The deplorable uninformed diatribe that needs to end
This guy is talking horse*!?@. In the “good old days”, which I was a big part of creating, 95% of the buyers lining up were investors. Wannabe condo homeowners didn’t wait in these lines and certainly won’t wait 5-6 years to move in. The concept of selling a $500,000 one bedroom from a floorplan with just a developer’s assurance is a tall order. I.e. not easy to accomplish. If any people are profiting handsomely currently it is due to the ridiculous rise in prices that occurred over 2016. This happens once in 30 years. The typical increase over a 5-6-year span is $50-75,000. This for a $50-70,000 deposit, and plenty of risk. Real estate escalation is not a guarantee or a right.
Developers sell new units to “insiders” for approximately the value of existing real estate. For instance, resale prices in Toronto are $1,000-1,100 per square foot. This is currently the insider price for a new condo. The gain here is based on the risk taken over a 6-year wait. Of course, intrepid, knowledgeable people invest. These are real estate agents, their informed investor clients, and anyone else they can convince to take the leap. They believe in the real estate market. They believe prices will rise. If an interested party bothered to try they could easily deal with a broker that has insider status. They are littered throughout the internet advertising exactly this kind of access.
It’s so convenient to accuse the industry of misdeeds when the real issue is fear and apathy in the buying public. The truth is the general population, will not step up and buy a ‘prebuild’ condo given the risk. A large part of the blame for this falls to the media for constantly terrorizing the public with real estate fear mongering. It’s true that anyone who bought in 2016 and sells today is earning a fortune. It’s dumb luck, and not to be expected as routine.
I’m tired of reading these ridiculous pieces about speculators ruining it for everyone else. It’s simply not true. It’s a witch hunt. There is absolutely nothing wrong with selling real estate to who you please, and there is nothing wrong with selling real estate for profit.
Gary Mason, get informed before you create this kind of dumb diatribe.
The deplorable condo shell game that needs to end | The Globe and Mail