02 June 2011 ~ 0 Comments

Condo Prices Per Square Foot?

With the surge in new condos being built in downtown Toronto there is a lot of mention when comparing value or sale prices on a price per square foot comparison.

This method of comparison is typically flawed in that many factors are omitted when relying only “price per square foot” such as: what’s the view like or how is the layout? Also things like being on a higher floor  (sometimes this matters, sometimes it doesn’t), is parking included and locker as well are not factored in.

You can’t open a newspaper or magazine today without there being mention of recent real estate sales, or information on a current or new condo development underway. Pricing information is typically provided by the builder for the article and this is not where I have concern.

It’s when you read the comment section attached to these articles where individuals get the chance to chime in with their two cents worth where there seems to be some great concerns. Offering their opinion on what is deemed a good purchase or bad purchase based on what the square footage price was paid can often lead to some bad investing or purchasing decisions.

Right now floating around downtown Toronto I am reading in the news that $650 per square foot is the “going rate”. Of course this is most likely an average but to the newbie investor who is looking to stroll in to a glitzy sales centre and buy a condo for investment purposes because everyone and their dog is doing so this information has doom written all over it.

Is $650 p.s.f. a fair deal for a unit nudged up against the garbage chute and looking North between two buildings and into a future wall (that isn’t shown on the glossy sales site brochures)? Or how about the units directly in front of an elevator? In a boutique building this may not be bothersome. But it will be for sure in a building that 400 plus units in. Especially one that is located downtown and catering to young owners or renters.

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