Real Estate

Did we just hit the peak of the Toronto RE bubble?

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  • Aug 17th, 2017 5:32 pm
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NotRobot wrote:
Aug 10th, 2017 3:40 pm
I'm pretty sure you couldn't build 55 Wedgewood for 500k.

The standard rate in this neighbourhood is about $200 per sqft and this home is close to 4000 sqft so I would say cost would be $750k to 800k

My neighbour builds in this area and he showed me the costs. I don't think he was lying.
Wow, that's pretty high. As the house gets bigger, a lot of costs like foundation and plumbing gets reduced per sq ft, so when you're at 4000 sq ft, the cost per sq ft is less than if your house was only 2000 sq ft.

This link indicated a $500K price for 4000 sqft assuming 2 story house built by builder ($400K if self-built).
http://www.ontariocontractors.com/buildcalc.htm

When I get house insurance the quotes I get for house replacement cost are much less than what I paid for the house. Maybe this neighbourhood as special requirements for permits or traffic control that inflates the prices. Sounds like there's a lot of variance here, might be worthwhile for folks to buy the dumps in this neighborhood, replace them and flip for a pretty decent profit. More than half the homes on the streets there are old bungalows.
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webdoctors wrote:
Aug 10th, 2017 4:28 pm
Wow, that's pretty high. As the house gets bigger, a lot of costs like foundation and plumbing gets reduced per sq ft, so when you're at 4000 sq ft, the cost per sq ft is less than if your house was only 2000 sq ft.

This link indicated a $500K price for 4000 sqft assuming 2 story house built by builder ($400K if self-built).
http://www.ontariocontractors.com/buildcalc.htm

When I get house insurance the quotes I get for house replacement cost are much less than what I paid for the house. Maybe this neighbourhood as special requirements for permits or traffic control that inflates the prices. Sounds like there's a lot of variance here, might be worthwhile for folks to buy the dumps in this neighborhood, replace them and flip for a pretty decent profit. More than half the homes on the streets there are old bungalows.
Yes certain things decrease in cost due to economy of scale but when it comes to luxury houses, other material plays a big role and the sky is the limit when it comes to pricing. Sometimes a roof might cost a few hundred grand. The internal structure also greatly affects the price and many of these are not visible to the average buyer. Some homes have automation systems that adds another few hundred grand.
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traderjay wrote:
Aug 10th, 2017 5:38 pm
Yes certain things decrease in cost due to economy of scale but when it comes to luxury houses, other material plays a big role and the sky is the limit when it comes to pricing. Sometimes a roof might cost a few hundred grand. The internal structure also greatly affects the price and many of these are not visible to the average buyer. Some homes have automation systems that adds another few hundred grand.
Sure, all of those are possible in an ultra luxury house, but would such a house be found in Willowdale, 50m from run down bungalows? I'm getting side tracked, but the point I was making with my examples was the area has become unrealistic targets for the original demographic it catered to 50 years ago. Folks used to get 1,000 sq ft starter houses, now they're getting removed and the American dream of a car, house and white picket fence has evaporated, and replaced with condos and public transit.

I added Z-wave automation to my house which was just $30 per light switch/outlet, and $50 for the controller ( a banana pi, but a Veralite or Samsung SmartThings is cheap too). Amazon Alexa, or Google Assistant, smart garage opener and wifi thermostats shouldn't add $100k to a house. My total cost was definitely under $1K. It can get expensive if you have automated blinds, but this example house doesn't have any blinds. Not sure if it has CAT6/5e wiring in the house (that's $100/per outlet and POE cameras are $100 each). Retrofit LED pot lights are $10/each, the wood flooring could be $10/sq ft (my tile guy does it at $3 sqft USD +cost of tile), and quartz or granite counter tops could be $50-$100 a sq ft depending on type with huge variation. I'm surprised this house doesn't have a movie theater, that's getting pretty common now with larger homes. Tempered glass interior walls are about $50/sqft . All this stuff costs money and adds up to over $100k, but its a stretch to hit $1M unless I've overlooked some hidden expense like special structural foundation work.
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webdoctors wrote:
Aug 10th, 2017 11:09 pm
Sure, all of those are possible in an ultra luxury house, but would such a house be found in Willowdale, 50m from run down bungalows? I'm getting side tracked, but the point I was making with my examples was the area has become unrealistic targets for the original demographic it catered to 50 years ago. Folks used to get 1,000 sq ft starter houses, now they're getting removed and the American dream of a car, house and white picket fence has evaporated, and replaced with condos and public transit.

I added Z-wave automation to my house which was just $30 per light switch/outlet, and $50 for the controller ( a banana pi, but a Veralite or Samsung SmartThings is cheap too). Amazon Alexa, or Google Assistant, smart garage opener and wifi thermostats shouldn't add $100k to a house. My total cost was definitely under $1K. It can get expensive if you have automated blinds, but this example house doesn't have any blinds. Not sure if it has CAT6/5e wiring in the house (that's $100/per outlet and POE cameras are $100 each). Retrofit LED pot lights are $10/each, the wood flooring could be $10/sq ft (my tile guy does it at $3 sqft USD +cost of tile), and quartz or granite counter tops could be $50-$100 a sq ft depending on type with huge variation. I'm surprised this house doesn't have a movie theater, that's getting pretty common now with larger homes. Tempered glass interior walls are about $50/sqft . All this stuff costs money and adds up to over $100k, but its a stretch to hit $1M unless I've overlooked some hidden expense like special structural foundation work.
What you mentioned above is DIY automation not typically found in a full custom built luxury home. I am intimately familiar with this because I've personally invested with JV partners in a few tear down projects that converted a crummy bungalow to a $4M++ home. The most expensive home I've been involved in cost upward $10M+

- Independent room climate control (LOTS OF HVAC ducting and dampers) in addition to two furnace and 3 to 4 ACs (all top of the range model)
- Proximity sensors that turns on/off light and HVAC as you approach or leave the house
- Imported Italian oversized tiles
- Imported stone/mansory materials from Europe
- Exotic wood (sky is really the limit here)
- Master painter that leaves no brush mark even when viewed from an angle under strong light.
- 2k/4K Resolution CCTV system with video analytics that recognizes license plates and faces (I personally helped with this system and total bill is $45K using Avigilon cameras)

The list goes on and that just scratched the surface. Some of them are structural such as extra reinforced roof because the tiles are terra cota or metal which weighs much more than regular shingles.
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You can easily spend $100K just on a kitchen. Heck you can spend $100k on landscaping.
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webdoctors wrote:
Aug 10th, 2017 11:09 pm
Sure, all of those are possible in an ultra luxury house, but would such a house be found in Willowdale, 50m from run down bungalows? I'm getting side tracked, but the point I was making with my examples was the area has become unrealistic targets for the original demographic it catered to 50 years ago. Folks used to get 1,000 sq ft starter houses, now they're getting removed and the American dream of a car, house and white picket fence has evaporated, and replaced with condos and public transit.

I added Z-wave automation to my house which was just $30 per light switch/outlet, and $50 for the controller ( a banana pi, but a Veralite or Samsung SmartThings is cheap too). Amazon Alexa, or Google Assistant, smart garage opener and wifi thermostats shouldn't add $100k to a house. My total cost was definitely under $1K. It can get expensive if you have automated blinds, but this example house doesn't have any blinds. Not sure if it has CAT6/5e wiring in the house (that's $100/per outlet and POE cameras are $100 each). Retrofit LED pot lights are $10/each, the wood flooring could be $10/sq ft (my tile guy does it at $3 sqft USD +cost of tile), and quartz or granite counter tops could be $50-$100 a sq ft depending on type with huge variation. I'm surprised this house doesn't have a movie theater, that's getting pretty common now with larger homes. Tempered glass interior walls are about $50/sqft . All this stuff costs money and adds up to over $100k, but its a stretch to hit $1M unless I've overlooked some hidden expense like special structural foundation work.
Yes, Willowdale has changed a lot in 50 years.

I don't have the numbers but I'd suspect that Willlowdale East is largely now 4000 sqft home. The bungalows remaining pretty much sell at land value.

The same thing is happening in terms of bungalows being torn down and rebuilt into 4000 sqft homes in Willowdale East, Newton East and Newtonbrook West. The change is happening quickly.

The areas above now cater mostly to wealthy Chinese and Iranians, definitely a different demographic from 50 years ago.

BTW - I've been told that the average cost to build in a new home in Lawrence Park is $250 per sqft.
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fdl wrote:
Aug 10th, 2017 11:54 pm
You can easily spend $100K just on a kitchen. Heck you can spend $100k on landscaping.
Or a $1M++ on a garden without a POOL. Have you guys seen the price of mature japanese red maple trees? Those go for $5 to 6K for a medium sized ones and all the way to mid six figure for bigger trees. As for kitchen, $100K sometimes only cover the cabinetry excluding appliances. One can make a cheap kitchen look similar to that of a $100K kitchen but any seasoned experts can quickly tell the difference by examining the materials and workmanship.
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traderjay wrote:
Aug 10th, 2017 5:38 pm
Yes certain things decrease in cost due to economy of scale but when it comes to luxury houses, other material plays a big role and the sky is the limit when it comes to pricing. Sometimes a roof might cost a few hundred grand. The internal structure also greatly affects the price and many of these are not visible to the average buyer. Some homes have automation systems that adds another few hundred grand.
Our experience when building our house from scratch is that the labour is approximately 90-95% of each subcontractor quote. No kidding. There may be the odd exception when you get into luxury finishings but for the most part this is the case. So if you decide to do something yourself (e.g. painting), just think that what you are paying for is mostly labour.
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traderjay wrote:
Aug 11th, 2017 10:06 am
Or a $1M++ on a garden without a POOL. Have you guys seen the price of mature japanese red maple trees? Those go for $5 to 6K for a medium sized ones and all the way to mid six figure for bigger trees. As for kitchen, $100K sometimes only cover the cabinetry excluding appliances. One can make a cheap kitchen look similar to that of a $100K kitchen but any seasoned experts can quickly tell the difference by examining the materials and workmanship.
Mid 6 figures for a mature maple tree? Typo?
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fdl wrote:
Aug 11th, 2017 11:11 am
Mid 6 figures for a mature maple tree? Typo?
Mature Japanese red maple such as the Tamukeyama variant (thin red or green leaves) can range from $100 to $50K.

Image
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choclover wrote:
Aug 11th, 2017 10:38 am
Our experience when building our house from scratch is that the labour is approximately 90-95% of each subcontractor quote. No kidding. There may be the odd exception when you get into luxury finishings but for the most part this is the case. So if you decide to do something yourself (e.g. painting), just think that what you are paying for is mostly labour.
Yes and when it comes to ultra luxury, the client very seldomly DIY because their time is more valuable than the contractors. They also select master craftsman that charges much higher rate than the typical contractors you find on the street. Of course, there are also owners who are very hands on and supervise the site with a sharp eye and demands that all the tools must be German made because it delivers the best possible finish/cut.

It takes an entire team of professionals to design and deck out a ultra-luxury home and many of them have very deep knowledge of the materials used that is way beyond my scope of comprehension. For example the masons knows which particular area in Italy produces the best cut stones with the finest detail etc...
Last edited by traderjay on Aug 11th, 2017 11:28 am, edited 1 time in total.
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traderjay wrote:
Aug 11th, 2017 11:25 am
Mature Japanese red maple such as the Tamukeyama variant (thin red or green leaves) can range from $100 to $50K.

Image
Beautiful tree. But when you wrote mid 6 figures I thought you mean $500,000k :)
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fdl wrote:
Aug 11th, 2017 11:29 am
Beautiful tree. But when you wrote mid 6 figures I thought you mean $500,000k :)
Yeah sorry it was a typo but you gotta remember sometimes the tree transplantation alone is $10 to $20K depending on the age of the tree. Of course its not uncommon to see gardens that cost mid six figures :)
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If you google 55 wedgewood you will see what was there a few years ago. Small white bungalow. Note the house that is being finished next door is of the same general look. Not a remodel but a complete rebuild. $3.5 M seems a little high, has the usual assortment of high end appliances. Lots of slightly higher end mill work. Usual electronic stuff. I would think the costs would be well over $200 per sq/ft. Someone is making a decent profitGrinning Face With Smiling Eyes building both homes.
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choclover wrote:
Aug 11th, 2017 10:38 am
Our experience when building our house from scratch is that the labour is approximately 90-95% of each subcontractor quote. No kidding. There may be the odd exception when you get into luxury finishings but for the most part this is the case. So if you decide to do something yourself (e.g. painting), just think that what you are paying for is mostly labour.
How much % is typical renovation labor in respect to material cost?

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