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And now to the main:
If in 1999 we saw prices at $200 PSF, by 2007 $400 PSF was the average downtown. We’re looking at value doubling in 7-8 years, or 9% average increase per year, with inflation at 2-3%.
Not a bad investment, considering it is useful: you can live in it and maintain or even upgrade it as you wish, or you can rent it out and let someone else live in it while you’re waiting for appreciation to repay your investment (which is not your purchase price, it’s the downpayment or the interest on such) and then some.
So in 2007 to 2008 our 700 sq. ft. condo now costs approx $280,000, and parking at $25,000 to $35,000. Makes sense? it does to me. if you look anywhere in the King West, Liberty Village, Queen to Carlaw, you’ll find similar asking prices. Go to Young and Bloor or King and Spadina, and you’re looking at $500 – $1000 PSF. Yes, some are luxury buildings but you get my point, right?
So now what? two main factors often forgotten in the always heated Toronto Condos arguments are:
(1) Inventory Levels: we’ve probably added +150,000 residential units to the GTA in the past 10 years alone. While now they are all full and occupied, a steady influx of skilled, payable labour coming for guaranteed jobs is required to continue this momentum.
(2) Inventory Type Change: how many of the new +150,000 units sold and built are condos? my guess is that quite a few, downtown 90% or more, condo townhomes make at least half of new builds in semi-suburbs (Mississauga, Markham, Richmond Hill and Thornhill), and we get further away from the urban areas you’ll see more semis and detached homes (along the 400, for example).
But here at UrbanRealty.ca we deal with Urban spaces, and that to me says CONDOS! There is simply no more land left and unless we build up we’ll destroy the little land we have left and be asked to pay through the nose. So condos are here to stay, and anyone who wants to tell me otherwise please put money on the table before calling, cause I’m going to win this bet.
Condos, people, is where we’re at. There is no magic carpet with homes on new created land in the Ontario Lake coming anytime soon. This is not Dubai. Buy a Condo now if you wish to live downtown. End of story.
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© All Rights Reserved Yossi Kaplan 2008.
As always, looking forward to your calls and emails,
Yossi Kaplan, MBA
Harvey Kalles Real Estate Brokerage LTD.
416.441.2888 x 678
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