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The Housing Market needs to crash.

The propoganda machine avoided MoM price changes. Those paint a different picture.
 
http://www.thestar.com/business/rea...ousing_market_drawing_the_bigmoney_crowd.html

Sotheby’s International Realty is seeing a surge in demand from wealthy Syrians, Egyptians and Europeans looking for a safe and relatively stable place to park their millions — Canada’s softening real estate market.

There has been an uptick in “very significant transactions” in tony areas like Oakville and North Toronto by Europeans, many with young families who originally had planned to settle in the U.S. but fell in love with Canada instead, says Sotheby’s Canada CEO Ross McCredie.
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The Greater Toronto Area has just posted a record decline in sales of land for future residential developments, suggesting that home and condo builders are reacting to the decrease in housing sales by tempering their appetite for new construction.

Investments in such land fell 45 per cent from the fourth quarter of last year to the first quarter of this year, according to new data from RealNet Canada Inc.

http://www.theglobeandmail.com/repo...al-development/article11479718/?from=11469780
 
pignchick said:
It drives me nuts when Toronto attempts to justify high real estate because Manhattan is expensive. Hello? NYC is one of the largest cities in the world (~18M+ people) that built up over 100 years, and only Manhattan is expensive. You can live off the Manhattan island for a lot less (Jersey City or Newark are dirt cheap), and they have a much cheaper and better subway system. In GTA even the suburbs are overpriced. Over $500K for a nondescript suburban home in places like Markham... you can much more for you money in the USA. Plus car insurance and gas is way cheaper in the USA, so you don't need public transport in most places. Toronto also has a big problem with providing decent rentable units. Not everyone moving to Toronto for work wants to buy in Toronto. They should just stop building condos and build more affordable apartments (not tchc but not high end either).

GTA should be compared to a more equal size city in the Midwest like Chicago that is also on the great lakes. Chicago is much more affordable.
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Jersey City and Hoboken can be very expensive. We had an apartment in Jersey city right on the PATH for a year when my wife was commuting back and forth and it cost a freakin' fortune (as in the 500sq.ft. 1-bedroom there was almost $1000 more a month than our 2,300 sq.ft. Deer Park rental at the time).

Chicago can be even more expensive than Toronto as well. My mother in law lives in Lincoln Park and there are 3-4 bedroom townhouses that sell for north of $5mln and lots that sell for $7-8mln. Now Lincoln Park is like living in Summerhill but the high end prices in Chicago are appreciably higher than in Toronto.

The fact of the matter is that the GTA and Vancouver don't compete against Winnipeg or Kitchener or Halifax in almost any way shape or form. They do compete against London, NYC, Chicago etc... We might be disparaging of Toronto because we live here and I agree it isn't at the top of "World Cities" but it IS included in the group (like Vancouver). There is always going to be a disconnect between the prices in these cities and their surrounding regions (go look at prices 30-45mins outside of London, Paris, Shanghai, San Francisco...).
 
The perennial market bulls love to compare Toronto’s prices to that of other world-class cities, and they say, “Condos are $550/sqft in downtown Toronto? That’s nothing! It’s less than HALF the going rate in New York!â€

So?

What does one thing have to do with the other? What does Vancouver have to do with Toronto either? I hear people talk about how condo prices are $850 – $1000/sqft in Vancouver, as if that somehow makes Toronto’s prices easier to swallow?

There is only ONE thing I like to compare Toronto’s real estate prices against, and you all know where I’m going with this – Toronto.

Compare Toronto’s prices today, against yesterday’s, two years ago, and two years from now. Compare downtown Toronto to uptown Toronto, and compare new Toronto condominiums to old Toronto condominiums.

Prices in Dubai are $3,000/sqft, and somehow this makes me feel better/worse/the same about Toronto prices?

I hate that argument.
 
Really?!? Really?? Toronto is a bubble all alone in the world? It doesn’t have any connections to the rest of the world? It’s prices don’t matter and NONE of the houses/condos in the city are bought by people from outside of the city limits? London prices are rising because money is pouring in from outside. The same thing is happening for Toronto. Toronto is the 3rd largest city in NORTH AMERICA. It DOES have more to do with London, Paris, Hong Kong, Vancouver and New York than with Flin Flon, Gander, or Trois Riviers.

Let’s do it with Paris. 1999 to now has seen a 89% price increase.

London UK over the same time has seen a 279% increase

Vancouver has seen a 147% increase

Toronto has seen an 87% increase

Doesn’t seem out of place.

BTW Winnipeg has seen a 127% increase over the same time.
 
TORealtyBlog said:
Market prices are increasing, yes. But the point is you cannot say that the high prices in Vancouver or anywhere else reveal something specific about Toronto's market. Context: http://www.torontorealtyblog.com/archives/toronto-vs-new-york-city/8794
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No you're right. We shouldn't look at any cities home prices against any others. Sudbury up 1000%? Can't tell if that's normal or not because I'm only looking at Sudbury. It's as foolish as it sounds! Gas prices went up in Monreal but it doesn't matter what gas prices are in ANY OTHER PLACE because we should only look at in a bubble...

The FACT of the matter is that since 1999 Toronto home prices have appreciated less than Paris, less than Vancouver, Less than London, Less than New York, Less than Sydney, Less than Winnipeg for god's sake!

FACT. Toronto has 118,000 MILLIONAIRES living in it. It does NOT compete with Winnipeg, it does less business and trade with Winnipeg than it does with New York or London. When you look at prices in the world's financial centers (New York, London, Hong Kong, Shanghai, Chicago, Toronto, Paris, Frankfurt) Toronto is at the bottom end in terms of housing costs. Toronto is going to get MORE expensive. It will have its ups and downs but it will go more in line and correlate more with those cities than with Winnipeg.
 
Mithras,

Just because our bubble was smaller does not mean it was not a bubble.
 
ttk77 said:
That's assuming it's a bubble at all and not a sign of some lasting demographic trend.
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What sort of demographic trend, stupidity?
 
ttk77 said:
That's assuming it's a bubble at all and not a sign of some lasting demographic trend.
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it's a result of ultra-cheap money home and abroad.
yes, there may be money flowing from countries like China, India and the Middle East; however, unless they are buying every single product that will be listed, it is the local population that dictates the long-term pricing which is why prices vs. rents and incomes has always been a valid metric.
 
Last edited:
I don’t think it IS a bubble. The 15 year CAGR for Toronto home prices is 5.2%, the 10 year is 5.2%, and the 5 year is 5.3%. If you put that in real terms the 10 year CAGR is 3.3% and the 5 year is 3.7%. (Everything is Feb-Feb to be apples to apples).

In comparison the 10 year CAGR for house prices for the following cities are:

Victoria – 6.4%
Vancouver – 7.7%
Calgary – 6.5%
Edmonton – 7.0%
Winnipeg – 9.3%
Montreal – 6.5%
Greater London UK – 4.0%
Central London UK – 8.2%
Paris – 4.1%
Greater New York – 1.0%
Manhattan – 3.6%
Gasoline Prices at the pump – 7.1%
Gold Price – 16.7%

I look at those numbers and say Toronto’s 5.2% increase is pretty darned steady. In real terms it’s 3.3% y/y growth. It’s not much higher than Manhattan, Greater London or Paris and they have all had massive price corrections. Even with the massive price correction, Central London is still appreciating at a much greater pace. Gas is getting expensive much faster as has gold. Toronto has appreciated in value slower than most of Canada. Almost everything gets more expensive over time and some things will almost always outpace the CPI. House prices are usually one of those things.
 
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