MAU
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LOL = laugh out loud
Is it complimentary? Depends if they're laughing with you or at you.
Is it complimentary? Depends if they're laughing with you or at you.
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Baby, we got a bubble!?
- Thread starter simuls
- Start date
CN Tower
Banned
Smell Test: Is Toronto facing an immigration boom?
To those of you who accept at face value the '100,000 people per year' battle cry so often but yet so recklessly used to support the endless stream of new condo units flooding this city, here is a sobering statistic that illustrates the true number:
17,000-27,000
I can't tell you what will trigger the final correction or when it will accelerate (it is happening already) but there is most definitely a speculative bubble in the Toronto condo market friends. The 'investors' in this pyramid are extremely vulnerable.
http://www.thestar.com/news/gta/tor...ll-test-is-toronto-facing-an-immigration-boom
Smell Test: Is Toronto facing an immigration boom?
Comment on this story »
Published On Thu Sep 23 2010
Jesse McLean Staff Reporter
Claim: Rocco Rossi and Rob Ford have both said Toronto will be absorbing one million newcomers over the next 10 years.
Background: In a March 4 speech, Rossi said the city needs a transit system that will support the wave of newcomers coming to Toronto over the next decade.
“We’re getting one million new people in the next 10 years. That’s either a fabulous economic opportunity or a recipe for disaster,†he said.
The “one million†figure soon became a staple in Ford’s talking points. On a televised debate, he questioned the value of immigrants when, he said, the city struggles to serve the needs of the people already living here.
“Right now we can't even deal with the 2.5 million people in this city. I think it is more important to take care of people now before we start bringing in more people. There's going to be a million more people, according to the official plan, over the next 10 years coming into the city,†he said.
The smell test: According to the Toronto Official Plan, the city will have about 537,000 new residents by 2031. That’s about 270,000 new residents in the next 10 years — just over one-quarter the number Ford and Rossi claim.
But did the politicians just make up the number? They may have simply misconstrued the Ontario government’s 2006 Places to Grow report, which predicts that nearly one million newcomers (relocating Canadians as well as immigrants) will settle into the entire GTA-Hamilton area over the next 10 years.
More conservatively, that report states that Toronto will grow by only 170,000 people in the same period of time.
To those of you who accept at face value the '100,000 people per year' battle cry so often but yet so recklessly used to support the endless stream of new condo units flooding this city, here is a sobering statistic that illustrates the true number:
17,000-27,000
I can't tell you what will trigger the final correction or when it will accelerate (it is happening already) but there is most definitely a speculative bubble in the Toronto condo market friends. The 'investors' in this pyramid are extremely vulnerable.
http://www.thestar.com/news/gta/tor...ll-test-is-toronto-facing-an-immigration-boom
Smell Test: Is Toronto facing an immigration boom?
Comment on this story »
Published On Thu Sep 23 2010
Jesse McLean Staff Reporter
Claim: Rocco Rossi and Rob Ford have both said Toronto will be absorbing one million newcomers over the next 10 years.
Background: In a March 4 speech, Rossi said the city needs a transit system that will support the wave of newcomers coming to Toronto over the next decade.
“We’re getting one million new people in the next 10 years. That’s either a fabulous economic opportunity or a recipe for disaster,†he said.
The “one million†figure soon became a staple in Ford’s talking points. On a televised debate, he questioned the value of immigrants when, he said, the city struggles to serve the needs of the people already living here.
“Right now we can't even deal with the 2.5 million people in this city. I think it is more important to take care of people now before we start bringing in more people. There's going to be a million more people, according to the official plan, over the next 10 years coming into the city,†he said.
The smell test: According to the Toronto Official Plan, the city will have about 537,000 new residents by 2031. That’s about 270,000 new residents in the next 10 years — just over one-quarter the number Ford and Rossi claim.
But did the politicians just make up the number? They may have simply misconstrued the Ontario government’s 2006 Places to Grow report, which predicts that nearly one million newcomers (relocating Canadians as well as immigrants) will settle into the entire GTA-Hamilton area over the next 10 years.
More conservatively, that report states that Toronto will grow by only 170,000 people in the same period of time.
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Condo George
Active Member
I only own one stock, High River Gold, HRG on Toronto, I posted this a while back, some clients say my nickname is the wealth builder, they say they should be paying me for buyer rep lol
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Condo George
Active Member
I dont like the some studio and one beds plans at Mercer, they have a ton of wasted space in the foyer ( bowling alley ) , this will negatively effect resale demand , my 2 cts, most one and dens very good, be careful of obstructed views, go to site and look around for those who are interested, I have also viewed the pricelist and for 9 months almost over in 2010 when all the supply is supposed to bring down the house, Mercer is launching avg mid $600 psf
simuls
Senior Member
I saw this article as well and was really glad somebody pointed it out. Plus, how many of these new immigrants can actually afford a condo. Maybe 15%? That translates roughly into 1300 condos/year needed new. A far cry from the 12-15000 I believe Urbanation thinks we need.
CG, I think this Mercer re-launch will be an unmitigated disaster (ala Bisha but on a cheaper scale - at least Bisha is offering something new!).
Also, without having to requote previous notes, for my personal comparison, I ALWAYS include the price of pkg and locker when comparing condos both new and resale because the vast majority of resale include them and to ignore it is simply bad math. While certain costs have increased for builders, they are going to need to seriously recalibrate their expectations very quickly. They were making money selling in these exact locations 3 years ago at $400/ft and have enjoyed a ridiculous gravy train since then with prices for medium quality buildings (Tridel, MLR, ICE) garnering what I would call at least at 30-40% premium above what they should. Until that's corrected and rents fall back in line or prices drop back down to the $500 range in the heart of downtown, then anyone who buys to live in a condo is throwing their money down a toilet and I just don't think the builders will find many people like that. I could be wrong however.
lafard
Active Member
^ contrary to popular belief it's not being driven predominantly by immigrants. They either rent cheap apartments or go all-in and buy a house in the 905.
The condo market is primarily driven by demographic shifts, largely 20-somethings that moved out of their parents houses either recently or a few years before, and are now buying condos. There is no population growth involved in this; it is merely the creation of new households to offset the declining size of existing ones. (and in fact given sub-replacement fertility there is negative "growth" in this sector, disguised by a demographic bulge)
As such this is not a sustainable source of "growth". It's not growth, it's just a rearrangement. Eventually all the kids have moved out, and thanks to the way the birthrate dropped off dramatically in the late 80s, there are fewer kids moving up from below. Eventually the Echo generation is going to start having babies and leaving the condos en masse with only a 0.75 replacement ratio behind them.
Will it be offset by downsizing retirees? Maybe, maybe not. I suspect the boomers will hang onto their houses for a few years yet; the boomers are only just starting to retire now and it won't really affect the market for 5 or so years. If the market declines substantially and they can't sell the house for a profit they may not downsize at all. There is also the "windsor effect" - why buy a 400k condo in Toronto when you can buy a 100k bungalow in Windsor, pocket the difference, and still live in a proper house?
There is also internal migration, which brings the highly mobile 20-something condo crowd. Unfortunately Ontario has had a near-zero to negative interprovincial migration rate (in 2006 3 people left Ontario for every 2 that moved here) thanks to the boom out West. This benefits Calgary far more than Toronto. Within Ontario there is a well-established in-migration of young people from the hinterlands (I am one myself) but again, someone that already moved out of their hometown is not going to feel that attached to Toronto...
The condo market is primarily driven by demographic shifts, largely 20-somethings that moved out of their parents houses either recently or a few years before, and are now buying condos. There is no population growth involved in this; it is merely the creation of new households to offset the declining size of existing ones. (and in fact given sub-replacement fertility there is negative "growth" in this sector, disguised by a demographic bulge)
As such this is not a sustainable source of "growth". It's not growth, it's just a rearrangement. Eventually all the kids have moved out, and thanks to the way the birthrate dropped off dramatically in the late 80s, there are fewer kids moving up from below. Eventually the Echo generation is going to start having babies and leaving the condos en masse with only a 0.75 replacement ratio behind them.
Will it be offset by downsizing retirees? Maybe, maybe not. I suspect the boomers will hang onto their houses for a few years yet; the boomers are only just starting to retire now and it won't really affect the market for 5 or so years. If the market declines substantially and they can't sell the house for a profit they may not downsize at all. There is also the "windsor effect" - why buy a 400k condo in Toronto when you can buy a 100k bungalow in Windsor, pocket the difference, and still live in a proper house?
There is also internal migration, which brings the highly mobile 20-something condo crowd. Unfortunately Ontario has had a near-zero to negative interprovincial migration rate (in 2006 3 people left Ontario for every 2 that moved here) thanks to the boom out West. This benefits Calgary far more than Toronto. Within Ontario there is a well-established in-migration of young people from the hinterlands (I am one myself) but again, someone that already moved out of their hometown is not going to feel that attached to Toronto...
Condo George
Active Member
What about the investor element, they want 10 units because they believe that we are cheap to London, New York and yes Vancouver. I dont think Toronto core condos International investment is going away
Condo George
Active Member
Waterfront Toronto banks on demand.............pessimistic times now, but future why launch this area
Condo George
Active Member
Sim, I know you disagree, this maybe a buy op, just like stocks buy TSX at 7500
lafard
Active Member
By the way, TSX at 7500 was a buy op. But RE is not at 7500 level right now. It's at 14000 in 2007. That looked like a buy op at the time too. It'll regain its value but people will have had to sit on their investments for 4 years to regain that. They lost an enormous amount of value and is taking an exceedingly long time for stocks to regain value. The possible parallels to RE cannot be overlooked.
There is a good chance that various factors will hit rents in the next two years. This diminishes the monthly income at the same time the diminishing domestic market removes capital appreciation. What kind of "international investor" buys a nonproductive asset?
This is not fictional. Five years ago Millenium Waters (Former Athlete's village) in Vancouver would have sold out to investors in a matter of hours. In 2010 its' empty and existing buyers are walking away from their deposits. This in a city with a bigger investor component than Toronto. When the market becomes unfavourable, investors stop buying.
Investors destabilize. Everybody needs a place to live but those units don't just disappear if the investor bails - the tenant's don't care if their landlord has to unload the condo at a substantial loss. Either they or another set of tenants will still live there. The investors have no vested interest in Toronto and will bail if their investments stop making money. This segment will shut down completely once buying a presale unit ceases to be a guaranteed 20% return on investment.
There is a good chance that various factors will hit rents in the next two years. This diminishes the monthly income at the same time the diminishing domestic market removes capital appreciation. What kind of "international investor" buys a nonproductive asset?
This is not fictional. Five years ago Millenium Waters (Former Athlete's village) in Vancouver would have sold out to investors in a matter of hours. In 2010 its' empty and existing buyers are walking away from their deposits. This in a city with a bigger investor component than Toronto. When the market becomes unfavourable, investors stop buying.
Investors destabilize. Everybody needs a place to live but those units don't just disappear if the investor bails - the tenant's don't care if their landlord has to unload the condo at a substantial loss. Either they or another set of tenants will still live there. The investors have no vested interest in Toronto and will bail if their investments stop making money. This segment will shut down completely once buying a presale unit ceases to be a guaranteed 20% return on investment.
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CN Tower
Banned
Stop Lafard, you are just making too much damn sense! 
CG- what difference does it make what apartments sell for it London, New York, or Vancouver? How does that have any affect on the value of apartments in Toronto? Less expensive does not equal 'cheap'.
Parking in Toronto is less than parking in Calgary. Should I therefore bet the bank on parking spots in Toronto hoping that parking rates will rise to match Calgary?
Your logic is flawed and outrageously self-serving.
CG- what difference does it make what apartments sell for it London, New York, or Vancouver? How does that have any affect on the value of apartments in Toronto? Less expensive does not equal 'cheap'.
Parking in Toronto is less than parking in Calgary. Should I therefore bet the bank on parking spots in Toronto hoping that parking rates will rise to match Calgary?
Your logic is flawed and outrageously self-serving.
f00kie
New Member
So, what's everyone's take: will I be able to get a unit at the Shangri-La Toronto for $600/sq. ft. in 2 years when it's ready for occupancy?
urbandreamer
recession proof
^Wait about another 5 years...after all the drug lords get arrested there, the bad press will make them crazy cheap. $400SF?
JayBee
Senior Member
$300/ft....book it!