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Baby, we got a bubble!?

KA1 said:
Folks! Just a friendly reminder that this thread is not about 'lifestyle -- on the lake or cars. It is about a bubble. The bubble, as a matter of fact.

This bubble was supposed to have bursted, or at least have sprung a leak, during the months of February/March/April. It has not happened. As always, Interested, once again, has been wrong with his predictions.

In the "New Homes & Condos' section of Saturday's star, there is an article about ' the condominium market juggrernaut marches through April'. In an earlier post, Condo George has hinted that May sales will be spectacular. In another thread 'Pace Condos', a post has been made that 95% of the units were sold in just 1 month. Watch for more sales activities -- and higher prices -- by various builders in that area. On the front page of ' New Homes' section, there is a news item that Daniels Corporation has started construction on the development ( of Cinema Tower) well before sales launch, certain they've got a blockbuster.

In March 2008, unit in AURA, on lower floors were going for $ 550 sq/ft. Interested has stated about prices in downtown core are at $ 750 sq/ft. Units in Cinema Tower start at 420 sq.ft start at mid$300,000. That comes to around $ 850 sq ft, if parking and locker is included.

Does anyone out there still believes -- even with the financial analysis of skewed up data -- in the 'second coming ' of bubble bursting or springing up a leak in the near future?
Click to expand...

Ka1

Mea culpa. I admit it. I am guilty. I still think it will happen. Not sure when. And if I wrong, I guess good for those of us in the market but a tragedy for the young people who want to get it. They will be like Vancouver, proverbially house poor. Other things give at that time. And I will be wrong until I am right and then everyone I am sure will say but you were off by 2 or 4 years. Won't be the first time. I called the market over in 1988 in Toronto and it happened in 1989. I called Florida to stop in 2003 and I was 3 years early but still right. And unfortunately, I still think I will be ultimately right here to.

Daniels always starts construction and sells when they are in the ground. A very solid family with serious $$$ behind them. They did the same strategy with the building that houses TIFF. That building is selling at $800/sq.ft. and higher because of the TIFF so I would expect the same with Cinema Tower as it is the sister tower. Of course, they can ask more because they are not selling paper that may be cancelled. They have a hole in the ground and are building and people know it will get built.
 
KA1 said:
Folks! Just a friendly reminder that this thread is not about 'lifestyle -- on the lake or cars. It is about a bubble. The bubble, as a matter of fact.

This bubble was supposed to have bursted, or at least have sprung a leak, during the months of February/March/April. It has not happened. As always, Interested, once again, has been wrong with his predictions.

In the "New Homes & Condos' section of Saturday's star, there is an article about ' the condominium market juggrernaut marches through April'. In an earlier post, Condo George has hinted that May sales will be spectacular. In another thread 'Pace Condos', a post has been made that 95% of the units were sold in just 1 month. Watch for more sales activities -- and higher prices -- by various builders in that area. On the front page of ' New Homes' section, there is a news item that Daniels Corporation has started construction on the development ( of Cinema Tower) well before sales launch, certain they've got a blockbuster.

In March 2008, unit in AURA, on lower floors were going for $ 550 sq/ft. Interested has stated about prices in downtown core are at $ 750 sq/ft. Units in Cinema Tower start at 420 sq.ft start at mid$300,000. That comes to around $ 850 sq ft, if parking and locker is included.

Does anyone out there still believes -- even with the financial analysis of skewed up data -- in the 'second coming ' of bubble bursting or springing up a leak in the near future?
Click to expand...

Yes, I do. I provided the timing when I joined this forum.
 
KA1 said:
Can you, please, remind me of your timelines, once again. This wait is killing me.
Click to expand...

I read this forum since day 1. Joined 2-3 months ago. Why? Because I was not convinced that 2-3 years ago we were at the point where r/e prices didn't make sense. I'm talking about fundamentals. I believe we crossed the line in the first half of 2010. Then I waited to see if some sort of soft landing will happen. Although last summer / fall showed some weaknesses, the prices continued to climb. I'm not talking just downtown core, luxury vs Cityplace, etc. I'm talking GTA. So I decided to join this forum and provide my 2 cents. I said and still stand by my prediction: 18-24 months max before we see significant cracks. Total damage 20-25% (last 12 months we had 8% increase, so we are looking at 3 years of increases wiped out). I do recognize that some buildings / areas may not follow the same trend. In general, all of "middle class" r/e will see above noted adjustment.
 
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KA1 said:
Does anyone out there still believes -- even with the financial analysis of skewed up data -- in the 'second coming ' of bubble bursting or springing up a leak in the near future?
Click to expand...

A couple of year ago, I thought our correction would be less than the US, albeit still substantial. But in light of the RE activity of the past year, I figure our downswing will now match that of the US, since our prices are currently 10% higher than the US peak.

As for why it didn't start in 2010? As had been said before, a market can remain irrational for a long time. But as has been also said before, the bigger they are, the harder they fall.

Anyone who genuinely doubts that Canada wide and Toronto wide prices will correct downwards, should search out the posts in various RE forums from the US/Ireland/Spain from 2006-2008. Every "Canadian RE isn't in a bubble" argument that is posted here, was matched almost word for word in those RE forums all of those countries whose bubble has burst.

As a final caveat, I've got no objection to people owning or investing in RE. But if you can't handle a 25% price correction, then you are over leveraged and playing with fire.
 
So, Tip Top seems OK, not uber luxury. However, the unit seemed overpriced at $1.13 million, even though it was almost 1800 square feet, which probably explains why it has been sitting there for 3 months. It's not a particularly efficient use of space, but then again my sis likes wide open spaces, and that's one of the big problems with current construction. It's $700 per square foot in higher end buildings just so you can live in a shoe box... with granite countertops.

Meanwhile, at the uber luxury end of things...

Four Seasons penthouse sells for $28-million

A spectacular array of rooms featuring 12 ft. ceilings, including a stunning floor-to-ceiling glass Galleria and four expansive corner terraces;

An opulent, 2,500 sq. ft. Master Suite featuring a large bedroom complete with a sitting room and fireplace, a private terrace, two walk-in closets and a lavish ensuite bathroom, with his-and-hers vanities, showers and water closet enclosures, built-in TVs behind the vanity mirrors, and a freestanding tub opposite an impressive stone fireplace;

A gracious 1,000 sq. ft. living room with a walk out terrace, a library and a separate study;

A spacious family room combined with an open-concept entertaining kitchen, with a large island and three refrigerator/freezer units, two wall ovens, a dishwasher, integrated coffee system, food warming drawer and a gas range;

A 550 sq. ft. formal dining room and a servery connected to a walk out terrace;

A theatre room with a bar featuring a refrigerator and bar sink;

A walk-in wine cellar with a sealed glass-paneled door, built-in cooling unit, and a redwood racking system to accommodate nearly 800 bottles; and,

Two guest bedrooms, each with its own ensuite bathroom.

---

At $28000000 and 9038 square feet, that's $3098 per square foot! I wonder what the condo fees are, $7500 per month? It says here that the estimated fees are $0.82 / sq.ft.
 
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Latest Teranet numbers:

Toronto Mar 2011: 125.69 (with June 2005 being 100.00).
National Mar 2011: 138.94

Toronto Mar 2010: 120.44
National Mar 2010: 133.47

Pre-stock market crash:
Toronto Aug 2008: 117.29
National Aug 2008: 130.79

Rise since 2010 / pre-crash peak:
Toronto: 4.4% / 7.2%
National: 4.1% / 6.2%

Rise since Aug 2007 when I bought my current house: 13%. At the time I was saying I was worried about a pullback, and wouldn't be overly surprised to a 10-15% drop. At this point that'd actually just take me back to about the price I paid for it. :p
 
KA1 said:
This bubble was supposed to have bursted, or at least have sprung a leak, during the months of February/March/April. It has not happened. As always, Interested, once again, has been wrong with his predictions.
...

Does anyone out there still believes -- even with the financial analysis of skewed up data -- in the 'second coming ' of bubble bursting or springing up a leak in the near future?
Click to expand...

The TREB April numbers are interesting.

New listings went from 20,683 to 14,494 (-30%) and active listings from 22,951 to 17,466 (-24%). Days on the market increased from 21 to 22 (+5%).

Something new is definitely going on, here. The Year Over Year price increase can be attributed to low supply.

There's a very high psychological component to the real estate market. If people start really getting it into their heads that housing is overpriced, prices will drop. This trend could accelerate as sellers try and cash in their gains.
 
CN Tower said:
I'll make this brief:

I DON'T BELIEVE IT. NO ONE IS THAT STUPID, PARTICULARLY NOT A BILLIONAIRE.
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India's Ambani hosts party for 'world's priciest home'

Mr Ambani, said to be India's richest man, moved into the house last month with his wife and three children.

Reports suggest the residence is worth more than $1bn (£630m).

The skyscraper in Mumbai (Bombay), which overlooks sprawling slums, is said to have a cinema, swimming pools and a helicopter pad, and is named "Antilia" after a mythical Atlantic island.

Local newspapers said the house would require 600 members of staff to maintain it, and according to the Times of India, the first electricity bill, for September, is costing Mr Ambani 7m rupees (£98,000).
 
CN Tower said:
I'll make this brief:

I DON'T BELIEVE IT. NO ONE IS THAT STUPID, PARTICULARLY NOT A BILLIONAIRE.
Click to expand...

I would believe that 4S did sell it CN tower. Is this a lot of money? yes. Is this "THE" penthouse in the City of Toronto; probably. So maybe we are finally becoming "world class" that so many seem desperate to achieve.
 
CN Tower said:
I'll make this brief:

I DON'T BELIEVE IT. NO ONE IS THAT STUPID, PARTICULARLY NOT A BILLIONAIRE.
Click to expand...

I'll make a guess here (assuming the sale price is correct) - this is not "old(er) money" buyer. Not even dot com type Canadian / American.
 
Eug said:
The place includes a nanny suite, and the condo fees are $6500 per month.
Click to expand...

It's not the $28-million that leaves me in disbelief though that in itself is shockingly high. It's the notion that someone would spend $3098 per square foot for something that costs probably less than 1/3 of that to build. Those willing to spend $3000 per square foot typically do not wish to reside under the same roof as those willing to spend only $1000 per square foot.

I suspect this undisclosed mystery buyer is the same fellow who supposedly snapped up the PH at 1BE and equally mysteriously vanished when the development went south.

$28M to a billionaire is chump change.
Click to expand...

Not the billionaires that I know.
 
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