E-Condos - Yonge and Eglinton - ADVICE PLEASE

[angiec27@ymail.com]

Pre-Vip Launch today for E-Condos at Yonge and Eglinton by Bazis International. Saw this on Kijiji. Any thoughts on this? My boyfriend wants to buy four Southwest Facing condos on the 53rd to 57th floor as his analysis of the project is that though he will be paying slightly over $500,000 for a a two bedroom plus den is that by the time the building is registered in fall 2017 these condos will be approaching $1,000,000 if not over it. I'm shit scared because we're thinking of having kids in a few years and he's already bought 8 condos in the downtown core that are in pre-construction. Do you think this is a good investment? I think the market may slow down in 2017 and the condo may actually go down in value!!!

http://toronto.kijiji.ca/c-real-esta...AdIdZ385055608

http://dl.dropbox.com/u/47345891/E%2...o_brochure.pdf

 

[TeasePlease]

$500,000 to $1,000,000 in 4-5 years? Really?

If that's his analysis, is he expecting to sell the units?

If he believes that prices will be that high, does he think there will be enough buyers at that price point, or is it more likely there will be renters in a hyperinflated real estate market?

 

[fun-guy]

he will be paying slightly over $500,000 for a a two bedroom plus den is that by the time the building is registered in fall 2017 these condos will be approaching $1,000,000 if not over it. I'm shit scared

You should be, unless of course his net worth is several millions and if the market corrects itself it won't efect him that much, however if he's buying on borrowed funds, I'd be shit scared as well.

btw, I've been doing this for over 20 yrs and today's market is tenuous. Tread carefully.

 

[EntertainmentMan2000]

if your boyfriend is smart enough he'll buy 3 of them...sometimes you have to go against others advice because of the fact that they will mislead you in order to gain more for themselves

 

[borntosoon]

The condo market is on the verge of a correction, and those condoes probably won't be worth a million each in 2017, perhaps much less. However, if he is putting down 5% to hold them, $25,000 on each for a total of $100,000, and can sell the right to buy them at $600,000, he will have made 400% on his investment. This is much more likely than his million dollar dream.

 

[angiec27@ymail.com]

Actually, you have to put 20% within a 2 year period on each condo! He's angling to hold on for two years and sell though you may have a better strategy! How does your strategy work?

 

[TeasePlease]

Read the fine print on the purchase contract for transfers. May be a fee or restriction involved.

Maybe I missed the memo, but what's the logic on the market floating 2+1 condos for $1mm in a few years?

( I certainly hope so. I live in the area, so by extension, my house should be worth $5mm by then!)

 

[Tangwhich]

Buying pre-construction condos these days is no longer investing, it's gambling. Your boyfriend is out of his mind.

 

[cb123]

I recently bought a pre-construction condo in the city, and while I'm waiting for it to be built, it was purchased with the intent of living in it.

For what it's worth, Toronto is safer than a lot of other places in the world (either in terms of crime, or in terms of potential for natural disasters). People are still coming here and buying condos, much as I dislike what they've done to almost price something "reasonable" out of most everyone's reach.

 

[Brandon123]

Great investment.

 

[Sid1234]

Please buy away I am waiting for the condo correction so I can swoop in
I think small houses and a reno is the way to go right now. A 1500Sq ft house with basement is going for less than a condo right now.
Fix and flip

 

[wetnose]

Insanely bad idea to invest in a condo right now...because over the next 2-3 years, a LOT of new inventory is coming on the market which WILL depress the condo market. Wait till the dust settles, then decide again.

 

[babyfinsta]

Pre-Vip Launch today for E-Condos at Yonge and Eglinton by Bazis International. Saw this on Kijiji. Any thoughts on this? My boyfriend wants to buy four Southwest Facing condos on the 53rd to 57th floor as his analysis of the project is that though he will be paying slightly over $500,000 for a a two bedroom plus den is that by the time the building is registered in fall 2017 these condos will be approaching $1,000,000 if not over it. I'm shit scared because we're thinking of having kids in a few years and he's already bought 8 condos in the downtown core that are in pre-construction. Do you think this is a good investment? I think the market may slow down in 2017 and the condo may actually go down in value!!!



http://toronto.kijiji.ca/c-real-esta...AdIdZ385055608

http://dl.dropbox.com/u/47345891/E%2...o_brochure.pdf

your boyfriend is a moron if he thinks those units will be worth $1,000,000 in 2017. given that the unit is priced at $500,000, i assume the size is less than 1,000SF. probably less than 900SF. At $1,000,000, the $/sf is priced similar to a condo in yorkville, that being in excess of $1000/sf. lots of projects openings downtown in the last couple of months have failed to meet builder's expectations in terms of demand. how many people or DINKS today can afford $1MM for a two bedroom? Will income growth over the next 5 years of the average person match the supposed growth in the unit price? 3% interest rate today is a lot different that what interest rates will be in 5 years when he thinks he can resell. Dont get me wrong, i think condos are a good investment if u are living in them long term but the easy money in just buying units and looking for 10% annual growth in prices are over.

 

[angiec27@ymail.com]

Great investment.

The price per square foot is between $630 to $750 for this project right now... The million dollar question is whether the price will exceed $1,000 per sq foot by 2018 to 2020.

Thanks so much for everyone that contributed. I'm so confused right now! 10 day recission period starts today and my boyfriend went ahead as planned and bought three 2 bedroom condos (one that was bought in my name and the other of which was bought in my mom's name because you can only purchase one condo in the development during the pre-VIP!)

 

[Tangwhich]

The price per square foot is between $630 to $750 for this project right now... The million dollar question is whether the price will exceed $1,000 per sq foot by 2018 to 2020.

Thanks so much for everyone that contributed. I'm so confused right now! 10 day recission period starts today and my boyfriend went ahead as planned and bought three 2 bedroom condos (one that was bought in my name and the other of which was bought in my mom's name because you can only purchase one condo in the development during the pre-VIP!)

There's an expression in investing, the pigs get slaughtered. Your boyfriend has gone balls deep into something that has clearly peaked and cannot realistically go up (and all signs point to at best a levelling out, but more likely a correction). If I were you I would get out of these deals immediately. If you don't I predict your boyfriend will lose massive amounts of money within the next two years.

 

[d_jedi]

Housing is unaffordable as it is for most people (it only appears affordable because of historically low interest rates).
Have people learned nothing from the sub-prime mortgage crisis down South?

Hint: Many of the people being foreclosed on are either investors or non-sub-prime buyers who are under water.

The bubble will pop, and for those who buy now, with the expectation that housing always rises.. the result will be bloody.

 

[angiec27@ymail.com]

There's an expression in investing, the pigs get slaughtered. Your boyfriend has gone balls deep into something that has clearly peaked and cannot realistically go up (and all signs point to at best a levelling out, but more likely a correction). If I were you I would get out of these deals immediately. If you don't I predict your boyfriend will lose massive amounts of money within the next two years.

Thanks for your advice. I think you have a point but it will be in 2018 that we may go belly up and that's my fear. The building more than likely will not be registered until 2018. The next two years will not be an issue. He's playing the fact that 6 years from now prices will be dramatically more than they are right now.

 

[elassowipo1]

LOL, looks like the OP already made her purchase but some of my thoughts nonetheless:

1. Over the previous 5 year and 10 year periods the average price increase in Toronto has been between 6-7% per year. In order to double your investment in 5 years, basic arithmetic dictates that you need an annual price increase of roughly 20% per year. 6 to 7% per year already signals a really hot market, a tripling of this rate of increase would would be highly unlikely (I see very few drivers for this) and almost unprecedented barring a black swan scenario (i.e. massive inflation, currency revaluation, etc). In fact the 6-7% increase we have been seeing have already been well above historical norms, which is roughly on the order of inflation+0.7% (Case-Shiller).

2. Pre-construction condos used to be sold at a discount to market price as a sort of yield or risk premium in return for putting forward a deposit for future delivery of a product (your condo) as well as the risks associated (i.e. delays etc.). Most pre-construction condos are now sold at or even slightly above market price. In effect, you are assuming all the risks without receiving any risk premium in return, this does not make for a rational investment.

3. Real estate can be a great investment and I personally have investment in commercial real estate both in Canada and abroad. However, I strongly feel that given current valuations and macroeconomic conditions, condos would make for a poor investment. If you are intent on allocating your assets into real estate, there are far better options out there from a risk/return standpoint.

Cheers

 

[Tangwhich]

He's playing the fact that 6 years from now prices will be dramatically more than they are right now.

I wonder how many people said something like that in early 1989?

The US market tanked about 4 years ago and in parts still hasn't hit the bottom. If there's a correction in Canada in the next year or two, it's incredibly optimistic to think that in 6 years prices will not only recover but rise to "dramatically more" than what they are today.

Traditionally the average house is around 3.5x average income. What's in Toronto now, closer to 7.5x? Unsustainable. In Vancouver is about 10x and there are parts of BC where the real estate market is already showing clear sings of a bubble pop (lots of listings, far fewer sales, lots of price reductions, etc). It will infect the rest of the country sooner or later.

 

[Allejandro2011]

Pls pls pls if anyone who truly believes that there is going to be a correction provide the reasons why in your opinion that would definitely take a place?