Discussion in 'Looking To Buy' started by VeronicaLoria, May 12, 2010.
how would a major correction not benefit a homebuyer?
That part I dont agree with. Only agreed with increasing income part.
As for lower prices - of course that benefits a home buyer.
I think people have become delusional or that they have bought the holy grail of "Canada is special" and hence home prices can only go up. The same sentiment was in place at the peak of every asset bubble in all of history. Bank economists, credit analysts, fed officials were all of the belief that the US housing market was not in bubble in 2005-6, just before it popped. Same will happen in Canada. What are people expecting, BOC to unleash massive QE to bail them out? That will crater the dollar, especially in an environment where the Fed is hiking.
Keep your powder dry, increase your income and don't over reach. The opportunity will come.
It is super depressing to see everything over 550K....
BTW whatever happened to townhouses with a bit of backyard?
My main aversion to condos is lack of BBQ....I cannot spend half a million and never BBQ again...that is insane....or worse carry my damn korean rips in the elevator to bbq them in a public arena...no way jose
Patience my friend, patience. WTI Crude now sitting @ $37 and change, which means Canadian Crude is $30 bucks (trades at a discount given heavier grade and there is a glut of it).
Once US falls into recession you can say good bye to today's housing prices for a good 10-15 years.
The last time I checked I don't see a job boom in any revolutionary industry in Toronto. Toronto isn't the new San Francisco Bay Area (Sbay) that has a job boom in a high paying industry that is permanently entrenched in the region. Even if the so called tech unicorns go bust, there will always be deep pocketed strong hands in the Sbay area. Its permanent wealth. Toronto lacks that and so does Vancouver, Montreal etc. Prices have run away because of low rates and Chinese buying. The good times roll on until they don't.
I completely agree with you, prices are going up, but right now is perfect time to buy. Market is cooling off, but it will pick on during spring and summer time. If you want something decent size, I would recommend to look at midtown or downsview area. There are way more options, bigger condos and way, way cheaper prices.
^^My banker, my parents' banker and at least 2 of our real estate agents would disagree; they all believe a correction is imminent, due to the recent surge in prices in Vancouver/Toronto. I actually held off on a small investment purchase with a friend to see what happens to the market during the winter.
These graphs make me believe that Vancouver houses and Toronto condos are overvalued relative to their respective markets.
Of course prices are insane. Markets of all kinds can stay irrational longer than anyone can stay solvent.
Last I checked I don't see a high paying job boom in Toronto or Vancouver. New grads are coming out of school are either living in mom/dads basement or if they were lucky to get a job then starting out making $50k if they were lucky which is the same starting salary I got paid as an engineer when I graduated in 1999 so there you have it - no income gains in over 10 years. All driven by cheap rates and that never lasts.
No condo in either city yields a good return. Virtually all condos are net cash flow negative currently and I don't see rents rising to make them yield a positive return. The frenzie has been fed by zero bound rates, which will all be tested by bond markets as the CAD continues to slide on the back of crude oil declines and saturation in housing.
Toronto has the highest number of real estate agents per capita in the world. There is a reason for that. Easy money and that never lasts.
Financial memory is very short. Always has been.
Yeah I heard the same thing from my financial advisor. Major correction not merely "inevitable", but "imminent", said by a guy who would be better of telling me to do a mortgage with him (I was looking at a few properties already)
imminent could mean 6-7 years from now.
Or it could mean 2016-2017 with Oil hitting $20 handle, US and global recession, CAD$ testing new multi-decade lows and BoC having to cut rates to below zero bound and then having to desperately raise rates to defend a tanking currency.
Only time will tell...
Despite the "imminent" price correction, would it be beneficial for home buyers to hold of on their purchase even if it means continue paying rent?
A 5% drop on a $500k property is $25K in principal or about $45K in mortgage payments. If I'm renting said property at $24K/year, $9K/year would've gone to maintenance fee and property taxes anyway, so it's really only $15K loss per year, divisible into $45K three times - basically I can rent for 3 years if I expect a permanent 5% drop during that time. Chances are it'll be a temporary 10-15% drop, with a partial recovery.
Well, I am Tom and recently moved in Toronto from NYC due to my job transfer presently looking for an affordable apartment in Toronto. If someone can suggest me some trust-able agents who can provide an apartment rapidly as well as in negotiate value then please leave your massage.