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Baby, we got a bubble!?

i believe i read somewhere on here that developers for high end products are selling for $1100-1200 psf.

if SL, Trump and Ritz all go to $800/sq.ft. level or lower, as you say, and there is that Ritz unit asking for under $700 psf and the other sold one ~$800 psf (?); that amounts to a 35% discount/decline.

i think that will translate to other products as well, and we may see pre-con prices of $400-500 again, where they should be.


cdr: I can tell you prices at SL. I am not sure if there are updated prices but as of Feb 2012:
The cheapest suite in the residences NW face 1746 sq.ft. unit on floor 41 at $2,000,500 or $1146/sq.ft.
There is an 1810 sq.ft. NE face on floor 37 asking $2.029,500 or $1121/sq.ft.(slightly cheaper but there is a premium for higher floors and therefore the 4 floors would likely add another $20/sq.ft.
SW is asking $2084500 for 1537 sq.ft. or $1356/sq.ft. for the 18th floor.
The smallest unit remaining on floor 19 in the residences (floors 18 to 50) is 1659 sq.ft. at $2109500 or $1272/sq.ft.

In the Estates they have new release units which have been downsized. Floor 53 East face (which had the least premium) and no balcony/outside space (the other units all have balconies):$978,600 for 891 sq.ft. or $1098/sq.ft. The issue is the condo fees at the estates are proposed at 75 cents/sq.ft. vs. 54 cents in the residences to floor 50 and below. This means an additional $200/month condo fee on an 891 sq.ft. unit vs. the same unit with a West face lower down(which are all sold out).

1114 sq.ft. (similar essentially to my 1100 sq.ft. with 200 sq.ft. balcony but East face vs. my West face) on floor 51 starts at $1,360,600. or $1221/sq.ft.

Larger units: eg. 1848 sq.ft. NE face on floor 54 starts at $2515800 or $1361/sq.ft.

Finally; 2200 sq.ft. West face with 300 sq.ft. terrace on floor 51 starts at $3,195,500 or $1452/sq.ft.

Then one goes to signature suites of 4431 sq.ft.(2 storey suites starting at $6.5 mill) or $1480/sq.ft.
and the Penthouses at $9.3 mill for 3350 sq.ft. or $2784/sq.ft. but lots of terrace and 2 story units.

So SL seems to be well above the $1100 to 1200 price you suggested with only a few suites at those prices now.

I understand Trump is around the same price range. 4S is more like $1500-1900/sq.ft. from my understanding.
It will be interesting to see what happens to prices when resales hit at SL; Trump and 4S and to see if they follow the "Ritz" discount.

I agree it will translate to other products as well as you suggest. Not sure we will see $400 in the core again but I would not be surprised to see $650 to $700 hitting $500/sq.ft. or close again.
 
I am on a mid 20's floor (with the condos starting on floor 18 and 19 which are atypical floors. Floors 20-50 are similar all the way up in the residences. I have been told I get occupancy Aug 1,2012. The hotel opens I believe on Aug 5 or 6th, 2012.
Assuming they move in roughly 1 floor/week I am guessing occupancy will start in early June 2012.

Registration usually occurs when there is 80% occupancy so I am guessing some time around summer of fall 2013. This is just a guess.

I don't know if they allow assignments. I know the developer has to approve assignments and charges a 1% fee of the price of the sale. My guess is the developer would not allow assignments unless the units are sold to a realtor who has the clause modified to allow a resale prior to closing. I have not asked and am not really interested in assigning so I have not informed myself further. If/when I next speak to them, I will ask and post the response.

Once registered of course, there will be no stopping of sales. If the developer is having difficulty, he will not hurry up to register the building as he would not want a lot of competition for his units. If all the small units are sold and he only has large units, he might allow resale of smaller units but there is no incentive for him other than the 1% fee he could get.

My understanding of the issues around registration is slightly different.

There is a bunch of requirements developers have to fulfil to get to the actual registration. But once the conditions are met, they typically will want to register the units ASAP as that is when they get to pay down the construction financing.

It used to take about six months to a year from first occupancy to registration, as when happened with our condo back in 2006. The process is apparently more streamlined in 2012. For example, first occupancy at 400 Wellington was back in Dec 2011 or thereabouts and word has it they will register in April!

You did bring up a point about strategically delaying registration so a developer can sell off their remaining inventory. I've never heard of that but it is an interesting concept. Owners might have something to say about it though as most have an aversion to paying occupancy fees.

It will be interesting to see how SL plays this one.
 
There are requirements that have to be met along with the occupancy rates -- I don't know what those are, but that was the explanation we received when we bought last year.We were fortunate -- took occupancy in May, building registered in June. (first occupancies were April)
 
There are requirements that have to be met along with the occupancy rates -- I don't know what those are, but that was the explanation we received when we bought last year.We were fortunate -- took occupancy in May, building registered in June. (first occupancies were April)

I am not aware occupancy rates affect the registration timetable. Unless it was for the purpose interested alluded to, I don't quite understand why it should. Does anyone know?
 
Here is an interesting article which discusses registration.

http://www.zimbio.com/Toronto+Real+...wV/Toronto+Ontario+Condominium+Occupancy+Fees

Toronto, Ontario Condominium Occupancy Fees
By PeterTarshis Toronto-Realtor on March 17, 2010 | From petertarshistorontorealtor.blogspot.com


Whenever you purchase a new condo, there is a period of time between when you take occupancy of your unit and when you take ownership of your unit. This is known as the ‘occupancy period’ or ‘interim occupancy’. During this period you will be requested by the developer to pay occupancy fees or ‘phantom rent’ as it is also known.

The Condominium Act requires condo developments to be constructed to a substantial level prior to registration of the condominium plan. Title to a unit cannot be transferred until the condominium is registered.

Thus, with newly built condominium apartments, there are two “closings”. The “interim closing”, occurs at the time of occupancy and the “final closing”, occurs at the time of final registration.

The process works something like this; the developer undertakes to build a condo development by submitting a site plan with the Municipality. When the Municipality registers this site plan it becomes a “Registered Site Plan”, setting out exactly what the developer is promising to deliver.

The developer then sells the suites as “pre-construction”; based on floor plans, brochures etc. Once the developer sells enough units, say 60% or more, they start the construction while continuing to sell the units.

When construction is completed, the municipality verifies the building to be in accordance with the registered site plan and issues the “Occupancy Certificate”. The developer start to contact all the buyers notifying them of their occupancy date, at this stage your unit is ready and liveable; you take possession of it, but not ownership. This is the first or “Interim Closing”.

Since the buyer’s down payment is deposited into the lawyer’s trust account, the developer does NOT receive any money until the building registers (final closing), a process that normally takes 4-6 months.

Until such time you must pay the developer “occupancy fees” for the right to live in the unit. The amount of the occupancy fees is roughly equivalent to the interest on the amount outstanding on the purchase price. For example, a $300,000 condo with 25% down means you must pay monthly occupancy fees roughly equal to interest payments on $225,000.

When the municipality completes its process and registers the building, the second or “final closing” take place. This is where the purchasers receive title to their property and their mortgage payments starts, and this is when the developer gets his money.

During the occupancy period the buyers undertake a portion of the developer’s mortgage, also called “Phantom Mortgage”, which is equal to their proportionate share of the overall condo.

The occupancy period is normally 4-6 months, but the higher up you are in the building, the shorter the occupancy period will be. So if you buy a unit on the ground floor, you can expect a long occupancy period. If you buy the penthouse, you will likely have a very short occupancy period.

There is no way to say absolutely how long the occupancy period will be. In most cases the length of the occupancy period depends on the experience level of the developer. Experienced developers who are familiar with process and have diligent lawyers working behind the scenes for them know how to build and how to register a building as quickly as possible.

It is in the developer’s best interest to register the building as quickly as possible and to have the occupancy period as short as possible. This is because they don’t get their money from the banks until the building is registered and all the unit owners have their mortgages commence.


The “Occupancy Fee” is made up of three components and is roughly equivalent to the:

interest calculated on a monthly basis on the unpaid balance of the purchase price
the monthly maintenance fee contributed for the unit; and
a factor for property tax
In total it will be about the same amount as if you took a mortgage. But you cannot get a mortgage because there is no “Title” to the property, thus banks cannot issue a mortgage.

Occupancy fees will be paid to the developer when you purchase a new condo, it does not apply for re-sale condos.

The purchaser can avoid paying the interest portion of the occupancy fee should he/she elect to pay the full balance of the purchase price owing on the date of occupancy. However, in order to do this, the purchaser or his lawyer must request this during the 10-days rescission (or cooling off) period.

In all the cases it is left to the developer to include or exclude any of the above components in the occupancy fee, as long as this is made clear in writing and disclosed in the developer’s disclosure documents.
 
to interested and others ... i don't know if there is a typo in the article, but that's starting under $700 psf up tp $2,000 psf


Shangri-La luxury hotel-condo balances yin and yang

http://www.yourhome.ca/homes/decor/...i-la-luxury-hotel-condo-balances-yin-and-yang

March 30, 2012
Alex Newman

Parachuted into Toronto’s buttoned-down Financial District, the whimsical Shangri-La Hotel & Residences offers an interesting bit of yin and yang.

Designed by Vancouver architect James Cheng, it’s one of the tallest downtown buildings at 66 storeys, and with a glass, stone and brick exterior that appears to zip up one side and ripple down another, thoroughly modern. That’s the yang.

The yin (literally ‘shady place’ in Taoist philosophy) is the heritage components the Shangri-La towers over. Such as Bishop’s Block, a row of brick townhouses built in 1830 in what was considered “fashionable Adelaide St.†And the 1908 South African War Memorial with its granite obelisk and allegorical winged figure on University Ave.

The hotel and condo complex — which includes the rebuilding of Bishop’s Block — is dramatically changing the streetscape, says Michael Braun, marketing manager of Shangri-La developer Westcorp. And yet, it will appear to be a “natural coming together over time,†with heritage brick at the corner juxtaposed against glass tower with its intriguing angles at street level, outdoor café, and an extraordinary art installation. Most other downtown towers, Braun points out, go straight up from the street, and can only be differentiated by their signage.

It’s the piece of public art, however, that will really distinguish the building. Slated to be unveiled May 5, it stands to be on a par with the Crystal at the ROM in terms of significance. The 20-foot high brushed stainless steel sculpture, by internationally known artist Zhang Huan and titled Rising, depicts an upside down branch out of which a flock of birds take flight up the building and into the lobby. It appears to be pink in the renderings, but we won’t really know until it’s unveiled May 5. What is known is that the sculpture promises to inject an Asian delicacy and femininity into Toronto’s serious downtown core, demonstrating that nature insinuates itself wherever it — or art — wills.

“Rising†is also an indicator of the level — and type — of luxury one can expect in both hotel and residences. For starters, a restaurant will open by Momofuku and founded by celebrity New York chef David Chang. Condo residents can avail themselves of any hotel amenity, including room service from the five-star hotel restaurant, as well as maid service, use of The Spa, concierge and valet parking, limousine service, indoor pool and hot tub, 2500 square foot fitness facility, corporate function rooms and banquet rooms, 40-seat screening room.

Service Asian-style is the brand, says Braun. “Check any Conde Nast Traveller magazine and you’ll see that Asia is known to have the best hotel service in the world … it’s their values of communal culture, quiet discipline and caring.â€

That translates well into the condo residences, too, he says. These days, hotels pair up with condo residences because as Braun explains, “it’s hard to make the economics work to build a five star luxury hotel on its own.†Construction costs work out to almost $1 million per hotel room, so the condo can help subsidize the build cost, plus residents have the benefit of enjoying all the amenities that are part of five star living — access to all doorman, concierge, room service, maid service, and being able to head downstairs for dinner, without walking outside.

The residences, too, are all about luxury, especially the ultimate luxury of space. Condos begin where the hotel leaves off — at floor 17 — and range in size from 818- to 4808-square feet, with two level penthouses on the top floors at 3350-square feet each.

A refreshing change from normal high end fare, the 1833 square foot model suite is not only large, but airy and open, with the Boffi (Italy) wood kitchen as centre hub, and dining, living and family room areas radiating out from there. This kind of layout affords great flow — even with sunlight flooding through the floor to ceiling windows, it’s easy to imagine a well attended evening event, city lights twinkling at your feet.

It’s also easy to see why the layout and design is such a game changer for the luxury market. Its designer, Anwar Mukhayesh, whose name was put forward by one of Braun’s colleagues, is part of the hip and young The Design Agency — and was one of the three Designer Guys on the popular HGTV show.

Mukhayesh started with the kitchen — sleek wood cabinets, Miele and SubZero appliances — and designed the spaces around it. It dictated the spaces around, including the dining area which he placed between the kitchen and the double balcony doors so dining would feel like “sitting in an outdoor pavilion.†In like fashion, he selected modern furnishings — a white Saarinen tulip dining room, birch chairs and slim white-lacquer consoles against the wall.

Having two fireplaces also helped determine the seating of gathering spaces — living and family room. One fireplace is on a large support pillar at the end of the kitchen run of cabinetry, facing the windows — this is where Mukhayesh placed the living “room.â€

It’s always a little tricky to create living rooms in situations like this with so many windows, Mukhayesh says, because there are no walls to anchor the furnishings. But rather than depend on walls to define space, he used floor lamps, area rugs and furniture. In the living area, for example, the gently curved back of the purple Arne sofa (from B&B Italia) nestles snugly into where the two window banks meet. Though the purple is soft and heathery — also a brand colour for Shangri-La — he has toned it down further with grey throws and cushions and paired with two modern chairs from Kiosk.

Delving deeper into the suite, and around the “corner†of its L-shaped configuration, Mukhayesh placed the family room. It too has a fireplace, and to further enhance the intimacy, he wallpapered the fireplace wall in a black damask.

Although the Shangri-La brand is best known as international modern or minimalist style, Mukhayesh says he incorporated traditional pieces to add the unexpected and to infuse the space with warmth: tufted oversized leather sofa in the family room; a large button-tufted ottoman; spindle-turned glass legs on the coffee table which rest on a cowhide rug; a cream Barbara Barry like chair in the living room.

While the two bedrooms are meant to be oases away from the public space, one of them plays with small doses of boldness in the same way — a bright blue blanket and two purple pillows are all it takes in a soft grey room. And in the bathroom, a photograph of picnickers on a Mediterranean beach introduces colour into the pale grey and white marble tiled bathroom.

Like the block in which the condo is situated, the suite’s juxtaposition of eclectic elements lend a sense of having been there awhile. It’s extravagant for sure, but understated at the same time. A lot of that comes from the Shangri-La brand, but some of the credit is due Mukhayesh and his own eclectic background: a degree in engineering; a long family history in the restaurant business — Kensington Kitchen here in Toronto and Citrus in Paris. Mukhayesh seems to know how to make people feel both celebrated and comfortable — likely one reason he was also contracted to design the five-star Momofuku Restaurant.

The residences, priced anywhere from $993,500 to $9,332,500, for unit sizes of 1537- to 4431-square feet, are appealing to a wide variety of buyers — first time buyers who work on Bay St, downsizing local couples, international families interested in Toronto’s educational opportunities, Braun says. With 80 per cent of the suites sold, Braun is feeling confident about Toronto’s market and economy, and its ability to support and willingness to embrace luxury hotel/condo projects. And with three such neighbours close by — Trump, Four Seasons, and the Ritz — the Shangri-La is in good company.
 
I have the price list at least as of Feb 2012.
1 bedroom 836 sq.ft. 53rd floor; 1 left $993,500.
891 sq.ft. from 53rd floor: $978,600.
the 1537 is on floor 18: SW and in my view overpriced at $2,084,500.
$9332 is for the penthouses.
I posted a more detailed price list previously.
 
He's talking about a 30% drop from 2009, vs. current prices.

Using the Teranet index:

2009 March: 105.14
2009 Nov.: 119.21
70% 2009 March: 73.60 (which was the index at May 2000).
70% 2009 Nov.: 83.45 (which was the index at May 2002).
2011 December: 138.15

The percentage drop from Dec. 2011 to a level that represents a 30% drop from March 2009 = (138.15 - 73.60)(138.15) = 46.7% drop.
The percentage drop from Dec. 2011 to a level that represents a 30% drop from Nov. 2009 = (138.15 - 83.45)(138.15) = 39.6% drop.

Given that March 2012 is probably a little higher than Dec. 2011, rbt's 50% number is a little off, but not that far off.

ie. For the doom-and-gloom 30% haircut predictions at the beginning of this thread to actually come true, we'd have to see a drop of around 40-45% from today's levels.
Forgive me if this was already posted, but I didn't see it. However, I haven't been following closely because I've been busily emptying a condo to get ready for staging.

Toronto Teranet numbers are out for January 2012:

2011-01 126.370
2011-02 126.370
2011-03 126.820
2011-04 127.700
2011-05 129.800
2011-06 132.440
2011-07 134.860
2011-08 137.010
2011-09 137.740
2011-10 138.810
2011-11 138.550
2011-12 138.150
2012-01 138.910

2009-01 110.620

2010-01 121.430
 
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=10796278

Only Canada's house-price ratio tops NZ

"New Zealand house prices are the world's second-highest compared with rents, according to the Economist.

The magazine published a list of 21 countries, comparing prices with rents, and showed that only Canada topped New Zealand.

It showed the relationship between the price of buying a house and the amount of rent which would be generated from that house, saying the price-to-rent ratio was "an analogue of the price-to-earnings ratio used to judge the equity value of listed firms".

That showed that New Zealand properties were 68 per cent overvalued compared with the rent generated.

Canada's were higher on 76 per cent but New Zealand's were ahead of Belgium's 65 per cent, Singapore's 60 per cent, Hong Kong's 58 per cent and Australia's 48 per cent.

The magazine said New Zealand house prices were 20 per cent overvalued compared with income, with an average of 44 per cent overvalued when both rents and income were taken into account.

Canadian house prices are 54 per cent overvalued compared with rents and income.

Houses are undervalued in other markets, the survey shows.

Japan's price-to-rent ratio is -36 per cent, Germany's -18 per cent and Austria's -13 per cent.

Of the 21 countries studied, the magazine said buying a house looked like an increasingly good bet compared with renting.

Rising rents are helping to cut into a backlog of unsold homes, the Economist found.

Yesterday, the Herald reported how high rents were forcing people to buy because only slightly more money was needed to service a mortgage, according to the Roost Rent or Buy report.

The typical Kiwi first-buyer household would need only slightly more money to service a mortgage on a bottom-range house than it costs to pay a median rent."
 
^^^^
Don't you know that we don't worry about such minor incoveniences as looking at price to income or rent to price paid.
These are irrelevant and outdated metrics. Fundamentals are all irrelevant. After all, just ask your local realtor, prices just go up and up and up. Now is a great time to buy.
 

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