It appears we finished the townhouse renovation project (late unfortunately) and launched the MLS listing at the height of the viral shutdown that is gripping the entire planet. With the pause button hit on the global economy, livelihoods in peril, and governments hitting the print button on the bailout/money printing machine, can we actually expect to sell this house? Will any prospective buyers even want to go and see it? These are the questions we will find the answer to in the coming weeks. Until then, I expect little to no realtor traffic.
Let us take a deeper dive into the situation we have at hand at the renovation site;
The finished unit is priced below cost of production - that’s right, you couldn’t build it for what we are selling it for, complete with a $50k renovation. Attached two car garage is another amenity very hard to find in the inner city at twice the price.
Just the air conditioning and window covering/blind package account for 3% of the purchase price. That is a massive allocation to optional items. In a new build infill, as is the norm, we don’t include AC or blinds unless the buyer request it. These would account for about 1% of the purchase price of an inner city property.
Mortgages are available at almost unheard of low rates (if you have a job and can qualify). We may see people getting sub 2% loans?
Owning is actually cheaper than renting. This isn’t common in major cities today. With the high price of housing today, usually the rental income does not even cover the mortgage, not to mention upkeep, taxes, and capital expenses.
Massive government bailouts and money printing to avoid a deflationary collapse of the monetary system could eventually lead to increase in prices of hard assets and a rise in interest rates. That could make owning a property a great hedge against inflation and a way to lock in a shelter payment that will not increase over time.
Renovated homes that are purchased have no GST to be payed upon the sale. This is a %15k savings vs a new home. Compare this to the land transfer fees paid in Toronto for a buyer to purchase a property.
So I’ve now basically convinced myself to buy the townhouse and keep it. Unfortunately living in the ring road communities doesn’t work for me with all my infill builds coming up (or on hold?). Despite the crazy world we live in, I think this townhouse is going to sell.
New hardwood, new window coverings, new lights, new casing, baseboard, trim, paint, door hardware, appliances, cabinets, carpet, tile, countertops, sinks, faucets…