Helen Morris - National Post
When it comes time to sell your condo, you want to make sure it stands out from the crowd and you get the best possible price. If a new condo building has just been completed next door to your older place, the new units will be competing to catch the eye of buyers. A number of factors will determine if the new place will inadvertently force you to reduce your price or make it harder to sell.
“Is the new building cutting out your view? It’s back to location, location, location,” says Ed Saxe, president of the Ontario Association Appraisal Institute of Canada. “In Toronto, if your existing building has a view of the waterfront and they put up a 30-storey building in front of you, most purchasers or homeowners would say, ‘Now my value has decreased because there goes my view.’ ”
If the new building does not have a physical impact on your place, then it need not damage the prospects of your sale.
“A lot of times [in today's] market the square footage price is actually going up. It may cost more to get the same amount of square feet today than it did when your building went up,” says Andrew Bodnar, sales representative with Re/Max Condos Plus brokerage in Toronto. “One of the positive benefits [your older place has] is that typically older layouts will be larger.”
Mr. Bodnar says the age, style and condition of your older condo will affect the level of interest from buyers; not all buyers will favour brand new units.
“Inventory is one of the big things that … we don’t have. If you’re trying to buy a unit in the city right now, it would be common to get into multiple offers,” Mr. Bodnar says. “If you’ve got a place that’s available for resale now, there’s a lot of buyers on the market.”
Another selling point for your resale place is that you can provide buyers with a clear track record of condo fees and maintenance history.
“On the new building, maintenance-fee pricing may work for the first year then they realize they don’t have enough and [fees increase],” Mr. Saxe says. “If you look at your 20-year-old building [you can see] if they haven’t built up the reserve fund properly.”
Mr. Saxe says the size and type of accommodation, amenities, parking facilities and other attributes of your resale condo may be so different from the new place next door that you could end up marketing your place to a totally different set of buyers and not be in direct competition at all.
Mr. Saxe says the price and saleability of your condo is much more likely to be affected if it is part of phase one of a development and phase three has just been completed.
“Phase one to phase three, your amenities are basically the same,” Mr. Saxe says.
In a downward market, Mr. Saxe says resale places may struggle against competitively priced new, broadly similar, units next door. Equally if the market has risen, your slightly older, perhaps less expensive place, could be just what the Toronto condo buyer is looking for.
