Location, Location, Location

by Darrin DeRoches December 15 - 21, 2011

The most expensive real estate in the world is on Severn road in Hong Kong it will cost you $43,526 a month for two bedrooms and three baths. The same type of accommodations in our city would cost you under $2000 a month. It would not seem sensible to compare Hamilton to the most expensive city in the world, but Canada as a whole, did not even hit the top 10.     The second priciest street in the world goes to Kensington Palace Gardens in London, third is in Monaco, fourth in France. Fifth and sixth spot goes to New York and Paris, then seventh to Geneva, eight to Italy. Ninth is in Australia and the 10th priciest street in the world is in Moscow. The comparison is the priciest street in our neck of the woods is the bridal path in Toronto which is only worth about 10 percent of the world’s most expensive street in Hong Kong.     Should we be upset or proud of this?     A home on the bridal path will be a huge mansion, without buildings, land, garages, fountains etc., whereas in Hong Kong it is a townhouse/condo with a backyard as large as yours and mine. I usually would not concern myself with the ‘rich and famous’ but the perspective and magnitude of the differences intrigued me. The area and ‘prestige’ really affects the price of a property. In our community a piece of land in one neighbourhood can be worth about $30,000 and the same exact size of land can sell for $300,000 in another neighbourhood. Same size, same dirt, 10 times more costly because of location. I get the whole location, location, location of real estate but where is the dividing line? A property can be worth a certain price due to perception, its neighbours or the clout attached to it.      You really see this in the commercial property world. If you buy a property in a so called “bad area” and you fix it up it is only worth so much. Years later the city buys the corner property and pumps in 30 million into a building and Starbucks is now looking to open on the street, all of a sudden your property is worth a great deal more? The area is still underdeveloped and the dirt, cost of building etc. all cost the same but due to some investment and perceived value – the cost of a property can double, triple or more? We are seeing this happen on James Street and King William to a certain extent. Lister Block, Film Work Lofts, Central Police Station, theatres, restaurants all on King William which just finished construction. Word of a Starbucks coming to the area. How much is this street now worth? It is no Hong Kong or Bridal Path but properties on King William  with certainly be asking for a “King’s ransom” in the near future. V Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at mail@uniquerealty.ca.