I'm looking into buying a new condo in downtown Toronto but I'm not sure if this is a good time to do it. There are so many available and so many being built. Just wondering if anyone's just been through this and what the overall feeling is out there...is the condo market going to crash soon? Is it still a smart time to buy? Will my condo increase in resale value?I'm planning on buying within the next 6 months.
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Buy a house instead, even in a lower income area.
Condos are VERY risky...the main reason being that, generally speaking, HOUSES depreciate, except in high-interest times, but THE LAND THE HOUSES SIT ON appreciate.
When you buy a house on a piece of land, the "house" you think will appreciate in 10 years. Actually, the land appreciate more than the house, although you don't know that, since you buy or sell them together.
When you buy a condo, you are buying part of a structure. That part can be affected by so many things beyond your control....like neighbors, the home association, structural damage caused by others, etc. You are not, remember, buying any land. When you buy a condo, ALL you are buying that part of a structure, so anything that affects it is critical to its value.
When you buy a house on a piece of land, what happens to the structure of the house is more under your control. And even if the house's structure suffers damage, the value of the land is unaffected by that.
So...it's far less risky to buy a house on a piece of land as an investment than a condo.
(P.S.....It's also more difficult to sell a condo than a house. Sure, they sell. And sure, someone will always know someone who sold one quickly. But there's just a far smaller market for buyers of condos than buyers of houses.)
(A.P.S.....Don't underestimate the cost of the homeowners' association fee. This is beyond the condo owner's control. Sure, it provides a value. But when you own a home, if you want to pull back on maintenance costs for a month or two, you can. You have no suchoption in a condo. Also, you have no control over what the association pays for its grounds maintenance, etc. When you own a home, you can shop around and hire a less expensive lawn service, for example.)
not to buy
Yes! The time to buy is now! Prices are extremely low and interest rates are also historically low. In my professional opinion of value as a licensed real estate broker, we have hit the bottom and will begin to see a change from the buyers' market towards a more neutral market over the course of the next several months
Given the economy right now this is a really difficult questions...I'd consider the following right now before deciding...
1. What is your job security like? Do you provide an essential service that isn't often affected by economic conditions (ie Nurse, Doctor, Teacher etc) or are you in a more high-risk sector (ie IT, finance)
2. Are you currently paying rent, if so, is it similar to what a mortgage payment (plus condo fees etc) would be?
3. Can you afford to buy in a high demand area of TO that would likely hold its value (ie downtown core vs. suburbs)
4. Can you afford to buy a place with an extra bedroom? Renting out a spare bedroom can greatly reduce mortgage payments.
My girlfriend purchased an unbuilt condo right down town 1 bdrm + den 600/ft2 total. took 4 yrs to build , they had a beautiful view when they bought it and just when they moved in 3 other condo's went in and blocked their view, and the sun . They were not told about these new developments prior to buying. They sold in May of this year, they felt they were fortunate to sell . The other big mistake they made was not purchasing the parking spot when they bought it. Their parking spot was originally 17,000 they decided after 3 yrs to buy one ..parking spots were up at 29,000 and there were none available, they ended up having to rent spot.
Hi, sorry I don't have any idea about any particular city as I don't belong tho that place, but if there is a matter of real estate investment, I have a very good experience as an investor,I have invested my money and am happy to hear that the investment is going the right way.
Yes you can go with it but according to me real estate investments are most trust worthy investments. I think it is one of the best way to secure one's future.
Foreclosure profits are not only earned quickly but they are also easy for you to know a foreclosure system. You just need a proper plan and way to go about it and then you can be good at judging the circumstances.
Vanessa, if I were you I would wait, just like the previous poster told you.
My 27year old who is an Investment Analyst and would want to invest in a condo, is still living at home because he feels the condo prices will be going down sharply and wouldn't want to buy in a higher market.......wise guy, believe me. So for the time being mama looks after him and he has to ride the GO train every day.
Patience and you will be rewarded.
I'm probably not going to be very popular with my answer, but I would tread VERY carefully in the condo market right now in Toronto. It has been faltering for some time now even though the prices don't yet reflect that. The developers have been including more and more incentives to make their sales (without price reductions), but that only works for so long and I can almost guarantee you will see price reductions in the very near future. The condo market in Toronto is the most overbuilt area of the real estate market there.
What you really DON'T want to do is buy a condo that is not already finished.
This would be the riskiest purchase right now.
If you are currently renting, and if you are committed to living in Toronto for at least a few years, and you want to take advantage of the capital gains exemption for a personal residence, buying an existing condo is not a bad idea. But, if it were me, I would wait it out at this stage of the market. You would almost certainly be buying at the peak of the market.
I would suggest that you do a lot of research. Some buildings in Toronto do increase in value and some do not. The more upscale you go i.e. the more you pay, the more likely it will hold its value. My parents lived in a condo for four years and hated it...but they made 60% on their investment!! Condos geared to the single, young professionals or students (studios, one bedrooms etc.) often lose value because of the competition they get from new builds.
Toronto will always be a high demand city, a safe bet.
I personally don't like the thought of condo fees every month so I might suggest looking at freehold townhouses instead.
I just caught the tail end of a CBC radio programs interviewing an expert on the housing market place. He said if you want to see the projected values of Canadian towns and cities in Canada, check out cmhc.ca. They project up to a year ahead. I haven't been there myself yet. This may help you.
Usually markets like Toronto are pretty safe bets. See if you can find stats (your local real estate board) on prices over the past 10 or 20 years. I would bet you will find prices have never gone down. That is important as you can view your purchase as an investment. The trick is will your money make more money than it will in the bank somewhere (and in many markets right now, no investment matches real estate), Your local newspapers probably run articles all the time on the prospects of various types of property there.
Also, interest rates are still very very good. As long as that is the case, buying is a good thing although you have to be careful how stretched you could become if the rates go up. The people who got into trouble in the 80's couldn't take the increase in rates and had to sell for $1 just to get out. So it's important not to cut it too close or to lock in so you know where you sit for a while.
Meanwhile, go with what you can afford, in the best location you can afford, and with the best features you can afford. If you make sure you have something others will want you will always do okay.
Your real estate board is full of data and you will see what districts, number of bedrooms, etc. have stayed profitable and they may have projections for the next couple of years as well. Just know, any projections are always speculation, not based in anything but what has happened in the past.
On the personal side, the only regrets I have ever heard coming out of Toronto is from the people who decided to move out and buy elsewhere. Their money didn 't do anything close to what it would have in Toronto when it came to selling...well unless they bought in Calgary or Vancouver and sold lately.
Well my mom just bought a condo right down town (london lofts) and she spent under 300k for a 2 bedroom that is about 700sq feet. Its as down town as you can get and I am guessing by the time it is done (2007 - 2008) that it will have increased in value by at least 50k. I think that there are way to many 1 bedrooms or 1 bedroom plus den (den tends to = a small room with little to no natural light) so i think if you want your condo to go up in value you have to buy a 2 bedroom, there are a lot fewer of them out there so that will drive the price up.