Well builders are pretty much passing through the municipal/soft costs directly to buyers charging everything from parkland levy to community art to any increases in levies, edcs and really only capping DC increases yet DCs are set to time of approvals.CondoMan98 wrote: ↑ People forget how expensive it is to build condos. It isn't just hard costs like concrete...you also have to consider soft costs that the city keeps charing builders to develop. I am critical of high prices, but I completely understand them. They aren't going away and the cost to build will only go up as labour, materials, and soft costs continue to increase.
As an investor, it just means you have to be more selective with the product that comes to market. You can make money buying precon, you just have to know which neighbourhood and projects to look for.
These were all costs builders absorbed in the past as part of the selling price.
Construction costs have gone up a lot and that's what's screwed a lot of the high density builders as their proforma for construction costs increasss were way above what they guessed when they sold all their units at the time
Condos are expensive to build especially with how much steel prices have gone up due to the trump tariffs and shortage of workers with so many projects going on in the GTA . Also ever improving building codes for multi unit residential adds cost, meanwhile ground related freehold products don't have as stringent standards on everything from doors to fire suppression and etc
Ground related developers have the same soft costs but don't pass it on as separate charges like condo developers do. The argument used to be ground related products have less time btwn sale and construction so the soft costs are more certain but DCs are now fixed to time of approvals, so unless developers are selling well before approvals (way less likely nowadays) they know how much it is.
Moreover, it used to be "increase " in DCs were passed on to buyers from condo developers with the rationale that the increase was unexpected but now they're just treating it like an admin fee at car dealerships and it's not really an increase let alone unexpected one