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Baby, we got a bubble!?

RZ12 said:
Bayview is a long street need to be a bit more specific. Old-Mill is a very old neighborhood, a niche market tailored toward wealthy seniors who are setting up shop for retirement.Don't see too much chance of a severe price correction here as this is a place for downsizing. Fort York is close to the waterfront which is also close to Cityplace if a price correction were to occur. I'd say Fort York would be the first to go, but it's still very far from a price correction as prices are in line with market values and still very affordable compared to other parts in the city and the area is going in a positive direction.
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I'm not sure that Fort York would be the first to go -- with the Under Gardiner project happening and Loblaws finally setting up shop, the area is gaining appeal.
 
RZ12 said:
Bayview is a long street need to be a bit more specific. Old-Mill is a very old neighborhood, a niche market tailored toward wealthy seniors who are setting up shop for retirement.Don't see too much chance of a severe price correction here as this is a place for downsizing. Fort York is close to the waterfront which is also close to Cityplace if a price correction were to occur. I'd say Fort York would be the first to go, but it's still very far from a price correction as prices are in line with market values and still very affordable compared to other parts in the city and the area is going in a positive direction.
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Sorry, I meant the area around Bayview/Sheppard (Bayview Mall).

PinkLucy said:
I'm not sure that Fort York would be the first to go -- with the Under Gardiner project happening and Loblaws finally setting up shop, the area is gaining appeal.
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That's one of the reasons why I'm also considering this area. I feel that the upcoming Under Gardiner project and Loblaws will help minimize price correction and Fort York is pretty affordable.
I'm just afraid the area will have a high number of renters such as CityPlace.
 
There is a high number of renters, but less than City Place. There are no bars, and it's a much quieter area than Liberty Village and City Place. One person I know said City Place is where you go to rent when you move out of your mother's house. Fort York is where you go when you are finished living in a frat house and are settling down.
 
TheKingEast said:
Yep. There's so many people sitting back waiting for prices to fall off a cliff so they can enter into the market. Some have been waiting for 10 years. My question to those people. Was it worth it? If prices drop 20% there are many who will be affected, but there are many who won't be affected and would still turn a profit if they sold. People underestimate the number of homeowners who have had their properties double in the last 5-10 years, there are some who have tripled the value.

I see more tears from those who missed the boat.
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If you can't afford to buy, it's always a smart idea to wait until you can. Like any bubble, there will be a few people who profit massively, and many who lose. It's like any casino game. You'll always hear about the winners. Nobody goes around telling everyone they just took a bath in the real estate market.

Second: buying into certain neighborhoods in a city because you think they will be protected from a correction is foolish. Market corrections correct the market. The market doesn't end at a neighborhood boundary, sorry.

Third: real estate cycles usually last 18 years. Timing it is a fool's errand.
 
nrb said:
If you can't afford to buy, it's always a smart idea to wait until you can. Like any bubble, there will be a few people who profit massively, and many who lose. It's like any casino game. You'll always hear about the winners. Nobody goes around telling everyone they just took a bath in the real estate market.

Second: buying into certain neighborhoods in a city because you think they will be protected from a correction is foolish. Market corrections correct the market. The market doesn't end at a neighborhood boundary, sorry.

Third: real estate cycles usually last 18 years. Timing it is a fool's errand.
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Even if there is a market correction, wouldn't some areas be affected more than others? Such as if one particular area is currently more over-priced than another.

Are we reaching the next cycle?
 
Just some rough math to think about...

A 25% correction today would take a home owner who purchased an average home in Toronto in 2012 (4 years ago) to market value break even. This is based on a Toronto average price appreciation of 7% per year.
 
TREB December 2015 market watch figures are out: http://www.trebhome.com/market_news/market_watch/

Noteworthy figures for detached houses:
All of Toronto - 571 sales - $1,039,638 average - $765,000 median - 514 new listings
Toronto West - 195 sales - $808,761 average - $681,000 median - 183 new listings
Toronto Central - 163 sales - $1,768,589 average - $1,350,000 median - 138 new listings
Toronto East - 213 sales - $693,169 average - $646,600 median - 193 new listings

Once again, not that many new listings in central Toronto. Much fewer sales than west or east. Sales price continues to climb.
 
Crash is coming (no, not really).

Royal Bank has announced they're increasing mortgage rates while the bond rates have been falling. Other banks will likely follow suit.

This is evidence that the banks see mortgages as a little bit more risky than they did a short time ago. They're expecting a small increase in the default rate.
 
I'm wondering if anyone thinks the tanking Chinese stock market will have much impact on the condo and house market in Toronto, given that things like margin calls and need for liquidity at home may cause the Chinese-based Toronto condo owners to put a lot of those units on the market? I know the CMHC has said that (direct) foreign investors are a small percentage, but I don't believe the data.
 
No question it will impact condo sales. Single detached, probably not. Local demand for houses is high enough, IMO.
 
http://www.cbc.ca/news/canada/toronto/5-reasons-toronto-house-prices-won-t-crash-in-2016-1.3393299

The article asks several people who make their livelihood on real estate, and they say there's no reason to be concerned about a housing price crash because there isn't an oversupply, there's no GTA recession on the horizon, mortgage rates aren't going up, "Toronto's not a bubble by any definition", and there are affordable options that allow households to stay in good financial shape. So the message is essentially to not delay that purchase of a house or condo, because it isn't getting cheaper.

Judging from Bank of Canada's recent comments, I suspect that maintaining housing prices is their top priority, even though it means poor savings and investment returns for Canadians, and a brain-drain of top talent for more lucrative U.S. based jobs. Is there no will to try to protect the dollar and make longer term investments in training for the high-value industries and productivity improvements?
 
ponyboy said:
I'm wondering if anyone thinks the tanking Chinese stock market will have much impact on the condo and house market in Toronto, given that things like margin calls and need for liquidity at home may cause the Chinese-based Toronto condo owners to put a lot of those units on the market?
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That's a good question.

I'm also wondering whether snowbirds with places in the US are feeling the dollar pinch. If they need to maintain their places -- mortgages, condo fees, insurance, etc. -- in Florida or Arizona, will they remortgage in Toronto? Or does this even make sense?

Selling in Florida right now is not a good idea because, if lots of Canadians are putting their condos on the market, prices will go down. This will be offset somewhat by the gains made by selling in $US and converting to CAD but it's not a good time to sell, IMO.

Unless you want to get the jump on the climate change rush to bail out. (Pun intended.)
 
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