Thursday, August 7, 2008

Developer pwn3d city

defintion of "pwn" here FYI.

My last post was not very clear on the subject. I think that the First Place Edmonton program is a way for the city to make availabile some land, and to provide a builder incentive primarily to help developers make profit. By builder incentive I mean that the city is bearing the cost of deferring payment of the land for 5-years, which is not unlike other private promotions offered to lure buyers. Also I think the land cost of these units, from $30,000/unit at the southside development, is on the low side and somehow the final cost ends up being not terribly affordable. Maybe the developer's "costs" make up some of the difference.

Specifically, I am concerned about the 2-bedroom south side townhouses. Of the 43 units at the southside location 27 are two bedroom suites between 905-921 sqft. From the site:

2 bedroom unit $229,400 town home + $30,210 land = $259,610*
3 bedroom unit $238,800 town home + $38,780 land = $277,580*
2 bedroom accessible unit $276,400 town home + $29,750 land = $306,150*
*Prices do not include GST and are subject to change without notice.
Two bedroom units are $249-$253/sqft without considering the land cost and $281-$286/sqft with land. From Bob Truman's site sales price per square foot in July was $244 for condos, which includes land and GST. Granted this average would include older building but it also includes condos with underground parking, townhouses with fenced yards and garages and properties in more expensive neighborhoods than Millwoods or NE Edmonton. Also the floorplan raises some concerns. Note on the main floor how there is no closet by either entrance and the bathroom is directly adjacent to the kitchen/dining room.

Also the resale comparisons I made in the last post are still on the market. The 1345 sqft Millwoods townhouse is still $274,900, the duplex in Caynon Ridge is $279,000. The least expensive 3 bedroom/1.5 bath townhouse with double attached garage in Summerside is now $283,900 down from $288,00o from last post.

Anyway it will be interesting to see if all these 2-bedroom condos will be unloaded by August 12th when the "draw" takes place.

This of course is my totally biased opinion, the Edmonton Journal said that these units are being sold at a "cut rate". My advice would be not to take their word for it and explore other housing options before committing to this program.

1 comment:

buff_butler said...

This seems like a really slimy deal with the government backing profit taking companies for the sake of "affordability." This seems very contradictory.