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Coronavirus brought median Toronto condo prices down $65,000

Ceiling Cat

Well-known member
Feb 25, 2009
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It is just the beginning, at the lowest point housing will lose 40% from its highs and in the short term may only regain 15% in five years.
 

Bigdaug

Well-known member
Aug 17, 2017
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This recession has just started. Some areas in toronto condos are down 150k. Give it another 4 months and see where we're at. This is usually the busiest time for sales though
 

babyfinsta

Well-known member
Jul 2, 2005
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On top of yo mama!

Goodoer

Well-known member
Feb 20, 2004
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GTA & Thereabouts...
This is unimportant at the moment as listings were way down. The people that sold, probably had to sell for whatever reason so they took the on-paper loss... Which was probably not a loss, but rather a reduction in assumed on-paper profit.
 

decoy2673

Well-known member
Oct 31, 2010
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Real estate is going to take a major hit.

Some simple undeniable reasons:
1. Work from home is exploding - people who pay premium to reduce commute, will no longer do so
2. Reduced immigration to mitigate covid - neuters demand
3. Layoffs, and fear of layoffs - further kills demand
4. Asset prices dropping, like stocks - take RE gains and invest in stocks
5. Restaurants, bars, theatres closing/closed. No sports. - Amenities/attractions that boosted DT value now gone.
6. International students/regular students zooming online (UofT, Ryerson, York, OCAD all brought big #s into city) now - further demand drop.
 

Samranchoi

Asian Picasso
Jan 11, 2014
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There is a definite softening of the condo market and expect that to continue, especially when tourism numbers do not expect to improve any time soon. Many condo investors rent their units (and in some cases multiple units) as short term rentals. This demand is just not there now so they have a choice to hold and wait for better times, which many cannot, rent their units on a long term basis (but it may be difficult finding a good tenant now) or sell. It is the third action that will cause downward pressure on prices. Once the market improves slightly there will be a large number of vacant units hitting the market and combined with a still high expected unemployment rate of approx 9% and low immigration numbers, buyers will be limited. Many will need to sell at lower prices and those in a relatively good position will be able to take advantage of the decreased prices.
 

xix

Time Zone Traveller
Jul 27, 2002
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La la land
Well said Samranchoi, but don't forget Airbnb (tourist) plus others.
I believe in hot areas where there are a lot of Condo buildings one can walk in with 40% less than the asking price.

My reference is NYC when 2008 hit rock bottom. I knew a few people there and they turned around and asked their Landlords for less rental price since next door was way less because a lot of tenants walked out /lost their jobs.

How long is "short term rental" to you?
 

Samranchoi

Asian Picasso
Jan 11, 2014
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Well said Samranchoi, but don't forget Airbnb (tourist) plus others.
I believe in hot areas where there are a lot of Condo buildings one can walk in with 40% less than the asking price.

My reference is NYC when 2008 hit rock bottom. I knew a few people there and they turned around and asked their Landlords for less rental price since next door was way less because a lot of tenants walked out /lost their jobs.

How long is "short term rental" to you?
When I mentioned short term rentals I was including Airbnb. I have seen many individuals who had been relying on short term rental income to make ends meet. Now, they are definitely hurting, even those who were renting some units in their owner occupied home
 

Mencken

Well-known member
Oct 24, 2005
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Sales and listings both way down. And in many markets the resulting prices haven't moved much yet.

I agree it may go down overall...but most of the above comments seem to be about the condo market in downtown Toronto. The switch to working at home might induce a premium for single family homes with potential "home office" space. And this may be spread out all over the area. A lot of workers will be able to work from home...and maybe go into an office once a week or so. Anyway, however that works out it may raise demand outside of the core. And short term rentals are not just to tourists. Again, if there are a lot of people working from home, that, for example need to be downtown once a week - bingo, demand for short term furnished rentals.

Anyway, for sure there will be changes. But how it will balance out is still not clear.
 

Samranchoi

Asian Picasso
Jan 11, 2014
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CMHC, Canada’s largest mortgage insurer for high ratio applications, is tightening their guidelines which will affect what individuals will be able to borrow. Currently if the main borrower has a beacon score of 680 and above, the GDS and TDS ratio maximums were 39% and 44%. As of July 1/2020, no matter what the beacon score is, the maximums are decreasing to 35% and 42%. As well, they previously had a minimum beacon score requirement of 600 for one of the borrowers, that had been increased to 680. Finally, down payment obtained through debt can no longer be used.

The good news is that they are keeping their 5% down payment product. In 2019, two out of three first time homebuyers required mortgage insurance. These changes may force buyers to come up with at least 20% down payment. This will definitely affect the housing market as those wanting to get into the housing market will find it more difficult. The other two mortgage insurers in Canada have not followed suit, yet.
 
Ashley Madison
Toronto Escorts