Buy or Rent?

[BobBob]

I wish these reported stats would be more scientific and meaningful. For instance, an average-per-square-foot monthly average would make a lot more sense.

If more people buy smaller (cheaper) homes than more expensive ones in a given month, the average sale price (the metric they report) will drop, but no home's value actually needs to decrease at all.

I'm not saying the 6% drop in average closing price is meaningless, it just isn't the most accurate metric to tell us what's going on.

 

[condoboy]

Indeed, according to the TREB sales data from September 2008, Toronto sales fell 6% in the final 2 weeks of the month--aka, when the American turmoil reached fever pitch. That indicates just how closely tied Toronto real estate is to American markets.

Condoboy, I get this sense you're working for one of the realtors--Brad Lamb, perhaps?

Source: http://www.movesmartly.com/2008/10/toronto-real-es.html

Urbandreamer...I have read a lot of your posts and respectfully appreciate your opinions....why do you think I work for Brad Lamb? I watch his show but personally I think he's a bit of a jerk and some of the comments that he has made on t.v. has really put off a lot of would be condo owners in Toronto. I just want to see this city grow and become what I think it can be....WORLD CLASS! Isn't that a good attitute to have?

 

[condoboy]

I wish these reported stats would be more scientific and meaningful. For instance, an average-per-square-foot monthly average would make a lot more sense.

If more people buy smaller (cheaper) homes than more expensive ones in a given month, the average sale price (the metric they report) will drop, but no home's value actually needs to decrease at all.

I'm not saying the 6% drop in average closing price is meaningless, it just isn't the most accurate metric to tell us what's going on.

I agree with you BobBob....sales of smaller, mid, or high-end homes can tip the scales and skew the results...both up or down in my mind.

 

[urbandreamer]

Condoboy, everytime I hear someone say those words "world class" to describe Toronto, I cringe.

Toronto is Toronto.

The kind of people that keep saying "world class" are people who don't have a clue about Toronto, because they live in their own little insular ghetto-ized worlds--be it Forest Hill, or Mississauga, or Brampton. It's lame, and pathetic!

 

[poppajojo]

Condoboy is saying all these naive advertisement-like statements because he just bought into a new condo (according to his previous posts) and he's afraid that it was a bad decision. Probably similar situation for BobBob, though I'm not sure.

The fact of the matter is that due to the huge supply of new condo developments in Toronto it is definitely the most vulnerable part of the real estate market if things turn sour.

 

[condoboy]

Condoboy is saying all these naive advertisement-like statements because he just bought into a new condo (according to his previous posts) and he's afraid that it was a bad decision. Probably similar situation for BobBob, though I'm not sure.

The fact of the matter is that due to the huge supply of new condo developments in Toronto it is definitely the most vulnerable part of the real estate market if things turn sour.

I'm not worried at all Poppajo....but it's good to see that you do your homework before you speak . I'm not here to argue with anyone, I'm just here to express my opinion and that's what these types of forums are all about. I appreciate all of your opinions and one of the reasons that I am here is to learn from others and hear other people's point of view. I have choices when the project that I bought into is completed - if it's completed according to many of the people on this forum . I can either live in the unit, rent the unit out, sell it when I take posession or sell it as an assignment before it's built...I've made sure to cover all my bases. People need to stop feeling so doom and gloom and look at the positives in every situation....where there is turmoil...there is opportunity - and some of the most succesful people in the world began when things looked to be their worst.

 

[condoboy]

Condoboy, everytime I hear someone say those words "world class" to describe Toronto, I cringe.

Toronto is Toronto.

The kind of people that keep saying "world class" are people who don't have a clue about Toronto, because they live in their own little insular ghetto-ized worlds--be it Forest Hill, or Mississauga, or Brampton. It's lame, and pathetic!

Urbandreamer...take a trip to New York, Rome, or Paris and you'll see what world class city means! Toronto hasn't even tapped into 1/100th of it's potential and you shouldn't hate on people who don't live in T-dot as you have mentioned above. Some of my best friends are from Brampton and Mississauga, and you should take a trip with me some time to the places where I grew up and I can introduce you to some of these people and you can tell them all about your views about ghettos.... I'm sure you'll get a kick out of it...haha.

 

[AKS]

Toronto hasn't even tapped into 1/100th of it's potential

That's the thing. Toronto isn't up to it's potential yet. It's not a NY, Paris or London. If it's 1/100 of it's way, it should be 1/100 of the price of those places.
I think Toronto has room to grow even if it will never reach the level of NY, Paris or London and given it's current state of infrastructure, it still has a long to go get close to them.

 

[condoboy]

That's the thing. Toronto isn't up to it's potential yet. It's not a NY, Paris or London. If it's 1/100 of it's way, it should be 1/100 of the price of those places.
I think Toronto has room to grow even if it will never reach the level of NY, Paris or London and given it's current state of infrastructure, it still has a long to go get close to them.

So AKS...you think that condo properties in New York and Toronto are comparable??? It costs $7,500 per square foot for a condo on 5th Avenue in NY and about $1,200 for one in Yorkville...we have a ways to go.

 

[cdr108]

No rush...I just wouldn't want to wake up one morning and realize that I couldn't afford that condo in the city because the prices have risen to eight, nine, one thousand dollars per square foot like other major cities throughout the world. I mean I hope I'm wrong and prices don't get out of control like in NY or London, but isn't it better not to take that risk? For the short term investor you are right, it's not the time....but for the person that can buy and hold on to something for 5-10 years...isn't it a good time to buy? When things are still affordable? Does anyone see a major crash in prices in Toronto?

I wouldn't want to wake up one morning and realize that a large portion of the downpayment I worked so hard to save was wiped out because the real estate market turned down.

Real estate always go up; but it also follows the long term trend (100 years of data) of appreciation of ~4%.
http://www.irrationalexuberance.com/Fig2.1Shiller.xls

When it appreciates beyond the mean, it also goes BELOW the mean.
In TO, we've had 10 years of unprecedented appreciation (~125 - 150%) ... what do you think the next step will be ?!?!?

BTW, I wouldn't call average $450/SF or new projects of $600/SF 'affordable'.
Please don't compare TO to Paris, London, NYC, Dubai, Singapore, Hong Kong, etc.
The density in Toronto doesn't even compare to those cities, nor does Toronto have the land restriction issues (Golden Horseshoe issue aside). We still have plenty of land, surface parking lots, low-rises (<5s) that could be razed and built up, etc.

 

[condoboy]

I wouldn't want to wake up one morning and realize that a large portion of the downpayment I worked so hard to save was wiped out because the real estate market turned down.

Real estate always go up; but it also follows the long term trend (100 years of data) of appreciation of ~4%.
http://www.irrationalexuberance.com/Fig2.1Shiller.xls

When it appreciates beyond the mean, it also goes BELOW the mean.
In TO, we've had 10 years of unprecedented appreciation (~125 - 150%) ... what do you think the next step will be ?!?!?

BTW, I wouldn't call average $450/SF or new projects of $600/SF 'affordable'.
Please don't compare TO to Paris, London, NYC, Dubai, Singapore, Hong Kong, etc.
The density in Toronto doesn't even compare to those cities, nor does Toronto have the land restriction issues (Golden Horseshoe issue aside). We still have plenty of land, surface parking lots, low-rises (<5s) that could be razed and built up, etc.

In the year 2021, the population will be 6.4 million, pedestrians will have rights, garbage pickup will cost you and bingo will be big. These and other surprising predictions from the University of Toronto's celebrated demographer. By David Foot with Daniel Stoffman

Toronto's land is shrinking and there are only so many parking lots...The quote above is from somebody of higher credentials as a top demographer than myself. Does 6.4 million look a little more comparable to the cities you've mentioned above now???

 

[condoboy]

I wouldn't want to wake up one morning and realize that a large portion of the downpayment I worked so hard to save was wiped out because the real estate market turned down.

Real estate always go up; but it also follows the long term trend (100 years of data) of appreciation of ~4%.
http://www.irrationalexuberance.com/Fig2.1Shiller.xls

When it appreciates beyond the mean, it also goes BELOW the mean.
In TO, we've had 10 years of unprecedented appreciation (~125 - 150%) ... what do you think the next step will be ?!?!?

BTW, I wouldn't call average $450/SF or new projects of $600/SF 'affordable'.
Please don't compare TO to Paris, London, NYC, Dubai, Singapore, Hong Kong, etc.
The density in Toronto doesn't even compare to those cities, nor does Toronto have the land restriction issues (Golden Horseshoe issue aside). We still have plenty of land, surface parking lots, low-rises (<5s) that could be razed and built up, etc.

Toronto, Los Angelas and Nagoya are quite comparable in density actually...Nagoya and LA being two of the most expensive cities in the world to live in!

 

[licious]

Toronto, Los Angelas and Nagoya are quite comparable in density actually...Nagoya and LA being two of the most expensive cities in the world to live in!

I find it interesting that you mention Los Angeles. It was only a couple of years ago when people were talking about how homes prices would never drop there... how they are a world-class city and everyone wants to live there. Funny how quickly things can change.

 

[lowesthangingfruit]

Because by the time we peak....the cyclical values of real estate will have started once again, and we would have weathered the current storm. All this is just my opinion. We'll just have to wait and see!

So your thesis is that we are going to share in all the upside of other world markets but we will never share the down side of other world markets....is that your thesis ??

 

[cdr108]

So your thesis is that we are going to share in all the upside of other world markets but we will never share the down side of other world markets....is that your thesis ??

Well of course, lowesthangingfruit - because TO lives in a bubble and has a cloaking device which makes us immune from the rest of the worlds woes