h/t to Roger Need for suggesting this post. I'll leave it up top for a few days to see if we can drum up some good insight and discussion and so I can complete some school work too.
Let's start with Shutters Spa and Residences: I used to see this advertised all the time in the TC. Not today. Anyone know how much the starting price was? Anyone own a unit?
Sister project to Shutters is The Falls: Their website says starting price is $389K, but the TC has an advert today for a 6th floor, 1 bed, 708SF unit for $409K. I guess if you don't mind living above Starbucks and her jazz-lite till 10 pm you can save yourself $30K and live on the 2nd floor.
Prefer golf to the downtown spa lifestyle? Money to burn? Have no fear, Victoria's got it here: The Sayward Hill project offers "million dollar views for free", and all you'll need to get started on this new, exclusive lifestyle is a mere $720K for over 1800SF of living space looking over the par 3 pitch and putt and Cordova Bay Golf Club.
Don't want to spend that kind of cashola? Don't plan on making Victoria your home more than one week per month? Not a concern here at Parkside Victoria where for just $125K you can get luxury living at a quarter of the price. My favourite thing about this development? When I enter in my criteria into MLS (you know, under $200K) this one always comes up. I figure we buy a share, live at home with the in-laws 3 weeks per month and live it up the rest of the time. Maybe we'll make some career moving contacts?
Like urban living without the condo? Well Redstone just may be for you. Priced between $485K and $659K these homes without the size and hassle of the real thing offer urban living in a unique "masterpiece of architectural design". Another sister property, Vicino, in James Bay is over 60% sold and starts at just $349K.
And the final piece in our luxury living puzzle? Bayview. Now I can't find any Internet links to back up these claims, but I'm pretty sure Mike Harris and Brian Tobin are involved in this project... at least as unit owners (I clearly remember the unveiling featured Alan Lowe, and the two aforementioned ex-politicos.
So what is the point of this post? Well, first off my cynicism and lame attempts at humour should not be misconstrued as contempt for any or all of these projects and what they bring to our city. I'm glad they are here and feel open to the idea of more. I think responsible development is generally good, especially if it considers the community and gives back perks in the form of green technologies and public green spaces. It means more natural financial gain for business owners and employees alike in this town and hopefully a reduction in the reliance of seasonal tourism for some businesses.
But really, who can afford to live in these places at these prices? Let's use Sayward Hill as an example because it is probably median price for luxury in this town. I can't back that up, but for this hypothetical it seems to me that is unnecessary.
Purchase Price: $720K... I'm a shrewd negotiator so I got them to eat the GST.
Down Payment: $180K or 25%. I'm a savvy investor, I know the market is high, my returns in stocks will likely be better so I won't keep all my cash in RE.
Monthly mortgage payment: $2700; I'm a high net-worth person, the banks appreciate my business, I have no trouble getting 5% interest rate for 5 years.
Fundamentals: if $2700 represents 30% of my available monthly income, as it should, then my monthly income is somewhere around $9K give or take a few hundred depending on how the bond market is doing this month. What do I have to have in my savings to generate that kind of dough? Only about $1.7-1.8 Million if my bond yield is around 5-6%.
We had a really interesting conversation with 5 adults whom I would guess to be roughly in the age demographic of buyers of these types of units. It was insightful to say the least. 2 of them were from TO and simply said, you sell your North Toronto home for $550K-$650K once your kids are gone, then 'downsize' out West to one of these units. You get luxury, a beautiful city, fresh air, rare snow (and all the other things we know about the west coast lifestyle) all for roughly the same equity you had in your TO house that was paid for a decade ago. Your retirement income doesn't change no matter where you live, and in effect your purchasing power goes up a bit out here because generally speaking the cost of living is cheaper here than in TO.
That part of the conversation made perfect sense. And maybe that's the answer to this question?
Those of us from out here already didn't quite see it that way. We just see condos costing more than the homes we grew-up or still live in and can't fathom the idea of selling a perfectly good house at $600K to carry a mortgage on a relatively good-sized condo that, while may be a luxury-upgrade, comes at a cost of high monthly assessments and a new round of keeping up with the Jones' in the parkade where our Toyota Corolla's don't fit in with the sea of BMWs and Mercedes. So we sell our house, buy a $450K, 800 SF unit, not quite on the water, invest the $150K difference elsewhere and there you may have the buyers of the lower priced units.
So next question? Whose buying those $950K houses in Oak Bay? I could chase my tail around these questions all day. So I will stop and let you try to make some sense of it for me.