urbandreamer
recession proof
I never said prices will pick up this year. Spring 2011 should be good though. Look at the stock market--kaboom. RE will follow.
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Baby, we got a bubble!?
- Thread starter simuls
- Start date
interested
Senior Member
UD,
Weren't you just posting or am I misremembering that you thought 1 to 5% increases that BJL said were within realm or was that something else.
Or if it was you, are you suggesting that these 4 buildings being in the same core area more or less are vying for the same end user/investor and we are running out of those. Because if so, then I gather you are now retrenching back to the drop in the market camp again.
If I am misremembering, please forgive me.
Sorry UD,
I guess I was typing while the last few posts came on. I apologize for being somewhat redundant.
That said, my 2nd question is still pertinent about the "eruption of a war for investors/end users for these 4 condo projects".
Weren't you just posting or am I misremembering that you thought 1 to 5% increases that BJL said were within realm or was that something else.
Or if it was you, are you suggesting that these 4 buildings being in the same core area more or less are vying for the same end user/investor and we are running out of those. Because if so, then I gather you are now retrenching back to the drop in the market camp again.
If I am misremembering, please forgive me.
Sorry UD,
I guess I was typing while the last few posts came on. I apologize for being somewhat redundant.
That said, my 2nd question is still pertinent about the "eruption of a war for investors/end users for these 4 condo projects".
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interested
Senior Member
urbandreamer
recession proof
2011 is year of the rabbit. That is all that matters. Look it up.
simuls
Senior Member
I used to respect UD, but the fact is he's been so "Smitherman" on his predictions lately (it's up, it's down, prices rise, prices fall, double dip, INDU 20 000!) that while I still think he has his ear to the ground, his predictions are useless. I think he just F*$*$*$ with people most of the time.
Ric
Active Member
UD - Jekyll and Hyde
X2 Buyer
Active Member
INTERESTING ARTICLE - WE ALL TALK ABOUT BUBBLES BUT CERTAINLY IN DIFFERENT SIZES
FULL ARTICLE:
Global Housing Bubble - Based on Ratio of Price to Rent, Which Countries are the Bubbliest?
Inquiring minds are wondering where the biggest housing bubble is.
In what should be no surprise, the Economist rates Australia #1, followed by Hong Kong, Spain, Sweden, France, and Great Britain. Supposedly, US home prices are undervalued and Japan (having gone through decades of deflation), the most undervalued.
The Economist made its determination on the basis of price-to-rent.
In recent months several countries have experimented with measures to cool bubbly property markets. Yet since The Economist’s global round-up of housing markets was last published in April, house-price inflation has accelerated in some of the very countries where the authorities have intervened to slow its rise.
FULL ARTICLE:
Global Housing Bubble - Based on Ratio of Price to Rent, Which Countries are the Bubbliest?
Inquiring minds are wondering where the biggest housing bubble is.
In what should be no surprise, the Economist rates Australia #1, followed by Hong Kong, Spain, Sweden, France, and Great Britain. Supposedly, US home prices are undervalued and Japan (having gone through decades of deflation), the most undervalued.
The Economist made its determination on the basis of price-to-rent.
In recent months several countries have experimented with measures to cool bubbly property markets. Yet since The Economist’s global round-up of housing markets was last published in April, house-price inflation has accelerated in some of the very countries where the authorities have intervened to slow its rise.
interested
Senior Member
While this data is interesting I am not sure it provides alot of help to evaluate R/E. Yes, perhaps for the investor condo units being bought by foreigners, they may look at this data. But that said, the foreign investor unit purchases may be significant in downtown Toronto and downtown Vancouver, but this while a significant part of the local downtown market perhaps, is small when looking at the total market of Canada.
So will a foreign investorlook at this and say chose to buy in Canada over France since France is more overvalued. Maybe but I doubt it. Maybe compare to Australia to somewhere else. I guess the foreign investor would say don't buy in Australia. I don't know why it is so high there but I can only conclude there may not be much demand for rental and perhaps incentives to buy so on a price to rent basis it is expensive. Perhaps there are limits to where property can be built. Maybe on this basis it is a bubble.
My point which I apologize I am poorly making is I don't find this data all that helpful. I do prefer looking at the 1997 to 2010 data and on that basis Canada does not look too bad. However, what would be more relevant would be to post the affordability index in each of these countries since even if the price escalation has not been great but the affordibility is not there, how can the properties escalate more.
Perhaps someone smarter than me can help draw more useful conclusions from this.
So will a foreign investorlook at this and say chose to buy in Canada over France since France is more overvalued. Maybe but I doubt it. Maybe compare to Australia to somewhere else. I guess the foreign investor would say don't buy in Australia. I don't know why it is so high there but I can only conclude there may not be much demand for rental and perhaps incentives to buy so on a price to rent basis it is expensive. Perhaps there are limits to where property can be built. Maybe on this basis it is a bubble.
My point which I apologize I am poorly making is I don't find this data all that helpful. I do prefer looking at the 1997 to 2010 data and on that basis Canada does not look too bad. However, what would be more relevant would be to post the affordability index in each of these countries since even if the price escalation has not been great but the affordibility is not there, how can the properties escalate more.
Perhaps someone smarter than me can help draw more useful conclusions from this.
BrianPersaud
Active Member
That study by the economist is based on long-run average of price-to-rents ratio. Bad indicator because most apartment rental stock is in Quebec and Ontario that have rent controls so its difficult to get a higher rents
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BrianPersaud
Active Member
September numbers are expected be strong (1000 units) but very dilute because of all the openings. We should see price reductions and more incentives at some of 332 existing projects in the GTA
urbandreamer
recession proof
The month: February 2011
The project: The Mercer
The price: From $179,999
The customer: late 20 and 30-something (single, with no hope of getting a bf lol I know the type) women sick of the "long" commute to LV from their gov't and Bay st offices.
The project: The Mercer
The price: From $179,999
The customer: late 20 and 30-something (single, with no hope of getting a bf lol I know the type) women sick of the "long" commute to LV from their gov't and Bay st offices.
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aguduser
A part of UT
I hope you didn't just figure that out now.
X2 Buyer
Active Member
Interested, I am not saying I am smarter but it is interested people's take away from one article (or anything) will be very different. My take away from it:
1. get a sense the size of the bubble - though understanding I cannot really take the numbers as "bible", at least it tells me there is a possibility it may get bubbled as three times bigger, to the most extend...some reference.
2. get a sense that more and more countries getting into the R/E bubbles and try to figure out why...to convince the thought of what I always believe:
- currency war caused by devalued U.S. dollar (US intention to devalue so less debt)
=> other countries followed to devalue their own currencies because only in this way U.S. debt owed to them will not be diluted
=> inflation
=> money worth less if saves in bank
=> it has to go somewhere to invest in investor's mind
=> R/E would be a long term good investment and not fluctuated that much (may no incl. US)
=> Many investors around the globe felt the same way so boosted up demands
=> so here is the trend of the bubbles
Anyway the above may not sound new to anybody...and may not sound right to somebody..
lafard
Active Member
Um, no. There is no rent control when a tenant turns over, and thus if rents were artificially low a new tenant would pay substantially higher rents than the old one that left. For almost a decade now rents have been falling or stable in real terms. My current place rents today for $25/month less than what I signed a lease for 6 years ago.
In fact, it can be argued that rent control actually skews rent up as landlords are aware that they can't jack up rents if the tenant stays on for a long term so they set the entry level rent higher than it naturally should be if simple supply and demand were in control.
Thus, the rent controls are probably improving the economics of investing. Without controls rents would probably be 5-10% lower.
interested
Senior Member
Lafard has a point. As a landlord, I can tell you that while at times I have increased rent with longer term tenants, I often in the 2nd or 3rd year to keep them if they have been good will forgo rent increases.
However, Lafard, landlords know it costs us money to rerent a place so we may allow rents to stay(at least small individual landlords) but we also know the tenant has a vested interest not to incur the costs of a move.
Finally, I am not sure you can conclude what you are suggesting. It will boil to supply and demand. In the condo market in downtown TO, there is 1% vacancy (at least that was the figure about 1/2 a year ago: I don't know the current but assume it is not far off). Older apartment buildings 5%. Therefore overall perhaps 3% approximately. I believe if there were no rent controls, you would see higher rent demands. The years of rent review have helped (I am not saying exclusively) to keep rents in check because someone in longer term has a low rent and it is difficult to ask more than what the apt. or condo next door is asking.
The other issue is that as you point out, rents have stayed the same for the last 6 years and in fact probably more or less the last 10 years. What else has? My point is the rents in the absence of rent controls would have gone up more I believe but they would have bounced around alot more and likely in 2008 with the market meltdown if there was product available it would have dropped again.
Rents in Toronto are in fact I believe artificially low. Remember people are looking at financing at 3.5% -4% (I am talking 5 year fixed not variable mortgages)today (and the past 3 years) and saying rents are high but just 5 years ago, that was probably closer to 6 or 7% and yet rents were the same. I can tell you if allowed, landlords would have raised rates en masse much more than the 2% or so rent review allowances.
However, Lafard, landlords know it costs us money to rerent a place so we may allow rents to stay(at least small individual landlords) but we also know the tenant has a vested interest not to incur the costs of a move.
Finally, I am not sure you can conclude what you are suggesting. It will boil to supply and demand. In the condo market in downtown TO, there is 1% vacancy (at least that was the figure about 1/2 a year ago: I don't know the current but assume it is not far off). Older apartment buildings 5%. Therefore overall perhaps 3% approximately. I believe if there were no rent controls, you would see higher rent demands. The years of rent review have helped (I am not saying exclusively) to keep rents in check because someone in longer term has a low rent and it is difficult to ask more than what the apt. or condo next door is asking.
The other issue is that as you point out, rents have stayed the same for the last 6 years and in fact probably more or less the last 10 years. What else has? My point is the rents in the absence of rent controls would have gone up more I believe but they would have bounced around alot more and likely in 2008 with the market meltdown if there was product available it would have dropped again.
Rents in Toronto are in fact I believe artificially low. Remember people are looking at financing at 3.5% -4% (I am talking 5 year fixed not variable mortgages)today (and the past 3 years) and saying rents are high but just 5 years ago, that was probably closer to 6 or 7% and yet rents were the same. I can tell you if allowed, landlords would have raised rates en masse much more than the 2% or so rent review allowances.