Housing Starts Remained Strong in September

[condoboy]

Not about supply and demand ?? I just don't get it then.

Remember condoboy,....real estate,....especially condos are a COMMODITY (which alot of ppl forget, but at the end of the day, it is simply that, a commodity to get consumed). Just as with any commodities, there is always a supply and demand fundamental. This S/D fundamental can and will get distorted at times for various factors, but at the end of the day, there is always a reversion to the mean which will be based on the basic S/D fundamentals.

By the way, what do you mean ppl have to "wait" to find a bargain ??
Just to be perfectly clear, I was under the impression that you feel the TO market will weather the storm and only have "moderate" appreciation or flattening while the rest of the world drops like a stone and then when the rest of the world recovers, TO for some reason will outpace other parts of the world ?? Wasn't that your opinion and outlook ?? If so, why "wait", why not just buy now before TO "catches up" ?

Yeah..that's right. I am saying if people are hoping that there is going to be a significant drop in prices or a market crash in real estate, they are going to be sadly mistaken....it ain't gonna happen!

Btw....I'm not a real estate agent or a work for a builder...I'm just a guy who wants to see the city of Toronto grow and become what it can be!

One question for you: Do you think builders start projects without doing market research and build without any sales? If there is a market out there...somebody will fill it!

 

[cabbagetowner]

One question for you: Do you think builders start projects without doing market research and build without any sales? If there is a market out there...somebody will fill it!

sometimes. that's what happened in the us.

 

[cdr108]

Yeah..that's right. I am saying if people are hoping that there is going to be a significant drop in prices or a market crash in real estate, they are going to be sadly mistaken....it ain't gonna happen!

what is your definition of a "significant drop" in a percentage terms and during what time frame ?

Reality is RE does go up, in the long term of 25 years span. But in the interm there will be appreciation fluctuations from positive/negative, moderate/hyper/hypo.

That means one can purchase a property at the top and have to wait almost 20 years to get back their principle, if and only if, they were able to stay the course. You want proof, speak to anyone who bought in the 1989/90 boom/bust and you will find it took about 18 years for them to get back to the original purchase price, and then there's the lost opportunity cost of having to pay mortgage interest during that time and not getting the normal appreciation with it that would offset the payments.

BTW, default rates in Canada increased in the early 90s while interest rates were coming down; and there weren't programs out there like 5% down and 40 year mortgages.

 

[condoboy]

what is your definition of a "significant drop" in a percentage terms and during what time frame ?

Reality is RE does go up, in the long term of 25 years span. But in the interm there will be appreciation fluctuations from positive/negative, moderate/hyper/hypo.

That means one can purchase a property at the top and have to wait almost 20 years to get back their principle, if and only if, they were able to stay the course. You want proof, speak to anyone who bought in the 1989/90 boom/bust and you will find it took about 18 years for them to get back to the original purchase price, and then there's the lost opportunity cost of having to pay mortgage interest during that time and not getting the normal appreciation with it that would offset the payments.

BTW, default rates in Canada increased in the early 90s while interest rates were coming down; and there weren't programs out there like 5% down and 40 year mortgages.

My definition of a significant drop in the market would be 20-30% over a one year span. However we also have to take into consideration 2007 which would skew the results because of the records that were broken in almost every category.

Btw....I like positive news. Canada's banks today were voted BEST in the WORLD by the "World Economic Forum" today!!! Why don't you ever report the good news cdr? Only bad....

I agree that fluctuations exist over time and these fluctuations are all apart of the real estate market cycle...that's normal. However I fundamentally believe that we haven't reached anywhere near our peak yet, and that is why we won't have a repeat of the 89' drop in the market. Too many people see Toronto as a safe haven around the globe and re-affirmation by the global community that our banks are indeed the best in the world confirms that.

 

[TKTKTK]

I agree that fluctuations exist over time and these fluctuations are all apart of the real estate market cycle...that's normal. However I fundamentally believe that we haven't reached anywhere near our peak yet, and that is why we won't have a repeat of the 89' drop in the market. Too many people see Toronto as a safe haven around the globe and re-affirmation by the global community that our banks are indeed the best in the world confirms that.

Just to be clear:
Is it that you "fundamentally believe that we haven't reached anywhere near our peak yet" in a long-view sense? ie: prices in 10 years will be higher than now?

Or do you believe that we haven't reached our peak yet in this cycle?

 

[condoboy]

Just to be clear:
Is it that you "fundamentally believe that we haven't reached anywhere near our peak yet" in a long-view sense? ie: prices in 10 years will be higher than now?

Or do you believe that we haven't reached our peak yet in this cycle?

We haven't reached our peak in this cycle yet. There will be a minor blip on the radar screen for the upcoming year, probably stagnant or minor loss and then growth in 2010, 2011, and 2012. I predict 25 to 30% price gains over the next 4 to 5 years. While other people are predicting that we will fall because all of the other markets have fallen...it is is precisely this reason why I think that our condo market will not crash and hold it's value and continue to climb. Toronto is the condo capital of the world and a lot of people, not just domestically are realizing it.

 

[MADEinHK]

Btw....I like positive news. Canada's banks today were voted BEST in the WORLD by the "World Economic Forum" today!!! Why don't you ever report the good news cdr? Only bad.....

Condoboy:
It's human nature. Most of the people always have a tendency to think negative rather than positive.
Have you ever heard this? "Why do people always identify the flaws first and start criticising and being negative everytime they encounter something?" It's because they never think positive.
What we can do is to turn Negative Thoughts to Positive Thoughts and Positive Attitude.
This I believe, tomorrow will be a better day.

 

[TKTKTK]

We haven't reached our peak in this cycle yet. There will be a minor blip on the radar screen for the upcoming year, probably stagnant or minor loss and then growth in 2010, 2011, and 2012. I predict 25 to 30% price gains over the next 4 to 5 years.

Based on what? Price gains of another 20-30% over 4 years will put prices out of reach of nearly everyone - especially coupled with tighter lending practices.

While other people are predicting that we will fall because all of the other markets have fallen...it is is precisely this reason why I think that our condo market will not crash and hold it's value and continue to climb. Toronto is the condo capital of the world and a lot of people, not just domestically are realizing it.

Condo capital of the world in what sense? More condos here than anywhere else in the world? Highest percentage of people living in condos? Or is it just that we're currently building more condos than anywhere else right now? (and wouldn't that suggest we're reaching a point of over-supply? Especially in a city where single-family homes are (even now) quite readily available?)

 

[condoboy]

Condoboy:
It's human nature. Most of the people always have a tendency to think negative rather than positive.
Have you ever heard this? "Why do people always identify the flaws first and start criticising and being negative everytime they encounter something?" It's because they never think positive.
What we can do is to turn Negative Thoughts to Positive Thoughts and Positive Attitude.
This I believe, tomorrow will be a better day.

I agree! Wholeheartedly!

 

[condoboy]

Based on what? Price gains of another 20-30% over 4 years will put prices out of reach of nearly everyone - especially coupled with tighter lending practices.



Condo capital of the world in what sense? More condos here than anywhere else in the world? Highest percentage of people living in condos? Or is it just that we're currently building more condos than anywhere else right now? (and wouldn't that suggest we're reaching a point of over-supply? Especially in a city where single-family homes are (even now) quite readily available?)

7 % gain annually is modest...as long as employment remains high, the government injects (as they say) some much needed funds into Ontario's manufacturing sector, our banks stay solid, investors abroad keep investing, the government sticks to their infrastructure plan, indebtedness stays relatively low, there isn't widespread panic, there is consistent population growth, and no catastrophic event that creates fear...everything will be fine.

Condo capital of the world in the sense that no where else on Earth our more condos being built in one particuliar place. Foreign investors (both builders and purchasers) are continuing to invest in our city. The condo lifestyle has become the preferred lifestyle of choice in this city and ammenities are outstanding compared to other cities throughout the world. Plus who the hell wants to shovel snow...our winters last 8 months of the year !

 

[cdr108]

Why don't you ever report the good news cdr? Only bad....

Sorry but I'm not a doom and gloomer, just a realist - there's too much fluffing out there that there needs a balance.

I told collegues in early 2007 that the stock markets were beyond rational and advised them to be cautious and hedge themselves. Most thought I was crazy ... we all know what has happened since. I don't advise people to worry about missing the last 10% or the early 10% gains since you can never time the markets perfectly.

My definition of a significant drop in the market would be 20-30% over a one year span. However we also have to take into consideration 2007 which would skew the results because of the records that were broken in almost every category.

We haven't reached our peak in this cycle yet. There will be a minor blip on the radar screen for the upcoming year, probably stagnant or minor loss and then growth in 2010, 2011, and 2012. I predict 25 to 30% price gains over the next 4 to 5 years.

I don't think TO will experience 20-30% drop in 1 year either; however, IMO we have reached a peak and will not have 25-30% gains over the next 4/5 years. I think the opposite will occur, 25-30% loss over the next 4/5 years.

The condo lifestyle has become the preferred lifestyle of choice in this city and ammenities are outstanding compared to other cities throughout the world. Plus who the hell wants to shovel snow...our winters last 8 months of the year!

Preferred lifestyle ... not my choice but because of affordability issues where appreciation has increased beyond the norm. A years snow shovelling and lawn care costs could be taken care of by 2 months of maintenance fees by a provider ... it's no different.

 

[condoboy]

Sorry but I'm not a doom and gloomer, just a realist - there's too much fluffing out there that there needs a balance.

I told collegues in early 2007 that the stock markets were beyond rational and advised them to be cautious and hedge themselves. Most thought I was crazy ... we all know what has happened since. I don't advise people to worry about missing the last 10% or the early 10% gains since you can never time the markets perfectly.



I don't think TO will experience 20-30% drop in 1 year either; however, IMO we have reached a peak and will not have 25-30% gains over the next 4/5 years. I think the opposite will occur, 25-30% loss over the next 4/5 years.



Preferred lifestyle ... not my choice but because of affordability issues where appreciation has increased beyond the norm. A years snow shovelling and lawn care costs could be taken care of by 2 months of maintenance fees by a provider ... it's no different.

Careful cdr....after the age of 40 a man's likelihood of sustaining a heart attack while shoveling snow in the winter rises by 50% . Even though this is somewhat of a joke....it happens more than people think. Plus I like my underground parking, pool, gym, 24 hours security, and many other ammenities right at my doorstep!

 

[TrickyRicky]

"I'm just a guy who wants to see the city of Toronto grow and become what it can be!"

I think that describes most of the people on this forum positive or negative atttitude. Optimism and positive thinking are great things. Look how much has changed in this city over the last decade, how far we have come. There are exciting things happening all over the city in all different fields of interest.

That doesn't change the fact that I would not touch the condo market at present with a 10 foot pole. As I mentioned elsewhere I believe the demand for condos is real and strong. However, what I believe we are experiencing at present is an inventory bubble fueled by supply side hubris. That is just an opinion but one thing that is absolutely certain, developers as a group (as opposed to an individual developer) have absolutely no idea when to stop building. This is fact. Every downturn developers go under in droves.

 

[cabbagetowner]

7 % gain annually is modest...as long as employment remains high, )

very dangerous way to think. you're going to be very disappointed the next couple of years.

 

[BobBob]

That is just an opinion but one thing that is absolutely certain, developers as a group (as opposed to an individual developer) have absolutely no idea when to stop building.

Can you elaborate on this a little bit? Don't developers sell most of a building before actually building it? If so, they are reacting to demand, and not blindly creating over-supply as some fear.