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Baby, we got a bubble!?

interested said:
This isse TheKingEast has been discussed before. Given 5 years out, most end users cannot wait that time frame or are unwilling to do so. Some who are trading down, e.g., the boomers can plan a bit better than the youth I would think as they have a better idea of where they are likely to be 5 years down the road.

Builders build small investor units for that reason (as well as the high price point with larger units). This is exactly why some speculate that we will down the road have a glut of small units. I am not so convinced this will in fact be the case with changing demographics, families taking longer to form, and more singles staying single longer. At least, this is my view on the downtown market which I think is slightly different than either midtown or uptown.
Click to expand...

I'm seeing it now. Bigger units (2beds) are going pretty quickly whereas small units are sitting. There's so much product out there. Then in he next year we're going to have even more 1 beds flood the market. Scary.

I think 2 beds will go up in price as 1 beds will drop
 
TheKingEast said:
I'm seeing it now. Bigger units (2beds) are going pretty quickly whereas small units are sitting. There's so much product out there. Then in he next year we're going to have even more 1 beds flood the market. Scary.

I think 2 beds will go up in price as 1 beds will drop
Click to expand...

I have said it before. I think 2 bedrooms are going up as rents are simply beyond the reach when a 1 bedroom is $1500 and a 2 bedroom $2200. People are choosing a room mate for financial reasons. Of course, a 2 bedroom is always better to have than a 1 bedroom as people can stay over, you can use it as an office, etc. but there is a cost associated with it. I am sure if the 2 bedrooms were cheaper, people would choose them over the 1 bedroom every time.

I believe the market which has been indiscrimately buying will start to signs of fracturing. Better located buildings will continue to command more money. Less well located, poorly designed flats will command less or sit on the market. Until recently (the past year or 2) despite all the talk of glut, pretty much anything rented at the lower price range. The market will introduce price differentials as more product comes available.
 
urbandreamer said:
With the recent (and on-going?) stock market correction I expect a downturn in the condo (and real estate) market shortly. Actually my data points to a correction already underway since July. Investors may still be buying, but are locals?
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May I ask UD what data points are you using and are you referring to both the stock market and the condo market for the correction already underway or just the stock market. We know the US market broke through its 200 day moving average so I expect further downturn as programs kick in to sell off further. Also, tax loss selling may start early with the drop happening.

For condos, are you saying volume or sales price are down or what stats are you following. There is of course seasonal variation with May and September being the big $ months historically but I assume you are allowing for that variable.
 
TORONTO, October 16, 2014 – Toronto Real Estate Board President Paul Etherington
announced that residential sales reported through the TorontoMLS system during the first 14
days of October were up by 12.2 per cent compared to the same period in 2013. Over the
same period, new listings entered into TorontoMLS were up by a lesser 5.9 per cent.
“We have seen a strong hand-off from the third quarter into the fourth quarter, as sales for all
major home types were up. This suggests that a great diversity of home buyers remain active in
today’s market, from first-time buyers looking for affordable home ownership options through to
high income households looking to purchase a luxury property,” said Mr. Etherington.
The average selling price for sales during the first two weeks of October was $583,719 – up by
8.8 per cent compared to the same period in 2013. Overall price growth continued to be driven
by the low-rise market segments, including detached and semi-detached houses and
townhouses.
“Strong annual rates of price growth for low-rise home types were sustained, as sales growth
continued to outpace growth in new listings. Sellers’ market conditions are expected to remain
in place for the remainder of 2014 and into 2015 as well. This means that high single-digit rates
of price growth for singles, semis and townhouses will likely remain the norm over the next few
months,” said Jason Mercer, TREB’s Director of Market Analysis.
 
GREATER TORONTO REALTORS® RELEASE Q3 CONDOMINIUM REPORT
TORONTO, October 17, 2014 - Toronto Real Estate Board President Paul Etherington
announced a 12.9 per cent year-over-year increase in condominium apartment sales
through the TorontoMLS system in the third quarter of 2014. Sales amounted to 5,954.
New listings of condominium apartments on TorontoMLS were also up compared to the
same period last year, by 4.5 per cent.
“Condominium apartments represent an affordable home ownership option for first-time
buyers. New condominium apartment completions have been at record levels over the
past two years. However, even though many of these newly completed units have been
listed on TorontoMLS, we have not experienced a glut in inventory. There have been
enough buyers to keep market conditions balanced, with the average selling price
increasing at an above-inflation pace,” said Mr. Etherington.
The average selling price for Q3 condominium apartment sales was $359,352 – up by
5.7 per cent compared to the average of $339,878 in Q3 2013. The average selling
price was highest in the City of Toronto, at $382,210, representing a year-over-year
increase of 6.1 per cent.
“Growth in condominium apartment listings will likely continue over the next year,
reflecting the continuation of strong condominium apartment completions. However, the
fact that we are seeing growth in condo sales outstrip growth in listings suggests that
market conditions will remain tight enough to prompt continued price growth,” said
Jason Mercer, TREB’s Director of Market Analysis.
 
Can anybody help me understand this report: http://www.torontorealestateboard.c..._updates/news2014/nr_condo_report_Q3-2014.htm

TREB states: "The average selling price for Q3 condominium apartment sales was $359,352 – up by 5.7% compared to the average of $339,878 in Q3 2013"

Yet, when I scroll to the bottom table and look at the year-over-year change for condos, it shows a 2.7% DECREASE.

What accounts for the difference? One number is showing strong year-over-year growth while the other shows a decline has already started.
 
DearSummer said:
Can anybody help me understand this report: http://www.torontorealestateboard.c..._updates/news2014/nr_condo_report_Q3-2014.htm

TREB states: "The average selling price for Q3 condominium apartment sales was $359,352 – up by 5.7% compared to the average of $339,878 in Q3 2013"

Yet, when I scroll to the bottom table and look at the year-over-year change for condos, it shows a 2.7% DECREASE.

What accounts for the difference? One number is showing strong year-over-year growth while the other shows a decline has already started.
Click to expand...

The -2.7% YOY change is for the period Oct 1-14.
 
Hi Ben,

Excellent report, thank you for sharing!

This is one of the best and most detailed explanations why we don’t have a condo “bubble†in Toronto.

I couldn’t agree more.
 
Johnzz said:
Hi Ben,

Excellent report, thank you for sharing!

This is one of the best and most detailed explanations why we don’t have a condo “bubble†in Toronto.

I couldn’t agree more.
Click to expand...

Thanks for the kind words Johnzz, I make an attempt to back up the statements I make with data.

You might like this interview I did as well with the Toronto Star: The Truth about the Canadian Housing Market
 
DearSummer,

If you’re attempting to discredit Ben’s report, you might want to focus on actual facts. Your post is basically meaningless.
 
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Maybe I should list some facts about the North Pole to help support my view of the Toronto condo market…
 
Some experts expect "price correction" the next year, the condo market bubble is definitely here in TO, prices are over the roof at least 10%
 
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