Usually when you visit a new construction condo project, they have price lists available showing the prices of all the different floorplans, parking and locker costs. They may have a promotion such as a free locker or $5,000 in “free upgrades”. Typically you should not expect to negotiate the purchase price at a new construction site but we really have to take it case by case. If you’re looking to buy a 1 bdrm plus den for $350k in a popular building then you should expect there to be no negotiation on the purchase price.

If you’re considering a $1.6M penthouse in a small boutique building which has completed construction, and perhaps even registered, typically you might expect the builder to come down $30-$50k to get the suite sold. Personally, I don’t think developers should negotiate their prices at all. I think they should offer their best price and take it or leave it. That way every purchaser feels that they’ve been treated fairly and equally. If buyers want the lowest price for a suite, they need to be prepared to buy on the opening weekend of sales with the understanding that it may be a 3 year wait until they can actually move in to their suite. With the most reputable developers such as Tridel, Daniels and Menkes, I have never seen them negotiate purchase prices but I have seen some of the smaller developers receptive to negotiation for their more valuable suites or if you’re buying more than one.

Not a simple answer. In discussing this we’re going to assume the suite is a traditional condo representing good value in a good location such as King St W, St Lawrence Market or the Harbourfront. An example might be 954 King St W, 109 Front St E or Waterpark City. Obviously the numbers will be different if you’re considering a trendy loft or a Yorkville address which will obviously add costs. We’re going to have to make some general approximations on income and expenses. These figures will include 1 parking spot and the mortgage assumes a 25 percent downpayment paid monthly at an interest rate of 3.5 percent amortized over 30 years. We will also include a 1 bedroom plus den.

We need to look at the math from two points of view… cashflow and appreciation. Appreciation is difficult to predict but the general consensus is that 2 bedrooms are expected to appreciate at a greater rate for several reasons. Most new construction projects are comprised of many more 1 bedrooms than 2 bedrooms creating an imbalance in the supply ratio. It is likely that many of the current 1 bedroom owners who are mostly single, first time buyers will eventually want to move into a larger condo with their future partner. Also, as boomers downsize, the demand for 2 bedrooms is expected to increase. For these reasons, we are going to give 2 bedrooms a greater rate of appreciation.

Please note the ROI does not take into account the mortgage paying down the principal, vacancy or any repairs. We choose to look at ROI on a 5 year basis as we feel investors should be prepared to hold their condos for that length of time. At these prices, with 25% down, your condo investment is cashflow neutral or even about $50 negative per month in your first year. Investors will make their profits through appreciation so it all depends on which product you believe will benefit the most in the coming years. Although we believe 2 bedrooms will appreciate the most, it’s also important to consider that the largest pool of tenants are looking for 1 bedrooms or 1 bedroom plus dens. You may have less vacancy with a smaller unit but many also believe tenants in 2 bedrooms are more likely to stay longer. With 2 tenants you may feel more comfortable if one tenant loses their income, the rent can still be paid by the other.

I don’t think there is a simple answer to this question and the math alone can’t be your only guide. My personal opinion is that an 850 sq ft 2 bedroom, 2 washroom suite with parking in a good location with TTC access is the best investment in the coming years.

The Cinema Tower will be a 37 story building at the corner of Widmer and Adelaide. The developer is the reputable Daniels group who has among the highest customer satisfaction ratings in Toronto. The tower will be 37 story’s on top of a 6 story podium. Cinema Tower is the sister building to Festival Tower and owners will share many of the same privileges at the Bell Light Box.

The Daniels group hosted a Platinum Agent event to introduce the project to us lucky few who will be able to bring our clients to the first buying opportunity. Prices will start in the mid $300′s, likely around $675 – $725 per square foot. We were also able get in to see some of the completed Festival Tower suites. Our impression was that the finishes were very modern, high quality, clean lines, smooth ceilings, pot lights and quality workmanship.

You can also expect high quality amenities including a party room, fitness studio, terrace, hot tub and I’m sure it’s movie screening room will be among the best you can expect in a condominium. Kirkor Architects designed this project; you should expect lots of natural light and modern finishes. The Festival Tower is meant to be the flagship building for Daniels but since the standards continue to rise, I expect the Cinema Tower will be quite similar.

In some older condos, pools were once located in dingy basements and were rarely used by residents. Today, pools have been repositioned outdoors on rooftops with sweeping views of downtown. Surrounded by cabanas and BBQ fire pits, outdoor pools have now become a key marketing feature for many condos. Residents take advantage of them in our short summers and they are often the center of interaction and socialization.

This trend isn’t new, there are some older buildings with nice outdoor pools such as The Bentley, Polo Club, The Summit, and the Cosmopolitan. Condos amenities in general waned in the 90’s because developers thought buyers did not want to pay for their added cost in the purchase price as well as the monthly maintenance fee. But today’s new generation of condo buyers consider outdoor amenities, especially an outdoor pool, a key feature.

Casa, at 33 Charles St by Cresford Developments, has a swimming pool on the fifth-floor podium with a landscaped terrace, double-sided fireplace, dining pavilion and alfresco bar. Their fitness center also overlooks the outdoor amenities. Freed developments has built a rooftop, salt water, infinity pool at 550 Wellington for a boutique hotel experience and will also be building a 140 ft rooftop pool on top of the Thompson Residence. This will make it the longest rooftop pool in the world.

Luna, at Concord Cityplace has an outdoor pool on the 9th floor podium surrounded by tanning areas and a zen garden. At Camrost-Felcorp’s The Tides in Mystic Pointe, Etobicoke, the outdoor pool sits on the condo’s podium along with a yoga and aerobics studio. The pool is surrounded by a landscaped deck, barbecue area, whirlpool, running track and sun decks. Great Gulf Homes have taken outdoor pools over the top, One Bloor will have two outdoor pools and be surrounded by 19,000 square feet of outdoor space. One of the prettiest options I’ve seen which is already complete is the salt water pool on the rooftop of Verve which was built by Tridel.

An outdoor pool is a desirable selling feature for a condominium and is a sought after amenity. Buyers want to be able to invite friends over to the pool to cool off on a hot day. Outdoor pools and other amenities are considered substitutes for a backyard. Whether a resident has a studio or a penthouse, an outdoor pool is a key selling feature for today’s buyer.

No and not for the past 3-4 years. It used to be the case that you could buy on opening weekend from floorplans 3 years in advance at prices less than you’d see in the resale market. Today, with most new construction projects around $600-$650 per sq ft, it’s easy to find a comparable product for a lower price. The justification most often explained by new construction sales sites is that when your condo will be ready 3 years from now, the market will bring you more than what you’d pay today. They also explain that their costs have increased significantly. I do understand that land values, permits and the cost of construction have all increased which has put pressure on new construction prices.

I believe the question most want answered is if todays new construction prices of $600-$650 per sq ft and up will bring them a profit in 3 years. With most cases, I struggle to believe so. Once you factor in your occupancy costs, closing adjustments and the selling costs… you would have to sell your new suite at around $650-$700 per sq ft to see any profit. I was much more comfortable recommending new construction projects when they offered values at or below current market prices.

There are still some good new construction options around though if you search hard enough and believe in value investing. One of our clients recently secured a couple suites at 530 St Clair Ave W. An upcoming neighbourhood which we thought offered very good values with suites under $500 per sq ft. There is easy access to the subway, new streetcar lines along St Clair and all the amenities of a developed neighbourhood. Please feel free to contact us to discuss any other new construction option as well.

If you’re looking to buy new construction as an investment or for personal use, just contact us and we’d be happy to help you with your search.

If you agree that the most realistic way of measuring who the best condo developers are would be to survey customer satisfaction, then JD Power has already done the job for us.

Their 2009 survey measured the customer satisfaction of eight factors. These were the home quality, suite and building readiness, sales staff, service and warranty staff, building and shared features, price and value, physical design and design centre. The study surveyed 745 condo owners in the GTA who registered a newly built condo in the previous year. For each developer, I will reference a condo that they’ve recently built or a new project to help you with your search.

1st Place: Tridel.
This is the fourth year in a row that Tridel has won this well respected title. Our personal experience from our clients is that it is well deserved having earned a great reputation for the quality of their product and service. A couple recent projects they’ve finished are Verve around Jarvis 7 Wellesley, The Element at 20 Blue Jays Way or The Icon at Wellington and John St. Some of their newer projects include One Old Mill, Reve and 300 Front.

2nd Place: Daniels.
Many are already aware of Daniels quality and it’s shown in the popularity of some of their recent buildings. Most notably their Festival Tower project was among the most popular we’ve seen as buyers devoured their inventory… now the anticipation for it’s sister tower Cinema Tower has begun!

3rd Place: MintoUrban Communities.
Minto stands out with either it’s great values or luxury projects. Their project at 775 King St W represented a good quality downtown location at attractive prices. Value investors should watch for other new launches from Minto in the downtown area if they’re looking for an investment with good cashflow. If you’re looking for more of a luxury building, it’s Yorkville project The St Thomas should be considered. One of their recently completed projects is Quantum Towers which is located near desirable Yonge and Eglinton.