Toronto house sales off 54% and the average price down 12%

[cdr108]

Felino, open & free markets by definition and sheer size dictate that no individual, buyer, seller or in-between broker can manipulate them.

It's a true basket of supply and demand, just like the stock market or any other "free & open" markets. Buyers and sellers have the say and the power to decide on buying or selling of any good or commodity.

It'd make no difference on values if homes (or any other commodity) will be traded directly through an electronic interface, market square or brokers - the only thing that sets value is what ppl are willing to pay for it, no matter what the marketing is.

i.e. 1 Bloor - developer raised prices and people were willing to pay more. Why? they could have gone next door and buy something else for less, but they opted for a more expensive product.

If we all stopped buying (gas, condos, bread, stocks, whatever) - the price will go down until it hits a level of support - and then rise again if demand exceeds supply.

Nonetheless, if you believe anyone was able to manipulate the market please share your experience.

All the best,

By the same explanation, there are market participants in the stock market, gas, etc. where certain groups (i.e. major players in the industry) can and have manipulated prices.

At least to some extent, those markets have transparency in pricing where you can what others are bidding.

Why is it that OREA does not disclose to all potential buyers the price others are bidding vs. the 'blind' system that is in place now?
Other jurisdictions in Canada and countries do it.

 

[Yossi Kaplan MBA]

bid price disclosure

By the same explanation, there are market participants in the stock market, gas, etc. where certain groups (i.e. major players in the industry) can and have manipulated prices.

At least to some extent, those markets have transparency in pricing where you can what others are bidding.

Why is it that OREA does not disclose to all potential buyers the price others are bidding vs. the 'blind' system that is in place now?
Other jurisdictions in Canada and countries do it.

Great point there. This is legislated into REBBA 2002:

Competing offers 26. (1)If a brokerage that has a seller as a client receives a competing written offer, the brokerage shall disclose the number of competing written offers to every person who is making one of the competing offers, but shall not disclose the substance of the competing offers. O. Reg. 580/05, s. 26 (1). (2)Subsection (1) applies, with necessary modifications, to a brokerage that has a seller as a customer, if the brokerage and the seller have an agreement that provides for the brokerage to receive written offers to buy. O. Reg. 580/05, s. 26 (2).

http://www.reco.on.ca/onlineguide/


I can ask my broker for further explanations, just let me know.

thx.

 

[simuls]

I agree with you cdr108. The current system of real estate buying/selling in Ontario is horribly broken and IS subject to manipulation - just like the "open" market is. Blind bidding does nobody any good and I was shocked when I moved here that it even existed (kind of like I was shocked that there was still a publicly funded Catholic school system - what is this 1909?). I'd like to see an open auction system like in Australia.

 

[boojiking]

Prices are down

Toronto prices are actually down around 34% if you factor in that the dollar is now valued at around 78 c US and was trading close to par.If we do like most countries and base the current prices of real estate in TO using US $ conversion you will see that TO real estate is cheap in comparison to many other parts of the industrialized world and will only fall if the CAD rises against the USD. TO real estate is great for investors looking to park their money.

 

[DarnDirtyApe]

That argument has been repeated ad nauseum, but still doesn't make any logical sense. Prices are fundamentally limited by the incomes of people who live in this city and the cost of financing. It doesn't matter if Toronto real estate is cheaper than New York or Hong Kong because most people who live here could never afford the average home price found in other cities. If the average household can afford $X per month of housing, then ultimately there is no way the average unit price can lead to a mortgage that costs significantly more than $X.

 

[TrickyRicky]

"I agree with you cdr108. The current system of real estate buying/selling in Ontario is horribly broken and IS subject to manipulation - just like the "open" market is. Blind bidding does nobody any good and I was shocked when I moved here that it even existed (kind of like I was shocked that there was still a publicly funded Catholic school system - what is this 1909?). I'd like to see an open auction system like in Australia."

I agree with this from an ideological perspective. From a practical and self-interested perspective I prefer the current system precisely because it allows for some manipulation. From a greater societal perspective does a "more fair" open auction system work better for society? Maybe someone can enlighten us on the Australian situation but from what I understand it inflates prices and exacerbates cyclical conditions. For the record (and I am making no judgement on the policy itself) public funding was extended to Catholic Schools under the Bill Davis Conservatives. It is a modern, not antiquated piece of legislation.

 

[cabbagetowner]

Toronto prices are actually down around 34% if you factor in that the dollar is now valued at around 78 c US and was trading close to par.If we do like most countries and base the current prices of real estate in TO using US $ conversion you will see that TO real estate is cheap in comparison to many other parts of the industrialized world and will only fall if the CAD rises against the USD. TO real estate is great for investors looking to park their money.

yes of course local real estate markets are tied inexplicably to the us dollar. makes perfect sense, i'm on forex right now shorting us to hedge against my semi-detached.

 

[simuls]

For the record (and I am making no judgement on the policy itself) public funding was extended to Catholic Schools under the Bill Davis Conservatives. It is a modern, not antiquated piece of legislation.

This is (90%) incorrect. Bill Davis' only contribution to Catholic school funding was to make high schools (grades 11-13) fully funded in 1985 (reversing his 1971 stance against it). Up to that point and since the 19th century (BNA Act of 1867 to be exact), all Catholic elementary and middle schools in Ontario were fully and publicly funded (to grade 10).

OK, back to the topic at hand.

 

[livkroy]

yes of course local real estate markets are tied inexplicably to the us dollar. makes perfect sense, i'm on forex right now shorting us to hedge against my semi-detached.

lol!

I agree with the cabbageman- that comment was extremely specuvestor-centric. The bulk of the market is comprised of those utterly oblivious to the cost of housing in far away lands.

 

[urbandreamer]

It's the expensive homes dragging down the average prices--Forest Hill for example, has seen $100k+ average price reductions.

Cheapish homes are still moving.

 

[AKS]

yes of course local real estate markets are tied inexplicably to the us dollar. makes perfect sense, i'm on forex right now shorting us to hedge against my semi-detached.

I guess this only works if you don't live in Canada? It's like playing exchange rate and real estate. If you bought foreign exchange for a low price. $1 = .78 and you bought real estate cheap. You get someone manage and rent your property for you. The dollar goes up sometime in the future cuz oil prices are up. Let's say $1 = $1. You gain 22 cents per dollar and your real estate goes up and you sell it in 10 years In good case scenerio. But this doesn't really affect non-Canadians in this situation other than RE prices going up again.

 

[simuls]

We are definitely seeing a segregation in the market. Units under 300k are still moving relatively rapidly from what I've read.

 

[Woodbridge_Heights]

It's the expensive homes dragging down the average prices--Forest Hill for example, has seen $100k+ average price reductions.

Cheapish homes are still moving.

I'm seeing homes in the lower price range (at least the range I'm looking at) starting to come down as well. All I can say is c'mon baby give me more. If I see any of the units that I'm looking at come down another 10% I'm jumping in!

 

[livkroy]

It's the expensive homes dragging down the average prices--Forest Hill for example, has seen $100k+ average price reductions.

Cheapish homes are still moving.

What's with your hard-on for FH dude? I'm read some of your posts and you seem to mention it in every other one.

 

[Therion]

What's with your hard-on for FH dude? I'm read some of your posts and you seem to mention it in every other one.

This is my second newb smackdown of the night. STFU about regulars until you contribute something meaningful.