I took a look at what developers are charging for parking spots on newly built condos locally. Tribute has several towers on Simcoe and the lowest priced unit with a parking space is listed for $714,000. This unit is 828 sq feet. Another unit with no parking and at 482 sq ft is priced at $428,500. If you dig a bit deeper, Tribute advertises surface parking valued at $35,000 and for an underground spot you will pay $45,000. Parking spaces are subject to HST so the underground one will actually cost $51,000!

I recently learned on a blog penned by a realtor in Toronto that the average price for a new construction parking space is around $200,000. Assuming that the average parking space is 8ft x 14ft that works out to $1,800 per square foot. Yikes!

If we look at resale condos locally there are many that offer parking spaces and the prices seem to be much lower than new construction prices. Here are a few examples.

• 2550 Simcoe St, Oshawa. 599 sq ft with underground parking. Selling price $493,000.
• 44 Bond St, Oshawa. 1,100 sq ft with covered parking. Selling price $485,000.
• 55 William St, Oshawa. 1,100 sq ft with underground parking. Selling price $485,000
• 650 Gordon St, Whitby. 1,100 sq ft with underground parking. Selling price $850,000.
• 1880 Valley Farm Rd, Pickering. 1,100 sq ft with 2 underground parking spaces. Selling price $855,000.

By doing some research it is easy to determine that resale condos are much better value than buying new. Compare the 428 sq ft new construction condo with no parking at Tribute in Wynfields to the 1,100 sq ft on Bond St. Bond St. is almost triple the size with a parking space at only $56,000 more. If you want to compare prices per square foot Bond St. is 440 per sq ft and the new condo is selling for $890 per square foot.

The appeal for new condos is due to the fact that many Buyers are looking at them as investment vehicles and are hoping with a 1 or 2 year move in date, the market will rise in value allowing the units to be sold and the investor making a tidy profit. A unit on Simcoe Street recently sold for $469,000 which included a parking space. The Seller purchased the condo as a brand-new unit for $326,000 in December 2022. This is the goal of many preconstruction Buyers.

If we look at the condos that sell as resales, most of them are sold to Buyers who are looking for a home to live in. There are still some investors in the market but when you look at the costs of maintenance fees factored into the monthly costs, an investor is better off with a freehold property. Looking at the best values available for resale condos, I feel the best value is 900/700 Wilson Rd. The condos in these two buildings all offer 2 parking spaces, floor plans between 1,500 – 2.000 sq ft and have amazing amenities. The next best offering are the Tridel condos at Valley Farm Rd. Pickering. These buildings have similar size units as Wilson Rd. and many have 2 parking spaces, however they are walking distance to the Pickering Town Centre and 5 minutes from the GO station.

Buying preconstruction condos or detached homes is a bit like rolling a dice. You are gambling that when you take possession in a year or two that the market will have risen, the mortgage rates have been stable, and you can see a return on your investment. The above example where the Buyer paid $326,000 for the unit in 2022, they would have ended up with a mortgage of at least $260,000 and with a mortgage/tax/maintenance payment of about $2,000/mth and the unit would most likely not rent for that amount. (Currently, with the increase in mortgage rates that same payment would be about $2,360/month.)

Preconstruction purchases are more about investment, whereas resale condo purchases take place with Buyers looking for homes. The upside is, if you are a Buyer looking for a resale condo over the next few months, the resale market may be flooded with investors looking to unload their properties as they take possession of them. This may be a time where Buyers who have held off end up with the best bargains.

If you are interested in looking for a condo to purchase or just want to discuss the market in general, I can be reached at lindsay@buyselllove.ca or 905-743-5555

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