daveto
Active Member
Just to clarify, being "in the plus" for cashflow is different from it being a profitable investment.
These are the only two ways you can forsee to solve this?
I can think of a third.
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Baby, we got a bubble!?
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Just to clarify, being "in the plus" for cashflow is different from it being a profitable investment.
These are the only two ways you can forsee to solve this?
I can think of a third.
pigeontology
New Member
Because i heard Benjamin Tal speak, i want to repost some of his bullish views. Realist123 posted the cibc article in post #4385.
2 key points of a no-crash scenario are
- interest rates will not go up given the situation in the euro zone
- number of Canadian "stretched" households with > 40% service ratios is below 6%
Argument on the second point goes that the US had 30+ % in the stretched households category when the country went into the housing meltdown.
Lastly Tal says no more r/e growth in Canada but rather a mild decline in the next 3-5 years. Tal says HOLD.
2 key points of a no-crash scenario are
- interest rates will not go up given the situation in the euro zone
- number of Canadian "stretched" households with > 40% service ratios is below 6%
Argument on the second point goes that the US had 30+ % in the stretched households category when the country went into the housing meltdown.
Lastly Tal says no more r/e growth in Canada but rather a mild decline in the next 3-5 years. Tal says HOLD.
KA1
Senior Member
marsh
Active Member
Record high household debt in Canada triggers alarm
Roughly one in 10 Canadians is in a vulnerable financial position, Bank of Canada Governor warns http://www.theglobeandmail.com/glob...debt-in-canada-triggers-alarm/article2269210/
Roughly one in 10 Canadians is in a vulnerable financial position, Bank of Canada Governor warns http://www.theglobeandmail.com/glob...debt-in-canada-triggers-alarm/article2269210/
drewp
Active Member
The rental market is always healthier between May and September.
The unit at 77 Carlton was leased in November for asking. Also a unit at 333 Adelaide leased in May 2010 for 2150, this month for 2350.
A rare loft at 81A Front Street (nice building by the way) listed at 1850 leased for 1800. Leased the previous year for 1700. The lease was in November as well.
I definetely see units stay on the market longer during the winter seasons, but hot areas are always being leased. Areas like Fort York, City Place, Waterfront, and even parts of St. Lawrence market take longer because they are slightly outside the core, but eventually they do lease. This is where you see some flexibility in prices, and some price drops.
From what i have experienced in the downtown core the rental market continues to be healthy and shows signs of steady increases. It really depends on how many people are looking for units. What I am noticing more and more is individuals are being priced out of one bedrooms which on average rent for 1550 in the downtown core, are pooling thier resources and moving in with a roomate. I see two friends/colleagues/student buddys moving in together now because it makes more sense. The average two bedroom goes for around 2200 in the core. Some people who want the shiny new condo life that can't afford it on their on find a roomate which enables them to live the "dream". If I were an investor I would start buying two bedroom units.
The unit at 77 Carlton was leased in November for asking. Also a unit at 333 Adelaide leased in May 2010 for 2150, this month for 2350.
A rare loft at 81A Front Street (nice building by the way) listed at 1850 leased for 1800. Leased the previous year for 1700. The lease was in November as well.
I definetely see units stay on the market longer during the winter seasons, but hot areas are always being leased. Areas like Fort York, City Place, Waterfront, and even parts of St. Lawrence market take longer because they are slightly outside the core, but eventually they do lease. This is where you see some flexibility in prices, and some price drops.
From what i have experienced in the downtown core the rental market continues to be healthy and shows signs of steady increases. It really depends on how many people are looking for units. What I am noticing more and more is individuals are being priced out of one bedrooms which on average rent for 1550 in the downtown core, are pooling thier resources and moving in with a roomate. I see two friends/colleagues/student buddys moving in together now because it makes more sense. The average two bedroom goes for around 2200 in the core. Some people who want the shiny new condo life that can't afford it on their on find a roomate which enables them to live the "dream". If I were an investor I would start buying two bedroom units.
Condo George
Active Member
I would not buy off builder at any site at this time, I am coaching investors to consider resale or assignment market, much lower than builder site as I said ...... spread is too wide for us to buy builder padded pricing vs resale or assignment.
Lux condo concept is new to Toronto, will take time to see upward price appreciation.
Condo George
Active Member
drewp. Return on deposit is more on bachelors and one beds
interested
Senior Member
CG, If I put both your last 2 posts together, there is a potential contradiction. Since you would not buy from builder at this time, you are clearly expecting some price drops I am guessing or rent increases will have to be very significant to justify increased prices to get resale/assignments to match or come up close to current ask prices. That said, if rents do not go up that much, presumably there will be price drops and if so, would that not be a difficult situation for sellers trying to sell their deposits in a falling market.
I think drewp's comments deal with what he perceives as a market shift in the rental market in the core and presumably since wages are not increasing that much and given rent increases he suggests the demand will shift more to 2 bedroom units; just as demand now I read seems to be for 1 bedroom / dens since people are realizing it is difficult to live in a bachelor or 1 bedroom and need that small cubicle that a lot of builders a re calling dens. Also, a number of people are using the den as a 2nd bedroom If we assume drewp is right, then if one is an investor as opposed to a speculator banking solely on price appreciation on the deposit, would it not make sense to be buying small 2 bedroom units?
That said, I do appreciate that the smallest deposit and largest percentage increase has been historically in the smallest cheapest units. However, should the market falter, or there be a glut of condos on the market, I think these ridiculously small units in poor locations within complexes will not rent, and further if rents fall (should that occur) perhaps people will shift out of studios and go to 1 bedroom units; and possibly go from 1 bedroom to 1 bedroom + den if they can pay the same rent as previous but now can have a larger unit. Just my thoughts.
I think drewp's comments deal with what he perceives as a market shift in the rental market in the core and presumably since wages are not increasing that much and given rent increases he suggests the demand will shift more to 2 bedroom units; just as demand now I read seems to be for 1 bedroom / dens since people are realizing it is difficult to live in a bachelor or 1 bedroom and need that small cubicle that a lot of builders a re calling dens. Also, a number of people are using the den as a 2nd bedroom If we assume drewp is right, then if one is an investor as opposed to a speculator banking solely on price appreciation on the deposit, would it not make sense to be buying small 2 bedroom units?
That said, I do appreciate that the smallest deposit and largest percentage increase has been historically in the smallest cheapest units. However, should the market falter, or there be a glut of condos on the market, I think these ridiculously small units in poor locations within complexes will not rent, and further if rents fall (should that occur) perhaps people will shift out of studios and go to 1 bedroom units; and possibly go from 1 bedroom to 1 bedroom + den if they can pay the same rent as previous but now can have a larger unit. Just my thoughts.
interested
Senior Member
If I put these 2 statements together, you are saying if I am drawing the correct conclusion, that the new condo market is overpriced; both the mid range ($600-700) and the luxury market. So then presumably resale and assignments asking less than this price range are appropriately priced. So unless the market continues its upwards trends, and I point out that Canadian household debt is now 153% of income and that the average Canadian's net worth dropped from $184K to 180K in the past quarter and all the world problems, it would seem that the logical conclusion would be that the upsdie likelihood of price appreciation is small and that buying today should really be either for personal use or long term appreciation. Those days of automatic returns on buying, especially when factoring transaction costs, are over. CG, am I wrong in my assumptions based on your statements?
cdr108
Senior Member
Toronto Life article back from July 2010 ... was posted somewhere but can't find it.
it's a risk assessment by neighbourhoods by market watchers, economists, mortgage brokers and real estate agents for price corrections, etc.
http://www.torontolife.com/daily/in...-safest-places-to-buy-real-estate-in-toronto/
Bridle Path: medium
Forest Hill: very low
Rosedale: very low
Annex: low
Yorkville: very low
Kingsway: very low
Roncesvalle: low
Trinity-Bellwoods: low
Danforth Village: medium-high
The Beach: medium
Leslieville: medium-high
Leaside: medium
The Junction: medium-high
Parkdale: medium-high
Bloor West Village: low
Harbourfront-CP: HIGH
Yonge/Sheppard: medium-high
Riverdale: very low
Yonge/Eglinton: medium
Bayview Village: medium-high
it's a risk assessment by neighbourhoods by market watchers, economists, mortgage brokers and real estate agents for price corrections, etc.
http://www.torontolife.com/daily/in...-safest-places-to-buy-real-estate-in-toronto/
Bridle Path: medium
Forest Hill: very low
Rosedale: very low
Annex: low
Yorkville: very low
Kingsway: very low
Roncesvalle: low
Trinity-Bellwoods: low
Danforth Village: medium-high
The Beach: medium
Leslieville: medium-high
Leaside: medium
The Junction: medium-high
Parkdale: medium-high
Bloor West Village: low
Harbourfront-CP: HIGH
Yonge/Sheppard: medium-high
Riverdale: very low
Yonge/Eglinton: medium
Bayview Village: medium-high
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canarob
Senior Member
Interesting stats on the rental market here:
http://www.cmhc-schl.gc.ca/odpub/esub/64459/64459_2011_A01.pdf
http://www.cmhc-schl.gc.ca/odpub/esub/64459/64459_2011_A01.pdf
interested
Senior Member
Won't open for me: Adobe says bad dictionary??
canarob
Senior Member
Works ok for me...
drewp
Active Member
CG, as of now yes it is, but I am dealing with more and more people realizing that a 500 sqft condo for 1600 is not worth it.
I am being contacted by couples, friends, sisters, colleagues, students more often than indivduals. This has shifted the last year or so which to me is an indication that small two bedrooms like interested said will be the best return on investment in the upcoming years. I would look for small two bedroom units if I were an investor.
Interested like CG said the luxury condo market is new in Toronto and no one really knows what to expect. Unfortunately you will have to wait a couple of years to see how these units sell. I know Ritz is not a good indication but the projected sales price that some listing agents were expecting have been over inflated. We are seeing the same price per square foot as TIFF, around 750 a square foot, for a project that was supposed to command (to some) close to 1000 square foot.
I am being contacted by couples, friends, sisters, colleagues, students more often than indivduals. This has shifted the last year or so which to me is an indication that small two bedrooms like interested said will be the best return on investment in the upcoming years. I would look for small two bedroom units if I were an investor.
Interested like CG said the luxury condo market is new in Toronto and no one really knows what to expect. Unfortunately you will have to wait a couple of years to see how these units sell. I know Ritz is not a good indication but the projected sales price that some listing agents were expecting have been over inflated. We are seeing the same price per square foot as TIFF, around 750 a square foot, for a project that was supposed to command (to some) close to 1000 square foot.
KA1
Senior Member
A follow up question, please.
Is Ritz price at 750psf due to the building not being all that desirable -- as Interested has pointed out, no balcony, need to take 2 elevators, etc -- or is it due to luxury market iself?
In one of the previous posts, Interested has stated that,currently, units in Shangri-la are being sold by the developer at 1,200psf. Buyers at that price level, generally, are not that ignorant of the prevailing market conditions. Then, how come units at that price are still moving?