Baby, we got a bubble!?

[radioheadmike]

I had difficulty when prices got beyond $450/sq.ft. making the math make sense. I could probably accept $500/sq.ft. for mid range downtown TO prices.
Resale I believe is around $500/sq.ft. on relatively new projects and even $600. So perhaps $550 but that would be pretty well tops for me and not a price I would purchase at. I would probably draw the line at $500 or thereabouts.

Just my view though.

I just read cdr's post. He is of course correct that the correction in the past has been more. However, |I am trying to remember...$400/sq.ft. was that the price in 2008 when things went soft? I am not so sure we will see $400-$425 now since product is over $600 and that would represent a 33% decline. It could happen but will as others have said require a major meltdown and a very significant increase in interest rates (more than 2 or 3% beyone where we are now) in my estimate.

For the amount of supply coming in, I think $450 - $500 is the ideal price for the mid range. Anything below that will trigger quick sales or bidding wars.

 

[cdr108]

This comment is a little too pedantic for my taste.

What was once an anomaly has because the new normal in the past 2008 Financial Crisis world. Whereas Wall Street has the 'Bernanke Put' to juice the US Stock Market, Canada has the Flaherty Fake- he shortened amortization periods and reduced HELOC leverage when things were hot but the market knows that he will quickly reverse that policy if things get really weak. Canada needs a strong housing market.

of course, it's different this time and Canada (ie. Toronto) will be so different than the rest of the world.

Canada needs a strong economy which it's doesn't have country-wide, that's not just isolated to certain regions to oil/gas and potash, and not just a strong housing market.

we're in an over-inflated housing market, which only results in the diversion of a larger portion of income / discretionary to one area.
being house poor reduces consumer spending on other aspects and skews GDP

 

[cdr108]

I also know a lot of immigrants who are on unemployment insurance but have millions of dollars in foreign bank accounts. Keep that in mind. .

they should be reported to CRA and services canada if illegally defrauding the system.
what's lots - 10, 20, 100? you should tell them to buy TO real estate then since it's so cheap globally and never drops in prices.

 

[radioheadmike]

they should be reported to CRA and services canada if illegally defrauding the system.
what's lots - 10, 20, 100? you should tell them to buy TO real estate then since it's so cheap globally and never drops in prices.

You know what; I pay a lot of taxes so that our beloved government hires people to find defrauders.
They all own homes and have bought with cash.

It is naive to think that not many people are defrauding the system.

During the Iraq war, I had at least 10 new students in my class from Iraq. Poor Iraqi refugees. Yet somehow they all magically lived in nice large homes in Mississauga, Dad and Mom not working, and their kids driving Mazda speed 3.

A lot of money came from Iraq after the Iraq war. A lot of rich families not working in Canada but getting the benefits and not paying for it. But why are they not getting screened?

If I make one honest mistake on my tax returns, I get ripped apart by CRA.

Anyways, enough of my rant. The point is 9% in a highly populated city means nothing. Wealthy Immigrants, Business owners who like to work with cash, and most importantly students (lots of universities and colleges in Toronto).

 

[CN Tower]

of course, it's different this time and Canada (ie. Toronto) will be so different than the rest of the world.

Canada needs a strong economy which it's doesn't have country-wide, that's not just isolated to certain regions to oil/gas and potash, and not just a strong housing market.

we're in an over-inflated housing market, which only results in the diversion of a larger portion of income / discretionary to one area.
being house poor reduces consumer spending on other aspects and skews GDP

What Canada NEEDS and what Canada HAS are not the same.

Seems to me that if 70% of Canadians own homes and default levels are in the very low single digits Canada actually has what it needs- although you personally may not but 70/30 ain't bad in a democracy!

 

[Ric]

Ric, a generous offer, but one that needs to provide us more foundation for our laughter. Perhaps we can "laugh you out of the room as your strip naked and walk around the DT core with a sign around your neck saying "Hear ye, hear ye, $400psf has arrived. Let the apocalypse begin"

Or something along those lines.

ps. we should be clear that we're talking $400 psf in 2012 dollars, after adjusting for inflation. Just wanna make sure we have a decent chance for our show.

I can agree with the sign around the neck, but can't understand why you would also wanna see me naked: but if that's what u r into, who am I to judge.

 

[daveto]

Ha. Touche.

 

[Riverdale Rink Rat]

You know what; I pay a lot of taxes so that our beloved government hires people to find defrauders.
They all own homes and have bought with cash.

It is naive to think that not many people are defrauding the system.

During the Iraq war, I had at least 10 new students in my class from Iraq. Poor Iraqi refugees. Yet somehow they all magically lived in nice large homes in Mississauga, Dad and Mom not working, and their kids driving Mazda speed 3.

A lot of money came from Iraq after the Iraq war. A lot of rich families not working in Canada but getting the benefits and not paying for it. But why are they not getting screened?

If I make one honest mistake on my tax returns, I get ripped apart by CRA.

Anyways, enough of my rant. The point is 9% in a highly populated city means nothing. Wealthy Immigrants, Business owners who like to work with cash, and most importantly students (lots of universities and colleges in Toronto).

Seriously, that was awesome. There are so many conspiracy theories and befuddled economic crackpot whingeing that I actually had the kids run in from the other room to ask what was causing so much laughter! (Of course, I then had to put up with their 'you're even crazier than usual, Dad' looks, but it was worth the belly laugh!)

Thanks for that.

 

[daveto]

The point is 9% in a highly populated city means nothing.

Yes, agreed, 9% unemployment is irrelevant. You have a bright future as an economist. Actually, It's surprising that more politicians don't make this point. Have you considered a career as a campaign strategist?

ps. What level of unemployment, pray tell, would you say does mean something? 13%? 20%?

 

[ILuvTO]

13%? 20%?

Yikes!!!

 

[radioheadmike]

Seriously, that was awesome. There are so many conspiracy theories and befuddled economic crackpot whingeing that I actually had the kids run in from the other room to ask what was causing so much laughter! (Of course, I then had to put up with their 'you're even crazier than usual, Dad' looks, but it was worth the belly laugh!)

Thanks for that.

No problem! . Any ways I am all for sneaky wealthy Immigrants now as I own a property in the city. Let them overbid on my property when I go to sell it in the future.

 

[radioheadmike]

Yes, agreed, 9% unemployment is irrelevant. You have a bright future as an economist. Actually, It's surprising that more politicians don't make this point. Have you considered a career as a campaign strategist?

ps. What level of unemployment, pray tell, would you say does mean something? 13%? 20%?

As you pointed out, I am no economist, so I cant really give you a number.

Using a scale from 1 to 5, where 1 is "we are done for" and 5 is "all is well", I would say currently Toronto is at 5. Not hard to see that when there are more BMWs than Hondas on the streets. Apple store at Yorkdale Mall still have line ups, even during Noon.

My favourite Toronto economist is Mr. Mall Parking Lot. Let's see what he think of the 9% in the next coming months.

 

[cdr108]

As you pointed out, I am no economist, so I cant really give you a number.

Using a scale from 1 to 5, where 1 is "we are done for" and 5 is "all is well", I would say currently Toronto is at 5. Not hard to see that when there are more BMWs than Hondas on the streets. Apple store at Yorkdale Mall still have line ups, even during Noon.

My favourite Toronto economist is Mr. Mall Parking Lot. Let's see what he think of the 9% in the next coming months.

and 6 out of 10 of those people are probably up to their noses with debt, and just a pay(or welfare) cheque away from bankruptcy.

 

[flonicky]

My favourite Toronto economist is Mr. Mall Parking Lot.

That's a good measure. Back at the end of the 80s, I remember going to the Eaton Centre at Xmas and it was PACKED. Then, a year later .... ghost town.

 

[Riverdale Rink Rat]

No problem! . Any ways I am all for sneaky wealthy Immigrants now as I own a property in the city. Let them overbid on my property when I go to sell it in the future.

Here's hoping you bought in a bidding war in the last six months or so, so they really have to make fools of themselves! (Or, conversely, you get your ass kicked and don't have time to talk crap here, given the three jobs...)