Imperia | 95.3m | 27s | Truman | NORR

[maestro]

I'm not saying land is a guaranteed money maker (and it probably shouldn't be much more than a money keeper), but to me there's more baseline value there long term. The property that sits on it may fluctuate (in condition, size, value etc), but even if it burns down you have something of value to work with. With condos, you're more tied to the property itself (ie general condition, level of finishings, types of amenities etc), which tend to degrade over time and have to be renovated/replaced. That and more condos can always be added to the market as a city densifies...you can't always add more good land.

My biggest beef though is that so much of condo life comes down to being at the mercy of decisions made by other people. With owning land, you have more control and flexibility with what you can do with it. Obviously there are still neighbours and laws to comply with, but you're still mostly in control. For me, the older I get, the more I value that agency/independence.

I understand the independence. Land is a much bigger investment. All repairs and maintenance is all on you. Greater upswing as well as greater risk of losses. Oil bust tanked real estate in Calgary. That's obviously behind stagnant condo values. In Toronto, a $150,000 condo from 25 years would have sold in 2023 for $800,000. Whoever, bought that condo for $800,000 in 2023 is likely kicking themselves. A $400,000 house off Yonge in 2000 could have been worth as much as $5 million in 2023. However, anyone that bought a house for $5 million in 2023 is on hands and knees paying for a 2025 recovery. Timing.

 

[1875]

when the city said assessments on condos this year are up +15%. are those suburban units vs inner city prices not moving?

 

[maestro]

Population growth attracts investors. It's an endless supply of global investors with limited opportunities to invest streaming into Canada flipping over and over to each other that drives up prices. Rental income won't be a determining factor in whether to buy or not to buy. There's plenty of properties that are vacant the majority of the year that have been successfully flipped several times.

Investment shifts to surrounding neighbourhoods once a desirable neighbourhood becomes too expensive. That's what happen to Toronto. Investment shifted elsewhere be it Kitchener, Niagara or, Hamilton. There's no way Calgary can build itself out of it if they come in droves. The unpredictability is the global real estate investment market itself. China, Russia, etc. economies are all not looking too good.

 

[trtcttc]

I've heard anecdotally that the condo market has only just caught up to the previous peak value of 2007.

Condos are the first to go up in value and the first to come down and are often used as income properties. Homeowners typically own for longer and swings of a few years are largely irrelevant. But for condos, the rental market and demand drives the prices in a market like Calgary where most housing forms are affordable (relatively) and is more up to choice.

 

[trtcttc]

Population growth attracts investors. It's an endless supply of global investors with limited opportunities to invest streaming into Canada flipping over and over to each other that drives up prices. Rental income won't be a determining factor in whether to buy or not to buy. There's plenty of properties that are vacant the majority of the year that have been successfully flipped several times.

Investment shifts to surrounding neighbourhoods once a desirable neighbourhood becomes too expensive. That's what happen to Toronto. Investment shifted elsewhere be it Kitchener, Niagara or, Hamilton. There's no way Calgary can build itself out of it if they come in droves. The unpredictability is the global real estate investment market itself. China, Russia, etc. economies are all not looking too good.

Most investors in Canadian real estate are Canadians. The people that owned a house in Markham 15 years ago have seen their house prices 3-5x, they're often not sophisticated investors and see the best option as buying a rental property. The argument that there is somehow this huge supply of empty homes in Toronto/Vancouver/Calgary and everything is just investors is pretty inaccurate. Rental incomes definitely affect prices, as seen by declines or inability to sell a Toronto condo the last year or so.

 

[KrisYYC]

when the city said assessments on condos this year are up +15%. are those suburban units vs inner city prices not moving?

My primary residence condo is more central though not really inner city (Elbow Dr near Heritage) and the assessment is up 48% from last year. My rental condo is more suburban (Millrise) and is up 33%.

This is the first year ever where the assessment was actually close to actual market value. Previous years the assessment was waaay lower.