Baby, we got a bubble!?

[drewp]

These scare tactics are only published because it sells papers and that is it. Sure there are so many projects on the go, and maybe the market might slide a bit, at worst 5% or stagnation over the next year. I focused on the rental market this year with some of my clients and I can tell you EVERYTHING went in multiple offers. There is so much demand for rental units in this city it is insane. For example a property listed the end of August on 21 Nelson street for 2000 had 5 registered offers in one day. We had to go over asking of course at 2225. A 2 bedroom at maple leaf square 3 registered offers listed at 2400, leased at 2450. Murano listed at 1800 went for 1850, all of these in less than a day. I lost so many opportunities because the demand cannot compete with the supply. Whether these investors will sell, and if there is a market for selling in a couple of years it is hard to say, but the rental contiues to show signs that these condos will be filled and quickly. I can't justify spending 2000 for a 600 sqft condo but people are willing to pay for this.

 

[wang888]

I think I read somewhere that 50% of households in Toronto are renters. And majorirty of those living in inner-suburb high rises are in poverty.

Could those new condos coming online provide housing for the poor? Especially if that's where the demand is? Rental prices could fall because of this.

 

[radioheadmike]

I think I read somewhere that 50% of households in Toronto are renters. And majorirty of those living in inner-suburb high rises are in poverty.

Could those new condos coming online provide housing for the poor? Especially if that's where the demand is? Rental prices could fall because of this.

Interesting point. I remember reading an article on how people living in poverty within Large U.S cities are being pushed out towards the outer suburbs due to the increase in rent.

I could see this happening here in Toronto as well. For example, Lawrence and Allen area is booming with new development and this is having an impact on the rent prices. With that, a lot of the poor to low-income families are moving towards Lawrence and Weston area. I guess the correct term is Gentrification.

So it is interesting to see what will happen.

 

[daveto]

Every month or so I make what is essentially the same post, in reply to the latest rehashed and ubsubstantiated claims.

Here it goes, (again!)

1. The media does not profit from publishing stories about decreasing RE prices. To the contrary, RE advertisting (developers, banks, etc) is one of their major sources of revenue. The media, especially the dailies, are heavily biased in favour of a rosy outlook on the RE market.

2. Toronto does not compare to London or NY. It will never compare to London and NY. Sorry. Get over it. The following link is the definitive ranking of "global cities". Go to page 3. Read. Think.
http://www.atkearney.com/images/global/pdf/Urban_Elite-GCI_2010.pdf

3. The list showing that a home in Guelph costs more than Toronto is absurd. In the same way that it is absurd to suggest that a home in Paris costs nearly $3m. How can you read that data and not question what it is telling you?

4. Toronto does not have 50% renters. Canada's home ownership is now at an all time high of 70%. If Toronto had 50% renters, that means the rest of the country needs to have a 75% home ownership rate, so the country would average out to 70%. Does anyone do math anymore? Does anyone quote their data sources?

See you all next month.
dt

 

[radioheadmike]

Every month or so I make what is essentially the same post, in reply to the latest rehashed and ubsubstantiated claims.

Here it goes, (again!)

1. The media does not profit from publishing stories about decreasing RE prices. To the contrary, RE advertisting (developers, banks, etc) is one of their major sources of revenue. The media, especially the dailies, are heavily biased in favour of a rosy outlook on the RE market.

2. Toronto does not compare to London or NY. It will never compare to London and NY. Sorry. Get over it. The following link is the definitive ranking of "global cities". Go to page 3. Read. Think.
http://www.atkearney.com/images/global/pdf/Urban_Elite-GCI_2010.pdf

3. The list showing that a home in Guelph costs more than Toronto is absurd. In the same way that it is absurd to suggest that a home in Paris costs nearly $3m. How can you read that data and not question what it is telling you?

4. Toronto does not have 50% renters. Canada's home ownership is now at an all time high of 70%. If Toronto had 50% renters, that means the rest of the country needs to have a 75% home ownership rate, so the country would average out to 70%. Does anyone do math anymore? Does anyone quote their data sources?

See you all next month.
dt

1. Rosy News is boring. You will get less traffic on your site. Therefore, you profit less.
2. You are right, Toronto does not compare with London and NY. It is far better than those two cities. It's more livable & less crowded, still affordable, It's Art Cultural is expanding and a lot less pretentious (more creative with new ideas) than the Art scene in those cities you mention. NY City is crumbling due to excessive greed and the ever diminishing of the middle class. London (like other European cities) is rotting from the inside since the Rich are living off Government Grants and the Poor are sucking the welfare system dry.
3. The list could be wrong, but you need to remember there are a lot of poor pockets in the city of Toronto, compared to suburban cities like Mississauga and Guelph. Averages can be impacted by extremes. Believe it or not, I can buy a 2500 sqft Townhouse in the Weston corridor for less than 250,000 Canadian dollars. That is rare in a city like Mississauga.
4. No comments.

 

[CN Tower]

1. Rosy News is boring. You will get less traffic on your site. Therefore, you profit less.
2. You are right, Toronto does not compare with London and NY. It is far better than those two cities. It's more livable & less crowded, still affordable, It's Art Cultural is expanding and a lot less pretentious (more creative with new ideas) than the Art scene in those cities you mention. NY City is crumbling due to excessive greed and the ever diminishing of the middle class. London (like other European cities) is rotting from the inside since the Rich are living off Government Grants and the Poor are sucking the welfare system dry.
3. The list could be wrong, but you need to remember there are a lot of poor pockets in the city of Toronto, compared to suburban cities like Mississauga and Guelph. Averages can be impacted by extremes. Believe it or not, I can buy a 2500 sqft Townhouse in the Weston corridor for less than 250,000 Canadian dollars. That is rare in a city like Mississauga.
4. No comments.

Mike,

Let me make this really really simple for you buddy:

People in London, New York, Tokyo, etc. MAKE A SH*T LOAD MORE MONEY than people in Toronto and therefore they can AFFORD to pay more for houses and apartments. It's that simple.

Dave, what do you say you and I start our own Canadian real estate discussion forum and institute a minimum aptitude test for admission?

 

[radioheadmike]

I am agreeing with you. These cities do have higher paying jobs than Toronto at the moment. This is why the real estate in those cities are much higher than Toronto.
No one is disagreeing with you. And this is why I am saying that Toronto has a lot more growing to do (specifically with real estate prices).

And you can’t argue with me that Toronto is currently expensive. I am sorry that you can’t afford to live in well established neighborhoods. Look elsewhere. You can buy a home in the Weston corridor, heck; you can get a pent house unit in a well maintained tridel-built condo in that area for less than 200k.

What I am saying is that there is a lot of foreign investment that is going into this city because there is potential for higher ROI (with less risk). With this money coming into this city, there will be higher paying job. In 10 to 15 years, Toronto will become the financial hub of the world, while neo-socialist and neo-capitalist cities crumble. So that 400sqft studio in downtown will be worth at least over a million & that townhouse in Weston will be double in price.

It upsets me with the lack of pride in this City or in Canada.

 

[klb86]

GTA REALTORS® Release Mid-Month Resale Market Figures

TORONTO, October 18, 2011 -- Greater Toronto REALTORS® reported 3,477 transactions through the TorontoMLS® system during the first 14 days of October 2011. This total represented a 20 per cent increase over 2,890 sales reported during the first two weeks of October 2010. Year-over-year growth in new listings for the same period was slightly stronger than that recorded for sales – up 21 per cent to 6,249.

"The first two weeks of October seem to be pointing towards more balanced market conditions as we move toward 2012. Growth in new listings outstripped growth in sales, meaning more choice for buyers," said Toronto Real Estate Board President Richard Silver. "A growing number of home owners are reacting to the above average price growth reported this year and have decided to list their home for sale. They are confident they will receive timely offers in line with their asking prices."

The average selling price during the first two weeks of October was $475,743 – up 7.5 per cent compared to the same period in 2010.

"The average resale home price is expected to grow at a slower pace in the months ahead because the market is becoming better supplied. There will be less competition between home buyers as we move through the fall and winter." said Jason Mercer, the Toronto Real Estate Board's Senior Manager of Market Analysis. "With a more balanced market in 2012, the average rate of annual price growth is expected to be in the mid single digits."

http://www.torontorealestateboard.c...market_updates/news2011/nr_mid_month_1011.htm

The average price of a home in the 416 is now $524,553, up 5% y/y. Average price of a condo in the 416 is now 369,528, up 10% y/y.

 

[klb86]

In 10 to 15 years, Toronto will become the financial hub of the world, while neo-socialist and neo-capitalist cities crumble. So that 400sqft studio in downtown will be worth at least over a million & that townhouse in Weston will be double in price.

I can't tell if you're trolling or being serious. But I LOL'ed nonetheless.

$2500+ psf coming soon folks. Look out.

 

[redfirm]

I am agreeing with you. These cities do have higher paying jobs than Toronto at the moment. This is why the real estate in those cities are much higher than Toronto.
No one is disagreeing with you. And this is why I am saying that Toronto has a lot more growing to do (specifically with real estate prices).

And you can’t argue with me that Toronto is currently expensive. I am sorry that you can’t afford to live in well established neighborhoods. Look elsewhere. You can buy a home in the Weston corridor, heck; you can get a pent house unit in a well maintained tridel-built condo in that area for less than 200k.

What I am saying is that there is a lot of foreign investment that is going into this city because there is potential for higher ROI (with less risk). With this money coming into this city, there will be higher paying job. In 10 to 15 years, Toronto will become the financial hub of the world, while neo-socialist and neo-capitalist cities crumble. So that 400sqft studio in downtown will be worth at least over a million & that townhouse in Weston will be double in price.

It upsets me with the lack of pride in this City or in Canada.

mike, I don't mind your comments. I like optimistic people. just don't get too "patriotic" with your money, or even worse: with your bank's money.

 

[apom]

Yes the prices are getting ridiculous, but with the amount of foreign investors purchasing units downtown I wouldn't be surprised if Toronto becomes the next Vancouver. This ride to the top isn't slowing down anytime soon.

 

[wang888]

Twenty-five years ago low-income families could find housing in most parts of the city, in neighbourhoods where households with different levels of income lived next door to one another. Today, Toronto’s poor are increasingly concentrated in pockets of high-poverty and in high- rise buildings.
The widening income gap between rich and poor is a world-wide phenomenon, which is altering the landscape of many cities around the world, including Toronto.

 

[wang888]

Every month or so I make what is essentially the same post, in reply to the latest rehashed and ubsubstantiated claims.

4. Toronto does not have 50% renters. Canada's home ownership is now at an all time high of 70%. If Toronto had 50% renters, that means the rest of the country needs to have a 75% home ownership rate, so the country would average out to 70%. Does anyone do math anymore? Does anyone quote their data sources?

Have you not heard of the phrase 'Toronto is a city of renters'?

Anyways, here are some more fun facts for you:

Today, Toronto is more often called a city of renters. In 1996, more than half of the city’s households rented their accommodation—a huge increase from the 29 per cent who were renters in 1951 at the start of the apartment construction boom. This percentage declined slightly to approximately 46 per cent in 2006, likely as a result of the low borrowing rates for first-time buyers, and the robust condominium market, which was, and still is, strongly marketed to young professionals who otherwise might opt for rental accommodation during their first years in the workforce.

City of Toronto. Profile Toronto: Rental Housing Supply and Demand Indicators (Toronto, Ontario: City Planning Division Policy and Research, September 2006).

 

[marsh]

I honestly don't understand the news reports about condo rental market being in such demand. There are lots of well maintained older apartment buildings where I live (in the downtown core) with vacancy signs. Maybe they don't have the shiny new appliances but they are cheaper and seem to be well maintained. So have people's tastes changed? Or is this all a marketing gimmick by developers?

 

[Eug]

I honestly don't understand the news reports about condo rental market being in such demand. There are lots of well maintained older apartment buildings where I live (in the downtown core) with vacancy signs. Maybe they don't have the shiny new appliances but they are cheaper and seem to be well maintained. So have people's tastes changed? Or is this all a marketing gimmick by developers?

When I was a renter it always seemed the nicest places were always condos. The reason I stayed in an apt was because it was cheaper but it certainly wasn't as nice.

My condo rental friends also said their landlords were usually more responsive than most apt landlords.