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condo market in TO

My parents and I are currently thinking of buying me a condo in TO for the next 2 years.
pay the 300K for it, have little to no maintenance, and as long as the market doesnt plumet, and lost 24000 dollars in value on the place, it would be cheaper than renting for the next 2 years.

Do you see this working? or is real estate in too much flux to say 'in 2 years, this place wont lose 24K in value'

no dont do it.. thats my only advice..dont buy with ur own money

Well, if you have 300K cache to pay for it then sure. Condo in downtown TO is unlikely to drop in price anytime soon.

However if you are taking a mortgage, don't forget to consider the interest that you'll be paying over first 2 years.

The condo market will bottom out. It can only go up for so long.

Spend the $300K on a house if you can, even a semi detached or townhouse. Land will only go up in value in the city.

Obviously owning a condo is more ideal than pissing away money on rent, but there's a huge risk in buying right now. At least with renting you know exactly what you're getting out of it.

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Originally posted by Durafei Well, if you have 300K cache to pay for it then sure. Condo in downtown TO is unlikely to drop in price anytime soon.

Like I said, it's inevitable that the market will collapse. There are signs of it already - condo buildings are being rented out as apartments b/c they weren't bought up.

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Originally posted by Durafei 300K cache

you seem like you've been working with computers too long

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Originally posted by Superstar you seem like you've been working with computers too long

LOL - how did you guess

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Originally posted by Superstar Like I said, it's inevitable that the market will collapse. There are signs of it already - condo buildings are being rented out as apartments b/c they weren't bought up.

Yeah, I guess in short term the prices may come down. However, in the long run I think the prices will only increase. Especially since baby boomers are getting older and would probably want to spend their late years in a Condo instead of a big house, that they don't need.

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Originally posted by Superstar you seem like you've been working with computers too long

if you have 300k why would you want to buy a condo. I say buy a house in T.O so you don't have to pay for the maintenance fees. Also the land will only go up in value.

Buy yourself a single or even a semi and it will be a lot easier to sell later on. I too don't like to rent and in a few years I would like to buy myself a house. Right now I'm not too sure if i want a condo downtown or save up a little more and get myself a house somewhere in markham.

Preferably I'd like to live downtown but it can get expensive.

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Originally posted by Skipper The condo market will bottom out. It can only go up for so long.

Yup...

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Spend the $300K on a house if you can, even a semi detached or townhouse. Land will only go up in value in the city.

...and if you can handle the double digit morgage rate to follow then go for it...

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Obviously owning a condo is more ideal than pissing away money on rent, but there's a huge risk in buying right now. At least with renting you know exactly what you're getting out of it.

Exactly why I'm renting right now.
The wifey and I were looking at the market for the past year and we looked at:
a) Houses outside Toronto.
For first time home buyers, unless you've got the cashflow, is waaaay out of our league.
Just being able to make the mortage payment is not enough.
Houses are money-pits plain and simple.
One has to be able to handle emergencies and not become 'house poor'.
I'm not saying buying a house isn't a good idea; I'm saying get one you can really afford based on your cashflow.
b) Condos in the Toronto area.
While the condo market looks real good right now, hold that thought.
The pot will only get sweeter as the vacancy rate is double what is was last year.
That and look around...there are tons of developments that aren't even finished!
Who are they going to sell to since a lot of people have already bought to take advantage of the low mortage rates??
And be real careful about the maintenance fees. Read the fine print about what the condo consortium intends to do to the property and the rates.

I don't claim to be an expert but through my own research and consultation with respectable businessmen I say, keep saving until you can really get a good deal and have the cash to do it.

Look for land value to drop in the next 20 years as baby boomers die off and suburbs become irrelevant. I feel sorry for property owners in 20 years or so when all thats left are less well off immigrants and children of baby boomers to buy and way too much property to sell (since we are not replacing ourselves and population is about to start dropping)

no the thing is all we're doing s replacing ourselves...guvernment is pissed off ppl are only having 2 kids instead of 3 or 4...but the cost of living keeps on going up and we're not making any more money..so how can u afford to have a family of more then 2 kids

actually we are having less than 2 kids...

^^^

one of the reasons non-english speaking imigrants with minimum of 12 kids are being allowed into the country...

quote:

Originally posted by Skipper The condo market will bottom out. It can only go up for so long. Spend the $300K on a house if you can, even a semi detached or townhouse. Land will only go up in value in the city. Obviously owning a condo is more ideal than pissing away money on rent, but there's a huge risk in buying right now. At least with renting you know exactly what you're getting out of it.

I agree with all of that...although people have been saying that about the condo market for a while and it's still pretty strong...my friend's low rise condo had two entire floors marked for rentals and they ended opening them up for sale and are almost sold out.

I don't think money would be lost if you bought a quality condo built in a good location, but I don't think it will appreciate too much over those two years either. A townhose or semi that doesn't need much work might be your best bet...it should appreciate more than a condo will over the next couple of years and be much easier to sell.

Just remember when you're investing in property .. You have to take property tax into consideration. 1.5% or thereabouts sounds cheap. But for a $300k house, it means $4.5k a year...

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Originally posted by psychosomatica it means $4.5k a year...

4.5k/year is still cheaper than the 12k in rent. Even with the interest on a mortage, I dont think that would add up to 8K in a year(or would it?)
Condos are more ideal (I think) , as I want to stay within walking distance to UofT.

dont buy a condo jspot take my advice on it...i work in these ideal half a mill condos downtown and trust me theyre but together so shitty number 1...number 2 the prices are outrageous..ad the only reason theyre outrageous right now is cause condos are the new in thing..dont get suckered ull lose tons of money..we're booming in construction now but in 2 years theres not gonna be alot of work and prices are gonna plummet big time...this is how high the prices are ever going to be to buy now could be a horrible mistake..trust a man that works with this every single day..dont buy

quote:

Originally posted by Durafei Well, if you have 300K cache to pay for it then sure. Condo in downtown TO is unlikely to drop in price anytime soon. However if you are taking a mortgage, don't forget to consider the interest that you'll be paying over first 2 years.

I've been asking around because I'm thinking about buying and alot of people (market analysts) are predicting a drop in the condo market in the next few years.

Buying right now in Toronto at the inflated prices is not a good idea if you plan on flipping it in a coule of years. Part of the problem is that interest rates have been so low, that people who shouldn't really have been in a position financially to get mortgages, did. So they were able to put 5% down and make high monthly payments over a long period of time. Once the interest rates start rising (which will be soon), these people aren't going to be able to afford their mortgages any more and there will be an influx of available resale condos, which will drive the prices down (even if only temporarily - the market cycles). The biggest hit will likely be a couple of years from now when people who locked in for 5 years at a low interest rate 2-3 years ago have to renew their mortgages.

Coincidentally, if anyone wants to buy or rent a condo in Oakville (where the market isn't saturated with new buildings and the city doesn't allow many new high-density developments), PM me. Right at the GO station - 30 minutes commute to downtown.

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Originally posted by j_spot 4.5k/year is still cheaper than the 12k in rent. Even with the interest on a mortage, I dont think that would add up to 8K in a year(or would it?) Condos are more ideal (I think) , as I want to stay within walking distance to UofT.

Have you thought of investing that 300k (returns would be high, for eg. GIC, etc.) if you have that amount of cash lying around , instead of putting the whole thing on a condo?

Just my $0.02

u wanna invest ur money invest it into property in vaughn....honestly.. the goal rigth now is to move people out north vaughn go to woodbrige or more north..invest in property there...with 300 thou u can get anice size lot with a nice size house and 5 years down the line itll prolly double in value

I am looking into this as well but from a quick glance at prices in the Toronto area I know that now is not feasible.

The way the market is going is pretty crazy. People are buying these overprices houses and condos. Eventually, buyers are going to say, no more and will not purchase at these crazy prices, do they will go down in value and the loser that bought now are going to be regretting because when it will be time for them to sell prices are going to be low. Right now property is raising in value but it will start to drop and that will be the time to buy for when it rises again.

Dont forget the penalty of cancelling your mortgage. The bank quoted me at $6000 after 2 years when i sold my rental house.

If you know what your doing you cant lose with realestate.
I say BUY.

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Originally posted by TrueToTheCrew If you know what your doing you cant lose with realestate. I say BUY.

+1 !!

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