Measuring the condo market


It’s pretty typical for condo developers to be uncertain about what will sell. As a result, they offer a variety of unit sizes and configurations. If the smallest, or largest, units don’t sell well, they will redivide the space into the unit sizes that are popular. So yes, many builders do offer large family size units of two and three bedrooms … it just that they don’t sell.

Builders sometimes stratify the building by putting more smaller units on the lower floors and larger more expensive units on the upper floors. Certainly it is common for the “penthouse” units to be larger and more expensive. In this sense, the building becomes a more mixed income community than if all the units were identical from floor to floor.

It is more difficult to redivide the space if every second unit is sold, so builders release some floors for sale and hold back others. This allows them to announce new release of (modified) floor plans mid way through the marketing process, even when they had said the place was 80% “sold out” months ago.  

Some builders do this subtly, by not posting any diagrams of the whole floor layout. You choose your model, the sales agent tells you it is available on floors x, y, and z; you don’t know that maybe next week it will also be available on floors a, b, and c. And if you thought the building had mostly large suites and you liked that, well, it might be a very different mix of suites by the end of the process.

I’ve been to sales offices that show floor plans on the wall, but you have to be sharp to notice that some whole floors are missing. I was surprised to see Ashcroft being so obvious at its sales centre for the Our Lady of the Condos site on Richmond Road:

You might notice that the units sold tend to be the studio and one bedroom+den units; the two bedroom and two bedroom+den units in the corners are slower selling. I fully expect the plan offering to be updated shortly with new layouts, emphasizing smaller units. Also notice the units on the right side, marked with blue dots, facing the school playground, are not released … will they be released later, combined into larger units, or what?  The ones on the left will face another building over the “arch”.

The two buildings across the street, 101 and 111 Richmond Road are almost fully sold, with a majority of units being one bedroom. Starters, Investors,  or Empty Nesters I guess. In about five years, those owners who love the place but don’t want to sell will start bashing units together. Usually this is an adjacent unit; sometimes it is one up or down making a two storey unit.

5 thoughts on “Measuring the condo market

  1. I’m no expert, but I’ve also noticed that many condo tower developers (e.g., Domicile) seem to put more of the smaller units along (what I would consider to be the more desirable) south and west sides, and tend put the larger units closer to the north-east corner of the building, which I would consider less desirable for sunlight exposure. This seems like good revenue maximization, since two small apartments sell for more than one larger apartment, but it’s also one of the reasons we never seriously considered buying a condo apartment for ourselves. (that and the fees, which still sometimes seem to include flat rates for water, heat and/or electricity)

  2. Dont take the suggested floorplans or unit locations as gospel. If you want two bedrooms in the sw corner, ask, and usually you shall receive. Most builders sell by the square foot … and there should be a slightly lower price per foot for big units as there is less expensive stuff, at least in the form of one less kitchen, compared to the square footage divided into two or more smaller units.

    I used to think that some units with long private hallways leading into them were a great waste of dollars, but I recently took a unit price list and noticed the one with the long entrance hall was cheaper per square foot. When I subtracted the long hallway, the remaining per foot price was the same, so the builder in essence discounted the hall … but it wont be discounted from the per sq foot condo fees.

    I am unsure about condo fees. If you add up the costs of maintaining a house, its taxes, and a reserve charge for replacing the roof, furance etc a house is very expensive. If you do it yourself, the house is cheaper, since for the condo pros are being paid to do every task.

    House and transportation, followed by food, comprise 80% of our expenses. The more you can cut these down, the more there is for exotic pleasures. Ergo, I have never had a car, our house is modest but now too large with the kids gone… and with teens gone I expect our grocery bills to plummet.

    thanks for reading and commenting

  3. Wow…never owned a car! I find it a necessary evil but I would love the day to come when I don’t need one. I try to bike more and walk more but I can’t shed the car yet. Ottawa has a rather interesting condo market at the moment. One of every five units sold now is sold to an investor. In some of the new buildings the ratio is even higher. I am not sure it is a good thing as investors often have the jump on the public because of their relationships with realtors. But it is interesting. If I had one complaint about the condo market here it would be that so many of the new units are just too small. Some bedrooms have barely enough room for a king or queen bed and forget a cabinet for two in the room. As you say, two small units will bring in more $ than one large one.

  4. Catherine B postulated at a recent meeting that the main reason that family units don’t get sold in condos is because Condo developers don’t really market them. Apparently the 3-bedroom units in the Beaver Barracks are being snapped up by families.

  5. Or .. it could be that Beaver Barracks isn’t charging full costs for the three bedroom units. A 1200 sq ft 3 bdrm unit would sell on the market for about $500,000. That might deter young families with kiddies.

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