Condo proerty values
September 28, 2005 11:28 AM Subscribe
What types of nearby land developments can increase or decrease the value of a condo?
We are thinking of buying a condo under development in downtown Montreal.
1) They are planning to build a supermarket adjacent to the building.
2) Other probable developments are an entertainment/hotel complex 10 minutes away. I know this could decrease values of homes nearby (nuisance factor), but how close is nearby?
3) The condo is a couple of blocks away from the Bell Centre.
Is there a resource that lists what types of nearby developments can increase/decrease property values, or do you know of examples from experience?
We are thinking of buying a condo under development in downtown Montreal.
1) They are planning to build a supermarket adjacent to the building.
2) Other probable developments are an entertainment/hotel complex 10 minutes away. I know this could decrease values of homes nearby (nuisance factor), but how close is nearby?
3) The condo is a couple of blocks away from the Bell Centre.
Is there a resource that lists what types of nearby developments can increase/decrease property values, or do you know of examples from experience?
Public transportation availability, ground level retail, anything that adds density (aside from a big high rise public housing project a la Cabrini Green) can be good.
As for decrease, big, empty space wasters, like parking garages, and bad things, like toxic waste dumps, are not so good for the property values.
posted by Pollomacho at 11:45 AM on September 28, 2005
As for decrease, big, empty space wasters, like parking garages, and bad things, like toxic waste dumps, are not so good for the property values.
posted by Pollomacho at 11:45 AM on September 28, 2005
If this is a high-rise condo, usually one of the big attractions is the view. If there is potential for other high-rise construction immediately surrounding the building, that could block views and hurt property values.
posted by pitchblende at 11:59 AM on September 28, 2005
posted by pitchblende at 11:59 AM on September 28, 2005
I can't say anything about Montréal, but I'll emphasise part of GuyZero's comment above - if the city decides to go condo-crazy in the way that Toronto has (CityPlace is just the prime example), then you might get a less than stellar return on your investment.
I purchased a unit in an authentic loft conversion in Toronto a few years ago, and the massive development currently underway in the city probably cost me about $20k on the sale a couple of months ago.
The location sounds like it's probably okay, but if there's a lot of land around that could have towers of residential units stuck into it, be careful. I think you're more likely to get a good return on a house.
posted by lowlife at 12:19 PM on September 28, 2005
I purchased a unit in an authentic loft conversion in Toronto a few years ago, and the massive development currently underway in the city probably cost me about $20k on the sale a couple of months ago.
The location sounds like it's probably okay, but if there's a lot of land around that could have towers of residential units stuck into it, be careful. I think you're more likely to get a good return on a house.
posted by lowlife at 12:19 PM on September 28, 2005
There's a supermarket being constructed next door to my condo - a realtor that I spoke to said it should increase the value of my place by 10-20%.
posted by bonecrusher at 1:09 PM on September 28, 2005
posted by bonecrusher at 1:09 PM on September 28, 2005
Ha! That's my old abattoir, Capn! My low-rise condo was about a block or two from that place. I only smelled it once in a while and, honestly, I've smelled worse on the streets on NYC on garbage day. Heck, after my first kid was born our diaper bucket was a much bigger concern in the olfactory department.
I paid approx $200K to buy the place, sold it two years later for $300K. Like I said, in an urban area, all the bad stuff is already there. No one will approve a new abattoir and existing ones may close, so you've got nowhere to go but up.
posted by GuyZero at 1:18 PM on September 28, 2005
I paid approx $200K to buy the place, sold it two years later for $300K. Like I said, in an urban area, all the bad stuff is already there. No one will approve a new abattoir and existing ones may close, so you've got nowhere to go but up.
posted by GuyZero at 1:18 PM on September 28, 2005
Is there a resource that lists what types of nearby developments can increase/decrease property values
Studies that are looking to actually quantify these effects are kind of hard to do and are often interested in finding the effect of one specific amenity on housing prices, like cleaner water or better schools.
Here's a study that uses some pretty old data from Quebec. The thing you'd be interested in from that study would be the coefficient on their "ACF2" number, which is negative and significant. This would say that people value being closer to the basket of "local level services" they created, which includes shopping (i.e. the farther you are from the services, the less the house costs). That's about the only one I could find from Canada that included something of that nature.
There's also this, from the Wall Street Journal earlier this year: "Indeed, cities trying to improve their downtowns are seeking out grocery stores. "Many cities, particularly the densest parts, have been dramatically underserved by grocery stores for the past couple of decades," says Michael Beyard, a senior resident fellow at the Urban Land Institute." They're a major factor in stabilizing neighborhoods and rising property values.""
With entertainment and sports, there's a some other issues that can pop up like having a flock of bars nearby.
posted by milkrate at 1:19 PM on September 28, 2005
Studies that are looking to actually quantify these effects are kind of hard to do and are often interested in finding the effect of one specific amenity on housing prices, like cleaner water or better schools.
Here's a study that uses some pretty old data from Quebec. The thing you'd be interested in from that study would be the coefficient on their "ACF2" number, which is negative and significant. This would say that people value being closer to the basket of "local level services" they created, which includes shopping (i.e. the farther you are from the services, the less the house costs). That's about the only one I could find from Canada that included something of that nature.
There's also this, from the Wall Street Journal earlier this year: "Indeed, cities trying to improve their downtowns are seeking out grocery stores. "Many cities, particularly the densest parts, have been dramatically underserved by grocery stores for the past couple of decades," says Michael Beyard, a senior resident fellow at the Urban Land Institute." They're a major factor in stabilizing neighborhoods and rising property values.""
With entertainment and sports, there's a some other issues that can pop up like having a flock of bars nearby.
posted by milkrate at 1:19 PM on September 28, 2005
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My experience with condos is that their values usually go up from the price quoted before the building is built - essentially, it's a discount for the risk you take that the whole enterprise may go bankrupt. Other than that, price changes seems mainly to be a function of how well the condo is kept up. Is the condo association effective? Do they spend the condo fee money well?
Other than that, most other factors that influence price seem to be macro-economic. Low interest rates have boosted real estate prices lately, at least in Toronto. Rising interest rates may lower the resale value of your condo. How many units are being built in Montreal versus the overall migration in or out of the city? Are rental vacancy rates high or low, rising or falling? If vacancy rates rise, rents will fall and possible buyers may decide to keep renting instead of buying. etc, etc, etc.
The only concrete example I can think of in Toronto that has affected condo resale values is the huge glut of new condos being built. If a brand new building gets put up next door to your, that may be bad. Otherwise it's unlikely that anything offensive, like an animal rendering plant, is going to get built in an urban center.
posted by GuyZero at 11:42 AM on September 28, 2005