Roy G Biv
Senior Member
Why is 15k pocket change for someone speculating on a 250k condo/house?
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So, um, when are condo prices supposed to drop again?
- Thread starter JayBee
- Start date
Why is 15k pocket change for someone speculating on a 250k condo/house?
gei
Active Member
^Although in reality, by mid-2010 condos will be selling for an average of $200,000, so that tax will only affect the few that can afford larger units.
Could it lead to more rental housing being built? (I hope so.)
Are your posts supposed to be tongue-in-cheek or do you really take what you say seriously?
Bubba
New Member
Hope not to offend anyone.....
Do people actually think the average condo price will drop to below $200k in the coming few years????? I think this is an unrealistic expectation, and on the contrary, will not see a significant price drop in the condo market for downtown Toronto.
Although some units may be overpriced, a good portion are priced fairly, and can be afforded by many. We in the downtown core have decent incomes, and it only takes an income of approximately $50k to support a $200k condo, given today's rates. Are people actually thinking that a large amount of people in our downtown core do not make incomes well in excess of $50K (either individually or with their partner)?
Several things can drive prices downwards. Toronto (or specifically Canada) is NOT in the same situation as the U.S. market. Granted, Toronto does rely indirectly and direct on the US economically, however, this will only help to keep prices from increasing, and will unfortunately for those waiting for massive price drops, not bring prices down significantly.
What will drive the prices down in Toronto is the over supply of condos purchased by investors and who intend to dump their units in the coming years. However, this will only affect selected areas where they was a large investor base (Cityplace for example), and will not affect areas such as Yorkville and perhaps King West. This has already begun to occur and can be seen by the fact that Cityplace units sell for significantly less than the average downtown condo. Even for places like Cityplace, I don't think that prices will drop that much more, perhaps another 5-10% or so, but not 40% like some are hoping. Why would investors dump their units at such a low price just to get out of the deal? Most investors will just wait out the recession until it is over, renting in the interim, and then sell once the market recovers.
For our market to crash, we need significant job losses to occur. But as long as interest rates are low, and unemployment stays relatively constant, we will not experience a crash similar to the US. Interest rates will not be moving up too quickly over the next couple of years as we do not want to shock the economic after the recession.
We have to remember that the market goes in cycles, and as always, we will have those that are overly optimistic and overly pessimistic. I am not a real estate agent, but am an ordinary owner of a condo unit downtown, and plan to continue to invest as times goes on.
I think that this coming fall is a great time to invest in resale condos (and in selected pre-construction for those who need the time save a down-payment). Yes, you may profit by waiting a few more months or a year perhaps, but there is also a chance that things may turn around, new regulations come in, etc.
Do people actually think the average condo price will drop to below $200k in the coming few years????? I think this is an unrealistic expectation, and on the contrary, will not see a significant price drop in the condo market for downtown Toronto.
Although some units may be overpriced, a good portion are priced fairly, and can be afforded by many. We in the downtown core have decent incomes, and it only takes an income of approximately $50k to support a $200k condo, given today's rates. Are people actually thinking that a large amount of people in our downtown core do not make incomes well in excess of $50K (either individually or with their partner)?
Several things can drive prices downwards. Toronto (or specifically Canada) is NOT in the same situation as the U.S. market. Granted, Toronto does rely indirectly and direct on the US economically, however, this will only help to keep prices from increasing, and will unfortunately for those waiting for massive price drops, not bring prices down significantly.
What will drive the prices down in Toronto is the over supply of condos purchased by investors and who intend to dump their units in the coming years. However, this will only affect selected areas where they was a large investor base (Cityplace for example), and will not affect areas such as Yorkville and perhaps King West. This has already begun to occur and can be seen by the fact that Cityplace units sell for significantly less than the average downtown condo. Even for places like Cityplace, I don't think that prices will drop that much more, perhaps another 5-10% or so, but not 40% like some are hoping. Why would investors dump their units at such a low price just to get out of the deal? Most investors will just wait out the recession until it is over, renting in the interim, and then sell once the market recovers.
For our market to crash, we need significant job losses to occur. But as long as interest rates are low, and unemployment stays relatively constant, we will not experience a crash similar to the US. Interest rates will not be moving up too quickly over the next couple of years as we do not want to shock the economic after the recession.
We have to remember that the market goes in cycles, and as always, we will have those that are overly optimistic and overly pessimistic. I am not a real estate agent, but am an ordinary owner of a condo unit downtown, and plan to continue to invest as times goes on.
I think that this coming fall is a great time to invest in resale condos (and in selected pre-construction for those who need the time save a down-payment). Yes, you may profit by waiting a few more months or a year perhaps, but there is also a chance that things may turn around, new regulations come in, etc.
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cdr108
Senior Member
Instead of the 'price of a condo unit', what do ppl think will be the price PER SQUARE FEET?
Quoting a price for the unit is deceptive because the size of 1 bedroom suites have dramatically changed in the past 10 years from 650 SF to 500 SF.
From what I've seen, pre-construction projects in the dt core comprising of Dufferin as the Western limit, Distillery District as the Eastern limit, Bloor as the northern limit, and Harbourfront as the Southern limit is still asking ~$500 PSF for the typical condo unit, while re-sale is ~$400 PSF. (excluding Yonge/Bloor)
Typical unit = black or s/s appliances, 3/4" granite/corian kitchen countertops, laminate flooring, ceramic/porcelain kitchen + bath tiles.
IMO, RE values are still 15% overly-inflated.
Quoting a price for the unit is deceptive because the size of 1 bedroom suites have dramatically changed in the past 10 years from 650 SF to 500 SF.
From what I've seen, pre-construction projects in the dt core comprising of Dufferin as the Western limit, Distillery District as the Eastern limit, Bloor as the northern limit, and Harbourfront as the Southern limit is still asking ~$500 PSF for the typical condo unit, while re-sale is ~$400 PSF. (excluding Yonge/Bloor)
Typical unit = black or s/s appliances, 3/4" granite/corian kitchen countertops, laminate flooring, ceramic/porcelain kitchen + bath tiles.
IMO, RE values are still 15% overly-inflated.
Johnzz
Active Member
The 73 Richmond St West unit has no windows.
Maybe a good unit for a shift worker who wants to avoid sunlight? Or a vampire?
Well, with all these "zombie" banks out there, could be a good market.
Mike in TO
Senior Member
You might start seeing more builders 'downspecing' units - essentially less bells & whistles, less expensive amenities, less money spent on exterior/architectural finishes, less money spent on interior finishes and possibly less green features to reduce some of their costs. Some of those savings could be passed onto buyers and while the overall psf may drop slightly, the buyer is purchasing a lesser unit in terms of overall quality.
TrickyRicky
Senior Member
"Several things can drive prices downwards. Toronto (or specifically Canada) is NOT in the same situation as the U.S. market."
"For our market to crash, we need significant job losses to occur"
We will see what we will see but check the latest figures. Our economy at present is decelerating at a very fast clip. The unemployment rate is rising at a historic pace and Toronto is worse off than the national average.
It's great from a building admirer's prospective that we still have such an inventory of structures being built to entertain us, but from the real estate investor perspective it's a supply side push tsunami disaster.
Are condo prices going to crash? I don't honestly know. It takes a lot of time to work these things out and the word crash has a temporal component to it. It could be the on-set of a real estate coma where activity just dries up and everyone just suffers in silence for years.
The key word is patience. Everyone wants things to happen too fast. Crash now! Recovery now! Price reflecting market conditions now! Time to sell now! Time to buy now! Every answer is correct given enough time, but timing as they say is everything.
"For our market to crash, we need significant job losses to occur"
We will see what we will see but check the latest figures. Our economy at present is decelerating at a very fast clip. The unemployment rate is rising at a historic pace and Toronto is worse off than the national average.
It's great from a building admirer's prospective that we still have such an inventory of structures being built to entertain us, but from the real estate investor perspective it's a supply side push tsunami disaster.
Are condo prices going to crash? I don't honestly know. It takes a lot of time to work these things out and the word crash has a temporal component to it. It could be the on-set of a real estate coma where activity just dries up and everyone just suffers in silence for years.
The key word is patience. Everyone wants things to happen too fast. Crash now! Recovery now! Price reflecting market conditions now! Time to sell now! Time to buy now! Every answer is correct given enough time, but timing as they say is everything.
TrickyRicky
Senior Member
Oops...but just the tip of the iceberg.
Sales of new homes, condos plunge
Condos experience biggest decline as first quarter figures show a drop of 78 per cent over 2008
Article Comments (85) KATE HAMMER
From Tuesday's Globe and Mail
April 21, 2009 at 4:00 AM EDT
Hopes for a rebounding real-estate market buoyed by the traditionally busy spring season were dashed yesterday as the latest data show that new-home sales in the Greater Toronto Area fell 62 per cent in the first quarter of 2009 compared to 2008.
The data, collected by RealNet Canada Inc., show that much of that decline was in Toronto condominium sales: In January through March of 2008, 1,419 units sold, compared to only 317 this year; a decline of 77.7 per cent.
"It's dramatic but that's exactly the area where I think you're going to start to see weakness," said Robert Kavcic, a Bank of Montreal economist. "Typically it's a more volatile sector and it's been a very hot market during the housing boom, so typically that's one of the markets you'd see cool off the most."
Also, the tax incentives in this year's federal budget are more likely to benefit homebuyers than condo purchasers, he said.
It might seem counterintuitive that, during a recession, sales of more affordable dwellings, such as condos, lag more than those of less affordable dwellings, such as homes, according to Stephen Dupuis, president of the Building Industry and Land Development Association. But home developers have instituted more aggressive discounts and reduced inventory, especially in the east end of the GTA, he said.
Mr. Dupuis pointed to two areas of the market that defy the downward trend: home sales in Durham Region were down less than 1 per cent, and in Halton Region they were up 0.4 per cent. But it won't be long before lagging sales threaten to stall construction, he added.
"You're basically looking at two jobs for every unit we sell, so if we're down 15,000 units then we're down 30,000 jobs. So obviously that's [developers'] problem too, but it's really a far bigger problem for governments that look to our sector for jobs and taxes."
Sales of existing homes and condos have also declined in the first part of 2009, and were down 7 per cent in the first half of April, according to the Toronto Real Estate Board.
Most of that decline was in the areas outside the city proper. Within Toronto itself, there were 1,514 sales in the first two weeks of April, 2008, compared to 1,494 sales over the same time period of 2009.
Throughout the GTA, average sale prices also fell in the first two weeks of April, from $399,177 in 2008 to $383,161 in 2009.
Sales of new homes, condos plunge
Condos experience biggest decline as first quarter figures show a drop of 78 per cent over 2008
Article Comments (85) KATE HAMMER
From Tuesday's Globe and Mail
April 21, 2009 at 4:00 AM EDT
Hopes for a rebounding real-estate market buoyed by the traditionally busy spring season were dashed yesterday as the latest data show that new-home sales in the Greater Toronto Area fell 62 per cent in the first quarter of 2009 compared to 2008.
The data, collected by RealNet Canada Inc., show that much of that decline was in Toronto condominium sales: In January through March of 2008, 1,419 units sold, compared to only 317 this year; a decline of 77.7 per cent.
"It's dramatic but that's exactly the area where I think you're going to start to see weakness," said Robert Kavcic, a Bank of Montreal economist. "Typically it's a more volatile sector and it's been a very hot market during the housing boom, so typically that's one of the markets you'd see cool off the most."
Also, the tax incentives in this year's federal budget are more likely to benefit homebuyers than condo purchasers, he said.
It might seem counterintuitive that, during a recession, sales of more affordable dwellings, such as condos, lag more than those of less affordable dwellings, such as homes, according to Stephen Dupuis, president of the Building Industry and Land Development Association. But home developers have instituted more aggressive discounts and reduced inventory, especially in the east end of the GTA, he said.
Mr. Dupuis pointed to two areas of the market that defy the downward trend: home sales in Durham Region were down less than 1 per cent, and in Halton Region they were up 0.4 per cent. But it won't be long before lagging sales threaten to stall construction, he added.
"You're basically looking at two jobs for every unit we sell, so if we're down 15,000 units then we're down 30,000 jobs. So obviously that's [developers'] problem too, but it's really a far bigger problem for governments that look to our sector for jobs and taxes."
Sales of existing homes and condos have also declined in the first part of 2009, and were down 7 per cent in the first half of April, according to the Toronto Real Estate Board.
Most of that decline was in the areas outside the city proper. Within Toronto itself, there were 1,514 sales in the first two weeks of April, 2008, compared to 1,494 sales over the same time period of 2009.
Throughout the GTA, average sale prices also fell in the first two weeks of April, from $399,177 in 2008 to $383,161 in 2009.
taal
Senior Member
Ah, interesting that sales have dropped the least in Toronto proper ... a reversal of trends
JayBee
Senior Member
so far in 2009 resales are up. Not surprising since you get more bang for your buck IMO. Not surprised that sales for new dwellings are down...especially condos.
I guess the days of developers overcharging people for jail cells are over.
I guess the days of developers overcharging people for jail cells are over.
Felino
Banned
My condo has gone down in value from about $330k to $285k in less than 6 months. Scary.
cdr108
Senior Member
Johnzz
Active Member
How is this scary?
Here's your quote: "I have my own company and make more in a month than you do in a year"...
You've made back this loss by working just 2 weeks.
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simuls
Senior Member
Don't start with him Johnzz, it's neverending.
My condo would've sold for $315 a year ago and just sold for $296 in King West, so prices have come down - although it did sell in 1 day.
I think that when Urbandreamer says prices will drop to $200 he's talking a GTA average not downtown Toronto. I'd say a place like mine will drop to $250-270 within the next 2 years. About $400/sq ft and not the $500 it went for in 2007/early 08. Again, that really depends on the building, etc. Candy Factory Lofts haven't dropped a dime and won't because they're in a great location and are unique.
My condo would've sold for $315 a year ago and just sold for $296 in King West, so prices have come down - although it did sell in 1 day.
I think that when Urbandreamer says prices will drop to $200 he's talking a GTA average not downtown Toronto. I'd say a place like mine will drop to $250-270 within the next 2 years. About $400/sq ft and not the $500 it went for in 2007/early 08. Again, that really depends on the building, etc. Candy Factory Lofts haven't dropped a dime and won't because they're in a great location and are unique.
TrickyRicky
Senior Member
Evidence that "when the tide goes out you can see who isn't wearing any pants".
I have the suspicion that most spring 2009 purchasers who put less than 25% down will flirt with being under-water during their first 5-year mortgage period.
I have the suspicion that most spring 2009 purchasers who put less than 25% down will flirt with being under-water during their first 5-year mortgage period.