Marco said:
That is very interesting to hear. I think that customer service is nice, but it is not at all a determining factor to me. I want to be in a place that I think will appreciate in value and is built well.
This has been the main issue with real estate over the past 10 years. What are most condo investors/owners expecting from appreciation?
People think of it as an investment that will fund retirements or help them accumulate investment earnings at a quick pace. It's been proven many times over that an economy can only sustain real estate appreciation at a rate of 4% in order to stay consistant with income and inflation. I hear agents talking about 8-10% per year like it was nothing, and then in the next sentance they talk about Toronto not being overvalued or in a bubble. It doesn't make too much sense. The US is a prime example of not only failures of the financial system, but also a market that averaged 10-15% per year for many years in many major markets and then saw a collapse of 40-50% over a short time.
Let's put it this way....
Imagine buying a pre-construction condo for $300,000.......selling it 2 years later (after completion) for $450,000 (a 50% increase which happens a lot in Toronto with some of the better condos). Sink the profit of lets say $100,000 (factoring in commissions and your initial downpayment) into a new home for your family of $750,000. The market then shifts and has to make up for the unbalanced levels of income debt owed by homeowners, and comes down by a conservative 20% over the next 2 years. Look at that......the $750,000 house you bought is now worth $150,000 less. So, your condo investment was actually at a loss of $50,000 in the LONG term.
Expecting appreciation higher then 4% is unrealistic if we expect growth to remain consistant without major downturns in order to play catch up.
We need to look long term when it comes to real estate investments, just like our parents and grandparents did. Too much percieved "easy money" floating around in real estate these days.
Mike