I’ve been at this a very long time, having started back in 1980 selling, what was then a brand new concept in home choices.
Prior to that, if you wanted to own an apartment you had to buy into a “Co-Op” which had one “Title” to the property and not “individual title per unit“.
Condoland came into its own shortly thereafter with developers constantly refining their sales and marketing tactics.
Unfortunately, no-one kept an eye of the actual product that the developers delivered.
I was shocked to learn, amidst a dispute over poor “sound attenuation” in a condo that I had purchased a number of suites in (with clients), from the City Inspector that he “didn’t actually physically inspect the building or unit“, and that “the Municipality assumed that the developer was building to Code“.
Now if you know developers at all, and I do after almost four decades of swimming in the deep water with them, you will know that they try to wring “a buck and a half out of every one of the tens of millions that they generate in the sale of a single high rise tower“.
Our basic trusting nature leads us, intellectually to fantasize that the dream unit that we are purchasing won’t end up a nightmare, whereas the odds for the night mare are much greater!
Condos boomed in the 80’s but crashed in ’89, due to a toxic cocktail of “oversupply” and “interest rate increases“.
The industry, in its infancy had shifted to “speculative investors” over legitimate “home owners“.
Condos were being sold with 5% and 10% down payments and had the appearance that there was a never ending demand for these “dream homes in the sky“!
In ’89, I saw interest rates skyrocket by over 10% in a matter of days!
Investors with 5% down were now facing mortgages with 300% increases in rates.
They walked away from their deals, many knowing that the developer will also end up in bankruptcy and thereby cancel out their bad debt.
The only difference that I see today, to that which I observed then, is that our government, following some sophisticated mathematical three card monty game is “buying down interest rates“, apparently to keep this carnival going.
I don’t like or appreciate seeing my tax dollars being applied to “keeping mortgage interest rates down for speculators in a high risk market“, so Condoland can continue to employ so many workers for the Province.
In 2000 I bought and represented forty some other buyers in Hudson, a good condo in the Entertainment District.
Prices ranged just over $300/square foot and a parking space was $25,000.
When 18 Yorkville came along a couple years later, the market showed resistance at $400/square foot and the developer had to back down from refusing to work with Realtors to get it sold.
With a decade the prices in Condoland jumped to $800 per square foot for “entry level” stuff (a 500 sq.ft. studio = $400,000)!
I stopped investing in, and advising client to invest in Condoland five years ago!
The math simply did not, nor does it today, add up.
I read reputable media outlets saying that Condoland has a rental shortage but have difficulty believing that as there are more new rental buildings going up than you can shake a stick at.
This tax payer buy down of interest rates is called “sustaining a false economy” in my books!
As a Province we have deficits!
When I came into the business there was NO GST!
Then came a 5% GST (“Goods & Services Tax”)
Then came the 13% HST (“Blended Tax”)
Then came the Second “Municipal” Land Transfer Tax.
And we still have deficits!
We have deficits because we are creating this “investment in Condoland-driven Quantitative Easing” concept by our government.
This suggests to me that our government is in the “speculation business” also and I’m not quite sure that this falls into their job description.
Call me “old world“, but I pay my bills. I believe in paying my bills. I don’t carry debt and don’t believe that others, including countries, provinces, states, districts, school boards, et al, should either!
Everyone involved in Condoland is making out financially “like bandits” EXCEPT THE CONSUMER, who pays for it ALL!
Does no-one else wonder “where does all the money go” and “why is there not even the most basic protections in place to insure that the playing field is at least level for the consumer“?
With so much money on the table, why has there been no, or minimal technology enhancements in building sciences or materials used in today’s construction of multifamily residential construction?
Why do so many building experience “sound attenuation problems, ventilation, plumbing, etc.” when quality sound attenuating wall coverings are available to mute 100% of normal sound transfer through walls, and new venting materials and solutions are available?
As my recent Window Wall blogs show, why are buildings being allowed to be built with such obvious deficiencies?
Why aren’t Municipalities, who are enjoying millions of dollars in permit fees per high rise, not physically inspecting and requiring that developers to at least live up to the Building Code (which is outdated);
The “why’s and why nots” are so plentiful that I’ll pause them here.
I’m hoping that as a reader you are getting the point, that there is a Crisis in Condoland, and if you live in, own, intend to own, know someone who owns or intends to own or invest in a condo in Condoland, you will want to get involved by Registering and commenting frequently here at simplycharles.com.
Something, or someone has got to fix this!
In my upcoming E-Book, “Crisis In Condoland“, I set out each and every hurdle that must be met in the race to preserve Condoland.
I address every aspect of the multiplicity of problems that have shaped Condoland over the past four decades, leaving it “the wounded dove” that it is today.
Each and every aspect of the infrastructure supporting Condoland must be dissected and addressed (Condo Act, new revisions to Condo Act, Tarion Warranty, Building Code, Advertising, Sales Methodology, Contracts, Turn Over Meeting, Technical Audits, Board of Directors, Property Management . . . . )
That’s because every aspect of it must be fixed if the consumer is to gain any ground at all.
Condoland today is much more an “unregulated commodities market” with every investor offered “Assignment Rights with their condo unit investment” (the right to sell before the building is built).
This had led to a “wild west” environment where “quality” was thrown out with the bath water, and the total fixation was on “profit“.
In an unsupervised and unregulated mega-buck industry it is not difficult to understand why Condoland is in the mess it is in today.
Actually Condoland is just fine these days.
It’s the consumers who make up Condoland that are at risk.