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Baby, we got a bubble!?

GREATER TORONTO REALTORS® REPORT Q4 RESALE CONDOMINIUM FIGURES
TORONTO, January 16, 2015 – Toronto Real Estate Board President Paul Etherington
announced that there were 4,975 condominium apartment sales reported through the
TorontoMLS system in the fourth quarter of 2014. This result was up by 8.3 per cent
compared to the fourth quarter of 2013.
“Demand for condominium apartments remained strong in the fourth quarter of 2014.
While the supply of condominium apartments listed for sale grew in the fourth quarter,
including a large number of newly completed units, the number of sales grew at a faster
pace. Competition between buyers increased in the condo market over the past year,”
said Mr. Etherington.
“Interest in ownership housing in the GTA, including demand from first-time buyers in
the condo market, is extremely strong. The majority of households understand that a
home purchase represents a quality long-term investment,” said Mr. Etherington.
The average TorontoMLS selling price for a condominium apartment in the fourth
quarter of 2014 was $367,199 – up 3.8 per cent compared to the average of $353,799
reported for the same period in 2013.
“Despite very strong condominium apartment completions over the last two years, we
have not experienced a glut in inventory. The number of buyers has more than kept up
with the number of units available for sale. This is why we continued to experience
above-inflation average price growth in the condo segment,” said Jason Mercer, TREB’s
Director of Market Analysis.
 
GREATER TORONTO REALTORS® REPORT Q4 RENTAL MARKET FIGURES
TORONTO, January 16, 2015 - Toronto Real Estate Board President Paul Etherington
announced that fourth quarter 2014 condominium apartment rental transactions though
the TorontoMLS system were up by 17 per cent to 5,036 compared to the fourth quarter
of 2013. Over the same period, the number of condominium apartments listed on
TorontoMLS was also up, but by a lesser annual rate.
“We have seen record condominium apartment completions over the last two years.
Many of these new apartments are owned by investors who have chosen to rent them
out. The increased supply of rental condos has been met by increased demand for
these units, as renter households turn to the condominium apartment segment to find
modern units in popular neighbourhoods,” said Mr. Etherington.
“Increased rental demand has resulted from steady population growth in the Greater
Toronto Area, as newcomers have been attracted to the region by its economic and
ethno-cultural diversity,” continued Etherington.
Average rents for popular one-bedroom and two-bedroom apartments were basically
flat in the fourth quarter when compared to the same period in 2013. The average onebedroom
rent was up by $10 year-over-year to $1609. Over the same period, the
average two-bedroom rent remained the same.
“Average rents can be influenced by both changes in market conditions and changes in
the type and geography of apartments rented from one period to the next. Over the
next few months, if we continue to see the growth in rental transactions outstrip the
growth in units listed for rent, we will likely see a new upward trend in average rents,”
said Jason Mercer, TREB’s Director of Market Analysis.
 
I think the percentage is an over exaggeration but plenty to be worried about.
it's best to read the article since many charts attached with it that I can't post here.
In Toronto, I believe we are 35-40% over inflated

Deutsche Bank reveals 7 reasons why ‘Canada is in serious trouble,’ starting with a 63% overvalued housing market

http://business.financialpost.com/2...starting-with-a-63-overvalued-housing-market/

Andy Kiersz, Business Insider | January 8, 2015 12:33 PM ET

Deutsche Bank’s chief international economist Torsten Sløk has circulated a chart deck looking at global housing markets, and Canada stands out as having quite a few problems.

According to the report, homes in Canada are 63 per cent overvalued, greater than the 50 per cent levels in Australia and Norway, Deutsche Bank AG said in a report Thursday.

Values in Canada are 35 per cent higher when the median house price is compared to the median household income than the historical average and 91 per cent higher compared with average rentals.

Sløk dedicated seven charts to the country.

Simply put, debt levels are very high, and with sky-high home prices cooling off, we could see pressure on the Canadian financial system and the labor markets.

While US households have been deleveraging since the Great Recession, Canadian household debt as a percent of household income is higher than ever:

Canada Household Debt To IncomeTorsten Slok/Deutsche Bank

The mortgage credit market has been slowing down, which is a bad sign for the housing market:

Canada Mortgage Debt GrowthTorsten Slok/Deutsche Bank

Other forms of debt have also been exploding, while income has grown at a much slower rate:

Screen Shot 2015 01 08 at 10.14.45 AMTorsten Slok/Deutsche Bank

Construction of houses has been level over the last decade, while multifamily units like apartments have reached record highs:

Canada multifamily vs detached housingTorsten Slok/Deutsche Bank

Canada’s biggest housing market, Toronto, has been slowing down over the last couple years:

Canada Toronto housing startsTorsten Slok/Deutsche Bank

Meanwhile, Canada’s West Coast metropolis of Vancouver has held steady:

Canada Vancouver Housing StartsTorsten Slok/Deutsche Bank

Any difficulty in the Canadian housing market could bleed over into the larger economy, since construction is a much larger part of Canadian employment than US employment:

Canada vs US housing construction jobsTorsten Slok/Deutsche Bank
 
cdr108 said:
I think the percentage is an over exaggeration but plenty to be worried about.
it's best to read the article since many charts attached with it that I can't post here.
In Toronto, I believe we are 35-40% over inflated

Deutsche Bank reveals 7 reasons why ‘Canada is in serious trouble,’ starting with a 63% overvalued housing market

http://business.financialpost.com/2...starting-with-a-63-overvalued-housing-market/

Andy Kiersz, Business Insider | January 8, 2015 12:33 PM ET

Deutsche Bank’s chief international economist Torsten Sløk has circulated a chart deck looking at global housing markets, and Canada stands out as having quite a few problems.

According to the report, homes in Canada are 63 per cent overvalued, greater than the 50 per cent levels in Australia and Norway, Deutsche Bank AG said in a report Thursday.

Values in Canada are 35 per cent higher when the median house price is compared to the median household income than the historical average and 91 per cent higher compared with average rentals.

Sløk dedicated seven charts to the country.

Simply put, debt levels are very high, and with sky-high home prices cooling off, we could see pressure on the Canadian financial system and the labor markets.

While US households have been deleveraging since the Great Recession, Canadian household debt as a percent of household income is higher than ever:

Canada Household Debt To IncomeTorsten Slok/Deutsche Bank

The mortgage credit market has been slowing down, which is a bad sign for the housing market:

Canada Mortgage Debt GrowthTorsten Slok/Deutsche Bank

Other forms of debt have also been exploding, while income has grown at a much slower rate:

Screen Shot 2015 01 08 at 10.14.45 AMTorsten Slok/Deutsche Bank

Construction of houses has been level over the last decade, while multifamily units like apartments have reached record highs:

Canada multifamily vs detached housingTorsten Slok/Deutsche Bank

Canada’s biggest housing market, Toronto, has been slowing down over the last couple years:

Canada Toronto housing startsTorsten Slok/Deutsche Bank

Meanwhile, Canada’s West Coast metropolis of Vancouver has held steady:

Canada Vancouver Housing StartsTorsten Slok/Deutsche Bank

Any difficulty in the Canadian housing market could bleed over into the larger economy, since construction is a much larger part of Canadian employment than US employment:

Canada vs US housing construction jobsTorsten Slok/Deutsche Bank
Click to expand...


YAWN... 63 Percent ? Who are these people? I totally agree of pockets being overvalued by 30-35% at most but not the entire city as a whole. I think our city works 10x harder then most cities down south. Household Debt on the other hand..
 
RZ12 said:
YAWN... 63 Percent ? Who are these people? I totally agree of pockets being overvalued by 30-35% at most but not the entire city as a whole. I think our city works 10x harder then most cities down south. Household Debt on the other hand..
Click to expand...

That's ridiculous. One thing about this housing "bubble" is it's full of delusional people on both sides of the spectrum. I don't know who's worse...those that manipulate numbers to argue that the market will explode or those that say that the market is great and prices will keep going up up up.

It's all tied to rates, though. If rates are extremely low then house prices will be sky high and "overvalued". If rates go back to double digits then house prices will drop obviously. So what is the true value of a home? I guess it's what someone will pay for it at the present point in time.

Canada's housing market should never be compared to the US. Automatically lost all credibility with 63 percent. LMAO
 
RZ12 said:
YAWN... 63 Percent ? Who are these people? I totally agree of pockets being overvalued by 30-35% at most but not the entire city as a whole. I think our city works 10x harder then most cities down south. Household Debt on the other hand..
Click to expand...

What does this mean?
 
Migos said:
What does this mean?
Click to expand...

Since every article likes comparing Canada to the USA. My impression of the USA while visiting is that there much more laid back if not lazy. We work hard for what we want. Every immigrant still wants that dream of pride of home ownership. We didn't have it given to us like candy compared to the south. People in general are very happy in Canada minus the winter months and people seem to be staying to raise a family. The demand is here to stay.
 
RZ12 said:
Since every article likes comparing Canada to the USA. My impression of the USA while visiting is that there much more laid back if not lazy. We work hard for what we want. Every immigrant still wants that dream of pride of home ownership. We didn't have it given to us like candy compared to the south. People in general are very happy in Canada minus the winter months and people seem to be staying to raise a family. The demand is here to stay.
Click to expand...

This is a very analytical approach to valuating real estate in Canada... :rolleyes:
 
Condo George said:
GREATER TORONTO REALTORS® REPORT Q4 RENTAL MARKET FIGURES
TORONTO, January 16, 2015 - Toronto Real Estate Board President Paul Etherington
announced that fourth quarter 2014 condominium apartment rental transactions though
the TorontoMLS system were up by 17 per cent to 5,036 compared to the fourth quarter
of 2013. Over the same period, the number of condominium apartments listed on
TorontoMLS was also up, but by a lesser annual rate.
“We have seen record condominium apartment completions over the last two years.
Many of these new apartments are owned by investors who have chosen to rent them
out. The increased supply of rental condos has been met by increased demand for
these units, as renter households turn to the condominium apartment segment to find
modern units in popular neighbourhoods,” said Mr. Etherington.
“Increased rental demand has resulted from steady population growth in the Greater
Toronto Area, as newcomers have been attracted to the region by its economic and
ethno-cultural diversity,” continued Etherington.
Average rents for popular one-bedroom and two-bedroom apartments were basically
flat in the fourth quarter when compared to the same period in 2013. The average onebedroom
rent was up by $10 year-over-year to $1609. Over the same period, the
average two-bedroom rent remained the same.
“Average rents can be influenced by both changes in market conditions and changes in
the type and geography of apartments rented from one period to the next. Over the
next few months, if we continue to see the growth in rental transactions outstrip the
growth in units listed for rent, we will likely see a new upward trend in average rents,”
said Jason Mercer, TREB’s Director of Market Analysis.
Click to expand...

I wonder why condo rents are flat if there is so much demand. Actually, they're not even flat but decreasing when you consider inflation. The tidal wave of condo completions has hardly started.
 
Migos said:
This is a very analytical approach to valuating real estate in Canada... :rolleyes:
Click to expand...

Sorry Forgot to mention this is just for Ontario. Don't know what's going on else where in Canada.

Migos said:
I wonder why condo rents are flat if there is so much demand. Actually, they're not even flat but decreasing when you consider inflation. The tidal wave of condo completions has hardly started.
Click to expand...

People are staying put in their places thats why..These new condos aren't even fully built but 6-1 year away from completion and just occupying why pay more for something not 100% completed. Also a wave of condo buyers hitting the market.
 
Last edited:
I see. Pardon the ignorance; I'm from Vancouver so the standards I'm used to are a bit out of whack. I've been scoping the market recently, and have been finding Toronto prices surprisingly high for condos (~90% of Vancouver equivalent) but surprisingly cheap for houses/townhouses/duplexes (60-70% of Vancouver equivalent)
 
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