TheKingEast
Senior Member
And so it begins...
|
|
|
Baby, we got a bubble!?
- Thread starter simuls
- Start date
redfirm
Active Member
Two different ratios. Both showing the same thing - numbers are bad! Second highest household debt on that chart is not bad?
*****Just noticed that Daveto already pointed that out.
redfirm
Active Member
KA1, CN, Interested,
what do you think? First serious cracks on the horizon? Dare to predict the next 6 months?
I stand by my prediction given in March of last year: 18-24 months for clear cracks to show up. So here we are, 18 months later...
Total damage over several years 25%+ from the peak.
I am no expert. Looked at the published figures and ratios, looked at other countries, looked at what's
happening with my rental properties ... came up with the conclusion noted above ... call it a semi-educated
guess. I always assumed that the guy who started this thread wanted other people to answer two simple
questions: when and by how much. So I tried to do it.
what do you think? First serious cracks on the horizon? Dare to predict the next 6 months?
I stand by my prediction given in March of last year: 18-24 months for clear cracks to show up. So here we are, 18 months later...
Total damage over several years 25%+ from the peak.
I am no expert. Looked at the published figures and ratios, looked at other countries, looked at what's
happening with my rental properties ... came up with the conclusion noted above ... call it a semi-educated
guess. I always assumed that the guy who started this thread wanted other people to answer two simple
questions: when and by how much. So I tried to do it.
HelloToday
Active Member
There will be buyers all the way down. No crash. No correction. Just a gradually and drawn out 'slide', if any. More likely price stagnation.
interested
Senior Member
There is an article today that Vancouver is coming down a lot faster than thought. If that happens in Toronto as well, psychology will change quickly.
We can overshoot. I stand by idea that we could retest 2008 prices.
However, I also believe that the stock market will correct vastly by 2014 or 2015 when everyone realizes that QE3 has worked poorly(which i expect) and people grow fearful. However, prices may not go that far because people may hold onto investment real estate as a place to get yield.
So I think 15% but 25% not out the realm of possible. Condo market will be hit more than SFH.
those who bought over $550/sq.ft. will regret the decision for mid-upper product that is currently $600-$700+. Hi end will encounter the $1000/sq.ft. ceiling and have difficulty. Just my guesses (re Precon in the core).
000
Senior UT Member
A guy I follow on Twitter @YVRHousing is looking for a 6% yoy drop in Vancouver by Spring 2013. His guesses are usually pretty accurate.
Wish there was someone like that (making their research public) covering the Toronto market.
Wish there was someone like that (making their research public) covering the Toronto market.
radioheadmike
Active Member
What would you consider as the ideal price for condos in term of $/sq.ft?
cdr108
Senior Member
IMO, $400-425 psf for mid $ - range product in dt core.
mid $ - range = pretty much everything in the market except Yorkville proper or luxury products like SL, 4S, Ritz, etc.
radioheadmike
Active Member
So a 500sqft condo in Toronto should be worth $212,500?
It doesn't seem realistic at all when considering the low interest rates & job growth in the GTA. Current Min Wage can handle this mortgage.
At these prices, you will have bidding wars and the price will jump again.
The truth is there is a lot of well employed people in the GTA and a lot of well off immigrants.
Your ideal prices will only make sense if jobs disappear to due economic head winds. Interest rates go over 5%.
Ric
Active Member
I disagree. Under no circumstance will prices in the downtown core ever hit $400 psf again. U can hold me to that statement and laugh me out the room if that ever happens.
cdr108
Senior Member
i'm going to guess that you're under 35 years olds and never experienced a housing recession beyond 2008, which was an anomoly due to gov't interference via changes in CMHC rules and drastic lowering of B of C bank rate from 4.75% at November 2007 to 0.50% at April 2009.
long term, prices follow inflation and local incomes.
low interest rates will rise.
one should be considering the 25+ years of an amortization on a mortgage, not just your current term.
Interest rates over 5% is possible and probable. In fact, 5% is under the historical average for the Bof C bank rate, and bank prime rates are definitely higher than the BofC bank rate.
http://www.bankofcanada.ca/wp-content/uploads/2010/09/selected_historical_page1_2_3.pdf
http://www.fin.gov.bc.ca/PT/bcm/ref/cibcHistoricalPrime.pdf
re: job growth in the GTA
as of June 2012 -
Canada’s unemployment rate: 7.3 %
Ontario’s unemployment rate: 7.8 %
Toronto's unemployment rate: 9.0%, its highest level since October 2010 and the highest among all Ontario economic regions.
http://www.servicecanada.gc.ca/eng/on/offices/2012/06-olmb-june.shtml
interested
Senior Member
I had difficulty when prices got beyond $450/sq.ft. making the math make sense. I could probably accept $500/sq.ft. for mid range downtown TO prices.
Resale I believe is around $500/sq.ft. on relatively new projects and even $600. So perhaps $550 but that would be pretty well tops for me and not a price I would purchase at. I would probably draw the line at $500 or thereabouts.
Just my view though.
I just read cdr's post. He is of course correct that the correction in the past has been more. However, |I am trying to remember...$400/sq.ft. was that the price in 2008 when things went soft? I am not so sure we will see $400-$425 now since product is over $600 and that would represent a 33% decline. It could happen but will as others have said require a major meltdown and a very significant increase in interest rates (more than 2 or 3% beyone where we are now) in my estimate.
Last edited:
daveto
Active Member
Ric, a generous offer, but one that needs to provide us more foundation for our laughter. Perhaps we can "laugh you out of the room as your strip naked and walk around the DT core with a sign around your neck saying "Hear ye, hear ye, $400psf has arrived. Let the apocalypse begin"
Or something along those lines.
ps. we should be clear that we're talking $400 psf in 2012 dollars, after adjusting for inflation. Just wanna make sure we have a decent chance for our show.
CN Tower
Banned
This comment is a little too pedantic for my taste.
What was once an anomaly has because the new normal in the past 2008 Financial Crisis world. Whereas Wall Street has the 'Bernanke Put' to juice the US Stock Market, Canada has the Flaherty Fake- he shortened amortization periods and reduced HELOC leverage when things were hot but the market knows that he will quickly reverse that policy if things get really weak. Canada needs a strong housing market.
radioheadmike
Active Member
9% of 2.48 million people is a lot but still means a lot of people are employed. Does the 9% include students?
I also know a lot of immigrants who are on unemployment insurance but have millions of dollars in foreign bank accounts. Keep that in mind.
I don't look at numbers as an indicator of bad times (or good times). My indicator is Mall parking lots during the Christmas season. I guess we will see in a few more weeks.