maestro
Senior Member
You can't really compare the price per square foot of a condo apartment to that of a house.
You can't really compare the price per square foot of a condo apartment to that of a house.
maestro
Senior Member
The pricing is insane. Whose to blame is beside the point.
cdr108
Senior Member
No you can't but people, realtors, and appraisers generally do.
IMO a house should have a higher value since it has substantial land value since the house on it is a depreciating asset; while condos have almost no land value since one never owns it, plus the land value is diluted by the density on it and again the tower is depreciating in value with age.
Johnzz
Active Member
True, but the structure of most detached houses will "fall apart" much faster then a modern concrete tower.
Of course there's more land associated with a house vs a condo, but condo's still have land. For example, a well located condo unit at Bay/Bloor might own a 1% share of the buildings plot. 1% is not a huge share but, depending on the location, could be worth quite a bit.
Mike in TO
Senior Member
There is still a land component in the cost structure - which can be very substantial depending on the location and number of units to spread the cost between units (with land values escalating depending on potential density).
Mike in TO
Senior Member
It's not about 'blame' or 'insanity' - there is a fairly rational reason behind most price points (however there are always some projects that deviate from the norm) - if one were to look at a project pro forma & feasibility study there usually isn't anything 'insane' printed. There are clear rational reasons based on supply side inputs and market studies to support selling prices.
Perhaps there is another thread that would be more appropriate to discuss so called insane prices as despite the broader moderation in condo sales absorptions this particular project by Pemberton is actually doing quite well at the current prices.
maestro
Senior Member
Jeez. Just forget it. I'm fully aware of the business end of things. I'm more concerned about the socioeconomic impact of the entire system. It deals with dollar amounts most can hardly comprehend. It's widely considered safe or a sure bet ignoring the fact its as cut-throat as any with a continual chain of abusee turned abuser. That misguided amateur investors are being convinced $650 a square foot is of good value at this time and place is of concern. That the gross costs are $550 a square foot to build is beside the point. (there are many, many buildings out there whose market value is less than the cost to build)
Are we talking after abandonment? Otherwise, I'm not convinced. You'd be hard pressed to find a concrete tower from 40 years that hasn't had major structural repairs and/or reconstruction. The same can't be said about a house from that era.
Are we talking after abandonment? Otherwise, I'm not convinced. You'd be hard pressed to find a concrete tower from 40 years that hasn't had major structural repairs and/or reconstruction. The same can't be said about a house from that era.
Johnzz
Active Member
cdr108
Senior Member
Mike in TO said:
According to the Community Planning docs:
http://www.toronto.ca/legdocs/mmis/2008/te/bgrd/backgroundfile-10219.pdf
"The development permission the applicant is seeking is 74,000 square metres, which represents a gross density of 7.9 times the area of the development site."
... to me that means whatever the land cost was PSF has been diluted to 1/8 of the value.
Mike in TO
Senior Member
The socieoeconomic impacts of maintaining an affordable supply of housing to attract labour supply and a high quality of life for the middle class are obviously very important. I don't think anyone would be advocating that downtown Toronto become a playground for the rich. One of the best things about this city is that it is still by and large home to a diverse population with a range of incomes. So yes from that perspective the price increases are obviously something that we should all be very concerned about.
Sorry Cdr, I don't quite follow what you mean... I was suggesting that for example if a plot of land cost $10,000,000 and 100 units are built on it, that a $100,000 land component per unit is built into the price per unit.
cdr108
Senior Member
Hypothetically speaking ....
let's say it cost $10,000,000 to buy this plot of land of 100,000 sf.
That equals $100 PSF.
However, the density being built on that land is 7.9x the development site.
Therefore, the land value for each unit has been diluted to $12.65 PSF = $100 / 7.9
Mike in TO
Senior Member
Usually the anticipated densities are a factor in the land sale price. Obviously there is a risk factor, but both the buyer and seller would typically take into account what type of density a zoning change would bring and that is reflected in the price for the land. Therefore in the hypothetical price of $10,000,000 - both the buyer and seller would have anticipated a density in the range of 7.9x coverage give or take a bit... had only half the density been anticipated the initial cost for the site would have reflected that....
So yes in the example at 7.9x coverage the price works out to $12.65 PSF - however I wouldn't use the term 'diluted' as the value of the initial land sale would have been based on anticipated density.
The case is certainly different when land is held over an extended period of time vs. taking a product to market shortly after the land is acquired.
So yes in the example at 7.9x coverage the price works out to $12.65 PSF - however I wouldn't use the term 'diluted' as the value of the initial land sale would have been based on anticipated density.
The case is certainly different when land is held over an extended period of time vs. taking a product to market shortly after the land is acquired.
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Ramako
Moderator
Not that I don't find this discussion riveting, but could ya'll continue it over here?
http://www.urbantoronto.ca/showthread.php?t=7542
http://www.urbantoronto.ca/showthread.php?t=7542
luxome
Active Member
what's up with these "grand opening" e-mails that i'm getting from U Condo?? how many "grand openings" do they have??? in the e-mail it states something like...."come visit the sales office before it is released to the public"....got that e-mail yesterday.... from my knowledge...it's been available to the public for quite some time... i don't like how builders/salesreps misinforms the public/potential buyers 
The Condo Observer
Active Member
Agreed! I think U is desperate. Imagine, 320 sq ft for 220K. "Urban Design" studio. ITS ONE ROOM!!!! ONE ROOM.... omg. The math does not work. Who will buy this? I should add that these developers need to take a lesson out of Empire's Fly. That project sold when they adjusted prices to suit the market. U is such a disappointment....the plans are krap, and the prices are outrageous.
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