Real estate kingpin Donald Trump is feeling the pain of the downturn in the global housing market. Buyers in one of his latest luxury condo/hotel buildings in Toronto began having second thoughts even before the ribbon-cutting ceremony.
Condos in the 65-story Trump International Hotel and Tower start at $2.3 million and hotel condos start at $967,000. Owners of hotel condos pool their rental income and share it. But according to the Wall Street Journal, at least eight of the investors in the hotel condos have contacted lawyers to try to back out of their contracts and recoup the $212,700 deposit.
Developer Talon International Development Inc. reports that 60 percent of the condos and 85 percent of the hotel condos have sold, which is fewer than Trump’s other, similar towers. A spokesman for Talon told the Wall Street Journal that the weak global economy is to blame.
Toronto’s condo market has been enjoying a bubble, but many Canadian real estate analysts are predicting a downturn, because the market has been saturated. Here in the U.S., luxury real-estate prices have been falling even as cheaper properties are stabilizing, according to the S&P/ Case Shiller report last month. Perhaps Canada can look to the U.S. for a cautionary tale about overbuilding during a housing bubble.
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