cdr108
Senior Member
It certainly doesn't hurt that the price of crude has receded from $147 US/bbl to ~$65 US/bbl in the year.
Mind you $147 crude was mostly speculative $$$ as were many things.
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Toronto prices decline 15% in mid-October
- Thread starter poppajojo
- Start date
It certainly doesn't hurt that the price of crude has receded from $147 US/bbl to ~$65 US/bbl in the year.
Mind you $147 crude was mostly speculative $$$ as were many things.
TKTKTK
Senior Member
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cdr108
Senior Member
Yeah, and none of us foresaw the price of oil receding
Well not if you are Benjamin Tal (CIBC analyst), who predicted $200 US/bbl by end of 2008.
Probably the same group that thought RE will rocket to the moon, so buy now or be priced out forever.
cdr108
Senior Member
Brent Weiner of the CMHC's market analysis centre said in an interview that 2007 was a record year in home-sales volume in Canada – with more than 520,000 homes changing hands. Average prices increased steadily for six consecutive years – up by 9.7 per cent in 2003, 9.3 per cent in 2004, 10 per cent in 2005, 11.2 per cent in 2006 and 10.7 per cent in 2007.
My personal analysis of dt Toronto properties (C1, C2, C8, C9) has seen values increase ~125% since 1996, with some more desirable areas like Annex by 150-200%.
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TKTKTK
Senior Member
As prices tumble, homeowners best prepare for the long haul
JOHN BARBER November 6, 2008
Home sales in the Greater Toronto Area fell 35 per cent this October compared with sales a year earlier, according to the Toronto Real Estate Board. Prices fell 10 per cent over the same period, leading the industry to acknowledge the existence of a deep slump in the market.
"Consumer confidence is critical to the housing market and it appears that consumer uncertainty has been prevalent in today's market conditions," board president Maureen O'Neill said in announcing the numbers.
The decline is evident across the region, with the average home price dropping to $352,974 from last October's $394,646. Prices and sales both dropped most quickly inside city limits, where the average price dropped 13 per cent, to $376,896 from $434,022, and sales fell 38 per cent.
But no region was immune. Sales dropped 32 per cent in the 905 suburbs and the average price there was down 8 per cent compared with a year ago, to $364,142 from $336,049.
Realtors in Western Canada reported similar price drops. The Real Estate Board of Greater Vancouver played up buying opportunities after it saw a 55-per-cent dive in housing prices from this time last year. The Calgary board reported a 26-per-cent drop in metro sales during the same annual period.
Toronto-area houses are also sitting on the market much longer, according to the board, with the average one taking more than a month to sell.
The latest numbers appear to have persuaded real-estate professionals that the market is in a deeper slump than they had been willing to admit.
The Toronto board dismissed early evidence of decline as the result of excess snowfall at the beginning of the selling season. Subsequent declines were attributed to the new municipal land-transfer tax.
Last week, board spokesman Von Palmer told The Globe and Mail the October figures would show the negative impact of a land-transfer tax that came into effect in February, repeating a concern expressed by Ms. O'Neill earlier in the month.
But the results put an end to the talk. Instead of the new tax, Ms. O'Neill blamed media reports from the United States for "unduly" affecting confidence in the local market. "There's no question that in Canada the economic fundamentals to support a healthy housing market remain in place."
Another tactic the board had used in recent months to minimize evidence of decline was to compare current sales with those posted two years ago, in 2006. In that context, current drops in sales and prices can look more like a return to normal after an exceptionally buoyant 2007. The current figures are "indicative of a return to a more-balanced market," according to the board.
But are they? Sales last month were 25 per cent lower than they were in the same month two years earlier, according to the October report. Prices were 1 per cent lower compared with October, 2006, and they are steadily trending downward. It's a precarious form of balance.
Torontonians will quickly recover their appetite for residential real-estate once they realize how healthy the local market actually is, according to Ms. O'Neill.
"Earlier this year the International Monetary Fund undertook a study of housing markets in 17 countries and found that Canada was one of only two nations in which house prices are supported by the economy," she said. "There's no doubt that real estate will continue to be a solid long-term investment in our country."
Emphasis on "long term." In the meantime, watch out.
JOHN BARBER November 6, 2008
Home sales in the Greater Toronto Area fell 35 per cent this October compared with sales a year earlier, according to the Toronto Real Estate Board. Prices fell 10 per cent over the same period, leading the industry to acknowledge the existence of a deep slump in the market.
"Consumer confidence is critical to the housing market and it appears that consumer uncertainty has been prevalent in today's market conditions," board president Maureen O'Neill said in announcing the numbers.
The decline is evident across the region, with the average home price dropping to $352,974 from last October's $394,646. Prices and sales both dropped most quickly inside city limits, where the average price dropped 13 per cent, to $376,896 from $434,022, and sales fell 38 per cent.
But no region was immune. Sales dropped 32 per cent in the 905 suburbs and the average price there was down 8 per cent compared with a year ago, to $364,142 from $336,049.
Realtors in Western Canada reported similar price drops. The Real Estate Board of Greater Vancouver played up buying opportunities after it saw a 55-per-cent dive in housing prices from this time last year. The Calgary board reported a 26-per-cent drop in metro sales during the same annual period.
Toronto-area houses are also sitting on the market much longer, according to the board, with the average one taking more than a month to sell.
The latest numbers appear to have persuaded real-estate professionals that the market is in a deeper slump than they had been willing to admit.
The Toronto board dismissed early evidence of decline as the result of excess snowfall at the beginning of the selling season. Subsequent declines were attributed to the new municipal land-transfer tax.
Last week, board spokesman Von Palmer told The Globe and Mail the October figures would show the negative impact of a land-transfer tax that came into effect in February, repeating a concern expressed by Ms. O'Neill earlier in the month.
But the results put an end to the talk. Instead of the new tax, Ms. O'Neill blamed media reports from the United States for "unduly" affecting confidence in the local market. "There's no question that in Canada the economic fundamentals to support a healthy housing market remain in place."
Another tactic the board had used in recent months to minimize evidence of decline was to compare current sales with those posted two years ago, in 2006. In that context, current drops in sales and prices can look more like a return to normal after an exceptionally buoyant 2007. The current figures are "indicative of a return to a more-balanced market," according to the board.
But are they? Sales last month were 25 per cent lower than they were in the same month two years earlier, according to the October report. Prices were 1 per cent lower compared with October, 2006, and they are steadily trending downward. It's a precarious form of balance.
Torontonians will quickly recover their appetite for residential real-estate once they realize how healthy the local market actually is, according to Ms. O'Neill.
"Earlier this year the International Monetary Fund undertook a study of housing markets in 17 countries and found that Canada was one of only two nations in which house prices are supported by the economy," she said. "There's no doubt that real estate will continue to be a solid long-term investment in our country."
Emphasis on "long term." In the meantime, watch out.
TOBoy
Active Member
I believe the media is a big reason of the fluctuation of consumer confidence. This article (one of many) certainly dampens a reader's confidence in the real estate market. When the reader reads it, he/she will think the price will drop further and wait it out. Then a month from now, another article comes out with another reported drop in sales/price. Again, the reader waits it out......it's a vicious cycle.
Whether or not our economy is that bad remains to be seen, but negative reports from the country and the US certainly don't help.
Whether or not our economy is that bad remains to be seen, but negative reports from the country and the US certainly don't help.
TKTKTK
Senior Member
The media is merely doing its job: reporting. It's up to readers to make up their own mind. It isn't as if the media has shied away from printing TREB's platitudes for the last couple months.
Also, the fluctuation in consumer confidence can probably be better linked to media reports from the USA, or from the world, rather than from regional real estate news.
panekkkk
New Member
Advice?
Okay, given all this info I need a little advice.
First let me lay down my general impression:
- The resale price of Toronto real estate is dropping
- However, this is driven largely by a drop in luxury homes, while the downtown condo market is still seeing increases (albeit minor)
- Anyone know where good median data can be found?
I am considering purchasing a condo, sometime in February or March. Should I wait until then, will downtown condo/loft prices drop further? Projections anyone? Or should I rent?
I am hoping to have 20% down for a 300-400k condo/loft. I keep seeing very conflicting opinions on whether it is worth it to rent or buy at this point. I plan on staying for at least five years, and if not, renting it out.
Okay, given all this info I need a little advice.
First let me lay down my general impression:
- The resale price of Toronto real estate is dropping
- However, this is driven largely by a drop in luxury homes, while the downtown condo market is still seeing increases (albeit minor)
- Anyone know where good median data can be found?
I am considering purchasing a condo, sometime in February or March. Should I wait until then, will downtown condo/loft prices drop further? Projections anyone? Or should I rent?
I am hoping to have 20% down for a 300-400k condo/loft. I keep seeing very conflicting opinions on whether it is worth it to rent or buy at this point. I plan on staying for at least five years, and if not, renting it out.
fieras
Banned
Could you qualify that statement? I see absolutely no evidence of this, downtown condos that I've been monitoring over the past few months are all dropping
panekkkk
New Member
Just noticed from an earlier post in this thread. Apparently from the Toronto Star forum. Are you monitoring single condo prices? I'm new to this, that was just the general impression I got, so if I'm wrong, and I'm hoping I am, it would be nice to know or see some real data.
"No doubt very upsetting to anyone that has an interest in real estate, but what it illustrates, if anything, is how misleading statistics can be, & how easy it is to manipulate & interpret them to suit one’s need. What the article fails to mention & what the public does not know is that in any given year, monthly statistics can vary greatly, even in very good markets! The stock market meltdown has had a negative impact with the sale of luxury homes. From Oct.1-15/08 there were 37 property sales over $1,000,000. From Oct.1-15/07 there were 114 sales (82 in Toronto). One sold for $18,500,000! Remove these from the equation & the drop (if any) will not even be close to the 15% reported. In the TREB Central Districts, the median Sept./08 price was $356,000, a $1,000 increase from Sept./07, whereas the average price statistic shows a drop from $501,419 to $464,397. The Median in this case is a more reliable statistic to use, but obviously it would not sell as many papers!"
Urban Shocker
Doyenne
The last time this sort of thing happened prices sagged for years before bottoming-out and starting to rise again. I bought my place in Sept. 1990, which was about a year after the high-point in prices, and the bottom of the price-trough wasn't reached until about 1995. My property probably didn't appreciate to reach parity with what I paid for it until about 1997. In theory, if I'd waited until 1995 to buy, I would have saved more of a downpayment and would have been able to buy a larger property - but then I'd have missed out on all the enjoyment I had by living in my house from 1990 onwards rather than renting an apartment. So it's swings and roundabouts. If you're Flipper these are depressing times, but if you're buying a place to live in then be not afraid.
fieras
Banned
I'm just basing it from what I've been seeing, prices seem to be dropping in C1 since July. But my anecdotal experience seems to be backed up by reports in the media of a 15% drop YOY.
I know this, I'm a statistician. Keep this in mind next time a realtor tells you we're different & everything's gonna be alright.
From my perspective, it's just not worth it paying 350K for a 1 bedroom 500 sq foot condo. 5 years from now, what can you get for it? 400K? Doubtful, since wages have barely increased to match inflation. You'll need at least 375 for this unit to profit, factoring in closing costs. From a buyers perspective, it's very hard to justify spending 2K or more per month when you can rent for half that. Maybe it's just me, but this whole system doesn't make sense. Values should depreciate with age, not appreciate.
dpylyp
Active Member
Timing the market
Many have mentioned timing the market is impossible.
Buyers should be conscious of last sales information and making sure they get a better deal than the last guy.
People who are waiting on the sidelines, waiting for the ultimate drop in value of x% on this day of April in Year XXXX just does not happen.
As confidence erodes so do the sales values, with the addition scrutiny of headlines in the media, the consumers are being cautious.
If they paid rent for another year at 15K per year or the condo adjusted in value by 3- 5% they are in exactly the same place.
Wait too long and the prices started up ? you missed the boat. AGAIN
Many have mentioned timing the market is impossible.
Buyers should be conscious of last sales information and making sure they get a better deal than the last guy.
People who are waiting on the sidelines, waiting for the ultimate drop in value of x% on this day of April in Year XXXX just does not happen.
As confidence erodes so do the sales values, with the addition scrutiny of headlines in the media, the consumers are being cautious.
If they paid rent for another year at 15K per year or the condo adjusted in value by 3- 5% they are in exactly the same place.
Wait too long and the prices started up ? you missed the boat. AGAIN
panekkkk
New Member
I was just posting that quote from an earlier post in this thread. The stuff about statistics was not my own. Did not mean to demean you.
Alvar
Active Member
True. And, none of those 'Real Estate' types seemed to mind when the media (up until recently) went on and on about the 'red-hot' housing market, multiple offers, 'hot' new areas, and buying without home inspections. Hmmmm. You can't have it both ways. Ultimately, things did get too crazy, and now a looooong time out is required. I feel sorry for those who did buy at the 'peak', or got duped into bidding more than the house is actually worth. Let common sense prevail. Again, so Ontario circa 1990.
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