James
Senior Member
Does anybody have any data on the who is actually buying these overpriced bungalows in North York?
VZ64, in my opinion the property sold for well over market value. The comparison you are trying to make doesn't apply as the sales over a million in the vicinity were for homes that sit on quieter streets, larger (more bedrooms), some more updated, deeper lots or a combination thereof. I think Eug is correct in that while this lot is not as deep it's wider (7 feet or so)in comparison to many that sold and so perhaps if it is for a quick investment turnaround the intent may be to get approval to squeeze in 3 townhouses because 2 certainly won't be cost effective. One last thing that wasn't stated in the article is that this sale actually took place last month and so new listings are trying to piggyback off that price.
Eug the backsplit is holding offers for later this week.
Freehold is moving upward, condo pricing not in stride and lagging at the moment.
No single bungalow listed below $999000 in 3-block radius, but there is a $999000 backsplit one block away in a nicer location with a complete separate second suite. That makes a $1 million land value sale amount already suspect.Well, these bungalows go for land value, so I don't think the number of bedrooms or some other house-related advantages affects the selling price much in the area. We can argue endlessly, but the fact that the median sold price is over 1m and that there is no single bungalow posting on MLS below 999K supports my argument. Let's agree to disagree
I already gave you the MLS number in the picture I provided. However, you should already know it if you've done the investigation you claim you've done as it's just around the corner from the $1.18 million dollar house.Give some detail of that backsplit (MLS number?)--is it in the same area I mentioned (East of NYCC, between Sheppard and Finch)? What is the lot size? How can it be that 60ft frontage bungalow is smaller 18% than whatever you found there? Does it have 75ft frontage?
The $1.18 million house was bought by a Chinese student, with money from the bank of mom and dad. I highly doubt it'd be for townhouse development purposes in this context. More likely a teardown, as those are quite common with these types of purchases by Chinese, both in Vancouver and Toronto.So it faces the park right? Looks like a front for a developer that's buying up the block to put up townhouses.
So it faces the park right? Looks like a front for a developer that's buying up the block to put up townhouses.
That said, urbanation makes its money selling research to the development industry. To me, I have read the arguments and I agree with parts of it but on the balance it just sounds like an attempt to justify that there is no need to have a relationship between price and rent. To accept such a premise while it may hold for some periods of time would be to say that economics has no place in what I believe are to a degree economic decisions. We could argue that the macro picture is not reflective of the micro picture but to basically say there is no basis in any economics and try and put arguments up as posed here to justify it to me suggests that the conclusion is driving the hypothesis. It should be the other way around. Make the hypothesis and try and prove it with cohesive arguments. I find the above rationale is simply the same approach as in the OJ Simpson trial. Let's throw up racism as the issue and make this the issue instead of murder of his wife and divert the argument so that no justirfication can be produced. This is also the same approach politicians do....not answer the question but go onto an answer which suits the argument.
I think it is good that both arguments are reviewed and considered. Again, Urbanation is a very interested party to continuing price increases. If the market stops, developers don't build, they don't buy Urbanations product. We apply this to Realtors and accept that it may be difficult for them to seperate their own individual needs from the overall reality. Would not the same argument apply to urbanation. Note: that does not mean I disregard what they say. I think they put out good data...I just don't necessarily agree wtith some of their conclusions.
^^^
Bmyers,
Thank you for your response.
I pointed out that to my understanding you make much of your revenue mainly from the develop industry. I think it would be difficult for you to write bad things about the market just as it is difficult for realtors to say the market is dropping since their livelihood depends on it. I would point out in the USA, the National Association of Realtors kept saying the problem was temporary and minor long after it was clear to everyone that this was not the case.
In your rebuttal, you point out that you have often been accused of being too negative. I was simply responding to the 1 article posted that I read. I have no reason not to believe you when you say on other occasions you have been on the other side of the argument.
It is just my personal view that the article presented appeared to have a conclusion(s) which you have indirectly acknowledged in your rebuttal. It appeared to me on reading the article that the conclusion had been predetermined/ This was a justification as you acknowledge to explain why rents and pricing were less important and to play them down. I happen to personally disagree. Hence, my conclusions.
In summary, I just found that the article did not present a cohesive rebuttal but rather chose to deal with the issue by arguing other variables and I really did not find it persuasive. I am not suggesting Urbanation set out to discuss the issues by just dismissing the price/rent ratios but this is how it came across to me. Perhaps you could explain to those of us the forum how price/rent is not relevant and address that directly.
That said, let me complement Urbanation on the job it does getting a lot of raw data. While I disagreed with this article, it should in no way be taken to suggest that I feel Urbanation does not provide a valuable service and give us information otherwise not available elsewhere.
One final point. With due respect to developers and the banks; the "experts" got it very wrong in 1989 with a massive overbuild, the largest developer in the world (Reichmann's) went bankrupt. The banks that funded them made massive loans that where not repaid. The banks in Europe have loaned massively against real estate and sovereign debt and are in financially precarious positions because of it at present. So, experts get it wrong too. By the way, I am the first to admit that I get a lot of things wrong as well. Developers build. Banks lend. That is what they both do. They will continue to do so and to expect them not to build or not to lend is unrealistic. There will continue to be correct decisions made and bad ones going forward. To suggest that just because banks loan $50 million means that they must be right is foolhardy in my personal view. Of course they don't rely on McLeans, and they don't have to worry about rent ratios to price. You know as well as I that 70% presales means their loan to the developers are safe. And the recent increase of the banks downloading mortgages on CMHC just shows they take their profit and download the risk. So this is another conclusion that I cannot agree with.
There are 170 projects and 45,560 units under construction in the Toronto CMA as of Q4-2011 and 90% of those units are sold.