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Baby, we got a bubble!?

I currently work in IT and I have the privilege to work with a lot of talented folks that are recent immigrants from India or Asia and what I am hearing from them is that less Asians are leaving Asia to work abroad (U.S, Canada, and Australia) as the lifestyle and job growth is much greater than it is over here. Their monthly pay (with a Degree and a couple of year’s job experience) is equivalent to the lifestyle of getting paid $6,000 (take home income) dollars here in North America.

A lot of these colleagues I work with are temporary in Canada and are looking to move back to India. They have no interest in becoming Canadian Citizens or permanent residents. I am afraid this will be the catalyst to the housing crash.
 
marsh said:
Drop in net migration to GTA contributing to softening housing market: CMHC
Drop in net migration to GTA adding to softening of housing market: CMHC
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By: Susan Pigg Business Reporter, Published on Thu Jan 31 2013
A significant decrease in the number of people migrating to Ontario from other countries — and leaving the province in search of jobs — is contributing to the softening of the GTA housing market, says a new report from the Canada Mortgage and Housing Corporation.
As of last September, net migration in Ontario had fallen by 20 per cent year-over-year to below 60,000 new residents, says a CMHC review of GTA housing activity released Thursday.
That’s the lowest levels of net migration since the late 1990s and about 40 per cent less than the 110,000 or so people who migrated to the province annually, most of them to the Toronto region, about a decade ago, says Shaun Hildebrand, CMHC’s housing analyst for Toronto.
“Over time, that can have a drag on home sales activity as fewer people move into the region, impacting the pool of potential buyers,” says Hildebrand.
The GTA housing market has been softening since last spring, with sales down 16 per cent by year end over the fourth quarter of 2011.
While prices declined almost one per cent in the fourth quarter of 2012 — the biggest decline in four years, according to CMHC — house prices were up seven per cent overall in 2011, thanks to the strength of the market earlier in the year, the report says.
On the up side of downward migration was a close to a 50 per cent increase last year in the number of “non-permanent residents” coming to the GTA, most of them foreign students who have been helping drive the demand for rental accommodation, and condo purchases, close to schools in downtown Toronto, the report notes.
While Hildebrand expects some uptick in net migration this year given strong employment growth in the GTA, it’s unlikely to return to levels anywhere near 110,000, he says.
That could be a wake-up call for residential developers who have been pressing the province and suburban municipalities to open up more GTA land for development, citing what would appear to be an outdated notion that the region gets about 100,000 new residents a year.
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^ 60,000 a year and dropping, wow.

60,000/ 2.5 (typical household formation rate) = 24,000 units....i'd lop off maybe 8-10k to cover student rooming house situations/multi family units/illegal accomodations/general poverty, etc... so we'd maybe need ~15k units a year? how many are they building again?
 
cereal said:
^ 60,000 a year and dropping, wow.

60,000/ 2.5 (typical household formation rate) = 24,000 units....i'd lop off maybe 8-10k to cover student rooming house situations/multi family units/illegal accomodations/general poverty, etc... so we'd maybe need ~15k units a year? how many are they building again?
Click to expand...

''
Remember we are talking about all of Ontario and much more than the downtown/core Toronto condo market.
there are 50K condos coming on line over the next 2-3 years. I know construction seems to allow only 15K to be completed in a year but too much sales and it has to catch up.


the other way to look at this data is 40% decrease means if there were 20,000 sales in Toronto, and the foreign investors bought say 25%, that is 5000 less sales. Also, given our 70% home ownership rates, an all time high, the only valve is investors (not speculators) and there has to be enough renters for this market. I think that requires more people to move to downtown and at some point it is my view that the vast majority of those who want to move have or are doing so leading to a rental price adjustment in the cards and a drop in selling prices. I don't know when this will occur but I think the logic of the argument is sound.
 
New treb report is up:

http://torontorealestateboard.com/market_news/release_market_updates/news.htm

TORONTO, February 5, 2013 – Greater Toronto Area REALTORS® reported 4,375
transactions through the TorontoMLS system in January 2013. This number
represented a slight decline compared to 4,432 transactions reported in January
2012.

“The January sales figures represent a good start to 2013. While the number of
transactions was down slightly compared to last year, the rate of decline was
much less than what was experienced in the second half of 2012. This suggests
that some buyers, who put their decision to purchase on hold last year due to
stricter mortgage lending guidelines, are once again becoming active in the
market,†said Toronto Real Estate Board (TREB) President Ann Hannah.
“It is interesting to note that sales were up for many home types in the GTA
regions surrounding the City of Toronto. This is due, at least in part, to the
additional upfront land transfer tax in the City of Toronto,†added Ms. Hannah.
The average selling price for January 2013 sales was $482,648 – up by 4.3 per cent
compared to $462,655 in January 2012. The MLS® Home Price Index (HPI)
Composite Benchmark price was up by 3.8 per cent over the same period.
“There will be enough competition between buyers in the marketplace to prompt
continued growth in home prices in 2013. Expect annual average price growth in
the three to five per cent range this year,†said Jason Mercer, TREB’s Senior
Manager of Market Analysis.
 
Kenny said:
New treb report is up:

http://torontorealestateboard.com/market_news/release_market_updates/news.htm

...
“There will be enough competition between buyers in the marketplace to prompt
continued growth in home prices in 2013. Expect annual average price growth in
the three to five per cent range this year,” said Jason Mercer, TREB’s Senior
Manager of Market Analysis.
Click to expand...

This was one of the aspects of this changing market that I anticipated as well. While both sales volume and sales inventory are down, the stock of listings that are out there these days are still quite sought-after. I've seen sellers drop their asking prices a few percentage points as compared to last year and a slew of potential buyers rushing to see the property. At the end of the day (usually a week or so), the property has sold for over asking. Unfortunately it's still a tough market out there for buyers. There's talk about the environment changing from a sellers market to a buyers market (particularly in Vancouver), but I don't believe it truly is yet. At best, it may be an even market but with the figures I'm still seeing for single detached homes in the core, it's still chugging along steadfastly.
 
James said:
This was one of the aspects of this changing market that I anticipated as well. While both sales volume and sales inventory are down, the stock of listings that are out there these days are still quite sought-after. I've seen sellers drop their asking prices a few percentage points as compared to last year and a slew of potential buyers rushing to see the property. At the end of the day (usually a week or so), the property has sold for over asking. Unfortunately it's still a tough market out there for buyers. There's talk about the environment changing from a sellers market to a buyers market (particularly in Vancouver), but I don't believe it truly is yet. At best, it may be an even market but with the figures I'm still seeing for single detached homes in the core, it's still chugging along steadfastly.
Click to expand...

James, four points

1. January 2013 sales inventory is up 25% over the 2010-2012 average Jan inventory.
2. January 2013 DOM is up 20% over the 2010-2012 Jan average
3. GTA prices (both average and median) have decreased slightly since April 2012. (Seasonally and inflation adjusted)
4. Single detached 416 prices are down 7.6% YOY (from TREB's January 2013 report)

January was indeed an encouraging month for the market, after a very difficult May to Dec period. But let's not gild the lily too much. Over the past nine months sales are down 20%, inventory is up 20%, DOM are sharply higher and prices have decreased.
 
Daveto, to correct one of your points, sales are down in regards to detached at 7.6%, and prices for the same segment are up 2.7%.

I think the number to pay attention to is the condo market. Sales, down 4.5% in 416, and prices only dropped 1.5%. Much better than the 20-30% decline we saw in the second half of last year. I remember January 2012 being surprisingly busy, so more listings should alleviate the inflated selling prices that were seen in the first half of last year.

DOM have increased for two reasons, more inventory which is a good thing. Properties listed in Novemeber and Decemeber 2012 that weren't selling are starting to sell this year for close to asking price. I would wait until the end of February before we jump on either bandwagon.

Either way you look at it, this a healthy start to the new year.
 
My apologies. I should've clarified that I was looking at single family detached homes in my post above. The condo market, on the other hand, would be a different story. Everything that most of us have been discussing about the condo market is essentially playing out as we speak. The reason for my post above was simply because the single family home market in Toronto proper has been continuing to outperform many people's expectations.
 
http://www.reuters.com/article/2013/02/08/canada-economy-housing-idUSL1N0B82DN20130208

UPDATE 2-Canada housing starts plunge in January

Fri Feb 8, 2013 9:52am EST

By Andrea Hopkins

Feb 8 (Reuters) - Canadian housing starts plunged in January as both single and multiple starts fell, particularly in Ontario, Canada Mortgage and Housing Corp said on Friday in a report that showed the housing market was weakening even faster than expected.

The seasonally adjusted annualized rate of housing starts was 160,577 units in January, down from 197,118 in December and the lowest monthly rate since July 2009 when the housing market was sideswiped by the global financial crisis.

The December figure was revised down from the 197,976 units reported previously.

The number of starts in January was well below the forecasts of analysts in a Reuters poll, who had expected 195,000 starts.

Mark Chandler, head of Canadian fixed income and currency strategy at RBC, said the monthly series tends to be volatile.

"It was almost all concentrated in the multiples category. So as a result of that, we'll wait and see on that front. It is consistent with the slowing you saw in the existing home sale market, though," Chandler said.

The CMHC said it was preferable to focus on the six-month moving average of housing starts, which were trending at 203,208 units in January.

"The trend in total housing starts has been moderating since September 2012 and in existing home sales since May 2012. Trends in the two market segments typically follow a similar pattern with the new home market lagging behind the existing home market by a few months," CMHC Deputy Chief Economist Mathieu Laberge said in a statement.

"The current trend is also in line with CMHC's housing market outlook, which calls for moderation in housing starts activity in 2013."

Urban starts decreased by 22.3 percent in January to a seasonally adjusted annual rate of 138,134 units, the report showed. Single urban starts fell 11.2 percent to 59,318 units and multiple urban starts decreased by 28.9 percent to 78,816 units.

By region, Ontario and Quebec had the most dramatic drop. Urban starts fell 43.9 percent in Ontario, 29.6 percent in Quebec and 5.9 percent in the Prairies, while urban starts increased 59.4 percent in Atlantic Canada and 7.7 percent in British Columbia.
Click to expand...
 
TorontoMike$$ said:
Early indications are January TREB sales numbers are much higher than 2012.
I think we are in for a run these next few months. Need to change the name of this thread soon or just let it die. Unless the boys waiting for a bubble want to talk about it for another few years.

Good to be back.. some things never change
Click to expand...


so if things are sooo rosy, then why are you selling off your properties?
you've posted several listings in the For Sale / RE section and even soliciting the services of CG.
those actions would be contrary to someone who firmly believes "bubble talk" is unwarranted.
or are you a shill like some others, getting your pound of flesh out while it's still possible ?!?
 
I don't think the present generation of buyers can even comprehend what a buyer's market can look like. An extreme buyer's market in this city looks like (not fiction real example): you take a look at a listing, hum and haw about it for 6 months. After 6 months you get back to the seller, ask him to do $10,000-15,000 dollars in renovations, drop his price a bit and maybe you will consider buying.
 
Why would you ask the seller to do renovations when renovations are done to people's own taste? I would just ask to drop the price, don't waste time on work that's just going to be undone and redone anyway. I want to know the quality of the work, what's behind the walls and if the structure is sound.
 
Hi CDR.. the simple answer is repositioning
I have always been a strong believer in the Toronto market. Toronto has a lot going for it - there are not many places in the world where there is steady immigration, strong employment, economic GDP above water, well educated workforce, growing companies centralizing to the core, strong financial hub, strong affordable real estate market (compared to other major cities) I could really go on.

Urbaniztion states that vacancy rates are <1% and some areas in this city are closer to no vacancy! Urbanization mentions that the GTA needs 40k new homes/condos just to keep up with demand... builders can only produce 30-35k.

The Ontario Places to Grow Act projects population growth of 40-50% range in only 20 years. The GTA could be home to another 3 million people from various places in the world+domestically.

I am a long term believer in our city. The reason I think bubble talk may be unwarranted is it seems like the same people talking about the same bubble for 10+ years and we have seen the exact opposite.. some of the best gains and the largest boom we have ever seen.
I believe this year will see strong sales and slower price growth (which is very healthy) with a few hiccups along the way.
 
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