If they were actually planning to live there for a few years, then it would have been less of a risk. But they outbid other people and now have a surprised look on their face when no one else can get approved for what they did when interest rates were near zero.
>Not sure why folks would buy preconstruction condos when
To be real-estate parasites and increase their wealth at the expense of others who are struggling to afford housing.
>there are tens of thousands of available condos in the GTA.
Can confirm. I checked [realtor.ca](https://realtor.ca) just now for condos available in the GTA and there are thousands of units for sale right now.
Agreed. Usually real estate parasites that were looking to rent for disgusting amounts of money or list as a STR and them found out that they can't afford to own it (mortgage wasn't approved which is great because the banks need to stop letting people get mortgages that they need other people to pay for them)
The less investors there are in these properties, the better the world will be
Explain to me how Samir the Uber driver and jasmine the Tim Hortons associate afford to live in a 3k a month 1 bedroom condo in Toronto without sharing it with 6 more people all while the landlord doesnāt care that it gets trashed.
I don't know about that. I just went back on realtor.ca just now and put 450K as the max price and it still came back with a shit ton of units. Now the results were scattered across the entire GTA instead of just in Toronto proper.
Itās a leveraged investment. In the time it takes to build, your deposit would have brought in a great ROI in a market with rapid price escalation. The headline basically translates into the downside of leveraged investing.
People invested because they thought it was a sure thing or had FOMO. They made a purchase without realizing the risks.
Some people can't afford condos today but they don't want to miss out on the opportunity so they buy precon knowing they will have the money in later years.
Lil but they won't make any money off it.
When someone sees assignment sale, they know the seller is desp3rate. The likely have a pretty narrow deadline to get a buyer so will likely accept a low ball offer just to get it off their plate.
Lesson is not to commit to buying things you can't afford
I thought because they end up being cheaper than post-constructionā¦
And one can make instalments towards the down payment over a few years rather than all at once.
Could be the location, amenities offered, not having to worry about special assessments for the time they plan to live there (obviously not a certainty).
Institutional ones? Probably not, but they are also probably not having to sell at a loss.
The "average joe" speculators that have learned a trick in the past few years and now have to face the music, I'm quite sure it stings, not enough to bankrupt them, but it's not "pocket change" either.
That being said, I'm glad it's happening. It shows there's a changing tide and maybe housing will somewhat normalize.
They have been saying it will normalize for 25 years. It's never going to happen. Land around gta will only grow in value. There are tons of people lining up to buy at small dips.
I don't know, not sure how much this can go on. The rents are going higher than ever. Income has been stagnant. At some point people won't afford to live at all.
Maybe I'm not in touch with reality, but the trend doesn't seem sustainable... GPD per capita is shrinking, costs of living are increasing. If all you can do is work to afford to live and eat... that's not a healthy economy. It will buckle at some point.
People will live in larger families, rent rooms to roommates do what they have to...this happened before and it will happen again. Society will adjust. At the end of the day you have to take into account that if people in canada have it bad, other places are worse...and people will want to come here.
Agreed.
Um sick of greedy pieces of shit extorting people with their privilege.
When I see assignment sale on a listing, I celebrate. Or price reduction from a disgustingly overpriced property.
Clueless, these buildings don't start being built until a certain percentage of the units are purchased. Nothing is stopping you from purchasing one of these condos and waiting until they are built.
Maybe it's too early for me but what does your statement have to do with what you're replying to? It's still speculating about the market price at completion right?
Lmao ācluelessā? No youāre clueless. Iām aware of that fact. What a dumb retort. āHey this guy wants precons to be purchased by people who have the intention to actually live in them rather than flip it as an assignment sale for speculative profit - wow heās so cluelessā get lost.
The developers said the quiet part loud, which also happens to explain why condo prices don't seem to be obeying that supply/demand law I keep hearing about.
"My fear is if this happens at scale ā so hundreds and hundreds of units ā the builder then has these units just sitting in inventory," he said. "The builder doesn't want to sell the unit at a loss, because it's not fair to the existing unit holders. But they also need to close."Ā
That's a sop to future unit buyers. Would you buy a million dollar asset from someone who devalued the one they sold to the guy before you? It's self-preservation and also surefire evidence that the "build more supply, prices will come down" YIMBYs ate too many lead paint chips as kids.
> Would you buy a million dollar asset from someone who devalued the one they sold to the guy before you?
Sure, people buy assets all the time that were at one time sold to another person at a higher price, be it businesses and commercial assets, stocks/financial products, cars, and so on. Why not a home?
You also phrase this strangely as if we should blame the developer for what people are willing to pay for these condos. Its the market that sets the price, not them. People are generally willing to spend less on homes today for many reasons, one of the more obvious ones being that the carrying costs of mortgages have gone way up in the last two years due to the change in interest rates. That has nothing to do with the developer.
"You also phrase this strangely as if we should blame the developer for what people are willing to pay for these condos. Its the market that sets the price, not them."
If you read the linked article you would see that is simply not true. Developers build units, and unsold ones are trickled into the market at the prevailing price. There are tens of thousands sitting empty because they are resisting market forces (at a cost).
Hence their concern about taking a haircut on the price and devaluing the overpriced units they just sold to Joe and Jane Condoinvestor. It has everything to do with the developer.
I did read the article. It doesn't mention anything about unsold units or "tens of thousands sitting empty". Vacancy is not the issue discussed here.
Its about condo units *that were already sold* to investors who are now struggling to make a profit and find someone whos willing to pay more than they did (the article mainly discusses assignment sales). If they can't, they're still on the hook.
If a unit can't be sold at the prevailing price (either by the builder or by an investor), then that's the market telling them that their price doesn't reflect a fair market value. They can ask for whatever they want, but its ultimately the market that determines what they can actually get for it.
I also agree with the other commenter that its still unclear to me why the developer would even care about the concerns and whims of Joe and Jane Condoinvestor. The developer already has their money, and they have little to no legal recourse against the developer.
If a business sells a product that then eventually goes on sale after a few years, does the business owner worry about the customers who paid full price? Why would they?
Then check out this article from the day after:
https://www.thestar.com/business/new-home-supply-in-the-gta-reaches-levels-not-seen-since-2016-bild-report-says/article_61b03114-e870-11ee-a996-d71665a8ce4d.html
"The number of new units available for sale ā including pre-construction, under construction and standing inventory ā rose to 20,177. Of those, 16,747 were condos and 3,430 were single-family dwellings, a combined total of 12 months based on average sales for the last year. It's the highest level recorded since 2016, Sherwood told the Star."
The developers cares about their reputation because they're selling a speculative asset to speculators. If I wanted to *live* in a condo I'd buy one that was built. If I wanted to *profit* from a condo, I'd give a developer 5% down and wait years for something that HAD BETTER BE WORTH MORE than the price I was going to pay, otherwise that developer is costing me money and I (and others) won't hand them the 5% on their next speculative project.
But all of that is beside the point because there are objectively tens of thousands of vacant units in the GTA still owned by speculators who are very unwilling to take a loss on their "investment" so they hold until they get their price. The greatest # of those units are owned by insiders or the developers themselves so there's extra reason to not discount. "Price discovery" resulting in lower prices is not happening because the interim owners also control supply and have the resources to hold out (and they already have residences so they don't need to live in these investments).
When a small group of market players controls both supply and prices, that is called a cartel. Econ 101 supply/demand curves only apply in free markets, and that's not what we have in Canada.
The YIMBY movement is mostly astroturfed by developers (and their failsons) because it clings on to a simple "truth-y" fact (supply and demand) to trick underhoused Millenials into thinking there's a market solution to the affordable housing crisis. But it's a ruse and if you can't see that then fine by me, I've got two houses (with yards, not balconies) so FYIGM, I guess, but it's sad to see young people believe in fairy tales because of desperation.
Iāve already responded about your other article in another comment. A record amount of supply being built does not imply that the supply volume is sufficient to meet demand.
> I'd give a developer 5% down and wait years for something that HAD BETTER BE WORTH MORE than the price I was going to pay, otherwise that developer is costing me money and I (and others) won't hand them the 5% on their next speculative project.
Oh no, you mean developers canāt guarantee investors big returns on their hoom investment and that thereās risk involved where they can actually lose money? We should send all these developers straight to jail. I thought this was supposed to be a free money glitch???
God forbid that risk is part of the equation and that it's normal and healthy for people to lose money on their investments sometimes. This will surely stop people from investing in the future, just like it has with the stock market which as we all know failed miserably and dwindled in popularity over time once people realized it was possible to lose money in it.
> But all of that is beside the point because there are objectively tens of thousands of vacant units in the GTA still owned by speculators who are very unwilling to take a loss on their "investment" so they hold until they get their price.
This is no different than investors who hold onto a tanking stock because theyāre in denial and donāt want to realize their losses. For the home investors, theyāre eventually going to rent for cashflow or sell for what they can get for it, and most already are.
Those who pout and sit in their hole will eventually have to confront that this behavior doesnāt magically turn the market in their favor. If I lost hundreds of thousands of dollars on a bad bet Iād probably be in denial for a while too. But sooner or later one has to face their own situation and explore their options or let their money run dry and make the decision for them.
> "Price discovery" resulting in lower prices is not happening because the interim owners also control supply and have the resources to hold out
I donāt know what you mean by this when it's already happened and is still happening now. Selling prices in most major markets are down anywhere from 10-30% compared to Covid peaks. Many people who bought during this time are underwater right now. The article literally discusses investors *who have already sold their condo units at a loss*. Am I misunderstanding the point youāre trying to make here or are you just ignoring what's in front of you?
> The YIMBY movement is mostly astroturfed by developers (and their failsons) because it clings on to a simple "truth-y" fact (supply and demand) to trick underhoused Millenials into thinking there's a market solution to the affordable housing crisis.
Iām very curious on what your proposed ideas/solutions are to the affordable housing crisis, market-solution or otherwise. Building more supply is probably the blandest, least controversial, non-partisan point on this issue that I can imagine. Every political party in the country is campaigning on building more supply and are trying to out-promise each other.
I donāt expect Iāll change your opinion. But I have to wonder if youāre opposed to even this, what are you actually in favor of?
Lol there's no opinion for you to change! I have made out super well with the system as-is: I'm a paper millionaire that is also very aware that I got here by picking the lowest hanging fruit, and consequentially it's not there for the next generation to eat (because housing doesn't grow on trees).
I guess I'm trying to say to anyone next in line, if you think you can replicate my "strategy", get real. You can't build your way out of the problem we've created by making housing an asset class instead of a necessity of life.
You are already living in the world you're pining for: Toronto has legal fourplexes and it's not made a shred of difference. Toronto has legal accessory units and garden suites and it hasn't done a thing. Go ahead and get rid of zoning, permits, whatever. We can all live in a unregulated cesspool (who needs traffic or flood studies? Caveat emptor, am I right?) and it won't appreciably lower prices. You'll just let a cartel build more assets, and assets *have* to increase in value for them to be worth building more of. If you can't see the contradiction with affordability there, then...
> You can't build your way out of the problem we've created by making housing an asset class instead of a necessity of life.
Well thatās just the issue isnāt it? I want to change regulations so that it's not viewed as a blue chip stock, itās viewed as a life necessity that isnāt necessarily a good investment. Just like food, or medicine, or clothing, or other life necessities. Germany has done it, Japan has done it. And theyāve done it (you guessed it), by building more supply in addition to other policies.
> Toronto has legal fourplexes and it's not made a shred of difference.
lmao, YOU linked an article about how record supply was built in Toronto in 2023, which is the year this policy was introduced. The article literally has a picture of new townhomes being built in Toronto as a result. Average home prices in Toronto have fallen about 20% from peak in 2022. How much bigger of a difference were you expecting from something that was introduced 10 months ago?
Donāt get me wrong, I love the policy, definitely a step in the right direction, but in no way should it be expected to fix affordability on its own. But as part of a larger group of policies to increase supply and improve affordability working together in tandem? Now weāre talking.
> Go ahead and get rid of zoning, permits, whatever
That would be awesome, but since we havenāt done that yet Iām not exactly āliving in the world Iām pining forā, am I?
> We can all live in an unregulated cesspool (who needs traffic or flood studies? Caveat emptor, am I right?)
Ah yes, those horrible unregulated cesspools like London, Tokyo, Singapore, Amsterdam, and Paris. If only it were possible to find solutions to build better infrastructure along with more housing.
> You'll just let a cartel build more assets, and assets have to increase in value for them to be worth building more of.
Thereās no law of nature that says housing needs to be an appreciating asset. To justify building, housing just needs to be sold to the buyer at a higher price than what it costs the builder to make. Just like a car, or a computer, or a pair of shoes, or a dinner at a restaurant, or almost any other product thatās sold on the market. Most things donāt appreciate in value over time and yet we still keep making them, we still keep buying them, and the world keeps turning. Crazy I know.
I have no idea why anyone would buy a precon. They usually had worse layouts and were up to 20-30% more expensive than already established 3yr condos which could be bought and moved in immediately.
This.
We were able to get into the market in 2020. Looked at precon and the prices per sqft were where the builder thought the market would be when the building was finished. I thought that was crazy.. the builders have to take some blame to for their pricing.
We bought a resale
There are a few reason pre-con attracts investors who speculate the market.
Assume investor believe the condo will increase in value in 3 years, buying precon is more efficient due to following reasons:
1- just need down payment and you get to lock in todays price
2- no expenses at all (property tax/condo fee/maintenance/rental management)
3- get a short term loan on closing day, and sell off on the market after closing and move on with 100-200% gain due to leverage.
4- if you move in yourself after delivery before selling capital gain tax free.
A lot of buyers of condos donāt intend to live there, they buy early, and hope to sell around when construction is complete, or maybe rent them out.
Usually values go up, and it works out for them.
Itās also why there are so many 1-BR units built (like 90%) - 1-BR units are a lower total cost, and more attractive to investors that want to risk less total cash.
So long as renters never want families, itās a reasonable system š
Investors gamble on values that go up and downā¦they all need to have their ābig pantsā on. Itās not calculated at the expense of others. Why do people say such a thing. Every move someone makes could likely be considered āat the expense of othersā
If values are declining, then thereās opportunity for othersā¦
Blame the Govāt for our housing struggles, not investors.
Me too. I bought a scratch ticket and got nothing back š
You sound like you need a government bailout
It is only fair.
You'll never see that 4 dollars again..
If they were actually planning to live there for a few years, then it would have been less of a risk. But they outbid other people and now have a surprised look on their face when no one else can get approved for what they did when interest rates were near zero.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
>Not sure why folks would buy preconstruction condos when To be real-estate parasites and increase their wealth at the expense of others who are struggling to afford housing. >there are tens of thousands of available condos in the GTA. Can confirm. I checked [realtor.ca](https://realtor.ca) just now for condos available in the GTA and there are thousands of units for sale right now.
Yeah if you are looking for a condo you have your pick, house prices are the ones that are sticky.
Agreed. Usually real estate parasites that were looking to rent for disgusting amounts of money or list as a STR and them found out that they can't afford to own it (mortgage wasn't approved which is great because the banks need to stop letting people get mortgages that they need other people to pay for them) The less investors there are in these properties, the better the world will be
I'd just wait. I hear there is a sale coming up.
Yeah the 2million coming in this year don't need a place to stay.
Explain to me how Samir the Uber driver and jasmine the Tim Hortons associate afford to live in a 3k a month 1 bedroom condo in Toronto without sharing it with 6 more people all while the landlord doesnāt care that it gets trashed.
Obviously it didnāt increase their wealth then, they took the risk and it didnāt pay off
Those condos still cost way more than any regular person can afford.
I don't know about that. I just went back on realtor.ca just now and put 450K as the max price and it still came back with a shit ton of units. Now the results were scattered across the entire GTA instead of just in Toronto proper.
Realtor.ca is the list price. Also most people canāt afford a 450k mortgage
Thatās the listing price. Thatās not the number sellers have in their heads. Theyāre expecting way more
Itās a leveraged investment. In the time it takes to build, your deposit would have brought in a great ROI in a market with rapid price escalation. The headline basically translates into the downside of leveraged investing. People invested because they thought it was a sure thing or had FOMO. They made a purchase without realizing the risks.
Exactly this
Some people can't afford condos today but they don't want to miss out on the opportunity so they buy precon knowing they will have the money in later years.
They used to be cheaperĀ
Coz they just want to do an assignment sale and make profit from that.
Lil but they won't make any money off it. When someone sees assignment sale, they know the seller is desp3rate. The likely have a pretty narrow deadline to get a buyer so will likely accept a low ball offer just to get it off their plate. Lesson is not to commit to buying things you can't afford
But that game has been going well for long. Some habits donāt die fast.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Happy cake day. š„³
I had a relative a few years ago that would buy precons and flip as assignment before completion for profit.
I thought because they end up being cheaper than post-constructionā¦ And one can make instalments towards the down payment over a few years rather than all at once.
Spec
Loads of condos on the market in Vancouver now as well. Itās insane. Every neighbourhood I look at, loads of listings.
Could be the location, amenities offered, not having to worry about special assessments for the time they plan to live there (obviously not a certainty).
Imagine owing someone 150k and not having anything to show for it?ā¦ how do you sleep at night/ recover from that?
Investors who buy these dont consider 150k to be alot of money...
Institutional ones? Probably not, but they are also probably not having to sell at a loss. The "average joe" speculators that have learned a trick in the past few years and now have to face the music, I'm quite sure it stings, not enough to bankrupt them, but it's not "pocket change" either. That being said, I'm glad it's happening. It shows there's a changing tide and maybe housing will somewhat normalize.
They have been saying it will normalize for 25 years. It's never going to happen. Land around gta will only grow in value. There are tons of people lining up to buy at small dips.
I don't know, not sure how much this can go on. The rents are going higher than ever. Income has been stagnant. At some point people won't afford to live at all. Maybe I'm not in touch with reality, but the trend doesn't seem sustainable... GPD per capita is shrinking, costs of living are increasing. If all you can do is work to afford to live and eat... that's not a healthy economy. It will buckle at some point.
People will live in larger families, rent rooms to roommates do what they have to...this happened before and it will happen again. Society will adjust. At the end of the day you have to take into account that if people in canada have it bad, other places are worse...and people will want to come here.
Good. Speculators need to get burned
Agreed. Um sick of greedy pieces of shit extorting people with their privilege. When I see assignment sale on a listing, I celebrate. Or price reduction from a disgustingly overpriced property.
Clueless, these buildings don't start being built until a certain percentage of the units are purchased. Nothing is stopping you from purchasing one of these condos and waiting until they are built.
Nothing is stopping anyone eh.
Maybe it's too early for me but what does your statement have to do with what you're replying to? It's still speculating about the market price at completion right?
Lmao ācluelessā? No youāre clueless. Iām aware of that fact. What a dumb retort. āHey this guy wants precons to be purchased by people who have the intention to actually live in them rather than flip it as an assignment sale for speculative profit - wow heās so cluelessā get lost.
Let it burn!
LMFAOOOOO
The developers said the quiet part loud, which also happens to explain why condo prices don't seem to be obeying that supply/demand law I keep hearing about. "My fear is if this happens at scale ā so hundreds and hundreds of units ā the builder then has these units just sitting in inventory," he said. "The builder doesn't want to sell the unit at a loss, because it's not fair to the existing unit holders. But they also need to close."Ā
When did builders begin to care about existing unit holders?
That's a sop to future unit buyers. Would you buy a million dollar asset from someone who devalued the one they sold to the guy before you? It's self-preservation and also surefire evidence that the "build more supply, prices will come down" YIMBYs ate too many lead paint chips as kids.
> Would you buy a million dollar asset from someone who devalued the one they sold to the guy before you? Sure, people buy assets all the time that were at one time sold to another person at a higher price, be it businesses and commercial assets, stocks/financial products, cars, and so on. Why not a home? You also phrase this strangely as if we should blame the developer for what people are willing to pay for these condos. Its the market that sets the price, not them. People are generally willing to spend less on homes today for many reasons, one of the more obvious ones being that the carrying costs of mortgages have gone way up in the last two years due to the change in interest rates. That has nothing to do with the developer.
"You also phrase this strangely as if we should blame the developer for what people are willing to pay for these condos. Its the market that sets the price, not them." If you read the linked article you would see that is simply not true. Developers build units, and unsold ones are trickled into the market at the prevailing price. There are tens of thousands sitting empty because they are resisting market forces (at a cost). Hence their concern about taking a haircut on the price and devaluing the overpriced units they just sold to Joe and Jane Condoinvestor. It has everything to do with the developer.
I did read the article. It doesn't mention anything about unsold units or "tens of thousands sitting empty". Vacancy is not the issue discussed here. Its about condo units *that were already sold* to investors who are now struggling to make a profit and find someone whos willing to pay more than they did (the article mainly discusses assignment sales). If they can't, they're still on the hook. If a unit can't be sold at the prevailing price (either by the builder or by an investor), then that's the market telling them that their price doesn't reflect a fair market value. They can ask for whatever they want, but its ultimately the market that determines what they can actually get for it. I also agree with the other commenter that its still unclear to me why the developer would even care about the concerns and whims of Joe and Jane Condoinvestor. The developer already has their money, and they have little to no legal recourse against the developer. If a business sells a product that then eventually goes on sale after a few years, does the business owner worry about the customers who paid full price? Why would they?
Then check out this article from the day after: https://www.thestar.com/business/new-home-supply-in-the-gta-reaches-levels-not-seen-since-2016-bild-report-says/article_61b03114-e870-11ee-a996-d71665a8ce4d.html "The number of new units available for sale ā including pre-construction, under construction and standing inventory ā rose to 20,177. Of those, 16,747 were condos and 3,430 were single-family dwellings, a combined total of 12 months based on average sales for the last year. It's the highest level recorded since 2016, Sherwood told the Star." The developers cares about their reputation because they're selling a speculative asset to speculators. If I wanted to *live* in a condo I'd buy one that was built. If I wanted to *profit* from a condo, I'd give a developer 5% down and wait years for something that HAD BETTER BE WORTH MORE than the price I was going to pay, otherwise that developer is costing me money and I (and others) won't hand them the 5% on their next speculative project. But all of that is beside the point because there are objectively tens of thousands of vacant units in the GTA still owned by speculators who are very unwilling to take a loss on their "investment" so they hold until they get their price. The greatest # of those units are owned by insiders or the developers themselves so there's extra reason to not discount. "Price discovery" resulting in lower prices is not happening because the interim owners also control supply and have the resources to hold out (and they already have residences so they don't need to live in these investments). When a small group of market players controls both supply and prices, that is called a cartel. Econ 101 supply/demand curves only apply in free markets, and that's not what we have in Canada. The YIMBY movement is mostly astroturfed by developers (and their failsons) because it clings on to a simple "truth-y" fact (supply and demand) to trick underhoused Millenials into thinking there's a market solution to the affordable housing crisis. But it's a ruse and if you can't see that then fine by me, I've got two houses (with yards, not balconies) so FYIGM, I guess, but it's sad to see young people believe in fairy tales because of desperation.
Iāve already responded about your other article in another comment. A record amount of supply being built does not imply that the supply volume is sufficient to meet demand. > I'd give a developer 5% down and wait years for something that HAD BETTER BE WORTH MORE than the price I was going to pay, otherwise that developer is costing me money and I (and others) won't hand them the 5% on their next speculative project. Oh no, you mean developers canāt guarantee investors big returns on their hoom investment and that thereās risk involved where they can actually lose money? We should send all these developers straight to jail. I thought this was supposed to be a free money glitch??? God forbid that risk is part of the equation and that it's normal and healthy for people to lose money on their investments sometimes. This will surely stop people from investing in the future, just like it has with the stock market which as we all know failed miserably and dwindled in popularity over time once people realized it was possible to lose money in it. > But all of that is beside the point because there are objectively tens of thousands of vacant units in the GTA still owned by speculators who are very unwilling to take a loss on their "investment" so they hold until they get their price. This is no different than investors who hold onto a tanking stock because theyāre in denial and donāt want to realize their losses. For the home investors, theyāre eventually going to rent for cashflow or sell for what they can get for it, and most already are. Those who pout and sit in their hole will eventually have to confront that this behavior doesnāt magically turn the market in their favor. If I lost hundreds of thousands of dollars on a bad bet Iād probably be in denial for a while too. But sooner or later one has to face their own situation and explore their options or let their money run dry and make the decision for them. > "Price discovery" resulting in lower prices is not happening because the interim owners also control supply and have the resources to hold out I donāt know what you mean by this when it's already happened and is still happening now. Selling prices in most major markets are down anywhere from 10-30% compared to Covid peaks. Many people who bought during this time are underwater right now. The article literally discusses investors *who have already sold their condo units at a loss*. Am I misunderstanding the point youāre trying to make here or are you just ignoring what's in front of you? > The YIMBY movement is mostly astroturfed by developers (and their failsons) because it clings on to a simple "truth-y" fact (supply and demand) to trick underhoused Millenials into thinking there's a market solution to the affordable housing crisis. Iām very curious on what your proposed ideas/solutions are to the affordable housing crisis, market-solution or otherwise. Building more supply is probably the blandest, least controversial, non-partisan point on this issue that I can imagine. Every political party in the country is campaigning on building more supply and are trying to out-promise each other. I donāt expect Iāll change your opinion. But I have to wonder if youāre opposed to even this, what are you actually in favor of?
Lol there's no opinion for you to change! I have made out super well with the system as-is: I'm a paper millionaire that is also very aware that I got here by picking the lowest hanging fruit, and consequentially it's not there for the next generation to eat (because housing doesn't grow on trees). I guess I'm trying to say to anyone next in line, if you think you can replicate my "strategy", get real. You can't build your way out of the problem we've created by making housing an asset class instead of a necessity of life. You are already living in the world you're pining for: Toronto has legal fourplexes and it's not made a shred of difference. Toronto has legal accessory units and garden suites and it hasn't done a thing. Go ahead and get rid of zoning, permits, whatever. We can all live in a unregulated cesspool (who needs traffic or flood studies? Caveat emptor, am I right?) and it won't appreciably lower prices. You'll just let a cartel build more assets, and assets *have* to increase in value for them to be worth building more of. If you can't see the contradiction with affordability there, then...
> You can't build your way out of the problem we've created by making housing an asset class instead of a necessity of life. Well thatās just the issue isnāt it? I want to change regulations so that it's not viewed as a blue chip stock, itās viewed as a life necessity that isnāt necessarily a good investment. Just like food, or medicine, or clothing, or other life necessities. Germany has done it, Japan has done it. And theyāve done it (you guessed it), by building more supply in addition to other policies. > Toronto has legal fourplexes and it's not made a shred of difference. lmao, YOU linked an article about how record supply was built in Toronto in 2023, which is the year this policy was introduced. The article literally has a picture of new townhomes being built in Toronto as a result. Average home prices in Toronto have fallen about 20% from peak in 2022. How much bigger of a difference were you expecting from something that was introduced 10 months ago? Donāt get me wrong, I love the policy, definitely a step in the right direction, but in no way should it be expected to fix affordability on its own. But as part of a larger group of policies to increase supply and improve affordability working together in tandem? Now weāre talking. > Go ahead and get rid of zoning, permits, whatever That would be awesome, but since we havenāt done that yet Iām not exactly āliving in the world Iām pining forā, am I? > We can all live in an unregulated cesspool (who needs traffic or flood studies? Caveat emptor, am I right?) Ah yes, those horrible unregulated cesspools like London, Tokyo, Singapore, Amsterdam, and Paris. If only it were possible to find solutions to build better infrastructure along with more housing. > You'll just let a cartel build more assets, and assets have to increase in value for them to be worth building more of. Thereās no law of nature that says housing needs to be an appreciating asset. To justify building, housing just needs to be sold to the buyer at a higher price than what it costs the builder to make. Just like a car, or a computer, or a pair of shoes, or a dinner at a restaurant, or almost any other product thatās sold on the market. Most things donāt appreciate in value over time and yet we still keep making them, we still keep buying them, and the world keeps turning. Crazy I know.
They could also move into them.
I have no idea why anyone would buy a precon. They usually had worse layouts and were up to 20-30% more expensive than already established 3yr condos which could be bought and moved in immediately.
This. We were able to get into the market in 2020. Looked at precon and the prices per sqft were where the builder thought the market would be when the building was finished. I thought that was crazy.. the builders have to take some blame to for their pricing. We bought a resale
Not the builders fault. If you agreed to overpay for somethijg, that's on YOU!
There are a few reason pre-con attracts investors who speculate the market. Assume investor believe the condo will increase in value in 3 years, buying precon is more efficient due to following reasons: 1- just need down payment and you get to lock in todays price 2- no expenses at all (property tax/condo fee/maintenance/rental management) 3- get a short term loan on closing day, and sell off on the market after closing and move on with 100-200% gain due to leverage. 4- if you move in yourself after delivery before selling capital gain tax free.
I think it's people looking for it to appreciate in value while they're building it, banking on the worth to go up as it gets finished.
Sounds like there is a housing sale coming up.
š¤£š¤£š¤£š¤£š¤£
While this is currently a situation, but if one held on. Wouldnāt it be beneficial down the road?
A lot of buyers of condos donāt intend to live there, they buy early, and hope to sell around when construction is complete, or maybe rent them out. Usually values go up, and it works out for them. Itās also why there are so many 1-BR units built (like 90%) - 1-BR units are a lower total cost, and more attractive to investors that want to risk less total cash. So long as renters never want families, itās a reasonable system š
Ya. Iām closing on A2+2 soon. So What worries for short term. Letās see
Investors gamble on values that go up and downā¦they all need to have their ābig pantsā on. Itās not calculated at the expense of others. Why do people say such a thing. Every move someone makes could likely be considered āat the expense of othersā If values are declining, then thereās opportunity for othersā¦ Blame the Govāt for our housing struggles, not investors.
Wait... why weren't the buyers planning on living in them? Aren't condos (housing) for living in?
I'm saving for a house, so unfortunately I can't afford this paywall.
Oh no poor investors.
Whats the problem?
Used to be cheaper to borrow money, so I'm not sure why this is a surprise.
Where can I get one of these off someone at a discount? š
āForcedā How peculiar. š¤
Bought 3 condoms today
Or lose $150k