In the heat of the deal
Originally Posted by waterloowarrior
there's an article on the launch in today's Homes section of the Citizen. Construction is set to begin in 2011.
Last weekend, buyers lined up to nail down a Rideau Street condo. Smart strategy because prices were hiked by $10,000
By Michael Prentice, The Ottawa Citizen, November 21, 2009
ON THE STREETS: CLARIDGE PLAZA
It was selling madness last weekend when buyers lined up to write $5,000 cheques to reserve a condo in the third phase of the mammoth Rideau Street project being orchestrated by Claridge Homes.
Within 90 minutes of the sales launch, Claridge boosted prices by $10,000 in the 28-storey tower, which will have 226 units when construction is finished in the summer of 2013. Work is set to begin in 2011.
"It was wild, absolutely crazy," says Dan Kosabek, a mortgage lender who witnessed the scene when Claridge offered buyers the first opportunity to purchase.
Jeffrey Mziray, a 26-year-old bachelor and a real estate agent, was among the first to put down a $5,000 deposit on a two-bedroom condo in Phase 3 of Claridge Plaza. He already lives in a smaller condo in Phase 1 and has watched his investment grow.
Mziray decided to buy a larger apartment as an investment, or possibly as his future home when it's ready in four years. "That is four years out and a lot can happen," he says.
Mziray currently lives in a one-bedroom apartment with a den and a view of downtown Ottawa and the Gatineau Hills. His new 1,280-square-foot condo will have two bedrooms and a den. He paid $518,000, beating the $10,000 price hike.
Mziray loves the fact he won't have to pay most of the purchase price for about four years. Claridge Homes will have his $5,000 deposit, a deposit set to increase to 15 per cent of the purchase price, within the next few weeks.
"The longer it takes until my new apartment is built, the greater the profit I could make," says Mziray. "I've seen how well people have done who bought in Phase 1 of Claridge Plaza."
Past experience is no guarantee of future gains, as we are repeatedly being told about the stock market, but Mziray says condos in Phase 1 which cost $170,000 five years ago, are now selling for $300,000.
He decided to buy his first condo several years ago, but didn't actually have to come up with most of the purchase price until last year.
Phase 3 of the condo complex will sit at the corner of Rideau and Cumberland streets. The site is now occupied by a branch of the National Bank, as well as a chiropractor's office and a small apartment building, all of which will be demolished.
After factoring in the $10,000 increase, condos in Phase 3 will range from $185,000 for a 440-square-foot studio up to $700,000 for a penthouse measuring 1,415 square feet, featuring two bedrooms and a den.
Pent-up demand prompted 85 buyers to move quickly, putting down a $5,000 deposit, according to Kosabek, who is manager of mortgage development for TD Canada Trust in the Ottawa region. His bank is offering discounted mortgages in the building.
After Phase 3, there will be Phase 4 at Claridge Plaza. The first building is already occupied, and the second is nearing completion.
The first two towers front on Rideau Street, between Cumberland and Waller streets.
Claridge Plaza is the hottest selling condominium in the city, says Shawn Malhotra, vice-president of Claridge Homes. Still, Malhotra -- son of the firm's founder, Bill -- says he was surprised by the strength of demand when 250 guests showed up to an advance gathering in advance of last weekend's opening sales.
Demand turned to fast sales last Saturday, prompting Claridge to raise prices by $10,000 within the first 90 minutes, says Malhotra. The higher prices applied to anyone who had not picked up an information package at the front door.
Malhotra says demand used to be strongest for two-bedroom apartments.
Now, it's one-bedroom apartments that are hot commodities. Claridge has taken account of the shift, offering more one-bedroom condos in Phase 3.
TD Canada Trust is offering a cash-back deal to customers who purchase a condo, rebating one per cent of the mortgage. On taking out a mortgage of $150,000, the customer receives a cash payment from the bank of $1,500.
Such a mortgage now requires monthly payments of about $730 for the first five years.
Demand for Claridge Plaza condos is strong because of the location, says Kosabek.
"This area is No. 1 in the entire city, because it's downtown and within walking distance of so many attractions."
A downtown condo has greater appeal for older people who are downsizing, says the lender.
Many condos -- especially those costing less than $300,000 -- are being bought by investors, he says.
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