In Vancouver, the seller’s market recedes

[sags]

We downsized from a 4 bedroom two storey home to a 3 bedroom rented townhouse.

We are considering a condo as a final move.......but have noticed they are almost all small units of 1-2 bedrooms and no extra room anywhere.

We are used to extra space.........for a den, family room, playroom etc. and we have been keeping an eye out for 3 bedroom condos..........but haven't found anything in a building we would want to live in. We want the amenities.......pool, underground parking, nice lobby, green areas outside, trees etc...............

These size units are rare and from what I read developers aren't building them.

People downsizing want room................so I think the developers are a little off here. They say no one wanted them in the past.....but there are a lot of baby boomers downsizing from big homes and stuffing into a tiny condo isn't on the agenda for them.

[Jay]

^^ That aligns with what I've been seeing - the older 3 bedroom condos seem to be in high demand (even if they're at a premium price), with the 2 bedrooms that are value priced going quickly, and the 1 bedrooms being very difficult to sell at any price.

The newer condos are mostly 1 bedrooms, and overpriced 2 bedroom units... I feel most of the new buildings are aimed at specu-vestors who are looking for a cheap buy-in, and then plan to flip on closing (or rent) or young professionals who can't do math and think renting is "throwing money away". I think these buildings will end up having a high rate of turn over, will be poorly managed....stainless steel appliances only go so far.

[bigbadbull]

I like the way this thread is turning out, its been a good read so far but I would like to raise a few points:

Sags- isn't the point of 'downsizing' going from more room to less? I'm interested to learn what you mean by 'wanting room'. I haven't done any research but I'm sure there are condo's geared towards seniors in popular retirement destinations that do have amenities like pools, tennis courts, lawn bowling, nice lobbies, gardens and the like.

Jay- "(A good Super is usually far more attentive/helpful to their residents than condo property managers.. and don't get me started on condo boards)" You sound pretty knowledgable about the market in Ottawa and RE in general and I would like to know if the supers are just residents of the building who the company pick or are they elected within the building? also would they get cheaper rent/bonuses?

[Spudd]

Supers for rental buildings are normally employees of the building. They generally get free rent and a low salary in exchange for being on-call and taking care of all the paperwork/repairs/etc. At least that's how it worked in the building I used to live in.

[Sherlock]

A lot of the new builds have 3 bedrooms, they're not as rare as you think. My building (built 2 years ago) has a mix of units including 3 bedrooms. But they cost as much as a detached house.

[andrewf]

^ Vancouver or Toronto?

I think Vancouver has stronger regulations around the mix of units.

[Jay]

Jay- "(A good Super is usually far more attentive/helpful to their residents than condo property managers.. and don't get me started on condo boards)" You sound pretty knowledgable about the market in Ottawa and RE in general and I would like to know if the supers are just residents of the building who the company pick or are they elected within the building? also would they get cheaper rent/bonuses?

Any knowledge I have on the Ottawa market and RE just comes from a lot of research and looking from the past year... I'm no expert, just another poster giving opinions. Perhaps I should have said a good landlord, as a good landlord will ensure there is a good super - and by "super", I mean what Spudd described. A good super will treat their building like it's their own, and treat the residents like they are clients of their business...if they don't, it will affect their business's bottom line. That means keeping the building in good shape, and the people happy. Elected condo boards and the property managers they select are frequently under no such obligations...which is why there are so many badly run condos.

[Berubeland]

I would argue that the reason you see such badly managed condos is because of a complete and total lack of expertise on the part of the condo boards who run the show. It is a volunteer unpaid position that frequently gets filled by nosy old busybodies and troublemakers looking for advantage.

These volunteers are making multimillion dollar decisions about things they have no idea about. Boilers, cladding, landscaping, renovations to common areas, utility contracts, garbage removal etc.

The property manager is there to supposedly inform the board but in reality, personality conflicts and cronyism is the winner in many cases. The manager doesn't get a vote.

Furthermore, there is significant incentive in condo management to continually increase expenses because management companies are paid by a percentage of operating expenses. If you start paying for savings rather than expenses you'll get them. After all, budgets in a well run residential rental building are usually a fraction of the operating expenses for a condo. I would say about 50% or less.

Let me give you an example, today in parkdale I can get a one bedroom for $700 utilities all in and even free bedbugs. In a condo building in the same area the maintenance fees are close to as much as the rent on the 1 bedroom. (No free bedbugs) Having said that the rental building will have huge capital requirements because of the age of the infrastructure and the condo building will be much newer in most cases.

I see large problems ahead for those buildings as they age. If they cost that much to operate now, what does this bode for the future? Not only that but the elements in a newer condo will be much more efficient and use newer technologies so the burden of utilities is much less. Taxes are about 1/2 of the residential rental because of the different mill rates. There is simply no reason at all for these outrageous maintenance fees.

[kcowan]

My buddy is looking for a penthouse in downtown Vancouver. One he was interested in was 2000 sq.ft. and offered for $2.1 million. The taxes and condo fees amounted to $2k/mo. Crazy! Add in a mortgage at 4%, and his monthly nut is $9k.

[the-royal-mail]

"Toronto home sales in July slipped 1.5 per cent compared with a year ago as sales of condominium apartments fell 10 per cent, the city’s real estate board said."

http://www.theglobeandmail.com/repor...rticle4459710/