Let’s face it life is full of risks. But the voluntary risk that condo investors have been building into the game just makes no sense!
When I refer to voluntary risk I’m referring to the fact that they are betting their dollars on an unseen product, by an unknown developer, while they have no knowledge of the status of the market.
The odd speculator may read some of those FREE condo magazines but if they think they will find any truth there, someone should try to wake them up!
Developers buy blank pages in those magazines and then have their high priced ad agencies write articles as if they were being written by a journalist reporting on the merits of the building. What they don’t include in these pages is the fact that it is NOT a journalist writing all those flowery words about their “great condo opportunity” . . . . . . it is them!
Now, that’s not what I call “doing your homework“, but read it they do and then they line up for a chance to buy a unit or two.
If not for our government using our tax payer dollars to prop up the condo industry in Toronto sales would have dropped off the map a couple years back (when prices were around $600/sq ft. although even that price was hardly justifiable).
My inbox is constantly flooded with brand new condo launch announcements in a city that already boast more high density high rise condos than any other city in North America.
When you realize the population disparity between our country of 33 Million or so and America’s 330 Million people you might catch a glimpse of the dysfunctional logic that is underpinning Toronto’s condo boom!
If the government cuts off supporting mortgage rates (America had its “quantitative easing“) it will have to face the reality of our number one industry for employment hitting the skids, so it’s easier and more cost effective for them to just keep throwing our tax payer money at buying down mortgage interest rates so employment continues to appear strong.
There are still solid investment opportunities out there. I take my clients these days to the resale market (already existing condos) where you can still buy in the $500 – $600 per square foot range for a quality built and managed building.
Oh, I know the maintenance fees are higher on older buildings but those maintenance fees promoted by pre-sale construction condo offering are so out of whack with what they are going to be when the building is completed, you are really comparing apples to oranges.
The only thing an astute investor can count on when considering investing in a condo in Toronto is the track record of the developer, the location and the price per square foot.
If you are looking for a condo to live in and want room sizes greater than postage stamps again logic should take you to the resale market. As prices have shot up over the past few years (unjustifiably I might ad) sizes of units have shrunk considerably and when sizes shrink so do room sizes.
The only way that you can consider the history of the developer is to be working with a buyer’s agent that has been around as long as I have been. I know all the developers and their track record for not only building the building on time but also getting “Registration” in a timely manner.
I had bought my permanent residence (or what was supposed to be) in Churchill Park condo in Forest Hill and Tower Hill (the worst developer that I’ve come across in my almost four decades in Toronto condos) took a full year before registering it.
Have you got any idea of the phenomenal amount of free money Tower Hill gleaned from its unsuspecting buyers, over and above the prices they paid for their units?
The “Phantom Mortgage” component of the “Occupancy Fees” in some instances hit buyers with $5,000 – $8,000 per month! And all that money goes into the developer’s pocket as a bonus on top of the outrageous profits that they were already making. Not only that! The manner in which this arrogant developer refused to even communicate with buyers was more than offensive!
So, let me conclude today’s blog by telling you that walking down the street and stumbling into a condo presentation centre without a knowledgeable and informed buyer’s agent is much like playing roulette!
I guess if you are a gambler by instinct you like the thrill of gambling but when I invest I want as much “risk” as possible removed from the equation.
My advise is to first contact me and take advantage of my FREE Buyer Agency Services.