ILuvTO
Active Member
^^^^^Unreal. When will the madness end? Something has got to give eventually.
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Baby, we got a bubble!?
- Thread starter simuls
- Start date
interested
Senior Member
^^^
cdr: /this article all but says the market is totally overheated. the other issue is the buyer is from china with family money. Maybe if this is the case Toronto will go the way of Vancouver with locals being displaced and unable to afford to live in the city.
My real concern is foreign money can change its mind much more easily that locals can. If the decision for whatever reason is that Toronto is "not the place to be", these prices are absolutely unsustainable by the local market conditions alone.
My fear is that i do not appreciate that our market is totally out of our control. While we may have a social and moral responsibility to the country, foreign money has no such loyalty and will seek out the best place for it to invest. While that may be Canada for now, and I believe Canada is a superb country, that may not always be the case.
cdr: /this article all but says the market is totally overheated. the other issue is the buyer is from china with family money. Maybe if this is the case Toronto will go the way of Vancouver with locals being displaced and unable to afford to live in the city.
My real concern is foreign money can change its mind much more easily that locals can. If the decision for whatever reason is that Toronto is "not the place to be", these prices are absolutely unsustainable by the local market conditions alone.
My fear is that i do not appreciate that our market is totally out of our control. While we may have a social and moral responsibility to the country, foreign money has no such loyalty and will seek out the best place for it to invest. While that may be Canada for now, and I believe Canada is a superb country, that may not always be the case.
ILuvTO
Active Member
It looks like we're on our way. Here was a comment posted in the G&M under the article:
Eug
Senior Member
Meh. Like I said, we just bought a condo for 8% under asking. It was in North York. Bayview Village in fact, one of the nicest areas of North York. It's in immaculate condition in a building < 5 years old. Hardwood floors, granite counters, etc. Move in quality, no work needed, except a new dining area light fixture because the previous owners want to take the existing one with them. Fine by us because that's the one stylistic choice for the place (chandelier) we didn't like. Overall "reno" cost: $100.
OTOH, we've got another round of record low interest rates:
Banks’ mortgage war may lure new homeowners
Canadians are getting another chance to sign a mortgage at historically low rates, and for some it may be enough to push them to take a leap in the overheated real estate market.
On Thursday, Toronto-Dominion Bank, (TD-T81.701.361.69%) Royal Bank of Canada (RY-T56.931.142.04%) and Canadian Imperial Bank of Commerce (CM-T76.11-0.16-0.21%) trimmed the rate on four-year mortgages to 2.99 per cent – following Bank of Montreal’s (BMO-T57.510.450.79%) move on Wednesday to cut its five-year mortgage rate to the same level. BMO also chopped its 10-year rate to 3.99 per cent.
OTOH, we've got another round of record low interest rates:
Banks’ mortgage war may lure new homeowners
Canadians are getting another chance to sign a mortgage at historically low rates, and for some it may be enough to push them to take a leap in the overheated real estate market.
On Thursday, Toronto-Dominion Bank, (TD-T81.701.361.69%) Royal Bank of Canada (RY-T56.931.142.04%) and Canadian Imperial Bank of Commerce (CM-T76.11-0.16-0.21%) trimmed the rate on four-year mortgages to 2.99 per cent – following Bank of Montreal’s (BMO-T57.510.450.79%) move on Wednesday to cut its five-year mortgage rate to the same level. BMO also chopped its 10-year rate to 3.99 per cent.
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CN Tower
Banned
Eug
Senior Member
It's hard to give you an exact number because for several of the units we looked at the exact square footage wasn't included. However, the ones we looked at ranged from the low $400s to closer to $550 bux per square foot for asking price. However, that's asking price. We bought for 8% under, which in our case is probably around $490 psf based on my guessimate of the square footage.
BTW, the place we looked at that was in the low $400s per square foot was a two bedroom, with 2 baths. It did have a good setup, and lots of light, but it faced the 401, had an extremely dated kitchen, with crappy stained carpet, scuffed walls, and this wall:
MLS C2281774
I was thinking it'd cost about $10000-15000 to update the place, or say an extra $20 per square foot, but to get it to the level of the one-bedroom place we bought (hardwood/granite/stainless steel), it would have cost a lot more. Maybe an extra $40 PSF. That would have still kept it in the mid to high $400s PSF though. IMO the ones closer to $550 PSF were simply overpriced. Low $500s as a starting point for negotation is more reasonable for a nice building in this area (just south of Bayview Village Mall) with granite/hardwood, etc.
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Eug
Senior Member
This is the house:
She's a moron. Or at best, she's a gullible rich young immigrant.
That doesn't explain the other 3 bids over $1 million though. Yeah, it's a 60 foot frontage, but that doesn't justify a $150000 premium, much less the $300000+ premium over fair price it sold for. Given the description and the location, I would have expected an $800000+ sale price, but $1.18 million is just stupid.
Luckily, this type of stupidity is not representative of the market at large.
cdr108
Senior Member
This is the house:
She's a moron. Or at best, she's a gullible rich young immigrant.
That doesn't explain the other 3 bids over $1 million though. Yeah, it's a 60 foot frontage, but that doesn't justify a $150000 premium, much less the $300000+ premium over fair price it sold for. Given the description and the location, I would have expected an $800000+ sale price, but $1.18 million is just stupid.
Luckily, this type of stupidity is not representative of the market at large.
do you know the address?
from the article, all i know is that it's close to Yonge St in Earl Haig School district.
maybe the other 3 offers were flippers/developers looking to either sever the property and build 2 houses on 30ft lots, or a developer who's acquiring properties to build more condos since the proximity to Yonge subway.
OolloO
New Member
This is the house:
She's a moron. Or at best, she's a gullible rich young immigrant.
That doesn't explain the other 3 bids over $1 million though. Yeah, it's a 60 foot frontage, but that doesn't justify a $150000 premium, much less the $300000+ premium over fair price it sold for. Given the description and the location, I would have expected an $800000+ sale price, but $1.18 million is just stupid.
Luckily, this type of stupidity is not representative of the market at large.
Sometimes I don't think people understand the wealth of these foreign buyers. It's simply ridiculous. To scale it down, some may think that taking a taxi over a bus or first class over coach are wasteful. But to those who earn enough to consider the upgrade cost insignificant in comparison to the income, its a no brainer to pick the upgrade.
Now think outside the box and increase the income of the examples and the price difference between first and coach, and you may understand...
I've had tenants in the mega rich category under 20 years old, purchasing luxury cars on a whim and throwing around their parents money freely. It was an eye opener for me.
You have to think about it in terms of numbers. The countries under the BRICS range in the billions of people. For every 10,000s of super poor, there's 1 mega rich. Since their are just soooo many people there are a lot of mega rich.
Back to the story. Her parent's are obviously funding her purchase and if they are entrusting her to make a 1.2 million dollar decision, they probably don't think much of the amount of money being spent. Again, due to the number of people in these developing countries, for every thousands of mega rich, there's an ultra rich.
I don't think it's stupid paying to get exactly what you want for what one may consider to be a minuscule upgrade cost.
I know I've made quite a few assumptions here, but I've meet a lot of these people to know that I'm not too far off.
Just my 2 cents.
Eug
Senior Member
I know a fair bit of these rich foreign student types, trust me. A lot of them wise up a few years later as they age and enter the real world, when they have to make their own money... after they've squandered their parents' money. The ironic part is that businessman dad often would not have made the same idiotic purchase decision.
One scenario where they might pay significantly more than it's worth is if they need a whole row of properties for a bigger development, but that's not the case here.
It's Yonge and Finch in Willowdale. Dunno the exact address. Regardless, it's still stupid.
Perhaps, but I don't usually see flippers and developers paying $150000 over fair market price. I see them buying crap-buckets for cheap, or reasonable but dated homes for fair market price.
One scenario where they might pay significantly more than it's worth is if they need a whole row of properties for a bigger development, but that's not the case here.
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cdr108
Senior Member
quite abit of talk about this ... over 400 comments on G&M so far.
found this one quite interesting ... i wonder if the stats are similar or possibly less since the west coast is closer and more desirable.
Steve the Canuck
10:38 AM on March 9, 2012
There is a study on the RE ownership in Metro Vancouver (Landcor Data Corporation, "A Decade of Peak Performance 2000-2009 Metro Vancouver Market Overview", February 10, 2010).
The report shows that foreigners own only a small fraction (0.64%) of total RE in the Metro Vancouver area. Only a small percentage of those foreingers who own properties are from China/Hk/Taiwan.
1. foreingers from China own 0.006% of Metro Vancouver REs.
2. foreingers from Hong Kong and Taiwan own 0.1% of Metro Vancouver REs.
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Roy G Biv
Senior Member
hmmmmmmmmmmmmmm....
I was in conversation with a real estate reporter from The Star, and she told me about her recent tour of The Ritz. She made a point to highlight that 90% of the people she saw in the building were Asians under 30. I know it's anecdotal evidence, but still...
I was in conversation with a real estate reporter from The Star, and she told me about her recent tour of The Ritz. She made a point to highlight that 90% of the people she saw in the building were Asians under 30. I know it's anecdotal evidence, but still...
daveto
Active Member
The wealthy foreign investor is constantly cited as the source of Canada's price increase, but no-one can ever provide anything more than anecdotal evidence to support these claims.
The comment CDR has quoted above sounds intuitively reasonable to me. While I don't doubt that foreign nouveau riche investors have added to the price increases, I think the absence of hard numbers is telling and the majority of the increase derives from the local market.
Ultimately, looking at the recent Toronto market for example, price increases are deriving from normal demand chasing record low supply. It is the locals who aren't reselling who are responsible for the price increases. Why they aren't selling? I don't know. i think any release of pent of supply would have a big effect on the market, but there's been little indication of such a release and who knows when (or if) such a release might occur.
The comment CDR has quoted above sounds intuitively reasonable to me. While I don't doubt that foreign nouveau riche investors have added to the price increases, I think the absence of hard numbers is telling and the majority of the increase derives from the local market.
Ultimately, looking at the recent Toronto market for example, price increases are deriving from normal demand chasing record low supply. It is the locals who aren't reselling who are responsible for the price increases. Why they aren't selling? I don't know. i think any release of pent of supply would have a big effect on the market, but there's been little indication of such a release and who knows when (or if) such a release might occur.
vz64
Active Member
Actually, I was not surprised at all that it went for $1.18 m. Check MLS and all these old bungalows in NYCC East of Yonge with 40+ ft frontage—they usually listed for at least 900K. There is a similar bungalow (60ft frontage, close to Yonge) listed for 1.48mln (MLS®: C2294826). What does surprise me that the area (NYCC, East of Yonge, between Finch and Sheppard) used to have the lowest median income in the NYCC--according to 2006 census, it was 52K (compare it to 71K West of Yonge or 77K South-West of Yonge). Well, maybe it went through intense gentrification, boosted by Earl Haig school appeal to Asian investors. The latest numbers from the 2011 census might confirm it.
Kenny
Active Member
If they're going to bulldoze the home to put a new one in its place, then the fact that it's a shabby bungalow has no bearing on the value of the property to investor. If this lot is in a really good location, it may not have been that bad a purchase decision.