Toronto prices decline 15% in mid-October

[Johnzz]

Common sense does not imply that at all and I have no idea how it would

I guess you lack common sense then. Do you not think that someone earning 200k/year might perhaps have a larger % of their net worth tied up in equities vs someone earning 30K/year.

Even if you did factor in the possibility of a lesser number of expensive homes being sold, a conservative estimate would still probably lead to around 10%.

So you don't agree that removing a large number of $5 million plus home sales will decrease the average price significantly? Perhaps you should look up the definition of average vs median...

Toronto never had a huge run-up in prices compared to some of western Canada because our economy at the time wasn't thriving like Western Canada..

Well, 5% GDP growth in Alberta is good but does it justify home price increases of 30%+ a year? I guess you think it does.

Any reasonable person and anyone who did not have their own interests ahead of them would absolutely advise a person to at least wait it out a month or a few to see where prices are going in the near-future.

I agree with this statement. However, even in the current market, you may find unique opportunities others miss because they're on the fence. A home is not just a short term investment, it's primarily a long term lifestyle choice.

My main point (which Poppajojo fails to grasp) is that we're unlikely to experience a house price "crash" here in Toronto. Something gliding 2 feet above the ground cannot "crash".

 

[daveto]

My main point (which Poppajojo fails to grasp) is that we're unlikely to experience a house price "crash" here in Toronto. Something gliding 2 feet above the ground cannot "crash".

Johnzz, can you put a %figure on your definition of crash? 10%? 50%?

I'm not stirring the pot, just clarifying.

 

[poppajojo]

I guess you lack common sense then. Do you not think that someone earning 200k/year might perhaps have a larger % of their net worth tied up in equities vs someone earning 30K/year.

Lol, no, I have no reason to believe a person making more money has a larger percentage of their net worth tied up in equities vs. someone making less. Someone making 30k/year is probably having a tough time getting by living in Toronto let alone looking for a home in Toronto.

So you don't agree that removing a large number of $5 million plus home sales will decrease the average price significantly? Perhaps you should look up the definition of average vs median...

Ummm yea I do, that's why I said if you factored in the possibility of it, a conservative estimate could be around 10% as indicated by the GTA average price decrease. A 5% difference is a lot.

Well, 5% GDP growth in Alberta is good but does it justify home price increases of 30%+ a year? I guess you think it does.

Lol, some people might agree that Alberta's economy had been thriving strongly. Yea I think the crazy increase in the price of oil and the fact that's somewhat of an main industry in Alberta had caused enough reason for such a a quick run-up in prices... you seem to disagree.

 

[Johnzz]

Johnzz, can you put a %figure on your definition of crash? 10%? 50%?

I'm not stirring the pot, just clarifying.

This, of course, is subjective but I would say a 30% yoy fall in the GTA would constitute a crash.

This alone would cause tremendous hardship across the region.

 

[cdr108]

This, of course, is subjective but I would say a 30% yoy fall in the GTA would constitute a crash.

This alone would cause tremendous hardship across the region.

I don't think anyone on here expects 30% yoy fall in the GTA.
Heck, even the US didn't experience that.

IMO, GTA will experience 30% fall by the time it is over, whether it takes 2 or 5 years.

 

[bornandbredinto]

I have always paid more attention to Median prices rather than average prices. This figure does a better job at eliminating expensive housing that skews numbers. Also, I would say that pricing trends from month to month put things more in perspective. Prices in Toronto may have dipped 15%, but again...location, location, location. From people I know in the business, properties in the Bluffs, Etobicoke, etc are just sitting out there. Downtown there's still buyers.

Without a doubt there was also a sales increase at the end of 2007 due to Mayor Miller's tax being imminent at the time. That's an event that without a doubt had more buyers out in the market then.

As far as rentals go....rent is up from what I see. Rental condos are hot. Just wanted to point out that if you strip out the principal that goes towards your mortgage, the rental costs vs. ownership costs of a similar condo downtown is very similar.

 

[CanadianDriver]

...location, location, location.

...due to Mayor Miller's tax...

...if you strip out the principal that goes towards your mortgage, the rental costs vs. ownership costs of a similar condo downtown is very similar.

Excellent points B&B! I agree with your observations.

 

[cacruden]

It is totally and completely wrong to state that those who chose to rent are, by definition, making a poor financial decision. Whether you rent or whether you own, the most responsible thing you can do financially is live within your means, and put aside money each month for the future.

I made a conscious decision to rent rather than to own. When you add up condo fees, property taxes, interest on the mortgage, and utilities, the "money down the drain" factor of owning a condo is essentially the same as my current situation as a renter. Monthly expenses are often less when you rent, therefore the responsible renter will put that money directly into a savings account or RRSP and over a lifetime, they will accumulate an equal amount of wealth as an owner.

I stopped renting around 8 years ago, at that time I was renting a condo on Bay St. (10 minutes from Eaton Centre). cost $1,100 / month.

I bought a condo (mostly the bank) - which was around 35% larger than the one that I was renting - 5 minutes from the Eaton Centre. Mortgage payment/month less than $600. Add on Condo fees and taxes and it is around $1,000.... still less than I was renting for 8 years ago. Now if I was moving often - it would make less sense.

 

[cabbagetowner]

this topic is often batted around this forum. the right answer is probably different for everyone. it's a personal choice that depends largely on on your own circumstances. in my experience however, i don't know very many wealthy people that do not own property. for many, purchasing a home to live in, serves as a foundation to build financial independence.

investment properties are a great wealth builder if you have the know-how. the people that have bought based on income will continue to do well regardless of the direction of the market.

 

[cdr108]

I stopped renting around 8 years ago, at that time I was renting a condo on Bay St. (10 minutes from Eaton Centre). cost $1,100 / month.

I bought a condo (mostly the bank) - which was around 35% larger than the one that I was renting - 5 minutes from the Eaton Centre. Mortgage payment/month less than $600. Add on Condo fees and taxes and it is around $1,000.... still less than I was renting for 8 years ago. Now if I was moving often - it would make less sense.

^ ^ ^
That would be a good example of when it's more beneficial to buy (i.e. larger space for similar money).

Unfortunately, the reverse is happening now where you get less space for what one would pay for rent based on a conventional mortgage of 25% DP /25 year amortization.

 

[condoboy]

^ ^ ^
That would be a good example of when it's more beneficial to buy (i.e. larger space for similar money).

Unfortunately, the reverse is happening now where you get less space for what one would pay for rent based on a conventional mortgage of 25% DP /25 year amortization.

I'm not sure why you would be so concerned about people and the amount of space they are getting for their home...times have changed, and spaces are getting smaller, that's just the way it is! If people are happy living in a condo in Toronto of 900 square feet for the same money that they would be getting for a 1600 square foot detached in Orangeville....then that's their perogative.

 

[androiduk]

Here are the approx. rents & sq. footage in my building @ Yonge & Bloor.


Studio - 400 sq. ft - $850 mo.

1 Bdrm - 650 sq. ft - $1050 mo.

2 Bdrm - 900 sq. ft - $1250 mo.

The rent includes all utilities. There are no amenities in the building.

 

[borisp]

As far as I can see prices in good areas are still rising...

 

[cdr108]

I'm not sure why you would be so concerned about people and the amount of space they are getting for their home...times have changed, and spaces are getting smaller, that's just the way it is! If people are happy living in a condo in Toronto of 900 square feet for the same money that they would be getting for a 1600 square foot detached in Orangeville....then that's their perogative.

What are you talking about, and who said anything about Orangeville?
Very typical of your responses to others posts, putting words in peoples mouths.

The guy moved from 10 mins to 5 mins away from Eaton Center; ended up paying less for more square footage.

That is an example of when it's a good time to buy; unlike the hype by RE insiders cheerings 'it is always a good time to'.

 

[condoboy]

What are you talking about, and who said anything about Orangeville?
Very typical of your responses to others posts, putting words in peoples mouths.

The guy moved from 10 mins to 5 mins away from Eaton Center; ended up paying less for more square footage.

That is an example of when it's a good time to buy; unlike the hype by RE insiders cheerings 'it is always a good time to'.

My point was that some people are willing and more than happy to purchase a condo with less space and enjoy the benefits of city living...you implied that it is only better to buy a condo, when you are going to pay less for more square footage. Nonetheless, the guy made a great decision...at least we both agree on that