cdr108
Senior Member
Canada's market needs saving by deflating some of the air in it ... not blowing it up more !
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Baby, we got a bubble!?
- Thread starter simuls
- Start date
Canada's market needs saving by deflating some of the air in it ... not blowing it up more !
interested
Senior Member
This is a great observation. In many ways it echoes what happened on Wall Street prior to 2008 where assets were packaged, sold and resold so the Wall Street titans made profit not once but 3 and 5 x on the same investment. Finance became a much larger segment of the US economy than a decade previous. Unfortunately the RE sector is making most of the profits though at least here there remains 1 house and not 3-5x 1 house being "remarketed". However, the continued inflation of price does somewhat resemble a Ponzi scheme in that when prices are so high that there are no takers to buy at the inflated prices,the Ponzi fails though presumably there will be some floor....the question is where.
recharts
Banned
Sorry buddy but I can't miss this one!
In case this is true (which is not) they must share one more common trait:stupidity!
You seem to forget that many times "investment immigration" coincides with money laundering and you might want to see if Canada and China have some treaties signed in this respect.
If my memory serves me well recently China took some measures to stop that sort of immigration.
Anyway, to believe that the biggest dream of the foreign reach people is to emigrate to Canada and to buy a matchbox for the price of a mansion here in Toronto then you are living another reality.
The people you are probably seeing are poor Canadian Chinese hopping that there is still tons of greater fools left (the other 30% currently not owning ?)
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AKS
Senior Member
You've left out a lot of other fees.
construction permits
education levies
Section 37
park levies
lawyers
HST
development charges (might double)
art contribution
ongoing fees
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property management fees (maintenance)
hydro (usage cost is around 30% or so, the rest are
property taxes
security
insurance
These fees are all passed on to the buyer before or after closing or ongoing.
azureray
Active Member
These are good fees. Better city better infrastructure, creating jobs getting people paid.
Ultimately housing is a vehicle to keep money movement, so that economy can move. Otherwise everything will be a standstill and we go back to a third world country. That's why we need to avoid a crash so we don't see a backward movement.
Ultimately housing is a vehicle to keep money movement, so that economy can move. Otherwise everything will be a standstill and we go back to a third world country. That's why we need to avoid a crash so we don't see a backward movement.
KA1
Senior Member
radioheadmike
Active Member
http://www.thestar.com/business/rea..._as_wouldbe_homebuyers_stay_on_sidelines.html
I have a friend who is living in Chicago and he told me that property prices have dropped and continue to drop at a slow pace but still difficult to be approved for mortgage as the prices are still unreachable for the majority, thus rent rates have spiked significantly and continue to increase.
Seems like what is currently happening here in Toronto.
I have a friend who is living in Chicago and he told me that property prices have dropped and continue to drop at a slow pace but still difficult to be approved for mortgage as the prices are still unreachable for the majority, thus rent rates have spiked significantly and continue to increase.
Seems like what is currently happening here in Toronto.
Kenny
Active Member
Nah, it's still very easy to get a mortgage in Toronto.
js97
Senior Member
It's funny, but I know many of my friends (mid 30's range) that are either looking to 'off-load' or extremely worried about their investment in DT condos...
James
Senior Member
Why would they want to offload in such volatile times? With the rental market heating up, they'd be better inclined to sustain their investment via market rents versus selling in a declining market.
Kenny
Active Member
People are rarely rational when it comes to investing. They'll see the news that condo prices are stagnant or falling, then they'll want to jump ship before everyone else. The sheep always follow the herd.
daveto
Active Member
If one isn't going sell one's investment into a declining market, than which market should one sell into?
Notwithstanding that, rents currently remain insufficient to produce sufficient yield on the market value of the property. It is unfeasible for rents to increase substantially because rents are funded by income, and faced with unaffordable rents people will simply rent a smaller or less attractive space (more people per unit, etc). If the market price of the property decreases substantially (20%+?) then that would go a long way to bringing rents back in line with prices.
Anyone who thinks there is currently a shortage in DT condos available for either rent or sale should spend 5 minutes looking at the MLS.ca listings. In C1 alone I'm seeing 500 condos for rent under $1800, and 600 condos for sale under $350k.
azureray
Active Member
Like the presidential election, people are manipulated by the media. As oppose to the doom and gloom news we have seen last winter and this spring, now the media seems to be turning their heads:
Toronto Star: Housing meltdown fears ‘unfounded,’ says BMO
"While some are highlighting the fact that prices are now rising at their slowest pace since the 2009 recession, the plain facts are that they are still rising faster than inflation, and prices are at all-time highs, suggesting concerns of a meltdown were unfounded.”
http://www.thestar.com/business/rea...dian_home_sales_fall_3_per_cent_in_april.html
Toronto Sun: Canadian house prices edge higher in April
"The report suggested Canada's housing market has regained some spring strength after a long, slow winter of declines following the government's move to tighten mortgage lending rules in July 2012, but remains subdued."
http://www.torontosun.com/2013/05/14/canadian-house-prices-edge-higher-in-april
Bloomberg: Home Capital CEO Soloway Sees No Canada Housing Bubble
"“Despite a softening housing market in Canada, we do not believe there is a bubble,” Gerald Soloway, chief executive officer of Home Capital, said at the company’s annual meeting in Toronto today. “While the volume of home sales may have declined about 15 percent across Canada, prices have remained very stable.”
http://www.bloomberg.com/news/2013-...ay-says-sees-no-housing-bubble-in-canada.html
CTV News: Flaherty discounts fears over Canada's slowing housing market
Read more: http://www.ctvnews.ca/business/flah...lowing-housing-market-1.1281018#ixzz2TOWEklWd
etc. etc.
Toronto Star: Housing meltdown fears ‘unfounded,’ says BMO
"While some are highlighting the fact that prices are now rising at their slowest pace since the 2009 recession, the plain facts are that they are still rising faster than inflation, and prices are at all-time highs, suggesting concerns of a meltdown were unfounded.”
http://www.thestar.com/business/rea...dian_home_sales_fall_3_per_cent_in_april.html
Toronto Sun: Canadian house prices edge higher in April
"The report suggested Canada's housing market has regained some spring strength after a long, slow winter of declines following the government's move to tighten mortgage lending rules in July 2012, but remains subdued."
http://www.torontosun.com/2013/05/14/canadian-house-prices-edge-higher-in-april
Bloomberg: Home Capital CEO Soloway Sees No Canada Housing Bubble
"“Despite a softening housing market in Canada, we do not believe there is a bubble,” Gerald Soloway, chief executive officer of Home Capital, said at the company’s annual meeting in Toronto today. “While the volume of home sales may have declined about 15 percent across Canada, prices have remained very stable.”
http://www.bloomberg.com/news/2013-...ay-says-sees-no-housing-bubble-in-canada.html
CTV News: Flaherty discounts fears over Canada's slowing housing market
Read more: http://www.ctvnews.ca/business/flah...lowing-housing-market-1.1281018#ixzz2TOWEklWd
etc. etc.
Kenny
Active Member
The media cycles with the double hump real estate seasons. The news stories are about the falling real estate market in the winter and summer and the they're about the growing market in the spring and fall. Sells more papers, I guess. I wonder if they get tired of writing the same thing.
azureray
Active Member
The sales figures we have seen this year so far are measured against last years numbers which were astronomical when looking at the 10 year average. This was due to many echo boomers and luxury buyers rushing to buy before the new mortgage rules came into effect. The lull in sales is to be expected when so many people bought to avoid the new rules. Look at the long term average and things are about where they should be.
Has anyone done comparison between 2013 and 2011, or 2010?
Has anyone done comparison between 2013 and 2011, or 2010?