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Thread: Toronto Housing Market Implodes: Prices Plunge Most On Record

  1. #25
    New rental rules from the government are absurd.
    https://condos.ca/blog/new-landlord-...les-now-apply/

    "the new rules might cause a decrease in the number of properties on the market. Landlords who decide to sell won’t be able to deal with buyers who want to live in the residence, unless the landlord has informed the tenant one year in advance. That means it will be more difficult for leased properties to be turned over into the re-sale market, and there could be fewer properties available."

    "1) The landlord must pay the tenant 1 month’s rent in compensation for the eviction.


    2) Or, the landlord must offer the tenant a comparable unit in the same or a different building.


    3) The landlord must provide notice of intention to evict the tenant for personal use of the unit 1 year in advance.


    4) If the landlord fails to follow these rules, and then re-lists, sells, converts, or demolishes the unit within 1 year of eviction, the landlord could face up to $25,000 in fines."

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  2. #26
    #1 Gem Finder! Nicole King's Avatar
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    Quote Originally Posted by rhuarc29 View Post
    An implosion? Ha! Hardly. We're not even in correction territory yet.

    Exactly my point.. If you want to be serious about real estate, you need to study the facts and numbers and stop listening to the news.. Most reports are not investors..



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  3. #27
    Wow really people? Unless you are real estate agents....and there is actually a high probability that at least one of you are.....Lol....WAKE UP. Listing prices don't tell the tale. It's the sale prices. If you put your Nortel shares up for sale at $150/share and no one buys them, they ain't worth 150!!!!

  4. #28
    Quote Originally Posted by wonkyknee View Post
    Wow really people? Unless you are real estate agents....and there is actually a high probability that at least one of you are.....Lol....WAKE UP. Listing prices don't tell the tale. It's the sale prices. If you put your Nortel shares up for sale at $150/share and no one buys them, they ain't worth 150!!!!
    Nobody knows what's going to happen. Sales are down however if inventory begins to dry up, the market will be in balanced territory. Also we're seeing a shift in buyer behavior from detached homes to condos. As buyers on the low end buy up condos, perhaps the price gap between houses and condos will begin to narrow, as well as send average sale prices higher.

    With regard to price, August saw tremendous price growth over last year. Perhaps not the mind blowing growth seen in previous months, but those were outrageous. From a historical perspective, August y-o-y price growth was exceptionally strong. Traditionally one would expect real estate growth of 3 - 5%. But looking at the numbers: http://www.trebhome.com/market_news/...watch_0817.htm

    Detached homes up 10.54%, Semis up 9.74%, Townhouses up 20.15%, and condos up 26.09%

    All things equal it's still a crazy market even with the slowdown in sales volume.

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  5. #29
    Been in real estate 3/4 of my life, and we are still in a bubble. The stutter back in May was just that, a stutter. We have not had any serious devaluation as of yet. Don't listen to the CP24's property show as a source of unbiased news of the subject - the block of time is bought and paid for by the developers and real estate agencies they feature on the show - it's basically no more than infomercial. Prices in certain areas may have dropped 1-3% while all the hot markets are pretty much continuing to have upwards pressure with month over month increases. What the government's tax on foreign buyers has done is simply turned down the dial on the gas pipe feeding the balloon but it hasn't stopped it completely. So there is still plenty of room for things to get worse.

    Real Estate companies want to talk the stutter into being "the bubble being popped" in order to continue pushing the market upwards. They are part of the problem of the greed involved in the housing market - they always push prices higher so they get a bigger commission, and the more churn they get the more sales they can push.

  6. #30
    The 1-3% is year over year decline Aug to August That would imply buyers lost more 10 months ago, as well as 9, 8, and all the 7 months this year before August. So 11 months worth of buyers highly leverage are now underwater(on average) And we know that approx 10 000 deals close every month in the GTA, so at least 50 000 buyers are now underwater especially after considering land transfer, and other massive closing costs. In Toronto thats about $25 000 just on land transfer and another $10 000 on sundry closing costs. By the way at 10 000 deals a month, the annual average, with 48 000 realtors in the GTA, a significant decrease in activity like we've seen is taxing on this whole industry. With 2-3 more rate hikes expected over the next 12-18 months and a whole host of new rules on qualifying for mortgages there are a number of headwinds. In the Financial Arena, they say "never try to fight the Fed" For many years the the government has been feeding the real estate industry with cheap money, inflated amortizations, and RSP raiding. This has been great and most of us have made a fortune in real estate, but cycles occur in every market, and this one is ending. The government was clear 5-10 years ago about their interest rate plan, and they are clear now that rates are rising. No one wants you to sell your home, but buying a rental property today is clearly "fighting the Fed".
    Hot Property is definitely an infomercial, no doubt. Al Sinclair has been a perpetual bull, but I'll give him credit and Vince Gaetano as well. Neither one of them is hiding the sweat over their brows. Both have conceded that this market is hurting and it will get even harder to close deals in 2018. Unfortunately they are pushing to buy now because of that? I'd rather not be the last one to be holding the hot potato with a $750 000 mortgage attached to it and rising interest rates.

  7. #31
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    Quote Originally Posted by wonkyknee View Post
    average price of a new home in GTA is still 1.3million and $990 000 for a resale. I wonder if buyers are being told this? The minute they buy a new home it drops in value on average by $300 000. I know this is pure speculative option buyers on home sites, but still this is quite the arbitrage play if it was possible.

    I do agree with Smallcock that people are rushing before interest rates rise. It looks like we have one more rate increase probably in October. Maybe we get one more rush before the rules change in the fall and everyone will have to qualify at posted rates. Unfortunately that posted rate might now by 5%!!! There is even talk that banks will look at appraisal values at renewal now too. They are devious. If they see that there is reduced equity in the home then they won't be discounting the rate on renewal anymore, and since you'll have a harder time qualifying on a mortgage transfer clients will have to agree to their rate! Banks stocks have been a little shaky this year but this will add to bottom line!!
    That's not devious, that's underwriting.


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  8. #32
    Quote Originally Posted by wonkyknee View Post
    The 1-3% is year over year decline Aug to August That would imply buyers lost more 10 months ago, as well as 9, 8, and all the 7 months this year before August. So 11 months worth of buyers highly leverage are now underwater(on average) And we know that approx 10 000 deals close every month in the GTA, so at least 50 000 buyers are now underwater especially after considering land transfer, and other massive closing costs. In Toronto thats about $25 000 just on land transfer and another $10 000 on sundry closing costs. By the way at 10 000 deals a month, the annual average, with 48 000 realtors in the GTA, a significant decrease in activity like we've seen is taxing on this whole industry. With 2-3 more rate hikes expected over the next 12-18 months and a whole host of new rules on qualifying for mortgages there are a number of headwinds. In the Financial Arena, they say "never try to fight the Fed" For many years the the government has been feeding the real estate industry with cheap money, inflated amortizations, and RSP raiding. This has been great and most of us have made a fortune in real estate, but cycles occur in every market, and this one is ending. The government was clear 5-10 years ago about their interest rate plan, and they are clear now that rates are rising. No one wants you to sell your home, but buying a rental property today is clearly "fighting the Fed".
    Hot Property is definitely an infomercial, no doubt. Al Sinclair has been a perpetual bull, but I'll give him credit and Vince Gaetano as well. Neither one of them is hiding the sweat over their brows. Both have conceded that this market is hurting and it will get even harder to close deals in 2018. Unfortunately they are pushing to buy now because of that? I'd rather not be the last one to be holding the hot potato with a $750 000 mortgage attached to it and rising interest rates.
    What year over year decline are you referring to? Post link to reference.

    I want you to point your finger at me. I want you to call me names.

  9. #33
    This blog is mostly bearish on the market and this is their assessment of Sept thus far: https://betterdwelling.com/city/toro...es-this-month/

    In related news, rental bidding wars are still fierce. http://globalnews.ca/news/3728181/re...-bidding-wars/

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  10. #34
    The link was already provided. The silly practice of advertising a sale over the asking price has been going on for decades. What relevance is a a sale to asking price when the asking price has been dropped twice already totalling a 20% in decline? Then it sells for 104% of ask on a dramatically reduced listing price? Oldest trick in the book. Do you also realize every time a buyer renegotiated the asking price on closing, and a seller paid them tens of thousands of dollars to close, the selling price still gets recorded as the original deal? Even though it was far less based on the rebate!! More lies in the market.
    Why do you want prices to go up anyway? Do you want your gas price to go up? Your food costs too? Housing is a cost of living? Why do you want it to go up so badly?
    The tide has turned. You are no longer going with the fed. Buying investment properties now is simply "fighting the fed". You won't win that battle. They are telling us rates are going up and mortgage rules are getting tougher. Listen to them.
    It was a great run. But it's over.

  11. #35
    As far as the detached market is concerned, prices are probably close to the ceiling, if not beyond it, and therefore is correcting. But I don't see a "crash" yet. Condo prices might have some continued room for growth which is what we're seeing, but it too has limits.

    It's not so much that I want prices to go up, but I'm not seeing the doom and gloom reported by media outlets. I'm seeing a stabilization in the market which I think is good.

    I agree that the bull run was incredible and lengthy and could not last forever. I don't expect to ever seen a run-up in prices like that again in my lifetime.

    I want you to point your finger at me. I want you to call me names.

  12. #36
    I'm not selling any time soon, so really don't have a iron in the fire.....but......houses in my mostly detached suburb are back being listed and selling fairly quickly. Detached houses in the GTA will always succumb to the supply<demand equation. Consequently prices will not buckle entirely.

  13. #37
    Quote Originally Posted by Smallcock View Post
    As far as the detached market is concerned, prices are probably close to the ceiling, if not beyond it, and therefore is correcting. But I don't see a "crash" yet. Condo prices might have some continued room for growth which is what we're seeing, but it too has limits.

    It's not so much that I want prices to go up, but I'm not seeing the doom and gloom reported by media outlets. I'm seeing a stabilization in the market which I think is good.

    I agree that the bull run was incredible and lengthy and could not last forever. I don't expect to ever seen a run-up in prices like that again in my lifetime.
    The prices are indeed stabilizing. Soon we will probably see a modest and consistent 3-5% growth year over year for awhile.

    And hopefully when I'm initially planning to sell in about 10 years we will be in the middle of another economic boom and bull run.
    Unlike other I don't need to compensate my shortcomings with a big sig.

  14. #38
    http://business.financialpost.com/re...king-the-trend

    Moody's has also been bearish on housing in general but this is their assessment for Toronto:

    "In the census metro area for Toronto, Moody’s said it can see average annualized price growth of 10.7 per cent from the third quarter of 2017 to second quarter of 2018. It sees an another 8.5 per cent of annualized growth from third quarter of 2018 to the second quarter of 2019."

    They're forecasting much less housing price growth in the rest of Canada ( i.e. outside of Ontario).

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  15. #39
    The housing crisis is mostly for renters tbh.

    I have been looking since August. I have been denied by 10 landlords and 2 landlords gave the unit to someone else even after I gave them my deposit/ first and last. It's fucked up because I have the money to rent but they only want to rent to international students or people in their mid to late 30s, if you are a single female 20 something wanting to rent a luxury 2 br condo they think theres a catch.

    The universities give money to landlords who rent to international students so even if they get a bunch of inconsiderate entitled assholes for tenants, the school is throwing money at them so they don't care.

    There are 30,000 vacant apartments/condos in Downtown Toronto right now because of foreign investors who don't want to rent out their places....they rather just let them sit there unoccupied. So, when a single 20 something female comes to them applying to live in their condo, offering $100 more a month with 6 months down they're like....no thanks.

    And this is looking for luxury condos, I would hate to be on government assistance and looking for a place to live rn.
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  16. #40
    Quote Originally Posted by BuxomBabeTO View Post
    if you are a single female 20 something wanting to rent a luxury 2 br condo they think theres a catch.
    There isn't a catch? Why luxury 2 bedrooms?

    If you are unable to provide an employment letter (which would be a huge red flag for a landlord), I would suggest you get a guarantor.

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  17. #41
    Quote Originally Posted by Smallcock View Post
    There isn't a catch? Why luxury 2 bedrooms?

    If you are unable to provide an employment letter (which would be a huge red flag for a landlord), I would suggest you get a guarantor.

    thats the problem with a cash biz and no job. you cannot garnish wages. lesson 1 being a landlord. you cant get blood from stone. as a former landlord I would be suspicious of a person who needed a guarantor and would find another tenant who would meet my rental standards. its a competitive market, so tenant you need to be on your A++ game. letter of employment, pay stub, rental history, deposit, no pets and one kick ass first impression.

  18. #42
    Quote Originally Posted by BuxomBabeTO View Post
    The housing crisis is mostly for renters tbh.

    I have been looking since August. I have been denied by 10 landlords and 2 landlords gave the unit to someone else even after I gave them my deposit/ first and last. It's fucked up because I have the money to rent but they only want to rent to international students or people in their mid to late 30s, if you are a single female 20 something wanting to rent a luxury 2 br condo they think theres a catch.

    The universities give money to landlords who rent to international students so even if they get a bunch of inconsiderate entitled assholes for tenants, the school is throwing money at them so they don't care.

    There are 30,000 vacant apartments/condos in Downtown Toronto right now because of foreign investors who don't want to rent out their places....they rather just let them sit there unoccupied. So, when a single 20 something female comes to them applying to live in their condo, offering $100 more a month with 6 months down they're like....no thanks.

    And this is looking for luxury condos, I would hate to be on government assistance and looking for a place to live rn.
    its a business and they are there to make money, not for charity. would you accept less money for your work?

    housing is not a right, its a privilege.

  19. #43
    Quote Originally Posted by BuxomBabeTO View Post
    There are 30,000 vacant apartments/condos in Downtown Toronto right now because of foreign investors who don't want to rent out their places....they rather just let them sit there unoccupied
    Interesting. So you're saying (if I can read between the lines) those are mostly Chinese speculators who are just waiting for the housing market to pick up again, so they can quickly flip their unit.

    Am I right??

  20. #44
    Quote Originally Posted by Phil C. McNasty View Post
    Interesting. So you're saying (if I can read between the lines) those are mostly Chinese speculators who are just waiting for the housing market to pick up again, so they can quickly flip their unit.

    Am I right??
    Or dirty money hiding from Chinese government.

  21. #45
    Capital controls have been tightening in China for months. Buyers from China have all but dried up.

    I want you to point your finger at me. I want you to call me names.

  22. #46
    Stats so far on https://toronto.listing.ca/real-esta...ce-history.htm indicate that home prices are still selling for a healthy sum higher in September 2017 than in September 2016.

    September 2016 avg sold price: $660k
    September 2017 avg sold price: $714k

    Is a $50k gain in price evidence of a crash?

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  23. #47
    #1 Gem Finder! Nicole King's Avatar
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    Quote Originally Posted by Smallcock View Post
    There isn't a catch? Why luxury 2 bedrooms?

    If you are unable to provide an employment letter (which would be a huge red flag for a landlord), I would suggest you get a guarantor.

    The problem is that nobody will rent a single person two bedrooms. It would be better to put two people one the application. A two bedroom for a single person, especially female is a huge red flag.


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  24. #48
    Quote Originally Posted by wonkyknee View Post
    ........I went to visit a friend in Oakville. He just moved into brand new townhouses they paid $850k? A whole row of the same townhouses for sale behind him. (8-10) all for sale in the $900s. Remember he closed his deal 2 years ago at $850k. None of these are selling in the last month for $950k. We'll have to wait and see how bad the drop is.
    Guess what? One month later and not one of those 10 townhouses have sold. $960 000 ask prices now down to $875 000 and still no buyers. Guess what? Those townhouses after closing costs are down after not one year but two years. Prime location in Oakville. Similar new townhouses were for sale this year at 1.2million. From the the top to now those homes are down $350 000! Is that a crash yet?

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