Did you know that a townhouse in Greenwich Village in NYC costs approximately $5 million, and much more on the Upper East Side, commonly $20 million? In fact, this pricing reality is played out in many cities and neighbourhoods where heights of buildings have been contentious. Paris, London, Boston, all cities have exorbitant pricing for downtown single family homes. Why is that – because there is pent up demand and a lack of supply of that kind of housing stock. It is now common to see urban town homes in the central area of Toronto selling for $1.0 million. These town homes are usually less than 2000SF.
High buildings bring high density living. Of course, adding life to streets is good for a city, making them safe and lively and providing more options for consumers. Additionally, high density living provides efficiencies for transit systems, energy usage, and lessens car use. For the consumer, it does something that every selfish person wants – it lowers the cost of housing and keeps Toronto affordable. At least more affordable than it would otherwise be.
Embrace high buildings, embrace density. It is essential. It is our future and it is smart on every level. The strange fear and mistrust of height is misplaced and ludicrous.
CONDOS VERSUS REITS
Recently, I read an article in the Globe and Mail touting the returns in REIT’s versus a condo. The article was written by Martin Mittelstandt and according to his research; a REIT offered a 22.6-29.9% return over a one, two, or three year period. The one-year return (2010) being 29.6%. I would agree that for a passive no work investment such as a REIT, 29.9% is nice.
If Martin had down his homework, he would have seen that a condo investment during the 1996-2011 period has thrown off unbelievable returns, and I will highlight a few typical options below.
EXAMPLE 1 – 55 STEWART ST. (Junior 1-Bedroom)
- 449SF (no parking, no locker)
- Bought from floor plans for $159,900
- Total deposit of $31,980
- Further deposit of $7995 on occupancy
- Sold March 7th 2011 for $280,000
- TOTAL INVESTMENT = $39,975
- TOTAL PROFIT = 120,100
- TOTAL RETURN ON INVESTMENT = 300% (over 4 years)
EXAMPLE 2 – 25 OXLEY ST. (Junior 1-Bedroom)
- 410SF (no parking, no locker)
- Bought from floor plans for $128,200
- Total deposit of $19,230
- Further deposit of $6410 on occupancy
- Sold November 5th 2010 for $246,000
- TOTAL INVESTMENT = $25,640
- TOTAL PROFIT = 117,800
- TOTAL RETURN ON INVESTMENT = 459% (over 4 years)
EXAMPLE 3 – 201 CARLAW AVE. (1-Bedroom)
- 583SF (no parking, no locker)
- Bought from floor plans for $189,900
- Total deposit of $28,485
- Sold January 28th 2011 for $292,000
- TOTAL INVESTMENT = $28,485
- TOTAL PROFIT = 102,100
- TOTAL RETURN ON INVESTMENT = 358% (over 4 years)