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Baby, we got a bubble!?

cdr108 said:
frankly, alot of residential rentals are not listed on MLS because brokers don't think it's worth their time for the money, and owners don't think it's worth their money for the time.

most of the rental listings on mls are probably favours for investors who bought a condo from the agent/broker in the first place.

additionally, some of the older apt buildings are owned by REITS who have their own marketing .... again, not on mls
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I believe there's a reason why owners don't think it's worth their money. It's super easy to rent residential units with all the available websites to advertise your unit and the demand. If these unreported numbers were included, I would think it'd drop the vacancy rate.

craigslist
51
kijiji
padmapper
yorkbbs

As long as you are able to get the following with no exception, your pretty much covered even without an agent.

-Identification
-Employment letter or school acceptance letter.
-previous landlord reference
-First and last month rent
-Credit check (I don't always do this)
-A lease (If you're not looking for short term)

Just my thoughts. You may feel more comfortable using an agent.
 
redfirm said:
Ok, all valid points and yet .... how do you explain sharp down adj of almost 15% within a 6-7 month period 3 years ago? Or the bubble in early 90s? Wasn't TO major Canadian city, played a big economic role, big banks were here, immigration magnet, etc in the 90s as well?
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3 years ago, the world was shaken by the market crash. I am not saying that Toronto is immune to all obstacles. If Europe, Asia, or U.S collapses, we will go down too. Everyone will be impacted. The savers who waited to get into the market will have their savings wiped out, their good paying jobs disappear. And those who bought in will lose their homes as well. Banks will not give out mortgages as easily.

But if the world economy continues on with no major hiccups, I don’t see Toronto real estate dropping. It will continue to go up.

I can’t say much about the 90’s as I was too young to know much back then. But from what I understand, Toronto (or Canada) did not play much of a role in the World Economy. Our Banks were not heavily invested or as big (in profiting) as they are now. Foreign investment was little. Toronto was just shedding its rust belt industry. Toronto is a different city now. It has diverse industries; its art scene cultural has vastly evolved, foreign investment is pouring in, great night life cultural, our schools and education have improved significantly. Yes I understand we are not New York City, or Paris, but we are playing catch up to these cities and we have a long way , but we are heading the right way.
 
drewp said:
In the 90's the interests rates were well above 10%.(...and that is why there was a bubble)
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Huh? How does that explain the bubble? Interest rates did not increase in the late 80's and early 90's. They were high to begin with from the late 70's, and they were actually decreasing from the late 70's, through the 90's, up until present.


OolloO said:
It's super easy to rent residential units with all the available websites to advertise your unit and the demand. If these unreported numbers were included, I would think it'd drop the vacancy rate.
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The units listed on Craigslist/etc are vacant. If they were included in the vacancy calculations, wouldn't that increase the vacancy rate?

radioheadmike said:
If Europe, Asia, or U.S collapses, we will go down too. Everyone will be impacted. But if the world economy continues on with no major hiccups, I don’t see Toronto real estate dropping. It will continue to go up.
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Whew. Good thing everything is rosy in the world economy.


radioheadmike said:
The savers who waited to get into the market will have their savings wiped out (...if the global economy collapses)
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Huh? I'm not following you. Are you talking about equities? Bonds? Or people who have cash in their mattress and will burn it for heat?

radioheadmike said:
I can’t say much about the 90’s as I was too young to know much back then. But from what I understand, Toronto (or Canada) did not play much of a role in the World Economy. Our Banks were not heavily invested or as big (in profiting) as they are now. Foreign investment was little. Toronto was just shedding its rust belt industry. Toronto is a different city now. It has diverse industries; its art scene cultural has vastly evolved, foreign investment is pouring in, great night life cultural, our schools and education have improved significantly. Yes I understand we are not New York City, or Paris, but we are playing catch up to these cities and we have a long way , but we are heading the right way.
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For someone who "can't say much about the '90's as I was too young to know much back then", you seem to say quite a bit.

KA1 said:
http://www.theglobeandmail.com/news...-toronto-leads-canadas-growth/article2307960/
Bouncing back from recession, Toronto leads growth.
There goes my bubble.
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I can't argue with logic and analysis of that calibre.
 
It says in the article they dropped 3.7%, and the prediction is for another 3% this year. If this all keeps going down > 25% then that's getting into burst bubble territory. If it plateau's out at -10% or something, some may just say it's a healthy correction.

For perspective: A 10% drop in Toronto would bring us to 2010 prices. A 25% drop would bring us to 2006/2007 prices.
 
Eug said:
It says in the article they dropped 3.7%, and the prediction is for another 3% this year. If this all keeps going down > 25% then that's getting into burst bubble territory. If it plateau's out at -10% or something, some may just say it's a healthy correction.

For perspective: A 10% drop in Toronto would bring us to 2010 prices. A 25% drop would bring us to 2006/2007 prices.
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So we've gone up over 10% since this thread was started?
 
Eug said:
For perspective: A 10% drop in Toronto would bring us to 2010 prices. A 25% drop would bring us to 2006/2007 prices.
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are you basing your figures from teranet or treb, etc ?
from personal experience and tracking prices in C1/C2/C8/C9 south of dupont, prices have gone up 50% since 2006.
i've also noticed similar trends in Toronto in general N/W/E of the core so the figures must be including the outer 416-suburbs and 905 for their Toronto area.
 
realist123 said:
http://www.bloomberg.com/news/2012-01-19/hammer-falls-on-australia-home-auctions-as-bids-scarce-in-faltering-market.html

Australia, like Canada avoided the US & European real estate meldown.

They are a resource based economy.

They have low interest rates (currently 4%, but expected to drop)

They have high debt/income ratios (see article)

Ooops.... bubble burst.
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I would need someone to inform me but I believe that in general Australia's price increases over the past decade have been higher than in Canada. While in Toronto we may be up 80-100% over 10 years, I believe Cities in Australia are up more like 150-200%. If that is so, there is more room to fall. Similar to certain markets in the US. That said, I agree with the comparisons being drawn by realist123. I am not sure their interest rates on mortgages are quite this low.

Is the 4% the prime rate or the 5 year mortgage rate vs. about 3% in Canada?
 
I believe the rate is 4.25% (Reserve Bank of Australia rate). This can be compared against the Bank of Canada rate of 1%.

http://www.rba.gov.au/media-releases/2011/mr-11-28.html

Mortgages in Australia for homes is north of 6%

Australia's prices are a lot higher than Canada's when compared against income. They also have a lot higher interest rates. So theoretically, demand can be increased by lowering their rates to something like ours.
 
RBA.JPG


The central bank's rate is currently at 4.25, but look at the graph.

Rates were originally higher than in Canada in 2008, and are currently projected to drop a full % point by November, essentially restoring the 2009-2010 levels.

Although the numbers are slighly different, the rate trend is very similar. A 1% increase from 3-4% didn't pop their bubble. It just happened organically. Don't assume we need 6% mortgages in Canada to reverse our trend.
 

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Xenosblitz said:
I believe the rate is 4.25% (Reserve Bank of Australia rate). This can be compared against the Bank of Canada rate of 1%.

http://www.rba.gov.au/media-releases/2011/mr-11-28.html

Mortgages in Australia for homes is north of 6%

Australia's prices are a lot higher than Canada's when compared against income. They also have a lot higher interest rates. So theoretically, demand can be increased by lowering their rates to something like ours.
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Theoretically they can, however s REalist123 points out, their bubble is bursting it would appear despite only a 1%-2% increase and levels far below 2008. I would like the answer to the other 1/2 of the equation if someone knows it. What % increase did Australia incur. If my beliefs are correct, and someone could confirm, the fact that their R/E went up so much more than ours means it should potentially drop further. As well, realist brings up a very valid point: their wages are not as high as ours; however that said, their debt to income level seems to be similar to ours here on average.
 
cdr108 said:
are you basing your figures from teranet or treb, etc ?
from personal experience and tracking prices in C1/C2/C8/C9 south of dupont, prices have gone up 50% since 2006.
i've also noticed similar trends in Toronto in general N/W/E of the core so the figures must be including the outer 416-suburbs and 905 for their Toronto area.
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CDR, I'm not sure that you and EUG are quoting very different figures. Using 2006 as a base, a 50% increase would bring it to 150%, a 25% increase would lower it to 112.5%, and EUG had quoted 2006/7 vs your 2006.

Interested and co, the following link to the demographia study shows Australia's prices are indeed higher than Canada's, as based upon the median price to income ratio at least. The demographia study talks a lot about the effect of land regulation limiting supply, especially in Australia.
http://www.demographia.com/dhi.pdf
 
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