Johnzz
Active Member
You've cracked a home run here neuhaus, well done!
I didn't even know this project existed.
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Is it a good time to buy now
- Thread starter theflyingsquirrel
- Start date
You've cracked a home run here neuhaus, well done!
I didn't even know this project existed.
neuhaus
Senior Member
Don't want to hijack this thread, but there are less than 30 units at LH, so their marketing hasn't been as agressive as other developments.
Other than the very cool sales office on the site, their marketing has been very low key.
The developer has just increased their pricing to $815/sf including storage and parking for the remaining few units.
Click here for LH updates.
Other than the very cool sales office on the site, their marketing has been very low key.
The developer has just increased their pricing to $815/sf including storage and parking for the remaining few units.
Click here for LH updates.
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cityboy
Active Member
It makes no difference what the builder is asking (bigger fools theory). if you believe rates are going up (even 100 to 150 basis points) and or the availability of money is getting squeezed, then now is not the time to buy. New government rules are making it harder for individual to qualify for larger mortgages, hence the availability factor. Did I mention real estate pricing biggest unknown is future interest rates. Any of you remember 1990 when John Crow raised short term rates to double digits to rid the country of inflation?..................prices fell fast. If you believe interest rates will stay steady or fall to zero...then maybe its still a good time to buy. You decide!
MAU
New Member
I'm fairly confident UD has been saying this is the wrong time to buy for the last 3+ years
If not him I'm sure many have ... I can point you toward countless articles over the last 5+ years that utter this same sentiment.
Many people have been saying that 'houses are overpriced' for the last 3+ years. The fact that houses prices have sometimes gone up doesn't mean it's not true. What is different today, is that supply is greatly exceeding demand. Just like in 2008. If you're wondering what the beginning of a downturn looks like, this is it.
myfive
Active Member
People have been saying this for 8 years. Every year the same thing. Every year demand grows and grows and grows, and of course, so does supply. The beginning of a downturn doesn't look anything like this. Perhaps a pause for now. I don't want to argue the point...it gets very silly, but frankly i'm tired of all the naysayers year in and year out being continually wrong. Can't anyone get anything right? It's curious as to why the analytics are wrong so much of the time in all markets. When people get things wrong for many years in a row, and finally things turn and now they look correct, are they really right now. I say no becasue they missed the whole move. They've proven they don't know what they are saying, and now they are just lucky.
The person that says Up, up up during the boom times then changes and correctly calls a top is the only one that gets it right. There are shockingly few of these people around.
cdr108
Senior Member
they wouldn't have been wrong were it not for the BofC cutting Lending Rate to lowest since 1958 due to 'emergency' measures, which was unnecessary in Canada IMO ; the relaxing of CMHC standards of LTV ratios and extension of amortizations from the standard 25 years up to 40 years at one point.
interested
Senior Member
I will tell you personally what I think is different this time. Listings are growing at twice the rate of sales. Sales have been pulled forward due to change in mortgage rules, HST and a requirement now for higher down payments and people trying to beat the deadlines.
The world economy is not doing all that well. Interest rates are near 0 (nowhere to go but up). Prices are becoming less affordable (talking about the downtown TO market) to many locals. So maybe foreigners will keep buying but at what point do they decide that they are in fact the ones inflating the prices beyond market value and stop buying.
Rents have actually started to decline inspite of posts to the contrary (not markedly but slight, certainly not increasing to justify increased prices). In fact,rents have not increased in 10 years despite quite hefty price increases. Investors will evaluate their returns and decide if Real estate is the best investment now at these prices.
As well, there is alot of product scheduled for completion over the next 2 years which will add considerable supply.
Can it keep going up, yes it is possible. But I think it is reasonable to look and ask a fundamental question. What more could possibly be done to inflate prices further vs. what could go wrong and result in a price adjustment.
All I am saying MyFive is that the chorus is getting louder as the prices continue to loft up into the stratosphere. And as I have said before, I recall 1989 when the market stops and it happens quickly, and devastatingly. This 2008/2009 minicorrection was just an example of what I believe is coming and we will retest 2007 2008 prices I believe.
You are right saying alot of people have been predicting a pull back for a long time and they have been wrong. Does not mean that they are wrong going forward. this is the nature of bubbles. they grow until they implode. I do not think we will implode but I too now expect some lowering of property values. I bought in 2007 to be built and at the beginning of 2008 to be built but I will not be buying at these prices. As investments, downtown condos do not make financial sense at present.
daveto
Active Member
Two years ago I was a bull planning on buying, and then shortly thereafter (thanks to various interest forums) I moved to the bear side.
I think those people who have been saying that housing is overpriced for the last 5-8 years have not been wrong - to the contrary they are, and have been, correct. But RE is a slow moving market, and further, any market can remain irrational for a long time.
Further, in the case of Canadian RE, there has been significant gov't intervention in the past 4 years. First the move to 40/0 mortgages in 2006, and then the dramatic downward trend in short term rates recently. We've also had a huge bull market in bonds (where yield are dropping which raises prices) which makes fixed mortgages cheap.
The trouble with any sort of forecasting is that there are many factors (see the prior paragraph) which can change the outcome. All things being equal, yes I think RE prices will move sharply lower over the next several years. But if gov'ts choose to game the system? Well then, sure they can stay where they are for a while. But eventually I think they will go down to historic norms (from 5x incomes in Toronto to 3-3.5 x incomes). Finally, yes, I think we've crested the wave and now is the downswing.(but I said the same thing back in the second half of 2008 here on this board)
I think those people who have been saying that housing is overpriced for the last 5-8 years have not been wrong - to the contrary they are, and have been, correct. But RE is a slow moving market, and further, any market can remain irrational for a long time.
Further, in the case of Canadian RE, there has been significant gov't intervention in the past 4 years. First the move to 40/0 mortgages in 2006, and then the dramatic downward trend in short term rates recently. We've also had a huge bull market in bonds (where yield are dropping which raises prices) which makes fixed mortgages cheap.
The trouble with any sort of forecasting is that there are many factors (see the prior paragraph) which can change the outcome. All things being equal, yes I think RE prices will move sharply lower over the next several years. But if gov'ts choose to game the system? Well then, sure they can stay where they are for a while. But eventually I think they will go down to historic norms (from 5x incomes in Toronto to 3-3.5 x incomes). Finally, yes, I think we've crested the wave and now is the downswing.(but I said the same thing back in the second half of 2008 here on this board)
EvilC
New Member
I've set a date for myself - if the market does not start dipping by the end of the year, I will bite the bullet and plunge.
I've got my 20 percent saved for a $250k condo. I'm hoping that will net me a new (or less than 3 years old) 1B+D around 700sq feet with parking in midtown. Probably a little idealistic, but one can always hope.
Stupid thing is that in Toronto, supply never does seem to outpace demand.
I've got my 20 percent saved for a $250k condo. I'm hoping that will net me a new (or less than 3 years old) 1B+D around 700sq feet with parking in midtown. Probably a little idealistic, but one can always hope.
Stupid thing is that in Toronto, supply never does seem to outpace demand.
interested
Senior Member
I can't comment about mid town specificially but I think it is becoming apparent at least in the downtown core that supply is increasing and I would think it would be similar in midtown. $350/sq. ft. by the end of the year I don't think will happen but $400 I think may.
The longer you can wait, the better I believe.
interested
Senior Member
I bought at the beginning of 2007 a unit for either personal or family use in a luxury building. Presently it is 34% higher than what I paid. I fully expect it may go down back to what I paid, possibly even drop 5-10% below that in a worst case scenario. That said, as it is for personal use, it does not matter as I would not barring a material change be forced to sell.
The "investment unit" I bought in early 2008 was bought in Liberty Village at $410/sq. ft. for a mid level floor, 777 sq. ft. 2 bedroom/2 bathroom with 90-100 foot balcony, west face, with parking and locker to be ready in 3 years (approx. $365/sq. ft exclusive of parking and locker). Presently, prices (this unit is sold out) are $460/sq.ft. or so.
Resales nearby are closer to $480-$500/sq.ft including parking/locker. When I was asked by some people I know whether to buy now, I advised against as I fully expect they will be able to buy again at $400/sq. ft. in 2-3 years, rather than my unit appreciating further or even staying at $460-$500/sq. ft. range.
Again, I plan to rent it out or possibly use it for family members.
My concern is and has always been, how many "investors" are out there who are marginal and when prices adjust downward, will be forced to unload at depressed prices thereby lowering the market for all until such time as the weak are out and the market again shifts in favour of the seller vs. the buyer.
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CN Tower
Banned
This sounds a lot like 'Do as I say, not as I do'.
Also find this really amusing:
So it's ok for you to buy speculative units to rent out for a whopping 2.2% net return but other people are 'marginal' investors?
No personal disrespect intended. I am merely dissecting your words to show you that there are quite hypocritical.
interested
Senior Member
CN Tower, I fail to see why you feel I am being hypocritical. In fact, I think I am being very honest and candid. I bought in 2007 and 2008, not in 2010. In 2007 and 2008 I would have said OK to buy but not expect a huge run up in price and be prepared to sit on low rates of returns and hope over the long term (say 7-10 years) for price appreciation. My point with the run up since I bought is it is getting very long in the tooth and becoming less and less reasonable. I thought it was quite expensive when I purchased but perhaps still reasonable in 2007/2008, I now do not feel it is reasonable at these prices today. And a 34% increase from 2007 to 2010 from builder I am sure you would agree is quite significant on the luxury property. I think I was very honest and stated clearly I fully expect it is in the realm of possibility that it goes down again and retests the price I paid.
Hippocracy to me would be saying buy it at the 34% increase and bid it up even further because it is going to go up another 34%.
I realize the whopping return of 2.2% you quote is not much. But it beats watching a stock market meltdown. It beats or comes close to short/mid term Treasury bills. It also makes sense to have some real estate as part of a balanced portfolio.
With regard to "marginal investors" I was referring to people who are barely scraping enough to meet the down payment and may or may not qualify to close the property.I am talking about people sitting on 3 or 4 units who do not have the financial wherewithall to carry the properties. I do not buy speculative units to rent out. I buy investments on which I am prepared to accept a low rate of return on for the longer term. Also, I said that I have children who may end up living there so my usage requirements are not "strictly speculative or strictly investment". Speculators buy on the hope of a quick return. I hold real estate for the longer term and use the revenue (albeit poor according to you) to live on. the investment unit I said made marginal sense to me with my expectations (clearlynot in your view which I respect and understand) at $410/sq. ft. At closer to $500 makes even less sense. And a well capitalized investor will not have to sell in a downturn. Marginal investors may. I hope this clarifies my position.
I appreciate no personal disrespect was intended and none is taken. I feel however you dissected my words and came up with perhaps the wrong conclusions or motivation for my comments.
jonathanyu
New Member
There has been a lot of talk that the housing market will slow down or fear of a 10% correction. There is a steady flow of 100,000 immigrants that come to Toronto every year. And like all taxes, they usually slow spending for a little while but sooner or later Canadians will end up moving on with their lives and purchase again. It is unlikely prices will drop but perhaps stay stagnate for a year or so. All this fear leads me to believe that more investors will see the opportunity of prices remaining the same and eventually drive prices up 4 years from now in 2014.
cdr108
Senior Member
those numbers have been used indefinitely and are incorrect.
google stats from gov canada last census (2006) and you will find that number is for ontario, and the numbers have been steadily DECLINING.
70% (and also declining) of the 100K come to the GTA.
FYI ... the population of Toronto only increased by under 22,000 people from 2001 to 2006;
while within the GTA it increased by 425,000.
while the population has increased, it's not within the dt core so it doesn't really justify the huge supply in the area, not the $$$
http://www.toronto.ca/invest-in-toronto/excel/toronto_demographics.xls
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