Condos

[Russell]

As my 2nd and half year comes to a close at the U of C I am starting to look at putting a down payment on a condo. The place I am looking at is not cheap but I have some help from my parents who are willing to co sign the mortgage with me, the down payment is 5% with 95% approval on my mortgage (place will not be done for 3 year, 2009). My only concern is that the market could adjust as the current market has been going up like crazy as of late (the reason I want to put a down payment on a place now)... has anyone done research on this, or have any input? Does it look like the market will adjust?

Last year the Condo market in downtown Calgary went up ~25% is what I have be told... and they are saying it should be another 10% this year!

[Canadian Turbo]

Re: Condos

Is this a downtown condo Russell? With a 3 year wait and a down payment, I am assuming now of 5% I would say it would be a smart and safe move so if you can swing it go for it.

[kuhli]

Re: Condos

With a wait time that long I'd want to be careful that they don't have the ability to reset the original purchase price on you. Sounds weird and I think pressure has stopped this from happening. To my understanding some builders were putting clauses in their contracts that allowed them to buy the property back in some way.

I'm not totally sure of the details but be wary of anything regarding price changes...

[Road Runner]

Re: Condos

A lot of signs point to continued increases in housing prices in Calgary. The average Calgarian spends approx 29% of their income on housing expenses, compared to 31% in Edmonton, 33% is what the banks recommend, and 57% is the average spent for living expenses in Vancouver. So in comparison, we have a long way to go before our housing costs are on par with some of the major urban centres such as the GTA and Vancouver. Moreover,Calgary has one of the lowest mean ages in Canada with one of the strongest and fastest growing economies in Canada, this essentially means we have a lot of people in the market with a lot capital to spend.

I'm just finishing up my last year here at the U of C and I'm in the market as well for somehting in development for completion in the next couple of years. What area are you looking at? A lot of Vic Park/Warehouse District/East Village are some pretty good lookin areas around downtown for long term appreciation...

What faculty are you?

[NeonGTI]

Re: Condos

Market 'adjustment' will continue upwards with annual increases of 20% for at least the next 2 years. For the past 3 years my personal 'guess record' has tended to be conservative by about 5%.

We have already seen over 20% increase in prices since December 1, 2005, and have not even hit 'prime transaction season' (mid-april to mid-september).

I suspect we will easily see another 20% before the end of 2006.

[R-Audi]

Re: Condos

I could be wrong, but with condo projects that aren't yet done all you have to put down is a deposit.. then the remainder upon closing. The good thing about this is if the market does crash, the maximum you can lose is your deposit.. great for investing in time!

Just make sure if you are looking to get a finshed condo that you have someone look into it. (Condo Consultant) If you need contact info for one let me know, I think they charge a few hundred dollars, but can save you huge headaches later...

[NeonGTI]

Re: Condos

I tried to buy 10 units on two pointe of view projects (yuck) downtown and they told me they are now requiring 100% down (on the riverfront one anyway).

Buggers.

[Billip]

Re: Condos

I could be wrong, but with condo projects that aren't yet done all you have to put down is a deposit.. then the remainder upon closing. The good thing about this is if the market does crash, the maximum you can lose is your deposit.. great for investing in time!

Just make sure if you are looking to get a finshed condo that you have someone look into it. (Condo Consultant) If you need contact info for one let me know, I think they charge a few hundred dollars, but can save you huge headaches later...

Yes, with new projects you will have to provide a deposit (amount set by the developer). ALWAYS make the cheque payable to the developers laywers, and write "IN TRUST" on the cheque. This way the developers lawyers hold on to the funds until you take possession of it (ie: the funds are held in trust). If the project dies, you will get your money back. Never write a cheque directly to the developer.

However, as I am unfortunately discovering at the moment, if the project dies you ARE out the money that your investment would have appreciated in the time since you gave them your money until you got it back. This is a "paper loss", but still very real if you intend on buying another property after the dead one gives you your money back.

[James]

Re: Condos

Just make sure if you are looking to get a finshed condo that you have someone look into it. (Condo Consultant) If you need contact info for one let me know, I think they charge a few hundred dollars, but can save you huge headaches later...

was talking to a guy at work about exactly this in a meeting...he'd love this contact info so PM me if you get a sec..thanks dude!