Real Estate

Did we just hit the bottom of the Toronto RE correction?

  • Last Updated:
  • Nov 2nd, 2017 1:06 pm
[OP]
Deal Addict
Feb 22, 2011
1888 posts
1703 upvotes
Toronto

Did we just hit the bottom of the Toronto RE correction?

2017 Toronto Average Sale Price

January $768,330
February $876,640
March $916,767
April $919,449
May $864,491
June $793,585
July $746,218
August $732,292 ---> New bottom?
September $775,546
Last edited by rjg4235 on Aug 4th, 2017 2:26 pm, edited 2 times in total.
1053 replies
Member
Jun 12, 2017
358 posts
353 upvotes
rjg4235 wrote:
Aug 4th, 2017 2:26 pm
No one knows what will happen in the next 12 months but there are some interesting similarities to Vancouver. Not the least of which is a strong condo market;

https://news.vice.com/story/sorry-toron ... new-normal

The benchmark home price for all types of homes in Vancouver is now $998,700, up seven percent from July of last year, just before the housing rules were announced. Basically, nothing has changed. Prices are high, affordability is low, and we’re essentially back at square one.

“This whole tax thing was brought about in the guise of creating home affordability,” said Ash. “The reality of the situation is that it was politically motivated, given the looming spring election and the Liberals were under pressure by the NDP, so they put some sort of tax in place.”

Ash claims that the Vancouver market rebounded because of B.C.’s strong economy and the motivation of mainland Chinese, in particular, to get their money out of China in any way possible, undeterred by any form of tax. “They look worldwide — compared to L.A., Seattle, Sydney, San Francisco, Vancouver homes are still a good option.”

The latest housing data from the Toronto Real Estate Board shows a price trajectory similar to Vancouver’s in the immediate aftermath of the foreign buyers tax.

The Ontario government slapped a 15 percent tax on foreign buyers on April 20th this year — not only have home sales plunged for three consecutive months now, home prices have been steadily decreasing.

The average price of a home in the Greater Toronto Area was $746,218 in July, a far cry from the $921,000 in April.

“The typical month-over-month decline from June to July is 15 percent, this year we saw a 30 percent decline in the same period, indicating an increased velocity in the slowdown,” said Lauren Haw, CEO of real-estate listing site Zoocasa.

But the word out there is that this trend won’t last. “I’ve been tracking both Toronto and Vancouver for some time. Watch what happens in September — prices are going to shoot back up,” claims David Fleming, a Toronto-based realtor for Bosley Real Estate.

“Prices declined because of optics. We had Morneau, Trudeau, Tory stand at a podium and convince the people of Toronto that they were going to do something about housing affordability. That put buyers on hold. But foreign buyers are not just going to stop buying, they are going to just find a different way of doing it.”

2017 Toronto Average Sale Price

January $768,330
February $876,640
March $916,767
April $919,449
May $864,491
June $793,585
July $746,218 ---> New bottom?
Mostly based on a quote from a VP at ReMax. Not that it is reason to discount him but I would take the article lightly given the bias.

Personally I think August will probably be a noticeable drop too. We'll see what happens in September. I doubt it will continue to slide as badly though; as much as people love to compare current time to the early 90s, we are halfway through what happened in that correction despite just 2-4 MOI. At peak crash in 90s, MOI was 21 months I read somewhere. That alone tells me that this is psychology based, which is unpredictable and can reverse any time.
[OP]
Deal Addict
Feb 22, 2011
1888 posts
1703 upvotes
Toronto
trekkie500 wrote:
Aug 4th, 2017 2:58 pm
Mostly based on a quote from a VP at ReMax. Not that it is reason to discount him but I would take the article lightly given the bias.

Personally I think August will probably be a noticeable drop too. We'll see what happens in September. I doubt it will continue to slide as badly though; as much as people love to compare current time to the early 90s, we are halfway through what happened in that correction despite just 2-4 MOI. At peak crash in 90s, MOI was 21 months I read somewhere. That alone tells me that this is psychology based, which is unpredictable and can reverse any time.
Here's another source, albeit still in RE he is a MBA, CPA, CA and has some interesting data. 2008 was a down year for Toronto and saw days on the market go up to 44, we are currently at 15.

https://www.century21.ca/scott.ingram/b ... rket_-_yet
Member
Jun 12, 2017
358 posts
353 upvotes
rjg4235 wrote:
Aug 4th, 2017 3:04 pm
Here's another source, albeit still in RE he is a MBA, CPA, CA and has some interesting data. 2008 was a down year for Toronto and saw days on the market go up to 44, we are currently at 15.

https://www.century21.ca/scott.ingram/b ... rket_-_yet
Yeah I follow Scott.. love his analysis and his trends certainly show stabilization but the volatility in YoY sales decline is still concerning as that has not bottomed out yet and generally sales decline precedes more price drops. None of this discounts a fast recovery of course, but tailwinds are weak atm so we may just correct and flatline.
Penalty Box
Aug 11, 2005
3447 posts
904 upvotes
This falling knife will last for years. Anyone who's buying now will be underwater very quickly as prices plummet.

Come September, supply will flood the market even more and accelerate the price drop further.

It's a good time to be alive and watch those overleveraged home owners lose their houses.
[OP]
Deal Addict
Feb 22, 2011
1888 posts
1703 upvotes
Toronto
Luckyinfil wrote:
Aug 4th, 2017 4:39 pm
This falling knife will last for years. Anyone who's buying now will be underwater very quickly as prices plummet.

Come September, supply will flood the market even more and accelerate the price drop further.

It's a good time to be alive and watch those overleveraged home owners lose their houses.
Lol how sad is your life that families and children losing their homes would make it a good time to be alive to watch? You should seriously seek help.

Also you must be incredibly rich if you can predict the future of markets. Put your money where your mouth is and short banks.
Penalty Box
Aug 11, 2005
3447 posts
904 upvotes
rjg4235 wrote:
Aug 4th, 2017 4:51 pm
Lol how sad is your life that families and children losing their homes would make it a good time to be alive to watch? You should seriously seek help.

Also you must be incredibly rich if you can predict the future of markets. Put your money where your mouth is and short banks.
Ok. Link me to one bank that isn't diversified from real estate and isn't insulated by cmhc and I will short it.

Brent already shorted hog and have made a killing. Thanks for asking
Member
Jun 12, 2017
358 posts
353 upvotes
Luckyinfil wrote:
Aug 4th, 2017 4:39 pm
This falling knife will last for years. Anyone who's buying now will be underwater very quickly as prices plummet.

Come September, supply will flood the market even more and accelerate the price drop further.

It's a good time to be alive and watch those overleveraged home owners lose their houses.
Oh good, looks like you share the same crappy crystal ball with joepipe (whose 3% interest rate claim has still not come to pass).

Also, I am with @rjg4235 on this one.. you must be a very shitty person to be rejoicing at the thought of people losing their homes. You certainly don't have to feel sorry for anyone, but it takes a special kind of ass to take joy in the suffering of innocent family members, especially kids who will no doubt be affected.

What's ironic is that the economic downturn this will cause is far more likely to affect the poorer segment i.e. those who cannot buy today and usually I find hese are the sort of people cheering for a crash.
Newbie
Jul 8, 2017
13 posts
13 upvotes
Why do people think listing will increase in September? Owners who need to sell have already listed in this market condition.
Sr. Member
Aug 19, 2016
867 posts
310 upvotes
Koalabear4rfd wrote:
Aug 4th, 2017 5:19 pm
Why do people think listing will increase in September? Owners who need to sell have already listed in this market condition.
Not true. My sister is still waiting to list. Listing now is stupid as she puts it.
Deal Addict
Aug 28, 2014
1620 posts
339 upvotes
Toronto, ON
Koalabear4rfd wrote:
Aug 4th, 2017 5:19 pm
Why do people think listing will increase in September? Owners who need to sell have already listed in this market condition.
Many people bought investment properties thinking they could turn a profit by just waiting, some are trying to play armchair landlord which is a losing proposition, others are just sinking money into them. Either way to recoup costs they have to sell at some time and the master plan up everyone's sleeves is to wait until winter.

Question is how long can they hold out and how much money can they afford to burn.
Sr. Member
User avatar
Aug 15, 2013
583 posts
279 upvotes
Guelph
Hmm.. Market correction means market correcting to it should be .. i.e. prices falling back to the long term avg growth. They are not close to that number, by some distance.

So after 20 years of growth and atleast few years of double digit growth, with the last year being over 30%.. the market correction is complete in 3 months? Lol.

This isn't correction, it is a knee-jerk reaction. Proper correction would take atleast few years of fall in prices. Whether that will happen is a different issue. Personally, I dont feel a market correction will materialize till the interest rates are corrected to what they should be, instead of the current rates which are based on the decided "inflation rate".
Deal Addict
Nov 27, 2007
3318 posts
442 upvotes
It will go back to april peak in September, gud, why so many threads?
Penalty Box
Aug 11, 2005
3447 posts
904 upvotes
Engi-Nir wrote:
Aug 4th, 2017 6:26 pm
It will go back to april peak in September, gud, why so many threads?
MUST be feeling nervous. Gotta post more to keep the optimism up
Newbie
Feb 11, 2016
73 posts
78 upvotes
I always thought timing markets is foolish, but man you gotta have balls to buy right now when it could mean losing 50k a month in value.

I think market correction still has some way to go. Prices in Toronto are way overpriced when you compare to rent.

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