Kenny
Active Member
It really depends on the speculators. What kind of trigger are they looking for to "cash in" their gains? Imho, many are staying in real estate because most other modes of investment are so terrible right now.
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Baby, we got a bubble!?
- Thread starter simuls
- Start date
It really depends on the speculators. What kind of trigger are they looking for to "cash in" their gains? Imho, many are staying in real estate because most other modes of investment are so terrible right now.
avenirv
New Member
asian friends were telling me it is cultural thing too.
interested
Senior Member
It really depends on the speculators. What kind of trigger are they looking for to "cash in" their gains? Imho, many are staying in real estate because most other modes of investment are so terrible right now.
Agree with you Kenny.
Since there is so much high end product appearing on the market at once....Ritz has 14 on MLS currently for sale and 13 for rent (sales that can't occur as prices are suffering); SL will have a lot hit the market and if the usual 25% is investors looking to get out, that would be another 90 units I believe. The builder has around 40to 50 units. So it will not be a good market to try and sell. SL has some smaller units (819-860 sq.ft.) 1 bedroom units which may sell as the Ritz most units are 1500 sq.ft. 1 bedrooms for comparison. There are also 1100 sq.ft. unit 1 bedroom dens and 1400 sq.ft. 2 bedrooms which may be more "investor units" though some may have bought the 2 bedroom at 1550 sq.ft. and 1800 sq.ft. to spec. This will be in direct competition with Trump coming on board and the 4S which is due now in October.
So in summary, I think there will be a lot of "rentals" because I think people won't be able to sell at much gain if any at least at SL, Trump, Ritz, and probably the 4S.
Will be interesting. I expect to receive my unit at SL Aug 15. I know already there will be a fair amount of rentals. Based on Ritz experience...rentals are between $3.50-4.00/sq.ft. on average but there may be downward pressures. As I said, the Ritz units are larger and hence the costs much higher than the smaller units at SL.
Trump....you will have read the issues surrounding hotel units and I think there will be a stampede to try and unload but that is just my opinion.
4S I think will have healed investors and therefore less will come on the market.
interested
Senior Member
asian friends were telling me it is cultural thing too.
Not sure what you mean. That Asians like to own Real Estate, or that they want to be landlords, or that they buy/sell real estate to "flip" in the short run.
Kenny
Active Member
Not sure what you mean. That Asians like to own Real Estate, or that they want to be landlords, or that they buy/sell real estate to "flip" in the short run.
They see real estate as a solid place to put your money. It's harder to steal a house from you than gold, money, paper investments, etc. Can't say I blame them - poor people in Asian countries are often victims of all types of theft by those in authoritative/criminal positions. We westerners have greater trust in society.
cdr108
Senior Member
They see real estate as a solid place to put your money. It's harder to steal a house from you than gold, money, paper investments, etc. Can't say I blame them - poor people in Asian countries are often victims of all types of theft by those in authoritative/criminal positions. We westerners have greater trust in society.
i don't know exactly where you get the above notion. i should premise this that i am chinese.
many asians like r/e as a primary residence vs. renting; however, many buy r/e to flip, pure and simple.
there have been many booms/busts in the HK market and Vancouver that were played from speculation.
the influx of r/e investment $$$ from china now is the result of 25+ years of esclating prices in China because of policy changes with economic development.
none of the people from china have seen/felt a bubble burst. when (not if) it happens, it will cripple the property industry like it did to Japan.
asians also gamble and play the stock market.
what ever makes the easiest and best return is where they (as many others) will flock to.
gold is a highly desireable item and commodity which stores its value and is easily transportable.
look at the many jewellers in HK, china, major NA cities with chinatowns.
it's made with 24K (pure) gold, not the 18K or less that's predominant in other markets.
Kenny
Active Member
i don't know exactly where you get the above notion. i should premise this that i am chinese.
I'm referring to the notion that renting is "throwing your money away" and that real estate "always goes up". Where is that idea rooted from? Why do people often think that landlords are out to rip them off? What makes them think that owning real estate is so much better than other forms of investment?
AKS
Senior Member
I'm referring to the notion that renting is "throwing your money away" and that real estate "always goes up". Where is that idea rooted from? Why do people often think that landlords are out to rip them off? What makes them think that owning real estate is so much better than other forms of investment?
I think it's also a form of prestige and a place to put up their lovers. My friend's dad has several units in China, HK and US. He keeps his girlfriends in China while his wife resides in the US or HK. Also, in the long term, real estate does always go up. In the short term there may be dips, but over the long term, RE goes up. Never down completely unlike stocks which can drop to $0.
cdr108
Senior Member
signs of desperation ???
Get your smoked meat — and check out these condos
http://life.nationalpost.com/2012/07/19/get-your-smoked-meat-and-check-out-these-condos/
Sarah Kelsey, Special to National Post Jul 19, 2012 – 8:00 AM ET | Last Updated: Jul 20, 2012 11:26 AM ET
Aaron Lynett/National Post
Some 50 people lined up for a free Caplansky's sandwich, but a visit through INDX Condos' sales centre was required.
There’s a lot of competition to attract buyers to Toronto’s many condominium developments — some researchers suggest roughly 35,000 new units will hit the market over the course of this year. This is putting extra pressure on developers to attract the right purchasers to their buildings. To that end, many are going beyond traditional marketing initiatives to catch the eye of buyers.
“Finding ways of communicating differently with people, and in a way that’s more memorable, matters. Cutting through that noise and finding a way to stand out is so important,†says Brian Brown, vice-president of Lifetime Developments.
His organization recently took their marketing strategy to the next level by leveraging the food truck trend to attract buyers to their financial district development, INDX. The premise of the event was simple: Stroll through INDX’s sales centre, flip through one of the tower’s brochures, then line up for a free deli sandwich, pickle and drink from Caplansky’s Delicatessen. Some 550 people took advantage of the offer, and in the process, Lifetime Developments secured several strong sales leads from their target market: young professionals who work in the financial core and who want to live close by.
“Even people who weren’t buying were very interested in the project,†Mr. Brown says. “In many cases, you don’t know where things will go. A person who came for a lunch may not be a purchaser, but they may go back and talk to someone who is.†The company plans to hold similar events throughout the summer.
“We’ll keep doing things like this to keep people excited about the project,†Mr. Brown explains. “We’ll invite some of the purchasers, too.â€
Closer to the lake, Phantom Developments, the company behind Jade Waterfront Condominiums, is planning a publicity event of its own involving Breakfast Television personality Frank “Frankie Flowers†Ferragine.
Says Henry Strasser, principle of Phantom Developments, “The average size of our balconies is 200 square feet, so we decided to retain [Mr. Ferragine], who is well known in the industry for outdoor, gardening and landscaping tips, to create ideas for homeowners on what they can do with their balconies,†he explains.
“We wanted to create the perception for homeowners that they can do a lot with their outdoor living space — just like their indoor square footage.â€
The event generated a ton of early buzz among purchasers and was expected to draw dozens to the Jade sales centre.
“The condo market is very competitive and it’s very selective,†Mr. Strasser says. You can buy a condo being built on every corner. And people are picky about what they want.â€
Simply put, developers need to have an edge over their competition.
But marketing initiatives like these aren’t just about upping traffic in sales centres. They’re also about showing condo hunters why a certain development is special.
Pianosi Development recently launched an initiative to educate potential purchasers and current homeowners about the nature-rich land that surrounds their Perspective Condo tower in Etobicoke.
“[The Humber River Trail] is a big feature of the area,†Ian Pianosi says. “But we found a lot of people weren’t really aware of it, even though they were from the neighbourhood.†Many of the people buying into the development are empty-nesters, Mr. Pianosi says, and are looking for high-end, stylish living that’s close to the city, but also near countryside.
“[Our buyers] want to have access to this kind of natural amenity,†Mr. Pianosi says. What you have to offer that’s different [from others] helps you stand out. And what we have to offer is we’re close to the city, but we have a lot of green space.â€
To showcase the Humber River Trail as a selling point, developers held Nature’s Backyard, a one-hour exploration of the area’s landscape, wildlife and biodiversity. Led by Toronto field naturalists, purchasers were encouraged to bring a guest or an interested condo buyer on the tour with them. The event was so successful Mr. Pianosi says his company will lead a bike trail tour this summer.
Of course, while these marketing initiatives generate buzz for individual condo developments, builders say they also remind people Toronto is booming.
“The market is very strong and there’s a lot of potential. The economy is strong. The banking system is strong. Immigration — both national and international — is extremely strong,†Mr. Brown notes. “And Toronto is very attractive. It’s going to get even more exciting as these developments come to fruition and as people start moving into these new neighbourhoods,†he says.
Creative marketing ideas
Bikinis and surfboards on the Queensway? They weren’t there to lure mud-encrusted vehicles in for a car wash, but to draw attention to a veritable summer playground hidden away just off that main thoroughfare.
These sun-lovin’ models were emblematic of the lifestyle developer Camrost-Felcorp has created at California Condos, part of the Mystic Pointe complex near Park Lawn in Etobicoke. Its 75,000 square feet of recreational and lifestyle facilities include indoor pool, hot tub, Pilates studio, an upper-level gym complete with multi-purpose court and circuit training facility. There’s a sun deck and spa treatement room. And 16 acres of waterfront parklands.
The Bayside Sports & Entertainment Centre, a shared facility with iLofts next door, features an outdoor pool, landscaped rooftop garden, barbecue patio and running track.
And there’s more available: saunas, squash courts, games room, theatre, private dining room. Plus, the location is right by the network of city parks and trails.
How to encapsulate all of that active-living imagery to drivers with little time to read billboards on the roadside? Strategically position a few eyecatching models clad in swimwear and sporting surfboards to draw attention to the site.
With the building now under construction, it means buyers can move in this summer to take advantage of the facilities right away. Camrost recently opened two new two-bedroom model suites (975 sq. ft. and 860 sq. ft.), and to make a purchase that much easier, it is offering a rent-to-buy program, starting at $799 per month (covering principal, interest, maintenance fees and taxes for the first year).
From sporty to city-savvy, west-end condo 109OZ’s developer, RAW, recently had graphic illustrators create “a cartoon campground†showcasing the creative process behind the city’s transforming landscape. Floor-to-ceiling graphics in an empty warehouse space at 109 Ossington show superheroes leaping tall buildings, brainstorming and wrestling with ideas about density, design and streetscape.
Glow-in-the-dark cotton candy was handed out along that hip stretch of Ossington, while oversize marshmallows were roasted over firepits and foods in primary colours were dished out.
“There is a certain amount of intensity reqred to stay connected to a constantly shifting city,†says RAW’s Roland Rom Colthoff. This was “an opportunity for us to share our story and playfully engage with the people and ideas that are shaping Toronto’s future.â€
Get your smoked meat — and check out these condos
http://life.nationalpost.com/2012/07/19/get-your-smoked-meat-and-check-out-these-condos/
Sarah Kelsey, Special to National Post Jul 19, 2012 – 8:00 AM ET | Last Updated: Jul 20, 2012 11:26 AM ET
Aaron Lynett/National Post
Some 50 people lined up for a free Caplansky's sandwich, but a visit through INDX Condos' sales centre was required.
There’s a lot of competition to attract buyers to Toronto’s many condominium developments — some researchers suggest roughly 35,000 new units will hit the market over the course of this year. This is putting extra pressure on developers to attract the right purchasers to their buildings. To that end, many are going beyond traditional marketing initiatives to catch the eye of buyers.
“Finding ways of communicating differently with people, and in a way that’s more memorable, matters. Cutting through that noise and finding a way to stand out is so important,†says Brian Brown, vice-president of Lifetime Developments.
His organization recently took their marketing strategy to the next level by leveraging the food truck trend to attract buyers to their financial district development, INDX. The premise of the event was simple: Stroll through INDX’s sales centre, flip through one of the tower’s brochures, then line up for a free deli sandwich, pickle and drink from Caplansky’s Delicatessen. Some 550 people took advantage of the offer, and in the process, Lifetime Developments secured several strong sales leads from their target market: young professionals who work in the financial core and who want to live close by.
“Even people who weren’t buying were very interested in the project,†Mr. Brown says. “In many cases, you don’t know where things will go. A person who came for a lunch may not be a purchaser, but they may go back and talk to someone who is.†The company plans to hold similar events throughout the summer.
“We’ll keep doing things like this to keep people excited about the project,†Mr. Brown explains. “We’ll invite some of the purchasers, too.â€
Closer to the lake, Phantom Developments, the company behind Jade Waterfront Condominiums, is planning a publicity event of its own involving Breakfast Television personality Frank “Frankie Flowers†Ferragine.
Says Henry Strasser, principle of Phantom Developments, “The average size of our balconies is 200 square feet, so we decided to retain [Mr. Ferragine], who is well known in the industry for outdoor, gardening and landscaping tips, to create ideas for homeowners on what they can do with their balconies,†he explains.
“We wanted to create the perception for homeowners that they can do a lot with their outdoor living space — just like their indoor square footage.â€
The event generated a ton of early buzz among purchasers and was expected to draw dozens to the Jade sales centre.
“The condo market is very competitive and it’s very selective,†Mr. Strasser says. You can buy a condo being built on every corner. And people are picky about what they want.â€
Simply put, developers need to have an edge over their competition.
But marketing initiatives like these aren’t just about upping traffic in sales centres. They’re also about showing condo hunters why a certain development is special.
Pianosi Development recently launched an initiative to educate potential purchasers and current homeowners about the nature-rich land that surrounds their Perspective Condo tower in Etobicoke.
“[The Humber River Trail] is a big feature of the area,†Ian Pianosi says. “But we found a lot of people weren’t really aware of it, even though they were from the neighbourhood.†Many of the people buying into the development are empty-nesters, Mr. Pianosi says, and are looking for high-end, stylish living that’s close to the city, but also near countryside.
“[Our buyers] want to have access to this kind of natural amenity,†Mr. Pianosi says. What you have to offer that’s different [from others] helps you stand out. And what we have to offer is we’re close to the city, but we have a lot of green space.â€
To showcase the Humber River Trail as a selling point, developers held Nature’s Backyard, a one-hour exploration of the area’s landscape, wildlife and biodiversity. Led by Toronto field naturalists, purchasers were encouraged to bring a guest or an interested condo buyer on the tour with them. The event was so successful Mr. Pianosi says his company will lead a bike trail tour this summer.
Of course, while these marketing initiatives generate buzz for individual condo developments, builders say they also remind people Toronto is booming.
“The market is very strong and there’s a lot of potential. The economy is strong. The banking system is strong. Immigration — both national and international — is extremely strong,†Mr. Brown notes. “And Toronto is very attractive. It’s going to get even more exciting as these developments come to fruition and as people start moving into these new neighbourhoods,†he says.
Creative marketing ideas
Bikinis and surfboards on the Queensway? They weren’t there to lure mud-encrusted vehicles in for a car wash, but to draw attention to a veritable summer playground hidden away just off that main thoroughfare.
These sun-lovin’ models were emblematic of the lifestyle developer Camrost-Felcorp has created at California Condos, part of the Mystic Pointe complex near Park Lawn in Etobicoke. Its 75,000 square feet of recreational and lifestyle facilities include indoor pool, hot tub, Pilates studio, an upper-level gym complete with multi-purpose court and circuit training facility. There’s a sun deck and spa treatement room. And 16 acres of waterfront parklands.
The Bayside Sports & Entertainment Centre, a shared facility with iLofts next door, features an outdoor pool, landscaped rooftop garden, barbecue patio and running track.
And there’s more available: saunas, squash courts, games room, theatre, private dining room. Plus, the location is right by the network of city parks and trails.
How to encapsulate all of that active-living imagery to drivers with little time to read billboards on the roadside? Strategically position a few eyecatching models clad in swimwear and sporting surfboards to draw attention to the site.
With the building now under construction, it means buyers can move in this summer to take advantage of the facilities right away. Camrost recently opened two new two-bedroom model suites (975 sq. ft. and 860 sq. ft.), and to make a purchase that much easier, it is offering a rent-to-buy program, starting at $799 per month (covering principal, interest, maintenance fees and taxes for the first year).
From sporty to city-savvy, west-end condo 109OZ’s developer, RAW, recently had graphic illustrators create “a cartoon campground†showcasing the creative process behind the city’s transforming landscape. Floor-to-ceiling graphics in an empty warehouse space at 109 Ossington show superheroes leaping tall buildings, brainstorming and wrestling with ideas about density, design and streetscape.
Glow-in-the-dark cotton candy was handed out along that hip stretch of Ossington, while oversize marshmallows were roasted over firepits and foods in primary colours were dished out.
“There is a certain amount of intensity reqred to stay connected to a constantly shifting city,†says RAW’s Roland Rom Colthoff. This was “an opportunity for us to share our story and playfully engage with the people and ideas that are shaping Toronto’s future.â€
brockm
Active Member
I think it's also a form of prestige and a place to put up their lovers. My friend's dad has several units in China, HK and US. He keeps his girlfriends in China while his wife resides in the US or HK. Also, in the long term, real estate does always go up. In the short term there may be dips, but over the long term, RE goes up. Never down completely unlike stocks which can drop to $0.
It's worth mentioning that the trend of real estate appreciating more than income is a relatively recent trend. It's been happening for about 30-years. In the 150+ years before 1971, the cost of real estate roughly tracked wage growth.
Anyways, real estate *can* drop to zero. If you don't have home insurance and your house burns down, for instance.
Also, if we exclude hedonic considerations, and assume that over the next 30-years, house prices fall back into line with wage growth, we can pretty clearly say that real estate is a much worse investment than a diversified investment portfolio.
Your house doesn't produce anything. It consumes things. It must be maintained. Property taxes must be paid on it. Interest must be paid on the mortgage. And there's closing costs, land transfer taxes, and on and on...
I think anyone who looks at the last 30-years of real estate price trends and concludes it represents an unbreakable, reliable, long-term trend that can be counted on to produce wealth growth, is deluding themselves.
One must only look at the increasing gap between sale prices and incomes over this time to come to the conclusion that the trend is unsustainable. Couple that with the fact that consumer household debt is at an all time high -- the worst in the OECD, in fact -- and continuing to rise.
I find it ridiculous when people make this point that real estate is the only true vehicle of wealth retention, because it can "never go to zero". That's just nonsense.
Tell some of the American families whose houses are currently worth less than the outstanding value of their mortgage that real estate can "never go to zero". It hasn't just gone to zero for them. It's less than zero.
What happens when the breadwinners in those families are unemployed and cannot find local employment? Now, it's no longer even an option to move to an area where employment prospects are better. The cost of doing so is prohibitive.
Now, the real estate "investment" is truly doing its good work. Not only does the "investment" potentially trap you in this situation, but it undermined productivity of the entire economy. As people find themselves unable to move to areas where their skills are needed, because they're tied down to their homes and mortgages, the ability for economic restructuring in times of economic recession and depression is prolonged.
This is known in economics as the "labour mobility" problem. And home ownership has a very negative impact on it. People trap themselves in a geographical area, and as prospects get worse, it becomes even more expensive for them to move towards the opportunities.
Then, of course, we need massive wealth transfer programs from the successful areas to the unsuccessful areas to compensate for these effects.
Basically, what I'm saying, is we're all poorer because of the amount of money we collectively dump into our housing. In fact, it's the primary investment individuals make. And it's interesting to note correlations between home ownership levels and the size of the manufacturing base in various economies relative to GDP.
Compare Canada, the US, and the United Kingdom, all with extremely high levels of home ownership, and low levels of manufacturing relative to the economy. Then look at Japan and Germany, with much lower home ownership levels, and much larger manufacturing sectors.
Correlation is not causation. However, it is worth noting that other interesting correlations are found within all of these economies. Areas of higher levels of home ownership tend to have higher unemployment compared with areas with lower home ownership levels.
Basically, I'm challenging the conventional wisdom that we're collectively wealthier because we all invest more in our houses, which are constantly in a state of entropic decay. They require constant repair and constant re-investment to even maintain their value.
Compare that to owning an income-bearing investment like a dividend yielding stock. You know, like a company that actually *makes* something and yields a productive benefit from the things it consumes.
There is certainly a hedonic benefit to your house if it makes you happy. But any sort of economic reasoning that it's an "investment" (and I constantly use quotes to mock) should be attacked for the dangerous notion that it is.
marsh
Active Member
Based on the National Post story posted, it sounds like developers are getting desperate.
avenirv
New Member
"Anyways, real estate *can* drop to zero. If you don't have home insurance and your house burns down, for instance"
the lot/land is worth 50-60% of the house (you said house not apartment) value in a decent location. so if it burns down and you have no insurance you still have somehting.
theoretically you still keep a higher % than from a stock like nortel.
the lot/land is worth 50-60% of the house (you said house not apartment) value in a decent location. so if it burns down and you have no insurance you still have somehting.
theoretically you still keep a higher % than from a stock like nortel.
brockm
Active Member
"Anyways, real estate *can* drop to zero. If you don't have home insurance and your house burns down, for instance"
the lot/land is worth 50-60% of the house (you said house not apartment) value in a decent location. so if it burns down and you have no insurance you still have somehting.
theoretically you still keep a higher % than from a stock like nortel.
We're not comparing real estate to Nortel stocks. We're comparing real estate to diversified investments. In this comparison, I assure you, real estate always loses. Because, it's not really an investment.
interested
Senior Member
Based on the National Post story posted, it sounds like developers are getting desperate.
Reality is that developers had to get 60% pre sales which went to 70% and I have even heard 80% pre sales bantered around to get a project launched. The past few years (other than about 9 months from late 2008 to mid 2009) saw people lining up to buy projects. Despite the fancy marketing campaigns, most things were selling by simply putting up a sign.
While I agree things are bad, and a number of projects will/are being delayed/cancelled/redesigned, I thinkwe can conclude that developers are going back to the more historic market where investors/end users make more reasoned decisions and weigh the benefit of a project and think hard about the potential return. The past few years this has not been an issue because everything was being bought up....good bad and even ugly because the market would just absorb it.
Now, people are looking more selectively and deciding projects on their worth. With less purchasers, developers are suddenly having to attract people and "sell" them on the merit of their project over that of the competitor next door or near by. Personally, I find the Caplansky deli story just silly and while I get it is marketing, is a $10 sandwich really going to make the difference for an investor/end user going to a site? If so, then the investor/end user is not too bright in my opinion. On the other hand, if I was going to go to INDX anyway, the Caplansky deli smoked meat sandwich is really good and a definite bonus.
I don't know however marsh that we can conclude "desperate" based on this. To me, the signs of desperation are more the "free year maintenance; $5-10K of free upgrades; etc.
interested
Senior Member
Brockm and AKS and avenirv:
An interesting aside since you guys are talking about real catastrophes hitting the real estate and other markets.
My family owned an apartment building in Europe before the war (which was ultimately lost) but I recall being told my parents that when the stock market crashed in 1929 and the great depression peaked in 1931-1932; the one thing that kept the family afloat financially from 1930-1936 was that the apartments could be rented (at least for something). The family business could not sell any product but people still needed a place to live. Sure rents went way down but at least there was some cash flow which allowed the family "to live" (even if not well). The stock market was of course wiped out along with many people's total holdings.
Back then prior to 1929 I believe one could leverage the stock market at 20:1 so put down 5% and buy 100% stock.....a bit like CMHC insured mortgages. We see how that turned out and there is no reason to believe that R/E which is massively leveraged by a lot of people could endure a similar if perhaps not as drastic a fate.
An interesting aside since you guys are talking about real catastrophes hitting the real estate and other markets.
My family owned an apartment building in Europe before the war (which was ultimately lost) but I recall being told my parents that when the stock market crashed in 1929 and the great depression peaked in 1931-1932; the one thing that kept the family afloat financially from 1930-1936 was that the apartments could be rented (at least for something). The family business could not sell any product but people still needed a place to live. Sure rents went way down but at least there was some cash flow which allowed the family "to live" (even if not well). The stock market was of course wiped out along with many people's total holdings.
Back then prior to 1929 I believe one could leverage the stock market at 20:1 so put down 5% and buy 100% stock.....a bit like CMHC insured mortgages. We see how that turned out and there is no reason to believe that R/E which is massively leveraged by a lot of people could endure a similar if perhaps not as drastic a fate.