The condo

Detached houses are in trouble. Condos are hot. It’s a phenom rapidly distorting the real estate market, especially in the troubled towns of Toronto and Vancouver.

For example, in YVR the top end of the market is collapsing (and was even before Comrade Horgan went tax-crazy). In the first three months of 2016, detached sales totaled 2,033. This year it’s just 733. Ouch. Two years ago 64 properties sold for $5 million or more. This year, just 5. In fact there’s now a 9-year supply of luxury houses in the market. Incredible.

Meanwhile condos are being snapped up by newbies and moisters. Many of them, sadly, will regret it. In YVR last month only 13% of the detached homes on the market found buyers. The buy-ratio for condos was 60%. And over the last 12 months, as other types of properties languished, condo prices were pushed up by 27%.

Why?

Simple. That’s all they can afford. The average Van detached is $1.6 million. The average condo is $682,000. So that’s where all the action has been. Recall that the Millennial cohort is huge – bigger than the Boomers. Even though four in ten lack the courage to emerge from their parents’ basements into the harsh light of society, there are enough moisters around to fuel this condo FOMO in both the Lower Mainland and the GTA.

Many believe buying a 550-foot concrete box in the sky is the first rung on a property ladder which will inevitably lead to a single-family home with a driveway and soil. They’re mistaken. For a great many, this experience will end in losses and tears. Condos are a pathetic long-term investment for a myriad of reasons. Let’s review a few of them.

First, you’re not actually buying real estate, just space. No land. No structure. You own your unit from the paint in, however you’re responsible for helping maintain the entire structure. Remember that depreciation of the building begins at about the time construction completes. Elevators, flat roofs and parking garages are incredibly expensive, have a relatively short life span, and are essential.

New buildings are sexy, which is why new buyers want to live there. But they don’t stay desirable for long. Five years later, it’s just another glass tower full of apartments, with fresh buyers attracted to pre-construction sales down the street. If the market softens (and it will) flogging a resale can be hard.

The purchase price of a condo, now huge in Toronto or Van, is just the start of your financial obligation. You face far higher insurance costs as an owner than a renter, plus property taxes. (Toronto’s just went up another 3%.) The biggest worry, however, are condo or strata fees – a monthly levy intended to look after common expenses. Thus can be hundreds to thousands a month. The average is $700-800 for a thousand-foot unit and $550 for a small one-bedder.

You have zero control over these fees since they’re set by a group of rank amateurs who sit on the condo board and struggle to manage a multimillion-dollar enterprise. The fees are almost always lowest when a building is first completed (because stuff has not yet started to wear out or break), then escalate over time. The higher the fees, the more impact on the resale value of your unit. And developers are literally throwing up towers these days, cutting corners on materials and equipment, then shoving off to the next project.

When you buy a condo you’re also accepting liability for the entire edifice. Remember the costs faced by owners of leaky condos in Vancouver? They were on the hook for huge special assessments to fix the damage, had unsaleable units during the entire process, and many of them had to move out. The same will occur in Toronto towers built a few years ago with sub-standard window glass walls. The glazing will have to be replaced, and the occupants displaced – then presented with a bill. Just wait. It’s coming.

You can no longer buy a condo and rent it out for positive cash flow – not with the purchase cost being so high, with increasing mortgage rates, property taxes, insurance and condo/strata fees. These are awful investments. Go get a brain-dead GIC instead.

Of course, living in a condo is just like being a tenant in an apartment – you have exactly the same irritations, but it costs you twice as much. The person above can have friends in for a Zumba class. The guy next door can smoke weed all day with that miserable smell seeping into the scant drywall separating the units. Cooking odours, kids ripping up the hallways, defaced elevators – it’s all part of communal living. But as an owner, you can’t just move out. First you must find a greater fool to take over.

Meanwhile the value of your unit is set largely by the entire building. Comparables are easy for a potential buyer to review. So there’s not a lot you can do to raise the value of your condo. No return for sweat equity. And if the building starts to fade, so does your piece of it, no matter how great you made it look.

Resale value is also affected by supply and demand. In Toronto or Van nobody’s making any more land, so detached houses are in limited supply. There’s a floor to market value. Condos, on the other hand, are essentially unlimited. Buildings in Toronto are reaching 70 and 80-stories into the air, containing hundreds of units. Every parking lot, gas station and golf course is being turned into more high-rise, multi-unit housing. There are over 400 new condos going up in Toronto, and close to 400,000 existing units in that city alone.

Finally, there are only so many people who actually want to live in 500, 600 or 800 square feet in a place with no outside space, limited privacy, rising overhead and no potential for expansion. Once this crop of Mills starts to mate, breed and mature, you can be sure an exodus to the burbs or other affordable places will begin. But who will they be selling their condos to? How will they climb the property ladder without having achieved big equity gains?

Nope, condos are the worst form of real estate to own. The kids being sucked in by the current boom are naïve, gullible and vulnerable – exactly what you’d expect for first-time buyers. They would be far better off renting than owning, reducing risk and saving their precious cash so one day they can stand on an actual patch of dirt, look down, and say, ‘mine.’

236 comments ↓

#1 Tony in the 6ix on 03.31.18 at 5:06 pm

First… happy long weekend Garth, all!

#2 Lawnboy on 03.31.18 at 5:15 pm

The moral here is…..“ Never break into jail!”. And this condo thing is prison for sure.

#3 Stan Brooks on 03.31.18 at 5:17 pm

Canadian condos have no analog in the world.

Crappy glass walls in tundra temperatures in the winter/some places in Siberia are actually warmer.

Amateur condo board (good hit there)

Greedy developer who sell old ‘stainless steel’ appliances, radioactive granite counter-tops and kitchen cabinets that only last 2 years.
There are companies specialized in fixing crappy condo kitchenettes (you can hardly call that kitchen)

In addition these units are small (bedroom 2.3 x 2.5 m, really?), cold (low quality glass wall no insulation ir crappy insulation of the remaining minimum non glass external walls), noisy (this internal walls).

It is the emanation of the greed and idiotic building standard that allow such ‘building’ to be built legally in 1st place.

In addition you add community ownership with bunch of people you have nothing in common with.

Look at European apartment buildings built solidly that last hundreds of years with minimum maintenance and fees.

How is that possible?

I guess people there are not that stupid as us.

#4 waiting on the westcoast on 03.31.18 at 5:22 pm

Recency bias at work…

At least the sfh owners have the advantage of increasing density to propel their properties value in the future. Condo people might as well go and buy some construction supplies from home depot and watch it rot in the rain…

#5 Arctic Outback on 03.31.18 at 5:24 pm

Happy Easter to all blog dogs! Reading this post today makes me excited to get out in my yard this spring.

#6 John on 03.31.18 at 5:27 pm

Garth – Would you say the same about hard loft boutique condos (e.g., one off units in converted structures) in the $1M+ range (besides them being overpriced in the current market)?

#7 Jaco Joubert on 03.31.18 at 5:33 pm

> The same will occur in Toronto towers built a few years ago with sub-standard curtain glass walls. The glazing will have to be replaced, and the occupants displaced – then presented with a bill. Just wait. It’s coming.

First off, in Toronto the vast majority of buildings are not curtain walls, but window walls. Only luxury buildings like One Yorkville are curtain walls.

Secondly, the first City Place buildings was completed 15 years ago and they aren’t close to needing a facade replacement. Even when they do replace it moving out is probably not going to be required. The Palace Pier condos built in 1978 was just reglazed and nobody moved out. The whole window thing is overblown.

> Once this crop of Mills starts to mate, breed and mature, you can be sure an exodus to the burbs or other affordable places will begin.

I am sure _some_ millennials will move, but it if I will. Living in soulless suburbia where nothing is walking distance and car culture reigns supreme is my personal hell. I’ll take the 800 sq ft thank you very much.

#8 Gregor Samsa on 03.31.18 at 5:33 pm

I’ve run the numbers on condos many times and the conclusion is always the same: they only make sense over renting if (and only if) you pay 100% cash for the whole thing. In that situation, your carrying costs + depreciation can end up being lower then rent. But you are also taking on all the risks Garth wisely mentions.

I could pay cash for a condo in my city (a lousy one, at least), but still choose to rent.

#9 Penny Henny on 03.31.18 at 5:38 pm

Aliens exist. This one is for you Smokie.
That dog looks like my Penny.

#10 crossbordershopper on 03.31.18 at 5:39 pm

with so much land in canada, you wonder why real estate is so expensive, man you can buy a house for 20, 000 in lots of little places throughout Canada. New Brunswick, Saskatchewan, sure you have no neighbours or services but you have water and heat, and hydro. the rest is wireless. once you retire, all you need is proximity to a hospital and grocery store. nothing else. it isnt like you need to to go to Canadian Tire to buy a hammer or something

#11 Penny Henny on 03.31.18 at 5:41 pm

Oops. Forgot the link. ALIENS.
http://nymag.com/selectall/2018/03/13-reasons-to-believe-aliens-are-real.html?utm_source=Daily+AR&utm_campaign=13d0cd88a4-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_c08a59015d-13d0cd88a4-144097405

#12 KAC on 03.31.18 at 5:48 pm

Wow, I didn’t know condo owners don’t own any land. What exactly is that brown, earthy looking stuff they are built on top of? If it’s land who owns it? The tooth fairy?

And who owns those common areas, hallways, lobby, recreational facilities, garden areas? Oh, I know, it’s the strata corporation. But who owns the strata corporation? I know, it’s the unit owners who all own a proportionate share. Hence, the strata corporation owns the land, the unit owners own the strata corporation, hence the unit owners own a share in a large slice (of often prime) land and facilities.

Yes, condos need to be maintained and that costs money, but I have discovered to my horror that my house also requires maintenance ….. who knew? And when I had to replace my roof I was shocked to discover that I had to pay for the entire job myself, my neighbours refused to chip in.

Then I heard about an old condo building on Smythe Street in Vancouver where the unit owners recently sold their individual units to a developer for five times their assessed value.

A lot of this redevelopment is starting to happen in Vancouver’s prime locations because of the shortage of land, and when a four floor building gets rezoned for 40 or 50 floors the resale value of the site soars!

BTW, with my detached home I only have the “surface rights” to the land, just the area from the grass roots upwards to the municipal height limit for single family homes. Bummer!

Condos and SFHs both have their advantages and disadvantages, given the choice between an old stucco condo in a poor neighborhood or a newer SFH in a good neighbourhood the SFH sounds much nicer and will understandably cost much more.

However, a newer build, large luxury condo with sweeping water views, a large private terrace and a prime Downtown location will understandably cost much more than an old house in a poor location. It’s all about location and desirability.

The most expensive condo sold in Vancouver in recent years sold for $55 million. The buyer could have bought an extraordinary detached home for that price but it wouldn’t have had the prime Downtown location.

Please don’t tell me the buyer was stupid unless you can afford to pay a similar amount for your home.

#13 LS in Arbutus on 03.31.18 at 5:51 pm

FLOP! (Happy Easter btw.)

Check out this one:
Listed $3.388
Assessed $3.398 (new build so not sure this entirely captures that)
Purchased $3.050 May 15, 2015

If this is a new build, which it appears to be, then they’ve entirely lost their shirt? Just transx costs are $300k.

How much are construction costs on a new build like this?

http://www.realtylink.org/prop_search/Detail.cfm?areatitle=&ARPK=&ComID=&agentid=&MLS=R2249655&rowc=30&rowp=26&BCD=GV&imdp=9&RSPP=5&AIDL=23&SRTB=P_Price&ERTA=False&MNAGE=0&MXAGE=200&MNBT=0&MNBD=0&PTYTID=5&MNPRC=700000&MXPRC=200000000&SCTP=RS

#14 saskatoon on 03.31.18 at 5:55 pm

“mine”???

unfortunately, canada has no constitutionally protected property rights.

#15 Your Local Realtor on 03.31.18 at 6:07 pm

The world population is projected to reach over 15 billion people by 2100. Houses and land are in short supply. What would cost $100,000 for a house in the 1980s will be cost $10 million by 2100 using today’s dollars. Canada population will increase to 400 million by 2085. Buy now or live on the streets by 2100.

#16 Penny Henny on 03.31.18 at 6:09 pm

Once this crop of Mills starts to mate, breed and mature, you can be sure an exodus to the burbs or other affordable places will begin. But who will they be selling their condos to? -GT
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Gen Z of course.

#17 Smoking Man on 03.31.18 at 6:24 pm

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#18 Snowboid on 03.31.18 at 6:25 pm

While I agree with many of the comments about condos, they are certainly attractive for many folks (like us).

Some of the positives are: we are in an area where we can walk to everything necessary in our senior lifestyle: two supermarkets, two drugstores, pubs, medical and dental.

We can also walk to the beach, restaurants and parks.

Having said all of this, since we sold our winter home in Phoenix, we have been looking at SFHs because we want a dog – and of course we are in a no-pets complex.

But – noted a few days ago, Kelowna is insane currently, and any SFHs under $ 650,000 are junk. Sorry, Professor – but your example the other day is a modular home on leased land.

If you want a decent place that’s not backing onto ‘freeways’ or prone to flooding or mudslides – think $ 700,000 and up. Any good deals our agent finds are sold before we can even look at them – this is without a doubt speculators buying them up.

Even our 1400 sq ft condo is assessed at >$400K (we paid under $250K two years ago).

I too am on the side of cooling the market here, I’m not sure if the NDP program will work out – at least it’s something.

BTW, we did pay extra taxes on our former Phoenix home as non-residents (as did all the US snowbirds who didn’t live there fulltime).

Also, subject to an errors in our IRS/AZ/Can returns we ended up with a net gain (on an original investment of $160K CAD – house and improvements) of just under $90K CAD. Not bad for seven years of vacations in the sun and sand!

#19 Baroque Moustache on 03.31.18 at 6:29 pm

Some fake news from “Your local realtor”. “Canada population will increase to 400 million by 2085.” You’re an order of magnitude too high, the forecasts are between 40 and 60 million.

#20 Jungle on 03.31.18 at 6:30 pm

Garth I have agreed lately with you telling people not to buy detach, but today I agree with your condo bashing. Really a very risky stepping stone imo only because supply is elastic. A downturn in market and these thousands of units will just be “a dime a dozen”

#21 For those about to flop... on 03.31.18 at 6:35 pm

#13 LS in Arbutus on 03.31.18 at 5:51 pm
FLOP! (Happy Easter btw.)

Check out this one:
Listed $3.388
Assessed $3.398 (new build so not sure this entirely captures that)
Purchased $3.050 May 15, 2015

If this is a new build, which it appears to be, then they’ve entirely lost their shirt? Just transx costs are $300k.

How much are construction costs on a new build like this?

http://www.realtylink.org/prop_search/Detail.cfm?areatitle=&ARPK=&ComID=&agentid=&MLS=R2249655&rowc=30&rowp=26&BCD=GV&imdp=9&RSPP=5&AIDL=23&SRTB=P_Price&ERTA=False&MNAGE=0&MXAGE=200&MNBT=0&MNBD=0&PTYTID=5&MNPRC=700000&MXPRC=200000000&SCTP=RS

/////////////////////

Hey LS,Happy Easter to you too.

I don’t really celebrate it ,so what I do instead is hide all the wife’s handbags.

That house…the first thing that jumped out at me was the house next door looked similar and so I looked on Zolo and the house next door is up for sale as well.

I will look into it later ,but for now I have to hide more handbags before my wife gets home from the gym…

M43BC

https://www.zolo.ca/vancouver-real-estate/3376-w-king-edward-avenue

#22 devore on 03.31.18 at 6:36 pm

#12 KAC

And what are 50 floor condos getting rezoned to?

#23 Jungle on 03.31.18 at 6:38 pm

@#12 kac

The issue is in city they are not making more houses but condo developers keep building.

Supply and demand still favours detach.

Special assessment and abusive egotistic and corrupt condo board member out of your control.

Plus Garth right, search about poor build quality on new builds all those windows are flawed and short life span.

#24 Mark on 03.31.18 at 6:40 pm

“Re: #12 Mark on 03.30.18 at 5:27 pm
The U.S. stock market will tank the TSX for decades to come. No foreigners will buy anything Canadian due to the falling Canadian dollar.”

Yet the RE pumpers allege that foreigners are buying up all the RE. So which is it?

Fact is, large Canadian TSX corporations are incredibly profitable, the TSX60 index now trades at a trailing P/E ratio of less than 15 (with earnings rising significantly, particularly at the banks, golds, railways, and O&G), and with the housing bubble now deflating, the cost of corporate finance is falling as lenders desperately seek new places to invest their money.

To the topic of Garth’s wisdom today, I’d just point out that a lot of people are doing pro formas on condos assuming that the condo fees cover the entirety of long-term maintenance. On new builds, vendors are notorious for setting fees too low in order to increase the marketability of their projects. And even then, condo fees almost never cover maintenance to the interior of a condo unit. This has to be accounted for separately, and in all the pro formas I’ve seen online, it was rare to see anyone allocate even a dime for repainting, new interior fixtures, carpet replacement, etc. It was all just magically assumed that such elements would last forever.

#25 T on 03.31.18 at 6:42 pm

#12 KAC on 03.31.18 at 5:48 pm

Something your comment could use is the costs associated with ownership of condos vs sfhs.

Maintenance costs are extreme in condos, and most often they do not include utilities. A 1000 square foot condo in Toronto generally has a $850+ per month maintenance fee. That’s over $10,000 a year. You could replace the roof of your average house twice a year for that. This isn’t including any special assessments either.

Heating and cooling condos is also expensive, especially the newer ones. The windows in the new buildings always leak. I lived in a brand new condo on the Toronto waterfront for 5 years, when the wind picked up you could feel a breeze in the unit. Floor to ceiling windows with sliding glass doors to the balcony – not energy efficient.

Point being – condos are a massive money sink in every way imaginable.

Never mind the headaches of dealing with ignorant tenant neighbours, inept property management, and condo boards. Personally I don’t like inexperienced boards spending my money (liberally).

I would never buy a condo again.

#26 Jungle on 03.31.18 at 6:47 pm

You can run a detach way cheaper than paying maintenance fees. Imo

#27 Hans on 03.31.18 at 6:48 pm

Garth, what are your thought on condos for snow birds or the equivalent for those who travel west for winter? Renting is simpler to be sure, but for those that have a specific area they want to be in, say to be near kids or grandkids, tenure of housing is guaranteed with ownership over renting. Condos remove much of the property maintenance at a price, so those that are older or do not want to be bothered with grass cutting and snow shovelling, condo ownership seems like an option that makes some sense (albeit at a price).

#28 Zapstrap on 03.31.18 at 7:05 pm

Lived in a high end townhouse for a while. Volunteered to be on the board for a few years. That’s where you get to see it all. Ongoing problems were routinely hidden in the “minutes” as normal expenses so potential buyers knew nothing about them. The place was very well managed as the board members were all retired CEO’s and such with time on their hands. They knew the value of a dollar and no one complained much about the maintenance fee as they knew it was protecting their equity. The place had 95 units on 25 acres of prime LM real estate. Certainly not the norm though … but it was a great lifestyle.

#29 Sitting on the toilet thinking on 03.31.18 at 7:13 pm

A wise man once told me a condo is like herpes once you get it you can’t get ride of it

#30 dakkie on 03.31.18 at 7:18 pm

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#31 KAC on 03.31.18 at 7:19 pm

“#23 Jungle on 03.31.18 at 6:38 pm
@#12 kac

The issue is in city they are not making more houses but condo developers keep building.

Supply and demand still favours detach.

Special assessment and abusive egotistic and corrupt condo board member out of your control.

Plus Garth right, search about poor build quality on new builds all those windows are flawed and short life span.”

——————————————————————————

KAC responds:

In Vancouver, supply and demand has caused detached prices to tumble over the last year or so, meanwhile condos continue to soar. Detached tend to outperform in rising markets but condos outperform in falling markets.

The “no more land” argument was also fashionable way back in 1982 when Vancouver home prices dropped by around 40% in one year.

Yes, lots of condos are poorly contructed, and so are many newer houses. There is a popular TV show all about fixing poorly constructed houses whose builders have disappeared. Buyer beware.

#32 Lost...but not leased on 03.31.18 at 7:30 pm

EXCELLENT DISCUSSION re CONDOS GARTH !!!….

I shudder at the inevitable and ultimate blowback of the “non detached”…”multi family”…”strata” ie CONDO market COLLAPSE.

As you state, “detached” effectively has a limited quantity and is experiencing a correction…… economically healthy.

To the contrary….Condos are being constructed at unprecedented rates..perhaps the RE equivalent of fractional reserve banking(fsb)…yet ironically supported by original fsb

The future I foresee is one literally won’t be able to give condos away..the Detached market will retain its historical preference by buyers.

#33 FOUR FINGERS WATSON on 03.31.18 at 7:33 pm

Garth, what are your thought on condos for snow birds or the equivalent for those who travel west for winter? Renting is simpler to be sure, but for those that have a specific area they want to be in, say to be near kids or grandkids, tenure of housing is guaranteed with ownership over renting. Condos remove much of the property maintenance at a price, so those that are older or do not want to be bothered with grass cutting and snow shovelling, condo ownership seems like an option that makes some sense (albeit at a price).
…………………….

I am in exactly that situation. I lock the door and travel for months at a time, no problem. Just do your due diligence on the building ( roof etc ) and the strata balance sheet and u will be ok.

#34 Reynolds531 on 03.31.18 at 7:38 pm

My first house was a townhouse with a beautiful ivy cooling the south side. Twenty years later I’m still mad the board cut it down.

Never again.

#35 Hammerhead Hogger on 03.31.18 at 7:40 pm

Took a drive with the wife and kids up to the general store today. The smoked brisket and peanut butter chocolate ice cream rocks!! We bought a cupcake treat for the dog. Couldn’t bring him, he’s to big to fit in the car with all the kids. Mastiff rotti. You have amazing place Garth! Thanks for all the advice. Got the kids reading your blog now too! When I get the Harley back together again I’ll be cruising up there for more of that ice cream. Cheers

#36 BooBooBear on 03.31.18 at 7:41 pm

What about condos in the outer burbs? (Surrey, Richmond, PoCo etc.) People need to live somewhere afterall. Doesn’t it make, at least, some sense to be building equity rather than paying rent for years on end??

#37 KAC on 03.31.18 at 7:46 pm

#25 T on 03.31.18 at 6:42 pm

“Maintenance costs are extreme in condos, and most often they do not include utilities. A 1000 square foot condo in Toronto generally has a $850+ per month maintenance fee. That’s over $10,000 a year. You could replace the roof of your average house twice a year for that. This isn’t including any special assessments either.”
————————————————————————-

As I previously mentioned, when the roof on your your house needs replacing you don’t share the cost with dozens (or hundreds) of neighbours.

The typical monthly maintenance fee for 1,000 sq. ft. condo in Vancouver is around $500 and typically includes insurance and hot water, so it’s apperenty much cheaper than Toronto where the horrific climate must be taking a hugely disproportionate toll on any building’s maintenance costs.

Detached homes and condos both have their advantages and disadvantages. A condo’s advantage is that it can allow for much more freedom of lifestyle. No gardening (unless you overpopulate your balcony or terrace with plants), worry free “lock it and leave it” for vacations, great locations steps away from beaches, shopping, theaters and restaurants, etc., etc.,

I’m sorry you were in such a bad condo, they certainly exist, but I’ve also had friends who’ve lived in bad detached neighborhoods with frequent break-ins, vandalism, neglected gardens, obnoxious neighbours, etc., etc.,

My detached experience has been very positive …. except for being car dependent, which is something I hate but I’ve learned to live with it in exchange for having more square feet of living space for the same price as a better located condo.

When I retire I will definitely head back Downtown for the lifestyle. No more traffic woes, no more gardening, much better security and I’ll be able to have wine with my far more frequent restaurant dinners, and then walk home afterwards …. no police roadblocks!

I just hope Vancouver’s current trend of tumbling detached values and soaring condo prices doesn’t continue.

#38 Common sense on 03.31.18 at 7:47 pm

A good friend manages a group of over 40 condos for a property management company here in Niagara…

He has always maintained ” Never ever by a condo.”

#39 J. Canuck on 03.31.18 at 7:54 pm

KAK says:The most expensive condo sold in Vancouver in recent years sold for $55 million. The buyer could have bought an extraordinary detached home for that price but it wouldn’t have had the prime Downtown location.

Please don’t tell me the buyer was stupid unless you can afford to pay a similar amount for your home.
******************************
Who says that rich people are smart? Donald Trump?

#40 Linda on 03.31.18 at 7:56 pm

Never cared for condos myself. Seemed to be all the risks & none of the rewards of ownership, plus the perpetual condo fee. If one is going to pay a monthly fee, make sure it is for something you have actual control over. Or a rental unit you can leave w/o the trouble & expense of having to maintain & stage to sell.

So, what to do with the mass of condo towers in the future? Is there any chance that downsizing seniors might be willing to trade the big house for the box in the sky? Wouldn’t do it myself, but the house I live in is the kind that promotes ‘aging in place’. Single story, open concept, small & easy to take care of. Plus I’ve done the math, using prices posted by nursing, cleaning, yard & prepared meals/groceries delivered to your front door services. Expensive? Yes, but cheaper than the prices I found for ‘basic’ care in a home. Plus I used the high end rates when doing my calculations rather than trying to find the least expensive option to make sure I’d not be underestimating how much it would cost in comparison.

I agree with Garth. Steer clear of condos or rent one if you want to try one on for size. The condo rules may initially say ‘no rentals allowed’ but rules often change to reflect reality.

#41 Nonplused on 03.31.18 at 8:02 pm

Many years ago, when I bought my second house (wife got the first one), I faced a dilemma. $170,000 (I said many years ago!) for a new condo in a wooden structure 4 story building, or literally just around the corner an old 950 sqft post war house on a 40 foot lot with a garage and a 70’s style sun room with a hot tub for $175,000. I bought the house.

First thing I did was suite the basement. I don’t know that I ever made money on that but I definitely paid for the renovations and when I sold the house it was key to the buyer’s interest.

Over time I totally redid the main bathroom, kitchen, living room, deck, fencing, furnace, hot water tank, and added insulation, a hobby garden and parking pad. Much stuff was needing redoing.

But I sold it for well over twice what I paid for it 5 years later, so it was a happy ending. Try doing that with a condo.

The only sad part was that the new owner wanted the hot tub removed, which I found sad as it was either take out a wall or cut up the tub. I have fond memories of that tub. There are good reasons for a married man to have a hot tub, but even better reasons for a single man to have one.

Anyway, as skeptical as I am about these 3-4 story wood condos, I am even more skeptical of the super-high-rise condos. How do you get up and down if the power is out? Do they have back up generators? I mean, if the power goes out at work it’s fire drill time to get down, but if you are at the bottom of your condo building with a couple bags of groceries and you live on the 40th floor, what do you do then? Hopefully you are in good shape and there are windows in the stairwell.

Also, I had a friend who owned an older condo, and it was a bit of a nightmare because eventually the “reserve” ran out and they had to raise the condo fees. The same thing just happened with my water co-op, thanks in part to the new carbon taxes. Apparently it takes quite a bit of electricity to pump all that water around. Any time you are in “joint ownership” you also have “joint responsibility” and when the bill comes due it does not depend on your income.

Pumping water through a pipeline is more efficient than delivering it by tanker truck but thinking of the truck give you an idea what is involved. A carbon tax is a tax on everything, including your water. Even if you have your own well, it has a pump, and you pay carbon taxes to get the water out of the ground. They are horrible. I suppose a few farmers can use windmills to pump water, but where I live neither the well nor the windmill are permitted.

#42 NOSTRADAMUS on 03.31.18 at 8:08 pm

HARD ASS!

A great number of Real Estate cowboy stars (less then 10 years experience) shortly will find that the one way money highway they have been riding has come to an abrupt end. And the cautionary signs they passed along the express way are now coming back to haunt their dreams. They are now experiencing night sweats thinking about all the unpaid income taxes and H.S.T. installments they have dragged forward from the last couple of years income. With no spring market to play catch-up and real estate desk fees backing up, plus no dollars for advertisement, looks grim.
Say hello to Hard Ass!
If you think Banker Buzzsaw has no heart wait until you meet his evil twin brother ( Hard Ass) down in the holding pens at Revenue Canada. He takes his job seriously, for years he has watched patiently, maybe with a little jealously as you lived the good life. While he slaved away day in day out listening to the B.S. of big time no time losers. Cowboys with 10 gallon hats, big belt buckles, Tony Lama cowboy boots with sharp jingly spurs used to move their clients along to the promised land. You know the ones, big time cowboys with no cows in the barn. Hard Ass can see a lot of overtime coming his way. Maybe a promotion or two. The fallen, yesterdays real estate cowboy stars are just the ticket to the big time. Let her rip! There’s no way your ever going to buck Hard Ass off, he’s seen and heard every trick in the book. This isn’t his first rodeo, he’s been busting big time no time B.S. artists for years.

#43 T on 03.31.18 at 8:18 pm

#37 KAC on 03.31.18 at 7:46 pm

I’ve researched condos in Vancouver and their maintenance fees are no different than Toronto.

Yes, when your roof on your house needs replacing you don’t share the costs. Agreed. However, like I said, you could replace the roof on an average house twice a year for about the same costs as a year of maintenance. Shared costs or not – the math doesn’t work in favour of condos.

Crime can be a problem in condos as well as houses.

You did hit one point, albeit not directly. Purchasing and living in a condo is about lifestyle, especially in a large city. Not having to drive everywhere is nice, but having to walk past the hordes of homeless on your way to anywhere just isn’t worth it. Especially in Toronto or Vancouver lately – the horde is real.

#44 NoName on 03.31.18 at 8:18 pm

interesting read

Why the Germans are obsessed with saving money.

https://qz.com/1241591

#45 Pete in Barrie on 03.31.18 at 8:21 pm

A little off topic, but I have noticed in my south end neighbourhood in Barrie that a lot of house have “For Lease” signs in front of them. Not sure what this is indicative of – Owners can’t sell for what they want? Investors? Foreign ownership?

Any thoughts?

#46 Gravy Train on 03.31.18 at 8:26 pm

#17 Smoking Man on 03.31.18 at 6:24 pm
DELETED

Use your words! :)

#47 Catalyst on 03.31.18 at 8:36 pm

What about condo townhouses? Half way there?

#48 Long-Time Lurker on 03.31.18 at 8:36 pm

#114 Karma on 03.31.18 at 1:40 pm
Garth and blog dogs,

I’m trying to introduce a friend to this blog and she has zero idea on how to create a portfolio. So I want to provide her with the best of Garth’s portfolio creation posts over the years. Does anyone remember some of the best ones (and their dates of posting) for a newby?

>A quick search reveals:

Seeking balance
January 8th, 2018 — Book Updates — E-mail this blog post to a friend

So, it’s probably time to remind you that over the active life of this pathetic blog, a portfolio with 40% safe stuff (roughly half bonds, half preferreds) and 60% growth assets (Canada, US and international equities, REITs), diversified by using ETFs, has returned over 7%. During that time there were some horrible markets (2011 debt crisis, 2015 oil collapse) as well as great ones (like 2017). Unlike real estate, the portfolio is always 100% liquid, does not require land transfer tax to buy or 5% commission to sell, doesn’t come with property tax, tenants, insurance or cable bills, nor does it have strata or condo fees. Instead of costing you money, it can pay you income – in a tax efficient way. And when you want to unload, there’s no realtor or Audi involved.

This looks like an important year. Continued growth, rising stocks, more record highs (there were 70 in 2017), higher rates, wobbling real estate, endless Trump, US midterm elections and, yes, Oprah2020. We’re way overdue for a market correction. Find balance, and you just won’t care.

How to stop worrying
January 31st, 2018 — Book Updates — E-mail this blog post to a friend

Why 60/40
February 17th, 2018 — Book Updates — E-mail this blog post to a friend
RYAN By Guest Blogger Ryan Lewenza

Investing 101
September 27th, 2013 | Book Updates | E-mail this blog post to a friend

Happy Easter!

#49 SimplyPut7 on 03.31.18 at 8:38 pm

Luckily most people buying condos in the GTA are not millennials, they are gen-x and boomers who think it’s easy to be a landlord or hope to flip their units before the condo is completed.

Most millennials I know are renting and do not own these units, as they have seen inside these buildings when visiting other renters and know they are crap that won’t last 20 years.

In the GTA detached houses and townhouses are falling in price so much it’s cheaper to get a house than a condo.

Can you imagine looking at this box for the next 20 years as the maintenance fees increase to nearly $1,000 and the building starts to crumble? I would take my chances in the suburbs with a house that has 3-4 times the room than risk never being able to sell this unit.

https://d3ljd161w9lywl.cloudfront.net/property/image/C4081368/303-20-gladstone-avenue-toronto-on-3455_C4081368-1939977-1_lightbox.jpg

https://d3ljd161w9lywl.cloudfront.net/property/image/C4081368/303-20-gladstone-avenue-toronto-on-2151_C4081368-1939977-2_lightbox.jpg

This beauty can be all yours for 600k and the maintenance fees are already $520 a month.

#50 Re. Hammerhead hogger on 03.31.18 at 8:38 pm

You got your kids reading his blog.
May the Lord have mercy on their souls.

#51 Boombust on 03.31.18 at 8:41 pm

You’re absolutely right, Garth; the Millennials now buying condos here in YVR will have serious regrets. They will literally be “boxed into a box in the sky” with no way to sell them when the condo market turns.

Also, the average newbie “investor” will be in serious trouble when their HELOC-purchased “investment condo” drops in price in the face of steep developer discounts…which WILL be on their way probably sooner rather than later when the eventual condo sales slowdown gathers momentum.

#52 Protea on 03.31.18 at 8:52 pm

They would be far better off renting than owning, reducing risk and saving their precious cash so one day they can stand on an actual patch of dirt, look down, and say, ‘mine.’

AGREE GARTH SO TRUE .Excellent article today one of your best . not one too suck up but its true.

#53 Down and Out on 03.31.18 at 8:59 pm

Due diligence is important when buying a condo or SFH.The condo act is evolving quickly now in Ontario with a dispute center, bad non paying people can be booted out,(try that in a SFH neighborhood) board member education mandatory and reserve fund set up from a engineer study every 3 years to prevent some of the items talked about earlier .I needed a SFH when raising the family ,now me and the missus enjoy the lifestyle of the condo .Most condo boards have a rough time recruiting new members and now that property mangers have to be licensed weeds out the bad ones .I hope one day the SFH evolves more protection from the bad contractors ,neighborhood,flooding etc. More people involved like a condo board putting their minds together can solve problems quickly and efficiently than single person .

#54 What ? on 03.31.18 at 9:05 pm

‘…..cutting corners on materials and equipment, then moving to the next project ‘

Wow. Serous allegation Garth . Do you have any evidence of this ? That this is common place in the condo business ?

Please note an isolated incident does not speak for the industry

#55 mike from mtl on 03.31.18 at 9:17 pm

You know, us north americans have to be the stupidest bunch there is.

We buy RE at any price regardless of how its constructed.

Most of landmass on earth, yet throw together “1m+” halfassed wood and gyproc monstrosities. Also in equally disgusting suburbia without regard to actual living services. In the UK most of the newer ‘homes’ here wouldn’t pass for a tool shed.

Also the idea of purchasing apartments (aka condos here) is not really an issue elsewhere. However it’s how it’s done here which is so stupid. 8cm concrete, aluminium stud, gyproc, caulked in glass curtains. Even in a second or third rate Russian city, these would have CONCRETE block walls and last 50+ years.

Why are we so stupid to accept this, and blindly bind ourselves to 20-30 years to pay for such is totally beyond me.

#56 LS in Arbutus on 03.31.18 at 9:25 pm

OMG Flop, leave your poor wife’s handbags alone, small pleasures.

Hmmm…. so likely it was a 66 foot lot purchased for $3.3 and then subdivided… that might make sense.

So selling (list price) $6.8 million for both.

Paid $3 million plus $70k property purchase tax, plus $2 million to construct both homes? Approx $5.1 million, not including carry costs. Although $1 million each to construct is steep no?

So some profit left still possible?

#57 Hogtown Indebted on 03.31.18 at 9:30 pm

Sad and very true. The looming condo debacle has been documented for years already.

“Throw-away buildings…”

https://thetorontoblog.com/2011/11/14/cbc-news-series-will-investigate-looming-threat-of-slow-motion-failure-for-throw-away-glass-condos/

“The life cycle is clear. They are okay for the first five years, they gradually deteriorate by year 10 … and don’t even reach year 20 before significant remedial work needs to be done. In 50 years these buildings may well become an urban slum.”

– Ted Kesik, professor of building science at the University of Toronto

http://www.cbc.ca/news/canada/toronto/fears-that-shoddy-toronto-condos-could-become-future-slums-1.2796979

The percentage of these being bought by amateur specuvestors is incredible.

A major condo collapse is already on the horizon, I think.

#58 ryan on 03.31.18 at 9:43 pm

great read today.

#59 Keith on 03.31.18 at 9:47 pm

One of the few condos worth buying in Vancouver:

https://bccondos.net/the-vault

#60 Leo Trollstoy on 03.31.18 at 10:05 pm

For example, in YVR the top end of the market is collapsing (and was even before Comrade Horgan went tax-crazy). In the first three months of 2016, detached sales totaled 2,033. This year it’s just 733.

the real estate peak in 2017 was something to behold!

so is the aftermath

#61 Former Fool on 03.31.18 at 10:12 pm

One of your best posts Garth. Happy Easter to you and the blog dogs.

In my own building, the management is lax with the common areas deteriorating, frequent break ins in the underground parkade (and management refusing to install security cameras), and residents abusing the enclosed outside room intended for small garbage (and instead throwing away furniture, etc.).

One resident was so disrespectful and often played loud music into the early hours of the morning. After enough of my complaints (and his landlord receiving a few nice fines, which I’m sure he took from the deposit), he was finally evicted.

My neighbors are struggling to sell their own unit for $250k; I found the previous listing online for the same unit, where the ask was $280k, sometime between 2010 and 2016 (I am unable to determine the exact year). I assume they paid close to that, and I feel bad for them. Then there is the neighbor down the hall, wanting an additional $100k for an additional 267 sq feet more. He is delusional. Needless to say, his property has sat on the market for a couple of months now.

At least my condo unit is nice and the rent is cheap. But I couldn’t imagine being a prisoner here, legally liable for the maintenance costs of this building. Renting a condo is a stress free way to enjoy its benefits. Buying a condo is buying a liability.

On a final note, my old neighborhood (I cashed out in 2014) has seen a correction in prices for SFHs. Homes that were selling for $430k or so are now being listed for as low as $370k (and still not selling!). Some sellers are still hanging onto 2014 prices, which they won’t get. Feel for them, but better them than me.

#62 I’m stupid on 03.31.18 at 10:12 pm

Condos can be summed up with one sentence. They’re like STDs easy to get but difficult to get rid of.

#63 SoggyShorts on 03.31.18 at 10:14 pm

#15 Your Local Realtor on 03.31.18 at 6:07 pm
The world population is projected to reach over 15 billion people by 2100. Houses and land are in short supply. What would cost $100,000 for a house in the 1980s will be cost $10 million by 2100 using today’s dollars. Canada population will increase to 400 million by 2085. Buy now or live on the streets by 2100.

*****************************
HA! 400 million? Solid frankennumber only off by about 87%. Your name is perfect for your post.

#64 Victor V on 03.31.18 at 10:20 pm

https://www.thestar.com/life/homes/2018/03/30/339000-in-woodbridge-359000-in-mississauga-what-these-condos-got.html

WOODBRIDGE
Location: 7777 Weston Rd., Unit 1806
Asking price: $434,000
Selling price: $339,000
Previous selling price: $330,000 (2015)
Size: about 653 sq. ft.

#65 TheDood on 03.31.18 at 10:26 pm

#15 Your Local Realtor on 03.31.18 at 6:07 pm

“….Buy now or live on the streets…..”
______________________________

Realtor advice………nice.

..Or, don’t buy. Save your dollars instead, invest, and retire comfortably wherever you want in the world. Buying RE in Canada is a losing strategy. There is no financial argument in favour of buying. Stay on the sidelines, rent, save, invest, and watch it all burn to the ground. Those who wisely chose to stay on the sidelines during the insane run up in the last few years will have a smorgasbord to choose from, IF you still want to buy, although if renting, saving, and investing, I don’t know why you would.

#66 PianoMan on 03.31.18 at 10:35 pm

#45 Pete in Barrie
A little off topic, but I have noticed in my south end neighbourhood in Barrie that a lot of house have “For Lease” signs in front of them. Not sure what this is indicative of – Owners can’t sell for what they want? Investors? Foreign ownership? Any thoughts?
##################################

A) Owners can’t sell for what they want.

The same is happening in Innisfil.

#67 Brydle604 on 03.31.18 at 10:35 pm

Condos are for the Newly Wed and the Nearly Dead!
I professionally managed Condos in Vancouver and many are horror stories. ie the three Ps, People, Parking and Pets, never mind building deficiencies, special assessments. Rules, elevator moving fees, fines etc.
Another point for the retired, if you are in a condo that is more than the fourth floors, the time it takes for emergency services to get to you after a heart attack is very poor. Survival rates go down the higher up the floor is. lol

#68 guru on 03.31.18 at 10:35 pm

EVERYONE WAKE UP!!!!!. Condos are nothing but depreciating assets in the long run. Tell me how many 15+ year old condos in the GTA that actually look decent? There’s very few as they all become simply old and outdated because of their original lackluster design and workmanship. There are lots of older condos with $800+ strata fees in the GTA that have very depressed valuations because nobody (none of the smart ones) would strap themselves into a financial nightmare with high fees and something that looks like a rental apartment.

Fact of the matter is that the looks/style/quality of these cheaply made buildings in the GTA pales in comparison to some of the ones built in NYC and San Fran. i guarantee you that in approx. 5-10 years, we will see the unraveling of mass special assessments on condos across the GTA. (From numerous sources: trades people and developers).

#69 Popeye the Sailor Man on 03.31.18 at 10:38 pm

Condos in Victoria when I was in my early 20’s around 1993 were about 136K for Quadra and Bay St. (The Bay Ridge). Wife and rushed to buy with the FOMO because things had gone up nearly 10% a year at that point. The Realtor talked about our gains we will make over the next 5-10 years will be worth 250K in ten years or less!

After a couple of years the wife wanted kids, a dog, and a newer car ect. But the price of the condo was going down every year, With our 5% down and CMHC fee added to the 9.5% mortgage, we were not gaining ground. We were stalled, I had left the Navy and trying to get power engineering jobs in Victoria was not going well. A few more years pass, I had been working but nothing stable, condo had gone down more, the stress of being stuck got the better of us.

When we split the condo was worth about 105K and the Mortgage was 108K. She wanted to keep the Condo so I let her have it and all the furniture and the newer car.

The stress some young couples will have when they realize they took the wrong path, and can’t move, or are under water for years will end in tears for many.

History will repeat.

#70 Reynolds531 on 03.31.18 at 10:40 pm

Building quality isn’t just a problem with high rises.

A lot of new detached suffer from water intrusion, brick failing, covered up mistakes.

Even if there’s no true defect they are thrown up far too fast and as cheaply as they can possibly be done.

#71 Yorkville Renter on 03.31.18 at 10:40 pm

80 storeys and 3 elevators… good luck getting on in less than 15 minutes during the morning rush!

#72 Andrewski on 03.31.18 at 10:41 pm

Re: #54 What ?

http://www.cbc.ca/toronto/features/condos/pdf/condo_conundrum.pdf

#73 toronto1 on 03.31.18 at 10:47 pm

So true Garth so true

i have extended family whom build these towers in the big smoke…….. every possible corner is cut, every thing:

some examples:

some of the newer units have kitchen cabinetry from China, including these tiny fridges (also from China) that will be impossible to replace as that size is not standard in North America–

exposed concrete ceiling as that is the new “look”

cheapest grade crown molding- hallway runners etc.. even the elevator components are garbage- ever wonder why these new buildings have such a high failure rate of elevators vs 40 year old buildings?

cheapest grade glass,window curtains available in off standard sizes.

substandard mechanical components that will last maybe 5 years tops

the engineers spec everything to max allowable, ie, with elevators, instead of putting in three as they should they will build just a few under the number and only install 2 ( ie, extra elevator required for 201 units, lets build 197 units)– meaning the two elevators installed will be running a max utility over their lifespan causing premature failure.

same story for pumps , boilers and chillers if they are central cooled- most nowadays have A/C installed on balcony’s- another cost cutting feature, if it fails its your problem, less ducting required, another cost saving to builder

the condo fees are another huge scam– the first year is always super cheap, it jumps huge from there as the cost estimates from the builder are always too low…… on purpose. not uncommon for maint fees to jump from $360-$399 range to $525-$570 in the first two years.

#74 confused on 03.31.18 at 10:55 pm

About a year ago, I met a woman who owned a condo in the Palace Pier area, Marine Parade Dr. The building was about 25 years old, she had owned for 10 years. They had just been through replacement of the roof and elevators and repairs to the pool. The windows were not affected (yet). Total hit for each owner was $14,000.00.

#75 For those about to flop... on 03.31.18 at 11:09 pm

#56 LS in Arbutus on 03.31.18 at 9:25 pm
OMG Flop, leave your poor wife’s handbags alone, small pleasures.

Hmmm…. so likely it was a 66 foot lot purchased for $3.3 and then subdivided… that might make sense.

So selling (list price) $6.8 million for both.

Paid $3 million plus $70k property purchase tax, plus $2 million to construct both homes? Approx $5.1 million, not including carry costs. Although $1 million each to construct is steep no?

So some profit left still possible?

////////////////

Hey LS,what about this scenario.

They already bought 3376 King Edward years ago.

Decided in 2015 to buy 3388 and developed the two of them both just as the market started to tank for that type of product.

In which case you would have to find out how much they paid for 3376 way back when and add that into the mixer.

They both have legal suites which is why there’s two addresses on the front fence.

Next time I am out that way I’m gonna stop out front and knock on the front door and say…

Hey, what did you guys do?

People on a b-grade blog wanna know…

M43BC

#76 Lost...but not leased on 03.31.18 at 11:13 pm

Re: condos…

A word to the weary- yet- wise..
In booming markets..quality suffers.
BEWARE !

If one was STOOPID enough to buy a pre- sale, many developers will fulfill minimum obligations…aka quality trades etc will be difficult to access . In addition, many times the Inspections aren’t done due to workloads…..the developer gets any easy pass.

Some developers in BC are notorious for selling crap..whereby they rip off BOTH (i)the trades and(ii) the purchasers…daring them to litigate, knowing full well they either don’t have the time nor the fiscal resources to challenge the developer.

LESSON: Caveat Emptor…

#77 jane24 on 03.31.18 at 11:40 pm

Well let me tell you what happened with condos in the late 1980’s RE downturn when I was a TO RE agent. They were the first type of housing to fall and fall hard. The smaller the unit, the more impossible to sell on. The problem was that with the whole market falling, youngsters found that they didn’t need to buy a studio or one bed condo, they could afford a two bed condo or even a small rowhouse or semi. The drop in values for RE overall meant that many first time buyers could leap the traditional first step on the housing ladder and move directly to the second step.

Two other factors were at play in the fast decline of condo values in the 1980s downturn. Firstly many condos had been purchased from plans by amateur landlords on spec and by the time the bloody thing was built the market was falling and the buyer was on the hook for a condo that they couldn’t afford to close so they took anything to get out of the deal. Values collapsed.

Second builders had lied about service charges making them artificially low when the units were originally sold and then when the lucky owners moved in a few years later, the real costs were a surprise and high enough to instantly reduce the value of the condo.

Does all this sound familiar in 2018?

Those who cannot remember the past are condemned to repeat it.
George Santayana 1963

Happy Easter boys and girls.

#78 Paulo on 04.01.18 at 12:02 am

#45 pete from barrie

b) in addition to owners not getting there unrealistic asking prices, many of the proliferation of rentals are speckers and rookie landlords, caught in the early stages of what will likely be a very ugly correction in values
likely a 50% haircut from peak house prices in early 2017 areas north of york region likely to be hardest hit as they are low income/poor employment areas and the pool of ” Real estate Lottery winners” from the GTA
that where smart enough to cash in there ticked before the ship sailed, is quickly drying up.

#79 Mark on 04.01.18 at 12:08 am

“#13 LS in Arbutus on 03.31.18 at 5:51 pm
FLOP! (Happy Easter btw.)
Check out this one:
Listed $3.388
Assessed $3.398 (new build so not sure this entirely captures that)
Purchased $3.050 May 15, 2015”

Appears to be a double-wide lot, with a house built near the street on one half of the lot, and a house built set back towards the alley on the other half of the lot.

Figure about a million to a million and a half a house to construct the replacements on that lot (ie: $300-$500/square foot), and there wasn’t really a lot of developer profit in that example of a post-2013 peak era sale. They’ll probably have to discount to $2.8-$2.9M or so to actually move it.

So $3M (purchase price) + $1.25M x 2 (demolition/construction cost of new homes = $5.5M. If they get $5.8M for the pair, that’s not really a very good return on having that amount of capital tied up for 2 years. Fully taxable I might add, no capital gains treatment applicable there. A Garth portfolio with plane-jane index funds would’ve done better as is the case in the post-2013 GTA/GVR peak era.

#80 Paulo on 04.01.18 at 12:11 am

A highrise condo is nothing more than a rental apartment
that comes with all the obligations of owning a semi/sfd
and more than likely none of the long term benefits one has with the latter.

#81 John in Mtl on 04.01.18 at 12:15 am

One of the worst decisions in my life: buying a condo,

One of the best decisions in my life: getting rid of it!

This is an excellent article on the hazards of buying such real estate: i.t a.i.n.’t. w.o.r.t.h. i.t.

Thank you, Garth, for spelling it out to potential buyers, especially young and naive ones!

Happy easter, and much success and fun at Belfountain -;)

#82 Dtree on 04.01.18 at 12:16 am

Amen. Fully agreed with this post.

My wife and I just moved out(better rental opportunity) of <2 year old building in dt Toronto. Place was already falling apart. Our unit’s appliances, cabinets, and flooring all showing signs of impending replacement. A couple of elevators were out of service all winter. Imagine regularly coming home and standing in line for 15 minutes so you can to pile into an elevator with a bunch of sad souls in the same situation. No other way up.

Lots of cool folks in the building but also many snot nosed, 20-something party animals. Yelling bro stuff late at night, balcony fire caused by tossed cigarettes, vomit mines, full dog turds found in the lobby/elevator, etc. Also, I don’t mind people smoking the sweet sheeba sheeba but I do mind people doing so at 4am in the stairwell and setting off the fire alarm and causing the building to be evacuated.

Worst part is that the guy who purchased the unit paid 550k for a box we were renting for $1600. His mom was the real estate agent.

#83 People watching people on 04.01.18 at 12:24 am

Been in 2 TO condos for the past 15 yrs. The first one we went through 3 microwave/vent combos and 2 dishwashers and 1 fridge. All failed the first time within 7 years. The last straw, ants. The building got infested and they started migrating through the common access ways for the plumbing, electrical and cable. Condo management said, nothing to see here; no ant problem, and did you see our selection for new door paint?

Our current condo is far worse. Zero security in the parking garage, bowed concrete floors, bathroom that is tilted so that you feel like you are going to roll off the crapper. Frequent power outages of more than 5 hours, backup generator not always engaged, so it’s a hike up a lot of stairs. 2 of 4 elevators in an almost 60 story building off line constantly. Takes 15 minutes to get to street level on a good day during morning rush. Neighbor some units above who seems to like to barf off the balcony. Leaves nice streaks on the glass balcony railing. The list goes on. All this for a million. And I finally saw a Mill couple come by for a second look. Stayed 20 min. going through everything… maybe the landlord has found the greater fool at long last.

#84 Ronaldo on 04.01.18 at 12:49 am

An example of what you can be faced with as a condo owner. In this case each owner was faced with $67,000 special levy to repair the leaky problems. I know of a similar case in Nanaimo where owners had to cough up around $50,000 to repair leaks. Buyer beware.

http://vancouversun.com/news/local-news/judge-orders-vancouver-strata-to-impose-16-million-levy-to-repair-leaky-condo-problems

#85 Fuzzy Camel on 04.01.18 at 12:55 am

The lefty communists want everyone in a condo, that’s why they passed the Places to Grow act in 2005. Wynne, Trudeau, and their communist friends feel communal housing is better for the environment and everyone has no choice but to accept it.

Condo’s are terrible, maintenance fee’s, no space to park the dirt bikes, my jacked up pick up truck won’t fit in the underground parking, the damn neighbour above is always playing with her vibrator at weird times, you can hear the neighbours peeing, terrible.

A house is a pain in the butt too, but at least I feel at home there. Condo feels like a hotel room.

Garth, any thoughts on the Petro Yuan and how it might impact our crappy lives?

#86 jim on 04.01.18 at 1:17 am

actually a condo board (strata council, whatever they call it in Ontario) that is composed of amateurs is not the worst.

People are unaware of how many scams can be perpetrated by strata councils. Among others, developers often maintain a fractional stake in a unit, allowing them to put employees on the strata council and redirect maintenance fees in untoward manners. This sort of thing was common in the USA during the bubble, and also present in Canada far back enough that it was covered in my real property class in law school.

Other scams involve having occupants subsidize the maintenance costs of corporate/commercial tenants like grocery stores. Never ever buy a condo with commercial units on the first level.

“Once this crop of Mills starts to mate, breed and mature”

Given the shockingly low levels of testosterone present in 20-30 year old ‘men’ these days, I’m not sure this is a worry.

#87 ANON on 04.01.18 at 1:18 am

Somebody should do something! Stat1111!!!!

#88 Smoking Man on 04.01.18 at 1:36 am

#46 Gravy Train on 03.31.18 at 8:26 pm
#17 Smoking Man on 03.31.18 at 6:24 pm
DELETED

Use your words! :)
……

Vegas baby. What can I say.
Gartho is growing out of his cowboy boots. Perhaps frightend of the SJW backlash. At the time of the deleted post I was deep into the juices at the pool.

My observations at the time. A blue haired woman was trash talking a gorgeous blond in an American flagged bikini.

My post was not breaking any laws. But it clearly painted a picture of what DR Jordan Patterson has been warning us about.

I saw it with my own eyes. But yes it dident belong here.

You are growing more unhinged by the day. – Garth

#89 Bob Dog on 04.01.18 at 1:39 am

DELETED

#90 Dolce Vita on 04.01.18 at 1:55 am

#33 FOUR FINGERS WATSON

Ditto, except for RE perpetually plunging in Italia…but who cares.

I’m retired, reasonably well off and like you say, I lock the door and travel most of the time – plenty to see here in Italia, let alone the rest of the EU.

I have my own Italian Video Surveillance System to watch over my Condo when I’m gone (one across the hall, one next door):

http://www.randomlifestyle.com/wp-content/uploads/2016/02/Italian-Security-Cameras-635×421.png

Believe me when I say this: it works VERY well and better than the electronic version as you get a verbal account of all things that happened when you return from travelling. And of course, heck for not having been around.

Mercifully, they no longer wear black, are mean and tie their hair in a bun.

Hey, I’m allowed, it’s April Fool’s Day in Italia today and Buona Pasqua to all.

#91 Smoking Man on 04.01.18 at 2:27 am

Margarita Ville on the strip.

Perched up watching humans shuffling by. Every last one of them a byproduct of a lustful event.

If progressives had it their way. This place would not exist or the stories these beasts are hiding in their heads.

True man is what I should rebrand too.

Screw it Smoking Man works for now. Skiing on thin ice is difficult.

#92 Dolce Vita on 04.01.18 at 2:30 am

On Condo’s NEVER buy new.

Next year, they will put up another one down the street with all the new shiny whistles and bells that your place does not have.

Except for once, I always bought at least 10 years old.

Of course cheaper but more importantly, all that can go wrong, has gone wrong, and prior owners have paid for that with Special Assessments.

Older Condo’s will have built up a nice sized Contingency Fund (always check that is the case before buying) so that for the most part, wear and tear expenses in the future will be offset by the Contingency Fund. Add to that, if the building is just plain bad, you will see that easily (e.g., cracks in concrete parking walls/floors, leaks, worn initial cheap carpeting, etc. – pays to read the Strata Council Minutes before buying, at least 3 years worth).

Typically and by then, the Amateur Strata Council members (and the incompetent) will have been “weeded out” and replaced by more responsible/reasonable Owners (the type that do not create Bylaws and Rules in the dozens of pages and instead, rely on the common sense and good will of neighbors…well, for the most part…unless you bought in a Crack House Condo).

Strata Fees stabilize in older well maintained Condo buildings.

Most new Condo’s have initial Builder Strata Fees which are set very low (I believe to entice and not scare away budget conscious buyers) and then in the 1st year, after the Builder to Council handover, Strata Fees skyrocket as the truth “comes to roost” about what it takes to run and maintain a building.

Also, if you buy in an older Condo building, buy where the Owners are more “vintage” – makes for a quieter and gentler existence.

I bought new only once, in an upscale YVR Condo building with my unit having a roof top balcony (45 foot x 15-20 foot) which I converted into a garden (265 containers from 8″ to 24″ in diameter, trees, shrubs, exotic plants, herbs et. al.).

After 3 years of Ownership sold and near doubled my money – bidding war between 2 families that were downsizing and still wanted a lovely garden to much about in).- luckily turned out to be a solidly built Condo with many well healed and intelligent people at the helm of the Strata Council.

Buying a new Condo and succeeding with a resale value is a rare exception. You have to have an eye for what is desirable to people. Hit and miss. I got lucky with my sweat equity.

Better to buy in an older Condo building (about 10 years old, or so).

#93 will on 04.01.18 at 2:30 am

#2Lawnboy

The moral is “Never break into jail”

Hahahahaha!!

#94 under the radar on 04.01.18 at 5:15 am

#45 and 66
Novice speculators who bought pre-construction in innisfil ( 6th line) seduced by the significant disparity in prices between YYZ and the rest of the planet. Surprise ,a farmers field in the middle of nowhere , with no local jobs , except minimum wage,
and no greater fool to buy .
i drove through the 6th line site yesterday , every sign is for lease with rents between $1595 to $1995 per month . Those asking prices for rent are going lower. Who will rent these ? None of the locals even have a credit card. Even if these unfortunate souls paid cash, their return on cash will be 1.5 % . These reluctant landlords are in for so much pain and trouble, they will regret they ever ventured north of hwy 7 when their tenant moves out after 7 months and the place is completely trashed, if they find a tenant.

#95 Gravy Train on 04.01.18 at 6:20 am

The dreaded building envelope repair can cost each strata lot owner many tens of thousands of dollars in special assessments. The repair is authorized if three quarters of the strata corporation agree to it, and you as a strata lot owner are stuck with your pro rata portion of the cost—especially if a contingency reserve fund has not been properly maintained.

I strongly urge all strata lot owners to carefully read, review and—if necessary—audit the engineering reports to make sure that the repairs can be justified. (The engineering firm faces an inherent conflict of interest: It determines if a repair is necessary, and also undertakes and charges for the repair.)

#96 Hamsterwheelie on 04.01.18 at 7:30 am

To summarize 3 major things wrong with buying condos
1) They’re always making more nearby so folks are going to buy the new ones at pre-construction prices & financing packages. Most people buy small units they can afford but its the larger 2 beds+ that hold their value better. So all this means yours will be hard to sell in a few years – unless its in a special building, old warehouse retrofit etc.
2) Hard to get contractors to work on – no real expansion or renovation freedoms to add ”sweat equity’.
3) Lots of neighbours, above, below and side to side – lots of air bnb guests in the building while investors try to make their money back (because the monthly payments are so high no one will rent at the amount it costs to cover the expenses on a longer term lease)

Like most things if you’re lucky, thorough and have money to spare (downsizing because you’re older and want to be closer to amenities, give up the car-centruc lifestyle) this could still work for you in the right building.

#97 Honey Dripper on 04.01.18 at 7:31 am

Whatever you do, please don’t get sucked into seminars unless it’s someone credible like Garth doing the keynote.

https://thestockmarketspeculator.blogspot.ca/2018/03/what-really-happens-at-real-estate-and.html

#98 Pepito on 04.01.18 at 7:37 am

#3 Stan Brooks on 03.31.18 at 5:17 pm

“Look at European apartment buildings built solidly that last hundreds of years with minimum maintenance and fees.”

True that. We live in one on the Spanish Med coast. Late 1800s, French classical. Third floor 3bed/2bath 130 sq/m corner suite with a rounded living room and ceilings around 4 meters throughout. In the center of the city and would cost less to buy than a particle board shoe-box in Van. Still, at 800 euros/month rent, why bother buying?

Would be a deal breaker, of course, if this were an earthquake prone area.

#99 Henry on 04.01.18 at 8:08 am

Close to a hundred comments on this day and only very few said happy Easter… that’s why you are screwed people not because condos are expensive or even the land is run by commies…
I guess, Happy Day, peoplekind of Canada

#100 Frances on 04.01.18 at 8:47 am

I totally agree that condos are a bad investment for the reasons Garth and the commenters have pointed out. However, I am renting in a quiet luxury building in the west end of Toronto, and every time I go to an open house in the building the real estate agents remind me that this particular (Tridel) building will always be in demand because the neighbourhood is residential and other developers won’t be able to get the zoning to build other buildings like it. Isn’t there something to be said for quiet boutique buildings in residential neighbourhoods close to the subway? One bedroom units in my building are going for 550k and the building is three years old. Oh ya, and my landlord is selling and keeps asking if I want to buy it privately before he lists it. Any advice is welcome! :)

#101 Karlhungus on 04.01.18 at 9:10 am

Would there ever be a case to buying a condo Garth? Or is it always a hard no?

#102 Bezengy on 04.01.18 at 9:11 am

The 3 percent tax increase is a joke. Toronto needs a 300% property tax increase. I very much doubt Torontonians realize they are living in a heavily subsidized real estate market paid for by the rest of the province. We even sold Ontario Hydro to pay for your infrastructure upgrades. This is why Mayor Tory can’t open his mouth without asking for yet more money. He doesn’t even try to hide his extortionist threats to provincial leaders in which he attempts to trade votes for money. A 300 percent increase puts you on par with the rest of us. Pay up people. Try running these calculators on a 500k residential property and see for yourself.

https://www.toronto.ca/services-payments/property-taxes-utilities/property-tax/property-tax-calculator/property-tax-calculator/

http://www.timmins.ca/city-hall/budget-and-finance/municipal-property-tax-calculator

#103 BooBooBear on 04.01.18 at 9:41 am

Been watching a coworker of mine going through this experience lately. Mid 50’s couple, kids grown, sold their SFH last Oct (after it had been on market for 5-6 mons, believe it was in Maple Ridge) for $800K. Instead of downsizing and banking some profit, they decide to get a new mortgage on a prebuild luxury penthouse condo in New West for $1.2M. They spent 6 mons in limbo as the move in date kept getting delayed because of continued construction delays. Finally got to move in this Spring, and the place sounds like a nightmare. Shoddy construction, cracks in the walls, no hot water, on & on. Everyday a new problem. Everytime he talks about it instead of happiness or excitement, it’s nervousness and fear in his eyes. This is their retirement fund. Buyers remorse quickly settling in. I try to be empathetic, but at same time can’t help thinking to myself what a really stupid move that was on their part. Oh well, live & learn.

#104 crowdedelevatorfartz on 04.01.18 at 10:20 am

@#15 Local Realturd
“The world population is projected to reach over 15 billion people by 2100. Houses and land are in short supply……….. Canada population will increase to 400 million by 2085. Buy now or live on the streets by 2100.

++++++

Perhaps you should change your name to “Chicken Little”?

#105 Kathleen on 04.01.18 at 10:21 am

For all of the condo haters out there, let me tell you that there are condos and then there are condos.

As far as no opportunity for sweat equity – this is totally wrong. My husband and I bought a 1350 square unit in an older building three years ago and did a complete gut job on it. It’s now worth considerably more than we paid.

As far as making more nearby, we are on an eight acre lot right beside a golf course and are surrounded by single family homes. No one is building around us anytime soon.

Yes, the fees would be considered high at $900/month. But they cover our heat/cooling/hydro/water/cable plus amenities such as indoor/outdoor pool, gym, basketball, racquetball, tennis, billiards room, wood shop, hobby room, music room, golf room etc. And yes, I actually use some of them. Did I also mention that I have three balconies?

I used to own a house in Toronto’s east end. My sewage pipe broke due to tree roots between Christmas and New Year’s day one year. The cost to get it fixed was substantial, making the fees here look like a deal.

To each their own.

#106 Ben on 04.01.18 at 10:36 am

Sorry Garth, but we disagree with you here. We aren’t horny real estate millenials, just practical ones. We have a townhome in Vancouver. Close to the trains. This saves us a car which with insurance, car/lease payments/gas and parking can work out to 1000 bucks a month, more than enough to cover our strata fees and property tax. A two zone bus pass for me costs 126 bucks a month and for the rare occasion we need a second car (like when in laws come to town, we use car2go or a car sharing service, not available in the burbs). Our home has 1600 sq feet, enough for our family of 3 or 4. I like just paying someone 350 a month to maintain everything, as I’m not a handyman, and my time is worth way more than 350 a month. As for special assessments, we have had one in 7 years here, 750bucks to increase security on our doors and windows which is reasonable.

This is a lifestyle choice we made, and not everything can be measured with money, I spend 10 minutes on the train and I’m at work. I do my emails or watch Netflix in that time. It’s stress free. Our family has a huge park in front for the kids to play. We can walk to restaurants, the bank, the grocery store and get exercise in the meantime. I don’t miss having two cars or driving.

And in case you’re wondering, we have assets in things other than real estate and are multimillionaires, so the townhouse is easily affordable. Our choice was to either get a huge place in the burbs, or sacrifice for a smaller space close to everything or give up the freedom and buy a big SFH in our neighborhood which would mean a big mortgage. Since time is worth so much to us and buying a bigger home won’t make us happy we’ve made this sacrifice. I’ve had zero regrets. We are financially free in our 30s and it’s a good feeling knowing you have more net worth than your boss and can give her the middle finger and quit if she pisses you off. (I actually did that for one of my jobs last year).

#107 My_Own_Choice on 04.01.18 at 10:38 am

Garth,
On 30 April, me and my wife had taken a trip from Markham to the Belfountain General store and we also tasted the wonderful ice cream cones.
The place was nice, and we enjoy the trip.
Will definitely come again!

#108 Drill Baby Drill on 04.01.18 at 10:40 am

Excellent condo analysis Garth. You have always stated these facts but today you have put them in a logical format that works and is clear I am going to forward todays commentary to my kids living on Lakeshore Drive who are currently renting.

#109 Lisa on 04.01.18 at 10:43 am

Dtree and People Watching People:

You both either have lived or are living my personal nightmare.
I would never buy a condo.

Fuzzy Camel:

What you said about Commies wanting everyone in a condo is true. It happened in Romania. One of my neighbors in Constanta was forced out of his home and moved to a bloc. His mind snapped and he never unpacked and never shut his door, either. I was there from 2000-2002 so he had been living like that for about 30 years. He wasn’t the only one that happened to, I guarantee it.

#110 Smoking Man on 04.01.18 at 10:58 am

Warren Kinsella running as a PC candidate.

What hell is going on. That’s like Jimmy Kimmel working for Trump.

#111 crowdedelevatorfartz on 04.01.18 at 11:08 am

Hmmmm
April1st 2018….only one year to go before Brexit.
The next year should be “interesting” in the British economy, their politics and leadership.

At least it will get our minds off the intellectual lightweight running our country into the ground.

April 1st 2019. I wonder if Donald Trump will still be president? Amazingly he’s avoided impeachment thus far.
Perhaps divorced AND impeached? I can dream cant I?

#112 Millennials are good obedient puppets on 04.01.18 at 11:12 am

There is no generation as stupid and gullible as millennials. This sad group of puppets are destorying their own lives by buying the worse investment (condos) at crazy bubble prices. Only a millennial would buy a cash flow negative condo that will fall apart in years . This http://www.cbc.ca/doczone/m/episodes/the-condo-game has been happening for years as condo sellers are looking for suckers to get out. Sellers are trying to get out at a furious rate https://www.theglobeandmail.com/real-estate/toronto/in-toronto-realtors-deal-with-lockbox-lunacy/article38351875/ . Anyone with a brain will see sellers are dying to get out as everyone is trying to sell to the point realtors are having a hard time even locating the lockbox. Millennials are so stupid. They are the stupid generation. Yes you millennials are stupid .

#113 crowdedelevatorfartz on 04.01.18 at 11:13 am

@#105 Kathleen
“My sewage pipe broke due to tree roots between Christmas and New Year’s day one year. The cost to get it fixed was substantial, making the fees here look like a deal…..”
+++++

Christmas time.
Huge family gatherings. Huge meals.
Plugged toilets and leaking hotwater tanks are expected…….
And you HAVE to get it fixed ASAP.
Plumbers make out like bandits but in fairness to the trade….who really wants to work at Christmas time?

#114 Steven Rowlandson on 04.01.18 at 11:40 am

This real estate market is worse than I thought.
It is EVIL! It must be shut down and severely regulated for the good of humanity with the emphasis on extreme price suppression… I think you all know my mind when it comes to the crime and the punishment.

#115 Ronaldo on 04.01.18 at 11:49 am

#101 Karlhungus on 04.01.18 at 9:10 am

Would there ever be a case to buying a condo Garth? Or is it always a hard no?
——————————————————————-
There are several different types of condos. ”It is also possible for a condominium to consist of single-family dwellings. There are also “detached condominiums” where homeowners do not maintain the exteriors of the dwellings, yards, etc. and “site condominiums” where the owner has more control and possibly ownership (as in a “whole lot” or “lot line” condominium) over the exterior appearance. These structures are preferred by some planned neighborhoods and gated communities.”

https://en.wikipedia.org/wiki/Condominium

My first home was a Townhouse Condo, 2 level and basement and over 1800 s.f. which was just fine. I also owned a Townhome Condo (1 level, 1400 s.f.) which was very much like a single family home only attached to other units in a row and each having a double garage.
I have never owned an Apartment Condo or Highrise Condo and probably would not consider those due to the many reasons outlined on this blog.

#116 Reynolds531 on 04.01.18 at 11:49 am

I saw the globe article where agents are “complaining” that dozens of lock boxes are left behind at buildings with only a few units for sale. More like a white wash of the fact that you can buy any one of those units. Please buy them…. someone.

#117 Ace Goodheart on 04.01.18 at 12:22 pm

Re Condos: before you buy make sure you have a good idea what is happening on the main floor.

Timmies and Mickey Dees use a lot more water and hydro than your unit does and if the maintenance feed are pooled guess what you pay for their use too.

In other news a combination of carbon tax and lack of pipeline capacity means we’ll be paying a lot more for gasoline this summer. Look for Ontario prices to hit $1.60 to $1.70 per litre and BC to flirt with the $2.00 mark.

T2 wax going to try to do something about this gas crisis, but he could not decide what to wear to the meeting.

The communist BC people’s republic responded by taking about nationalizing the fuel supply for “the people”.

Stay tuned as Ontario’s debt is downgraded to junk and everyone gets to earn $40.00 per hour.

#118 Duke on 04.01.18 at 12:38 pm

It is strange that people still cheer about rising condo prices while SFD prices are coming down fast. The end result of this market tendency is that the price gap between condos and SFD will be narrower and potential buyers will change their target to SFD as it is more desirable housing type.

What that means, unless SFD prices go up again, the condo prices will come down soon. By how much? No one knows but it will be pretty substantial.

#119 Nut on 04.01.18 at 12:42 pm

With all this talk about high rises, and condos maybe its time for a Jane Jacobs urban planning refresher course.

https://www.youtube.com/results?search_query=jane+jacobs+death+and+life+of+great+american+cities

#120 LivinLarge on 04.01.18 at 12:45 pm

Are we in a no win situation here?

I agree whole heartedly with the assessment of condos but is waiting till you have the downpayment saved really a great option as well?

Presuming a Mil and Mil-ette starting out childless at this point. They can save for their future dp sure but with investment returns not even approaching price inflation on detached homes with land aren’t they continually slipping behind the curve?

Of course the current serious pullback or collapse in sfh provides a short to mid term advantage to wait but these periods have always turned and started a price climb but can they reasonibly expect to save enough for a sfw in say 4 or 5 years? I’m not saying “impossible” but when you start saving the sums don’t compound terribly aggressively and an another 2008 type scat storm could wipe a lot of equity out of a portfolio.

We know mutals will MER you almost to death and still be market sensitive and a balanced ETF portfolio properly rebalanced will deliver a safer long term return but proper balancing advice will also cost upwards of 1% if you can even find it when your portfolio is starting out.

So, which is the safer gamble? Rent and save and be subject to usually capricious markets or fees or buy a mediocre at best condo you can live with and still save and invest a bit less for the anticipated future move to suburbia?

#121 AGuyInVancouver on 04.01.18 at 12:48 pm

#43 T on 03.31.18 at 8:18 pm
#37 KAC on 03.31.18 at 7:46 pm

I’ve researched condos in Vancouver and their maintenance fees are no different than Toronto.
_ _ _
Absolutely untrue if the $700-800 figure Garth quotes for condo fees is based on TO. In Vancouver only luxury buildings head into that territory.

Similarly renting in Vancouver offers no peace of mind: you can be renovicted or the rental building can easily be sold out from under you to a condo developer. Add into that a poor tenant’s rights record in BC.

#122 Gravy Train on 04.01.18 at 12:57 pm

#111 crowdedelevator on 04.01.18 at 11:08 am
“Amazingly [Trump]’s avoided impeachment thus far….”

Um, I think it’s all too predictable. The Republicans control the legislative and executive branches of government. Morality, ethics and legalities don’t enter into any of the political calculations. History will judge these legislators—that and the midterm elections! :)

#123 NoName on 04.01.18 at 1:06 pm

#117 Ace Goodheart

gas prices, @ 1¼ gas is hurting people a big time, I know we feel it, and it will be interesting to she what happends when high gas prices gets paired with hi hydro bills this summer.

interesting read on that topic

Cutting out a daily hour-long commute each way is the equivalent of earning an extra $40,000 a year, according to a 2014 study by researchers at the University of Waterloo in Canada.

https://www.cnbc.com/2016/08/09/commuters-waste-a-full-week-in-traffic-each-year.html

#124 Spangler on 04.01.18 at 1:22 pm

The following may be of interest to boomers who a riding the fence (millenials are hooped).
You need to look around and see the opportunities that exist… everywhere.

Consider the equity in your home, when the prices collapse (and they will).
Every dollar that your house drops, is a dollar of retirement fun. {grin}

Last spring (a year ago ), after reading Garth’s blog for 4 or 5 years, I made a decision to sell our home in Nanaimo.

Sold it at full market and we purchased a similarily sized home in Cuernavaca, Mexico for about 40% of what I sold for.
(We’d been coming here since 2011)

I didn’t do this for financial reasons, I did it for the climate and lifestyle. Besides, I didn’t want to own two homes.

Sell… the prices are good. Let the millenials fight over it and go find your place in the sun.

https://jimhornnews.com/2016/11/19/cuernavaca-mexicos-unparalleled-place-to-retire/

https://www.mexperience.com/lifestyle/living-places/living-in-cuernavaca/

https://www.expatistan.com/cost-of-living/comparison/cuernavaca/nanaimo-british-columbia?

https://en.wikipedia.org/wiki/Cuernavaca

#125 For those about to flop... on 04.01.18 at 1:23 pm

Hey LS , I just spent a couple of minutes to find some evidence to support my theory.

Link one is the treed lot at 3376 King Ed,I think they owned this block of land already.

Link two shows what stood at 3388 King Ed ,which they purchased for 3.05 in 2015 and then demolished the brown house.

If you take the time to look at the two links on zolo,it shows you the two houses standing either side still.

Either that or take your chances and listen to Mark…

M43BC

https://www.google.ca/maps/place/EB+w+King+Edward+Ave+FS+Collingwood+St,+Vancouver,+BC+V6S+1M3/@49.249945,-123.1798875,3a,75y,211.2h,81.06t/data=!3m4!1e1!3m2!1sfjuyUf_-DyCYmCEvN_7YcQ!2e0!4m6!1m3!3m2!1s0x5486730fb51b97b3:0x3c1a6ff108205d01!2s3376+W+King+Edward+Ave,+Vancouver,+BC+V6S+1M3!3m1!1s0x5486730fd1924255:0x682312760be8813b

https://www.google.ca/maps/place/EB+w+King+Edward+Ave+FS+Collingwood+St,+Vancouver,+BC+V6S+1M3/@49.2499438,-123.1801548,3a,75y,211.75h,101.89t/data=!3m4!1e1!3m2!1smdH7ZSZvDHtK0-LvFhq_Ag!2e0!4m2!3m1!1s0x5486730fd1924255:0x682312760be8813b

https://www.zolo.ca/vancouver-real-estate/3388-w-king-edward-avenue

https://www.zolo.ca/vancouver-real-estate/3376-w-king-edward-avenue

#126 lisa thomson on 04.01.18 at 1:25 pm

Exactly. I add that the legal conflicts between owners and stratas are clogging the b.c. provincial courts. So, there’s that risk to look forward to as a shiny new owner.

#127 crowdedelevatorfartz on 04.01.18 at 1:51 pm

@#122 Gravy Train
“History will judge these legislators—that and the midterm elections! :)”

++++

True enough.

And who will be victorious in Nov 2018?

Only Russia and Facebook know for sure……..

#128 Rexx Rock on 04.01.18 at 1:55 pm

Condo’s are the worst.Everything in this article is exactly true and more.I was selling my rental condo and doing reno’s in the night and the guy upstairs would walk around with his work boots on for at least 2 hours every night.Noise in the parking lot,hallway,upstairs,the list is endless.I could see anyone going postal living in a condo or even renting a unit.I’m so glad I sold,buy land or a house but at a affordable price.

#129 Howard on 04.01.18 at 1:57 pm

But who will they be selling their condos to? How will they climb the property ladder without having achieved big equity gains?
———————————————

Gen Z / Centennials.

Or downsizing Gen Xers.

#130 Howard on 04.01.18 at 2:00 pm

Whatever happened to all the falling condo glass incidents in Toronto? They seemed to be in the news on an almost monthly basis circa 2010-2013. You never hear about it anymore. I doubt those problems have all been repaired?

#131 Smoking Fool on 04.01.18 at 2:13 pm

#110 Smoking Man on 04.01.18 at 10:58 am

Warren Kinsella running as a PC candidate.

What hell is going on. That’s like Jimmy Kimmel working for Trump.
..

The alien gets smoked yet again…..

#132 Triplenet on 04.01.18 at 2:20 pm

No realestate, no land, no structure?
Really?
Condominium is a legal term.
Condominium is modified form of fee simple ownership. So yes there is land and building.

Go dig up the yard or start painting the hallway and find out how much you own. – Garth

#133 PupPatrol on 04.01.18 at 2:40 pm

Is anyone else checking the Zolo stats (however accurate they may or may not be) – sales all over Vancouver and the lower mainland are dropping big time. Like fall of a cliff type dropping.
I believe something is about to happen. We’re about to see a surge of listings (post spring break/easter) and a bunch of those are relisted that didn’t sell, now competing with brand new listings.
I don’t think many people’s eyes are open right now to this…

#134 Andrew Woburn on 04.01.18 at 2:48 pm

3 Stan Brooks on 03.31.18 at 5:17 pm

Look at European apartment buildings built solidly that last hundreds of years with minimum maintenance and fees.
====================

We used to do that to. I was raised in rental apartments in the late Fifties, early Sixties in Hamilton and London, Ont. Probably because of lagging local economies, none of these buildings have been torn down.

They were quiet and spacious by comparison with modern units. Although I haven’t gone inside any of these buildings their exteriors still look fresh and well maintained.

#135 TurnerNation on 04.01.18 at 3:10 pm

The condos are like minimum security prisons as some say
One near me had a level of storage lockers cleaned out by thieves. They have to fight the third party running the parking there to access camera footage.

#136 Stone on 04.01.18 at 3:17 pm

I find the parallels between Canada and China when it comes to real estate eerily similar. Buy a condo in either country, same issues through and through.

https://m.youtube.com/watch?v=_lAoTBVTTO8

Stay awesome!

#137 Old Ron the Realtor on 04.01.18 at 3:36 pm

TO ACE GOOD-HEART:

If the gas pipe goes to the coast (And BC is planning on building their own from East BC) Then we will start paying the “World Price” for Nat Gas. Auz recently started exporting LNG and residents now pay more than they do in Japan.

When the LNG starts leaving Western Canada for Asia the price will double and maybe triple overnight. We have become very comfortable with very cheap gas, but a big change is coming, and nobody wants to talk about it.

It will make a carbon tax look like a drop in a bucket.

#138 Andrew Woburn on 04.01.18 at 3:43 pm

My random thoughts on condo’s apart from Garth’s totally on the money points.

There is a form of Gresham’s law that will drive down the quality of condo occupants, owners and renters both, as the market declines. I saw this happen in my quality English Bay rental. When I moved in the occupants were mainly aged 45 plus. As interest rates fell, and the condo price surge hadn’t yet begun, many occupants found it worth while to buy. They were replaced by a younger, noisier crowd. Management was good and quickly weeded the worst but they couldn’t mask the overall trend. I left. Retirees eyeing downtown condos should keep this in mind. Their interests and those of younger owners will diverge.

Another thought for retirees. My wife and I have extensive experience with Vancouver downtown condos as her three children are all Mills who live in Yaletown, Mount Pleasant and English Bay. The first thing we notice when we visit is the incessant traffic noise, endless sirens and construction noises at 7 am. You may have to get used to the sound of other people’s bodily functions coming through skimpy walls or travelling through ducts or plumbing.

While we have always been urban dwellers and do appreciate the joys of walk around neighbourhoods, there are only so many places you can actually walk to many of which you probably won’t really enjoy and will hardly ever visit. Naturally downtown restaurants cater to young people and often feature music you don’t enjoy at volumes that are close to psychological warfare. After a year you may find your urban world is smaller than you thought it would be just as your first flush of enthusiasm is waning in the face of noise and homeless beggars. Also as you become frailer with age, those hearty young people rushing through the streets tend to make you feel physically vulnerable even if the feeling is irrational (but realistic if they are staring at their phones).

I suggest before retirees take the plunge, they take advantage of the excellent transit system to take a few carless trips to spend some full days downtown to temper their excitement. We still enjoy visiting Vancouver but we don’t have to live there.

As to shoddy construction, I was general manager of an apartment developer in Victoria in the Eighties when it is possible that construction standards were higher than today. We only hired “reputable” contractors but we had a professional engineer on staff to ride herd on quality control and he was constantly demanding rework. Sometimes the contractor was at fault and sometimes it was the workmen on the site cutting corners to get away for the weekend but there were enough problems to justify his large salary. On one project, despite his best efforts, we had an unexpected noise transmission problem. He finally concluded the noise was entering the walls through nails in the 2×4 frame. He tried to mitigate it but it was too late to really fix it.

As to land value, there is no land value when you live in condo, only when the strata association sells the land for redevelopment. I think the owners of older buildings in Vancouver’s West End will do OK. However I knew a guy who spearheaded the sale of a group of older highrise condos at a decent location in Burnaby and he was very disappointed at the land value realized. Of course the new owner had to remove the old buildings and practically redevelop the site.

#139 Andrew Woburn on 04.01.18 at 4:00 pm

As to those who are relying on ever growing population to support ever growing property values, I caution that the male birth control pill is already a thing and some form of it will almost certainly be marketable within the next decade or so.

A second thing to realize is that neither gender will actually enjoy raising two children in a 750 foot apartment so they will either stick to one kid or none or move to the suburbs.

For the die-hard Mills who would never live in the soulless suburbs, I was one of you at 36. We had a great rental penthouse at False Creek. Two kids later I was in Richmond. Of course I hated it just like I hate minivans but what do you do?

One of the factors that keeps us hobbled in life is that we cannot imagine being different than we are today. My experience is that I am someone different every ten years or so but I didn’t see it coming. Hard as it may be, look at your stupid old parents and try to realize that you may actually see the world through their eyes at some point. Youth is a highly perishable commodity.

#140 Cory in Shangalila on 04.01.18 at 4:16 pm

Happy Easter all. The Lord is Risen from the dead!

High housing costs are a global phenomena, get used to it. The old ratio of 3-4 times one’s yearly salary/house cost is outdated.

In order for a 50% housing price correction the economy would have to be virtually wrecked and around 25% unemployment.

Of course these crises seem to be always so short lived as governments/corporations would rather pump back cheap debt money back into the economy rather than suffer an honest recession.

I agree with other commenters that vultures will not pull the trigger on cheap real estate in a major down turn as they will fear the loss of their savings.

#141 way too harsh.. on 04.01.18 at 4:38 pm

on condos. Good grief

my parents sold their home and downsized to a condo. Physically , they have limitations . They condo serves there needs . A lot less room, made new friends within the condo, safer than a home in some ways

this blog entry was not balanced

The post obviously deals with the investment merits of a condo and the risks in owning one. – Garth

#142 NoName on 04.01.18 at 4:42 pm

#136 Stone on 04.01.18 at 3:17 pm
I find the parallels between Canada and China when it comes to real estate eerily similar. Buy a condo in either country, same issues through and through.

https://m.youtube.com/watch?v=_lAoTBVTTO8

Stay awesome!

funny thing i was watching this video of his earlier today.

https://www.youtube.com/watch?v=ifcg_sji32g

#143 Keith in Rio on 04.01.18 at 4:42 pm

There is nothing wrong with buying a condo.

It just has to be the right kind of condo…………..I wish the “co-op” concept would grab hold up here in Canada, you probably know the New York model, the one that didn’t allow Madonna to buy into a co-op on central park (the board didn’t want her). The board meets the prospective buyer and reviews their CV and finances before approving them as residents in the building.

But I digress, want to have a great condo experience ?

Pay cash……buy into a solid concrete building “ONLY” no exceptions whatsoever……..the building must be 100+ units……………titled parking “ONLY”………and a solid 6-7 figure reserve fund.

We did this 15 years ago down here, and haven’t been happier. Now, obviously you’ve got to run the numbers versus long term rental and opportunity cost, etc, as well as analyze the overall market, but if you buy in the lower end of the price range, in a great building in a good location, you’re better off than renting.

#144 the Jaguar on 04.01.18 at 4:56 pm

What a great post(s) from Andrew Woburn today.
Thank you. Great insights.

#145 Mark on 04.01.18 at 5:25 pm

“#137 Old Ron the Realtor on 04.01.18 at 3:36 pm
TO ACE GOOD-HEART:”

I agree. Allowing LNG would be knee-capping re-industrialization of North America, and LNG inherently involves absolutely massive energy losses. Supporting LNG is defeatism at its best, an acknowledgement that the North American economy will never be great again. Unbridled short-term greed, at the long-term expense of North American consumers and manufacturers who need a source of inexpensive feedstock to their processes.

Unfortunately too many very narrowly focused special interests have been hijacked into supporting LNG, an economic and environmental disaster.

Either that or take your chances and listen to Mark…

It was just a theory. I haven’t seen anything in the data that suggests that Vancouver prices have dropped meaningfully from the 2013 era peak/plateau to date. The ‘big drops’ that might be seen in the Realtor averages these days are mostly an artifact of the mix changes reverting, but individual identical housing prices have been relatively stable.

#146 West Coast Woman on 04.01.18 at 5:34 pm

Thank you for pointing out many of the costs and problems with owning condos.

I have never believed the mantra that condos could be any form of “affordable housing”, which is what Vancouver City Council has been focusing on for the past 10 plus years at the behest of the real estate industry – under the mistaken belief that prices will fall if only enough condos are built.

All they’ve accomplished by rezoning everything they can for condos is to feed the speculative frenzy. I live near Arbutus Street in Vancouver, and almost all the businesses that used to be along Arbutus from Broadway to 37th Avenue have been forced out by this speculation which has resulted in escalating land prices and taxes. Meanwhile more residents are shoved into the area which is now without the employers, shops, services and public transportation necessary to service them!

#147 arfmoocat on 04.01.18 at 5:37 pm

Condo fees never go down

#148 crowdedelevatorfartz on 04.01.18 at 5:38 pm

DELETED

#149 Andrew Woburn on 04.01.18 at 5:46 pm

This from a conservative columnist who thinks the spending bill just passed by Congress is a potential disaster – for the GOP.

“Now House Speaker Paul D. Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.) have made the same calculation that has failed so many Republicans before them. They believe that by breaking their promises, ignoring their base and giving Democrats what they want, they can win the votes of the modern political unicorn: the swing voter.

It doesn’t work. Just ask Presidents McCain and Romney. Or they could just look at how Trump rallied the Republican faithful while still winning more Democrats, African Americans and Latinos than recent Republican presidential nominees. His pro-citizen, pro-worker, pro-growth agenda was a choice, not an echo. The Ryan-McConnell bill was not even an echo.”

– This monstrosity of a spending bill will badly hurt Republicans

https://www.washingtonpost.com/opinions/this-monstrosity-of-a-spending-bill-will-badly-hurt-republicans/2018/03/26/307fbe1e-3135-11e8-8abc-22a366b72f2d_story.html?

#150 Stone on 04.01.18 at 6:09 pm

#142 NoName on 04.01.18 at 4:42 pm
#136 Stone on 04.01.18 at 3:17 pm
I find the parallels between Canada and China when it comes to real estate eerily similar. Buy a condo in either country, same issues through and through.

https://m.youtube.com/watch?v=_lAoTBVTTO8

Stay awesome!

funny thing i was watching this video of his earlier today.

https://www.youtube.com/watch?v=ifcg_sji32g

———-

Found him yesterday just by chance and noticed he has the 2 youtube channels. Went through some of his videos and thought they were pretty well made. The content is fairly good too.

#151 NumNum on 04.01.18 at 6:22 pm

Why the HELL you haven’t posted yet today Garth? This is unacceptable. I need my fix.

Easter. See you tomorrow. – Garth

#152 Damifino on 04.01.18 at 6:46 pm

@148 Wow! C.E.F. managed to get himself deleted.

Is it a first? Excessively curmudgeonous perhaps?

#153 Leichendiener on 04.01.18 at 7:11 pm

Caveat emptor.

https://www.daniels.utoronto.ca/faculty/kesik_t/MURB-Design-Guide/Condo-Buyer's-Guide-Rev-Jan2017.pdf

BTW: Happy Easter

#154 Ace Goodheart on 04.01.18 at 7:23 pm

RE: #132 Triplenet on 04.01.18 at 2:20 pm

“No realestate, no land, no structure?
Really?
Condominium is a legal term.
Condominium is modified form of fee simple ownership. So yes there is land and building.”

I guess you never owned a condo. You are basically purchasing “air rights” to occupy the space between concrete (or increasingly commonly particle board wood frame) walls. You own the paint on the wall. Anything deeper than the paint is a “common element” and you do not own it.

A condo does not give you a land title. It gives you a share in a corporation, with “air rights” in a certain area, a locker and a separate “air right” to occupy a parking space (don’t let your lawyer forget to transfer to you the parking space, it is a separate item).

Just talk to anyone who purchased a condo townhouse, and decided they were going to do something like paint their outside window frames, or plant something in their backyard. Oops, can’t do that. You don’t own the outside of your window frames, or any of the land in your “backyard”.

#155 Cory in Shangalila on 04.01.18 at 7:23 pm

“…under the mistaken belief that prices will fall if only enough condos are built.”

According to the law of supply and demand this is not a mistaken belief.

That being said, do we really believe that the City and developers have a semi-secretive back room deal to keep building condos to unprofitability? Developers are not in business to bankroll affordable housing.

The taxpayer is ;/

Most likely the scenario is that of typical Canadian management: keep things to a dull roar.

Which means: build enough condos to keep just behind demand (ensuring developer profitability)

#156 Karma on 04.01.18 at 7:33 pm

#48 Long-Time Lurker on 03.31.18 at 8:36 pm

Thank you, kind sir.

Happy Easter to you to.

#157 Ace Goodheart on 04.01.18 at 7:33 pm

The Big Short:

TSLA. Vultures are circling.

Fully robotic assembly lines, “Alien Dreadnought like”, pumping out cars so fast that the robots in charge have to calculate for air resistance. The factory of the future.

130,000 cars per year, with a market cap higher than GM (which puts out 9.6 million cars per year).

Everything was riding on this fully robotic assembly line actually working.

Well folks, it does not work.

Figure on the share price decreasing by about $100.00 by August 2018. Come back here in August to see if I’m right.

The Big Short……..

#158 For those about to flop... on 04.01.18 at 7:34 pm

Even though I don’t celebrate Easter, I still feel as though I got ripped off by Trudeau not dressing up as the Easter Bunny…

M43BC

#159 Smoking Man on 04.01.18 at 8:08 pm

Communist manifesto
First they shut you up. Then they lock up your capital then they build a wall to keep you in.

https://globalnews.ca/news/4117054/rbc-head-canada-government-investment-us/amp/?__twitter_impression=true

#160 45north on 04.01.18 at 8:16 pm

condos in Toronto are going to be a long term liability.

The CBC supports this opinion but Jaco Joubert contradicts it.

The Condo Game is a CBC documentary on condos in Toronto. It says the individual buyer has no protection. There are flaws in the construction.

http://www.cbc.ca/player/play/2419776936

Jaco Joubert says the construction is not that bad:

First off, in Toronto the vast majority of buildings are not curtain walls, but window walls. Only luxury buildings like One Yorkville are curtain walls.

Secondly, the first City Place buildings were completed 15 years ago and they aren’t close to needing a facade replacement. Even when they do replace it moving out is probably not going to be required. The Palace Pier condos built in 1978 was just reglazed and nobody moved out. The whole window thing is overblown.

Hogtown Indebted provides links to stories the CBC is working on:

This is the nightmare many foresee for CityPlace. The fear is the buildings will fall into disrepair and the only people who will live in the tiny apartments are families who can’t afford housing anywhere else

The Building Code is a joke, the Condominium Act is a joke,” said David Fleming, a condo buyer turned realtor. “The City of Toronto  relies on the permits, the fees for its tax base, and construction and condos are what is carrying the city. You do not kill the goose that lays the golden egg.

the next bit makes me angry:
While the province is responsible for administering the Ontario Building Code, municipalities are responsible for enforcement and inspecting construction and renovation to ensure it complies with the code,” Spezowka said in an e-mail.

Massive condos were built in the City of Toronto but City Council didn’t have the authority to stop them or have much influence over their design. The rules have recently changed but the damage has been done. To a large extent, the lack of governance was a simple matter of inertia – developers took advantage of the rules that govern small-town Ontario. Even so, it was the Liberals who were in charge, provincially.

Whoever wins the next Ontario election is still going to have to deal with the condos. It’s going to take divine intervention. I mean like a miracle.

#161 45north on 04.01.18 at 8:18 pm

Nostradamus: Cowboys with 10 gallon hats, big belt buckles, Tony Lama cowboy boots with sharp jingly spurs used to move their clients along to the promised land.

looks pretty good to me:

https://www.tonylama.com

#162 DoubleM on 04.01.18 at 8:24 pm

My first RE purchase was a condo in Mississauga in 1996. It was a 2Bed+2BA + solarium. Quite nice and large.. The couple I purchased it from bought it in the tail end of the 80’s boom. Kind of where we are today.. I think they purchased for $180K. They ended up paying $600 to $700 out of their pocket, basically to subsidize the tenant. They tried to sell for quite some time but the tenant would not let anyone in. He knew he had it good ;) My RE was very persuasive, got us (I was living at home and 25) to see it. I bought it for $109k on the spot and rented it out. Currently, own no RE. Sold my detached house in June 2013, with impression prices could go no higher, obviously a HUGE mistake!! Plan to buy soon but that’s another story..

#163 Timberr on 04.01.18 at 8:32 pm

#136 Stone on 04.01.18 at 3:17 pm
I find the parallels between Canada and China when it comes to real estate eerily similar. Buy a condo in either country, same issues through and through.

https://m.youtube.com/watch?v=_lAoTBVTTO8

Stay awesome!

#142 NoName
funny thing i was watching this video of his earlier today.

https://www.youtube.com/watch?v=ifcg_sji32g

Since you both found the above with Winston, check out the “Ghost City” in China episode

https://www.youtube.com/watch?v=BcyYyyaPz84

Stay awesome. Stay balanced!

#164 Tony on 04.01.18 at 8:36 pm

The rule of thumb with condos is they always lose money, especially when the exact same condo in Toronto or Vancouver costs ninety percent less in America.

#165 Tony on 04.01.18 at 8:44 pm

Re: #157 Ace Goodheart on 04.01.18 at 7:33 pm

Earnings and fundamentals mean nothing in America. The central bankers can easily squeeze all the shorts and boost the share price back above the 300 dollar U.S. mark.

#166 Triplenet on 04.01.18 at 8:47 pm

Ace Goodheart
The slip in my marina, where I berth my boat also has a land value.
All 500 sq.ft.
……..and no, it’s not called water rights.
Read a book
.

#167 Dr. Talc on 04.01.18 at 8:56 pm

artificial scarcely of sfd homes c/o the UN
cradle to cubicle to condo to casket, that’s it for millenials
green belt, smart growth=Bolshevism

that’s where we are

#168 NoName on 04.01.18 at 9:01 pm

#158 For those about to flop… on 04.01.18 at 7:34 pm
Even though I don’t celebrate Easter, I still feel as though I got ripped off by Trudeau not dressing up as the Easter Bunny…

M43BC

Maybe he is on old calendar, there is one more easter next week.

#169 earlybird on 04.01.18 at 9:12 pm

Haha..April Fool’s No post…we’re cut off..too funny!

#170 Doghouse Dweller on 04.01.18 at 9:21 pm

In YVR the leaky condo fiasco is just a distant memory. $4 billion in losses and the lower mainland covered in tarpaulins and tears..
Here we go again, another Trudeau
Another generation about to get fleeced.

” Nobody seems to notice, nobody seems to care.
There’s a reason for this, there’s a reason education sucks, and it’s the same reason it will never ever ever be fixed. It’s never going to get any better. Don’t look for it. Be happy with what you’ve got…
~ the late George Carlin

#171 FOUR FINGERS WATSON on 04.01.18 at 9:37 pm

Offshore buyers. With the click of a mouse.

https://www.msn.com/en-ca/money/topstories/canadian-housing-to-be-listed-on-chinese-amazon-style-site/ar-AAvjsl0

#172 KAC on 04.01.18 at 9:41 pm

Wow! So much misunderstanding of the B.C. Strata Property Act.

Of course condominium ownwers get a title on their property. It’s a freehold title which includes their proportionate share of the land and other common elements.

Check a condominium apartment owners Tax Assessment and note how (in Vancouver) most of the value is in the land not the apartment. Who did you think owned the land? The Tooth Fairy?

Even an apartment in an “Air Space Strata” has most of its value assessed in the land because of the control the “Air Space Strata” has of the use of the land.

Check with City Hall, I’m sure they can e plain it to you.

I’m sorry to hear all the horror stories from people who bought into bad condos. As you have now discovered, thorough research is just as important when buying a condo as it is when buying a house.

Check the quality of construction, the quality of the neighbourhood, the type of new neighbors you’ll have, etc., etc., A bad condo can be every bit as bad as a bad house, and just as hard to sell.

Buyer beware!

#173 bdwy sktrn on 04.01.18 at 9:52 pm

145 Mark (the fraud engineer) on 04.01.18 at 5:25 pm
… LNG inherently involves absolutely massive energy losses
———————
hey there “enthalpy mark” quit pretending to be an engineer again.

real world liquefaction energy inputs run about 5-6% of the nat gas energy content.

once again a “massive” science fail from fake engineer enthalpy mark.

there is probably far greater losses in the electricity delivered to your home powering your computer.

mark – lowering the bar in engineering , investing ,job searching and market top identification since 2005.

#174 KAC on 04.01.18 at 9:52 pm

Wow! The misinformation regarding the B.C. Strata Property Act is amazing. Of course a condominium buyer gets a title to their property, and yes, it includes their proportionate share of the land and other common elements.

Even the increasingly rare “Air Strata” condominiums have most of their value in the land underneath them.

Just look at some condo Tax Assessments and note that the land accounts for the major part of their value. If that was not the case the tax bill for a Downtown suite would be the same as a similar suite in East Vancouver.

Ask City Hall, I’m sure they can explain it to you.

I’m sorry to hear all the horror stories from folks who bought into shabbily built condos, as you have now discovered, doing your due diligence is just as important when buying a condo as it is when buying a house. Buying a crappy condo can be just as bad as buying a crappy house.

Buyer beware!

#175 KAC on 04.01.18 at 10:00 pm

Here are some good tips for house and condo buyers:

“Look for these potentially expensive flaws when buying a house.”

https://www.hgtv.com/design/decorating/clean-and-organize/common-problems-found-during-home-inspections

#176 crowdedelevatorfartz on 04.01.18 at 10:00 pm

@#151 NumbNumb
“Why the HELL you haven’t posted yet today Garth? This is unacceptable. I need my fix.”
++++++

You can always ask for a refund for this FREE blog WITHOUT advertising…..
Or you can wait for the HOLIDAY WEEKEND to be over to send your complaints to the Customer Service Dept at 1-800- DIP SHIT.

#177 NoName on 04.01.18 at 10:16 pm

#162 Timberr on 04.01.18 at 8:32 pm
#136 Stone on 04.01.18 at 3:17 pm
I find the parallels between Canada and China when it comes to real estate eerily similar. Buy a condo in either country, same issues through and through.

https://m.youtube.com/watch?v=_lAoTBVTTO8

Stay awesome!

#142 NoName
funny thing i was watching this video of his earlier today.

https://www.youtube.com/watch?v=ifcg_sji32g

Since you both found the above with Winston, check out the “Ghost City” in China episode

https://www.youtube.com/watch?v=BcyYyyaPz84

Stay awesome. Stay balanced!

i remember i was on graveyard shift dude i work with showed me that 1st video and if i remember i posted it here next day, but that was some time ago so iam not 100 sure about it.

Ever since i found that serpenza dude i’ve been wanting to sent and email to ask him what was a title of that song in intro, just never got it. tryed google music search before but sample wasn’t long enough, but today my lucki day. chek out fisherman @ 3:30. i wish ia that good.

https://youtu.be/X9Dh2gFX4Mg?t=3m17s

#178 M on 04.01.18 at 10:27 pm

“The kids being sucked in by the current boom are naïve, gullible and vulnerable – exactly what you’d expect for first-time buyers.”

…and let’s not forget… ARROGANT…and ENTITLED.

…things that obviously hve nothing to do with the youth.

#179 Timberr on 04.01.18 at 10:55 pm

#176 NoName on 04.01.18 at 10:16 pm

i remember i was on graveyard shift dude i work with showed me that 1st video and if i remember i posted it here next day, but that was some time ago so iam not 100 sure about it.

Ever since i found that serpenza dude i’ve been wanting to sent and email to ask him what was a title of that song in intro, just never got it. tryed google music search before but sample wasn’t long enough, but today my lucki day. chek out fisherman @ 3:30. i wish ia that good.

https://youtu.be/X9Dh2gFX4Mg?t=3m17s

“Jüri Pootsmann – I Remember U”

This is Winston’s classic track used many a time in earlier videos – especially at the end with his drone shots! :-)

#180 I love real estate on 04.01.18 at 10:55 pm

Yet another reason why buying a home makes more sense than renting – you won’t get murdered.

https://www.thestar.com/news/crime/2018/04/01/hamilton-woman-charged-with-attempted-murder-in-rental-dispute.html

Better to build equity than build resentment and possibly your own casket with a crazy landlord. And there’s lots of them, sadly.

The current market adjustment will be over soon. Anyone who has been waiting and waiting and waiting for a correction to buy in will have missed yet another opportunity if they don’t act now.

How many years of future gains are you willing to put off?

How long will you let your life be controlled by others?

Things have changed in Canada in terms of real estate markets and global housing demands.

But the value of home ownership remains.

If you do choose to rent, be very careful and protect your family.

#181 Mark on 04.01.18 at 11:03 pm

“145 Mark (the fraud engineer) on 04.01.18 at 5:25 pm
hey there “enthalpy mark” quit pretending to be an engineer again.
real world liquefaction energy inputs run about 5-6% of the nat gas energy content.”

I’d be happy to look at any publications you’d like to provide me, but from the numbers I’ve seen, full-cycle, well-head to actual delivered and re-gasified gas is in the range of 15-20% losses.

Instead of shipping the LNG to make Asia’s industry great, why not use it in North America? Its a big short-sighted to be knee-capping the upside of the US and Canadian economies through LNG exports, when the gas is much better used, here at home, for value-added petrochemical and industrial production. If gas is too expensive in certain parts of Asia, why not repatriate those industries? As I argued earlier, those in favour of BC LNG exports are basically economic defeatists, and are not acting in the best interests of the Canada/United States’ integrated economies.

#182 pay your taxes on 04.01.18 at 11:14 pm

#65 the dude

Realtor advice………nice.

..Or, don’t buy. Save your dollars instead, invest, and retire comfortably wherever you want in the world. Buying RE in Canada is a losing strategy. There is no financial argument in favour of buying. Stay on the sidelines, rent, save, invest, and watch it all burn to the ground. Those who wisely chose to stay on the sidelines during the insane run up in the last few years will have a smorgasbord to choose from, IF you still want to buy, although if renting, saving, and investing, I don’t know why you would.

Xxxxx_xxxxxxxxx

Have you been in a coma for the last ten years or so? Savers have been slaughtered and real estate owners have made out like bandits. This is obviously reversing now but prices will never revert to what they were ten or even 5 years ago. The only places savers will be able to vultuch will be in the undesirable areas where nobody with money or sense would live anyways.

Rents in Vancouver have gone insane so unless you’ve saved some serious coin you won’t be retiring comfortably here unless social housing is in your future plans.

The condo thing is about lucky timing. The first one I bought in 98 sold in 02 for the exact same price I paid for it. The second one I bought in 02 sold in 05 for 45% more than I paid. A friend of mine has netted over 350k in the last 18 months from buying and briefly occupying 2 very nice condos. Now he’s sitting it out in a nice rental unit, but that’s 4k down the sewer every month for the next 2 years.

Nobody who comments on this blog seems to have a properly functioning crystal ball so we should avoid these absolute predictions lest we end up eating crow.

#183 For those about to flop... on 04.01.18 at 11:23 pm

Recent Sale Report/Realtor Assistance Needed.

Well,Gary Smith did it again.

The guy passes on addresses for me to watch out on the outcome and they all seem to sell in a short period of time compared to the rest of the market.

This one in New West sold 12 days ago.

On the hook for 1.17 ,last asking was 1.25

Did they lay an egg…

M43BC

215 Princess St,New Westminster paid1.17 June 2016 ask 1.25

Sold in Feb 2015 at 765,000
Sold in Jun 2016 at 1,172,000

https://www.zolo.ca/new-westminster-real-estate/215-princess-street

#184 crdt on 04.01.18 at 11:25 pm

KAC – Your bias is obvious, your enthusiasm admirable.

#185 Ben Dover on 04.01.18 at 11:45 pm

The RE pumpers keep on pumping..wtf

“ Roundtable teaser: 12 of T.O.’s top real estate pros on how they bought their first homes “

“THIS YEAR, IN A PARTNERSHIP BETWEEN POST CITY AND 680 NEWS, THE ROUNDTABLE HAS BEEN TURNED INTO A PODCAST — DOWNLOAD IT ON APPLE ITUNES, APRIL 9. “

http://www.postcity.com/Eat-Shop-Do/Do/April-2018/Introducing-our-Panellists-The-2018-Post-City-Real-Estate-Roundtable-tells-us-about-the-first-home-they-ever-bought/

#186 L on 04.02.18 at 2:31 am

Own a 2 bdrm, 2 bthrm, 1,000 sq ft condo in an older building in East Toronto with a lot of senior people who have been there for 20 to 30 yrs. Condo is very quiet, 5 minute walk to the GO stn, 20 min ride to Union, across from a mall, Mtc fees in the high 600’s & includes heat, hydro, electricity, cable, underground parking & security. It’s a well maintained building & never have to wait for the elevator as we are on the 2nd floor & always take the stairs. Love it here.

#187 We Didn't Know on 04.02.18 at 3:23 am

My husband and I bought 7 houses over a period of 7 years starting in 1983. We, at 1 point owned 3 at the same time, with one about to be sold. We had 1 child, a great income and looking foward to a wonderful future. The market crashed but we held on….12 years later of paying a 12% mortgage we finally sold at a 60K loss 12 years later. So sad for us I know. We split….fine, but I now have 2 successful children on the West Coast who have not bought and I take pride in the fact that they paid attention. I’m so proud today that they haven’t bought but have saved, waiting for their time. So Sorry for whomever is buying these condos. I get it. I Live in Kelowna and I see REDUCED every day as I ride my bike around (Kelowna is a small town) Totally off topic, however, the bs that’s taking over BC re taxes, it’s no good, who t f voted for this? I can look at myself in the mirror. Can you please educate yourself slightly before you vote for socialism?It has , never worked in any Country in the entire World. Why would it work here? Oh and by the way, how is it working for Venesuela?

#188 Gravy Train on 04.02.18 at 7:03 am

#139 Andrew Woburn on 04.01.18 at 4:00 pm
“Youth is a highly perishable commodity.”

And youth is wasted on the young! — George Bernard Shaw :)

#189 Oft deleted, beleaguered and abused stock picker on 04.02.18 at 8:34 am

#57 Hogtown….hahahah…. I titled my Masters Dissertation “Building tomorrow’s ghettos today”. It was obvious to a budding analyst like myself that the rhubarb design of Vancouvers newest product ‘the condominium’ (yes I predate the condo craze by decades), that chaos was just another word for greed.

I became interested when. Vancouver Shitty Hall admins, polls and engineers admitted a sneaky variance, reduction of the FSR by 47% in a single stroke. The ‘coffin condo’ was born. My paper caused a great deal of consternation. A famous demographer coined the term ‘functionally obselete’. Great minds think alike.

I was threatened with sanction, my work was very unpopular, even though time proved me correct when coelings and walls began collapsing in these faux Arizona designs under the constant wet coast rain. My work did produce some fancy legal work though, the indemnification of all the developers, architects and engineers involved. The fine print had the liability directed solely at the consumer.

The first unit built to fail was in the 1200 block W8 avenue Vancouver, it has long since been torn down after many migrating seniors lost everything. But…..Shitty Hall dis get a supercharged revenue base by doubling and then trebling the number of units allowable per sq ft. And….like a fairy tale come true, the civil service got their raises (did you know the average income is double and treble of counterparts in US cities), and the then Mayor was rewarded with an ambassadorship in London.

#190 Sam the Sham on 04.02.18 at 9:03 am

#14 saskatoon on 03.31.18 at 5:55 pm

“unfortunately, Canada has no constitutionally protected property rights.”
——————————————
Actually there is one group of people who do have constitutionally protected property rights: Canada’s First Nation aboriginals!

#191 IHCTD9 on 04.02.18 at 10:03 am

#173 KAC on 04.01.18 at 9:52 pm

Buying a crappy condo can be just as bad as buying a crappy house.
___________________

Just as bad? More like 10X worse.

If you own a house, you have exquisite control over everything that needs repair. You could hire a contractor to replace your roof for 5000.00, or you can get a buddy or two and do it for under a grand (plus beer costs).

In a condo, they just send you the special assessment and you eventually pay the bill. An enterprising homeowner with options would find everything more expensive to repair in a condo on a cost per sq. ft. basis.

Plus, in the end, all condos go to zero. The drop in value starts decades before the implosion date. No reversal is possible. At some point nearing the end, the unit owners become trapped, unable to sell or walk away, unable to fix the building, unable to attract sufficient rents. Landlords become slumlords before eventually the call is made to Controlled Demolition Inc. to finally put the decaying structure out of its misery.

#192 saskatoon on 04.02.18 at 10:40 am

#190 Sam the Sham

good thing to see that the canadian government is treating all people the same before and under the law.

#193 Reynolds531 on 04.02.18 at 10:49 am

KAC…one critical difference between detached sfh and condos…if I don’t like my neighbor I can go get a bunch of wood and build a big ass fence. Try that at any condo.

#194 Ace Goodheart on 04.02.18 at 11:02 am

RE: #165 Tony on 04.01.18 at 8:44 pm
Re: #157 Ace Goodheart on 04.01.18 at 7:33 pm

“Earnings and fundamentals mean nothing in America. The central bankers can easily squeeze all the shorts and boost the share price back above the 300 dollar U.S. mark.”

I just don’t see how Elon can glamour his way out of this one. The billions he raised went into two completely automated assembly lines, one in a battery plant and the other in Fremont. They were supposed to produce cars at a throughput rate never seen in Automotive assembly history.

The benchmark for auto assembly is one car per minute. He was going to try and beat that, using a fully automated line.

However, the reason why car manufacturers don’t use fully automated lines, is due to robots not being very good at final assembly. You need the “human touch” to get a bolt torqued just right, or put that dashboard exactly where it is supposed to be. Robots screw that sort of stuff up, so they have human workers doing it.

Musk’s idea was to fully automate a car assembly line, and achieve throughput times unheard of in automobile mass production circles.

However, his fully automated line does not work. This is a critical problem for TSLA. They cannot produce even at the benchmark 1 car per minute that all the other car companies are able to do.

TSLA is facing some very big problems and they have no money left, having burned it all building an assembly line that does not do what it is supposed to do.

#195 Capt. Serious on 04.02.18 at 11:10 am

#182 pay your taxes on 04.01.18 at 11:14 pm

Have you been in a coma for the last ten years or so? Savers have been slaughtered and real estate owners have made out like bandits. This is obviously reversing now but prices will never revert to what they were ten or even 5 years ago.

I think it’s entirely possible prices will revert to what they were 5 or more years ago. The price increases we’ve seen across the nation, more frothy in YVR and YYZ, have been due to low cost to rent money. When that trend reverses, unless there is a rise in incomes (have you seen those stats?) there will be nothing underpinning prices. They will drop to what people can afford to buy given the current cost of money. Plus B20 is just working through the system — it effectively increases the cost of money for everyone in a single step. That is the math.
It’s swell to observe you could have done well buying real estate ten years ago, but one shouldn’t confuse outcomes with strategy.

#196 pay your taxes on 04.02.18 at 11:38 am

#191 IHCD…..

Plus, in the end, all condos go to zero. The drop in value starts decades before the implosion date. No reversal is possible. At some point nearing the end, the unit owners become trapped, unable to sell or walk away, unable to fix the building, unable to attract sufficient rents. Landlords become slumlords before eventually the call is made to Controlled Demolition Inc. to finally put the decaying structure out of its misery

Xxx xxx

Where would I find one of these “condos at zero”? I’m in Vancouver and they don’t exist here and never did. Im sure the denizens of Toronto and just about every other Canadian city would report the same thing. So what are you on about? You’ve written one of the most bizarre narratives I’ve seen in this comment section, and that’s saying a lot. Man, if people started telling their TSX horror stories we’d really have something to listen to.

#197 I'm a skating Canadian hockey player on 04.02.18 at 12:43 pm

#91 Smoking Man on 04.01.18 at 2:27 am

Margarita Ville on the strip.

Perched up watching humans shuffling by. Every last one of them a byproduct of a lustful event.

If progressives had it their way. This place would not exist or the stories these beasts are hiding in their heads.

True man is what I should rebrand too.

Screw it Smoking Man works for now. Skiing on thin ice is difficult.
………………………………………………………………..
Yes Skiing on this ice is difficult!

Have you ever tried skating instead?

#198 Johnnyboy on 04.02.18 at 12:52 pm

#25 T on 03.31.18 at 6:42 pm

#12 KAC on 03.31.18 at 5:48 pm

Something your comment could use is the costs associated with ownership of condos vs sfhs.

Maintenance costs are extreme in condos, and most often they do not include utilities. A 1000 square foot condo in Toronto generally has a $850+ per month maintenance fee. That’s over $10,000 a year. You could replace the roof of your average house twice a year for that. This isn’t including any special assessments either.

Heating and cooling condos is also expensive, especially the newer ones. The windows in the new buildings always leak. I lived in a brand new condo on the Toronto waterfront for 5 years, when the wind picked up you could feel a breeze in the unit. Floor to ceiling windows with sliding glass doors to the balcony – not energy efficient.

Point being – condos are a massive money sink in every way imaginable.

Never mind the headaches of dealing with ignorant tenant neighbours, inept property management, and condo boards. Personally I don’t like inexperienced boards spending my money (liberally).

I would never buy a condo again.
………………………………………………………………………

Never, never, never purchase a condo period. Rent the dam thing if you want to live in one. The problem in the near future is all of these boomers that buy will die and their condo values are worthless to the huddled masses of millennials that either can not afford them or don’t want them. Way too many boomers are dumping the family abode and downsizing to a concrete box in the sky where as Garth says you technically don’t own anything tangible.
“First, you’re not actually buying real estate, just space. No land. No structure. You own your unit from the paint in, however you’re responsible for helping maintain the entire structure. Remember that depreciation of the building begins at about the time construction completes. Elevators, flat roofs and parking garages are incredibly expensive, have a relatively short life span, and are essential.” per Garth

#199 crowdedelevatorfartz on 04.02.18 at 1:04 pm

@#194 Ace

Total agreement.
While I applaud his vision and his foray into electric cars one has to look at the day to day problems associated with large scale manufacturing.
Something he’s NEVER done.
When Elon Musk was taking down payments for his cheaper electric car I shook my head…..sending money into a new company that has never turned a profit (and may not for years) aint a good idea
A person who “hand built” cars on a small scale (that never reached even those predicted 6000 per year production levels).
He bragged he would be producing 30,000 cars a month. Car industry experts with decades of experience shook their heads in disbelief.
Then he decides to build a mega factory to produce the batteries for the cars.
All while working on his Mars expedition…..
Too much.
Too soon.
Too scattered.

Something will give and the whole thing may come crashing down.
A shame really.
He has great ideas but zero patience it seems

#200 SimplyPut7 on 04.02.18 at 1:05 pm

With minimum wage at $14 in Ontario, heading to $15 an hour, how long does it take young families in Toronto to realize they don’t have to stay in the GTA to get a decent size property at a great price?

This detached house on 1.7 acres, at a price of $169,900 with a downpayment of 20%, and a mortgage rate of 3.49% for a 5-year fixed mortgage would only cost $678 a month.

https://www.realtor.ca/Residential/Single-Family/19017795/4561-COUNTY-ROAD-9-GREATER-NAPANEE-Ontario-K7R3K8-64—Lennox-and-Addington-South

Yes, it probably needs a bit of sweat equity to make it look like the homes people like to flip in the GTA, but to live debt free at a faster rate than any GTA city could offer while saving for retirement and having cash at the end of the month to enjoy life and travel. This place could be tempting to FOMO millennials or boomers in Toronto with little retirement savings who are house rich and cash poor.

#201 NoName on 04.02.18 at 1:13 pm

#194 Ace Goodheart on 04.02.18 at 11:02 am

it was funny to read year, year and a half ago about tesla ramping up to 500k units from 5 mill square ft fermont plant. NUUMI plant during operation as joint venture between gm and toyota was producing 300k per year, and that works out to be 2min cycle. toyota camry final line cyc. time.

what i think what tesla did wrong is that they made body build more complex than it should be, welding riveting epoxy dispensing. In video dude is so proud to point out robot tool changer and how robot does two very different tasks. and how they’ll fing more effivencies thru automation.

https://www.youtube.com/watch?v=8_lfxPI5ObM

I just wish i can ask him how many teslas robots will buy.

#202 Dog in The Fight on 04.02.18 at 1:17 pm

I lived in condo in Port Moody a new unit in Newport Village. One night I was awakened by what seemed to be a gun battle above me. The next morning a police officer appeared at my door. A drug deal gone bad. Sadly everyone survived.

#203 For those about to flop... on 04.02.18 at 1:20 pm

CNN is on Dow(n) Deathwatch…

M43BC

#204 NoName on 04.02.18 at 1:23 pm

300k per year, and that works out to be 2min cycle. toyota camry final line cyc. time.

read toyota camry plant have same cyc.time. nuumi was making vibe and matrix.

#205 jess on 04.02.18 at 1:57 pm

local community members protest for years regarding pollution /bad water
tax /development fee waivers given in exchange for clean up
the new infrastructure/housing is no longer affordable to the people
who once lived there.

==============
https://www.salon.com/2018/03/31/sustainable-cities-need-more-than-parks-cafes-and-a-riverwalk_partner/

Economy martin county
http://www.arlp.com/mines/central-appalachia.htm
The Kentucky county where the water smells like diesel

By Nadia Kounang, CNN
Updated 5:01 PM ET, Fri March 30, 2018
The Water Crisis in Martin County, Kentucky

For years, residents have complained of water outages, low water pressure and discolored water that smells of chemicals or sewage.
The system has persistently lost more than half the water it pumps due to leaks; from 2012 to 2015 it leaked more than 1.5 billion gallons of water.
Elaine Chao (then labor secretary and now one of Trump’s biggest infrastructure boosters as transportation secretary—and wife of Kentucky Senator Mitch McConnell) oversaw the investigation into the coal slurry spill in 2000 that precipitated many of the community’s water problems today. Massey Energy ended up paying only $5,600 in federal fines for the massive spill—amounting to less than 2 cents for every 1,000 gallons spilled.
Distant, absentee owners like Norfolk Southern and Harvard University have controlled a huge amount of the land and mineral assets in Martin County, and many of them face no (or very low) taxes. This lack of fair taxation has contributed to the fiscal problems that have hurt the water system.

“One of the most powerful men in Congress is ignoring his constituents in Kentucky, while his wife is cheerleading Trump’s plan to hand over our critical public water infrastructure to Wall Street,” said Wenonah Hauter, executive director of Food & Water Watch, referring to McConnell and Chao, respectively. “We urgently need full federal funding going to Martin County and other aging systems across the country.”

“Large economic interests that own land and mineral assets in the area are contributing to the problem by not paying their fair share in taxes off of the wealth these assets create,” continued Hauter. “Harvard has the largest endowment in the nation, while people in the community can’t afford clean water. The income inequality that leads to water crisis like this is a national disgrace. We don’t need regressive water price hikes: we need to hold corporations accountable for extracting wealth and revenues from communities like Martin County.”

“It is unacceptable that the water system has had so many unaddressed issues over the years, and now residents are being left holding the bag,” said Mary Cromer, an attorney with the Appalachian Citizens’ Law Center, Inc., who is representing the group Concerned Citizens of Martin County before the state Public Service Committee. “The egregious mismanagement of public funds and the water system has only compounded problems since the Massey disaster nearly 20 years ago.”

#206 Damifino on 04.02.18 at 2:40 pm

#194 Ace Goodheart

TSLA is facing some very big problems and they have no money left, having burned it all building an assembly line that does not do what it is supposed to do.
———————————-

Yeah, but they did lunch car into space. How cool is that?

#207 real estate on 04.02.18 at 2:44 pm

this is when i have a smile on my face……

who’s renting and pouring into the ‘globally diversified portfolio’, again?

BLOOD BATH……keep your fingers crossed Trump doesnt full postal

#208 Lost...but not leased on 04.02.18 at 3:00 pm

Condo Armageddon..

Pretty clear the consensus is condos are THE worst class of RE to purchase…

Given the condo market supply continues to multiply, this simply adds a continually diluting aspect to their market value.

I foresee all sorts of scenarios when SHTF….ie Condo Tower A has been bought 55% by speculators, who may be forced to sell ..
……Condo tower B has a huge assessment coming….
……Condo tower C developer has gone broke….building is 1/2 finished….
etc. etc.

Point is…people may be prepared to “vultch”in a market correction…..but vultch what?….

I can foresee a majority of stratas being caught up in a variety of sh*tstorm scenarios….hence they may be a vultch of last resort. So what if the condo gets a 50% haircut….it may only be worth 25% or less after the dust settles.

Keep in mind what has occurred to date is unprecedented…thus so will be the aftermath.

#209 jess on 04.02.18 at 3:02 pm

income inequality

LP: Let’s say you’re Joe the banker. You’ve made a lot of money in the stock market since the financial crisis and you’ve got plenty of money for consumption and speculation. Why should you be worried about the 95 percent and their ability to spend? What’s going to happen to you down the road if inequality continues to increase?

BZC: If the 95 percent do not have rising incomes, then their spending won’t rise. Without the increase in spending, eventually the sales of the companies you own will stop growing. Setting aside the possibility of revolution or other violent scenarios, there is a very real possibility of another financial crisis and a crash in the values of assets that simply cannot justify their valuations in a world that is too unequal. Worse—no single rich person can move the dial by voluntarily paying extra taxes any more than any of us can stop climate change by diligently recycling. It is only by massive coordinated action that we can operate on the level of the massive coordinated system of which we are all part.”

https://www.salon.com/2014/11/27/thomas_piketty_is_right_income_inequality_is_holding_us_back_partner/

#210 jess on 04.02.18 at 3:17 pm

stan

Hempcrete was discovered in a bridge abutment in France built in the 6th century.

Hemp itself is a beneficial crop requiring no fertilizer, weed killer, pesticide or fungicide. It grows so thickly that weeds cannot grow.

Made from the chassis of a Mazda, the car is made from cannabis hemp –

https://nypost.com/2016/05/06/this-car-is-made-out-of-cannabis-hemp/

http://www.scmp.com/news/china/society/article/2108347/green-gold-how-china-quietly-grew-cannabis-superpower

#211 Ace Goodheart on 04.02.18 at 3:26 pm

RE #187 We Didn’t Know on 04.02.18 at 3:23 am

“Can you please educate yourself slightly before you vote for socialism?It has , never worked in any Country in the entire World. Why would it work here? Oh and by the way, how is it working for Venesuela?”

BC Socialists have done something not often done in Canada, that being a “wealth tax”. Taking people’s equity out of their second properties. It’s not even a wealth tax you can actually pay (because you can’t take equity out of a property without selling it, you have to borrow against the equity and then pay interest on the loan).

It’s a “death spiral” tax taken to its conclusion. You borrow against the value of your property to pay the tax, the tax increases each year, and the property values go down, because no one wants to pay the tax. So you’re left with a property underwater, that you can’t sell, and a lot of debt taken out to pay a wealth tax.

Based on what has happened in BC, I would never own an asset located in that Province. I am sure a lot of other people would agree with me. First rule of asset ownership is you do not own anything in a jurisdiction where there is a history of governments enacting wealth taxes. This used to rule out various South and Central American republics. Now it includes a Province in Canada.

#212 jess on 04.02.18 at 3:34 pm

California’s Housing Crisis Is So Bad, Families Are Squatting Abandoned Homes Just to Survive
Activists are pioneering a bold—and possibly legal—way to combat the housing crisis.

Text by Bryan Schatz; Photography by McNair EvansMarch/April 2018 Issue

http://www.sandiegouniontribune.com/news/homelessness/sd-me-tent-opening-20171130-story.html
https://www.motherjones.com/crime-justice/2018/04/retake-the-house/

=====
San Diego’s first large homeless tent set to open Friday

#213 Ace Goodheart on 04.02.18 at 3:35 pm

RE: #200 NoName on 04.02.18 at 1:13 pm

Yeah it’s a shame what happened to TSLA.

The worst thing is, the Model 3 is an awesome little car. Very advanced, very powerful, really next generation stuff. And they set it up right, so that it needs “updates” and the like from the manufacturer, billed to the consumer each year, so there are trailing fees paid to the company.

What TSLA needed was two CEO’s. One flamboyant, boy wonder, charmer personality take on the world type, lovely ladies on his arms and always doing crazy things like sending cars into space, and a second CEO, who actually ran things and made it all work out.

They have the one. They lack the second one. It will be their downfall. A personality like Musk is a one in a billion thing, not found often. He can raise capital from the markets like nothing anyone has seen in modern times. He managed to get TSLA market cap over that of the big three automakers, while running a small cap company that builds less than 200,000 cars per year. That is unbelievable really.

But there was no one to put it all together.

#214 jess on 04.02.18 at 3:57 pm

Boris Epshteyn’s Sinclair segments are “as close to classic propaganda as anything I have seen in broadcast television in the last 30 years.”
https://www.motherjones.com/politics/2017/10/ready-for-trump-tv-inside-sinclair-broadcastings-plot-to-take-over-your-local-news-1/

Ready for Trump TV? Inside Sinclair Broadcasting’s Plot to Take Over Your Local News
Its mix of terrorism alerts, right-wing commentary, and “classic propaganda” could soon reach three-quarters of US households.

Andy KrollNovember/December 2017 Issue

john olivers take …

On Sunday, John Oliver went further to unpack some of the alarming ways the Trump-friendly media group twists viewers’ trust in their local news reporters to parrot highly misleading, right-wing messaging. That content can range from mandatory “Terrorism Alert Desks” to deceptive features on the “deep state.”

The HBO host also slammed the “fake news” script: “When you see just how many local stations were forced to read it and you watch them together, as many have been doing online in the last couple of days, you begin to realize the true effect of Sinclair’s reach and power.”

https://www.motherjones.com/media/2018/04/john-oliver-tears-into-sinclair-broadcasting-the-trump-loving-local-news-giant/

#215 Condo Projects on 04.02.18 at 4:08 pm

Solid engineering consultants do not do condos designs as the projects are cheap and expected to be done fast. So expect the corner cutting attitude not only by contractor, but also by designer.

Couple years ago I did structural engineering peer review on high rise condo building in GTA. My budget for review was rather low – only $4k. This low budget allowed me to work on the review for no longer than one week and, therefore, I was concerned that I might not find many hidden design issues.

The building construction progressed full speed and was about 50% completed, therefore, the Building Department requested to speed up the review to leave more chance for repairs (if necessary).

After one week of work my report indicated more than 100 issues included the Ontario Building Code violations, calculation errors and non-constructible details.

Long story short, the building, in my opinion, was a potential mass grave due to seismic resistance of the structure was less than 10% of that required by the Building Code. I am not sure if the engineer of record could fix many issues because, as I said earlier, the large part of the building was already installed and, in my opinion, it was not feasible to repair the installed structure without at least partial demolition.

#216 Entrepreneur on 04.02.18 at 4:18 pm

Yes, know about the qualities of hemp. And the laws that made it illegal to grow but one has to wonder if the laws were to stop the usefulness/benefits of hemp and protect the industries involved. Have to look at the dates.

Condos are a bad buy, so limited on what the owner is allowed to do or not to do. Also, increasing more of a fire risk and other risks. To be safe condos should only be built four stories high.

As for the many taxes on us taxpayers: All my life all I saw was the public workers/unions wages never go down and the system all follows but the small business owner struggle or shut down. So the game continues to the top and for more.

#217 MF on 04.02.18 at 4:24 pm

#142 NoName on 04.01.18 at 4:42 pm
#136 Stone on 04.01.18 at 3:17 pm

He’s incredible. Thanks for the links.

That’s pretty much why China will never have complete hegemony over the world economy like the US.

Thank g*d.

MF

#218 IHCTD9 on 04.02.18 at 4:29 pm

#199 SimplyPut7 on 04.02.18 at 1:05 pm
With minimum wage at $14 in Ontario, heading to $15 an hour, how long does it take young families in Toronto to realize they don’t have to stay in the GTA to get a decent size property at a great price?

This detached house on 1.7 acres, at a price of $169,900 with a downpayment of 20%, and a mortgage rate of 3.49% for a 5-year fixed mortgage would only cost $678 a month.

https://www.realtor.ca/Residential/Single-Family/19017795/4561-COUNTY-ROAD-9-GREATER-NAPANEE-Ontario-K7R3K8-64—Lennox-and-Addington-South

Yes, it probably needs a bit of sweat equity to make it look like the homes people like to flip in the GTA, but to live debt free at a faster rate than any GTA city could offer while saving for retirement and having cash at the end of the month to enjoy life and travel. This place could be tempting to FOMO millennials or boomers in Toronto with little retirement savings who are house rich and cash poor.
______

I wonder too since I’ve been shouting this from the roof tops for quite a while. I’ve flat out done the math several times and posted it here.

A couple making minimum wage in small town Ontario lives an equivalent quality of life (if not better since fresh air, no traffic jams, homogeneous culture etc), than a couple in the GTA making 100’s of thousands.

ie, you essentially need a low end 1%’er income to really start “looking” like you’re outdoing the small town home owning burger flippers if no one told you GTA houses cost 1.5+ Million.

By comparison – low end 1%ers out here have waterfront mansions with boat houses, acres, along with everything you’d expect them to own by looking at their property.

#219 Gravy Train on 04.02.18 at 4:32 pm

#91 Smoking Man on 04.01.18 at 2:27 am
“Skiing on thin ice is difficult.”

#196 Canadian hockey player on 04.02.18 at 12:43 pm
“Yes, skiing on thin ice is difficult! Have you ever tried skating instead?”

Okay, now you’re just being mean to Smokey! I just can’t countenance such behaviour! :)

#220 Tony on 04.02.18 at 4:42 pm

Re: #194 Ace Goodheart on 04.02.18 at 11:02 am

Tesla is in the index and we already know America will never have a bear market again ever so the DOW can’t finish a trading day 20 plus percent lower than the January 26th low this year. So when the selling abates the rig artists will “fix” the short sellers good just like they’ve done all along to the people holding silver. Until they kick Tesla out of the index you can only day trade it long or short.

#221 Stone on 04.02.18 at 4:46 pm

#216 MF on 04.02.18 at 4:24 pm
#142 NoName on 04.01.18 at 4:42 pm
#136 Stone on 04.01.18 at 3:17 pm

He’s incredible. Thanks for the links.

That’s pretty much why China will never have complete hegemony over the world economy like the US.

Thank g*d.

MF

———

No need to thank anyone. Just….stay awesome! LOL

#222 Stan Brooks on 04.02.18 at 5:04 pm

Surprise, surprise.

Capital flowing out of Canada, away from daddy’s boy ‘star capitalist’ wild bill and clueless socks boy with the incredible IQ of 10.

https://ca.finance.yahoo.com/news/investment-outflow-canada-already-underway-170004436.html


McKay told The Canadian Press that a “significant” investment exodus to the U.S. is already underway, especially in the energy and clean-technology sectors.

The flight of capital, McKay added, will likely be followed by a loss of talent, which means the next generation of engineers, problem solvers and intellectual property could be created not north of the border, but south of it instead.

“We would certainly encourage the federal government to look at these issues because, in real time, we’re seeing capital flow out of the country,” McKay said.

What did I say long time ago here on this blog?

We are done. This place is done.

#223 Howard on 04.02.18 at 5:11 pm

#219 Tony on 04.02.18 at 4:42 pm

we already know America will never have a bear market again ever…

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Well this seems to be what our host believes. All stock markets in fact.

And who can blame him? The Fed has made bear markets illegal.

#224 Newcomer on 04.02.18 at 5:17 pm

#100 Frances on 04.01.18 at 8:47 am
…One bedroom units in my building are going for 550k …
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Don’t lose sight of the fact that 550k is just over a half a million dollars and the thing for sale is a one bedroom apartment. Those two things do not go together.

If you want to ballpark something, go back to the 1% rule. Is this one bedroom apartment likely to fetch $5,500 a month in rent?

#225 Stan Brooks on 04.02.18 at 5:17 pm

Socks boy’s crown achievement:

He won the war with climate change/global warming with his carbon tax:

https://ca.yahoo.com/news/first-week-april-bring-wintry-storm-eastern-canada-193225334.html


First week of April to bring wintry storms to southern, eastern Canada

Environment Canada has issued weather alerts to New Brunswick, Nunavut, Ontario and Quebec, with a massive storm expected to arrive on Tuesday.

“The Colorado low is a major storm,” said Brett Anderson, a senior meteorologist at AccuWeather. “And it’s going to have all sorts of weather with it.”

Snowfall will begin Tuesday afternoon, with Quebec City and Sudbury receiving as much as 20 and 30 centimeters of snow respectively. Those cities, along with Georgian Bay and North Bay, will be among the hardest hit.

“Travel in those areas is going to be very treacherous, I suspect, even though it’s early April,” Anderson said.

1.5 mil for a cardboard house in the frozen tundra.

Bhahahahahahahhahahahahahahahhahahahaa

#226 NoName on 04.02.18 at 5:21 pm

#212 Ace Goodheart on 04.02.18 at 3:35 pm

And they set it up right, so that it needs “updates” and the like from the manufacturer, billed to the consumer each year, so there are trailing fees paid to the company.

TSLA trailing fee is setup wrong, gets collected by tire manufacturers.

Having 100% of torque at low rpm (almost instantly) very bad news for tires, who ever drives that car 30k-40k km per year he is looking for one set, probably 2 for year @275-300cad each. I need to change tires on my car so I know price. 1700$ for 4 tires size 245/40-20.
Just for comparison all AWD are hard on tires, car I drive whit full torque @3400rps “shredded” tires under 50k km travelled in 15months… I don’t look forward to being electric car driver just for that reason alone.

#227 jess on 04.02.18 at 5:44 pm

https://www.rollingstone.com/politics/features/russian-campaign-to-infiltrate-nra-elect-trump-w518587

#228 SimplyPut7 on 04.02.18 at 5:47 pm

#217 IHCTD9 on 04.02.18 at 4:29 pm

I’m listening now!

I came across the listing when counting how many homes in the greater golden horseshoe area were listed for over $1.7 million (approx. 2800). Very few homes sell for over $1.7 million now, I was wondering if we were getting close to having a year supply of higher-end homes yet. As I was zooming out on realtor.ca and about to add my filters, I noticed the cheaper listings on the site. I just thought we all went mad and no detached houses sold for less than 200k. If they sell for this much in peak times, they would probably sell for less once mortgage rates hit 4% or 5%.

It’s nice to know people have lots of options outside of the GTA and can leave the city when they get sick of hearing that Toronto is a ‘world-class city’ and that 500 sq ft concrete shoebox should sell for 500k because they will be worth a million in a few years because ‘homes in Toronto always go up in value’.

Seems like the media and big banks have been pushing this ‘world-class city’ thing for nearly 30 years.

https://pbs.twimg.com/media/DZu23KLX4AIfoQU.jpg:large

#229 Suburban coyote and pup on 04.02.18 at 6:11 pm

Where are you Garth? Any thoughts on the dissolution of municipal boards?

#230 LP on 04.02.18 at 6:22 pm

#208 jess on 04.02.18 at 3:02 pm

Just to be clear, the LP Jess references here is Lynn Stuart Parramore, not the LP who occasionally ventures an opinion on this blog.

#231 KAC on 04.02.18 at 6:54 pm

#191 IHCTD9 on 04.02.18 at 10:03 am
“Plus, in the end, all condos go to zero. The drop in value starts decades before the implosion date. No reversal is possible. At some point nearing the end, the unit owners become trapped, unable to sell or walk away, unable to fix the building, unable to attract sufficient rents. Landlords become slumlords before eventually the call is made to Controlled Demolition Inc. to finally put the decaying structure out of its misery.”
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Bizarre logic! Pray tell me how prime building lots in the centre of Vancouver will be worth nothing?

Check out the old apartment buildings in Vancouver which have recently sold for multiples of their assessed value as they are scooped up by developers looking to cash in on the new height regulations.

One recent high-rise sale involved a building which is still in good condition and is only about 20 years old. The developer paid more than double assessed value for the already expensive units in that one. Instant millionaires being created overnight.

Of course the same cash bonanza can happen with well located detached houses when a land assembly takes place. It’s just a bit easier to do it with a condo because, thanks to a recent change in BC law, you now only need 80% of owners to agree to wind up the corporation.

It must suck when a developer wants to buy a row of five houses for a development and one homeowner in the middle gets greedy and causes the deal to collapse.

#232 KAC on 04.02.18 at 6:58 pm

#193 Reynolds531 on 04.02.18 at 10:49 am
“KAC…one critical difference between detached sfh and condos…if I don’t like my neighbor I can go get a bunch of wood and build a big ass fence. Try that at any condo.”
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Try that when you have a crack shack next door. You’ll still find the needles and the occasional overdosed psycho on your lawn. In a condo you can get them evicted.

#233 KAC on 04.02.18 at 7:05 pm

#197 Johnnyboy
The problem in the near future is all of these boomers that buy will die and their condo values are worthless to the huddled masses of millennials that either can not afford them or don’t want them. Way too many boomers are dumping the family abode and downsizing to a concrete box in the sky where as Garth says you technically don’t own anything tangible.
“First, you’re not actually buying real estate, just space. No land. No structure.
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So you think condos will become worthless because the millennials can’t afford them. Hmmm, what grade where you in when you studied economics?

Once again, for the slow learners, who do you think owns the condo’s land and other common assets? The Tooth Fairy? Jeez!

#234 Anthony Maw on 04.02.18 at 7:12 pm

Condo boxes in the sky are just fine for some people. No lawn to mow. No roof to leak. Smaller place to maintain. Just eat, sleep and make yuppie babies.

#235 KAC on 04.02.18 at 7:19 pm

#207 Lost…but not leased on 04.02.18 at 3:00 pm
Condo Armageddon..

Pretty clear the consensus is condos are THE worst class of RE to purchase…

Given the condo market supply continues to multiply, this simply adds a continually diluting aspect to their market value.
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Ah ha! So that must explain why Vancouver condo prices continue to soar whilst detached home prices are tanking.

For what it’s worth, I think that condos will eventually follow detached into the abyss and I’ll be happy to see the day when I can once again consider buying a NICE Downtown condo for only a small premium in price per square foot compared to the House I’ll be selling.

I continue to recognize that condos and detached homes have their own distinct advantages and disadvantages. If you are still in your breeding years a house in the boondocks might be the better choice. If you are single or if you just enjoy all the benefits of Downtown living then perhaps a condo is the better choice.

Having enjoyed both types of housing I can make arguments in favour of both but I’m amused by the outrage from my fellow detached homeowners.

What’s making you so angry? Is it the commute time, the endless maintenance chores, the boredom of the burbs, or are you still struggling under the weight of a massive mortgage with inevitable rate increases looming.

#236 AGuyInVancouver on 04.02.18 at 8:45 pm

#197 Johnnyboy
..Never, never, never purchase a condo period. Rent the dam thing if you want to live in one. The problem in the near future is all of these boomers that buy will die and their condo values are worthless to the huddled masses of millennials that either can not afford them or don’t want them. Way too many boomers are dumping the family abode and downsizing to a concrete box in the sky…
_ _ _
LOL, and where do you think those Millenials are going to live then? If they can’t afford those Boomer condos, they sure can’t afford a SFH.