Condo developers hike fees on luxury building

A Vancouver luxury condominium is stiffing pre-sale condo purchasers with a 25% levy if they flip their units before occupancy.

Purchasers of units at One Burrard Place, being built by Jim Pattison Developments and Reliance Properties Ltd., once only had to pay the developers a 1.5% fee to re-assign their units, however, in recent weeks they’ve been forced to sign an amended agreement contractually obligating them to pay a quarter of their resale price.

It is speculated that Vancouver’s surging price points have whetted the appetites of developers, who want a bigger piece of the pie. However, it’s also believed the reason is to curtail speculation. Units at One Burrard Place went on sale in late 2015, but the 53-storey luxury condominium won’t be complete until 2019, and two years in prices have already climbed astronomically.

When sales opened, the price per square foot was in the neighbourhood of $890, however, they’ve risen to about $1,250 today, according to the Vancouver Sun.

Jim Stovell of Reliance Properties told the Sun that the inflated fee is designed to discourage speculators from flipping units at One Burrard. He added that buyers are welcome to wait until the units are completed, by which time the sale will be legally binding and the 25% levy won’t apply.

Stovell also told the Sun that unauthorized advertising of assignments are floating about online, especially on social media, private realtor websites, and through emails – which the developer is also trying to check. He added that some purchasers have legitimate reasons for needing to re-assign their units, such death, divorce or job change, and their needs will be balanced.

The industry standard for re-assignment is between the 1.5% One Burrard was charging, and 2%, while other developers proscribe it altogether.

One Burrard Place is a luxury tower in Vancouver’s West End, close to the Burrard Bridge at Drake St.

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The Toronto market investors may want to target

Many investors have been priced out of Toronto, but one neighbourhood is poised to see impressive price growth – and those who buy in now could make a fortune.

“Regent Park is an area under complete renewal and rebirth. It’s a terrific opportunity to be a part of that in the downtown market,” Brent Binions, president and CEO of Chartwell Retirement Residents, told Canadian Real Estate Wealth. “I have no doubt [prices] will continue to rise. Everything will have doubled or more compared to the original prices [prior to revitalization].”

That bullish outlook inspired Chartwell to establish a retirement residence in the up-and-coming neighbourhood.
What drew the company to the area was the revitalization efforts – which is apparent in the number of condos and parks being developed – as well as the affordability of the land.

“It’s very difficult to do senior living in Toronto because the cost of land is very, very high. You need pretty good density to make this work,” Binions said. “This is a multi-generational is great. And in the downtown core there just isn’t much down there for seniors, so this is great. And it’s a renewing area.”

Despite its close proximity to the downtown core, prices in the area are still affordable due to the poor reputation Regent Park is quickly shedding.

“Absolutely, [investors should be targeting this area]. I look at what they’ve done there and it had to take quite a vision at the beginning of this process,” Binions said. “And I’m not sure if they had come to me on day one, before they had begun the renewal, and said ‘this is what we’re going to do – we’re going to turn this neighbourhood around and this is going to be an area in demand’ I’m not sure 100% what I would have said back then.”

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Investment Hot Spots:
Good Corner, Pleasantville, Bella Coola, Glen Walter, Spa Springs

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The one market to target in Toronto?

It may be the one market many investors are now overlooking, but one industry veteran argues Toronto is still a great buy for potential landlords.

“Everyone is concerned about all the condos being built in Toronto but every year there are 81,000 new permanent residents coming to the city,” Andrew Adams, vice president of finance and investments for Capital Developments, told Canadian Real Estate Wealth. “Compare that to the 95,000 total new residents in Toronto; prices and rents are growing.”

Prices in Toronto jumped 14.9% year-over-year in February to $685,728. Condos, however, remain a more affordable option at an average of $403,392.

One neighbourhood Adams is bullish on is the Yonge and Eglinton area in mid-town Toronto.
“The Yonge and Eglinton area is one of the strongest markets for investors in Toronto,” Andrew Adams, vice president of finance and investments for Capital Developments, told Canadian Real Estate Wealth. “It’s got the Yonge line and the Eglinton LRT and it’s one of the strongest rental markets in the city.”

According to Adams, there are two types of condo buildings available in the neighbourhood; older, circa 1970 apartment-style condos and new-build condos that boast modern amenities and finishes.
The older condos often yield rents in the $2.60-$3.00 per square-foot range, while the newer units earn investors, on average $3.00-$3.50 per square-foot, Adams says.

“The Yonge and Eglinton neighbourhood has everything you need; the RioCan Centre has recently been updated, it has great access to public transit, and its surrounded by great amenities,” he said.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Saint-Léon-de-Standon, Saint-Joseph-de-Beauce, St. Edward, Enmore, Morriston

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