Baby, we got a bubble!?

[daveto]

wrt the 5.6% increase in 416 condos, note pages 14 of the 4/12 and 4/13 reports
http://www.torontorealestateboard.com/market_news/market_watch/2012/mw1204.pdf
http://www.torontorealestateboard.com/market_news/market_watch/2013/mw1304.pdf

Four things to note.

First, while the average price is up 5.6%, the median is up 2%. That indicates a strong skew from the higher priced properties

Second, look at C09, which went from 15 properties at $455k to 14 at $982k. That represents a $7m increase to the total sales of $560m, and is responsible for 1/4 of the 5.6% increase

Third, look at C02, which went form 34 properties at $798k, to 42 at $930k. That represents an $11m increase to the total sales, and is responsible for 1/3 of the 5.6% increase.

Fourth, C01 saw price decreases of 1%.

There are various other shifts, but the key takeaway is the first point (avg up 5.6%, vs median up 2%, which indicates product mix skew)

 

[azureray]

Good find!!

A few other things I'd add: HST and lending restrictions were implemented April last year, impacting higher price points. Inventory has also been low.

Maybe looking at Jan / Feb / Mar of 2012 which will paint a fuller picture.

wrt the 5.6% increase in 416 condos, note pages 14 of the 4/12 and 4/13 reports
http://www.torontorealestateboard.com/market_news/market_watch/2012/mw1204.pdf
http://www.torontorealestateboard.com/market_news/market_watch/2013/mw1304.pdf

Four things to note.

First, while the average price is up 5.6%, the median is up 2%. That indicates a strong skew from the higher priced properties

Second, look at C09, which went from 15 properties at $455k to 14 at $982k. That represents a $7m increase to the total sales of $560m, and is responsible for 1/4 of the 5.6% increase

Third, look at C02, which went form 34 properties at $798k, to 42 at $930k. That represents an $11m increase to the total sales, and is responsible for 1/3 of the 5.6% increase.

Fourth, C01 saw price decreases of 1%.

There are various other shifts, but the key takeaway is the first point (avg up 5.6%, vs median up 2%, which indicates product mix skew)

 

[azureray]

Just came across this:

OTTAWA -- The Canadian economy appears to be gathering steam, to the surprise of many, with better-than-expected growth rates in the first two months of the year that have many analysts revising their miserly forecasts for the year.

In the first welcome economic news in several weeks, Statistics Canada reported Tuesday that the nation's output expanded by 0.3 per cent in February. What's more it revised an earlier calculation for January by one notch also to 0.3 per cent.

The Canadian dollar climbed about half a cent on the news to 99.36 cents US in mid-morning trading.

"We can cheer not only the February result, but as well an upward revision to January and what now looks like a reasonably good first quarter," said CIBC chief economist Avery Shenfeld.

Analysts were pencilling in annual growth rates of up to 2.5 per cent for the first three months of the year, a pace that would make it the strongest in more than a year.

That's about where the Bank of Canada had been before a spate of under-performing indicators suggested the country's economy remained mired in the same stall that characterized the second half of 2012, when growth averaged 0.7 per cent. The central bank recently revised it's first quarter estimate to 1.5.

Read more: http://www.ctvnews.ca/business/inve...economic-growth-spurt-1.1259981#ixzz2SFSwAVhF


Read more: http://www.ctvnews.ca/business/inve...economic-growth-spurt-1.1259981#ixzz2SFSmzQzY

http://www.ctvnews.ca/business/inve...-s-surprising-economic-growth-spurt-1.1259981

 

[recharts]

How about the comments from Garth's blog made by CanadianWatchdog:

#152 T.O. Bubble Boy
April numbers are a mess. Let's review.
1) Two extra working days in April compared to last year. Adjusted for working days, daily dollar volume averaged $282M last year compared to $246M this year, down 12.7% y/y.
2) Always remove 3% to adjust for TREB revisions.
3) YoY Sales By Type
A = 0-$500,000
B = $500,000-$1,000,000
C = $1,000,000+
All Home Types
A. -8.0%
B. +0.2%
C. -7.8%
Condos
A. -5.1%
B. -6.3%
C. +8.1%
Detached
A. -10.1%
B. -0.6%
C. -6.9%
4) Presales added to resale data. ( just a few of many examples)
MLS# / Sold Price / Address / Condo Name
E2599754 $463,500 200 Woodbine Ave 205 Two Hundred Condos
E2599700 $433,500 200 Woodbine Ave 302 Two Hundred Condos
E2599786 $503,500 200 Woodbine Ave 505 Two Hundred Condos
E2540496 $299,000 151 Village Green Sq 105 Avani at Metrogate
E2561555 $340,000 151 Village Green Sq 1607 Avani at Metrogate
C2572714 $378,380 88 Sheppard Ave E 2305 Alto & Parkside at Atria
N2575223 $294,900 8167 Kipling Ave Woodbridge Courtyard
C2570123 $194,000 816 Lansdowne Ave 1106 UpsideDownCondoPrices Phase 2
W2570537 $225,000 816 Lansdowne Ave 221 UpsideDownCondoPrices Phase 2
W2581823 $194,000 816 Lansdowne Ave 225 UpsideDownCondoPrices Phase 2
W2577217 $248,000 816 Lansdowne Ave 311 UpsideDownCondoPrices Phase 2
W2566890 $255,000 816 Lansdowne Ave L02 UpsideDownCondoPrices Phase 2
C2573398 $399,900 996 College St 510 IT Lofts
C2544829 $534,000 10 York St 5001 Ten York Condos
C2566942 $481,000 10 York St 6104 Ten York Condos
5) Now I'm starting to find more of these sale errors. (it's the new guy's fault)
MLS# / Sold / List / Orig Price
W2567945 $4,950,000 $515,800 $540,000
Add it all up and you got nothing but TREB triple fudged stats being spoonfed to buyers.

 

[Johnzz]

In January:

This year will shock the media and their followers as the market will prove quite strong (5%-7% avg price increase). Housing markets globally are now perking up, with the help from another huge blast of money printing ($3 trillion globally this year alone) and continued low interest rates. Last year’s mortgage rules change in Canada caused buyers to pause (thus lower sales), but have now left pent-up demand which will be satisfied likely this Spring/Summer. If you’re still waiting for that 20% price crash, you’ll be bitterly disappointed. I guess there’s always the great crash of 2014 to hope for…

And from today's Toronto Star article:

"Surprisingly, downtown condos saw the biggest spike in prices — up 5.6 per cent to an average of $379,266 — and a decline in sales of just 1.3 per cent over last April, according to statistics released Friday by the Toronto Real Estate Board."

And so it begins...

The bears here can nit-pick all they want. We're comparing a theoretically weak April 2013 (which had miserable weather) to the booming April 2012 data (pre-Flaherty announcement) and still experiencing decent price gains yoy.

Let’s just say, a few of us here are not surprised.

 

[daveto]

wrt the 5.6% increase in 416 condos, note pages 14 of the 4/12 and 4/13 reports
http://www.torontorealestateboard.com/market_news/market_watch/2012/mw1204.pdf
http://www.torontorealestateboard.com/market_news/market_watch/2013/mw1304.pdf

Four things to note.

First, while the average price is up 5.6%, the median is up 2%. That indicates a strong skew from the higher priced properties

Second, look at C09, which went from 15 properties at $455k to 14 at $982k. That represents a $7m increase to the total sales of $560m, and is responsible for 1/4 of the 5.6% increase

Third, look at C02, which went form 34 properties at $798k, to 42 at $930k. That represents an $11m increase to the total sales, and is responsible for 1/3 of the 5.6% increase.

Fourth, C01 saw price decreases of 1%.

There are various other shifts, but the key takeaway is the first point (avg up 5.6%, vs median up 2%, which indicates product mix skew)

Johnzz, did you not read my post (attached here above)?

 

[Kenny]

The bears here can nit-pick all they want. We're comparing a theoretically weak April 2013 (which had miserable weather) to the booming April 2012 data (pre-Flaherty announcement) and still experiencing decent price gains yoy.

Let’s just say, a few of us here are not surprised.

Aren't you the one nit picking by only pointing out 416 average price condo numbers? Looking at median price, it only went from $330K to $337K, a rise of only 2.1%. This implies that more high priced units were sold this year than last, which skews average price.

But you're right about the weather. Let's see how May goes.

 

[recharts]

This might feel like a cold shower for some:

And hot off the press is this report from Toronto’s Urbanation: New condo sales were down 29% in the first three months of this year from the end of 2012, and year/year have crashed 55%. There are now 18,845 unsold units sitting vacant, a record. Resale condo deals are 18% below year-ago levels, while listings have ballooned 25%.

 

[urbandreamer]

Ouch. I am not surprised. (I said the bubble has burst and no one believed me.)

 

[recharts]

Some of you will need to use this a lot from now on

http://www.chpc.biz/uploads/9/7/9/5/9795010/re-valuator-free.xlsx

 

[interested]

sorry opened OK

 

[interested]

^^^
recharts.
This upload is helpful as a guideline.
the rate of return unrealistic in present day.
Very few people at least as far as condos are able to get 11-12% rent on a condo. In fact...If 1500/month is the base rent on a 500 sq.ft. condo bought at $600/sq.ft. or $300,000K (forget the legals and soft costs and assume that $300K is all in)..$18000/$300,000 is 6%...Then subtracting the all the others brings you to the 0-3% range.

However, 11% cap rates were not in a 2% interest rate environment on savings. Cap rates too have come down.

 

[CN Tower]

This might feel like a cold shower for some:

And hot off the press is this report from Toronto’s Urbanation: New condo sales were down 29% in the first three months of this year from the end of 2012, and year/year have crashed 55%.

1. Please share links. This info isn't public.
2. This comes as no surprise to me based on what I've heard from sources in the know regarding the falloff of investor demand from overseas commencing in Q3 2012.

A better question in my mind is why would anyone launch a new project in Q1 2013 knowing demand has been so weak?

 

[interested]

^^
In fact CN Tower, only a few projects have been launched. A number shelved and a number pushed back to 2014.
In a way, this is a good thing. The developers are not stupid. They read the tea leaves but they are in the business of building.
Less projects means less competition.
Also, when projects are 80% sold, while there may be some good units left, most of the most desirable units are already gone.
In a hot market, people will buy the residual dog suites.
In a market with more product, one waits for a good suite at a good price and the rest sit.

It is a bit like the low rise market where good product gets multiple bids (desirable) and other listings (sit). The last few years are the exception, not what is happening now.

Without the pressure of "having to buy", people go back and start to consider other factors such as "is the place what I want, do I have to buy this and compromise" etc.

 

[interested]

1. Please share links. This info isn't public.
2. This comes as no surprise to me based on what I've heard from sources in the know regarding the falloff of investor demand from overseas commencing in Q3 2012.

A better question in my mind is why would anyone launch a new project in Q1 2013 knowing demand has been so weak?

I don't know if recharts can post the data.

In the Post homes section today, there is an article on page 2 (sorry can't find the on line version)
Record lows, record highs by Lisa Van de Ven

In essence the first quarter of 2013 came close to a record low.
With 5570 sales in the GTA, it was the 2nd lowest quarter that BILD has recorded since it began reporting 14 years ago. Only the first quarter of 2009 was lower.
While it was only the 5th lowest first quarter for high rises (2931 sales) it was the second lowest first quarter for low rise sales.
"its the decline in low rise that really dragging down the total, as / George Carras, president of REal Net

The long term average for low rise sales for the first 3 months is 5887, compared with 2639 low rise sales therefore down 55%. High rise, meanwhile, is only 12% below average. "The biggest reason for the decline is low rise and the biggest reason for the low rise decline is supply" says Carras.
Bild President and CEO Bryan Tuckey echoes Mr. Carras' sentiments.
A decrease in low rise supply throught the GTA has fuelled the sales decrease. The accompanying stead rise in low prices is also contributing to lower sales. Usually when you have a low sales month, you're in a position where prices begin to be reduced as well but that's not happening here. That's a direct indication of a supply shortage.

BY the end of March, low rise price index had increased almost 11% over the year before, reaching $639,321. That compare with the high rise price index which increased 2.6% over last year to hit $432,631. The $206,690 gap between the 2 is at a record high. The average gap prior to 2011 was $75,000.

the gap has been growing monthly because of low rise price increases.

And it does not look like prices are going to drop any time soon he adds, pointing out that the prices for low density land has been tracking higher. City of Toronto talking about increasing land development charges on new projects could alsoresult in price increases for high rises. As opposed to low rises, high rise prices are relatively stable, though the average size of unit has decreased by 120 sq.ft. since 2007. That leaves little room for any more shrinkage. "that means any new cost being introduced into that sector is going to hit the end price. There's no way you can mask that anymore" the Real NEt President says. "Any new imposed cost is likely to go directly to the end price"



I have tried to type most of the article with a bit of paraphrasing but the gist is clear.