In the last few years, the price of an underground parking space in a downtown Toronto condominium has skyrocketed.

But recent developments point to a decrease in prices as we move forward, or at least more “deals” and “specials” with regards to the coveted slabs of concrete.

Is it possible that all these cycling-enthusiasts will finally see it their way?

“Did you say the Bird-Seed?”

“No, no – I said the Berczy!”

Yeah – I’ve heard that conversation about a dozen times!

Is there any condominium name more confusing right now than The Berczy?

Between the misspellings and the mispronunciations, I’m surprised anybody can keep it straight!

It’s like former Toronto Maple Leaf Marius Czerkawski named the condominium himself and tried to make it just as hard to spell as his last name.

Okay, well, the name didn’t exactly come out of nowhere – the condominium is named after Berczy Park which is across the street and is bordered by Front and Wellington.

Last weekend, the good folks at The Berczy were in a generous mood!

They were offering a “deal” on parking spaces for the very few units they have left in the project; slashing prices from $35,000 down to a mere $20,000!

WHAT A DEAL!

Of course, there are only a handful of units left and they are all 2-bedrooms over $500,000.  All the “good stuff” has been sold and the floor plans and available units have been picked through more often than the licorice allsorts at Bulk Barn…

Call me crazy, but dropping the price of parking by $15,000 doesn’t make the 1150 square foot unit for $819,000 any easier to swallow…

Nevertheless, I’ve seen more than a few new developments start to offer discounts on underground parking spaces, and many have relaxed their ridiculous rules about who can buy a parking space and under what circumstances (many projects limit the purchase of parking to units of a certain size – ie. 2-bedrooms, or a certain price threshold, ie. units of $429,000 or more).

So how then do we value a parking space moving forward?

And how do you feel about a parking space as an investment?

When spaces were valued at $20,000, they were considered great investments!  You could yield about 9% per year assuming a $150/month rental rate, and we all ‘knew’ they would eventually rise in value to $30,000, right?

When I compare apples and oranges, I’ll add or subtract $30,000 for a parking space in any building under five years old.

That $300,000 condo in your building would be worth $330,000 if it had a parking space.

This is how we’ve always looked at things!

And more to the point – we’ve always assumed that it’s easier to sell a condo if it has a parking space!

Well, with the carving up of Jarvis Street to fit in bike lanes, and with the number of downtowners that cycle or use TTC rapidly increasing, it seems like there is a serious movement towards going car-free in the downtown core.

Not everybody is doing it.  It’s not like jumping off a bridge…

But I’ve had a lot of clients tell me, “Well if I can find a condo within a ten-minute walk of Yonge Street, I’m going to sell my car.”

And many other buyers have no choice.

There are many entry-level buyers that can combine their savings and a bank loan to purchase a very small 1-bedroom for $250,000, but that $280,000 condo with parking is a dream.

Or some buyers look at how much further their $30,000 will go if they don’t look at condos with parking.  For example, maybe the $330,000 condo with parking is a 1-bedroom, and the $330,000 without parking is a 1-bedroom-plus-den.

So how do I answer the question I’ve been asked so many times: “Do you think my condo will be harder to sell in 3-5 years if I don’t have a parking space?”

I used to say, “I think it’s easier to sell with parking because many people who don’t have a car will want to rent the space out as an investment.”

Now I say, “No, I don’t.”

I would say the split between entry-level buyers who are looking for a condo with parking is 50/50.

But let me be clear – it’s going to be VERY tough to sell a $449,000 condo with no parking.  In fact, you’d be absolutely INSANE to buy a pre-construction property at that price and not take a parking space.  People in the middle-tier have cars, plain and simple, and I rarely, if ever, see properties over $400,000 on MLS with no parking space.

So if you’re looking at me for advice, I have to turn things back to you.

What do you want?

Do you want the extra space in your condo, or do you want the parking space?

Do you want the lower mortgage payment each month, or can you increase that mortgage loan amount another $25,000 – $30,000?

And can you go without a car?

I know I can’t.  Partly because I need one for work, but also because I feel that driving is a right, as is running over cyclists with my car…

As for the price of parking spaces, I’ve seen ridiculous prices like $50,000 for “luxury” developments a few years back, but I think that the price of an underground parking space will stay level at the very least, and maybe even tail off.

If developers continue to offer incentives and take $15,000 off the price of parking, I think it’s going to drive the price down in the short run…