City
Yonge and Bloor: Crosshairs of Insanity
Maybe it's David Miller's impending land transfer tax, maybe it's the prospect of living in such a great location, but something has gotten Torontonians raving mad about Bazi's International's mega tower condo project known simply as 1 Bloor.
For the past week or more, real estate agents or their surrogates have been lining up for a chance to purchase a unit in the project even though sales do not even begin until tonight, and the sales centre will not open up to the general public likely won't even open for another week or so.
For the uninitiated, here's how condo preview sales generally work: Agents show up at a specified time before the actual sales event to get a number. Numbers are handed out on a first come first served basis. The number the agents receive will determine the order in which their clients are 'served' at the actual sales event usually later that day in the evening. The better the number, the more selection to choose from and the better the price.
These events are known as Broker's Events as they are only open to real estate agents. Thus, by the time a typical condo opens their sales office to the general public, the project is usually about 40-80% sold out and prices will have gone up significantly depending on the response to that point. Prices for tonight's sales event increased by 25-50%, depending on the unit, compared to the price list that was sent to brokers about 2 weeks ago.
As of noon today when the numbers were being handed out, there were about 200 agents in line with police trying their best to keep things civil. Problems and confusion arose when several people who had paid surrogates to hold their place in line entered the line. Many agents abandoned the line when it was determined that prices were increased to about $500,000 for a small 1 bedroom unit after initially being told prices would start in the $350,000 range.
I don't know if it was a slow news day or what but there were half a dozen news crews at the event this morning filming the insanity and interviewing people in line. More drama ensued when it was announced that the developer would not be honoring the numbering system that had been set-up by the hardcore participants who had been camping out for days. Chants of 'HONOR-THE-LIST' seemed to work as the developer reversed their decision by actually dolling out numbers according to the list that had been created.
Is this a sign of a market that is about to collapse under it's own weight, or simply just another step in the Manhattanization of Toronto?
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Too bad the city is too hamstrung to allow more tall buildings along the subway and instead goes around lopping floors off developments like the Minto towers at Yonge and Eglinton. (Thanks Michael Walker! You're just super-good at your job!)
Good call. I should have smelled it too. But how much planning went into this? Did they orchestrate the whole thing from weeks ago until now, or did they try to start a riot by "encouraging" line jumpers after they saw the potential? Either way, utter death threats makes for a good slogan:
1 Bloor - You'll kill for a unit
We keep trying to buy a condo and every time we want to put an offer in (sometimes the same day it goes up), one of two things happen:
1. It's already sold. Gone.
2. There's another competing offer that's the same as ours and do we want to go higher than asking price? We've heard of phantom offers and so we say no we'll take our chances and within a couple of days (not the same day), the unit sells over asking (probably to a guy bidding against himself.)
Um, what?!
I suspect when this developer noticed Trump wasn't selling, they pushed harder by trying these gimmicks.
It's all going to bust.
On a completely separate note, bubbles usually require one last manic push (the proverbial straw) to reach popping state. Real or not, the title is right - it's insanity.
Beth/Chris/FC...if normal people aren't living in $300K one bedroom condos, then who is? The original point was that, in other cities, condos are exclusively the purvey of the wealthy. You don't have to be wealthy to afford a $300K condo in Toronto.
That is the case in my building.
This is from the Globe & Mail:
In the case of One Bloor, many committed and potential buyers are likely investors from other countries, said a real estate professional who asked not to be named.
"They are looking for a good safe investment in a good safe country ... and this is one of the best-known corners in Toronto, right at the edge of Yorkville," he said.
These are strong selling points for speculative buyers who may be inclined to sell their units well before they are completed in 2011 if they appreciate enough in price, the real estate professional said.
And no, Beth, I'm not a plant. I'm actually an ex-pat who lives in New York, so I have zero stake in what happens to the Toronto condo market. (I sold my old place in the Merchandise Building years ago). My main interest is in seeing the city prosper and keep up with its resurgent American rivals, and one way to do that is to build up underdeveloped sections of the city. Do I like tall buildings? Guilty. But if there was ever a place for one, or four, it is Yonge + Bloor.
Here are some facts from the Toronto Star regarding investors:
Re/Max says "investors have also jumped into the fray, now representing a sizable segment of the downtown market" with a significant 60 to 85 per cent of sales in new condominium developments involving investors this year, up from below 50 per cent last year.
Unfortunately, we don't have any reliable stats to back this up.
Be careful of any numbers quoted from a real estate brokerage or real estate company.
What does 60 to 85% even mean? It's not a useful stat.
And I'm pretty sick of seeing market comparisons between American cities and Toronto. Guess what? Toronto ain't the U.S. We've got a completly different economic system and culture over here. Things are never going to be all that directly comparable, just look at what's going on with the whole sub-prime thing. It's actually boosting our economy at the moment.
And Skyscraper dude, you're still not exactly convincing me you're not a shill.
Yes, that corner is disgusting, but this glassy, boring condo box is only slightly better than the ugly buildings that currently occupy the site. At least we can tear those down, but once this ugly thing is built, we are not going to be able to tear it down any time soon.
Our politicians are just too provinicial and greedy to fight for really spectacular architecture that would benefit Toronto for generations to come.
I am continually disappointed by the decisions of our idiotic politicians and embarrassed to be a resident of this city.
Andrew, what are you saying about the company you work for? Do you not work for a Real Estate Company/Brokerage? Your fellow RE agents must have loved that one!
Enjoy being packed like lemmings in your 1/4 million dollar hamster cages. The Real estate market is going to crash and crash bigtime.
As for "I don't know what kind of world you all live in, but among me and my friends we can't just live with our parents indefinitely until we can afford a three hundred thousand dollar condo (which, by the way, is still not exactly affordable for those of us with student loans, credit card debt and entry level jobs).
And I'm pretty sick of seeing market comparisons between American cities and Toronto. Guess what? Toronto ain't the U.S. We've got a completly different economic system and culture over here. Things are never going to be all that directly comparable, just look at what's going on with the whole sub-prime thing. It's actually boosting our economy at the moment.
And Skyscraper dude, you're still not exactly convincing me you're not a shill."
Enjoy your entry level job. If you want to get promoted, learn more about economics, and that yes, our economy is very much tied into the U.S. We just lag behind them, and our banks are also losing money. The sub-prime thing is a red-herring - the real disaster are all the hedge funds. And Canada is NOT benefiting - take a look at the last CIBC earnings, kiddo. It's also plain stupid to take out a mortgage of over 200K - that's a THOUSAND a month in interest alone, if you get a good rate. It's cheaper to rent.