Has anyone purchased a Tour Des Canadiens condo?
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11-01-2012, 09:42 AM
Tank Nation 2012
Join Date: Jul 2009
Originally Posted by
I see you have a lot of faith in this idea that the real estate market will double, and continuously grow, and get bigger. You do realize that such thinking is flawed, and this is what any real estate agent and developer would like you to believe.
It's this line of thinking that creates big trouble.
BTW: Montreal condo prices decline in August
To some up my opinion quickly, condo is the riskiest of any residential real estate investment, because:
- If employment levels dip - condos lose out right away on single dwelling renters, who will either move back home, move out of the city etc.. This creates a sudden surge of supply and drastic vacancy jump and price drop.
Example. Two men have the same job. 1 is renting or paying off a mortgage on a condo in Montreal. The other is married with kids, and is paying off a mortgage on a house in NDG.
The man in NDG will have the abilty to rely on his wifes income, and has the obligation to keep that home since he has kids and packing up and moving is not as easy.
The man that owns the condo has a much higher chance of wanting to sell asap. Again - more people wanting to sell - more choice for buyer - less demand for each unite - prices stagnate or drop.
- Supply can be endless. This is true in the city but even more true in suburbs. Every time a new project is built on a piece of land you are adding hundreds of units.
Example, a condo in Laval, might seem like a gem today, but tomorrow there will be 5 equivalents with a block radius.
A safer investment is a home, sitting on precious land in the city, such as Cote-st.luc / NDG, Westmount, tmr etc.
Vancouver Housing Bubble: Prices Decline By 25 Per Cent
Toronto condo sales plunge, prices stagnate
And the correction is not even complete - this is just the beginning.
However we can not compare the market to Toronto with Montreal. Toronto is a lot more global and foreign money is a lot more interested in Toronto than Montreal.
Now, if you believe that the our economic forecasts in the next 5 to 10 years is all rosey and that employment opportunities will be growing at a faster rate than they have been, than I can rationalize a purchase in todays market.
However if job growth remains stagnant and supply continues to grow this rate - I don't see prices doubling in 10 years. Surely not for condos, be it downtown or off the island.
Listen man, you have your opinion, and I have mine. If you believe that in 10 years prices of Condos will go down (lower than their actual value right now that is) then let me ask you this:
In the past 10 years, if you bought a condo at 100k, now it will be equal to at least 250k. If you bought a condo 15-20 years before that, the condo that was worth 75k is now worth 250K. People that bought their condos 30 years ago for I dont know how much, now they are worth at least 250k.
Land is becoming more and more scarce, population keeps on growing and aging. All the baby boomers that are gonna retire soon, where do you think they are going to live? in big houses? alot of them will actually start looking for condos. Not to buy only, but also to rent. An old man and woman will not want to cut grass, do the pool, clean a big house...they will want a little nice condo to settle in for the rest of their days. So even if prices do go down temporarily, renting it out will also be a good temporary option until the market prices readjust.
I agree with you that houses is a better investment. But for the prices they are being sold at right now it's why alot of people are opting to go for Condos. And the whole thing about unemployment causing high supply, I agree with you. But the baby boomers will increase the demand aswell causing it to go back to it's equilibrium point. But you do know that the last 5 years we've been going through a recession. We've had high unemployment rates and people were getting fired left and right. They still do! I even lost my job 2 years ago because of that but guess what? Condo prices are still high! they are higher than they have ever been and people are still buying them. There is alot of Condo constructions around the downtown area and we don't know how this will impact the Real estate market in the future for sure, but I think that the increase in Canda's aging population will increase that demand for condos in the near future. We might have that little bubble like Vancover is having right now, but overall, the price will still give you more than what you put in if you wait for the right moment to sell it. There always will be those fluctuations in prices but it will readjust. Just keep the condo and rent it out.
But then again, it's all a matter of opinion and speculation. I just dont see how prices will crash and stay low forever. There is that risk, of course, but in Canada and the way Canada has been handling it's economy, I think we're going to see a similar pattern than what we saw in the last 30 years.
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