Quote:
Originally Posted by Tacheguy
The growth of the burbs in my view has been driven by the strong preference most young people have for new homes. That is where the affordable new homes are. There is no inherent desire to live in a treeless farmer's field. It is the new house. I have done it twice, as have the vast majority of my contemporaries. Until recently there was really no choice other than undertaking some formidable addition/remodelling project.
I do believe that, given a choice, most young people would prefer to have their new home located more centrally. I have been quite struck by the number of young families moving into those infill home in North St. B. They can't seem to build them fast enough. And from what I understand the prices are very high. I think infill is going to become a much more prominent feature of this city in the future. And that to me is a very good thing. Mix the old with the new!
|
A note about the practicalities of infill re-development/renovation: where the financing is concerned, you need a much stronger cash position to do this sort of thing. If you're buying a home and tearing it down, barring a very solid financial position, the bank won't let you do the average 10% and then carry on with a construction mortgage. They'll only finance 50% of the value of the land. If you buy the house for $200K and they appraise the land at $100K, that's $100K cash you need, plus another 20% for the construction of the house, plus you have to be living somewhere while the house comes up. It's gets to be quite expensive. And this is generally why you see homebuilders doing it and rarely Joe Q. Public.
As far as the renovation goes, you can always buy a house and apply for a mortgage top up that essentially financing you to an 'as improved' value. But then you have to be incredibly smart about where and what you buy. If you purchase the home with next to no equity, you still have to maintain the ratio as you go. So if you decide to buy a house for $350K with 10% down (Plus CMHC, Plus closing, plus, plus, plus, as you know...) and you need to put $100K into the house to 'make it yours', so to speak, then A) The bank has to find a comparable in the area that justifies the $450K investment you'll be holding onto (which can be difficult), but also; B) You need to come up with another $10K+ to keep yourself in good stead with the bank and to top up your CMHC. And that's only if things go perfectly as planned where you're only out of the house for the 6-8 mths the contractor originally promised and where they find nothing else wrong with the house. Neither of those things
ever happen! Oftentimes the more likely scenario is that the bank lets you go to a certain point and makes you pick up the difference. 'Improvements' don't often mean a full gut and reno on the bank's tab, so you're back into pocket
So when you're making the comparison, you're likely getting a smaller house with a whole ton of hassle, more risk, and you ended up owning a house that likely can't sell for what you're into it for. On the other hand, you go to Gino's Homes and they build you a house for $450K and that's it. It's warranted and it's brand new.
It's not the way I live, but I see the appeal.
Prev
Linear Mode
