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Baby, we got a bubble!?

BMyers

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The GTA added something like 120,000 jobs in 2015, the highest level in a over a decade, and 75,000 new residents. So you probably need about 45,000 to 50,000 new units to accommodate that type of growth. The development industry will likely deliver less than 40,000 units. It's musical chairs and there's not enough chairs for everyone.
 

TheKingEast

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mania phase?
I don't know what's going on. A condo I passed up last year stayed on the market for close to a month (granted this was during the winter). It sold for 525K. Great looking unit. Fast forward to now. 2 units are for sale in the uilding. One is 580K the other is $599K. I'm kind of kicking myself for not scooping it since I knew the unit was priced well, but my girlfriend wasn't keen on the small kitchen. I'm seeing this with 2 bedrooms. Are they getting popular because a nice, 2-3 bed house, completely done with parking is unaffordable? I'd like to know as I have a large 2 bed and am hoping the value continues to climb.
 

PinkLucy

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Totally anecdotal but I know someone who bought a 2+1 in an older building last fall. The same unit was listed in their building recently (no additional upgrades so very comparable) for $80,000 more than what they paid.
 

James

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I've seen numerous 2-bedroom condos in prime downtown neighborhoods sell for over asking via heated bidding wars for the better part of 2016. The demand is definitely there.
 

Migos

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It's pretty obvious that it's foreign investment fueling this. Canada is ground zero for international money laundering. Chinese and others are taking dirty money from overseas and investing it in Canadian real estate.

The other side of the coin is extremely low interest rates which allow locals to purchase properties they probably can't afford (prices pushed up due to foreign investment). There is no longer any connection between economic fundamentals and housing prices in Toronto & Vancouver.

This situation could persist for years. However, I certainly don't have a lot of confidence in a market fueled by overseas investors, especially given that it doesn't even make sense how Chinese can buy here considering the restrictions on removing capital from China.
 

TheKingEast

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It's pretty obvious that it's foreign investment fueling this. Canada is ground zero for international money laundering. Chinese and others are taking dirty money from overseas and investing it in Canadian real estate.

The other side of the coin is extremely low interest rates which allow locals to purchase properties they probably can't afford (prices pushed up due to foreign investment). There is no longer any connection between economic fundamentals and housing prices in Toronto & Vancouver.

This situation could persist for years. However, I certainly don't have a lot of confidence in a market fueled by overseas investors, especially given that it doesn't even make sense how Chinese can buy here considering the restrictions on removing capital from China.
Do you have any data to support this? Problem is I have yet to see any evidence that supports whether the market is furled by foreign investment or not. I don't doubt there is some foreign influence but no idea how much.
 

Migos

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Do you have any data to support this? Problem is I have yet to see any evidence that supports whether the market is furled by foreign investment or not. I don't doubt there is some foreign influence but no idea how much.
There are limited stats available.

How else is it possible that the average house price in Vancouver is over $1 million? The only way that prices get so disconnected from incomes is foreign investment. Not even professionals can afford housing in Vancouver, let alone regular middle-class folks.
 

TheKingEast

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There are limited stats available.

How else is it possible that the average house price in Vancouver is over $1 million? The only way that prices get so disconnected from incomes is foreign investment. Not even professionals can afford housing in Vancouver, let alone regular middle-class folks.
I think it's a combination of several things and foreign investment is one of them. I just don't believe foreigners are buying every lice of real estate. I see plenty of homegrown Canadians buying and taking advantage of equity in their homes and the low interest rates.

Dont think there as much foreign investment in Toronto as there is in Vancouver.
 

Migos

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It's also just a matter of time until Canada starts cracking down on immigration fraud. It may not happen under this government but eventually the public outcry will reach a fever pitch that politicians will capitalize on.

http://www.huffingtonpost.ca/2016/05/03/canadian-citizenship-fraud-immigration-auditor_n_9828452.html
http://news.nationalpost.com/news/canada/how-a-b-c-man-pulled-off-one-of-the-most-sophisticated-immigration-frauds-in-canadian-history
http://news.nationalpost.com/news/canada/toronto-immigration-consultant-slapped-with-88-charges-for-allegedly-forging-papers-to-get-visas

"Wang collected some $10 million from about 1,200 clients for his “fraudulent services,” a court would find."

One single guy helped 1,200 people get citizenship through fraud. One. guy. This is a big problem.
 

PinkLucy

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You should check out some of the preconstruction events around the city. Not much English being spoken there...

This is an enjoyable read to get an idea of the craziness: http://forums.redflagdeals.com/1-2-week-line-ups-pre-construction-new-norm-1967089/
However, we're talking about larger units that typically aren't available precon -- they're in older, more established buildings, where there seems to be rising demand. Buyers I know looking at this type of purchase are Canadian-raised millenials.
 

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