See what happens once I get started?
A simple post turns into a record long essay, and then spills into a second post.
There are many reasons why I don’t like CityPlace, so I’ll continue where I left off, and include some more photo evidence…
Pop quiz: which building is which?
Or from your perspective and this picture, can you even tell that this is four distinct buildings?
Imagine looking out your window of the building that is furthest to the right; what do you see? Probably, another building ahead of you, and if you’re lucky, another building next to you as well.
People always talk about “the view” from these buildings, but in my experience, more than half of the views are obstructed by other buildings. And if you are fortunate enough to see something other than glass and steel, what are your options? Well, there’s the Gardiner Expressway, the Go Train tracks, and then to the west, there is a massive open space where 3-4 more condos will undoubtedly be built.
Take a look at this photo below:
On the right, you have buildings on Brunel Court and on the left you have 2-3 more buildings under construction. The irony is, the buildings at Navy Wharf were advertised with “clear west views” before those views became obstructed by the buildings at Brunel Court. Then, the buildings at Brunel Court were also advertised with the same “west views,” but as you can see from the photo, those views will be obstructed in about 6-8 months when these other condos are completed.
This will bring the total up to a whopping eleven buildings all within the CityPlace cluster, although these five are on the west side of Spadina.
The other day, I explained why I dislike (hate) CityPlace by citing three main issues:
2) Location & Lack of Infrastructure
3) Lack of Character, History, & Charm
I’d like to look at two more issues:
If they were giving these condos away, perhaps I might think a little differently. I mean, if these condos were selling at a huge discount relative to the buildings in this city that I really like, or the buildings that I don’t have any problems with, then perhaps I would see some value in it.
You can sacrifice location and style of living for the almighty dollar.
But you know what? The prices aren’t that much cheaper than what else is out there.
I think an example is needed. Let me just type in “Navy Wharf” to MLS……oh, no surprise; there are nineteen current listings!
There is a 2-bedroom-plus-den unit of 902 square feet at 81 Navy Wharf Court for $369,000. This works out to $409/sqft. Compare this to the 850 square foot unit my friend just bought in my building for $350,000, or $412/sqft.
The price is almost the same, but the catch is: you have to live in CityPlace.
Perhaps the 1-bedroom units offer a little more bang for your buck, but I repeat: you have to live in CityPlace.
If you could get a 900 square foot, 2-bedroom, 2-bathroom unit at CityPlace for $300,000, then I guess it might be worth a look. I’m still of the opinion that it’s a terrible investment based on the reasons I gave yesterday, but if you simply can’t afford other options, then okay, I get it.
But these are just “if’s” and not reality, since the reality is that prices at CityPlace are only slightly below what you might pay at a much nicer building in a better area that is closer to restaurants, retail outlets, grocery stores, coffee shops, and actual civilization.
5) International Investment
My father just got back from his trip to Dubai, and he told me it was like visiting another planet. It’s like a perfect specimen of a city designed from scratch, since they refer to the part of Dubai that was built in 1994 as “the old city.” My father told me that of all the thoughts, realizations, and lessons-learned on his trip, the one that stuck out the most was how much money is floating around in some parts of the world and how North Americans have no clue what being “rich” is really all about.
In the last ten years, international money has fueled the Toronto real estate market, more specifically: condos.
Whether it’s Dubai money, Hong Kong dollars, or funds from any of the parts of the world where the mattresses are so stuffed that people have to look across the pond for investments, international dollars have been pumped into our condo market like there’s no tomorrow.
Even before the United States began it’s three-part meltdown (credit crunch, housing market, equities), their country was deemed as somewhat unstable due to their preference for actors and other unqualified people as “leaders” and their persistence to spend money on a war against nobody in particular. International investors have shied away from the United States, and turned their attention to their friendly neighbors to the North.
Vancouver has been a destination for Asian investors for over two decades, but as Toronto stakes it’s claim to be a “world-class city” and people begin to take notice of the most multicultural city in the world, it became a haven for international investment.
So what do international investors buy?
Pre-construction condominiums. If you have $20 Million to spend on “real estate” in general with no specific preference (ie. you buy real estate like shares of stock, assuming the only difference is the city and not the product), what is the easiest way to spend that money? Call up your cousin’s friend’s Realtor in Toronto, and put in your order to spend your paltry $20 Million on condos.
Sure, your Realtor could diversify across the board and buy houses, condos, retail storefronts, etc., but that would entail actually working for your clients! It’s far too easy to show up at the sales centre and buy 40 condos at 15 Brunel Court and call it a day.
My point to this long-winded story is that international investors own a good portion of Toronto real estate, and most of that is tied up in brand-new condominiums such as those in CityPlace.
The moral of this long winded-story is that if international investors ever turn elsewhere to spend their excess dollars, who is going to buy all these God-awful condos being built next to the Gardiner Expressway? Most Torontonians are too smart (although there are still many who buy at CityPlace – those that haven’t been reading my blog), so imagine the next 400-suite building with zero international investment, then imagine the three 400-suite buildings next to it also having a hard time selling.
There will always be a demand for a unique condo in low-supply, but the same cannot be said for a condo with 5,000 identical units all within a few hundred feet of it.
If the international dollars cease to flow into CityPlace, then the bottom falls out.
Perhaps I’ve repeated myself in several of my points, but the points are all interrelated.
The ones that should stand out the most: quantity and location.
There are just too many units at CityPlace to overlook the basic laws of supply and demand, and the location is just atrocious. Next to the Gardiner Expressway, adjacent to Skydome and all the hoards of traffic that engulfs the area for eighty-one Blue Jays home games each year, and you’re city blocks away from any infrastructure.
I have never sold any of my clients condos at CityPlace, and if somebody told me they wanted to buy there, I would vehemently discourage them until they finally heeded my advice.
For the rest of you that buy at CityPlace despite my warnings, concerns, and experience, all I can say is “Good Luck”…