90 George | 64m | 19 fl | Completed

[YOWetal]

Originally Posted by JackBauer24

I know they do. I had this discussion about the Lansdowne spec on this forum recently.

Minto was clearly going after a different market than Glebites. Minto clearly saw that there was no need to go "high end" (I use that term loosely, I personally don't think hardwood flooring is high end) since there would be enough demand in their project.
I have heard many, many, many complaints about the specifications (or lack there of) of the towns at Lansdowne.

But look at what Minto did at Beechwood, they were targeting Baby Boomers, delivered a spec that Baby Boomers liked/wanted, cut the amenities Baby Boomers didn't want and they sold very well thus far.

What are the amenities Baby Boomers don't want?

I thought that the Lansdowne towers also had laminate as standard?
I think Minto's calculation is not that the buyers would be happy with laminate floors but they are counting on healthy upgrade revenue.

[p_xavier]

Originally Posted by JackBauer24

I'm going to guess your loft with the Bertazonni stove is probably in a nicer area - perhaps Old Montreal?

Out of curiosity - what are you paying for your loft in Montreal?

Between the Village and Plateau, not really a nice neighbourhood but it's getting gentrified.

199k$ (plus tax) for a 720sf unit on two floors with original brick walls. The price for my house in Ontario is another story

[Boxster]

OMG - Good luck to the owner. He will need it.

There is a new private listing by owner for one of the corner units on MLS.

The unit is 1101 and the asking price is $690K, which is $125K higher than the developer's identical new unit on floor 1001 for sale at $565K.

Actually, the highest priced similar unit is $595K which has a much better view of the market area. The lowest priced similar unit is $542K, still a mere $148K difference. Ah, there are also 8 units still available from the developper.

Given this, there is probably an unhappy owner that will need to absorb a very big loss if he is to have any hope of selling soon.

Add to this the condo fees of $1,047/month that also will not help things at the end of the day.

I actually feel sorry for current owners.

[TOexpat]

I notice the developers units are no longer listed for sale (after 4-5 years?). Does anyone know what came of these? Perhaps Canril is finally entering bankruptcy or the units are affected by the many lawsuits that the developer is in?

[lenderonabender]

Originally Posted by TOexpat

I notice the developers units are no longer listed for sale (after 4-5 years?). Does anyone know what came of these? Perhaps Canril is finally entering bankruptcy or the units are affected by the many lawsuits that the developer is in?

Heard that one buyer scooped them all up (at what price, I don't know). Not sure how the economics of a rental would work here given the high condo fees, but perhaps its just a long term bet on the location.

[TOexpat]

Wow, that is surprising. That would require at least $1.5 million in capital for units that will give you a negative return for several years in a softening RE market. I can't see any rational investor making that choice unless they got a sweetheart deal. Given the general sliminess of Canril's CEO and the huge money they owe to everyone that is quite possible. But still would have needed significant discounts on the already discounted units for it to be worth the while of a serious investor with deep pockets.

[Boxster]

Why do you think Terry Guilbeault is like slime?

Originally Posted by TOexpat

Wow, that is surprising. That would require at least $1.5 million in capital for units that will give you a negative return for several years in a softening RE market. I can't see any rational investor making that choice unless they got a sweetheart deal. Given the general sliminess of Canril's CEO and the huge money they owe to everyone that is quite possible. But still would have needed significant discounts on the already discounted units for it to be worth the while of a serious investor with deep pockets.

[JackBauer24]

I think any reasonable and rational buyer who is buying several units at once would expect a "sweet heart deal" - that's the purpose of 'bulk buying', right?

If the developer chopped 4-5% off the price of each unit for the group purchase, that wouldn't be a poor investment at all. The condo market as slowed, but it won't stay that way forever - Ottawa's growing, not shrinking. In the long term, buying real estate is a great investment in a growing city, especially in arguably one of the best locations in the city.

Originally Posted by TOexpat

Wow, that is surprising. That would require at least $1.5 million in capital for units that will give you a negative return for several years in a softening RE market. I can't see any rational investor making that choice unless they got a sweetheart deal. Given the general sliminess of Canril's CEO and the huge money they owe to everyone that is quite possible. But still would have needed significant discounts on the already discounted units for it to be worth the while of a serious investor with deep pockets.

[YOWetal]

Originally Posted by JackBauer24

I think any reasonable and rational buyer who is buying several units at once would expect a "sweet heart deal" - that's the purpose of 'bulk buying', right?

If the developer chopped 4-5% off the price of each unit for the group purchase, that wouldn't be a poor investment at all. The condo market as slowed, but it won't stay that way forever - Ottawa's growing, not shrinking. In the long term, buying real estate is a great investment in a growing city, especially in arguably one of the best locations in the city.

Even before any potential discounts they seemed well priced to me. Units in this building do very well on the rental market, though the high-end rental market is slowing lately. Selling them before losing lawsuits is not slimey it's just good business.

[TOexpat]

I agree reasonably priced for a purchaser, but not an investor. Your fixed costs are around 1700 a month (1050 fees, 650 tax) and they rent for 3200. You do the math. Not sure why an investor would lose money for at least three years on a monthly basis, in order to get the growth of the Ottawa condo market. S&P was up 30% last year. If you dumped your Canadian $ in that it would be closer to 35%. Not sure who is going to put 1.5-2 million into RE in a weak Ottawa economy and RE market that would maybe see 2-3% and will more likely decline. Would be dumb to not take the easy money in a bull market for high risk low reward Ottawa RE.

I am thinking the sweet heart deal involved something on the side, not a simple price cut. Keep in mind the many, many lawsuits and his need to raise capital. That is my humble opinion. Would be interesting if anyone could actually confirm whether this transaction took place.

[YOWetal]

Originally Posted by TOexpat

I agree reasonably priced for a purchaser, but not an investor. Your fixed costs are around 1700 a month (1050 fees, 650 tax) and they rent for 3200. You do the math. Not sure why an investor would lose money for at least three years on a monthly basis, in order to get the growth of the Ottawa condo market. S&P was up 30% last year. If you dumped your Canadian $ in that it would be closer to 35%. Not sure who is going to put 1.5-2 million into RE in a weak Ottawa economy and RE market that would maybe see 2-3% and will more likely decline. Would be dumb to not take the easy money in a bull market for high risk low reward Ottawa RE.

I am thinking the sweet heart deal involved something on the side, not a simple price cut. Keep in mind the many, many lawsuits and his need to raise capital. That is my humble opinion. Would be interesting if anyone could actually confirm whether this transaction took place.

Wow those fees are high. I was going to question your number but a previous poster had listed the amount. At 82 cents a Sq Foot that must be the highest rate in Ottawa (at least for a newish build). I wonder if this includes the special assessment for the lawsuits that the status certificate mentions? If so it may be temporary. If not you are correct $3200 would be at or below the break even point. If the units are distressed and will increase in value the could be a good investment but agree it is still risky.

The S&P is far from Risk free though. I would have that 2008 taught that lesson. $100 invested in 2000 is still worth less than that today.

I wouldn't be surprised if the investor was an Embassy. They like to buy in bulk and have several of the same flooplan. Another possibility is the builder selling to a dummy corp in order to avoid paying out on the lawsuits.

[lenderonabender]

To confirm, when I said "heard that one buyer scooper them up" I have it on good authority that this indeed happened.

If someone here works in the real estate industry or legal industry they can do a property subsearch and see the transfer of ownership, including price, which is public domain.

[Skyway]

Originally Posted by JackBauer24

I think any reasonable and rational buyer who is buying several units at once would expect a "sweet heart deal" - that's the purpose of 'bulk buying', right?

If the developer chopped 4-5% off the price of each unit for the group purchase, that wouldn't be a poor investment at all. The condo market as slowed, but it won't stay that way forever - Ottawa's growing, not shrinking. In the long term, buying real estate is a great investment in a growing city, especially in arguably one of the best locations in the city.

Apparently this tactic happened in Miami when the condo market tanked several years ago. The deals had to be sweet at that time since the investors could be looking at up to a decade to get their returns on investment.

[YOWetal]

Originally Posted by Skyway

Apparently this tactic happened in Miami when the condo market tanked several years ago. The deals had to be sweet at that time since the investors could be looking at up to a decade to get their returns on investment.

While South Florida might have looked like a ten year investment in 2010, in fact they have already done very well over the past 3 years. Prices are up 20-25% since then and rents are also up substantially. For example one purchase of 300 Condos for an average of $150,000 is now bringing an average rent of $1500 a month.

Ottawa and even this building are of course not nearly as distressed.

[JackBauer24]

I'm not so sure it worked too well. It took until this year for the real estate market to rebound in Florida - and it still hasn't completely returned. As of last year, you could still scoop up a very nice beach-front 2 bdrm condo at less than $200,000.

Originally Posted by Skyway

Apparently this tactic happened in Miami when the condo market tanked several years ago. The deals had to be sweet at that time since the investors could be looking at up to a decade to get their returns on investment.

[YOWetal]

Originally Posted by lenderonabender

To confirm, when I said "heard that one buyer scooper them up" I have it on good authority that this indeed happened.

If someone here works in the real estate industry or legal industry they can do a property subsearch and see the transfer of ownership, including price, which is public domain.

Anybody know if the sale closed? I am curious who bought them and at what price.

[TOexpat]

It is plain silly to compare Ottawa's market to what happened in Florida or the broader US. The Canadian market is one of the only RE markets in the developed world not to crash, which is why Deutche Bank says it is 60% overvalued. We won't see that type of drop, but think a 10-15% drop in the Ottawa condo market is likely and already happening. Already one year of supply and nothing is moving. More units coming on the market, Ottawa unemployment up, interest rates only have one way to go, TSX lagging and markets will be volatile...

To this thread, I did find out that ten units were bought by one investor at a substantial discount (don't know figures). He is going to resell them, which will mean more pain for the owners trying to get rid of units now. Too bad, as I was one of vultures waiting for these units to get further discounted.

[YOWetal]

Originally Posted by TOexpat

It is plain silly to compare Ottawa's market to what happened in Florida or the broader US. The Canadian market is one of the only RE markets in the developed world not to crash, which is why Deutche Bank says it is 60% overvalued. We won't see that type of drop, but think a 10-15% drop in the Ottawa condo market is likely and already happening. Already one year of supply and nothing is moving. More units coming on the market, Ottawa unemployment up, interest rates only have one way to go, TSX lagging and markets will be volatile...

To this thread, I did find out that ten units were bought by one investor at a substantial discount (don't know figures). He is going to resell them, which will mean more pain for the owners trying to get rid of units now. Too bad, as I was one of vultures waiting for these units to get further discounted.

The Deutche Bank study was looking at deviation from historical averages. This is a misleading comparison as Canada traditionally had much higher interest rates than the United States and therefore our rents were more expensive relative to purchase prices than they are now (same goes for income to price ratios). This is no longer the case. Not to say you are wrong about the 10-15% correction as I also think that is likely.

[JackBauer24]

I don't think anyone was directly comparing Florida to Ottawa, I think we were discussing a distressed market versus a stable market.

But regarding the Deutche Bank's claim, what is their supporting evidence that the Canadian Market is overvalued? That's a pretty wide and vague claim, since it's the 2nd biggest country in the world. Is the Vancouver market impacting the St. John's market? Are the condos in Toronto affecting homes in Nunavut? Real estate is a local market, not nation, not international. And traditionally, Ottawa is the anomaly when it comes to national trends, and Toronto & Vancouver tend to skew most national statistics - especially when it comes to condos.

If the Deutche Bank highlighted specific Canadian markets in their assessment instead of looking at Canada as a whole, it would carry a little more weight.

Originally Posted by TOexpat

It is plain silly to compare Ottawa's market to what happened in Florida or the broader US. The Canadian market is one of the only RE markets in the developed world not to crash, which is why Deutche Bank says it is 60% overvalued. We won't see that type of drop, but think a 10-15% drop in the Ottawa condo market is likely and already happening. Already one year of supply and nothing is moving. More units coming on the market, Ottawa unemployment up, interest rates only have one way to go, TSX lagging and markets will be volatile...

To this thread, I did find out that ten units were bought by one investor at a substantial discount (don't know figures). He is going to resell them, which will mean more pain for the owners trying to get rid of units now. Too bad, as I was one of vultures waiting for these units to get further discounted.

[TOexpat]

seriously Jack? All RE is local? You don't recall the world's largest economy having a housing bubble recently? You don't recall Canada's Finance Minister enacting numerous policy changes to try and prevent a housing bubble? Fiscal policy and regulation of lending apply to the whole country and is what would cause the country's entire RE market to correct. Canada's economy continues to suffer so our central bank is maintaining low lending rates, but in a few years when interest rates creep up 2 or 3 percent it will have a massive impact on home affordability. I don't think that 60% is near realistic, but I see very little room for growth over this period.

Now there is truth that markets are different and in Ottawa the economy sucks and will no longer be the rock of stability that it once was as changes come to the public sector. Couple that with way too much inventory and you will see and in fact are already seeing a correction in the condo market. Nothing is moving and prices are already declining, while more buildings are coming on line in the next few months. So I can't see any good reason why prices in condos will go anywhere from down in Ottawa in the next 12 months.

In terms of this discussion, the first unit that was bought by the mystery investor is now for sale. (I think at least) http://www2.oreb.ca/main/Details_CON.aspx?lid=3x84p93r95574l2sb7cjqnm1aaio45

So asking $60,000 more than a comparable unit that has been sitting for many months. Good luck with that.

Any case, unfortunate, but all markets are cyclical and in Ottawa RE we are moving down.

Originally Posted by JackBauer24

I don't think anyone was directly comparing Florida to Ottawa, I think we were discussing a distressed market versus a stable market.

But regarding the Deutche Bank's claim, what is their supporting evidence that the Canadian Market is overvalued? That's a pretty wide and vague claim, since it's the 2nd biggest country in the world. Is the Vancouver market impacting the St. John's market? Are the condos in Toronto affecting homes in Nunavut? Real estate is a local market, not nation, not international. And traditionally, Ottawa is the anomaly when it comes to national trends, and Toronto & Vancouver tend to skew most national statistics - especially when it comes to condos.

If the Deutche Bank highlighted specific Canadian markets in their assessment instead of looking at Canada as a whole, it would carry a little more weight.