to speculate on the very short term, the real estate selling fee alone would be a gamble to recover.
 

Uzo

Member
Jul 30, 2002
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The units I have so far I scooped up just before the condo market began to rise...2001 was theyear I last purchased a condo....all the units are holding tenants but I see that renting has its downfalls...apart from the obvious vacant period, I'm having issues with the "wear-and-tear" of the condo...I know things get scuffed and items need to be replaced over time, but when i decide to sell any of these units for a profit, I'm going to have to do some repairs and cleanups which for me seems like a large hassle and additional investment to my already large gamble...

I talked to a few friends who apparently made a killing on those condos at the Bayview/401 area by putting the 10%down and selling before they even got the keys to the units...I dont know what "a killing" is to them...but that thought has sparked my interest...
 

LancsLad

Unstable Element
Jan 15, 2004
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In a very dark place
The Condo market is pretty much like the stock market. If you really want to mae a risk free " killing" the only way is to be a broker.

The downfall of many of the new condos is going to be the sinking fund in the future. To keep montghly fees as low as they can I'mm proposing that there will be plenty of shortfalls in the future. I actually own in a luxury building downtown but only because thats where my son insisted for school. To me there just seems to be too much hype currently.
 

mmouse

Posts: 10,000000
Feb 4, 2003
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Uzo said:
I talked to a few friends who apparently made a killing on those condos at the Bayview/401 area by putting the 10%down and selling before they even got the keys to the units...I dont know what "a killing" is to them...but that thought has sparked my interest...
I'd be interested in the true calculation of this "killing" too. Most condo purchase deals make you put down 15% in the first 60-90 days. Then you put down another 10% at occupancy, then the balance (75%) at final closing.

If you want to reassign the purchase agreement to someone else (i.e. flip) you need to pay the builder a fee, usually $2000-$5000. Some builders will not allow you to reassign at all, e.g. Tridel.

I'm guessing your friends bought one of the Daniels condos at Bayview & Sheppard? If so I believe Daniels charges $4000 for reassignment.
 

Esco!

Banned
Nov 10, 2004
12,606
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Toront Ho
I'll get flamed for this but its IMHO that we could head for a market collapse one of these days.
Way too many condo buildings going up for my liking.

But if we do go into a recession it'll be a great time to buy
 

DATYdude

Puttin' in Face Time
Oct 8, 2003
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Esco, what else don't you like?

So we're headed for a downturn in the condo market because there's way too many for your liking???

Apparently one of the signs of a unhealthy housing market is too many investors, and it's true that a lot of the condo units are being bought by investors. Also, having too many renters in a building makes it less attractive to buyers who want to live there, and they'll spend their money elsewhere.

If you want to sell your units before construction is complete, assuming you CAN and will pay the premium if required, you may also be competing with the builder who may have unsold units.

Also keep in mind that you'll be paying GST on the purchase but when you go to sell you may not be able to recover what you paid, assuming your competing with the builder.

IMO the key is location. Get near a subway if you're looking at mid-priced units, get near recreation and amenities if you're looking at high-end stuff.

OH, also it's important to choose a good builder (probably more important if you're planning to live there).
 

Esco!

Banned
Nov 10, 2004
12,606
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Toront Ho
DATYdude said:
So we're headed for a downturn in the condo market because there's way too many for your liking???
Yes, I'm not sure if the demand can keep up with this seemingly endless supply.
Thats all I'm saying
 

fun-guy

Executive Senior Member
Jun 29, 2005
7,277
3
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The condo market will not collapse, there way too many other strong economic indicators that are keeping it in check. The market will cool off, that's for sure, but no collapse. A correction is always inevitable, but nothing drastic. If you sell during the correction because you can't carry it, then don't buy now. You have to carry it through the next cycle and you will be rewarded.

Another thing, do any of you have any idea what a downtown condo costs in New York, London, Paris, Rome, etc.. Toronto is a joke at how low the condo prices are relative to international great cities, which Toronto is finally being recognized now by international investors. That's why you are seeing the Trump, Ritz, 4Seasons, and soon to be announced the Shangra La, the most luxurious hotel/condo tower to be built in Toronto, all being built in Toronto by international investors. We are so undervalued relative to the international market. I personally invest in the higher end condos in the downtown market, Yorkville is my first preference, followed by the Theatre District and on the waterfront. Can't go wrong.
 

mmouse

Posts: 10,000000
Feb 4, 2003
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Condo investing really pushes your buttons doesn't it, mr ontario.

The opportunities for making money from condos may not be nearly as good as they were a few years ago, but they still exist. If you don't know how - that's your problem.
 

Guy7

Banned
Feb 18, 2004
2,183
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Turoro, Nova Scotia
Condo Market

These days due to heavy building of Condo Buildings in GTA/Mississauga, the market has saturated very badly, & now with Prime Rate over 5.25% it is going to be more harder for Condo Builders to sell their units at faster pace what they were doing since last couple of years. In all newly constructed Condo Buildings, the contructors/owners are eargerly looking for buyers to buy their units, so in the present trend, it is not at all advisable to invest in a condo for a short term, it would be rather difficult for u to even take out your original investment, when u go to sell your condo unit after a short term
Condo Market for 2~3 yrs would remain very soft as far as its appreciaiton is concerned, rather some are available at cost price or even at a lesser price these days. even the new housing market fell in February 2006 by 10% & the pace for construction of new houses have also slowed down considerably.
Rather invest your hard earned funds in Mutual Funds or if u want less risk in Long term Non-Callable Bonds which gives dividend or inrest between 4.5% to 6.10% & u can get your intrest bi-annually directly into your account without any hassele what so ever. Today Tim Horton's shares were the hottest buy in TSX.
 

mmouse

Posts: 10,000000
Feb 4, 2003
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Ah yes, Cityplace has a special place in your heart for some reason. Get burned did we?
 

mmouse

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Feb 4, 2003
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I don't know much about Cityplace. Are you trying to say it's a bad investment or a blight on Toronto?

All I'm saying is, with the right information and timing, some condos can generate a fine return, even today.

And, um, who's being personal here?

ontario said:
What a fucking ignorant statement! ... Bunch a fools! Stop following the fucking herd! ...! don't be a fool!
 

mmouse

Posts: 10,000000
Feb 4, 2003
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For example the unit I bought 1.5 years ago, if I were to sell it today, I'd see about 40-50% return (after agent fees & taxes). But you are right, I don't think you can expect that kind of return on a condo bought today.
 

fun-guy

Executive Senior Member
Jun 29, 2005
7,277
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Thank goodness for guys like Ontario, just makes more money for the ones that know what they're doing. You don't know who I am and I don't expect you too, but I just shared some general info that I'm privy to as I have been flipping condos since the mid 80's and have been successful, in fact I only lost money twice, once in VR and once in AB, both in the early 90's. Never lost money in TO. The point is you have to know what you're doing, be on the inside, and you'll do extremely well. I gave you a comparison of international markets so you guys can open your eyes at what's happened around the world over the last several years, not that Toronto is identical today, sheesh, but TO is following in the same footsteps as the other international centres. It doesn't really matter what you think Ontario, it's what in my bank account that I worry about.

btw Mouse, I just sold a condo in downtown TO after buying a pre-construction unit and grossed 62% on my downpayment. You can still expect high returfor on a condo today, it's not out there to the average Joe, it's who you know, let's leave it at that. Have a nice evening.:)
 

Maxie

New member
Feb 6, 2006
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DATYdude said:
Apparently one of the signs of a unhealthy housing market is too many investors, and it's true that a lot of the condo units are being bought by investors.
A third are being bought buy speculators apparently.

mmouse said:
I'm guessing your friends bought one of the Daniels condos at Bayview & Sheppard?
I've never seen a developer boast like that about being sold out, the buildings look awful and overpriced. I guess it's the location.

Sukdeep said:
Trump towers? Word is, it's dead. Not enough buyers. Pack it up, going home.
"The condo tower Alexander Shnaider is building in Toronto with Donald Trump, advertised as the tallest in Canada, has stalled amid slow sales; has yet to break ground."
 

fun-guy

Executive Senior Member
Jun 29, 2005
7,277
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Saturday's Toronto Star reports that 60% of the Ritz-Carlton are already 60% sold out. (135 suites) The condo/hotel concept with higher price tags seem to attract the wealthier baby boomers looking for conveniences. Urbanation, a quarterly report tracking Toronto condo market stated "The economy is doing well, Toronto has matured and is evolving into a world-class city".

The Star further reported the Trump Tower will have 147 condo suites priced at $895,000. It is targetting the world traveller, affluent people that want amenities at their doorstep. Those of you that have posted that Trump sales are slow, can you please quote your source?

btw, I have talked to several developers with new downtown buildings that are under construction or in occupancy mode and the consensus is that about 20% are speculators and 80% are end users. Although not scientific, this has been consisitent as I've questioned developers over the past couple of years.
 

Maxie

New member
Feb 6, 2006
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According to the Post 50% of the Condos in downtown Toronto are owned by investors who don't live in them.
 

lamwi

Member
Sep 2, 2003
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Scarborough
I think Toronto will be cooling off in the next few years. I am not sure if the price will drop or hold but I know the codo fee and property tax will goes up.

Toronto will also need to face the competition of Calgary and Vancouver. I see more opportunity in the west this day and the demand will increase in the western provices and decrease in Ontario.
 
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