Greed
Greed is bad. Greed distorts reality and greed in the condo market hurts both buyers and sellers, consumers and developers. Recently I’ve noticed some signs of greed finding its way into the downtown condo market. To me, this is a sign the market is about to change as an impending inventory surge in the resale market in the latter half of this year will affect all sectors of the market including new developments.
Here are a few recent observations:
- One developer recently offered 5% deposits on their remaining suites, but they also raised their asking prices by as much as $20K on each suite! I was very excited about this particular offering for my clients until I discovered the massive price increase that preceded it, therefore I could not in good conscience feature it on my blog.
- Another developer I have been dealing with is ‘capping’ closing costs at $8000 for 2 bedrooms and $7000 for 1 bedrooms – not much of a cap at all when you consider the industry average is something more like $5000 which is up from about $3000 a few years ago.
- Finally, another developer, in my opinion, raised prices far too much between the VIP stage and the public release stage. They had huge demand for suites at the VIP stage but they shut buyers out by limiting the number of suites they released, then after they raised prices demand seemed to wane off significantly as buyers moved on to other projects.
These are just anecdotes, but in my opinion they show that the tide has turned in the condo market – we have reached a tipping point and moving forward prudent developers will recognize buyers won’t buy just anybody’s cockatoo – they need to offer value and need to be reasonable, especially with investors.
Questions or comments? Leave a comment or email me.
