Baby, we got a bubble!?

[interested]

"...I believe but perhaps you can correct me if I am wrong."

Nah, I'm just guessing.

We all are just guessing. that's what makes it so interesting and fun and for lively discussion. If we knew what we were doing, we'd all be rich.

 

[Kenny]

Maybe in still as yet uncertain times, people are hesitant to take on further debt to move up and are asking themselves more about needs than wants as a sign of the more austere times.

Thanks. That sounds like the most reasonable explanation. Also, one could argue that high home prices also prevent people from buying, creating something of a falling inventory/rising price spiral. New home buyers can't afford the higher prices, so they continue to rent.

 

[Eug]

More Canadians plan to buy a new home by 2012, says RBC study

A new study by the Royal Bank suggests more Canadians are very likely to buy a new home in the next two years.

Ten per cent of the 2,047 people surveyed for the 17th annual RBC home ownership study said they plan to buy a home by 2012 - up from seven per cent two years ago.

Note that two years ago was before the crash. So, in 2010, people are even more inclined to buy than they were at the peak of the stock market in 2008.

 

[gei]

You know what's funny... since the day I started reading this forum (years before I even joined), people have been talking about a real estate bubble, and how it's a bad time to buy.

Had I ever actually listened to that advice I would have regretted it...

 

[Eug]

You know what's funny... since the day I started reading this forum (years before I even joined), people have been talking about a real estate bubble, and how it's a bad time to buy.

Had I ever actually listened to that advice I would have regretted it...

Out of interest's sake, how long ago was that?

I've been concerned about pullbacks since the mid-2000s... and then finally gave in and bought in 2007. However, it was a bit easier for me, since I already owned a place, so it was just an upgrade.

 

[daveto]

You know what's funny... since the day I started reading this forum (years before I even joined), people have been talking about a real estate bubble, and how it's a bad time to buy.

Had I ever actually listened to that advice I would have regretted it...

There are similar discussion boards in the US and elsewhere. I am sure they are laughing as well.

 

[Kenny]

Thanks. That sounds like the most reasonable explanation. Also, one could argue that high home prices also prevent people from buying, creating something of a falling inventory/rising price spiral. New home buyers can't afford the higher prices, so they continue to rent.

One more reason for low inventory: hot market = very short times on the market. So it's quite possible that while the overall number of houses available for sale per year hasn't changed that much, the number of homes available for any given day could be a lot lower. So, the "inventory" is low only in the short term sense.

 

[X2 Buyer]

More Canadians plan to buy a new home by 2012, says RBC study

A new study by the Royal Bank suggests more Canadians are very likely to buy a new home in the next two years.

Ten per cent of the 2,047 people surveyed for the 17th annual RBC home ownership study said they plan to buy a home by 2012 - up from seven per cent two years ago.

Note that two years ago was before the crash. So, in 2010, people are even more inclined to buy than they were at the peak of the stock market in 2008.

I've seen a similar news on Metro a couple of days ago. More young Canadians taking advantage of low interest rates in housing market

For people that I have known of, at least five in 25 years old range they all purchased condos in the past year or plan to buy. They are either University new graduates or international students.

 

[farhan]

i'm really curious to know about good deals on Pre-Construction Condos as some of the posters suggested that $500 SQ FT is a high price in DT, the problem is that it's almost impossible to find anything below that. I've been working hard to find places around $400 SQFT as my maximum budget is around $200K, but can't find anything.
I finally found some deals on King West (Urban Corp. Fuzion Project) but have really mixed reviews onit.....
Where would you find deals with under $500 SQFT, any suggestions, as I don't see anything....

I agree with one of the Poster who mentioned that people are talking about the bubble for about a decade now ...... but apart a small time period between 2008-2009 ... I never saw prices to depreciate for last 7-9 years ......

housing prices were exponential in 2006 when the Interest rates were around 6% ( I paid that rate until I sold my house) and I still wasn't able to find deals and had to deal with bidding wars .....

I've been asnwered on similar questions on a different thread, but would appreciate for some more input.

Q- Area after Dufferin street on King west ..... what region is it considered, Downtown, Toronto City ?????
Q- A $400 SQ FT is a really Risky rate to consider? Liberty Vilage is beyond $500 SQFT right now and is in the same region?
Q- Big Question .... NOW or later in the year ..... I know i will not get today's interest Rate anyways.

 

[Eug]

i'm really curious to know about good deals on Pre-Construction Condos as some of the posters suggested that $500 SQ FT is a high price in DT, the problem is that it's almost impossible to find anything below that. I've been working hard to find places around $400 SQFT as my maximum budget is around $200K, but can't find anything.

So buy resale then.

 

[interested]

Out of interest's sake, how long ago was that?

I've been concerned about pullbacks since the mid-2000s... and then finally gave in and bought in 2007. However, it was a bit easier for me, since I already owned a place, so it was just an upgrade.

LOL,
I remember telling someone when I bought in 2001 that I thought the market was at its peak. Then I again put down deposits in 2007 and then 2008 thinking it was the end of the rise. Thought I was finally right when Oct 2008 halted and now look. That said, the higher we go, the more we can potentially fall and I still think we are in for a period of stagnation or slight decreases by the end of this year. But then, it is quite clear I haven't figured it out yet and I guess if one predicts a decline long enough, sooner or later one will be proven right, even if it is only temporary.

 

[simuls]

Q- Area after Dufferin street on King west ..... what region is it considered, Downtown, Toronto City ?????
Q- A $400 SQ FT is a really Risky rate to consider? Liberty Vilage is beyond $500 SQFT right now and is in the same region?
Q- Big Question .... NOW or later in the year ..... I know i will not get today's interest Rate anyways.

A: Area after Dufferin on King West is considered Parkdale (to the north), not sure to the South. This is a very mixed neighbourhood but few condos (actually, none that I can think of) and low prices will be there for some time. Great place to develop I'd think.

A: $400 is not a risky psf. I'd say that around $450-500 is correct for West of Bathurst, south of Bloor, $375-450 east of Parliament, s of bloor, and $5-600 for downtown core. The non-luxury condo's that are currently selling for $7-800 (Casa, Ice, Maple Leaf) will probably drop a good 20% or more over the next 2 years back down to the range above, or stagnate for a good long while while everyone else catches up IMO.

A: We're all just giving educated guesses, but I'd say later in the year and even better into the middle of next year. I'd guess you'd have another 10 000 condos alone to look at and with the C$ expected to reach parity and bond markets going nowhere fast, historically low interest rates will still be around.

 

[interested]

A: Area after Dufferin on King West is considered Parkdale (to the north), not sure to the South. This is a very mixed neighbourhood but few condos (actually, none that I can think of) and low prices will be there for some time. Great place to develop I'd think.

A: $400 is not a risky psf. I'd say that around $450-500 is correct for West of Bathurst, south of Bloor, $375-450 east of Parliament, s of bloor, and $5-600 for downtown core. The non-luxury condo's that are currently selling for $7-800 (Casa, Ice, Maple Leaf) will probably drop a good 20% or more over the next 2 years back down to the range above, or stagnate for a good long while while everyone else catches up IMO.

A: We're all just giving educated guesses, but I'd say later in the year and even better into the middle of next year. I'd guess you'd have another 10 000 condos alone to look at and with the C$ expected to reach parity and bond markets going nowhere fast, historically low interest rates will still be around.

Simuls, a great assessment and informative about the prices in various areas. I would tend to agree with much of your assessment but then Fools seldom differ.

An interesting thought to run by you and curious to hear if you think this will have an impact and if so by how much. The Globe and Mail today says that the Canadian dollar is now poised to exceed $1 US by Sept and may drop back to $0.97 next year.

Let's assume for a minute that this is correct and that the Canadian dollar over the next couple of years stays at around parity and its longer term forecasts are to increase as the economy recovers and the demand for our raw resources increases. Do you think that might invite further foreign investment to take advantage of an asset that is appreciating on a currency basis and therefore increase demands for condos here by foreigners for a somewhat longer time, thereby absorbing some of the 10000 condos you expressed you expect to come on lline by the middle of next year?

 

[BrianPersaud]

Simuls, a great assessment and informative about the prices in various areas. I would tend to agree with much of your assessment but then Fools seldom differ.

An interesting thought to run by you and curious to hear if you think this will have an impact and if so by how much. The Globe and Mail today says that the Canadian dollar is now poised to exceed $1 US by Sept and may drop back to $0.97 next year.

Let's assume for a minute that this is correct and that the Canadian dollar over the next couple of years stays at around parity and its longer term forecasts are to increase as the economy recovers and the demand for our raw resources increases. Do you think that might invite further foreign investment to take advantage of an asset that is appreciating on a currency basis and therefore increase demands for condos here by foreigners for a somewhat longer time, thereby absorbing some of the 10000 condos you expressed you expect to come on lline by the middle of next year?

It might hurt it because they were buying in 2006 when it was a our dollar was $0.65 US. Today their $ is devaluing against, thus RE doesn't look as attractive because their $ doesn't go as far

 

[interested]

It might hurt it because they were buying in 2006 when it was a our dollar was $0.65 US. Today their $ is devaluing against, thus RE doesn't look as attractive because their $ doesn't go as far

Brian,

on the other hand, if the dollar continues to strengthen, converting a USD now would not only result in capital appreciation but if condo prices remain stable or increase, they would make both the gain on the condo and the gain on the currency. Given US real estate right now it may or may not be a safer bet to invest in Toronto depending on your forecast for the US.

Actually when I posed the question I was not really thinking about Americans and USD but rather more at the Indo Chinese population to invest in Toronto or possibly Europeans/South American's looking to diversify.