Will GTA house prices go down?

[kgee]

hi all,
Guys need to know , i am thinking to buy detach house in Mississuaga
what is current prediction about market? many people discourage me beca prices will go down
also want to know which area is good to buy Vaughn or mississuaga to increase price fast after buy

 

[TKTKTK]

hi all,
Guys need to know , i am thinking to buy detach house in Mississuaga
what is current prediction about market? many people discourage me beca prices will go down
also want to know which area is good to buy Vaughn or mississuaga to increase price fast after buy

Anything around Square One is probably a safe bet for future price increases, unless you're in Vaughn along the subway extension.

Any way you slice it though, you may be on the wrong side of the market to see profits in the short term. Only time will tell though

 

[Observer Walt]

Read a few of the other threads in the Real Estate forum. This topic comes up again and again. Don't try to "time" the market. You'll just drive yourself nuts. Decide what you want and can afford, then go out and find it.

As for Mississauga vs. Vaughan, it probably depends more on where your work is and how far you are willing to commute. They are both part of the larger GTA market, and I don't know of any way to predict that values will increase in one more than the other.

 

[urbandreamer]

Think about buying in Kitchener Waterloo Cambridge. Cambridge is close to the 401, 20 minutes' drive to Mississauga and is cheaper than either Miss or Vaughan. Most of the former farmland along the 401 in the tr-cities area has been spoken for and is rapidly becoming industrialized. That can only lead to further population growth, and a better housing investment. There's an industry magazine from the k-w area I used to read that had some interesting insights into developer's thinking; for example, since 95% of land in k-w region is already owned by industrial/commercial developers, large American/etc companies are buying land in Woodstock and London area.

So, in the tri-city area, housing is priced accordingly: (Most expensive to cheapest)
1. Waterloo
2. Cambridge
3. Kitchener

I'm cheap, and Kitchener has some amazing 150 year old housing stock.... UW campus expanding in downtown Kitchener, students need housing....

 

[dpylyp]

Buying Past the suburbs into the 519 and 705

Mississauga is a stronger and growing community. Avoids the Miller Tax and continues to sell briskly with an ever increasing population.

Having said that, I placed a family in Orangeville who wanted the "community" of a smaller center. I appreciate the draw that Kitchener and Cambridge have where Buyers can save substancially over Toronto prices.

Halton Hills and Georgetown Milton also have had extraordinary growth.

Sage advise from Walt.. you can never time the market. Its all about need and want.

Those who bought at the bubble in '90 & '91 saw their values erode [for a few years] but have seen 50% appreciation over the last decade.

History will tell us what happened.

 

[lowesthangingfruit]

hi all,
Guys need to know , i am thinking to buy detach house in Mississuaga
what is current prediction about market? many people discourage me beca prices will go down
also want to know which area is good to buy Vaughn or mississuaga to increase price fast after buy

My prediction is that prices will go down,...just don't ask me when.

I can also predict that prices will change by next year,....just don't ask me which direction.

The point is, hard to predict direction and time in the same breath.

Having said that, what do you consider "fast" appreciation after the buy ??

 

[Jarrek]

Prices will stabilize, and flat line. As long as there is demand to live in Toronto and the GTA, they won't fall significantly, if at all - especially in the lower end price bracket. Considering there is a huge influx of immigrants coming to live in the GTA, they only drive up demand for housing, and this has an effect on the price of homes.

 

[Bigchew]

huge drop in house buying intentions in Toronto- it is now 6% of households down from 9%, or a 33% decline. Meanwhile, listings continue to creep up.


Chill felt in Toronto real estate
TheStar.com - Business - Chill felt in Toronto real estate

Economic caution, record high prices have Toronto buyers getting cold feet, says CMHC

May 23, 2008
Tony Wong
Business Reporter

Consumer home-buying intentions in the Toronto area have dropped sharply this year, according to a Canada Mortgage and Housing Corp. report.

About 6 per cent of households in the Toronto area intend to buy a home this year, down from 9 per cent in 2007, the federal housing agency said yesterday.

"With the cost of buying a home moving upward, some people are re-evaluating their home-buying decision," said CMHC analyst Jason Mercer in an interview.

Among potential first-time buyers, who have been a key driver in Toronto, buying intentions have also cooled. The report says 40 per cent want to buy this year, compared to 47 per cent last year, taking some additional steam out of the market.

"You have a combination of things happening from fewer first time buyers to higher carrying costs," Mercer said.

Add to that, a certain amount of fear and uncertainty here about whether the U.S. housing meltdown will seep across the border.

So far that hasn't happened, but job losses in Ontario, particularly in the automotive industry, have raised concerns.

"Deteriorating economic conditions in the U.S., weaker Canadian growth and eroding affordability may begin to weigh on consumer confidence and prompt buyers to demonstrate more caution," says a report by Toronto housing analysts AltusClayton.

This year has seen four consecutive monthly decreases in Toronto-area sales as the market cools.

May looks to be following the same trend, as half-month sales were down 15 per cent from a year ago, according to Toronto Real Estate Board figures. Inventory is also up significantly, by 11 per cent, compared to a year ago.

Coming off a record year in 2007, sales nonetheless remain at a high level. CHMC is forecasting 84,000 sales for 2008, down from 93,000 last year. So far in 2008, average prices are up 7 per cent at $377,688.

One bright spot for the market are historically low interest rates.

And some banks announced this week they were cutting mortgage rates by, in most cases, 0.34 of a point to 6.65 per cent for five-year closed mortgages, shaving larger amounts for some shorter terms.

Nationally, 6 per cent of households expressed real estate buying intentions – the same as in Toronto – though this represented a lesser drop, from 7 per cent in 2007.

The biggest fall-offs in buying intentions were in Western Canada, among cities that have seen years of steep price appreciation.

In Calgary, 8 per cent of households intend to buy a home this year, down from 14 per cent last year.

In Edmonton, that number is 7 per cent, compared to 11 per cent a year earlier.

Nationally, most households still plan to buy a detached home (55 per cent) while about a quarter plan to buy condominiums.

About half of all households plan to make a down payment above 20 per cent of the purchase price.

Renovating a home also remains large on the agenda of Canadians, who spent $19.7 billion last year, says the CMHC survey. The largest share of that came from Toronto at $7.1 billion.

Torontonians spent an average of $15,585 on renovations in 2007.

Remodelling of rooms and painting or wallpapering, followed by replacing flooring, windows and doors, were the top renovations.

 

[cdr108]

Those who bought at the bubble in '90 & '91 saw their values erode (for a few years) but have seen 50% appreciation over the last decade.

I would disagree with that statement.

My parents bought their home in Toronto in 1990 for $250K and saw its value decrease to as low as $150K in 5 years (an identical house was put up for sale by the owner/investor who was a doctor).

Currently, another identical house is on the market for $308K with few updates done like front windows and furnace. It has been listed for a month now.

So it has taken 18 years for the value to appreciate ~20% assuming it sells for about $300K. The RE market has slowed down appreciably in the past 4 months and it is not isolated to the GTA so forget the realtors' excuses that it's the Miller tax.

If USA is a prelude to the RE market in Canada, we should expect at least 25-30% decline in values in the next 3 years. That would put us under the original values in the last boom/bust after 20 years.

That's from my personal experience and opinion.

 

[ArcticS]

I would disagree with that statement.

My parents bought their home in Toronto in 1990 for $250K and saw its value decrease to as low as $150K in 5 years (an identical house was put up for sale by the owner/investor who was a doctor).

Currently, another identical house is on the market for $308K with few updates done like front windows and furnace. It has been listed for a month now.

So it has taken 18 years for the value to appreciate ~20% assuming it sells for about $300K. The RE market has slowed down appreciably in the past 4 months and it is not isolated to the GTA so forget the realtors' excuses that it's the Miller tax.

If USA is a prelude to the RE market in Canada, we should expect at least 25-30% decline in values in the next 3 years. That would put us under the original values in the last boom/bust after 20 years.

That's from my personal experience and opinion.

What area is your parents house located?

 

[W. K. Lis]

Before You Move: Where Are The Next Transit Hubs Being Built?

http://www.citynews.ca/news/news_23104.aspx

Here's an easy question: where do you live?

Now here's a much harder one: where should you live to ensure you're near a GTA transit hub and how will the TTC's plans for expansion impact the value of your home?

The answer to both queries can be worth thousands of dollars because the old real estate axiom about location, location, location has a well-known addendum: being near a subway or major transit route can instantly increase what your home is worth without you having to do anything at all.

But can you tell where they're going to build or if the place you're looking to buy will one day find itself on a subway or major transit line? The answer is yes, if you believe government plans about where officials hope to put the new routes.

Adding transit takes years of planning and a commitment of millions of dollars and all of it has to be done well in advance. That means the powers-that-be know where they'll be putting the new tracks and trains as much as a decade or more before a shovel actually hits the ground.

One of those locations could be along waterfront-adjacent Cherry Street, which would make the folks on Condo Row lick their collective chops at the thought of bulging resale values.

"Streetcar access is phenomenal in terms of adding to value and presence ... people want to be on a streetcar line," said David Jackson, a Toronto urban planner.

Plans for the new tracks could start as early as spring 2009, while the underground expansion of the Don Mills subway line all the way to Morningside could have homeowners on the north side of town dreaming of dollars, though there's no official date for that project to commence.

So just how much of a bottom line difference are we talking about here?

"Easily thirty to fifty thousand dollars," confirmed Toronto realtor Janice Mackie. "Thirty thousand dollars is a parking spot ... you don't have to purchase that."

What's more, given the constant rise in gas prices and the GTA's traffic volume, the Better Way may soon be looking even better still.

And while the two mentioned above are among the more central and immediate transit expansion schemes in the works, there are dozens of others being hatched around the GTA and Ontario as well.

 

[TrickyRicky]

I suspect anecdotally now that market strength peaked in the fall of 2007. We talk about this subject again and again but I thought I would add in some new thoughts about new home buyers into the mix. If you look at Ontario population demographics what is interesting is there basically have never been so few approximately 30 year olds as a percentage of the population. This age range is where people traditionally buy their first homes and yet housing sales have been on fire. So either everyone who is 30 is single (thereby driving up the number of households) or first time home buyers did not really contribute significantly to the present boom. Also, anecdotally I notice the rental market for the even younger demographic 18-25 has virtually vanished, meaning people 19-25 aren't really renting anymore. Where are they? They aren't buying either so is everyone either living in student residence or in Mom and Dad's basement!?

 

[Urban Shocker]

Not necessarily. Boomers have been stashing extra money away by buying condos. Several I work with bought them as investments, or housing for their university-age kids, during the recent construction boom. Perhaps they'll move into them themselves once they've downsized and their offspring move out. Also, I think a lot of people are staying put and investing in renovations and improvements to their homes rather than selling. If the market tanks and prices drop there's no point in selling anyway - and there's even the tantalizing prospect of slightly lower property taxes, given how CVA works, if that happens. I also believe that more single people are buying property - women especially - so that's changing the market a bit.

 

[BobBob]

Yeah, different demographic shifts could be at work here. In Toronto, we've seen population growth flatten, yet the number of households continue growing significantly. So, average household size has been decreasing. Part of it is kids moving out, as you've pointed out. Maybe there's also been a massive spate of divorces?

 

[Urban Shocker]

Elderly cougars need somewhere to call home, too.