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Baby, we got a bubble!?

A lot of investors and airbnb operators have made such a killing for the past 5 years that I am afraid some of them may be able to weather the storm/tolerate negative cash flow and it may take a long while for these to collapse.

So far a lot of these former-airbnb units are getting put on the market for still quite exorbitant rents. I don't know if all of those 15,000 units will ever hit the market.
 
Let's be honest, the people that are driving the real estate market up, are they really impacted as much by this pandemic?

Unfortunately, most of the unemployment is coming from fast food workers, retail workers, etc.

If you're working for an established company, you've been getting paid this whole time assuming your job can be done from home. The CEOs might take a 10% pay cut, but 10% of $2million is not much.

A lot of people are trying to be optimistic by saying the market is going to crash or the bubble is going to pop. Maybe in Bradford, ON, Ancaster, ON, but downtown will not be stripped. You'll see normal commutes all over again.
 
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Once Safer Than Gold, Canadian Real Estate Braces for Reckoning

While lockdowns, job losses and uncertainty are roiling property markets from the U.K. to Australia to Hong Kong, Canada’s situation is more precarious than most. As its oil sector shriveled in recent years, Canada’s economy became ever more driven by real estate, an industry now in a state of paralysis.

https://www.bloomberg.com/news/arti...han-gold-canadian-real-estate-meets-its-match
 
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Cryptopreneur said:
Let's be honest, the people that are driving the real estate market up, are they really impacted as much by this pandemic?

Unfortunately, most of the unemployment is coming from fast food workers, retail workers, etc.

If you're working for an established company, you've been getting paid this whole time assuming your job can be done from home. The CEOs might take a 10% pay cut, but 10% of $2million is not much.

A lot of people are trying to be optimistic by saying the market is going to crash or the bubble is going to pop. Maybe in Bradford, ON, Ancaster, ON, but downtown will not be stripped. You'll see normal commutes all over again.
Click to expand...

Not even close. The pandemic affects more companies indirectly than you think. The companies that had to lay off waitresses and other staff can’t pay vendors. Those vendors have to lay off staff because no money is coming in. It’s a chain reaction and will eventually affect the higher salaries white collar jobs. This baby is far from over. Now we have real estate on the brink, it’s going to get much worse. Oil and real estate tumbling. We will have to live with the government pausing the economy due to their lack of preparedness and then overreaction. A lot of people are going to be hurting IMO.
 
Anyone have a sense of the impact of this potential down turn on the office tower projects coming up? Any being delayed or reduced in scope?
 
www.cnbc.com

'We are living the future right now' — 'Shark' Robert Herjavec says work-from-home here to stay

"We have been forced to change, whether we like it or not," "Shark Tank" investor Robert Herjavec told CNBC.
www.cnbc.com www.cnbc.com
. If work from home is here to stay, companies need less office space. Corporations world wide have been doing this for 5 or 10 years where ever possible. I can’t help but think multiple tower projects will stop at tower one. Or that tower 2 or 3 is shortened. And perhaps condos, dens and second bedrooms will be more in demand. I don’t think people will retreat to the outer burbs, perhaps to renovated inner burbs, but the draw to downtown will still be strong, just based on the variety of experiences that most seek. Times are changing, this virus accelerates this I think.
 
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TheKingEast said:
They don't know. I've read anywhere from 3% to 30%.
Click to expand...

No one knows for sure, but there's no argument that Toronto real estate is in a bubble and based on economics, we could be looking at 40-50% decline which would only put prices back to 2011:
* Canadian household-debt-to-income ratio is 177 % (+/-)
* properties are leveraged for more "investment" properties
* HELOCS used as ATMs
* house price-to-earning ratio is completely distorted where the average home price in Toronto is $823,300, while the median household income sits at $78,373– only good enough to qualify for a mortgage of $300,172 (zoocasa report 9/2019 https://www.zoocasa.com/blog/canada-down-payment-required/)
* house price-to-rent ratio is completely distorted where the average 500 sqft 1-bedroom condo costs $500-550K, while the average rent is $2,000 - 25 to 27.5X, where it should be around 15-17.5x
* foreign capital may be returned back home as Covid-19 has affected economies globally and currently China is starting to experience 2nd wave
* Between 1985 and 1989 the average price of a house in the GTA increased by 113%.
Between 1989 and 1996 average price of a house in GTA have declined by 40%. Downtown of Toronto was hit the worst with over 50% decline in value of a home.
Toronto r/e prices (2019/2020) have increased 400+% from the 1996 bottom, while global historical prices only rise marginally more than inflation doubling in value every 16/17 years. So in 23/24 year span, I'd expect it to increase by 200 % (+/-25)
 
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cdr108 said:
No one knows for sure, but there's no argument that Toronto real estate is in a bubble and based on economics, we could be looking at 40-50% decline which would only put prices back to 2011:
* Canadian household-debt-to-income ratio is 177 % (+/-)
* properties are leveraged for more "investment" properties
* HELOCS used as ATMs
* house price-to-earning ratio is completely distorted where the average home price in Toronto is $823,300, while the median household income sits at $78,373– only good enough to qualify for a mortgage of $300,172 (zoocasa report 9/2019 https://www.zoocasa.com/blog/canada-down-payment-required/)
* house price-to-rent ratio is completely distorted where the average 500 sqft 1-bedroom condo costs $500-550K, while the average rent is $2,000 - 25 to 27.5X, where it should be around 15-17.5x
* foreign capital may be returned back home as Covid-19 has affected economies globally and currently China is starting to experience 2nd wave
* Between 1985 and 1989 the average price of a house in the GTA increased by 113%.
Between 1989 and 1996 average price of a house in GTA have declined by 40%. Downtown of Toronto was hit the worst with over 50% decline in value of a home.
Toronto r/e prices (2019/2020) have increased 400+% from the 1996 bottom, while global historical prices only rise marginally more than inflation doubling in value every 16/17 years. So in 23/24 year span, I'd expect it to increase by 200 % (+/-25)
Click to expand...


Prices are not dropping 50%. Just no. Yes, we have been in a bubble for a little while now but prices are not getting chopped in half. The only way that happens is if there are 10 waves and we have to shut down the economy for years.
 
i recommend everyone download HouseSigma app , for the best info on actual data buy and sell prices , listings , for lease vs. actual leased data , really good real estate app very well organized , with this kind of app u don't need a real estate agent lol....

www.housesigma.ccom

some sneaky agents out there , check this out studio at 14 york st. was listed for 439K Apr 22 , no buyers , now relisted May 4 for $479K , they are hoping a newbie buyer comes along and buys it for $459K thinking they are getting a $20K discount hahaha
 
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Coronavirus brought median Toronto condo prices down $65,000: Zoocasa

May 14, 2020

Toronto’s condo market soared to new heights only weeks before the coronavirus pandemic.

But a new report from Zoocasa shows prices in the country’s biggest market have pulled back. It says median prices for condo apartments fell $65,000 (10 per cent) between February and April to $574,000.

Zoocasa says it doesn’t track data relating to Airbnb, a company hit hard by lockdowns, but says a variety of factors could be at play.

“There may be sellers who needed to move to accommodate lifestyle changes and preferences (e.g. a relationship or family change or a neighbourhood preference) or sellers who may have already bought a new home,” Emma Pace, a Zoocasa agent in Toronto, told Yahoo Finance Canada.

It also found 21 of Toronto’s 35 neighbourhoods in the report had fewer than 10 sales in April. Of the neighbourhoods that had more than 10 sales the median price dropped more than $100,000 in two, between $50,000 -$100,000 in four, and between $1 – $50,000 in seven.

Prices rose in only one — Milliken, Agincourt North — where the median price rose $34,000 (seven per cent).

The biggest decline was in Mount Pleasant East, where the median price fell by $131,500 (18 per cent).
Click to expand...

1589471961088.png



ca.finance.yahoo.com

Coronavirus brought median Toronto condo prices down $65,000: Zoocasa

Zoocasa says the dip in prices presents an opportunity for more buyers thinking about getting their foot in the door.
ca.finance.yahoo.com ca.finance.yahoo.com
 
at least some good news came of this corona virus , but on the others side lower home prices + lower interest rates , but harder to get a mortgage ? , has anyone tried to get approved for mortgage while on CERB payments ??
 
The home prices are not much lower. If you couldn't afford before, you're still going to have a tough time now. That said, things may change in a month....

Bank isn't lending to anyone getting CERB.
 
TheKingEast said:
The home prices are not much lower. If you couldn't afford before, you're still going to have a tough time now. That said, things may change in a month....

Bank isn't lending to anyone getting CERB.
Click to expand...
u have any links that states banks are not lending to people on CERB ??
 
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