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Toronto Condos Drinking From The Fire Hose


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#1 TheBlueCat

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Posted 28 April 2012 - 03:00 PM

I've been helping a friend look for somewhere to buy here in Toronto and have been really struck by the anomalous pricing of apartments (aka condos) vs. houses. It reminds me of what I saw in the UK in 2007/2008, so is relevant here. For example, we looked at this apartment, which is in a really grotty location:

http://www.realtor.c...Key=-1331960476

Despite the photos, it was pretty crappy inside too with much less usable space than the description would indicate and no secure parking of any sort (just an outside spot in a totally thief friendly location). All for 480K CAD give or take - realtor thought it would easily fetch that based on selling another place in the same building last month.

Next, we looked at this place:

http://www.realtor.c...dKey=1071650208

This is in a much better, although not particularly high end, location, was really nice inside, has around three times the usable space, a proper garage, more bedrooms and its own front door, yet is on for around 600K and, according to the realtor, will probably fetch around 580K.

So, better location, at least twice, more like three times, the size, but only 20% extra cash? I asked the realtor why this was and he said it's simple: he sells over half the condos he deals with sight-unseen to overseas buyers, mostly from Asia, and they don't want houses as they're a hassle to maintain and, in any case, their own expectation is that people live in condos, houses only being for the super-rich.

This is going to end in tears I think!

#2 Democorruptcy

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Posted 28 April 2012 - 03:04 PM

What are the rents like over there?

That first one has:

Maintenance Fees : $581.35 Monthly
Democorruptcy
If you say "Democorruptcy" quickly, it sounds a bit like "Democracy". In a "Democracy" people vote for politicians who represent their interests. In the UK's "Democorruptcy" people can only vote for expense fiddling thieving MPs who are in the hip pocket of big business and the finance sector.

Governbankment
A "Governbankment" is a Government that has no line between itself and it's banks. The UK's Governbankment does policies to enrich bankers at the expense of the public. The more money people are encouraged to borrow, the more money bankers make.

The Funding for Lending Scheme (FLS) is stealing from savers to make them pay for crimes by bankers. Via lower interest on savings, all the bank fines for PPI, LIBOR and interest rates swaps are now being paid by savers so that bankers can keep pocketing bonuses.

"We need to make a really big change: from an economy built on debt to an economy built on savings" - David Camoron Jan 2009
"Printing money is the last resort of desperate governments when all other policies have failed" - George Osborne Jan 2009
- So what do Camoron & Osborne do? Print money and leave interest rates at 0.5% when inflation is over 5%

If it is asserted that civilization is a real advance in the condition of man -- and I think that it is, though only the wise improve their advantages -- it must be shown that it has produced better dwellings without making them more costly; and the cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.
http://classiclit.ab...en-Part-2_4.htm

I want to tell you my secret now.... I see debt people

#3 TheBlueCat

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Posted 28 April 2012 - 03:15 PM

What are the rents like over there?

That first one has:

Maintenance Fees : $581.35 Monthly

Rents are running at about 2% yield. I'd guess that place would go for around 2K per month including the condo fee. The thing to watch though is that the condo fee includes a bunch of stuff usually - some utilities, buildings insurance etc. The house I linked also has a fee of 100 per month for which common areas are maintained and cleared of snow but all the utilities and maintenance for the house itself are your own problem. I haven't done the calcs but, comparing like for like, I'd say that 581 for the condo is probably about equivalent to 100+utils+maintenance for the house so won't have much impact on the price difference. You do see condos with very high maintenance fees for one reason or another (expensive facilities on site, backlog of maintenance etc) and they tend to be a fair bit cheaper per square foot.

#4 Democorruptcy

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Posted 28 April 2012 - 03:42 PM

2% yield on 480k so 9.6k rent, 7.2k maintenance (inc parking) and 7.2k utilities for your 2k a month?

I'm a renter there not a buyer.

Edit moved parking to maintenance

Edited by Democorruptcy, 28 April 2012 - 03:47 PM.

Democorruptcy
If you say "Democorruptcy" quickly, it sounds a bit like "Democracy". In a "Democracy" people vote for politicians who represent their interests. In the UK's "Democorruptcy" people can only vote for expense fiddling thieving MPs who are in the hip pocket of big business and the finance sector.

Governbankment
A "Governbankment" is a Government that has no line between itself and it's banks. The UK's Governbankment does policies to enrich bankers at the expense of the public. The more money people are encouraged to borrow, the more money bankers make.

The Funding for Lending Scheme (FLS) is stealing from savers to make them pay for crimes by bankers. Via lower interest on savings, all the bank fines for PPI, LIBOR and interest rates swaps are now being paid by savers so that bankers can keep pocketing bonuses.

"We need to make a really big change: from an economy built on debt to an economy built on savings" - David Camoron Jan 2009
"Printing money is the last resort of desperate governments when all other policies have failed" - George Osborne Jan 2009
- So what do Camoron & Osborne do? Print money and leave interest rates at 0.5% when inflation is over 5%

If it is asserted that civilization is a real advance in the condition of man -- and I think that it is, though only the wise improve their advantages -- it must be shown that it has produced better dwellings without making them more costly; and the cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.
http://classiclit.ab...en-Part-2_4.htm

I want to tell you my secret now.... I see debt people




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