Real Estate

Current condo market vibe | Explinations ?

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  • Feb 21st, 2021 11:58 am
[OP]
Sr. Member
Mar 13, 2017
994 posts
1175 upvotes

Current condo market vibe | Explinations ?

I'm confused, so I'm going to ask the condo experts ..

Clearly FOMO is back and condos are being eating up again by investors - and this time around I must assume a much higher volume of domestic buyers. I've been looking in some pockets I have interest in, and even missed out on a couple that went too fast. However, I continue to follow the leasing end of the story and don't see the correlation? Is the assumption that demand for these units on the rental side is lagging and must follow?

What do the condo pros think of newer Bathurst Manor product? I've had much success in this neighborhood with detached rental product on future build lots - I find tenant demand drawn to this hood very stable. I also prefer smaller buildings with limited amenities to keep long term maint costs in check. $850ish psf is very doable in this area with excellent access to transit, good schools and all around walkability.

I do follow the demand inputs for this market, U of T's move to go fwd with a large student residence is interesting given the glut of supply that the market currently faces. Hotels are so desperate in the core, they're chasing students as well .. let alone the purpose built student housing that's barely hanging on. Is that academia looking fwd to the demand that about to roar back .. or is that the nail in the coffin for some purpose built product that Uni operated housing will always be able to outperform.

https://torontostoreys.com/plans-u-of-t ... -revamped/
DoubleTree Hotel on Chestnut current chasing after students (89 Chestnut directly across street is one of the largest student housing in the system): http://newreztoronto.com/

Appreciate your comments ..
2 replies
Deal Addict
User avatar
Nov 2, 2020
1183 posts
1600 upvotes
The rental market right now is not very good. The downtown core has probably suffered the most. Right now the lack of students and immigration are factors, as well as the current wfh. I feel as the weather starts to warm up we may see some improvement with people wanting to come back downtown but this is all up in the air and no one knows for sure. That being said investors buying could have put larger dp resulting in being cashflow neutral or even positive depending on dp, or they are simply willing to keep it vacant or take their time to rent it out. If you look at it in the past when sfh have their run up, condos also follow. Ultimately if you buy and hold a condo in that area I think you will do well. Students will return, and there is always demand near universities. Anyone who thinks the future of universities is online forever either has never been to university or has no clue about what young people enjoy, and what they need from a mental well being perspective. Many articles have been written about mental health and low morale amongst students doing online learning due to covid. If you have a long term vision you will do well.
[OP]
Sr. Member
Mar 13, 2017
994 posts
1175 upvotes
atom2020 wrote: The rental market right now is not very good. The downtown core has probably suffered the most. Right now the lack of students and immigration are factors, as well as the current wfh. I feel as the weather starts to warm up we may see some improvement with people wanting to come back downtown but this is all up in the air and no one knows for sure. That being said investors buying could have put larger dp resulting in being cashflow neutral or even positive depending on dp, or they are simply willing to keep it vacant or take their time to rent it out. If you look at it in the past when sfh have their run up, condos also follow. Ultimately if you buy and hold a condo in that area I think you will do well. Students will return, and there is always demand near universities. Anyone who thinks the future of universities is online forever either has never been to university or has no clue about what young people enjoy, and what they need from a mental well being perspective. Many articles have been written about mental health and low morale amongst students doing online learning due to covid. If you have a long term vision you will do well.
You could say I've never left Uni, so I would hope my kids are able to create the same memories and life directional events I did back in the 90s while living on / near campus. That said, there's a profit motive in play for many schools, specifically urban based to use this reset to maintain a larger digital program than they had before. Hard to say what that will morph into. It's curious that after decades of U of T staying out of the housing business (and letting private deal with it), they appear to be diving in.

As for confirmation that the condo rental market struggles while the prices of condos continue to rise - only seen that twice in my lifetime;
(1) late 90s and early 2000s when developers could afford to attract investors with large incentives
(2) 2004-2007 in certain US markets where ninja loans were in play, titles were registered to dogs and unemployed owners were more interested in appreciation than renters scratching up floors

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