1 Jarvis Street | 44m | 15 fl | Under Construction

[TheRitsman]

Likely filling in for safety until the permits for excavation and shoring are issued. Still in review according to city site.

[Innsertnamehere]

It's pretty standard for it to be backfilled following demolition in order to allow the shoring rigs to operate.

[davidcappi]

Sold out in 48 hours.

[TheRitsman]

Originally Posted by davidcappi

Sold out in 48 hours.

I'm assuming you're talking about public sales? There were posts of people buying them back in March and April.

[TheHonestMaple]

It's clear that the demand for condos in downtown Hamilton is enormous. Why the city works so hard to deny applications is unbelievable. This city could be something special, a mini version of Toronto. But instead we have had years of stagnation because of an incompetent council and staff.

[ScreamingViking]

Originally Posted by TheHonestMaple

It's clear that the demand for condos in downtown Hamilton is enormous. Why the city works so hard to deny applications is unbelievable. This city could be something special, a mini version of Toronto. But instead we have had years of stagnation because of an incompetent council and staff.

I wonder how many are speculators or looking to rent their units out, vs. people who actually intend to live in them.

But the demand is definitely there and growing.

[Innsertnamehere]

Mostly investors I imagine, looking to rent out.

Hamilton is going to explode in condo construction in the next decade looking at the development pipeline. What’s under construction right now barely scratches the surface of what’s to come. It’s going to be a very different city in a bit.

[Dr Awesomesauce]

Originally Posted by Innsertnamehere

Mostly investors I imagine, looking to rent out.

Gross but what can you do...?

[HamiltonBoyInToronto]

It's not gross... people buying condos and people renting them...not like there's a huge supply of nice apartments for people to rent in Hamilton...this fixes that problem ...and it is still money being invested in Hamilton and property taxes being paid in Hamilton... this is a win win win

[Berklon]

Yeah, I often hear complaints that there just aren't enough rentals available for people who can't afford homes. Renting out these condos just adds to the supply that's sorely needed. This is a good thing.

[ScreamingViking]

So long as they're doing it responsibly.

[Beedok]

Originally Posted by Berklon

Yeah, I often hear complaints that there just aren't enough rentals available for people who can't afford homes. Renting out these condos just adds to the supply that's sorely needed. This is a good thing.

That only really works if the places are being rented at a loss, otherwise renting is more expensive than the mortgage payments would have been and it’s not really helpful to those who can’t afford homes.

[TheHonestMaple]

Originally Posted by Beedok

That only really works if the places are being rented at a loss, otherwise renting is more expensive than the mortgage payments would have been and it’s not really helpful to those who can’t afford homes.

The reason the mortgage payments are lower than the rent is because the owner of the unit had to put up a huge amount of cash to own the place, a down payment. If you had no down payment mortgage (they don't exist, no bank will do that obviously), the payments would be approximately equal to the going rate for rent. It's not complicated. It's market economics. A unit is worth what it's worth, whether that be in the form of monthly rent of the sell price.

If you can't afford the down payment, then yes, sorry, you are going to have to rent and be at the will of an investor.

If you own a condo it is not your duty to rent it out at a price that is 'affordable' for others. It is your unit, you can charge whatever you please - i.e. the market value of the place. For some reason in Canada people believe that investors are nasty evil people that owe poorer people a cheap place to live. Sorry, If i'm buying a condo to rent it out, im going to rent it out at whatever the market is willing to pay.

[Berklon]

Originally Posted by Beedok

That only really works if the places are being rented at a loss, otherwise renting is more expensive than the mortgage payments would have been and it’s not really helpful to those who can’t afford homes.

As HonestMaple said, if people can come up with the down payment for a home - then buying is probably the better option and maybe cheaper. But that's the problem - people are currently renting because they can't even afford the down payment and maybe even some of the other costs of ownership (ie. maintenance fees for a condo).

There are rental apartment buildings kicking people out to renovate and turn into a condo. Many of those tenants are complaining that they can't afford to buy a unit there or anything anywhere else and there's little supply in the rental market.

Someone buying a condo unit and renting it out is a godsend to them because that unit is useless to them if it were only available to purchase.

[TheRitsman]

The other issue is that typically that's not even true. Rent is nearly always cheaper than mortgage payments plus additional costs. This is largely because most rental units exist on properties that were purchased for less, many years prior. Ave rent for a 1bdrm is much much cheaper than mortgage+additional costs for the exact same size unit.

It's only new premium units that command such a high price. The main issue is too many rental units come on the market raises ave. rent across the board, which is why a steady supply of housing is good. The other issue is that investors buying up houses for rentals is pushing prices even higher exacerbating the problem, and making the purchase of property even more lucrative.

[TheHonestMaple]

Originally Posted by TheRitsman

The other issue is that typically that's not even true. Rent is nearly always cheaper than mortgage payments plus additional costs. This is largely because most rental units exist on properties that were purchased for less, many years prior. Ave rent for a 1bdrm is much much cheaper than mortgage+additional costs for the exact same size unit.

We're talking about renting out condo units.

[TheRitsman]

Originally Posted by TheHonestMaple

We're talking about renting out condo units.

Yes but the existence of condo rentals are not within a vacuum. If I have 100 units available for $5 each, and you take 40 of them off the market for rental units, there are 60 units left making them rarer. If there were 100 buyers before, they'd all have paid $5, now they will fight for them, raising the value to maybe $10 or $15. This means new units built now sell for $15 and for an investor to make money on their rental they need to raise the rent price to reflect that. It's a push and tug between private rental units and private ownership. It's simple supply and demand.

The quick sale of KiWi, Jarvis and Platinum shows there is high demand in Hamilton, but low supply, and the same can be said for rental units, which have continued to increase in price as a result of low vacancy rates.

The tl;dr being that increases in housing prices cause higher rents, and purchasing of rental units causes higher housing prices, which in turn cause higher rents, and the cycle continues.

[TheHonestMaple]

The market doesn't really differentiate between owning and renting. The cost of housing is the cost of housing. If you had a no down payment 25 year mortgage on a 1000sqft condo unit, the monthly payments would be approximately equal to the rent for a similar sized unit. Assuming they were purchased and leased on the same date.

That's the market price of a place to live. It costs whatever people can afford to pay. There is no magical difference between renting and owning as some people seem to think. Now the reason owning is generally cheaper as far as monthly payments are concerned, that's due to the reason I stated above - your down payment makes the monthly payments lower.

[TheRitsman]

That's not what I'm talking about, I'm talking about availability of units. If less units are on the market, it pushes cost of the units left upward. It's a simple supply and demand curve. You can argue all you want that price of living somewhere is the same month by month, but those looking to purchase is not a completely elastic group. Some may choose to rent, but many will simply pay more to buy, or buy further from a CBD. As in my example, if there were 100 home buyers for 60 homes, some may choose to rent, maybe 20, but 20 others would still want to buy housing. 80 buyers and 60 homes, means that someone is not getting a place in the housing game of musical chairs. This creates competition (hence the musical chairs comparison).

You are right that there isn't enough rental housing. This is very true, but there not enough homes to own either, causing upwards pressure on market prices, and therefore also raising the price of rents. As you indicated, rents on new builds are equivalent to monthly price of that new build (roughly), but that rental price follows market trends all the same.

We're not disagreeing, we're agreeing, I'm adding though that the caveat to creating more rental units through private condominium ownership does effect housing prices and rental prices in an upward motion.

[TheHonestMaple]

Originally Posted by TheRitsman

We're not disagreeing, we're agreeing, I'm adding though that the caveat to creating more rental units through private condominium ownership does effect housing prices and rental prices in an upward motion.

This is where I disagree with you. Adding more rental units through private condominiums actually decreases the prices by adding to the supply. We should not be begging the city to add more 'affordable housing' (as so many misinformed folks on this forum seem to believe), we should be pressuring the city to approve more condo developments.