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Baby, we got a bubble!?

Migos said:
That's because the condo market is currently very tight. That may change with all of this supply coming online. What you're saying is the equivalent of saying housing will always go up in price because that's what's happened over the past 20 years.

It's as if people don't realize there are two sides to the housing market. There is demand, which most of us agree is very strong and shows little signs of slowing given our immigration policies. However, there is also supply. At some level of housing starts, supply can and will outpace even a very strong demand for housing. That is what I predict is going to happen to the condo market over the next couple years.
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Don't put words in my mouth. I never said the rental market will continue to grow for eternity. I specifically singled out the types of condos that will still be very popular. As long as home ownership continues to become more of a pipe dream for people, the reantal market will be healthy. It's very difficult for young people to buy a home right now. Downpayment, closing costs, getting approved for a high ratio mortgage, etc. And i doesn't look like things will get any easier. As long as that happens, the rental market will be fine. In addition, if you're in a high demand location, you will not have a tough time getting your price. I would never buy rental property that was not near a subway and not in a high demand area.



As far as your precictions. Go back and read all of the "predictions" back when this thread was made by people just like you. There are a crapload of smaller 1 bedrooms out there. They are sitting on the market for some time. The 2 beds are getting snatched up rather quickly. Some in days. Why? Because the demand is there and there is so little product. New condos that are coming out are comprised of 75%+ 1 bed/1bed+den <700 sqft. The Demand will be there for bigger units since there are so few of them out there and not many coming out on the horizon.

I specifically said smaller units will drop due to lack of demand and an abundance of supply.
 
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NorthYorkEd said:
Condos are the new semis and rowhomes. We are still debating whether or not to try and get something in the 1100-1400 sq ft range, even though my guts wilt at the thought of it all.
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I have been looking at more and more houses over the last little while. A lot of the condos I'm seeing downtown just aren't worth it. 2 bed 2 bath 800 sqft most likely poorly built $550-600K with a $550 maintenance fee. It's madness. Might as well get a house.
 
TheKingEast said:
I have been looking at more and more houses over the last little while. A lot of the condos I'm seeing downtown just aren't worth it. 2 bed 2 bath 800 sqft most likely poorly built $550-600K with a $550 maintenance fee. It's madness. Might as well get a house.
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Have you checked out Pier 27? That's quality product.
 
TheKingEast said:
Don't put words in my mouth. I never said the rental market will continue to grow for eternity. I specifically singled out the types of condos that will still be very popular. As long as home ownership continues to become more of a pipe dream for people, the reantal market will be healthy. It's very difficult for young people to buy a home right now. Downpayment, closing costs, getting approved for a high ratio mortgage, etc. And i doesn't look like things will get any easier. As long as that happens, the rental market will be fine. In addition, if you're in a high demand location, you will not have a tough time getting your price. I would never buy rental property that was not near a subway and not in a high demand area.
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You are talking only about demand in a vacuum. Demand is virtually meaningless unless you consider it in the context of the supply. I think that's why we can't see eye-to-eye on this.

TheKingEast said:
As far as your precictions. Go back and read all of the "predictions" back when this thread was made by people just like you. There are a crapload of smaller 1 bedrooms out there. They are sitting on the market for some time. The 2 beds are getting snatched up rather quickly. Some in days. Why? Because the demand is there and there is so little product. New condos that are coming out are comprised of 75%+ 1 bed/1bed+den <700 sqft. The Demand will be there for bigger units since there are so few of them out there and not many coming out on the horizon.

I specifically said smaller units will drop due to lack of demand and an abundance of supply.
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Maybe you are right that 1-bedrooms are more susceptible to a downturn. However, could you envision a scenario where 1-bedrooms drop by 20% but 2+ bedrooms retain their value?
 
Sent out to my investor pool, thought to share here, this is reality.

Real estate continues its upward trend with year over year percentage gains of 8% on average in the GTA. The naysayers were wrong in 2008 during the global credit crises, wrong in 2011 when a wall street guru forecasted our market would tank 25% and wrong in 2012 when mortgage restrictions were tightened. Those who have not stepped forward are behind the 8ball. I continue to invest in the market I sell with a recent purchase at 501 Yonge St. I believe to focus on the indicators and not scare tactics over the years as read in the newspapers. Indicators being immigration, unemployment rate, interest rates, appetite for investing from global and local players seeking more return than GICs or an up and down stock market that has performed well over the past 2 years but is not yet at par to where the TSX was in 2008 before the global credit crisis hit the 15,000 level. Also gold, traditionally a safe haven, has also tanked. Up to you folks....
 
Condo George said:
Sent out to my investor pool, thought to share here, this is reality.

Real estate continues its upward trend with year over year percentage gains of 8% on average in the GTA. The naysayers were wrong in 2008 during the global credit crises, wrong in 2011 when a wall street guru forecasted our market would tank 25% and wrong in 2012 when mortgage restrictions were tightened. Those who have not stepped forward are behind the 8ball. I continue to invest in the market I sell with a recent purchase at 501 Yonge St. I believe to focus on the indicators and not scare tactics over the years as read in the newspapers. Indicators being immigration, unemployment rate, interest rates, appetite for investing from global and local players seeking more return than GICs or an up and down stock market that has performed well over the past 2 years but is not yet at par to where the TSX was in 2008 before the global credit crisis hit the 15,000 level. Also gold, traditionally a safe haven, has also tanked. Up to you folks....
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I shudder to think about the knowledge level of "investors" that are going to buy based on this type of analysis. Same crowd that watches HGTV and says things like "real estate always goes up" and "why pay somebody else's mortgage?".

However, good on you for putting your money where your mouth is CG. I respect that. Do you hold units for the long-term and rent them or do you flip them?
 
Looks like the BoC is starting to ring the alarm...

http://www.theglobeandmail.com/repo...-overvalued-by-as-much-as-30/article22021768/

The Bank of Canada has acknowledged that the country’s housing market may be overvalued by as much as 30 per cent as a long-awaited soft landing remains elusive.

The bank based the estimate on a new model it has developed, details of which are contained in its twice-yearly assessment of threats to the Canadian financial system released Wednesday.
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In Toronto, for example, the bank warned of the risk of an “impending overbuild” in the condominium market.
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“A more worrisome aspect of this trend is that a sizeable proportion of new uninsured mortgages are being issued to riskier borrowers,” the bank said.

About 35 per cent of new, uninsured mortgages by smaller federally regulated banks since the end of 2012 could be considered non-prime, according to the report.

The bank said various less-unregulated institutions are also getting into the subprime market, which was famously blamed for helping to trigger the financial crisis in the U.S. in 2008.
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Just a passing thought....

For foreign investors, hasn't the decrease in the Canadian dollar devalued the housing market by 15% to 20%? With oil prices continuing to freefall I think we should expect the CAD to follow.
 
OolloO said:
Just a passing thought....

For foreign investors, hasn't the decrease in the Canadian dollar devalued the housing market by 15% to 20%? With oil prices continuing to freefall I think we should expect the CAD to follow.
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That is correct, with the caveat that exchange rates will vary depending on what currency we're talking about. For example, the Canadian dollar depreciated against the U.S. Dollar but appreciated against the Brazilian Real over the past couple years.
 
Migos said:
That is correct, with the caveat that exchange rates will vary depending on what currency we're talking about. For example, the Canadian dollar depreciated against the U.S. Dollar but appreciated against the Brazilian Real over the past couple years.
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I agree with you Migos.
The C$ has done well against most currencies except the USD. That said however, remember that the US is our largest trading partner so the C$ vis a vis the USD is much more important that it is to other currencies, the clearly the USD is important as it is the premier world currency.
Regarding CG's post. While we are in some view a petro currency, the other consideration is that we are a stable country and not a "puppet democracy" so there is foreign investment that is made looking for stability and the rule of law with the hope that the asset will not be seized or be in a confict area. That said, no doubt that a decrease in our currency does not make us as attractive as the same investment in the US if the USD will appreciate as well as the property.

The other question is whether or not prices will continue to climb...while they have to date...with defference to CG, as I have said before....pendulums overswing....it will only be in hindsite that people will realize it if there is going to be a correction.

I don't know if/when or how much it will be....I just feel at current valuations "investment new condo realestate" does not make much sense to me personally. That said, there can be some exceptions even in the current market though I think it is more perhaps in the resale market.
 
Migos said:
That is correct, with the caveat that exchange rates will vary depending on what currency we're talking about. For example, the Canadian dollar depreciated against the U.S. Dollar but appreciated against the Brazilian Real over the past couple years.
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Agreed, CAD has held well against the Brazilian Real or Russian Ruble, but not the Chinese Renminbi, Singaporean Dollar, Indian Rupee, Hong Kong Dollar. Also need to consider that USD is the most held foreign currency in countries outside of the US.
 
Demogr

Miami - mainly south American money seeking that safe haven you guys are talking about.

Toronto - mainland China, although I think that money will dry up in 2015.
 
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