Condo Prices

[Phil C. McNasty]

Damn phone, it was a typo and it was supposed to say $700K.

But the question still stands - why buy a used/second hand condo for the same price you could get a new one? Especially when a ton of occupancy rates are nowhere near full on many buildings

Because of the location.

Its very hard finding a decent size, new condo downtown for $700K.
You might able to find a 500 sq ft shoebox, but you can forget about a 2-bedroom at that price.

If you go far into the suburbs you might find something nice for $700K though, but even thats getting harder these days

 

[Keebler Elf]

Just out of curiousity, what's a new condo in the downtown/condo alley area go for? Not talking super high end, just a normal new condo in 2017.

 

[Malika Fantasy]

average price being apparently 520k in April 2017
http://www.huffingtonpost.ca/2017/04/05/toronto-real-estate-prices_n_15826926.html

 

[doggystyle99]

How can people sell condos that are 5, sometimes 10 years old at such crazy prices considering how there are so many uninhabited units in the city and new units being built all over the GTA everyday?

Why would anyone buy a used condo for $70K when you can get a new one for the same amount?

Damn phone, it was a typo and it was supposed to say $700K.

But the question still stands - why buy a used/second hand condo for the same price you could get a new one? Especially when a ton of occupancy rates are nowhere near full on many buildings.

You can edit your original post

 

[doggystyle99]

A unit in an older condo with a good downtown core location is a lot less expensive than a new building unit, will often be larger, and has a solid maintenance history (maintenance fees have levelled off).

This is not true, maintenance fees for building majority of the times go higher as the building ages. And the more amenities any building has the more the maintenance will be.
Maintenance fees in newer condos are majority of the times lower than older buildings.
A unit which is older in the same general area of a newer building will be a lot less expensive but the newer building will appreciate a lot more in value and a lot more quickly than the older building hence why a lot of people by in newer buildings as an investment.
One can always check the Maintenance fee per square feet per month, of a new building to see what they are, Usually around the $0.50 mark is extremely good for a new building if it has a lot of amenities.

For illustrative purposes only:

You can plunk down $600k for a 2+1 bedroom, 2 bathroom unit in an older building, or $600k for a 1+1 bedroom, 1 bathroom unit in a new building. If you value space over newness then you might choose the former.

Again you get square footage but maintenance fees will be higher in an older building.

 

[Scarbarian]

So you're saying all new buildings are tiny? I thought every building will come with an assortment of spaces (some 1 bedroom, some 1+1, some 2 bedroom etc) so they can attract a variety of tenants.

I see people buying condos that are at least 5 years old near Yonge and College for example. They're not big but the selling price is the same, if not more, than what new condos in like the Bay and College area are asking for.

I'm trying to understand this whole real estate bubble but considering there are so many older buildings that are not occupied, and the fact that new buildings are being erected everyone in the downtown area, why would anyone pay premium pricing for a used building?

 

[doggystyle99]

Because of the location.

Its very hard finding a decent size, new condo downtown for $700K.
You might able to find a 500 sq ft shoebox, but you can forget about a 2-bedroom at that price.

If you go far into the suburbs you might find something nice for $700K though, but even thats getting harder these days

Excluding the new trend of high end hotel residences, there are a lot of decent size condos in the downtown core for $700K.
$700K will get you a 1000 sq ft condo in very good neighbourhoods like Liberty Village, Distillery District and even some King W area condos. Suburbs you can get a lot more for your dollar as long as you stay away from Oakville, Richmond Hill, Thornhill and Vaughan as those areas have become quite expensive.

 

[HOLLYWOODG]

Pre-construction prices just came out for a sub-par developer in Toronto known as Concord Adex. They are slated to build to monstrous condos at the northeastern corner of Spadina and Bremner.

A 1 bedroom on the 2nd floor costs $410,000. A 1 bedroom + den on the 2nd floor costs $510,000. A 2 bedroom on the 2nd floor costs $610,000.

There is a premium of $1,000 per floor.

This is VIP pricing offered only to select agents and by the time it goes public prices are estimated to go up 3-4 percent.

No cooling off of this market is in sight. Way to go Wynne!!!

 

[lighthouse boy]

You never could.

I visited here in 1998 and you could get a 1 downtown bedroom condo for $75K.

 

[Samranchoi]

There could be many reasons why individuals look to purchasing existing condominiums as opposed to new condos:

1. Location: an existing condo may be situated in a better location as compared to where a new condo is located (access to public transit, grocery stores, place of employment). Many existing condo buildings have direct access to subways and grocery stores providing non car owners easy access to things they require every day

2. New condos may not be ready for occupancy when the individuals want the units within a couple of months

3. For those purchasing as rental units, the unit may already be rented so the investor does not have to find a tenant

4. Brand new buildings are not necessarily better than existing buildings. Best to stay away from "all glass" construction as opposed to "brick and glass" buildings as the maintenance cost (and possibility of special assessments) of the former may be a lot higher in the future

5. Existing buildings may have better amenities than new buildings

6. Some buyers like to "touch and feel" what they are buying

7. You know for sure what your condo fee and property taxes are whereas for new construction you are dealing with projections. You will also know about the financial strength of the condo through status certificates and financial statements

8. Reputation of the builder. An existing building may have been constructed by a very reputable builder while some builders of existing buildings may not have a established reputation

9. For many, view is important. If you want to be downtown and want a "lake view", your choices are very limited to existing units.

There are many more reasons specific individuals may have when looking at condo units to purchase. Certainly if you are looking for a 1 bedroom or 1+1 unit, there are many units available for less than $700k.

 

[Smallcock]

Again you get square footage but maintenance fees will be higher in an older building.

This is untrue. The reality is counter-intuitive. Refer to: https://condos.ca/blog/breaking-news-toronto-condo-maintenance-fees-revealed/

The condos.ca website is a statisticians or data wonk's dream with regard to condos in Toronto.

 

[Smallcock]

A unit which is older in the same general area of a newer building will be a lot less expensive but the newer building will appreciate a lot more in value and a lot more quickly than the older building hence why a lot of people by in newer buildings as an investment.

Sometimes this is true. It all depends on whether you want cash flow or appreciation from your investment. Those seeking appreciation want to sell within 5 years and do not want to hold after the first 7-10 years when major repairs are usually needed (windows need replacing, elevators need to be replacing, etc.)

 

[Smallcock]

So you're saying all new buildings are tiny? I thought every building will come with an assortment of spaces (some 1 bedroom, some 1+1, some 2 bedroom etc) so they can attract a variety of tenants.

I see people buying condos that are at least 5 years old near Yonge and College for example. They're not big but the selling price is the same, if not more, than what new condos in like the Bay and College area are asking for.

I'm trying to understand this whole real estate bubble but considering there are so many older buildings that are not occupied, and the fact that new buildings are being erected everyone in the downtown area, why would anyone pay premium pricing for a used building?

Do you consider a 5 year old building as "old"?

e.g.

Options in Bay Street Corridor since you mentioned the area:

1) Unit that's 1 year old, 512 sq ft, (1 bed 1 bath), and costs $868k

https://condos.ca/toronto/u-condomi...86-bay-st-57-75-st-mary-st/unit-3008-C3779787


2) Unit thats 8 years old, 857 sq ft, (2+1 bed, 2 bath), and costs $788k

https://condos.ca/toronto/murano-38-grenville-st-37-grosvenor-st/unit-1803-C3795935

If you want space (say you want to have a small family or rent out a room for extra cash) and STILL pay $80k LESS than a smaller newer where there is only one bedroom (if someone lives with you, they're sharing your bed and bathroom), you might choose option 2.

 

[Smallcock]

3) If all you do want is a 1 bed 1 bath, you might opt for a unit that's 27 years old, and pay $470k rather than $868k for the new condo unit. That's a $400k difference and you still get a unit that's over 200 sq ft bigger (granted the condos fees are quite high in this building). https://condos.ca/toronto/minto-plaza-38-elm-st/unit-909-C3801496

 

[doggystyle99]

This is untrue. The reality is counter-intuitive. Refer to: https://condos.ca/blog/breaking-news-toronto-condo-maintenance-fees-revealed/

The condos.ca website is a statisticians or data wonk's dream with regard to condos in Toronto.

It is correct, as I stated in my post MAJORITY of condos maintenance fees will increase over time hence the reason why maintenance fees in older condos will be higher than newer buildings (again in most cases). Even the article you linked says that (read post #4) and they use 1 case the Toy Factory Lofts as an example of condo fees going down in a couple of consecutive years. Toy Factory Lofts maintenance fees have been on the rise since 2015 and are the highest they ever were again proving my point.
I don't know of anyone whose maintenance fees have gone down over the years consistently, it might go down one year, two years or even 3 years by very small amounts but usually following years it does increase and usually by significant amounts as buildings and amenities age they need more maintaining and that costs money. I have never owned a condo that has had the maintenance fees reduced year by year.

BTW Condos.ca is not a statistician for the condo industry in Toronto, they get their information from the Toronto Real Estate Board (TREB) and anything they write on the website is their own opinion, the information about the maintenance fees they would have to get from the Condominium Corporation in the Status of Certificate. The article you had linked was written by Carl Langschmidt who is a real estate agent and owns that website.

 

[doggystyle99]

Sometimes this is true. It all depends on whether you want cash flow or appreciation from your investment. Those seeking appreciation want to sell within 5 years and do not want to hold after the first 7-10 years when major repairs are usually needed (windows need replacing, elevators need to be replacing, etc.)

Again the statement I made will be true in the majority of cases in the GTA and has been so in the last 20-25 years. If you want quicker appreciation you would need to buy pre construction as that will in majority of cases will have the more rapid appreciation.

 

[nottyboi]

How can people sell condos that are 5, sometimes 10 years old at such crazy prices considering how there are so many uninhabited units in the city and new units being built all over the GTA everyday?

Why would anyone buy a used condo for $70K when you can get a new one for the same amount?

Used ones are probably larger and have some nice renos done to them. Plus the record of the building is known vs the new ones that are going up that can be utter crap.

 

[doggystyle99]

Damn phone, it was a typo and it was supposed to say $700K.

But the question still stands - why buy a used/second hand condo for the same price you could get a new one? Especially when a ton of occupancy rates are nowhere near full on many buildings.

What buildings occupancy rate are you talking about??

 

[Samranchoi]

It is correct, as I stated in my post MAJORITY of condos maintenance fees will increase over time hence the reason why maintenance fees in older condos will be higher than newer buildings (again in most cases). Even the article you linked says that (read post #4) and they use 1 case the Toy Factory Lofts as an example of condo fees going down in a couple of consecutive years. Toy Factory Lofts maintenance fees have been on the rise since 2015 and are the highest they ever were again proving my point.
I don't know of anyone whose maintenance fees have gone down over the years consistently, it might go down one year, two years or even 3 years by very small amounts but usually following years it does increase and usually by significant amounts as buildings and amenities age they need more maintaining and that costs money. I have never owned a condo that has had the maintenance fees reduced year by year.

BTW Condos.ca is not a statistician for the condo industry in Toronto, they get their information from the Toronto Real Estate Board and anything they write on the website is their own opinion. The article you had linked was written by Carl Langschmidt who is a real estate agent and owns that website.

Condo conversion projects are totally different than "normal" new condo buildings. There are some lenders that will not lend in some condo conversions no matter what. I have seen many instances where issues have occurred soon after the building registered and unlike brand new condos, ONHWP (Ontario New Home Warranty) is not available for condo conversions. There is one condo conversion where the roof was deficient which resulted in a lawsuit against the builder and huge funds to fix the problem. Not only did the monthly condo fees increase but a large special assssment was applied to each owner. Problems also happen with totally new condo buildings but ONHWP coverage is available to protect the condo owners.

 

[doggystyle99]

Do you consider a 5 year old building as "old"?

e.g.

Options in Bay Street Corridor since you mentioned the area:

1) Unit that's 1 year old, 512 sq ft, (1 bed 1 bath), and costs $868k

https://condos.ca/toronto/u-condomi...86-bay-st-57-75-st-mary-st/unit-3008-C3779787


2) Unit thats 8 years old, 857 sq ft, (2+1 bed, 2 bath), and costs $788k

https://condos.ca/toronto/murano-38-grenville-st-37-grosvenor-st/unit-1803-C3795935

If you want space (say you want to have a small family or rent out a room for extra cash) and STILL pay $80k LESS than a smaller newer where there is only one bedroom (if someone lives with you, they're sharing your bed and bathroom), you might choose option 2.

3) If all you do want is a 1 bed 1 bath, you might opt for a unit that's 27 years old, and pay $470k rather than $868k for the new condo unit. That's a $400k difference and you still get a unit that's over 200 sq ft bigger (granted the condos fees are quite high in this building). https://condos.ca/toronto/minto-plaza-38-elm-st/unit-909-C3801496

Comparing a condo on Elm St at Yonge & Elm St to a condo on Bay St at Bay & Charles St is comparing apples to oranges. One is in Yorkville and the other one is Yonge and Gerrard.