Housing Prices in Toronto area...

[21pro]

stats compiled by Re/Max realtor and economist Bob Ede.

http://www.gettingtechnical.com/01_home/market_commentary/can_en.html
I'm not a charter, but this above link is for the GTA housing real estate market... it suggests housing prices have well surpassed affordability and is due for a sharp and strong correction.

it says:

1) sales volume has dropped off.
2) prices are at all time high and still increasing.
3) seasonal tops in december preclude slowdowns in following years

i found the chart at this site:

http://www.gettingtechnical.com/01_home/index.shtml

do you know anyone shopping or currently or recently bought a house?

 

[Serpent]

Haven't bought but I'm renting downtown in a bldg where a 2br is going for 390k.

 

[LateComer]

Here is another chart. It shows that in December 2007 35% of the listings were sold. Anything above 25-30% tends to be bullish for house prices. In contrast some US markets are at 10% or less listing to sales ratio.
http://www.torontothegood.com/stats/ Click on "average prices".

 

[obelix]

December's housing sales were underpinned by this new property transfer tax by the Socialist Peoples Republic of Toronto.

However, as long as the GTA accepts yearly plus immigrants, the housing market will not collapse. It may move sideways though.

 

[Hangman]

December's housing sales were underpinned by this new property transfer tax by the Socialist Peoples Republic of Toronto.

However, as long as the GTA accepts yearly plus immigrants, the housing market will not collapse. It may move sideways though.

Could you describe what you mean by sideways? I'm having trouble visualizing that...

 

[Serpent]

Could you describe what you mean by sideways? I'm having trouble visualizing that...

Slowdown.

 

[nautilus]

Could.........you..........describe...........what...........you...........mean.........by............sideways? I'm.........having...........trouble..........visualizing..........that.

 

[21pro]

the best unbiased prediction indicator is when CANADIAN RENO RETAIL BIG BOX stores announce bad quarters.

RONA is our Canadian big boy:

'Rona profit down in "difficult" business climate'
http://www.globeinvestor.com/servle...50_RTRIDST_0_BUSINESS-RONA-EARNS-COL/GIStory/

Unbiased because the stats are NOT COMPILED by the propaganda 'everything is alright' group that includes the following:
OREA
CMHC
Toronto Real Estate Board
Greater Toronto Homebuilders Association
anything Re/Max, Royal Lepage, etc..

Rona is uniquely Canadian and local in market area.
the home reno project market ebbs and flows depending on a) home equity b) house debt/equity ratio and c) the general consensus on LOCAL real estate values.

apparently, it suggests the GTA market is in a 'sensitive' form of disrepair.
the company directly cites a slowing canadian housing market... something that contradicts what the Toronto Real Estate Board said last Friday!!!

this is even during a declining interest rates environment... doesn't seem like anything can stabalize this one.

``A major slowdown in the sales of Canadian building materials'' hurt earnings, the retailer said. Canadian new-home starts slowed more than forecast in December to the least since April 2002

sluggish Canadian economic growth:

Canada's growth in gross domestic product slowed to 0.1 percent in November from 0.2 percent a month earlier, a government agency said last month. Retail sales of building supplies fell 2.4 percent in November following a decline of 0.4 percent in October, according to a survey by Statistics Canada.

 

[Serpent]

You should never look to TREB pronouncements for gauging health of the housing market. With them, it's always going up and up and it's always a time to buy.

 

[james t kirk]

It's very simple kids.

As long as interest rates are low, the prices are not going to crash anytime soon. Those of you hoping for a "crash" are going to be waiting a long time. You may see a very slight correction or a plateau and that's about it.

In the early 90's interest rates went up to 12 or 13 percent I believe and real estate corrected by 34%.

You can get a mortgage right now for 5 to 5.25. Wait a while and it will be even less.

Interest rates are actually falling as the FED keeps lowering in the USA as a result of the sub prime mortgage crisis (Canada has no such similar crisis in the offing due to banking laws here being more conservative.) As the FED lowers state side, the Bank of Canada MUST also lower because the dollar is so high. If the BOC does not lower, the C$ will take off over parity. Our manufacturing sector simply can't handle that, in fact, it's already in crisis.

I have no doubt that if the dollar was at 65 cents, the BOC would be RAISING rates right now, but fortunately for us debtors, little Jorge Bush has doubled the US debt in 7 years, started a stupid war he can't win that has cost trillions, allowed the entire subprime fiasco to occur, and cut taxes to boot. All of this has caused the loonie to soar.

So, to repeat, the only thing that will pour water on the Toronto housing market any time soon is interest rates rising and or unemployment rising or any combination of both.

Interest rates are not going to rise anytime soon, UE may spike up, but not enough to cause anything significant to occur to housing prices.

 

[eenthusiast]

It's very simple kids....As long as interest rates are low, the prices are not going to crash anytime soon. Those of you hoping for a "crash" are going to be waiting a long time. You may see a very slight correction or a plateau and that's about it.

What about the most basic law of capital, that there will be an equilibrium between supply and demand?

I agree with you basically, that a correction isn't forthcoming but it's because supply isn't that high and there's relatively strong demand (interest rates have a smaller impact on demand than most people realize I think).

My 2 cents.

 

[Malibook]

In the early 90's interest rates went up to 12 or 13 percent I believe and real estate corrected by 34%.

I remember when the GTA average went from around $270k down to around $190k or so.
The average didn't recover for over 10 years.

I agree there will be no crash here but even a 10% or so correction will be a shock to many people, especially those who expect real estate to go up 10% or so every year.

 

[AndrewV1]

15-20% plunge in average home prices in Toronto - this is a minimum.

 

[bananaman]

15-20% plunge in average home prices in Toronto - this is a minimum.

and you base that on what? Hope?

 

[catchall]

15-20% plunge in average home prices in Toronto - this is a minimum.

I agree but not until 2009. I already see people struggling to pay their mortgages. Inflation is crazy. You buy bread today? Go. Did you buy gas today? Go.

The banks have given mortgages that are way to high. I mean construction workers own million dollar homes and drive BMW's because they mortgaged their homes so much. It's gonna crack no matter the rate. People are already lower their house prices. Spring 2008 is going to be flat. Spring 2009 is going to be bad.


http://www.thestar.com/Business/article/305513

 

[catchall]

The last time a "correection" happened, the market was significantly different. The price increase prior to the "crash" was driven by demand-pull, but mostly by speculators. Hence, when the market faltered, it was easy to panic. Many people just walked away from their downpayments.

This time, the speculators are not as large a force. (Of course, they still exist; particularly in the condo market.) But the majority of the buyers are owner-residence. They are not as likely to walk away from financing on their homes.

The rates were higher but debt people had lower. People are in huge debt. Just check around with friends and family. Everyone seems to be doing "great" if ignore the fact that after the payments are made they don't even have enough for a rainy day. And it's going to be raining soon.....

 

[ThePunkPanther]

imho, housing prices in toronto are way the hell too damn high.

 

[ricepower88]

The tipping point will be in a couple of years, when many baby boomers start retiring and will be relying on CPP as their main source of income. The economy will shrink and unemployment will rise.

 

[james t kirk]

15-20% plunge in average home prices in Toronto - this is a minimum.

You're wishing....

 

[james t kirk]

I mean construction workers own million dollar homes and drive BMW's because they mortgaged their homes so much.

A good Tradesman commands a good salary. Simple as that. Alsways has been a good career choice in Canada and you will always have work, even in slow times. A good tradesman can easily make 100 k plus a year. If his wife is working, all the better. Affording a million dollar home and a BMW in that situation is not a stretch.