Baby, we got a bubble!?

[TorontoMike$$]

http://www.torontorealestateboard.com/market_news/housing_charts/index.htm

 

[cdr108]

that only shows back to 1995 and the reasons for price appreciation have been noted many times.

where is the 8% average gain from 1964-2013 graph you mentioned?

http://www.torontorealestateboard.com/market_news/housing_charts/index.htm

 

[TorontoMike$$]

This link gives you the average sales and prices from 1967-2012 (the 2013 and 2014 data you can get from the January releases). I obtained the 1964-1966 stats from a different source and will try to dig up a link.

If you look at price appreciation per decade on average its 15% for the 1980's, -2% for the 1990's, 6% for the 2000's and about 8-9% so far for the 2010-14 so these periods show an average increase of ~7% per year for about 35 years. If you factor in the 1960's and 1970's it brings up the averages. So the run up in real estate values over the past decade or so are in line with the long term average. Digest the numbers and let me know your thoughts.

http://www.torontorealestateboard.c...storic_stats/pdf/TREB_historic_statistics.pdf

Oh and these stats give you data for almost 5 decades and is from TREB... not a tiny snapshot of preconstruction sales from over a year ago that some here use to illustrate their lack of business sense and knowledge of the market. eyeroll

Ps.. and also use the dictionary to personally attack those share knowledge.. reminds me of children craving attention

 

[TheKingEast]

It's funny to read the doom and gloom posts from 5 years ago and compare them to the ones now. I guess eventually they may be right? Frankly I have no dog in this race. I think condos are overvalued and right now are poor investments but anyone thinking the market will tank is out to lunch.

 

[CN Tower]

I think condos are overvalued and right now are poor investments but anyone thinking the market will tank is out to lunch.

TKE:

I concur although I think there's a strong chance that prices of sold units will fall sharply, perhaps 10% or greater and more troubling will be the lack of sales and liquidity. So while recorded sales may only drop slightly sales will be few and far between and extremely low offers will be commonplace. Above will persist until the bulk of the 20,000 or more unsold units are absorbed.

$$$CN Tower$$$ (don't mess with 3 dollar signs!)

 

[TorontoMike$$]

In very few instances we will see units worth less than what people paid. This is mainly because of irresponsible agents that sold trusting clients units priced over $750 per sq foot. These buyers will lose money after closing costs and commissions. But they likely have 20-25% down so would likely hold on because of strong rental rates in the core.

I see someone is educating themself a bit.. there is hope for someone that trashes everything.

 

[TorontoMike$$]

And condos may or may not be overpriced .. but the reality is that the average 416 detached is 900+k and towns are mid 500k so for less than 500k the only option other than the hood will be condos. Up up and away
Thank CNs boy Jimmy Finance minister for that one!
$$$$$

 

[Glen]

This link gives you the average sales and prices from 1967-2012 (the 2013 and 2014 data you can get from the January releases). I obtained the 1964-1966 stats from a different source and will try to dig up a link.

If you look at price appreciation per decade on average its 15% for the 1980's, -2% for the 1990's, 6% for the 2000's and about 8-9% so far for the 2010-14 so these periods show an average increase of ~7% per year for about 35 years. If you factor in the 1960's and 1970's it brings up the averages. So the run up in real estate values over the past decade or so are in line with the long term average. Digest the numbers and let me know your thoughts.

Without indexing for inflation these numbers are near meaningless. For example taking inflation into account, the 90's had a decrease of 25%.

Regarding the justifications you are employing for current and future valuations, I suggest you start reading from page 67 in this book...... www.cepr.net/books/plunderandblunder.pdf

 

[TorontoMike$$]

Thanks for sharing Glen. When inflation is factored in it makes the recent run up in prices seem less significant. Meaning Toronto is far cheaper from a price perspective.

That doom and gloom fictional novel maybe a good read aandis a very American perspective. Don't really see anything that closely resembles the situation here but I didn't get too deep.

Maybe we can ask our good friend CN to take a read through and confirm were going back to the 1930s

 

[CN Tower]

Profits in Toronto condo market getting slim as prices grow at slowest pace since 2005

http://business.financialpost.com/2014/01/17/toronto-condo-market-prices-urbanation/?__lsa=be7a-9d1f

The asking price for an unsold unit was $563 per square foot, down 0.9% in the fourth quarter from a year earlier.

 

[TorontoMike$$]

I would check those numbers to TREB. The downtown condo appreciated ~25% in 2007 alone and does not include the surges after the credit crisis. This period was probably the best for returns.. and we may never see gains like that again.

 

[KA1]

http://www.theglobeandmail.com/life...t-expected-to-feel-the-pinch/article17027427/

Vancouver luxury market expected to feel the pinch as a result of cancellation of investor visa programme.

 

[Condo George]

I thought I would share this with you all.

A friend called me yesterday and said that a house on his street was asking $925,000 while I was out of town, I confirmed that and reported to him it was sold conditional. He then told me that the same house new 14 years ago was sold by the builder for $290,000. I said to him that we tend to forget about our principle residence as an investment because we are living in it. But its good to know that in the last 14 yrs your home has tripled. Now the arguments of course are yes but mortgage payments etc etc but you have to live somewhere rent or own I guess if some here keep on thinking the market is going down as a few did when this thread was started, its once again proved to be a mistake not only has the market gone up since then but rents are also at their peak because of the seller that listened to all the negative press that sold thinking it was going lower to rent....

http://www.thestar.com/business/personal_finance/2014/02/25/real_estate_making_us_richer.html

 

[Mithras]

Using Teranet data (repeat sales regression, so much better than TREB data) the 5 year CAGR for Toronto home prices is 2.37%, 10 year is 1.42% and 15 year is 1.25%. Those don't factor in inflation (an important thing that some have mentioned and GREATLY deflate that "bubble". Yes that number is increasing and bigger in each and yes we are in a hot market. Gas prices however show a CAGR of 2.60%, 1.43% and 1.35% over the same 5,10,15 years. Are we doom and gloom about the "Gas Bubble"?

 

[TheKingEast]

I thought I would share this with you all.

A friend called me yesterday and said that a house on his street was asking $925,000 while I was out of town, I confirmed that and reported to him it was sold conditional. He then told me that the same house new 14 years ago was sold by the builder for $290,000. I said to him that we tend to forget about our principle residence as an investment because we are living in it. But its good to know that in the last 14 yrs your home has tripled. Now the arguments of course are yes but mortgage payments etc etc but you have to live somewhere rent or own I guess if some here keep on thinking the market is going down as a few did when this thread was started, its once again proved to be a mistake not only has the market gone up since then but rents are also at their peak because of the seller that listened to all the negative press that sold thinking it was going lower to rent....

http://www.thestar.com/business/personal_finance/2014/02/25/real_estate_making_us_richer.html

Housing market is doing well. Condo market is falling. I'd encourage anyone looking for a condo to wait. Prices will come down even more. Not a crash, but a decent amount.