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Toronto Housing Market Implodes: Prices Plunge Most On Record

Phil C. McNasty

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Dec 27, 2010
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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??
 

wonkyknee

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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.
 

Smallcock

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Jun 5, 2009
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Capital controls have been tightening in China for months. Buyers from China have all but dried up.
 

Smallcock

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Stats so far on https://toronto.listing.ca/real-estate-price-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?
 

Garden of Eden Ladies

#1 Gem Finder!
Supporting Member
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.


Thanks


Nicole King
 

wonkyknee

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........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?
 

nottyboi

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May 14, 2008
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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.
You only need to look at Torontos absurd rental laws to understand why they prefer not to rent. You pretty much hand over ownership when you sign a lease. Even when rent is not paid it takes FOREVER to evict someone.
 

onthebottom

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Hooterville
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With the relatively short duration of Canadian mortgages, and the high rate of household debt, what impact would 100-150bp increase in interest rates have on borrowers and bank asset quality?
 

Smallcock

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Jun 5, 2009
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With the relatively short duration of Canadian mortgages, and the high rate of household debt, what impact would 100-150bp increase in interest rates have on borrowers and bank asset quality?
It's already risen 50bp since July. This has added about $24/month for every $100k borrowed for a mortgage. A further 100bp is unlikely to happen any time soon due to a number of factors including the impact the previous increases have had on the loonie. A mortgage stress test implemented last year on insured mortgages meant that borrowers had to qualify based on a 4.64% interest rate, which would be in line with a full 150bp increase.

If it did happen, interest rates would still be low by historical standards - probably a return to 2005 levels - but it would dampen the Toronto market further in the near term. But Toronto and Vancouver are outliers. Most of Canada's housing markets have not experienced the same price inflation.

Some points to consider:
-in 10 years there will be another 1 million people living in the GTA, and they all need somewhere to live
-while Canadian household debt is at record levels ($2 trillion), Canadian household assets are also at a record high of $12 trillion.

Barring a shock to the economy like a rapid loss of jobs (but we're the new Silicon Valley!) I wouldn't expect a major deterioration of bank asset quality. Fortunately, prices in Toronto are stabilizing and in some cases reversing. But the fact is there is too much debt out there (the high and growing consumer debt, I think, is perhaps a bigger concern), so I hope folks start to rein it in some.
 

Smallcock

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2017 has been a bizarre year for real estate in Toronto, as the monthly graphs on http://www.movesmartly.com/toronto-real-estate-statistics.html show. The 'average price' graph clearly shows that the first quarter of 2017 was abnormally high.

Will we see a divergence or convergence in those graphs in the months ahead?
 

George The Curious

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Nov 28, 2011
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You only need to look at Torontos absurd rental laws to understand why they prefer not to rent. You pretty much hand over ownership when you sign a lease. Even when rent is not paid it takes FOREVER to evict someone.
And if you piss off tenants, they will hold your property hostage, damaging your house, and wasting utilities etc. A friend landlord had a $5000 water bill after a dispute with his tenant, tenant decided to keep bath faucet running non-stop. Landlord has no recourse, absolutely nothing he can do if tenant is broke and no money to pay.
 

George The Curious

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Some points to consider:
-in 10 years there will be another 1 million people living in the GTA, and they all need somewhere to live
-while Canadian household debt is at record levels ($2 trillion), Canadian household assets are also at a record high of $12 trillion.

Barring a shock to the economy like a rapid loss of jobs (but we're the new Silicon Valley!) I wouldn't expect a major deterioration of bank asset quality.
How is 1m increase in population predicted?

I wonder if "new silicon valley" is just a hype or government propaganda. If history is of any guide, Canadian tech. competitiveness is very weak compared to the US. Strings of failed tech companies, Corel, Nortel, Blackberry, ATI etc. etc. The real new silicon valley is actually China.
Which big tech giant has head quarters in Toronto. Most of tech companies here are worthless startups and free app developers relying scamming crowd sourcing funds. I fear once the bubble bursts, there WILL be massive job losses.
 

Smallcock

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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?
Regarding increased inventory and time it takes to sell: https://betterdwelling.com/city/toronto/how-much-did-toronto-real-estate-inventory-really-jump/

Seems like those stats still support a strong seller's market.

Maybe things will fundamentally cool in the coming months, which I would welcome, but it's not there yet. I'm looking at condos downtown and it costs the same for a 1 bedroom, 1 washroom with parking that it did an average detached house 10 years ago.
 

Smallcock

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How is 1m increase in population predicted?

I wonder if "new silicon valley" is just a hype or government propaganda. If history is of any guide, Canadian tech. competitiveness is very weak compared to the US. Strings of failed tech companies, Corel, Nortel, Blackberry, ATI etc. etc. The real new silicon valley is actually China.
Which big tech giant has head quarters in Toronto. Most of tech companies here are worthless startups and free app developers relying scamming crowd sourcing funds. I fear once the bubble bursts, there WILL be massive job losses.
Canada takes in 300k immigrants each year. 100k settle in the GTA so 10 years equals 1 million. 75k of those settle within the city of Toronto. Not to mention Canadians that relocate into the GTA from other areas of the country.

As for tech, time will tell. Getting highly skilled techies for a fraction of the price should be a huge draw for companies. Silicon Valley may be tapped out: https://www.theglobeandmail.com/rep...s-already-reaching-its-limit/article36333683/
 

George The Curious

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Nov 28, 2011
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As for tech, time will tell. Getting highly skilled techies for a fraction of the price should be a huge draw for companies. Silicon Valley may be tapped out: https://www.theglobeandmail.com/rep...s-already-reaching-its-limit/article36333683/
I work in tech industry. I know for fact that top talents still flow to the US. I know quite a few from my company and classmates from university went to the US for better pay and opportunity. You are right, the pay here in lousy if you got talent, why not go to where the real silicon valley is? Even I was tempted to move to the US many times. I only choose to stay due to family reasons, and liberal politics, and not as racist as US. But from pure economic perspective US definitely offers better opportunity than Canada

When you look at the type of tech companies in Toronto, most are not that important or revolutionary. I would say 90% of them will not exist in 5 years - many are startups with venture capital funds, just to experiment so to speak. the ones that go big tend to be aquired by bigger companies in the US, and talents get reloated , absorbed to US headquarters. this has been going on since the 80s, and all of the big Canadian tech companies went under, and US gets bigger and bigger.
 

wonkyknee

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Jan 20, 2006
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It's already risen 50bp since July. This has added about $24/month for every $100k borrowed for a mortgage. A further 100bp is unlikely to happen any time soon due to a number of factors including the impact the previous increases have had on the loonie. A mortgage stress test implemented last year on insured mortgages meant that borrowers had to qualify based on a 4.64% interest rate, which would be in line with a full 150bp increase.

If it did happen, interest rates would still be low by historical standards - probably a return to 2005 levels - but it would dampen the Toronto market further in the near term. But Toronto and Vancouver are outliers. Most of Canada's housing markets have not experienced the same price inflation.

Some points to consider:
-in 10 years there will be another 1 million people living in the GTA, and they all need somewhere to live
-while Canadian household debt is at record levels ($2 trillion), Canadian household assets are also at a record high of $12 trillion.

Barring a shock to the economy like a rapid loss of jobs (but we're the new Silicon Valley!) I wouldn't expect a major deterioration of bank asset quality. Fortunately, prices in Toronto are stabilizing and in some cases reversing. But the fact is there is too much debt out there (the high and growing consumer debt, I think, is perhaps a bigger concern), so I hope folks start to rein it in some.
All good points but there is similar or higher immigration in 30 other major metropolitan cities. The stress test implemented last year was on first time homebuyers only, but this Fall it will be passed on to ALL homebuyers. Bank of Canada gives a road map of where interest rates are going to all financial institutions. There are 2-3 more increases by the end of 2018. No one seems to get it. The trend has changed. The Fed here no longer supports homebuying. They are suppressing prices. Prices have stabilized over one month, but at prices that are 30% lower than previous this year. Sure this doesn't affect people who bought last year, but it sure does affect thousands of home buyers in the recent 6-12 months. Once further stress tests come in and even higher interest rates, prices could come down another 20%. That will affect 10s of thousands more recent buyers. The real problem is with investors who put a deposit down on multiple properties. This is a far greater factor than immigrant buying. Local investors buying multiple properties will get wiped out. 10s of thousands of such buyers. Why Fight the Fed??????
 

Smallcock

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That's a fair assessment wonkyknee. Real estate will obviously have to fall back in line with historical norms sooner or later (i.e. 3% - 5% annual growth), and the new mortgage rules, and interest rate hikes may do the trick.

I'm buzzing out over condo prices though. Today https://condos.ca/ shows 35% year over year growth on condo prices across Toronto. I don't think I've ever seen it so high. Wow.
 

Phil C. McNasty

Go Jays Go
Dec 27, 2010
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I'm buzzing out over condo prices though. Today https://condos.ca/ shows 35% year over year growth on condo prices across Toronto. I don't think I've ever seen it so high. Wow
Its because baby boomers, millennials and newlyweds cant afford houses in Toronto, so they start looking for condos. The problem is there's only so much space in Toronto to build condos (especially downtown), so that inflates the condo prices significantly.

One of the cheaper boom areas downtown is Regent Park (gentrification) and that area around Polson st./Cherry Beach.
Those are the new hotspots
 

Smallcock

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Prices have stabilized over one month, but at prices that are 30% lower than previous this year. Sure this doesn't affect people who bought last year, but it sure does affect thousands of home buyers in the recent 6-12 months. Once further stress tests come in and even higher interest rates, prices could come down another 20%.
Average prices in August were still 14% higher in 2017 than in August 2016, in Toronto. https://betterdwelling.com/canadian-real-estate-prices-fall-for-a-third-month-in-a-row/

The largest monthly price drop in Canada was in Southern Ontario. Toronto saw the composite benchmark price reach $755,400 in August, a 2.28% decline from the month before. This makes the price 14.26% higher than the same month last year. Guelph saw the benchmark drop to $411,600 in August, a 1.98% decline from the month before. Prices in Guelph remain 19.51% higher than the same time last year. Both cities saw large monthly drops, but the annual gains are still very high.
There has been no year-over-year decline in prices. And a 14% increase is a huge amount of money.

I think you're comparing the crazy prices seen in March and April of this year with current prices.
 

wonkyknee

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Average prices in August were still 14% higher in 2017 than in August 2016, in Toronto. https://betterdwelling.com/canadian-real-estate-prices-fall-for-a-third-month-in-a-row/



There has been no year-over-year decline in prices. And a 14% increase is a huge amount of money.

I think you're comparing the crazy prices seen in March and April of this year with current prices.
My English might not be great but yes. Prices are 30% lower than previously this year.(just a few months ago) Once again that doesn't affect people who bought 1 year ago(like I said), but 10s of 1000s of buyers have bought in the negative WITHIN the last year. Once again, if you bought 12 months ago, you'r ok, on average, but that doesn't take into consideration, land transfer, realtor fees, moving expenses and selling again if you bought an investment property 12 months ago. In which case, not so much gain.
As for the great job creation, teck boom in Toronto, take another look at the employment numbers. Crappy part time jobs make up all the gains. Those aren't the kind of jobs that buy more over inflated homes. Everything goes in cycles and this cycle is over. Now if everyone has to qualify based on the new stress test and not just first time homebuyers,(including renewals) then one more HUGE headwind this fall, along with another interest rate hike coming promised by the Fed(maybe not October, but by year end) Two more next year. After 20 years of "interfering" with home ownership rules in a positive way, realtors and mortgage brokers are complaining that the Fed is "interfering" now in a negative way. And once again, why is it that we're somewhat enthused about higher home prices and higher cost of living? that's what the Govt is asking too. ONce again. Don't try to fight the fed!!!
 
Ashley Madison
Toronto Escorts