The Downfall of the Ultra Luxury Apartment
Good days can’t last forever. Although the ultra luxury condo market exploded after the 2008 crash, it didn’t last very long. By 2015, the ultra luxury apartment market was on the decline. Prices were falling and lots of units were struggling to sell. Some even remained empty. In Manhattan alone, which is one of the largest ultra luxury markets in the country, more than 7,000 units were on the unsold market last year.
Thank you for reading this post, don't forget to subscribe!The problem basically boils down to supply and demand. With many developers trying to profit from selling or renting out ultra-luxury residences, they have run out of buyers. Only a small percentage of the condo buying market is willing to pay millions of dollars (in cash) for a place to live. This means that prices keep falling.
Estimated Cost of Ultra Luxury Condo
At the peak of the ultra luxury boom, units could sell for anywhere between $2,500 and $9,000 per square foot. And these are your tiny 900-square-foot one-bedroom units. Most of these luxury residences are at least 5,000 square feet, and can reach up to 30,000 square feet. Some quick math reveals that most of these units were worth well over a million dollars, with many actually reaching seven digits.
The good news is that the boom is over. The prices of these ultra luxury condos are dropping across the country. In Toronto, a luxury unit that sold for over $1,200 (CAN) per square foot a few years ago was recently resold for just $728 per square foot. That’s a drop of almost 40%!
The exact price reduction will depend on the supply/demand dynamics in the city where you wish to shop. Regardless, it’s safe to say that the ultra luxury market has cooled off significantly in recent years. This is good news for potential buyers.
