TheKingEast
Senior Member
At 500 PSF, you need to have the government build housing. Developers are private businesses who are in the business to make a profit. The math doesn't math.
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- Thread starter simuls
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evandyk
Senior Member
Does $500/psf even cover construction costs now, never mind the cost of land or financing?
Admiral Beez
Superstar
The province, city, financiers, and developers need to sort it out. Perhaps govt fees or regs are driving up the cost.
If developers don’t or can’t make what the markets wants AND can afford then there is no market.
toaster29
Active Member
I wonder why we aren't seeing a scaling back of things like the elaborate condo amenities, huge pools, saunas, gyms, rooms for massage, sports, these massive staircases and chandeliers, all these things add up, and appear in most new builds. People also don't want 1k in condo fees or special assessments to fix pools, or pay for these concierges. Just build regular buildings, and we could likely get the psf lower. Why aren't builders doing this? Is there no margin on non-luxury new builds?
evandyk
Senior Member
People do want the concierges, but those other things are often used by a small subset of residents.
yrt+viva=1system
Senior Member
My only guess here is that it's game of chicken to see who will relent first. The developers thinks the can wait it out until the government steps in give funding since the developers have locked up all the land and are just waiting it out. The government thinks that developers will relent as the market forces kick in thus not needing to provide as much funding to get construction going.
Admiral Beez
Superstar
I assume the developers throw in a lot of garbage quality, but initially-appealing amenities in order to attract a higher end buyer. But the quality is crap, and the special assessments will come on hard within the first decade.
The best condos I've seen are loft/factory conversion with nearly zero amenities, easily replaced punch out windows and keep it simple construction. Like the Tannery Lofts near me, https://www.realtor.ca/real-estate/26916037/501-736-dundas-street-e-toronto-c08-regent-park. $621 a month for maintenance fees is still high, especially as heat is seemingly not included.
One of my best friends lives in this place in Scarborough https://www.realtor.ca/real-estate/27205535/1213-5-greystone-walk-drive-toronto-e04-kennedy-park but has a 1 bed room plus a true glazed in den with window, and pays about $500 a month.
afransen
Senior Member
What funding would government give developers?
Admiral Beez
Superstar
Tax incentives and other deductions?
rdaner
Senior Member
I have a question for our real estate experts: when reporting on the creation of housing are addition of units inside existing units counted? How about renovations and the addition of ADUs? Thanks!
slickpete83
Active Member
lol..
slickpete83
Active Member
hey Brampton landlords are you cash flow negative each month and want to increase your cash flow, well start building this into every room jk... lol...
Admiral Beez
Superstar
High borrowing costs, record condo completions lead to oversupply in Greater Toronto Area
A report by TD economist Rishi Sondhi said sales activity hasn’t been absorbing supply fast enough, with July condo resales in the GTA down 25% from pre-pandemic levels
www.theglobeandmail.com
Um. The only way any market can have both an over-supply and over-demand of any product is when prices are not adjusting to meet the equilibrium of supply and demand.
Toronto does not have an over supply of condos, instead we have manufacturers, resellers and financiers of condos that are pricing their product over what the market can/will pay. Government, land owners and developers need to find a way to make it feasible for true 2bdrm units (no dens or interior glass doors) at $500k. That’s what the market wants to buy.
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Undead
Senior Member
Yeah I believe the condo market has just returned to balance--5 months of supply at current sales volume, if I remember correctly.
Also:
www.theglobeandmail.com
"That month the federal government capped the number of international student visas it issues, with the move expected to reduce Canada’s foreign student intake by 35 per cent this year compared with last year. However by some estimates, international study permits could be on track to drop by almost half this year.
While it’s impossible to say exactly how much of the asking rent slowdown is owing to those policy changes, it is likely significant, said Mike Moffatt, a senior director of policy at the Smart Prosperity Institute."
Always nice to see the "lack of supply" meme take another hit.
Also:
Rent relief follows federal cap on foreign students
Ottawa’s reform of international student visa program helped keep a lid on asking rents over the summer after years of spikes
www.theglobeandmail.com
"That month the federal government capped the number of international student visas it issues, with the move expected to reduce Canada’s foreign student intake by 35 per cent this year compared with last year. However by some estimates, international study permits could be on track to drop by almost half this year.
While it’s impossible to say exactly how much of the asking rent slowdown is owing to those policy changes, it is likely significant, said Mike Moffatt, a senior director of policy at the Smart Prosperity Institute."
Always nice to see the "lack of supply" meme take another hit.
afransen
Senior Member
That sound you hear is the Liberals furiously trying to reinflate the bubble.
Extending amortizations to 30 years for first time buyers on existing homes (previously it was just new build) and raising the insurable mortgage amount to $1.5M from $1M. Both are designed the prop up prices and protect the wealth of the homeowning boomer class, the most loyal remaining part of the LPC coalition. It will do very little for affordability, just saddle young people with more debt, and increase risk in the financial system, as low downpayment 30 year amortization mortgages are at high risk of being underwater after the first 5 year term.
globalnews.ca
Extending amortizations to 30 years for first time buyers on existing homes (previously it was just new build) and raising the insurable mortgage amount to $1.5M from $1M. Both are designed the prop up prices and protect the wealth of the homeowning boomer class, the most loyal remaining part of the LPC coalition. It will do very little for affordability, just saddle young people with more debt, and increase risk in the financial system, as low downpayment 30 year amortization mortgages are at high risk of being underwater after the first 5 year term.
Ottawa to expand 30-year amortizations, raise insured mortgage cap - National | Globalnews.ca
Finance Minister Chrystia Freeland announced proposals Monday to expand the availability of 30-year amortizations and to raise the price cap for insured mortgages.
globalnews.ca