KA1
Senior Member
Glad to know that you have a sense of humour.
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Baby, we got a bubble!?
- Thread starter simuls
- Start date
Glad to know that you have a sense of humour.
mig174
Active Member
These are my thoughts, exactly. I think that today's high levels of foreign investment are tolerated because they make our economy appear much stronger that it actually is by keeping a lot of low- to mid-skilled labour employed. Once the rest of the economy picks back up (or it might not), I would expect foreign investment in housing, at least, to be disincentivized. Otherwise, the locals simply won't be able to afford housing and maintain a lifestyle commensurate with their pay. If Carney et al. are already seriously worried about Canadians overleveraging themselves, I would expect them to make specific steps to try and fix the situation. To do otherwise is to risk another recession and crash a la US.
That said, high levels of foreign investment are also not healthy for livability long-term. Right now, developers and builders have almost no incentive to provide a competitive product in C01. The basic plan is - announce a project, have it 75% sold within a few weeks of launch, begin building. Most of the buyers won't ever step foot in the buildings. This is why Peter St. condominiums can sell 300 sqft units for 200k. It's hilarious. Nobody will rent that shit for more than 800-900 a month, if they are willing to live in such cramped quarters in the first place. Ditto for 670sqft 2 bedroom units at Ice. These are all just investor boxes. Money in, sit on your ass so that the price goes up, money out. Rinse, repeat. No real intelligence required. And of course, there are the RE agents who think they are the shit just leeching the money.
No local will sell in this market to try and move up or move down. Moving down is impossible cause you'll be left with the same equity you currently have once the market normalizes and moving up is exposing yourself to huge risk.
Condo George
Active Member
Condo George
Active Member
Lumiere is a great tower, Menkes did an outstanding job, I sold a one and den last month, strong resale demand for this tower.
Condo George
Active Member
I would think L Tower assignment market will be active as well, spinning off higher pre const pricing such as Cinema Tower. L Tower when up is just going to be something the city has not seen! 
KA1
Senior Member
Some of the units at $ 400,000+ don't come with the parking. I am not sure as to who is buying this type of unit.
Condo George
Active Member
I cant get into specifics Ka1, ask your agent to run 770 Bay st.
Those same units launched at $240,000s on the lower floors.
End user my guess, maybe investor looking longer term, this unit no parking rents for $1650 a month no parking at the low end.
Those same units launched at $240,000s on the lower floors.
End user my guess, maybe investor looking longer term, this unit no parking rents for $1650 a month no parking at the low end.
Condo George
Active Member
This is my point, some may take it wrong, but I too am an investor and when I look at a stock index chart from 4 yrs back showing TSX at 15,000 and now today at 13,000 I continue to buy into the up wave and focus on not what the papers or naysayers say but the indicators. We recently heard the unemployment rate to 7.4% absorbing the immigration, speaks to economic expansion! Rates, immigration, etc etc etc so many indicators that are positive and some here are seeing negative, I dont know.... maybe one day they will be right, but they have been wrong so far. One housing analyist has been calling for a plunge for 10 yrs, he may get it right some day!
Eug
Senior Member
Well, I pulled much of my non-RRSP portfolio out of the TSX in 2006 and 2007. Why? 1) I wanted to buy a house and 2) I was getting very nervous about the stock market. I thought it was safer to just leave the stuff in cash or cash equivalents than risk keeping it in an overvalued stock market. It turns out my gut feeling nervousness was early, but the market crashed hard 1 year later.
Why should the TSX be valued at 15000 in 2011 or even 2012? Even 13000 is beyond everyone's wildest dreams considering what happened in 2008.
interested
Senior Member
I am a little puzzled. I am not sure why it seems people think the stock market can go up or down (reflecting sentiment as well as real earnings potential) and not the real estate market.
As I have posted before, when real estate changed from being a place to live to being a commodity which is being traded, speculated, and being bought and sold for profit/loss rather than as a home, it enteres the realms of other investments.
I would think Eug (and congratulations on the right call even if a bit early) that if one could look at say: stocks in the TSX are not worth 15000(I am not saying they are or they are not) why can't one apply exactly the same rationale to the housing market.
Incidently, I did not sell but stopped buying in or around 2004-2005 stocks and kept a fair amount in Money Market and shorter term bonds; I essentially did not tread even water (inflation) but figured that prices had "got" a head of themselves. I did not enjoy the last 2 years of price appreciation. I also did not have the ride down with more than a relatively small portion of my portfolio; however I was not smart enough to buy back in April 2009 which I believe was the bottom and make a "killing". Just held my proportion which increased back though not to previous 2008 peaks.
With a world awash in money, and at some point, the deleveraging starting, I think all asset classes frankly will fall. There is simply too much loose money looking for a place to park. So far, the stock market has been dinged, the bond market is very expensive as people look for income, gold may go to $2000 or back to $800; who knows; and real estate at least is something that because people have not been hurt (at least in Canada unless they sold in the 8-9 month weakness from late 2008 to early 2009) and hence they are a bit more comfortable with this. This does not mean it won't adjust as many of us have been saying.
However, from my example, while I have seen some of the trends, my timing has not been particularly stellar. On the other hand, I have not been overly hurt either and have not experienced net worth fluctuations of up to 50% in either direction which I could not sleep with at night.
I too am a small time real estate"investor" as people know from reading the posts, but I willingly accept low rates of return. I worry however because all those "investor types" who are in it for the price escalation; if enough have to get up at once should liquidity dry up , that they will ruin the investment potential for me as well.
As I have posted before, when real estate changed from being a place to live to being a commodity which is being traded, speculated, and being bought and sold for profit/loss rather than as a home, it enteres the realms of other investments.
I would think Eug (and congratulations on the right call even if a bit early) that if one could look at say: stocks in the TSX are not worth 15000(I am not saying they are or they are not) why can't one apply exactly the same rationale to the housing market.
Incidently, I did not sell but stopped buying in or around 2004-2005 stocks and kept a fair amount in Money Market and shorter term bonds; I essentially did not tread even water (inflation) but figured that prices had "got" a head of themselves. I did not enjoy the last 2 years of price appreciation. I also did not have the ride down with more than a relatively small portion of my portfolio; however I was not smart enough to buy back in April 2009 which I believe was the bottom and make a "killing". Just held my proportion which increased back though not to previous 2008 peaks.
With a world awash in money, and at some point, the deleveraging starting, I think all asset classes frankly will fall. There is simply too much loose money looking for a place to park. So far, the stock market has been dinged, the bond market is very expensive as people look for income, gold may go to $2000 or back to $800; who knows; and real estate at least is something that because people have not been hurt (at least in Canada unless they sold in the 8-9 month weakness from late 2008 to early 2009) and hence they are a bit more comfortable with this. This does not mean it won't adjust as many of us have been saying.
However, from my example, while I have seen some of the trends, my timing has not been particularly stellar. On the other hand, I have not been overly hurt either and have not experienced net worth fluctuations of up to 50% in either direction which I could not sleep with at night.
I too am a small time real estate"investor" as people know from reading the posts, but I willingly accept low rates of return. I worry however because all those "investor types" who are in it for the price escalation; if enough have to get up at once should liquidity dry up , that they will ruin the investment potential for me as well.
Condo George
Active Member
For clarity, I continue to buy into the up wave on housing Eug. I only own one gold stock. I am a core condo investor and broker
Condo George
Active Member
Condo George
Active Member
Where is simulus
Eug
Senior Member
You're right, but the housing market is different for a lot of people. It's not as if everyone who owns a house to live in is suddenly just going to sell the house and rent because s/he is worried about a 15% real estate price decline.
I've been telling people that at these price points, short term condo speculation has become a very risky game, but I don't discourage people from buying a place in this market if it's their primary residence, as long as they don't get caught up in some stupid bidding war or something. My sis just bought a place, and when the prices have been high for places she checked out, I've voiced my reservations, but she ended up being quite the bargainer and got a reasonable deal for this market, for her primary residence. Sure, it's quite possible that even with her reasonable price (I'd guess around 4-5% or so below what I considered reasonable market value) a price decline of 15% would mean her home would be only worth ~90% of what she paid for it, but she still needs a place to live.
However, if she had said she wanted to spend that money as an investment, I would have been far less supportive, even if she could get the place for 5% under market value.
interested
Senior Member
CG:
You are doing something very smart but have a distinct advantage; not just you but all realtors.
1) You are investing in something you know very well. You live and breathe it.
2) If this was a stock, you would be a kin to an insider with advantages not available to the rest of the public. By this
I mean that you can buy with 3-4% off; earlier than other investors. As well by bringing in your clients; you can purchase say 4 units and if you accept that you don't make the commissions; effectively buy your unit for 20% off. Either way, you have down
side protection which other investors do not have.
3) You are connected to "unload" the investment should it go sour. Other investors have to pay a real estate commission to sell; you would save your side of the commission affording you further downside protection; can undercut other investors with resultant less loss even in a bad market.
Please note: I am not saying there is anything improper/illegal with this. However, I don't really feel this a level playing field.
In the stock market; this is "insider trading" but it is not illegal or not allowed in real estate. Whether it should or should not be allowed is a matter of debate with I am sure those benefiting from this advantage saying it is fair and others looking in saying it is not.
In fact, if I were a successful realtor which you are; I too would be an investor in real estate almost exclusively because you have(along with all realtors) a competitive edge with early access to the developer; discounted fees and abillity to favour your own sales over your other clients should the market sour. It is a bit of a rigged game.
The reality is in my view, and it is just my view; that the real estate brokers/agents have been "bought" by the developers and have added a level of bureaucracy (and expense) to all end users of real estate.
Please note: I know you will say I can get my real estate license and do the same thing. I am just pointing out that while obviously a realtor can suffer losses; he is playing in a game where part of the deck is fixed in his favour if one is being honest.
Thought I would inject a bit of controversy. Or perhaps CG, you might agree with some of my points?
You are doing something very smart but have a distinct advantage; not just you but all realtors.
1) You are investing in something you know very well. You live and breathe it.
2) If this was a stock, you would be a kin to an insider with advantages not available to the rest of the public. By this
I mean that you can buy with 3-4% off; earlier than other investors. As well by bringing in your clients; you can purchase say 4 units and if you accept that you don't make the commissions; effectively buy your unit for 20% off. Either way, you have down
side protection which other investors do not have.
3) You are connected to "unload" the investment should it go sour. Other investors have to pay a real estate commission to sell; you would save your side of the commission affording you further downside protection; can undercut other investors with resultant less loss even in a bad market.
Please note: I am not saying there is anything improper/illegal with this. However, I don't really feel this a level playing field.
In the stock market; this is "insider trading" but it is not illegal or not allowed in real estate. Whether it should or should not be allowed is a matter of debate with I am sure those benefiting from this advantage saying it is fair and others looking in saying it is not.
In fact, if I were a successful realtor which you are; I too would be an investor in real estate almost exclusively because you have(along with all realtors) a competitive edge with early access to the developer; discounted fees and abillity to favour your own sales over your other clients should the market sour. It is a bit of a rigged game.
The reality is in my view, and it is just my view; that the real estate brokers/agents have been "bought" by the developers and have added a level of bureaucracy (and expense) to all end users of real estate.
Please note: I know you will say I can get my real estate license and do the same thing. I am just pointing out that while obviously a realtor can suffer losses; he is playing in a game where part of the deck is fixed in his favour if one is being honest.
Thought I would inject a bit of controversy. Or perhaps CG, you might agree with some of my points?