Real Estate

Locked: Condo prices bottomed and trending up, did you buy

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  • Dec 22nd, 2020 2:52 pm
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Deal Addict
Jan 17, 2006
2153 posts
2266 upvotes
Toronto

Condo prices bottomed and trending up, did you buy

Looks like it was opportunity to snap some deals in DT condos, let's talk if anybody got a good deal, don't be shy and share it with fellow RFD members.
Last edited by ilim on Dec 19th, 2020 11:37 pm, edited 1 time in total.
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Deal Addict
Oct 27, 2012
2252 posts
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Toronto
I don't think I got a deal per se buying. I wasn't shopping purely with a deal in mind. I paid maybe 10-15% less than the peak price for a 2 bedroom unit that met my requirements, which is not really a "hot deal", but I ended up with something I love and it met my entire list of wants. The seller in my case actually lost money from their mid-2017 purchase price once LTT/commissions are accounted for. I saw a lot of value from having time to shop and look at tons of units instead of having to settle for something less than ideal.

I found the biggest discounts were on units I wouldn't have wanted to live in personally and that does me no good.
Deal Addict
User avatar
Nov 5, 2018
2916 posts
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Toronto
I had a list of my favourite buildings downtown and was willing to pull the trigger to buy if prices declined (88-100 Harbour, 10 York, 488 University, Theatre Park, etc.) Despite the constant attack from bears, I saw VERY LITTLE price drops, IF ANY. Prices were pretty much the same as before pre-covid for the city’s best buildings.

What I did do while I waited for any price drop is I bought a pre-construction condo in Port Credit. There is a very limited rental supply and condos there under $750,000 are VERY rare. So I bought a 1B+D at under $1,000 a foot. My view was that long term I am bullish on condos and I don’t want to look back in 10 years when condo prices have doubled and say “I can’t believe I never bought during the pandemic”.

The price of the precon was good, and the payment structure was fantastic! Would never have been that flexible if the pandemic never happened.

So ya, that’s my story. I think prices will be up double digits next year for condos. Although if you listen to bears (who are always wrong), you will get a very different picture.

;)
Called the bottom.
Deal Guru
Feb 29, 2008
14217 posts
10525 upvotes
How about those that sold in this market. I sadly had to and while I got a good deal given the circumstances, I would have loved to sell later. Oh well. 2021 should be a good run for condos. Some very good deals were had by many buyers especially those buying bachelors and smaller 1 bedrooms.
Deal Addict
Oct 27, 2012
2252 posts
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Toronto
I should add the other dimension of my deal were super low interest rates. I can lock into a 4/5 year term now that is easily a whole percent less than it was earlier this year. Just on interest cost alone for the next 4/5 years I've saved myself tens of thousands.
Member
Aug 13, 2020
328 posts
401 upvotes
Bought a 2 b/b in Scarborough.. is my first buy in Canada.. got at mid 2019 price, buying experience was good as could choose from 15-20 units and no bidding pressure. Could have got better deals by waiting but then first home here and being able to choose + no bidding was good enough for me!
Deal Fanatic
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Sep 8, 2007
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Way Out of GTA
JayLove06 wrote: How about those that sold in this market. I sadly had to and while I got a good deal given the circumstances, I would have loved to sell later. Oh well. 2021 should be a good run for condos. Some very good deals were had by many buyers especially those buying bachelors and smaller 1 bedrooms.
But I assume you sold because you went long your principle residence and needed the funds for that...hence you will get to ride that up!

People will look back on 2020 condos and wonder why they didn’t buy when they didn’t have bidding wars.
Deal Addict
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Nov 5, 2018
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cartfan123 wrote: But I assume you sold because you went long your principle residence and needed the funds for that...hence you will get to ride that up!
SFHs will continue to skyrocket upwards, so I think he is hedged.
Called the bottom.
Banned
Jul 23, 2020
473 posts
414 upvotes
$1000 PSF in Sauga is a deal? Can’t you get nice units downtown for that?

I don’t follow the burbs at all cause I have no interest in living there. Why is there no price premium to live downtown? Seems crazy.
Banned
Jul 23, 2020
473 posts
414 upvotes
JayLove06 wrote: How about those that sold in this market. I sadly had to and while I got a good deal given the circumstances, I would have loved to sell later. Oh well. 2021 should be a good run for condos. Some very good deals were had by many buyers especially those buying bachelors and smaller 1 bedrooms.
You said you were going to hold only a few weeks ago? What changed?

Weird that people are selling when they think prices are going to the moon. I like holding assets that increase in value.
Member
Jun 15, 2015
424 posts
457 upvotes
Thornhill, ON
Well, I have been telling all my tenants for the past 6 months to buy a RE property if they've been considering it. With interest rates as low as it can be and investors bailing out right and left, now is the time to enter the market. It won't last long.
Member
Oct 22, 2016
247 posts
85 upvotes
I know 1 bed and bachelor pad tanked pretty bad in downtown Toronto . But how is the market for 2 bed and 2 bath in downtown Toronto? value of 2bed 2bath hold up pretty well in Downtown?

My 2bed 2bath condo on Yonge Sheppard value hold up okay. My previous tenant contract ends in the middle of covid and had to move out. It took me 3 months to find a good new tenant and I had to take $300 cut monthly rent for the new tenant. I am okay with that since I still break even with cashflow and the tenant is a good tenant. I am thinking of buying another 2bed and 2bath in downtown if price dips a bit
Banned
Jul 23, 2020
473 posts
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DisneyKruze wrote: Well, I have been telling all my tenants for the past 6 months to buy a RE property if they've been considering it. With interest rates as low as it can be and investors bailing out right and left, now is the time to enter the market. It won't last long.
Notice how nobody can even agree if prices went down or not.
Deal Addict
Oct 27, 2012
2252 posts
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Toronto
sooonk wrote: Notice how nobody can even agree if prices went down or not.
Well the answer to this is more nuanced then a simple up or down conclusion. Median price is misleading because the mix of units that sold may have changed, I never paid attention to that statistic even when the market was hot. When I was doing my analysis of prices, it was really down to the individual building to make an assessment, and the type of unit. Some fell more than others and took big hits, others went down but only experienced a minor dip. Why does it have to be a simple answer?
Member
Aug 13, 2020
328 posts
401 upvotes
I think all condo prices fell to at least end of 2019 price. Basically the early 2020 rise in price was reverted. Then yes different units had different falls.
Deal Guru
Feb 22, 2011
10176 posts
12596 upvotes
Toronto
ozzie16 wrote: I don't think I got a deal per se buying. I wasn't shopping purely with a deal in mind. I paid maybe 10-15% less than the peak price for a 2 bedroom unit that met my requirements, which is not really a "hot deal", but I ended up with something I love and it met my entire list of wants. The seller in my case actually lost money from their mid-2017 purchase price once LTT/commissions are accounted for. I saw a lot of value from having time to shop and look at tons of units instead of having to settle for something less than ideal.

I found the biggest discounts were on units I wouldn't have wanted to live in personally and that does me no good.
That’s an extremely hot deal given housing is the biggest expense in life. Some of the “hot deals” on this site are like saving 50% on a 3 year old piece of technology.
Deal Addict
Oct 27, 2012
2252 posts
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Toronto
mazerbeaner wrote: That’s an extremely hot deal given housing is the biggest expense in life. Some of the “hot deals” on this site are like saving 50% on a 3 year old piece of technology.
Hmm, I still feel like it’s kind of a Canadian Tire like deal where the deal is based off of an inflated price. I still think the run up in the last 2 years was overdone, and the recent correction seemed to undo a lot of the 2018/2019 gains. So from that perspective I don’t think I got a hot deal, but I got a fair deal as I wouldn’t have considered buying at the market peak earlier this year. But theoretically if I compare buying at the peak to now I’ve saved myself well over $100,000.

I’m just trying to temper my expectations moving forward - if it’s up from here it’s all gravy, I bought factoring in prices staying flat or even weakening in the next 5 years. Right now in cash flow terms I will be paying the same as renting but a ton of my mortgage payments go to equity. The after tax break even point on my down payment funds is more than I can realistically achieve in a passive investment vehicle. So it all made sense to me to buy.
Deal Guru
Feb 22, 2011
10176 posts
12596 upvotes
Toronto
ozzie16 wrote: Hmm, I still feel like it’s kind of a Canadian Tire like deal where the deal is based off of an inflated price. I still think the run up in the last 2 years was overdone, and the recent correction seemed to undo a lot of the 2018/2019 gains. So from that perspective I don’t think I got a hot deal, but I got a fair deal as I wouldn’t have considered buying at the market peak earlier this year. But theoretically if I compare buying at the peak to now I’ve saved myself well over $100,000.

I’m just trying to temper my expectations moving forward - if it’s up from here it’s all gravy, I bought factoring in prices staying flat or even weakening in the next 5 years. Right now in cash flow terms I will be paying the same as renting but a ton of my mortgage payments go to equity. The after tax break even point on my down payment funds is more than I can realistically achieve in a passive investment vehicle. So it all made sense to me to buy.
No one really knows for sure. Personally I think the cost of building is a big driver. Taxes and development fees are now over $100k per unit. Land is more expensive. Trade labour is more expensive. Raw materials are more expensive. Transport is more expensive. There are real systemic changes that have pushed up prices of building. Many can't afford new so now they get resale.
Deal Addict
Oct 27, 2012
2252 posts
3559 upvotes
Toronto
mazerbeaner wrote: No one really knows for sure. Personally I think the cost of building is a big driver. Taxes and development fees are now over $100k per unit. Land is more expensive. Trade labour is more expensive. Raw materials are more expensive. Transport is more expensive. There are real systemic changes that have pushed up prices of building. Many can't afford new so now they get resale.
I agree these are all factors in favour of prices going upwards. And the run on any type of assets. If people think the run up in RE has been bad, you should see the market for certain other collectables. I have a few bottles of whisky that I bought years ago in Japan and by happenstance never opened them and they are now worth thousands each. Pokemon cards that I had written off as worthless years ago are now worth a small fortune apparently. Jordan sneakers sell for multiples of what they did a year or two ago. Rolex watches that used to sell for discounts are now selling for 1.5-2X MSRP. For truly rare watches, they've been doubling at successive auctions every few months. And the list goes on. The thesis right now is that cash is losing its value rapidly and anything tangible is being bid up.

I would have thought incomes not increasing at the same rate as RE prices would hamper RE price growth, coupled with the stress test. I've been proven to be dead wrong about it. There's going to be a growing separation of wealth between the owner class and everyone else. Wasn't quite like that in the 80s - my parents arrived dirt poor making minimum wage, going between sketchy rental units in Agincourt, and were able to buy a SFH in Mississauga for 80K in the 80s.
Deal Guru
Feb 22, 2011
10176 posts
12596 upvotes
Toronto
ozzie16 wrote:
I agree these are all factors in favour of prices going upwards. And the run on any type of assets. If people think the run up in RE has been bad, you should see the market for certain other collectables. I have a few bottles of whisky that I bought years ago in Japan and by happenstance never opened them and they are now worth thousands each. Pokemon cards that I had written off as worthless years ago are now worth a small fortune apparently. Jordan sneakers sell for multiples of what they did a year or two ago. Rolex watches that used to sell for discounts are now selling for 1.5-2X MSRP. For truly rare watches, they've been doubling at successive auctions every few months. And the list goes on. The thesis right now is that cash is losing its value rapidly and anything tangible is being bid up.

I would have thought incomes not increasing at the same rate as RE prices would hamper RE price growth, coupled with the stress test. I've been proven to be dead wrong about it. There's going to be a growing separation of wealth between the owner class and everyone else. Wasn't quite like that in the 80s - my parents arrived dirt poor making minimum wage, going between sketchy rental units in Agincourt, and were able to buy a SFH in Mississauga for 80K in the 80s.
That's what happens when currency doesn't have intrinsic value, they print too much to save themselves. Same amount of assets, a lot more dollars existing. The big piece most people miss is that home ownership rates can drop. If 50% of Toronto is owner occupied in 20 years it could be 30%.

In 50-100 years people will be talking about "old money" people whose families bought up RE while it was possible. It will even be a thing with dating, like what caste is your family. Land owner? I mean it kind of already is.

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