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Baby, we got a bubble!?

I just wanted to throw out what I feel is a perfect example of pure journalistic real estate sensationalism. Here is a newly written article on Buzz Buzz Home about how the price of a detached home in Rosedale has doubled in 2 years!!!

http://news.buzzbuzzhome.com/2014/02/treb-detached-houses.html

Engrossing title, isn't it? But once you read the article and actually look at the statistics, you can see that they're comparing sold prices in C09 Rosedale - Moore Park in 2014 (all 5-6 weeks of it) to all sales in C09 for 2012. One will also note that only median figures were used. For simplicity, if 3 homes in Rosedale sold in January 2014 for $4M, then the median sold price for 2014 will be $4,000,000. Now if you take all the homes sold in Rosedale - Moore Park in 2012, the chances of the median sold price being much less, given the much larger sample size, will be much higher. Take into account that homes in Moore Park are less than those in Rosedale. Go further north in Rosedale, near Summerhill Market or Governor's Bridge, and the prices will be lower than those on, say, Chestnut Park.

To make a long story short, I simply found the intent of the article to be misguided and, quite possibly, written to get the general public, who watch real estate like a pastime, all up in arms over by the water cooler.
 
James said:
I just wanted to throw out what I feel is a perfect example of pure journalistic real estate sensationalism. Here is a newly written article on Buzz Buzz Home about how the price of a detached home in Rosedale has doubled in 2 years!!!

http://news.buzzbuzzhome.com/2014/02/treb-detached-houses.html

Engrossing title, isn't it? But once you read the article and actually look at the statistics, you can see that they're comparing sold prices in C09 Rosedale - Moore Park in 2014 (all 5-6 weeks of it) to all sales in C09 for 2012. One will also note that only median figures were used. For simplicity, if 3 homes in Rosedale sold in January 2014 for $4M, then the median sold price for 2014 will be $4,000,000. Now if you take all the homes sold in Rosedale - Moore Park in 2012, the chances of the median sold price being much less, given the much larger sample size, will be much higher. Take into account that homes in Moore Park are less than those in Rosedale. Go further north in Rosedale, near Summerhill Market or Governor's Bridge, and the prices will be lower than those on, say, Chestnut Park.

To make a long story short, I simply found the intent of the article to be misguided and, quite possibly, written to get the general public, who watch real estate like a pastime, all up in arms over by the water cooler.
Click to expand...

BBH is nothing but a marketing arm for the industry. You'll find nothing of value there for your (our) objective minded appetites.
 
Monica Warzecha is not a real estate agent. She's a journalist, and her job is to get readers, not necessarily portray the truth. "The price of a detached" certainly indicates to the reader that the value of one certain house doubled. Bad journalism.
 
TOphotog said:
Monica Warzecha is not a real estate agent. She's a journalist, and her job is to get readers, not necessarily portray the truth. "The price of a detached" certainly indicates to the reader that the value of one certain house doubled. Bad journalism.
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The value of nothing has doubled. It's a clear distortion of the truth. 5 houses sold last year for $1,000,000 and 5 houses sold this year for $2,000,000. A meaningless stat if there ever was one.

Buzzbuzzoff!
 
Exactly. I concur. The scary thing is that the other 90% of readers who come across the article and read it at face value without actually understanding the underlying facts will start the chain reaction of hysteria and pandemonium. Exactly what the writer intended.
 
I don't agree with the assessment of not having any effect.

True, the initial money had to be invested in a business to create jobs for Canadians and the individual had to stay invested for a number of years, etc but it could be used as a way of getting their foothold into Canada for themselves and family to reappropriate capital from their homeland.

KA1 said:
CN Tower: Thanks for bestowing the honour on me.

Closing 'investor' program will not have any effect on specuvestors. Even when the program was on, it had effect, if any, on specuvestor market during the second step.

Under the investor visa program, an individual was required to invest money in a business to create jobs for Canadians and the individual had to stay invested for a number of years-- geneally, 3 years. After the stipulated period was over, an individual was free to do whatever he/she had wanted to do --- stay in business, sell it and keep the money or become a specuvestor.

Long, long time ago when I used to work in the Head Office of CRA in Ottawa, my attention was drawn to a restaurant in Vancouver that used to be 'revolving door' investment vehicle for would-be investors. An individual bought a restaurant and after the stipulated period sold the restaurant to another investor and so on. All these investors were of Chinese origin -- either from Hong Kong or mainland China. Neither CRA nor Immigration Canada could do anything -- as long various rules and regulations were followed. Once the investment in restaurant is sold, then, as a second step, money could possibly end up in real estate.

By the way Interested has just left for sunny pastures in Florida for 2/3 weeks.
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KA1 said:
http://cnews.canoe.ca/CNEWS/Canada/2014/02/16/21474326.html

Link to an article: Chinese millionaires turning back on Canada and moving to US/Europe.

Would it take sizzle out Vancouver and Toronto condo market?
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I have a very strong feeling that the elimination of the investor program will do serious damage. Think about it- wealthy immigrants come here with buckets of cash and shelter it in the real estate market. If this chunk of demand recedes it's only natural to expect fewer sales and lower prices, notably in Toronto and Vancouver.

Does anyone know what year the program started? It may coincide with the condo boom which began in the late 1990's.

EDIT


1986 according to this article.


http://metronews.ca/news/vancouver/...by-axed-immigration-program-for-millionaires/

Vancouver real estate moguls unfazed by axed immigration program for millionaires
 
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CN Tower said:
I have a very strong feeling that the elimination of the investor program will do serious damage. Think about it- wealthy immigrants come here with buckets of cash and shelter it in the real estate market. If this chunk of demand recedes it's only natural to expect fewer sales and lower prices, notably in Toronto and Vancouver.

Does anyone know what year the program started? It may coincide with the condo boom which began in the late 1990's.

EDIT


1986 according to this article.


http://metronews.ca/news/vancouver/...by-axed-immigration-program-for-millionaires/

Vancouver real estate moguls unfazed by axed immigration program for millionaires
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CN Tower, article in Metronews states that the programme is 28 years old -- that comes to 1986
 
Anyone can purchase real estate here.. there are many people that buy real estate that have never been to Canada. From what I'm seeing in recent pre-construction launches this trend will continue.

Elimination of the program will not have any impact.
 
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I had a thought recently that these speculators buying condos site unseen (and often, without setting foot in the country) are like those European settlers who bought farmsteads in NA--esp out west--under similar circumstances ... forever priced out so buy now.

We know how that went ... :)
 
Question is, given the known softening conditions of the market, can the market absorb an over 100% increase in completions in 2014/15?

QRQ7KsR.jpg


My answer is no.

TorontoMike$$ said:
Example we will see a shortage of new condos in 2015-16 because of the lag in sales form 2008/2009.. and same in 2018/19 because of 2013.
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Thanks for the laugh.
 
Oh misguided nrb.. look at the last few months of sales numbers. Its quite the opposite. Adjusted figures show Increases in sales figures and prices in 416 condos... which usually signals that there is some sort of demand out there. Mid Feb numbers will be out this week .. expect the same. PLEASE do some research before posting rubbish.

The market needs that supply to control price appreciation.
 
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