Another Pre-Construction Condo, Cancelled. Who Is To Blame?

I suppose it’s not fair of me to say “another” as though it were a common occurrence, since only 23 condo projects in Toronto have been cancelled since 2012.

But every time this happens, those who were “burned” cry foul, when all the while, they should have known the risks.

Two of the major Toronto newspapers picked up the story, and as a result, City Councillors are saying “something should be done,” when in fact, nothing ever will be.

Let me explain to you why this is a risk every pre-construction condo buyer takes…

Cancelled

I’m really having trouble understanding the world today.

Every day, it’s more and more complicated, and yet the complication arises through our own doing.

I’m one of “those people” who thinks the world is getting too soft.

Everybody is offended by everything.  Constantly.

I can’t open a newspaper without seeing somebody crying foul about something, and most of the time, it’s seemingly innocuous.

The topic of “entitlement” came up in the comments section of a blog post last week, and a reader called it “the elephant in the room.”  I certainly hope it’s not; I hope it’s something everybody would see, even if I, or other readers, forgot to mention it.

Entitlement is a word that gets thrown around a lot these days.

Privilege is another.

But what about responsibility?

Accountability?

When I was raised, these were traits we aspired to possess.

Remember what it was like in Grade-10 when you handed in an assignment one day late?  You got 10% taken off, on the spot.  Two days late?  20%.  Today, public schools have not only done away with “late marks,” but just about any other responsibility or accountability that an impressionable young boy or girl ought to understand.

One of my family members is a teacher, and she has kids in her classes that get eight.  Like, eight percent.  As in 8% in a class, when 50% is a “passing grade.”

Do those kids fail?

No.

They’re passed, usually at the behest of some socialist guidance counselor or vice-principal, as the “leave no child behind” school of thinking believes that we should teach these children they should skip class all year, do no work, call the teacher names with no repercussion, and then move on to the next grade, rather than learn responsibility and accountability for their actions.

I suppose the “business” of university will start doing the same – passing kids along, so they can get enter the workplace completely unprepared, with no concept of reality.  But in order to accomplish that, the universities would need to take some time away from their busy schedule of creating safe spaces for students who don’t want to debate anything, because there should only usually be one side to any argument.

Entitlement.

Privilege.

Responsibility.

Accountability.

I could go on.  But I feel as though I may have already lost half of you.

I may be a 37-year-old, trapped in an 82-year-old’s body, about to go outside and yell at a cloud for moving too fast while shaking my fist at a young whippersnapper for skateboarding too close to to my prized petunias, but it doesn’t mean I’m going to hold it in.

A few weeks ago, a notable condominium project called “Museum Flts,” was cancelled.

I know what you’re thinking, and yes, the project was cancelled because of financial woes, and yes, we should have known this a long time ago as they clearly couldn’t afford the “a” in “Flats”…

When the project was cancelled, my phone started to ring.

I talked to a half-dozen people, some who had bought into the project and had Googled “pre-construction” and found my blog, and some in the media who thought it was a great story and wanted some background fodder.

And even though I’ve “seen everything” in this industry, I was absolutely shocked to see a complete and utter lack of understanding, and accountability, among those who had bought into the project, and were saddened, disappointed, frustrated, outraged, confused, and financially crippled by its cancellation.

Two of the major Toronto newspapers picked up the story.

Let me provide the links and a couple of excerpts for some context before we move on:

 


 

From Friday’s Financial Post: “Cancellation of 10-storey Toronto Condo Tower Throws Buyers Back Into Pricey Market”

Excerpt:

The cancellation of a ten-storey Toronto condominium development that has thrust would-be owners back into an increasingly competitive condo market has renewed calls for tighter regulations and more protections for buyers of pre-construction projects.

The Museum FLTS condominium cancelled earlier this month is the latest condo project to be shelved. Developer Castlepoint Numa cited lengthy delays in obtaining the necessary approvals, building permits and, in turn, financing, as reasons for the halt.

“Recently, the industry has been experiencing the most significant cost increases in a decade,” the developer said in a post on its website.

Castlepoint Numa is returning deposits to original purchasers and giving them the first opportunity and a discount on the next residential phase of its greater Lower Junction neighbourhood project.

But those promises are cold comfort for Michael Lynn, a 47-year-old musician and university instructor who bought a one-bedroom unit in Museum FLTS 18 months ago. He received a registered letter on his birthday earlier this month, his first inkling that anything was awry.

He was refunded his nearly $60,000 deposit, along with $400 in interest, but does not think he will be able to afford a similar property in the same neighbourhood.

Lynn believes developers should be forced to meet a higher bar before they start selling units and taking deposits.

“At the moment, they can promise the world just to get the buyer in and then, say, ‘I’m sorry we couldn’t do that’.”

 


 

I’ve done enough newspaper interviews over the years to know the game.

You need “colour” for a story to work.

A story about a condominium being cancelled does not work if you don’t have a name, a face, and a quote to go along with it.

And both articles from the National Post and Toronto Star have exactly that!

Here’s an excerpt from the Star article:

 


 

From Saturday’s Toronto Star: “Cancellation Leaves Buyers of Pre-Construction Condos Priced out of Market”

Excerpt:

Kurt Trowbridge, 34, who bought with his partner, Zak Osman, 38, says they, too, have been priced out of the market while the developer held their money for more than a year.

“We’re still in disbelief,” Trowbridge said. “The market has changed so much.”

He said he felt sick about the cancellation. The couple had worked hard to save a deposit. They had shared their happiness with family and friends.

“I felt kind of ashamed telling people we made a bad investment,” he said.

Jason Paris, 43, has been living with family while waiting for his condo but there are others worse off, he said.

“There are couples still living with their parents (that) planned their wedding timed to the condo closing. There is someone who was moving from London, England. There are people who have been impacted more than me, but it still sucks,” Paris said.

At first, he wasn’t too worried because he has a place to live while waiting for another opportunity. Then he realized that new, stricter mortgage rules that are being introduced in January will probably make it tougher to qualify for a more expensive home.

 


 

Here we have people who are willing to go on record, and put their names out there.  I say, good for them.

All too often in today’s society, it’s the anonymous keyboard warriors who shout the loudest, and offer the most vitrol, not to mention act the most cruel.

I respect every single one of these people for going on record, and I understand their plight.

But forgive me when I say this: these people took a risk, and suffered from the wrong end of a risk-reward equation.

The person quoted who said, “I feel like of ashamed telling people we made a bad investment,” I have so much respect for this guy.

But Kurt, don’t be ashamed!

The people you are telling have made far greater mistakes, and far worst investments.  They just might not talk about them.

At least you tried something.  At least you took a risk.  It didn’t pay off, but you took a risk.  How many other buyers out there were frozen; paralyzed with fear, as the media continued to predict a market decline for a decade, who sat on the sidelines and did nothing?

I infamously put $15,000 into Nortel Networks when I was 19-years-old as my very first stock market investment, using a 65-year-old broker, who had been through three market cycles, and yet he thought it prudent to take every dollar I ever made pumping gas at Sunoco, making kebobs at Bruno’s Fine Foods, packaging fish at Metro, and bussing tables and eventually bartending (awesome job!) at Shark City – and put it all into ONE stock.

Talk about a bad investment.  Everybody has a story.

I respect these people for making the investment, and for going on record with their stories.

But a lot of them, and all of the people I talked to last week, somehow are coming out of this saying, “It’s not fair.”

Or “It shouldn’t have happened.”

Or my favourite, “Somebody should do something.”

And that somebody is……………wait…………….I know this……………..the government?

Yes!

The classic go-to!

And thanks so much to the City Councillors who jumped on this bandwagon and offered “Something should be done,” only to go home and eat a microwave pizza.

I’m sorry, but nothing will be done.

And if “something” is done, ie. there’s a mandatory $20,000 per buyer refund for any cancelled projects, the developers will simply build that into their pricing strategy from the onset.

This is the way pre-construction condos are sold in Toronto, and it’s why for the last decade, I have been the most outspoken critic about the perils, and risks, of buying pre-construction condos.

I have never sold a pre-construction condo to a buyer.  Not one.

A family friend recently told me, “That’s where you should be, dude!  Those fat 4% buyer-commissions?  You don’t want a piece of that?”

Nope.  Never have.

As both articles noted, only 23 projects in Toronto, since 2012, have been cancelled – according to real estate think-tank, Urbanation.

But how many have been delayed by a year, or two, or five?

How many have had an “occupancy period,” where you basically pay rent on a unit you’re supposed to own, for upwards of TWO YEARS?

How many buyers were shocked to see $47,850 of “closing costs” for their $399,000 condo?

How many buyers have had their promised 10-foot ceilings changed to 8-foot, with no financial compensation?  Or seen their magnificent 400 square foot terraces reduced to 60 square foot balconies, and been told, “The balcony is ‘exclusive use, common elements,’ and therefore you wouldn’t own it; you didn’t purchase it, and it’s not a material change.”?

I could go on, but you’ve heard this all from me, many times, over the last decade.

Sure, a lot of people made money on pre-construction condos, but that’s because the market continued to climb, and I maintain they’d all have made more in the resale market, not having to pay occupancy fees or closing costs.

I’ve never understood the investment.  The risks are too high.

And seeing these poor folks turfed out of Museum Flts sucks, but they need to hear the tough love here: it’s the risk they took.

To come around now, and cry foul, say that “something should be done,” or complain that developers shouldn’t be able to do this, when they had every opportunity to evaluate the risk-reward proposition of this investment three years ago, simply reeks of that entitlement, privilege, and lack of accountability and responsibility we spoke of earlier.

I had clients looking at freehold houses with me several years ago.

I was showing them properties on the east side around $800,000.

They went cold on me, and I found out eventually through a mutual acquaintance that they had bought into a pre-construction condo, and didn’t want to consult me as they “knew I was completely and utterly against the idea.”

I was a little hurt that they didn’t at least run the idea by me.  It had nothing to do with the commission, for those of you about to suggest as much, but rather if they knew I was “completely and utterly against it,” and didn’t ask for my opinion, then they were being irresponsible.  There are pros, and there are cons.  And while they had access to somebody who could point out all the cons, better than anybody, they chose not to hear it.

Their project, as you might assume from the way this story was set up, was eventually cancelled.

They were given somewhere around 0.75% interest on their deposit, and turfed aside.

Those houses I was showing them at $800,000 were worth about $1,150,000 by the time their pre-construction condo project was cancelled.

Hindsight, I know.  That’s what you want to tell me.

But they could have completely mitigated that risk by purchasing an $800,000 freehold home, in an A+ location, which I said at the time, and was proved to be correct, would massively out-appreciate the market average.

I feel bad for them, but I really shouldn’t.

And nobody should feel bad for anybody profiled in the two articles above, just as nobody should feel bad that at 19-years-old, I took my life savings and put it into ONE stock, even though I should have known better.  I could have blamed the stock broker, and I could have blamed accounting scandals that plagued the industry in the late 90’s and early 2000’s, and I could have simply blamed the market.  But I always blamed myself, and I learned from that experience.  It cost me $14,400, since I rode the stock all the way down to $2 at the advice of my broker, but it was the best $14,400 I ever spent.

I haven’t made a poor investment since, and I trace it all back to that investment when I was a kid.

So for those of you that are thinking about a pre-construction purchase, read the articles above, and ask yourself, “What level of risk would I tolerate, and how do I feel about this as a potential downside outcome?”

And for those of you that have invested in cancelled projects, don’t blame the developer.

There are so many things you could have done differently.

Did you use an agent?  Or did you walk into the sales centre and trust the “floor agent” who works for the developer?

Did you hire a lawyer during the Provincially-mandated 10-day rescission period?  Or did you simply assume everything was kosher, and try to save the $3,000?

Those questions are almost rhetorical, since I’d wager 50% of buyers would say “no” to both questions.

I tell new real estate agents all the time that I have a saying.  A mantra, if you will.  It’s simple, and it’s helpful.  It goes, “Find a way to blame yourself.”

You didn’t sell that house?  Find a way to blame yourself.

You didn’t get that listing?  Find a way to blame yourself.

Your buyer client started working with another agent?  Find a way to blame yourself.

Instead of blaming that stupid home inspector who didn’t know anything, or that jerk of listing agent who had it out for you, or that miserable parent of your buyer-client that got in your way, or your client’s idiot boyfriend who was a market bear – find a way to put the blame on yourself, and you’ll learn what you could have done differently.

I would encourage anybody with a real estate disappointment, whether it’s the buyers at Museum Flts, or anybody else out there, to try using the same mantra.

Who knows, you might learn something…

53 Comments

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  1. Sardonic Lizard says:

    It’s alright, David, you’ll still have schmucks out there throwing their life savings down and falling over themselves just to get a ‘slice’ of downtown in the form of a shoebox condo.

  2. Condodweller says:

    A bit late to comment but I thought I leave one thought. I fully agree people have to take responsibility for their action with one caveat. When someone buys re as an investment it implies a certain level of sophistication and it is up to the investor to do their full due diligence to make an informed decision. However, when it comes to a home buyer, I believe there should be a minimum mandated disclosure as the average buyer does not have the required knowledge and skepticism to dig deeper. I’m sure it’s true that a large number of first time home buyers, especially preconstruction condo buyers, do not seek the advice of a lawyer. In some cases, it may be because they are already overstretched on their upcoming mortgage that they are trying to eliminate what in their mind may be unnecessary costs, while others may simply not be aware of the gravity of the situation as there are many hidden potential problems an average first time home buyer is not aware of. What you don’t know won’t hurt you does not apply in this case.

    I do think that the government can take steps to make the playing field level against developers with teams of lawyers writing contracts full of loopholes in their favor which would allow them to completely and unfairly screw over the buyer. These unfair/unscrupulous practices should not be allowed in my opinion.

    The first item I would change is to disallow developers to sell units in buildings which are not permitted. I learned about this early on when I bought my first pre-construction property and I was shocked that this practice is allowed.

    Finally, I have a hard time believing that a developer is not advised properly to budget for several years of delays which means they are operating on bad faith when they cancel a project only to launch a new one on the same site for the only seeming reason of screwing over the buyers in order to capture a higher profit after the market significantly increases in a short amount of time. Again, unsuspecting first time home buyers should be protected against this practice. If a developer claims financial problems as the reason for “canceling” the project, they should be either forced into bankruptcy or in the very least they should be forced to sell to an arm’s length third party. Or, they should be forced to honor the contracts to existing purchasers. After all, what they are effectively doing is like when Bob owes money to Joe, and Bob changes his name to Mark then claim Mark does not owe Joe anything.

    In the very least there should be gigantic mandatory warnings required on these purchase agreements to warn buyers of these hidden issues.

    I do not think the above type of protections in some shape or form would make the government overbearing. They just need to implement some form of consumer protection laws already in place in other jurisdictions.

  3. Appraiser says:

    Reasons why the Canadian property market refuses to fall: Don Pittis
    So far low interest rates, a strong economy and large immigration are thwarting the doomsayers

    http://www.cbc.ca/news/business/realestate-canada-houses-1.4400092

    1. Kyle says:

      He argues “the issue is not land, the issue is the speed at which that land comes to market,” and that problem will only intensify as the gap between population growth and the ability for the regions to supply more land grows.

      Exactly what i’ve been saying. Pointing at two storey buildings on main avenues or a swath of bush up by the greenbelt and saying, see this could be built on, is overly simplistic and ignorant. Just cause something *could* be built there, doesn’t mean growth in supply is adequate to meet growth in demand.

    2. Kyle says:

      Just finished reading the full CIBC report. Basically it restates most of our comments over the last few weeks, with some very solid support for those arguments.

      1. Kramer says:

        Good to hear man. Not surprised. It’s all logical barring any black swan events or other highly improbable events.

  4. Ralph Cramdown says:

    First, let’s be clear: Yonkers is adjacent to Bronx, one of the five boroughs that make up NYC proper. It is not an exurb. Second, two of the three houses I posted were in NYC proper. David said “The solution is not to force developers to build 3-bedroom condos that families will never be able to afford […] There are 3-bedroom, 3-bathroom houses available in Pickering Village for $550,000. [38 GO minutes to Union]” That is this — a starter townhouse less than 16′ wide:
    https://www.realtor.ca/Residential/Single-Family/18809369/45-CULLCASTLE-ST-Ajax-Ontario-L1S0B1-South-West
    You can do better in NYC and its near suburbs, was my point. Are Manhattan and much of Brooklyn more expensive than equivalent ‘prime, prime’ Toronto? Yes. But I can find value in at least 3 of 5 boroughs that you can’t find in the 416. And I’m talking detached, renovated, big lots, good schools, low crime, decent transit — something which most middle class families here are priced out of.

    1. Kyle says:

      David was using the Pickering house as ONE example of an alternative. There are plenty of detached homes in Toronto (actual 416) on wide lots:

      https://www.realtor.ca/Residential/Single-Family/18624709/10-MERKLEY-SQ-Toronto-Ontario-M1G2Y4-Woburn#v=dir
      https://www.realtor.ca/Residential/Single-Family/18781588/10-LORNE-BRUCE-DR-Toronto-Ontario-M6L2G9-Rustic
      https://www.realtor.ca/Residential/Single-Family/18726010/17-PELMO-CRES-Toronto-Ontario-M9N2X4-Humberlea-Pelmo-Park-W4
      https://www.realtor.ca/Residential/Single-Family/18824543/1-KATRINA-CRT-Toronto-Ontario-M6L3G3-Rustic

      But the exercise of picking houses and making fantasy comparisons, when none of us are in the position to objectively judge one vs the other is a useless exercise.

      1. Ralph Cramdown says:

        LOL a wartime house! You make my point for me.

        1. Kyle says:

          See pointless – you’re just going to come up with all sorts of subjective knocks.

        2. Kramer says:

          LOL, a fenced-off garage and pink toilet backing on to a tattoo parlour!

          Your entire point is useless Ralph.

          But hey, don’t trust us… Call BNN and ask why they’re not covering this on “House Money”… and then call Bruce Flatt… maybe he’ll start investing in this hidden gem which is NYC and make you his Special Advisor.

        3. Ralph Cramdown says:

          Subjective? Wartime houses were great for what they were — I even posted a link to an NFB doc about them here recently. But if you told the men building them in the ’40s that middle class people would be paying 5x income to live in them 75 years later, you’d get “What? We’re going to lose the war?”

          Another house you posted was a semi. Another said “Needs Updating & Tlc* To Be Sold In “”As Is Where Is “” Condition* Lots Of Potential*” with no interior pics. Which suggests a bit more work than a $500 toilet replacement. I wasn’t picking handyman specials or bulldozer bait.

          1. Kyle says:

            Dude it’s all subjective – To you they’re “wartime houses”, to others they are a fully detached functional home. That’s just your opinion, i’m sure if posted a beautiful Bay n Gables Victorian, you would call it a “worker’s cottage”.

            Trust me, I can come up with as many subjective knocks for any of your examples as you can come up with for my examples. WHICH IS WHY THIS EXERCISE IS POINTLESS!

    2. Kyle says:

      In NYC you have a massive swath that sells for $1000 – $2100/sq ft and then you have some outlying areas that sell for around $200/sq ft. It’s probably not the best going in assumption, to say that everyone in Manhattan and the Bronx are stupid and paying 5 to 10 times more, just to be closer to downtown.

      You know what they say about, “When something seems too good to be true….”

  5. Kyle says:

    When people talk about NYC’s world class-ness they are not referring to Yonkers, anymore than Torontonians include Bradford when talking about our World class-ness. Straight comparisons of Toronto to New York, there is no contest which city (not exurb, or City that lies well outside of the actual City) is more expensive.

    Comparing houses out in the exurbs is largely a pointless exercise for determining one city’s value against another’s. Could there be some better values out in NYC’s exurbs or outlying cities then in Toronto’s. Maybe, Perhaps, who really knows – maybe someone who has lived in Yonkers and lived in Bradford could chime in? Either way it is subjective and largely pointless.

    If we’re not purposely trying to be disingenuous, here’s a more valid comparison:

    https://therealdeal.com/issues_articles/nyc-neighborhoods-by-the-foot/
    Toronto’s prime, prime downtown areas would be about $700 /sq ft CAD ($550/sq ft USD).

    1. Kramer says:

      Kyle, thank you once again for bridging the gap between the painfully obvious and utterly ridiculous.

  6. Appraiser says:

    What happens to cancelled condo projects:

    “When it comes to the fate of cancelled condo developments, Altus Group data shows that of 122 cancelled projects from 2003 to 2012 in the GTA, 28 per cent where re-launched and completed by the same developer, while 19 per cent were built and completed by a new developer.

    An additional 10 per cent are still under construction from the same developer, and 10 per cent are still under construction from a new developer.

    “So 70 per cent of the developments were eventually built or under construction after being cancelled,” Myers writes in a blog post. “Good real estate typically remains good real estate. Bad market timing, poorly priced or designed projects often need a reboot with a new strategy. The majority of sites have come back in a new form have been successful the second time around.”

    http://news.buzzbuzzhome.com/2017/11/toronto-cant-stop-talking-condo-cancellation-one-industry-player-says-market-still-strong.html

  7. crazyegg says:

    Hi All,

    My wisdom summed up in two phrases, for what’s its worth:

    New Construction: Best for investment
    Resale: Best for principle residence

    Regards,
    ed…

    1. jeff316 says:

      Agreed. Buying pre-construction is a speculative bet. Planning on living there just increases the or severity of win or the loss.

  8. Sampson says:

    Whoever brought up the point that if the market dropped, these buyers would complain they weren’t allowed out of their contracts, is bang-on.

    The grass is always going to be greener on the other side. And as David pointed out, we’re moving increasingly toward a society that wants to be “bailed out” of every bad move they make, but still able to make those moves freely.

    I’m also not convinced that the provincial government would be able to enact appropriate measures to protect consumers (from themselves) without killing the Golden Goose that is the Toronto real estate market. Billions and billions of dollars of economic activity flow from the construction, sale, and existence of real estate, from the tax revenue to the cash-strapped city, to the trades who make money hammering nails.

    These personal interest stories never serve the greater good. They just make headlines, and allow a couple of people to feel like they got their pound of flesh.

    1. BJA says:

      Gee, where could people have come up with the concept of being “bailed out of every bad move they make, but still able to make those moves freely”?

      It certainly can’t have anything to do with the biggest whiners in existence, corporations.

  9. Laurie says:

    Last weekend, we pulled down the panelling in our family room only to discover it was attached to the studs. No drywall, and… really badly cut styrofoam as insulation. I’m looking at a few thousand dollars to have someone put up drywall, plus more to put in proper insulation so we’re not freezing all winter.
    I could blame the home inspector for not pointing out this and so many many other issues we’ve run into in this money pit of a house.
    I could blame my realtor for pushing me into this house because he wanted the commission and didn’t want to wait while I took my time as I wanted to do.
    But at the end of the day, it was my decision not to reschedule the home inspection for a time I could be there and it was my decision to sign the offer on the house.
    And when I finally sell this house and buy something I don’t hate, I’ll know to find an independent home inspector, not one recommended by my realtor, and to do my own inspection with the giant list of things I now know to look for. And to listen to my gut before I make such a major purchase instead of someone who just wants to get paid.

    1. Jason says:

      You’re right, it is your fault for not being present at the home inspection! As for the wood panelling being attached directly to the studs, I don’t see that as a huge deal and it would be difficult for your home inspection to point that out. A really good inspector might knock on the panelling and hear voids and suggest follow up is required, but in general, home inspectors are not going to point out deficiencies that they can’t see. If there’s a lot of things wrong with what they can see, then they will probably suggest that there are other problems that they can’t see. I do a lot of renovation projects and if you were taking down the panelling to re-insulate the walls, it doesn’t matter that there was no drywall. In addition, most panelling is glued to the drywall anyway and it would have been hard to patch and sand all the affected areas so new drywall would probably be in order.

      1. Laurie says:

        Just to clarify this – my partner was at the inspection, I’m just a control freak and would have checked different things had I been there. And I don’t think it’s unreasonable to expect that on a main floor in a home that drywall was hung on all the walls. Had this been in a basement, I’d have understood it.

        1. Geoff says:

          I agree that the home inspector likely can’t find things that aren’t obviously visible. As a homeowner, I don’t want a home inspector punching holes all over my home either. I can’t tell you how many things I’ve found in the 10+ years we’ve had the home that we had to fix — dishwasher not hooked up properly, vent hood that looked like it vented outside but was half blocked; wall insulation that consisted of newspapers from the 1970s…. and I was there for the entire 3 hour pre-offer home inspection! There’s being prepared, and then there’s being psychic. 😉

          1. Ralph Cramdown says:

            FLIR cameras are still pretty expensive for the amateur, but I’d want my inspector to have one — I think places rent them, too. IR spot temperature meters go on sale periodically at Canadian Tire and other places though — I picked one up for $20. And I got a USB borescope camera from China for about $20 (I think), too. Not a perfect solution, but today’s gimlet-eyed gadget freak sure beats yesterday’s psychic.

        2. Jason says:

          I understand you’re point. I was pointing out that if you’re goal was to take down the panelling and re-insulate the walls, it wouldn’t matter if there was drywall or not. The old drywall would be discarded to re-insulate. Any house if going to have problems that are discovered over the years as projects are completed. There are also some people who make a big deal about minor defects and therefore never purchase a home. You buy a home with the best knowledge you have at the time and having done your homework and you hope that previous owners were diligent in their upkeep and renovation projects.

    2. Kyle says:

      Jason is bang on. Inspectors can only find what is visible to the eye. That said, that crappy fake wood “panelling” is only ever used as a cheap cover up. If there was decent drywall to begin with, then they would not have covered it in cheap panelling.

  10. Jason says:

    I don’t know why everyone hates pre-construction condos! I invest in them regularly and while there is some risk, it is easily mitigated by using a good real estate agent, a reputable lawyer and some experience. I find it is a good way to take advantage of an appreciating real estate market with only a small down payment. It is a very good leveraged option on the real estate market, but there are a lot of things buyers need to be aware of. I only invest in the downtown core and I haven’t invested in anything new since prices exceeded about $800 a square foot. I take possession of all my units and don’t assign the contracts and so far I’ve been happy with the returns.

  11. Ralph Cramdown says:

    Stories seem to vary as to whether sales on the project started last summer or early this year, but either way, it seems an awfully short time to go from start of sales to cancellation because they couldn’t get planning and permits. Did they think City Hall has a drive through window for this stuff?

    Oh, wait. this FLT tire was a replacement project on the site of the Sterling Lofts, by the same “developer,” which was launched back in 2012 and then cancelled. A cynic might suggest that as long as land and presale condo prices increase, they’ll keep cancelling and relaunching. Buyers thought they were buying a futures contract, but developers treated it as selling a put option. Bad faith?

    At least the erstwhile buyers got their deposits back. It appears we’re now starting to see same-property resales of 416 and 905 detached at 20% and more below their spring sale prices.

    1. Appraiser says:

      @Ralph Cramdown wrote: ” It appears we’re now starting to see same-property resales of 416 and 905 detached at 20% and more below their spring sale prices.”

      Any examples (meaning more than one)? When you say “same-property” do you mean the exact same property, or similar properties?

      1. Ralph Cramdown says:

        132 Laurelcrest Ave, Toronto
        43 Rollinghill Rd, Richmond Hill

        Meanwhile, elsewhere:
        https://www.trulia.com/property/5032711320-1305-Puritan-Ave-Bronx-NY-10461

        1. Appraiser says:

          Nice try Ralphy. Maybe you forgot that I have MLS access. Laurecrest never sold in the spring, the deal fell through at a listing price of $1.795M and the property is now listed for sale at $1.725M. It was also listed in August for $1.995M – the listing was terminated. A listing is not a sale, neither is a price reduction.

          As for the property in Richmond Hill, the original deal also appears to have fallen through, as the sellers names on the second deal are the same as the first deal. Albeit at a much lower price. That’s one deal Ralphy.

          One data point does not amount to market analysis – it’s an anecdote.

          1. Ralph Cramdown says:

            Dude, you post as ‘Appraiser’ and have demonstrated apparent access to the sacred sales histories before. I hadn’t forgotten. I understand that Laurelcrest sold at $2.118, and I didn’t know that it fell through.

            We all know that unrenovated paired sales less than twelve months apart in a declining market are as rare as hen’s teeth, which is why David could say “show me an actual house that has dropped by 20% or $200,000” and not have to worry about it. I’m not here to try to put something over on you or anybody else. With your access to the data, you know as well as anyone what it looks like out there. And it isn’t pretty.

          2. Ralph Cramdown says:

            But as long as you’re on MLS, maybe find me a comp to that Bronx property? Big lot, renovated, low crime, great schools, walking distance to subway, detached double garage, and in the 416 for C$700k? I’m not currently working with an agent.

          3. Kramer says:

            Ralph, I can’t find an exact comparable in Toronto (i.e. pink toilet, oasis back yard (slab) backing onto a tattoo parlour, gated garage). Kind of tough using an MLS listing and no knowledge of that exact street and area. Kind of a useless exercise overall isn’t it.

          4. Ralph Cramdown says:

            Useless? I don’t think so. You check crime, schools and transit, use Google maps to check proximity to greenspace, main streets, highways, and tattoo parlours, use Street View to see what kinds of cars the neighbours are driving and whether they maintain their properties and, if all that checks out, check the photos for pink ceramics.

            Maybe you’d be better suited to something in Westchester (think near 905). White ceramics and no tats.
            https://www.trulia.com/property/3016090198-51-Avondale-Rd-Yonkers-NY-10710

          5. Ralph Cramdown says:

            Italy eliminated. More bad news for local real estate.

          6. Chris says:

            Appraiser,

            https://pbs.twimg.com/media/DNMc3dwXUAAwVbi.jpg:large

            https://pbs.twimg.com/media/DH3m1pjW0AAzoYq.jpg:large

            https://pbs.twimg.com/media/DHUPd7OXcAAZVXd.jpg:large

            Kramer, were you unable to find anything comparable in Toronto to the three examples that HuffPo article provided?

            Oh and for anyone curious, that Yonkers house Ralph posted is about ~35 minutes from Times Square by car, 70 minutes by train.

          7. Kramer says:

            Yes Chris, I am unable to find anything comparable in Toronto because I DON’T LIVE/WORK IN NYC and don’t know the ins and outs of all ‘hoods and streets and lots etc required to understand why those 2-3 properties are listed for the amounts they are listed, nor to do a comparable analysis to properties in Toronto… and this is a useless exercise because all they/you’re doing is cherry picking cheap listings and anyone can see it’s ridiculous including the general public which is why that ridiculous Huff Post article is only being circulated by you two jokers. Why don’t you call BNN and alert them of this ground breaking finding.

            From median income all the way down to three listings huff post eh boys?

          8. Chris says:

            Kramer, you asked for examples. Don’t get so pissy now that Ralph and I have provided some. As Ralph said, you’re free to use Trulia or Zillow to see both listing and sold prices of homes in and around NYC for yourself.

          9. Kramer says:

            No that’s cool. As I said, it’s a useless exercise.

          10. Ralph Cramdown says:

            I wasn’t trying to cherry pick cheap listings. I was looking for places on large lots, close to good schools and in low crime neighbourhoods, with curb appeal (shame about that Z Brick on the basement walls…), and needing only minor renos. It only took a few minutes to find each example.

            And you know what? The results surprised me. I was looking for stuff only a bit more expensive than its Toronto equivalent, and I was going to say “see, you can live in or near NYC, which everyone admits is more ‘world class’ than Toronto, for not much more money.” But these places actually appear to be cheaper that their Toronto equivalents. You say you don’t know the New York neighbourhoods well enough to compare? Fair enough. I’ll spot you the schools and the crime and the transit. Show me comparable properties at comparable prices even in the 416’s least desirable neighbourhoods.

          11. Chris says:

            Kramer, if it’s a useless exercise, why did you ask for examples?

  12. Lui says:

    Like David said many time pre construction is playing the lottery.You may got a condo built on time with the exact specs as promised and see the value go up 25% or you see it delayed or canceled,specs revised and see zero increase in value.

  13. Kyle says:

    Very curious to see what happens to this site. Once the old Tower Automotive building re-opens, anchored by the Museum of Canadian Contempoary Art and many new office spaces, this location is going to go bananas.

  14. RPG says:

    Can we please get like 400-600 words on policital correctness? Please oh please!!!

  15. RedMapleCourt.Parkhurst says:

    Yes, yes, yes!! I completely agree, David. The culture of being easily offended, no accountability, coddling, entitlement and political correctness is maddening, and Museum Flts (no “A” — ha ha) is just another example.

  16. Paully says:

    If the condo market had fallen over the same time, then the same people would be screaming that the builder won’t let them back out of their deals. Entitled whiners.

    1. permabug says:

      Entitled whiners have always existed, they just appear to be more prevalent now because of (a) the internet/social media, (b) reality television, (c) print (aka dying) media desperate for so-called “stories,” (d) blogs like this one, and so forth. This kind of stuff is not, repeat not, generation-dependent, as so many people seem to (claim to) believe.

      P.S. I’m 63 years old.

  17. Graham says:

    Shark City! There’s a classic Yonge and Eglinton joint.

  18. ed says:

    I may be a 37-year-old, trapped in an 82-year-old’s body-David.

    you got it backwards David.

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