Story from http://www.theglobeandmail.com/ …
Aggressive development: Inside the building and selling of a Toronto condo tower
A man who makes a living helping the country’s largest bank avoid risks is preparing to double down on a market that many people believe is on the verge of a nasty fall.
Babak Habibzadeh, a 29-year-old risk manager with Royal Bank of Canada, lives with his parents and bought his first condo two years ago. He rents it out and has been delighted with the returns to date.
So today he’s buying another – a one-bedroom-plus-den, 601-square-foot unit on the 18th floor of a yet-to-be constructed building in Toronto called Core Condos that is scheduled to open in 2017. He’s not yet sure if he will rent it out or live in it, but says it will be a sound investment either way.
“Are you excited?” the saleswoman asks him as he plows through a stack of paper in the sales office, outlining the $360,000-plus deal.
“In three years I will be,” he says.
Toronto’s condo boom has given investors plenty of reason to be excited over the past decade, with prices for new units soaring by more than 70 per cent, according to RealNet Canada Inc. But the recent news is not so encouraging: Sales volumes have declined for two years, a backlog of 18,000 unsold units hangs over the market, and price growth has flattened, even as new condo projects continue to pour onto the market.
The plethora of construction cranes that populate Toronto’s skyline has made the city a prime exhibit for those who believe Canada’s real estate market is in bubble territory and a crash is imminent. But on the other side of the debate are buyers like Mr. Habibzadeh and developers like CentreCourt Developments, the company behind Core Condos. They are betting their own money on the theory that the market is still far from saturation.
If they’re wrong, the implications would extend far beyond Toronto. In December, the Bank of Canada singled out the market when outlining risks to the national economy and warned that “a sharp correction in the condominium market could spread to other segments of the housing market” with “significant repercussions on the real economy.”
So, what will happen if home prices keep going up and the government keep printing money – hypothetically of course, I don’t know what else can they do by not raising the interest rate ?
Maybe thing isn’t what think it is … You know, history doesn’t repeat itself exactly the in the same way. Because if it does, then all us will be billionaires already ?
I don’t have the answer, ask Rob Ford or Stephen Harper.
Hundreds of thousands of homes go up for sale every year in Canada. They come in all shapes and sizes — and so do their price tags. But we don’t want to bore you with the mundane, so here are the five strangest listings from the last 12 months or so.
SOLD: Hobbit House, Vancouver
One of Vancouver’s two “hobbit houses” hit the market in May before being bought by local developer David Mooney in June. Luckily for local Lord of the Rings fans, Mooney hired a well-known heritage expert and entered into negotiations with the City to include the home in his plans to build a residential townhouse complex on the site. Photo:JayBanks
SOLD: 934 Ossington Avenue, Toronto
This luxury home at 934 Ossington Avenue in Toronto was on the market for 16 months before being sold for $900,000 — $50,000 shy of the asking price. Why such a steal? Two years before the home finally sold in March, it’s believed to be where one of its previous owners, 49-year-old Allan Lanteigne, was beaten to death. On trial for the slaying is another of the home’s previous owners, Lanteigne’s ex-husband Demitry Papasotiriou. The couple bought the house in 2004 for only $375,000. The nearly $500,000 in net proceeds from the sale are being withheld from Papasotiriou while he stands trial for murder. Photo: Google Street View
ACTIVE: James Island, British Columbia
Located just off the coast of Central Saanich, secluded James Island has its own Jack Nicklaus designed golf course, western-themed village, white sand beaches and an airstrip. Currently owned by US billionaire Craig McCaw, the private island hit the market in June 2012 for $78 but has since dropped to $75 million. And while there is still no formal bid or live offer on the table, real estate agent Mark Lester recently told the Vancouver Province that he’s “receiving a lot of calls about James Island.” Still, we have to wonder how big the buyer pool is for a $75 million private island in a non-tropical locale. Photos: Sotheby’s International Realty
SOLD: Very tiny detached house, Toronto
This tool shed-sized home on Toronto’s east end was listed for $229,000 last month — 70 per cent less than the average price of a detached home. But just last week, the National Post reported that the 230-square-foot former garage with no running water sold for the bargain price of $165,000. Hot plate not included. Photos: Google Street View, vallis.ca
ACTIVE: $38-million teardown/”fake” mansion, West Vancouver
The West Vancouver home pictured on the left hit the market for a whopping $38 million back in February – the most expensive listing in Canada at the time. Besides the steep price tag, the other unusual thing about the listing was the way it was marketed. The original property ad included images of a guady mansion, pictured to the right, that was not actually part of the West Vancouver lot.
This confused a number of media outlets who ran the photos thinking they were real. There was also some dispute as to whether or not the listing agent was forthright enough regarding the nature of the “fake” images. In any case, after corrections and clarifications were issued by the media, the real home, which by the agent’s own admission has “no value,” saw its price slashed. Seven months later, a new agent has the property listed for just $12.9 million. Photos: MclarenTeam