There’s an article in the Globe and Mail from the end of last week about the lackluster performance of Vancouver condo prices over the last several years.
Many people seem surprised that condo prices have stagnated or fallen over the last few years, and the extra cost of fees and maintenance tend to turn that into a loss.
…interest and principal payments on the median condo in Vancouver last year were a full 20 per cent more than payments in Toronto. For that reason, Mr. Hynes, who’s become a father since he purchased his 620 sq. ft. condo, will rent out his condo and use the money to rent another place, in an area with better value. Mr. Hynes paid $182,000 for his condo, which was $7,000 below the asking price. He was thinking of selling the unit until he saw that his neighbour on the same floor, with the same suite, has just listed for $179,000.
“I thought it would at least keep its value, so I’m surprised,” Mr. Hynes says. “If it had kept its value, I definitely would have sold right now.”
He says his work colleagues, friends and relatives are facing the same situation. His cousin just sold her condo after renting it out for five years, and she lost money on it.
“It was for the exact same reason I’m losing out,” Mr. Hynes says. “Because there are so many condos in the area.”
Fortunately for Mr. Hynes, the Conference Board of Canada is forecasting lower starts in the future and increased demand for condos. They are predicting a slight rise in prices between 2014 and 2017.
Mr. Hynes says he’ll hang onto his condo long enough to see that happen.
“I’m in a situation where I cannot afford to sell it, so I’m going to be renting it out, probably next month.
“For me, it feels as if I am moving backward in life, but I have no choice, because I need to move on because I have a family now. I am going to move out and go rent a basement suite in Coquitlam.
“I know a lot of people can’t afford their mortgages because there are tons of cheap basement suites in Coquitlam.”
Read the full article in the Globe and Mail.