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Baby, we got a bubble!?

Here is why:

5Year bonds
bond-yields_STATIC_V39060_en.png


:)

They say that every bubble on records popped in September (or fall)
 
I am not sure what they are pumping up with these "fantastic" increases
YTD cumulative $volumes are DOWN!

Condos 416: 0.95 of 2012
Condos 905: 0.92 of 2012

Toronto is entirely below the 2012 $volumes excepting one section: semi-detached which is exactly at the August 2012 volumes. Everything else is below 2012 with at least 4%
905 is in better shape, an average 2% above the 2012 excepting condos which are at the lowest level in the entire spreadsheet.
 
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Rent seems low for a unit that size. Maintenance fees are high, although hydro is included. I'm not going to buy it :)
 
I could see all the eyes roll now:

http://www.theglobeandmail.com/repo...arket-even-in-toronto-report/article13994362/

No ugly downturn for condo market, even in Toronto: report

TARA PERKINS - REAL ESTATE REPORTER
The Globe and Mail
Published Wednesday, Aug. 28 2013, 8:35 AM EDT
Last updated Wednesday, Aug. 28 2013, 10:44 AM EDT

A new report from the Conference Board of Canada predicts that the much-watched condo sector will avoid an ugly downturn, even in Toronto.

Economists and policy-makers are keeping a close eye on condos, especially in the country’s most populous city, where cranes dot the sky. A number of economists say that too many units are being built, a development that would put pressure on prices. The Bank of Canada has highlighted the risks that this market could pose to the economy.

Condo sales plunged in most Canadian cities last year, and are expected to be down again this year.

But Wednesday’s report, which was done for mortgage insurer Genworth Canada, argues that the market will not sink too low, and will be propped up in part by population growth and modest employment gains.

While the report does say that higher mortgage rates could cool things off later this year or early next year, it adds that “a flood of foreclosures, and subsequent sharp supply increases, is simply not in the cards.â€

Homeowners are taking advantage of low interest rates to pay down their mortgages, offering a cushion when it comes time for them to renew, it says.

“Markets in Toronto and Montreal are cooling, but we think they will avoid major downturns, partly because, on the demand side, demographic requirements remain decent,†the report says. “Also, the banks will continue to require builders to have healthy pre-sale levels before advancing construction financing, keeping supply somewhat in check.â€

Vancouver’s condo market, it notes, is already well into a slowdown.

“While regional markets clearly vary in strength, all will benefit from an expanding population and a rising share of condominium-loving empty-nesters aged 55 or more,†the report adds.

It also says that “weak pricing will help affordability.†It predicts that principal and interest payments will drop in at least five major cities this year, led by a 2.5 per cent decline in Victoria.

While payments are expected to rise in Alberta, the report says that Calgary and Edmonton are still the most affordable condo markets when local incomes are taken into account, with mortgage payments taking only about 9 per cent of household income. “By contrast, we expect payments to eat up roughly 20 per cent of Vancouver incomes,†it says.

The report forecasts a 0.5 per cent drop in Vancouver resale condo prices this year, to $364,593. Victoria and Montreal are also expected to record price declines, with Montreal’s average resale price dropping 0.7 per cent to $265,344. Toronto is forecast to see its average price remain flat this year, at $305,239.

The report predicts that all cities will see some price growth, ranging from 1.4 to 3.6 per cent, in 2014.

~~~
 
Let me tell you how it works with the newspaper articles:
they are mostly designed to attract traffic, so they will put in their article as much bullshit as needed.
Imagine that they would write about only one side of the market (let's say, for your pleasure, this is the bullish side).
Then right there you lose a big chunk of your readers. So...just write about both, spread confusion with articles presenting both sides and confuse people. Do not take any sides because they can both attract more readers. All in all...ZERO info.

PS: that report is a piece of ...t. At least one market (Montreal) is in trouble with high inventory, so the prediction at the end of the article is pure fabrication
 
I think he was talking about sales. They're up substantially because people are rushing to beat the mortgage rate increases.
 
Rates won't be super high in 2014 either. Higher than where they are now, yes, but still low historically.
 
Kenny said:
REITs have fallen recently, so they might be a bargain right now.
Click to expand...

So have most interest-sensitive investments (preferreds, utilities' common shares, corporate bonds). If you have a specific date in mind ('for a while' can be highly elastic, eh?), a short-dated investment grade corporate bond might work -- you can hold it to maturity and therefore not have to sell. Any of these ideas should have a yield of 4-5% with a moderate amount of risk, for a 1-4 year time horizon. The problem with REITs, prefs, common, etc., of course, is they might be down on your sale date, whereas the corps would mature at par.
 
Riverdale Rink Rat said:
So have most interest-sensitive investments (preferreds, utilities' common shares, corporate bonds). If you have a specific date in mind ('for a while' can be highly elastic, eh?), a short-dated investment grade corporate bond might work -- you can hold it to maturity and therefore not have to sell. Any of these ideas should have a yield of 4-5% with a moderate amount of risk, for a 1-4 year time horizon. The problem with REITs, prefs, common, etc., of course, is they might be down on your sale date, whereas the corps would mature at par.
Click to expand...

Thanks for that! My horizon -- some money I won't need for 25 years (retirement), but I would hope to sell some equities (or GICs, bonds) within 5 years for a large downpayment. Perhaps this isn't the venue to ask, but I don't know how to buy bonds directly through a discount brokerage. I do own a short term bond ETF, which returns about 3% per year. I recently bought some Rogers and am looking at REITs. I'd be most interested in a REIT with a portfolio of primarily apartment buildings, because I think that those rents will firm up in the coming years, and not too leveraged with debt due to recent acquisitions. There was something in the news about REITS building rather than buying apartment buildings since prices have shot up. More purpose built apartment buildings would be good imo, but would put a lot of pressure on condo owners who rent out their units. A few years ago all I heard was bad things about owning multi-res apartment buildings, especially in Ontario.

In regards to taking the house buying plunge, I feel a bit like the guy in this recent Globe article

http://www.theglobeandmail.com/glob...the-debt-averse-house-hunter/article14264162/

A key issue for me, and one I rarely see discussed in these articles, is the time commitment and responsibility of owning a home, especially a detached house. I will always remember that after a long week at work, my father seemed to spend much of the weekend doing little jobs around the house. Perhaps he liked it in some way, but I know that I don't. My wife has no competence or interest in fixing even trivial stuff in our rental now, so I can't imagine her helping me with fixing stuff around the house that we own. I'm also weary of condos. Perhaps some kind of urban cohousing development, with aspects of single family homes, but a shared burden and intentional community, would be more appropriate for people like me.
 
Canadian home sales jump in August from July

(Reuters) - Sales of existing homes in Canada rose in August from July and were much higher than a year earlier, the Canadian Real Estate Association said on Monday.

The industry group for Canadian real estate agents said sales activity was up 2.8 percent in August from the month before. Actual sales for August, not seasonally adjusted, were up 11.1 percent from a year earlier.

CREA's home price index rose 2.9 percent in August from a year earlier.

http://www.reuters.com/article/2013/09/16/canada-economy-housing-idUSL2N0HC0IQ20130916
 
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