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real estate..... is it true??

Smallcock

Active member
Jun 5, 2009
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You're right, and new homes in the suburbs are now $1.8 million!

I wonder what will break the camel's back. Looking at things now, I don't expect interest rates to increase much for a long time. Prices that are divorced from fundamentals just means they will eventually plateau (few can afford to pay higher amounts) but not necessarily correct. Some macro economic event such as Chinese pulling out of the market causing a sudden flood of supply or an event that causes speculators to want to get out fast.
 

wonkyknee

Active member
Jan 20, 2006
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Interest rates don't have to rise much. 2 more quarter points and its a very different story...
Most of the speculators are starting to pull back now too....once there's no bid any more, you can wake up one morning to a collapse.
 

BigVee

Member
Apr 4, 2012
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My Analysis -

1) low interest rates are driving investors into the market - trying to make more than 1.25% gain annually.
2) These investors are not just local but international because low interest rates are a global problem now.
3) Canada imports 150,000 ppl every year. Approx 75,000 families. Fully 30 - 40% settle in the GTA (say 25,000). Those who arrived say 7 - 10 yrs ago now want a part of the Canadian dream. With natural attrition (deaths and emigration) plus furious building pace, we can only achieve about 10,000 "new" homes annually. Demand has far out stripped supply for a long time.
4) And then a question of a crash. We have so much pent up demand (by the lack of supply and current pricing) that a slight drop in the price will bring even more demand because it will suddenly become affordable to a huge chunk of the population. Yet again driving the prices up.
5) So you understand clearly, this demand is not from investors but from families looking for a home. Because they understand that buying a home is ALWAYS cheaper than renting. No matter what the price. Rents have to track with prices or there is no returns for the landlord.

In short, if you are think we will have the housing crash of the 90's - you are mistaken. That happened because the entire economy went into a recession.
 

Smallcock

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Jun 5, 2009
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In short, if you are think we will have the housing crash of the 90's - you are mistaken. That happened because the entire economy went into a recession.
But who's to say the economy cannot go into recession again?
 

BigVee

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Apr 4, 2012
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But who's to say the economy cannot go into recession again?
Oh of course it can and it is a matter of when. But that is a catch 22 situation. The reason we have a recession is because people ( incl investors) don't have the confidence to make big purchases / investments. So those who think they'll wait for a recession to get into a market ( any investment) are deluded. Market timing never works .
 

kstanb

Well-known member
Apr 25, 2008
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Because they understand that buying a home is ALWAYS cheaper than renting. No matter what the price. Rents have to track with prices or there is no returns for the landlord.
Funny when people talks in absolutes, it is ALWAYS cheaper, renters are LOSERS, etc.
"No matter what price" is too high a price for me to pay, as you pay in lost financial freedom and long term privations just to keep up that "dream" of home ownership

Rentals in the other hand are plentiful, and supply and demand (not landlord returns) will dictate how much they can price them. My rental has increased less than 10% in the 4 years I am renting it, I doubt it will go higher than inflation, and if it does, time to move somewhere else; again, plenty of deals as long as you are not aiming to be in the core downtown area
 

wonkyknee

Active member
Jan 20, 2006
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My Analysis -

1) low interest rates are driving investors into the market - trying to make more than 1.25% gain annually.
2) These investors are not just local but international because low interest rates are a global problem now.
3) Canada imports 150,000 ppl every year. Approx 75,000 families. Fully 30 - 40% settle in the GTA (say 25,000). Those who arrived say 7 - 10 yrs ago now want a part of the Canadian dream. With natural attrition (deaths and emigration) plus furious building pace, we can only achieve about 10,000 "new" homes annually. Demand has far out stripped supply for a long time.
4) And then a question of a crash. We have so much pent up demand (by the lack of supply and current pricing) that a slight drop in the price will bring even more demand because it will suddenly become affordable to a huge chunk of the population. Yet again driving the prices up.
5) So you understand clearly, this demand is not from investors but from families looking for a home. Because they understand that buying a home is ALWAYS cheaper than renting. No matter what the price. Rents have to track with prices or there is no returns for the landlord.

In short, if you are think we will have the housing crash of the 90's - you are mistaken. That happened because the entire economy went into a recession.
And there is no immigration going to other cities all over the world? There is immigration going everywhere. We have plenty of land. Plenty of cities with immigration that don't even have land to expand. and you know what, we've had immigration rates at these levels since the beginning of time

Buying a home is always cheaper? is this true only in a select few cities in the world including Toronto and Vancouver? No matter what the price? I don't think I even have to say anything about this. Brad Lamb is that you? LOL

And if you don't think that investors have anything to do with increasing prices or a FOMO attitude then you are delusional. I can sit in a coffee shop anywhere in Toronto and hear discussions about Real Estate rental investments. Thousands of people across the city have an Excel spreadsheet listing 2-3 properties of which they put deposits on, with a column for "Purchase Price" and and another column for "Today's Market Price" and a third column with "closing date" LOL

There are definitely other positive points to consider for investing in Toronto Real Estate for foreign investors. Canada is globally considered "safe", "multi culturally welcoming", "financially stable...etc etc.. but once again that helps some foreign buying. I can admit in many ways Toronto has gotten better. We needed a certain economy of scale to be able to afford globally recognised universities, competitive sports teams, and tourist attractions. But why would anyone locally want skyrocketing prices of living quarters? Its ridiculous. It's ridiculous that people regularly fear for the affordability of real estate for their children, yet think prices will still go up. If they become un-affordable that is intuitively the same reason why prices must come down. You take away the bid and a stock plummets. Same with real estate. It just takes a little longer and hurts much more. We can't sustain an economy of simply selling houses to each other. LOL

Increasing interest rates can cause the next crash, or Trump politics on trade can cause a recession...causing a crash. People don't even have to be losing much money. What if their investments are still worth the same 15 years from now and they keep having to add money, pay for repairs, buy new furnaces, change a roof. Going nowhere for 15 years can hurt quite a bit too. Not just a crash.

What's worse is people are renting out basements, rooms and weekend getaways just to make ends meet. Worse than anything, people are sacrificing eye doctor appointments that cost $70, dental appointments(living with pain), along with vacations, healthy food, time with friends and family all for a "granite countertop". Its silly. I'm sure most people on this site have their priorities straight! We sure aren't sacrificing everything for a home. A granite countertop that you own and unlimited internet, gets you a roof and hours and hours of facebook and youtube. What a life?
Thats' the real cost of increasing real estate.
 

Smallcock

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Jun 5, 2009
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Anbarandy

Bitter House****
Apr 27, 2006
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+50% of pre-construction condo units are sold to investors who buy blocks and blocks of units and then either sell them as transfers of assignments, hold on to them while lying on the HST affidavits and then re-selling them whilst not declaring the property as not a principal residence and thus paying zero in capital gains tax.

Therein lies the main reason, which the provincial and federal governments didn't address, for the rapid escalation of property values.
 

Smallcock

Active member
Jun 5, 2009
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Smallcock

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Jun 5, 2009
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Have the tides turned or is this temporary?

Home sales in Greater Toronto Area plunged 37.3% last month
Number of listings rose 15.9% year over year, according to the Toronto Real Estate Board
http://www.cbc.ca/news/canada/toronto/gta-home-sales-1.4192531

If you buy and hold long term, I think this is all a non-issue.
 

TheBuyer

Banned
Aug 22, 2013
264
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0
Have the tides turned or is this temporary?

Home sales in Greater Toronto Area plunged 37.3% last month
Number of listings rose 15.9% year over year, according to the Toronto Real Estate Board
http://www.cbc.ca/news/canada/toronto/gta-home-sales-1.4192531

If you buy and hold long term, I think this is all a non-issue.
Wow! Never ever thought I'd agree with anyone with a small cock :rockon:, but your're so right. All my talk estate contacts say that it's cooled but processed aren't going down. There isn't the frenzy any more, houses stay on the market a little longer, but it's still gonna cost you through the ass...
 

wonkyknee

Active member
Jan 20, 2006
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Just hold on for the long term as rates rise and cost of ownership increases, the value won't disappear. It never has before. The value always comes back. If you can keep at least a 1-2 % rate of return over the long run, you're far better off than having spent your money on depreciating assets. At 2% return your investment will be DOUBLE in 36 years! Hold on!
 

Denmae

Active member
Jan 30, 2013
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Just hold on for the long term as rates rise and cost of ownership increases, the value won't disappear. It never has before. The value always comes back. If you can keep at least a 1-2 % rate of return over the long run, you're far better off than having spent your money on depreciating assets. At 2% return your investment will be DOUBLE in 36 years! Hold on!
You are kidding, right ?
 

Butler1000

Well-known member
Oct 31, 2011
28,707
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Have the tides turned or is this temporary?

Home sales in Greater Toronto Area plunged 37.3% last month
Number of listings rose 15.9% year over year, according to the Toronto Real Estate Board
http://www.cbc.ca/news/canada/toronto/gta-home-sales-1.4192531

If you buy and hold long term, I think this is all a non-issue.
Right now I think we have a bit of a standoff. Buyers are holding waiting for prices to drop and sellers are holding out for the price they want.

So it's who blinks first. I think prices will level a bit. May see a 5% drop. But the overall gains over the last ten years of what 300%? Not worried about it.

The city is still booming. Huge tech industry is driving incomes up. And we still have massive immigration and about 9% foreign investment occurring. With the state of the world and the USA volatile Canada is still a safe bet to park cash.
 

wonkyknee

Active member
Jan 20, 2006
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Let's face it, the trends often overshoot before they revert back to the mean. Real estate in Toronto has definitely turned and started into a slight decline. Official numbers so far are only 10-12% from the top. Nothing to worry if you bought 4-5 years ago. Maybe we go down another 12-15% from here but no one loses much 10-15 years from now. I expect average Toronto detached to still be 1 million 15 years from now. Real estate holds its value in the long run.
 

Barca

Active member
Sep 8, 2008
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Real Estate not surprisingly had followed the bull run of the bond market and now that interest rates will rise, the bull run for both markets is over.

This however, does NOT mean a correction necessarily. I think what is most likely is a stagnant/low growth market for years to come. The interest rate cycle took 20 years to grind down to where it is today. It won't be a 20 year bear market but it certainly won't crash overnight either.

I think you'll see 3-4% average growth in RE for the next decade.
 

Jubee

Well-known member
May 29, 2016
3,501
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Ontario
Prices are holding, people refuse to sell anything less than what they have had in their minds (made up) already.

People are still coming here, they need homes, so it's just a matter of balance, there won't be a huge 25-40% drop like some are saying --- fear mongering in the papers, what else do media outlets do to attract readers???

Real Estate will be fine, it'll taper off a bit and then pick some steam up slowly, probably sooner than Vancouver had after they got their foreign tax.

Don't stress it too much.
A million dollar house before won't go to $700,000 in the next few months. It just mean it'll be a few days longer on the market, along with some negotiating, days of bidding wars are gone, unless of course your location (location, location) is hot. ie - by a subway line, condo downtown with a parking spot (not sold separately). You're fine. Also, it helps if the house or condo are in turn key condition, meaning, you move in and start living without having to renovate anything major.


The media is just trying to freak people, it's their job. Look to news outlets on TV as proof.... FEAR, HYPE, it's all they do.


I'm no real estate expert by any means, but by talking to a few builders, developers (1 with a really sweet car lol), agents and reading a lot of things online, I just draw up my own conclusions.
Fall is going to be an interesting time no doubt.

If you're a seller, you should stick to your price, don't drop.
If you're a buyer, well, you hope they drop.

This will be a game of chicken.

Developer owned sweet car mentioned above - https://terb.cc/vbulletin/showthread.php?609113-If-any-of-you-have-a-over-200-000
 

Smallcock

Active member
Jun 5, 2009
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