Baby, we got a bubble!?

[interested]

$2250 is unrealistic in my view.

I am guessing it is a 2 bedroom. Rents for 2 bedroom units in the core are on average $2.00-2.50 with most around the $2.25/sq.ft. mark.

Regent Park has the issue of its reputation. If one is in the camp that believes that it will turn around and be a desirable area going forward, your purchase likely will turn out to not only be good but great. However, you are being priced somewhat for the risk that you are taking.

If it maintains its reputation, then upside potential on valuation will be limited and move with the market but to aa much lesser degree.

As well, I believe when $30/sq.ft. was being quoted that was annualized, so $22500/year, not $2250/month. Given that there are 12 and not 10 months/year is $1875/month.

This is closer to the $2.25 x 750/month or $1687.50 or even $2.00 as no parking or amenities which would be $1500.

My suspicion is that you are looking at $1600/month if it is a 2 bedroom because it is Regent park maximum. No parking and amenities may result in $1500. That is my guess.

If it is a 1 bedroom den, then maximum would be $1600 not in Regent Park, so I would think that you would be looking at $1500 or maybe even $1400-1450/month as no amenities or parking. (1 bedroom dens in the core would be between $2.25 to $2.50/sq.ft. but with no parking and the Regency Park issue, it could be less and closer to $2.00 I would think.)

This is just my guess. If you can sell for a reasonable profit, I think personally I would sell and not take more risk forward, both market risk and area risk. That would be my approach.

Anyhow, good luck whatever your decision.


An apology to all those above. I responded without seeing all those other responses which I think are all fair.
The gist of all of us is the same. $1400 to 1600 max with $1500 seemingly realistic.

 

[interested]

Yeah, $30 per sq. ft. represents rentals of higher end units.

When I bought my condo, I picked one with the least possible amount of amenities and in King West before the full yuppification, simply because I didn't want to pay for those amenities or the yuppification tax. Rentals in the complex were comparatively cheap too, not surprisingly. Meanwhile, my friend on the waterfront had a condo only marginally larger but with a 270 degree lake view, squash courts, contiguous indoor and outdoor pool, downtown shuttlebus, full gym, rental apts for visitors, you name it. I'd guess the rentals there were $500 more per month, 10 years ago.

Eug, I think this is a bit of a bit of an unfair comparison. I would say the waterfront with a lake view would account for $150-200 more than downtown. Then, while I think King West is great (and I too bought in 2008 though not as smart as you so early in Liberty Village a unit to be built)( 2 bedroom with 2 bath with 100 sq.ft. balcony, parking and locker with every amenity for $410/sq.ft. to be completed which I figure will rent for $1800 or so), this is not really the downtown core and as such I think will get about $150-200/sq.ft. less than the same thing East of Spadina and West of Yonge. So, I think that most of the difference can be accounted for with these 2 numbers factored in.

 

[Eug]

Eug, I think this is a bit of a bit of an unfair comparison. I would say the waterfront with a lake view would account for $150-200 more than downtown. Then, while I think King West is great (and I too bought in 2008 though not as smart as you so early in Liberty Village a unit to be built)( 2 bedroom with 2 bath with 100 sq.ft. balcony, parking and locker with every amenity for $410/sq.ft. to be completed which I figure will rent for $1800 or so), this is not really the downtown core and as such I think will get about $150-200/sq.ft. less than the same thing East of Spadina and West of Yonge. So, I think that most of the difference can be accounted for with these 2 numbers factored in.

Heh. Got mine for for less than half of that ($204) per sq. ft. in 1999. That included a connected parking spot - shared 2-car garage with neighbour, and a 200+ sq. ft balcony. East of Bathurst too.

How times have changed...

 

[asiancolossus]

$2250 is unrealistic in my view.

I am guessing it is a 2 bedroom. Rents for 2 bedroom units in the core are on average $2.00-2.50 with most around the $2.25/sq.ft. mark.

Regent Park has the issue of its reputation. If one is in the camp that believes that it will turn around and be a desirable area going forward, your purchase likely will turn out to not only be good but great. However, you are being priced somewhat for the risk that you are taking.

If it maintains its reputation, then upside potential on valuation will be limited and move with the market but to aa much lesser degree.

As well, I believe when $30/sq.ft. was being quoted that was annualized, so $22500/year, not $2250/month. Given that there are 12 and not 10 months/year is $1875/month.

This is closer to the $2.25 x 750/month or $1687.50 or even $2.00 as no parking or amenities which would be $1500.

My suspicion is that you are looking at $1600/month if it is a 2 bedroom because it is Regent park maximum. No parking and amenities may result in $1500. That is my guess.

If it is a 1 bedroom den, then maximum would be $1600 not in Regent Park, so I would think that you would be looking at $1500 or maybe even $1400-1450/month as no amenities or parking. (1 bedroom dens in the core would be between $2.25 to $2.50/sq.ft. but with no parking and the Regency Park issue, it could be less and closer to $2.00 I would think.)

This is just my guess. If you can sell for a reasonable profit, I think personally I would sell and not take more risk forward, both market risk and area risk. That would be my approach.

Anyhow, good luck whatever your decision.


An apology to all those above. I responded without seeing all those other responses which I think are all fair.
The gist of all of us is the same. $1400 to 1600 max with $1500 seemingly realistic.

Thanks interested for your opinion. Unfortunately, mine is only a one bedroom, it is a HUGE one bedroom mind you, for 750 square feet, but in addition to the lack of amenities and lack of parking, this will definitely limit my rent potential.
On the plus side, it is considered a condo townhouse, with three floors, the two floors above me are 2 and 3 bedrooms but they would run in the 400's and I couldn't afford that and wouldn't want to take that kind of risk.
There are only 51 units such as these so I'm hoping that there aren't too many of them, unlike in high rises. Hopefullly this will yield me a slight premium.
1300 to 1500 is the range I'm looking at.

 

[interested]

I suspect $1300 is low. $1400-$1500 based on the footage at todays rates I would think may be realistic.
But you really would need to look at comparables and then you would have a better idea.
Good luck Asiancolussus

 

[interested]

Heh. Got mine for for less than half of that ($204) per sq. ft. in 1999. That included a connected parking spot - shared 2-car garage with neighbour, and a 200+ sq. ft balcony. East of Bathurst too.

How times have changed...

Yes thank you for making me really jealous Eug.
Joking aside, that is great. I already am quite happy because I understand prices are closer to $480-500/sq.ft. now for what I bought.
I won't be selling anyhow unless situation changes drastically. Family use or for a rental. I am not worried about making a killing and at todays rentals I am happy with the very mediocre return if it is rented in the end. I think I have quite a cushion already and if it drops to $350/sq.ft. which I would doubt, I can survive that too.
Interestingly, $204/sq.ft. is a very good price. I bought in 2001 summer in the core at $280/sq.ft. with no parking a 1 bedroom. So assuming $40-50 was the location difference, that still means that there was $25-30 per sq. ft. difference and the value of the parking spot which at the time was about $25/sq.ft. so prices went up by this standard about 25% from 1999 to 2001. I don't believe it was quite this much but I think you did very well with your purchase because you had the foresight to appreciate the potential of Liberty Village ahead of it becoming fashionable. Well done.

 

[asiancolossus]

I'm just thinking that its only a one bedroom. Its funny, many floorplans on new units these days for 750 square feet, you can get 2 bedrooms and a den! LOL One of the pitfalls of my floorplan I think, its not the shoebox shaped floorplan that maximizes space. I definitely need to look at comparables.
Any sites that you guys use to do your research? I just do a Google search on the area.

 

[interested]

You can go to MLS.ca, the realtor site, and use the map to zero in on the area, and see.

The problem is that 750 sq.ft. 1 bedroom is a great size but most people will sacrifice space and you do not get as much footage for the money but people make do. At 750 sq.ft., you are certainly the size of a generous 1 bedroom den though a bit small on the 2 bedroom front. However, the 1 bedroom / den would command more money.

Again, 1 bedrooms in the core average around $1400-1600. So maybe you will get this kind of money because while location is less desirable, size may make up the difference. And if the Daniel's project is a success, you may have much more bump up potential than we do as you have the escalation room. However, as I said previously, you also have the risk that the area does not catch on as hoped.

Good luck.

 

[Eug]

Yes thank you for making me really jealous Eug.
Joking aside, that is great. I already am quite happy because I understand prices are closer to $480-500/sq.ft. now for what I bought.
I won't be selling anyhow unless situation changes drastically. Family use or for a rental. I am not worried about making a killing and at todays rentals I am happy with the very mediocre return if it is rented in the end. I think I have quite a cushion already and if it drops to $350/sq.ft. which I would doubt, I can survive that too.
Interestingly, $204/sq.ft. is a very good price. I bought in 2001 summer in the core at $280/sq.ft. with no parking a 1 bedroom. So assuming $40-50 was the location difference, that still means that there was $25-30 per sq. ft. difference and the value of the parking spot which at the time was about $25/sq.ft. so prices went up by this standard about 25% from 1999 to 2001. I don't believe it was quite this much but I think you did very well with your purchase because you had the foresight to appreciate the potential of Liberty Village ahead of it becoming fashionable. Well done.

I didn't buy in Liberty Village. I was in a 2 bed 1 bath townhouse east of Bathurst, just off Portland, and just north of Front. At the time there wasn't any nearby big grocery stores either. Either it was shopping at the local small grocers or convenience stores, or go somewhere else (like Chinatown).

I also got the place a little cheaper than others. At the time the advertised interest rates were uber low for that pre-build, but the reason was because the builder had actually bought down the rates with one specific bank. However, to get the rate one had to adhere to strict conditions with the mortgage terms, and go with that specific bank. I told them I wasn't interested, and managed to get them to reduce the price of the unit by nearly the amount they would have paid for the interest rate buydown, and I'd just go and negotiate my own mortgage.

Do builders bother with these interest rate buydowns these days? I do know some have these extended rate guarantees though. That might seem good, but in the end you're just paying for it anyway, through slightly higher condo pricing.

 

[interested]

still well done Eug

Sometimes they offer mortgages on site at preferred rates. They will only offer it if they need to do incentives I would think.

 

[KA1]

http://www.cbc.ca/video/#/News/TV_Shows/The_National/1233408557/ID=1758092890

Link to CBC News video clip of January 21, 2011 re: red hot real estate market in Vancouver.

 

[interested]

I saw that last night.

That is Vancouver and stupid foreign bidding. That is the only thing that will keep parts of Vancouver going, the very wealthy bidding up certain areas. 200 people lining up around the street clearly shows an massive excess demand.
I assume that it was mainly foreigners buying.

As I said before, Vancouver is a subcolony of Hong Kong/Mainland China and is not trading like Canada.

This line up and insane overbid for a teardown simply to me represents that we clearly are not at risk for a bubble.(satire)

If I saw the same thing happening in Toronto, I guarantee you we are at the end because this is the same insanity that happened in Florida before the bubble burst and the same thing I remember in Toronto in 1988 before the bubble burst where whole condo projects were sold in a day or the lineups in front of 1 Bloor when Bazis had it and they jumped the introductory prices from the $300's to the $500's before even starting to sell.

Certainly, my guess is that the Chinese have lots of money and that things in China are overheating so badly (higher than reported) and the speculation so rampant in China on real estate that money is looking to get out of the Yuan and diversify into Canadian dollar to 1) avoid the inflation, 2) the currency risk and 3) the real risk of a Chinese asset bubble.

 

[Eug]

Except that a lot of these Chinese actually live in Vancouver. Well sort of. For the upper end of the market, these Chinese immigrate to Canada, buy a house and then house their kids and wives in these homes. They spend some time in Canada, but the real family business is stick back in Asia.

Toronto is a different story. It's more a destination for Chinese who actually work regular jobs locally for a living.

 

[interested]

My suspicion about the sale was the fact that it was a tear down and someone could build what they wanted there and an extra $500K for the land was not an issue to get in the right area and ability to build one's dream home.

As for Toronto, yes that may be true though I believe there is a group of Chinese business higher end people who buy here in TO instead of New York as it is 1/2-1/3 of the price, places them near the US without being in the US and still in Canada.

That said, I fully appreciate that TO is not Vancouver and that Vancouver because of its water views and its closeness to China make it a more ideal destination. As well, given that I understand it to be about 80% Chinese(ex pats) and Canadian Chinese it would feel to a degree for those people looking to emigrate (whether for their families and continue the business back in Asia or not) feel as close to "home" as they could in North America.

 

[ILuvTO]

http://www.cbc.ca/video/#/News/TV_Shows/The_National/1233408557/ID=1758092890

Link to CBC News video clip of January 21, 2011 re: red hot real estate market in Vancouver.

Here is another video from Global National along the same lines as the CBC video, except this one is talking about the bubble in China. This is very scary. They say that Chinese are buyig property in China and not even renting them out. They are just leaving them empty. They view it as a safer type of "savings account", and a better investment than the stock market. It's no wonder so many are parking their money here in the same fashion.

Go the below link and select the January 20 newscast. Then fastforward to about the 15:50 point. The story will start there:

http://www.globalnational.com/video/index.html