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Baby, we got a bubble!?

Those low interest rates sure are helping extend the rise.

I'm even almost starting to think my 3 year fixed (from spring 2010) will have ended long before interest rates hit anywhere near long term averages
 
Now that is interesting George.

May I ask are you dealing mainly with local buyers or are they overseas investors. Are there end users looking and if so approximately what percentage is end user vs. investor.

Thanks.

Condo George said:
I am crazy busy folks, having to refer new business to other agents at this time.
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interested said:
Now that is interesting George.

May I ask are you dealing mainly with local buyers or are they overseas investors. Are there end users looking and if so approximately what percentage is end user vs. investor.

Thanks.
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It's so hard to tell who's overseas and who's not. Barbara Lawlor and Tridel stats say its 10%. However many overseas investors use Canadian addresses or get access to SIN #'s. Baker is doing heavy marketing internationally
 
lafard said:
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.
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You're half right, you are not considering apartment buildings which make up a large portion of the country's rental supply. These buildings have had 0 investment in the past 30 years in improve quality to get those high rents. This keeps rents down.

A recent Altus CMHC study that has shown Costs have gone up 39% while rents have gone up 16% over the past few years
 
urbandreamer said:
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.
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According to Tridel, average age of buyers is 42+ and 2/3 males. Makes sense, End users or the kids of the 42+ year olds may be in their 20s-30s, how many kids born in the 80s can afford 20% nowadays?
 
BrianPersaud said:
It's so hard to tell who's overseas and who's not. Barbara Lawlor and Tridel stats say its 10%. However many overseas investors use Canadian addresses or get access to SIN #'s. Baker is doing heavy marketing internationally
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I appreciate the comment. I realize that CG's experience is a sample size of 1 but I was curious as to his mix. I gather he represents alot of Chinese buyers so I was wondering what his take was.

I find it intriguing that it would only be 10%(I understand the limitations of using this number). The reason I say this is we are told it is immigration driving the downtown TO market. If I believe what I am reading, alot of these "overseas investors" buy with the intent of moving here, placing their money, for their kids to study or for other family members. I suspect the number is much higher (triple or more than the 10% figure you have quoted).

My other question if the other 90% is local, surely we must be getting very long in the tooth because the local supply must be nearing exhaustion.

One final point, I am starting to see something which I remember seeing in 1988 before the crash though not to the degree. I have been approached 3x in the past 2 weeks for my opinion by people who never bought investment real estate and are now looking to do it. They have not done any rent calculations. Have not thought it out to be landlords. Have not worked out carrying costs until I pointed all this out. This tells me that we are near the peak now. I don't know if it will be 3 days, 3 weeks, 3 months or 3 years from now but we have definately crossed into danger territory from my perspective in this experience is being repeated by many others. I hope I am wrong.

However, like the expressions says: If it looks like a duck, quacks like a duck, it's a duck.
 
That's concerning. That's similar to the stock market. When everyone is talking about investing, I get very scared because I then suspect a correction is coming. And usually that happens in 1-2 years.

However, with regards to investment properties, I've not really noticed what you say. I'm not in the business so my exposure is limited, but I will say that everyone I've talked to is deathly afraid of a pullback, and in fact even some have wondered out loud if they should just wait it out until the supposedly inevitable fall in prices happens. So, if I'm hearing that, maybe there are some legs to the price increases after all. Well maybe not, but the low interest rates certainly aren't going to be hurting prices in the near term.
 
Since we're talking about experiences here. I have 3 friends who purchased condos (all end-users) in the last 2 weeks. I have another friend who has completely abandoned the notion of buying real estate for investment purposes. I no longer have any interest in real estate either until the prices come down. A lot of people on here underestimate the intelligence of prospective buyers. I believe there are a lot of people sitting on the sidelines waiting for the prices to drop a bit. Pre-construction is no longer worth it, and I think people are starting to realize this. I think the one positive is listings are down. The one negative is new projects are popping up everywhere.
 
interested said:
Now that is interesting George.

May I ask are you dealing mainly with local buyers or are they overseas investors. Are there end users looking and if so approximately what percentage is end user vs. investor.

Thanks.
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All investors both local and from the Mid East / south Asia as far as Singapore
 
JayBee said:
Since we're talking about experiences here. I have 3 friends who purchased condos (all end-users) in the last 2 weeks. I have another friend who has completely abandoned the notion of buying real estate for investment purposes. I no longer have any interest in real estate either until the prices come down. A lot of people on here underestimate the intelligence of prospective buyers. I believe there are a lot of people sitting on the sidelines waiting for the prices to drop a bit. Pre-construction is no longer worth it, and I think people are starting to realize this. I think the one positive is listings are down. The one negative is new projects are popping up everywhere.
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New listings are done but not as much as sales are down so there is still a net increase in the product on the market I believe. (May be wrong)

I like you believe that the Johnny come lately are in. We had a little window of what will happen I believe next year (though with the manipulation of interest rates (QE) it may be postponed when we saw the drop in 2008. I still think we will retest those prices. I just hope as I say it isn't more.
 
interested said:
exactly
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No one is doubting that most pre-construction condos are bought buy investors. That's why they raise the prices and lower the downpayment closer to occupancy....investors buy...supposedly at wholesale prices....so developer can get financing to build the condo

Big difference between now than before: Fewer banks are providing construction financing and you have to put 20% down and qualify for a mortgage
 
BrianPersaud said:
No one is doubting that most pre-construction condos are bought buy investors. That's why they raise the prices and lower the downpayment closer to occupancy....investors buy...supposedly at wholesale prices....so developer can get financing to build the condo

Big difference between now than before: Fewer banks are providing construction financing and you have to put 20% down and qualify for a mortgage
Click to expand...

My comment of "exactly" was to support dave in TO's comment that this supports the market being in "bubble terrirtory".
However, investors presumably are running numbers now and asking themselves if $600/sq.ft. justifies "investor purchases". As I have said before, I can't make the math add up.
 
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