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Thread: Baby, we got a bubble!?

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    The Toronto Star: Condos take the biggest hit as home sales drop in the GTA
    Home sales continue to slide and prices soften, especially in the 416 region, according to the Toronto Real Estate Board, which recorded a 16 per cent decline in sales compared with November, 2011.

    The biggest declines in condo prices were in the City of Toronto, a far cry from the boom days and bidding wars.
    By: Susan Pigg Business Reporter, Published on Wed Dec 05 2012
    Home sales continue to slide and prices soften, especially in the 416 region, according to the Toronto Real Estate Board, which recorded a 16 per cent decline in sales compared with November, 2011.
    Condos took the biggest hit with resale transactions down 25.5 per cent across the GTA and prices down an average of 2.3 per cent. The biggest declines in condo prices were in the City of Toronto, where they were down almost 4 per cent year over year.
    • More: Avoid condo buyers’ remorse and read the fine print
    Overall, resale house prices held relatively steady across the GTA, up 1.6 per cent year-over-year to an average of $485,328. But that’s a far cry from the boom days and bidding wars that defined the market up until last spring, with ‘for sale’ signs now gracing front lawns an average of 30 days.
    • More: Property tax increases in Toronto
    “Transactions have been down on a year-over-year basis since June, after being up substantially in the last half of 2011 and the first half of 2012,” Toronto Real Estate Board President Ann Hannah said in releasing the monthly statistics Wednesday.
    “Some buyers pulled forward their decision to purchase, which has impacted sales levels in the second half of 2012.”
    Once again, TREB attributed tougher mortgage lending rules — especially the capping of amortizations at 25 years instead of 30 years — and the City of Toronto’s land transfer tax for pushing many buyers to the sidelines.
    But also impacting average price growth has been a shift away from pricier homes, says TREB.
    “The share of detached homes that sold for over one-million dollars was down substantially, which influenced the overall average price,” says Jason Mercer, TREB’s senior manager of market analysis.
    The number of detached homes that changed hands this November compared with November, 2011 was down 13 per cent across the GTA — a drop in sales of 18.5 per cent in the City of Toronto and 10.6 per cent in the 905 regions.
    Prices for detached homes were down almost 4 per cent in the City of Toronto, but up 3.5 per cent in the 905 regions, according to the TREB figures, and averaged $741,480 and $556,745 respectively.
    Sales of previously owned condos sank by 25.1 per cent in the City of Toronto and 26.5 per cent in the 905 regions. Prices were down 3.9 per cent in the City of Toronto and up 2.5 per cent in the 905 regions over last November, with prices averaging $350,540 and $279,483 respectively.
    Semi-detached homes saw an 11 per cent drop in sales, especially in the City of Toronto. But prices held up better in that market segment than all others, with prices up 5.8 per cent in the 905 regions to average $392,067, and 3.8 per cent in the City of Toronto to an average price of $583,117 in November.
    Townhouse sales were down 13.6 per cent overall across the GTA, with the biggest decline recorded in the City of Toronto, where sales were off more than 28 per cent. Average prices were up 5.3 per cent in the 416 region to $440,930 and 1.3 per cent in the 905 regions to an average of $347,461.
    New MLS listings were up slightly year-over-year, with 9,838 homes for sale across the GTA last month. A total of almost 5,800 homes changed hands across the GTA in November, down from 6,908 a year earlier.


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    From the globe:

    Home prices slip
    Home prices in Canada slipped again in January from December, marking the fifth consecutive month of easing.

    Prices dipped 0.3 per cent on the month, and climbed 2.7 per cent from a year earlier, but that, according to the Teranet-National Bank house price index, was the smallest annual increase since November of 2009.

    Of the six major centres measured, prices fell in four from December. But, aside from Vancouver, all registered year-over-year increases.

    In Vancouver, prices fell 0.81 per cent in January from December, and were down 2.54 per cent from a year earlier.

    Prices in Calgary slipped 0.1 per cent on the month, but rose 4.29 per cent on the year.

    Toronto, which with Vancouver has been the focus of Canada’s cooling real estate market, saw prices dip 0.37 per cent between December and January, but register a gain of 5.31 per cent from a year earlier.

    Montreal also suffered a monthly decline, of 0.18 per cent, though prices were up 2.6 per cent from January 2012.

    Only Halifax and the Ottawa-Gatineau region saw increases in both the month and the year, the former by 1.69 per cent and 6.61 per cent, the latter by 0.47 per cent and 2.72 per cent.

    The Teranet-National Bank measure, different from the monthly report from the Canadian Real Estate Association, also studies 12 cities. On that count, January marked the 14 consecutive month of slowing growth in prices.

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    Intersting story on China:

    China’s housing slaves need lifetime to pay off mortgages

    Bloomberg News | Feb 20, 2013 12:39 PM ET
    More from Bloomberg News

    Tomohiro Ohsumi/BloombergChina’s growing middle class reaching for homeownership helped property prices rebound starting in the second half of last year.

    Sherry Sheng, a 29-year-old Shanghai policewoman, bought herself a 4,000 yuan (US$642) black fur jacket, splurging for the last time before she starts paying off the mortgage on her first home.
    Sheng is part of a generation of middle class that Chinese media has dubbed “fang nu,” or housing slaves, a reference to the lifetime of work needed to pay off their debts. They’re taking on mortgages even as the government maintains property curbs to damp prices that have almost tripled since China embarked in 1998 on a drive to increase private home ownership.
    “It’s a treat for myself because I could never afford such a luxury after I start repaying my housing loans next month,” said Sheng, who paid 1.1-million yuan for the one-bedroom apartment on the city’s western outskirts and will be using about 70% of her salary to service her mortgage.
    China’s growing middle class reaching for homeownership helped property prices rebound starting in the second half of last year. They rose 1% in January from December, the biggest gain in two years, according to real estate website SouFun Holdings Ltd. Home prices in Beijing and Shanghai each rose 2.3% from December.
    Average per-square-meter prices in 100 cities tracked by SouFun are five times average monthly disposable incomes. A 100-square-meter (1,076-square-foot) apartment today costs about 40 years’ annual income, according to SouFun and government data, even as salaries have more than quadrupled since 1998.
    40 Years
    Sheng was able to buy her 50-square-meter apartment after borrowing a combined 770,000 yuan through a 20-year mortgage from Agricultural Bank of China Ltd. and a 15-year loan from the local housing providence fund. Her parents helped with the 30% down payment. She will repay about 4,000 yuan a month for the home, a one-hour subway ride from central Shanghai’s historic Bund that cost 16 times her annual salary, based on the apartment price and her income.
    Chinese homebuyers typically use 30% to 50% of their monthly incomes to repay mortgages, said Wu Hao, a manager at the loan brokerage of Bacic & 5i5j Group, Beijing’s second-biggest realtor for existing homes. It advises clients to keep monthly repayments lower than one-third of their incomes.
    The “general guideline” among Chinese banks is that a borrower’s salary should be at least twice their monthly payment; otherwise they’ll be asked to submit proof of assets, such as property, cars, or insurance to show their ability to service the debt, Wu said. Using 70% of monthly income to pay the mortgage is “very rare,” she said.
    Related
    • China’s housing market correction is ‘sending shock waves through its economy’: SocGen
    • China’s ghost towns highlight shadow banking risks
    • China is building a huge eco-city where no one will need to drive
    Mortgage Lenders
    Mortgage rates, which move with the benchmark interest rate, usually have maturities of five to 30 years. The People’s Bank of China’s benchmark lending rate for loans longer than five years now stands at 6.55%.
    Outstanding residential mortgage loans grew 12.9% last year to 7.5-trillion yuan, the slowest pace in four years, as China tightened lending, according to central bank data. A credit binge in 2009 fueled inflation, weakened banks’ financial buffers and led to an increase in soured loans.
    Still, analysts remain upbeat on Chinese banks. Mortgage loans accounted for 20% of the total loan portfolio of China Construction Bank Corp., the nation’s largest mortgage lender, at the end of June, while at Industrial & Commercial Bank of China Ltd., the second largest, the ratio was about 14 percent, according to their first-half earnings reports.
    Stable property prices in 2013 “should benefit CCB the most, as it has the highest real estate-related exposure among the H-share banks,” Grace Wu and Leon Qi, Hong Kong-based analysts at Daiwa Capital Markets, wrote in a Jan. 22 report. H shares are the shares of Chinese companies traded in Hong Kong.
    ‘Heated Up’
    Developers also are benefitting as homebuyers rush to buy because they expect prices to rise further. China Vanke Co., the biggest developer that trades on Chinese exchanges outside of Hong Kong, said sales rose 56% last month from a year earlier, while Evergrande Real Estate Group Ltd., the country’s largest developer by sales volume, said its January sales more than tripled.
    Standard & Poor’s raised its outlook for Chinese residential developers to stable from negative in a report released today, saying the companies were able to improve their liquidity at favorable costs because funding channels reopened. The ratings company said it didn’t expect the central government to “drastically” tighten or loosen controls on the property market and average selling prices will rise as much as 5% in the country’s 100 major cities this year.

    The volume of residential property sales in China will rise this year, driven by improved funding to developers, Fitch Ratings said in a Jan. 29 research report.
    Developer Valuations
    The property market has already “heated up,” while home prices in major cities may rise as much as 10% in the next three months, said Johnson Hu, a Hong Kong-based property analyst at CIMB-GK Securities Research, in an interview.
    Loose monetary policy will drive housing prices and sales up in the near term, Hong Kong-based Jinsong Du, Credit Suisse Group AG’s head of property research, wrote in a report Feb. 18.
    Credit Suisse favours Hong Kong-traded Chinese developers with “strong” sales and “less expensive” valuations, such as Country Garden Holdings Co., controlled by China’s richest woman Yang Huiyan, and Poly Property Group Co., a developer that is partly state owned, Du said. Country Garden and Poly Property trade at a ratio of about eight times estimated profit, compared with 13.4 times for the Hang Seng Property Index, according to data compiled by Bloomberg.
    The central government has since April 2010 moved to stamp out speculation in the property market by raising the down- payment requirement on first mortgages to 30% from 20%, ordering a minimum 60% deposit for second-home purchases and an increase in rates for second loans. It also imposed a property tax for the first time in Shanghai and Chongqing, and enacted restrictions in about 40 cities, such as capping the number of homes that can be bought.
    More Measures
    The new government may introduce more property curbs when it takes power in March. China may tighten credit policies for people buying a second home or raise the tax on gains on transactions of existing homes in the most affluent, or so- called tier-one cities, the China Securities Journal reported Feb. 1, citing an unidentified person.
    Home sales in China’s 10 biggest cities almost quadrupled to 8.5 million square meters in the first five weeks from last year, property data and consulting firm China Real Estate Information Corp. said in an e-mailed statement Feb. 19.
    “The uncertainty lingers as the government may issue new tightening policies if home prices are rising too fast,” said Tian Shixin, a Shanghai-based property analyst at BOC International China Ltd., in a phone interview.
    Private Ownership
    Chinese urban residents’ average disposable income rose 12.6% last year to 2,047 yuan a month, according to the statistics bureau. The average one-square-meter of new floor space cost 9,715 yuan in December, according to SouFun.
    The shift to private home ownership stems from reforms started in 1998, when then Premier Zhu Rongji privatized state- owned housing provided at low rents to urbanites, transferring home ownership from the government to the families occupying the dwellings. About 230 million people moved to cities in the 2000- 2011 period, the biggest urbanization in history, according to the Chinese Academy of Social Sciences.
    The idea of buying a property with borrowed money didn’t become popular until 2004 when home prices in major cities started rising fast enough to compensate for interest payments, enticing buyers to borrow to buy property, said Liu Yuan, a Shanghai-based researcher at Centaline Property Agency Ltd., China’s biggest real estate brokerage.
    Today about 50% to 70% of home buyers in the first-tier cities of Shanghai, Beijing and Guangzhou use mortgages, borrowing an average 50% of a home’s value, according to Centaline.
    ‘Modern Idea’
    Cai Yue, a 33-year-old manager at a Shanghai-based pharmaceutical company, bought her first home 10 years ago after graduation, among the first wave of Chinese taking out mortgages as the government tried to encourage home ownership by offering income tax rebates and the cheapest funding in two decades.
    Cai borrowed 50% from the bank for her 300,000 yuan apartment in 2003. Her monthly payment was 1,600 yuan, about 40% of her salary at the time.
    “It was quite a modern idea to take on a mortgage back then,” said Cai, who earned 3,700 yuan a month back in 2003 and declined to disclose her current income.
    With home prices of 6.8 times of her annual income, Cai was able to pay off her debts in 2007 and buy a second home for 2-million yuan that same year. Her first home, the 75-square-meter apartment about 8 kilometres (5 miles) north of the Bund, has surged sixfold in value. Cai paid off all her mortgages in December and is barred from buying a third apartment in Shanghai.
    “The housing slaves term is quite reasonable because it will put a lot of burden on home buyers if housing payments are more than half of their incomes,” said Liu Li-Gang, a Hong Kong-based economist at Australia & New Zealand Banking Group Ltd.

  4. #7264

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    Condo George, have you ever heard of George Condo?

    I saw a Vine gif of you clapping at the Raptors game last night and wondered how old you are?

    CN Tower: CG is what he is. A good sales man. Since you're the "sales man" for the CN Tower you should try to sell yourself better.
    Canadian architecture I like: http://renderpornstar.com/

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    Interesting article on China..

    Ive seen the recent numbers ... sales in feb will be better than Jan ..what's most interesting is the avg price.. anyone have thoughts on the recent average price numbers.. ?

    Go shah rukh. =p

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    Quote Originally Posted by TorontoMike$$ View Post
    Ive seen the recent numbers ... sales in feb will be better than Jan ..what's most interesting is the avg price.. anyone have thoughts on the recent average price numbers.. ?

    'Month-to-month' sales figures and 'average' selling price are both poor metrics. Better to use the 'year-over-year' and 'median' price figures as they are more accurate for analytical purposes.

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    Baby boomers may be planning to move, but not into condos
    Royal LePage survey shows 'they love their garages and their yards'
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    By: Susan Pigg Business Reporter, Published on Tue Feb 26 2013
    Baby boomers may well be on the move over the next five years, but don’t expect them to be downsizing to condos, according to a new report by realtor Royal LePage.
    “They love their garages and their yards,” says Royal LePage CEO Phil Soper.
    In fact, they love them so much that 40.6 per cent of 1,011 boomers surveyed for the study said they plan to move out of the family home to another house — some 25.9 per cent into one of a similar size and almost 18 per cent of them into something even bigger.
    While 54 per cent of boomers surveyed said they do intend to downsize, less than a quarter (22.9 per cent) are looking to condominiums or apartments, the report notes.
    That could mean lights out in more than a few of those glass-and-steel units over the next decade, given that Generation Y kids born between 1980 and 1994 were also part of the survey and made it clear they don’t plan to be living the high life in the bustling downtown forever.
    Expect a rush to the suburbs over the next few years as they hit their child-bearing years: Almost 77 per cent of the Gen Ys surveyed said they will be looking for townhouses, bungalows or single family homes and less than 25 per cent of them close to downtown.
    “Like their parents, they dream of owning a lovely house in the suburbs, which provides value as well as access to parkland for children to play and the perception of greater family safety,” said Soper.
    Less than 20 per cent of the boomers surveyed by LegerWeb last September on behalf of Royal LePage said they are looking to buy multi-storey homes. Instead, almost half — about 40 per cent — are looking to buy a bungalow, a housing type that’s quickly headed for extinction because of escalating land values and intensification efforts that, across the GTA, are driving houses up rather than out.
    Relatively few boomers, it turns out, are being wooed by the call of the wild and the romance of living on a lake: Just 5.9 per cent say they plan to buy a cottage, ski chalet or other recreational property as their primary residence, the survey shows.
    Realtor Cindy Daly, a baby boomer herself, says most boomers she knows simply can’t fathom downsizing yet — they need the space in their often mortgage-free homes for grown children trying to get on their feet, or aging parents too frail to live on their own.
    “I’m finding that more people are staying put,” said Daly.

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    Quote Originally Posted by marsh View Post
    While 54 per cent of boomers surveyed said they do intend to downsize, less than a quarter (22.9 per cent) are looking to condominiums or apartments, the report notes.
    this wasn't a choice for some of my friends' parents.
    Last edited by mettle; 2013-Feb-26 at 11:18. Reason: fixed crappy grammar

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    I agree that the survey findings were surprising because it seemed to belie popular belief as well as experience, the parents of my friends who downsized also ended up in condos - mind you they remained in their homes for as long as possible not moving until their 70s/80s until health issues made a house too much of burden. So maybe their is a mismatch of "intenions" v. reality once they actually start looking.

    I also thought the survey was surprising when it stated that "Almost 77 per cent of the Gen Ys surveyed said they will be looking for townhouses, bungalows or single family homes and less than 25 per cent of them close to downtown." which again seems to bely the current trends. Though with overwhelming new condo developments being filled with small 1 bedroom units (and the escalating prices of low rise homes in Toronto and limited supply) I can see how Gen Ys would be pushed to the suburbs if they want a larger home and a yard. Anyways I just posted the article because I thought the survey results were interesting with respect to implications for the housing/condo market.

  10. #7270

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    My father stayed in his home well into his 80's. My uncle and aunt into their 90's and only went to a condo when they could not manage the house and in particular the flights of steps.

    We moved to a condo in downtown. It lasted 1 month and we missed being able to go out to the yard and so moved back to the house. Just not ready though perhaps in the distant future we will be.

    I wonder if when reality is really visited that people opt for the suburbs when kids become an issue. You can play on the street. Walk to parks ( or possibly drive ). Less crowds than downtown. I don't know that I would really want my 7 year old for e.g. walking downtown though I appreciate there are huge benefits to being downtown. Of course, there is the price factor which is probably the biggest reason. Also, for GenY's when they have families, perhaps the amenities of downtown are less important than a back yard....I don't know just speculating.

  11. #7271

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    We moved to a condo a couple of years ago after a major downsize. For the most part, it has been a positive experience. I certainly don't miss shovelling or mowing. On the other hand, our siblings think we're nuts and have no desire to live in a condo.

  12. #7272

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    Quote Originally Posted by PinkLucy View Post
    We moved to a condo a couple of years ago after a major downsize. For the most part, it has been a positive experience. I certainly don't miss shovelling or mowing. On the other hand, our siblings think we're nuts and have no desire to live in a condo.
    Haha PinkLucy.
    Guess what I had to do this morning!

  13. #7273

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    It's mornings like this that I really appreciate it. On the other hand, I have to take the dog out -- can't just open the door to the back yard. That part of condo life I don't like so much, and I can't understand why so many condo owners have dogs?

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    Quote Originally Posted by PinkLucy View Post
    It's mornings like this that I really appreciate it. On the other hand, I have to take the dog out -- can't just open the door to the back yard. That part of condo life I don't like so much, and I can't understand why so many condo owners have dogs?
    A lot of lonely people.

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    Quote Originally Posted by RZ12 View Post
    A lot of lonely people.
    Cats are a better atlternative

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