Real Estate

Did we just hit the peak of the Toronto RE bubble?

  • Last Updated:
  • Mar 16th, 2019 9:08 am
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Newbie
Apr 20, 2017
28 posts
4 upvotes
Thank you for posting the chart, but I don't think those numbers could possibly reflect the changes announced by Wynne just 2 days ago. There just hasn't been enough time since the announcement for sellers to have adjusted their prices, buyers to have executed at the lower prices, and for all of this to have been compiled and already reported.

Also, as someone else already correctly pointed out - the chart shows a 7.36% increase for Toronto for April (and since April isn't over yet, that increase must be for just the first 22 days of April?).
MMMPower wrote:
Apr 22nd, 2017 7:41 pm
go to zolo , or this

Image
Member
Jan 13, 2017
451 posts
355 upvotes
yes up to April 20th, it is not the full month.
I do expect however the final 10 days of April to have an average transaction price lower than the first 20 days of the month.
in any case the numbers do not lie, month to month you will be looking at some -% in parts of GTA. I know this is true in my area, Vaughan detached only.
Deal Fanatic
Feb 9, 2009
7646 posts
4573 upvotes
I suspect the drop was to happen as everyone waited for the news ... few weeks of flooded inventory then we'll see a few unmotivated sellers get out and market will likely balance out by middle of summer.... I wouldn't be surprised to see a drop for April.
Deal Guru
User avatar
Mar 31, 2008
10519 posts
1638 upvotes
Toronto
Definitely not a surprise.

Think of it this way.

February:
-100 people want houses
-10 people selling.
Top Let's say the top 15 wealthy people buy it. Some don't because they're really picky. They of course paid the higher price that the 85 people couldn't.

April:
-100 people want houses
-90 people selling.
Now the rest of the less wealthy people are in the market.
Seller's confused why they can't get the same pricing as seen in February.

Well duhhh... you can't expect the price to be a 'Forever floor' because the top 15 people set those prices. Now you got the rest of the 85 (let's say realistically 60 people) who are less wealthy legitimately in the market now. And once buyers start sniffing price flattening, they'll hold out.

But I did say, the 3 bedroom semi, some 2 bedroom coveted by millennials is still driving the increase in Toronto. There is still a significant shortage of those that want in a 'cooler' neighbourhood, within easy access to a streetcar or subway stn. They would rather stay put and rent then consider Scarborough which would be utter death.
Member
Jan 13, 2017
451 posts
355 upvotes
for sure we hit the peak in terms of listings, almost 5-10x the number of listing vs. Feb
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Penalty Box
User avatar
Apr 21, 2004
49337 posts
14597 upvotes
rfdchan168 wrote:
Apr 22nd, 2017 7:27 pm
The problem is rent is comparably cheaper and much with rent control... many will feel less pressure to buy .. we will see.

the 15% tax is smaller piece IMO... the elephant in the room is the rent control
That is what my friend would like to think as he never could save 20% for the down payment. I also assured him that short term, rent control will work to his favor. We only put 10% in 2010.

Even without rent control, people are beginning to think that interest rates will stay low for a good while and so they see the merits of buying because at 25 year amortization and 2.4% mortgage rate, each payment consists of 55% principal and 45% interest payments. Of course there is property tax and some extra maintenance to pay too. I don't see prices going up forever. There will be a peak for a while, then hopefully a minor correction. Everywhere there is stability (being close to but not part of the US can have some advantages too), r/e in the long term will go up, especially with the influx of immigrants. The faster the rise in mortgage rates, the more evident a correction will be.

I think rent control is to shake the highly leveraged landlords and push them to start selling a property or two to ease the for sale supply side but don't know to what extent it will happen.
Deal Addict
Nov 13, 2013
1582 posts
619 upvotes
Ottawa
MMMPower wrote:
Apr 22nd, 2017 9:07 pm
for sure we hit the peak in terms of listings, almost 5-10x the number of listing vs. Feb
Image
Isn't this normal April vs February?
Deal Addict
User avatar
Jan 5, 2003
2430 posts
453 upvotes
fogetmylogin wrote:
Apr 22nd, 2017 9:28 pm
Isn't this normal April vs February?
shhh, they think after 10 years they're finally right, don't ruin this for them.
When the truth offends, we lie and lie until we can no longer remember it is even there. But it is still there... every lie we tell incurs a debt to the truth. Sooner or later, that debt is paid.
[OP]
Deal Fanatic
Dec 5, 2009
5059 posts
2837 upvotes
MMMPower wrote:
Apr 22nd, 2017 9:07 pm
for sure we hit the peak in terms of listings, almost 5-10x the number of listing vs. Feb
Image
Wow. That's insane. Where is that?
Member
May 5, 2013
311 posts
97 upvotes
fdl wrote:
Apr 22nd, 2017 9:45 pm
Wow. That's insane. Where is that?
isn't that near Markville mall?
[OP]
Deal Fanatic
Dec 5, 2009
5059 posts
2837 upvotes
fogetmylogin wrote:
Apr 22nd, 2017 9:28 pm
Isn't this normal April vs February?
It's normal for listings to be up, yes. But new listing are up much more than normal this year. I posted a chart showing this a few pages back.
Member
Jan 3, 2017
316 posts
228 upvotes
Flavour wrote:
Apr 22nd, 2017 9:35 pm
shhh, they think after 10 years they're finally right, don't ruin this for them.
People in this thread are being ridiculous. All the people who have been waiting on the sidelines who regretted not buying 10 years ago and who are waiting for a crash to happen are jumping in with all this doom and gloom hogwash. Seriously, I think some of you guys are salivating on the sidelines every time there's a slight dip in the market and you really need to come to grips with what is happening.

The bottom line is this. Anyone with 1/2 a brain already realized that when the announcement came there was going to be a reaction causing the following:

A mild correction due to increased supply, and a a lessening of demand as "the herd" (as someone else put it) panics and does what the herd does best. If anyone thought there was going to be anything but a dip with the government intervention, you need a reality check.

The only question is how long it will take for the market to rebound. You guys talking about a 30-40% correction are really out to lunch. It's already been stated several times that the government only wants to cool the market, not cause a huge correction. And there have been graphs posted in this thread pointing out Toronto has had 100K plus corrections in the value of home sales in the past year alone for no relative reason whatsoever.

All we are going to see is a 5-10% correction, prices may stay flat for a short while and they will slowly climb back up. No one has ever said that 30%+ gains yoy were sustainable or achievable forever.

Are we going to see the massive yoy gains anymore? Probably not, but we are not exactly heading for a huge crash either no matter how much you guys sitting on the sidelines want it to happen

As for me, I'm indifferent as to what happens. I'm in real estate for the long haul. All my rentals cash flow very well and I have no intentions on selling any of them until I retire. If the market crashes like you guys want it to, I'll just buy more and nothign changes except my net worth on paper. If it doesn't crash I'll enjoy the appreciation in 15-25 years and the very hefty rental income that 15 properties brings
Last edited by fryguy1987 on Apr 22nd, 2017 9:53 pm, edited 4 times in total.
Member
May 18, 2015
455 posts
646 upvotes
Thornhill, ON
fdl wrote:
Apr 22nd, 2017 9:47 pm
It's normal for listings to be up, yes. But new listing are up much more than normal this year. I posted a chart showing this a few pages back.
I can confirm this on the ground in Thornhill and Richmond Hill. Not only were the for sale/open house signs on the street corners this afternoon way beyond anything I've ever seen, but there's a new record of 8 for sale signs on my block in Thornhill. The previous record at any given time was 5, and I've been jogging the same route (and taking note of for sale signs) for many years.
Millenial1994 wrote:
Dec 9th, 2018 12:31 pm
not possible
literally impossible to lose on RE in GTA if you hold for at least 2 years.
Penalty Box
User avatar
Apr 21, 2004
49337 posts
14597 upvotes
Didn't think rfd sell sell sell worked as well as matrixvibe's buy buy buy in the hot deals thread.
Member
May 18, 2015
455 posts
646 upvotes
Thornhill, ON
fryguy1987 wrote:
Apr 22nd, 2017 9:53 pm
It's already been stated several times that the government only wants to cool the market, not cause a huge correction.
The government isn't omnipotent. By their own admission, they don't even fully understand this market, much less are they able to control animal instincts even if they did.

This bubble is complex and a myriad of factors have culminated in the current housing euphoria - One thing is for certain though, sentiment, not fundamentals have taken over. It's possible that this government may have just killed sentiment and "pricked the bubble" in the process. We don't know if this is the bursting of the bubble yet, but when fundamentals reassert - and they will- many overextended sheep will learn the hard way that mean reversion is a b*tch.
Millenial1994 wrote:
Dec 9th, 2018 12:31 pm
not possible
literally impossible to lose on RE in GTA if you hold for at least 2 years.

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