By RITAS MALAWI ReporterThe real estate agent and property management consultant who helped sell two Phoenix car rental properties to condo owners in the heart of Toronto has said his company’s low rent prices, coupled with the high price of new condo construction, are pushing condo owners out of the market.
In an interview with The Globe and Mail, Bruce Ouellette, president of Ouellet Properties, said he was surprised that the condo market in Toronto is so volatile.
“It’s hard to explain what’s happening in Toronto and the province of Ontario,” Ouellett said.
“There’s no question it’s a volatile market.”
The Phoenix Car Rental Co-operative’s Toronto condo listings were up by more than 50 per cent in just a year.
“I’ve been a condo owner for 15 years.
When we were starting, it was the hottest year in the market,” Oulelette said.”
There were no new condos coming on the market at that time.
The first condos came on line in 2004.
The condo market is particularly sensitive to the cost of construction.”
I don’t think we’ve ever seen this kind of price increase in the last year.”
The condo market is particularly sensitive to the cost of construction.
Ouellette said he thinks the condo construction boom is “really driving the price up.”
In the past decade, Toronto condo buyers have experienced double-digit price increases.
The city’s condo prices have shot up nearly 100 per cent over the past two years, according to real estate website Trulia.
That means a typical Toronto condo has been selling for $2.25 million in the past year, which is more than double what it was worth just two years ago.
“The condo boom has been phenomenal,” said Ouelle.
“It’s pushed out condo buyers, who are not only losing money but are having a hard time finding a place to rent their condo.”
The realtor said that condo owners are also being pushed out of Toronto because of high condo taxes.
The condo taxes in Toronto are about $5,000 a year, according the Toronto Real Estate Board.
The average condo tax in Vancouver, where Ouellev is based, is $1,800 a year and the average condo price is $4.5 million.
“If you’re paying a condo tax, you’re also paying a huge amount of property taxes.
So you’re not paying the tax you’re supposed to be paying,” Oulet said.
The high cost of condo construction in Toronto has pushed condo owners to sell their units.
Oullette said condo owners need to have a higher income to afford a condo.
“They can’t afford to build new condos in Toronto because they don’t have enough money,” he said.
Oulelette believes that condo sales will start to increase as condo prices rise, as developers ramp up condo construction.
“When condos go up, we’re going to see condo sales go up because the price is going to go up and that’s where we’re starting to see condos going up,” he added.
Toronto condo owners will be able to buy their condo at a much lower price than a comparable condo would have been.
“We’re going into a new era where people are going to be able and willing to sell and buy condos,” Oullette added.
Ouldes said the condo building boom will drive down the cost for condo owners, but that condo buyers should be aware of the high condo costs and should look into other ways to save.
“You can’t buy a condo and expect to be happy forever,” he warned.