Real Estate

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

  • Last Updated:
  • Nov 17th, 2017 2:00 pm
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Newbie
Jun 8, 2017
89 posts
130 upvotes
With data out to date, appears unlikely that a Fall bounce-back/ reversal/ march-up in prices will materialize. Mid-month Sept TREB numbers should shed greater light on this...
Deal Fanatic
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Oct 23, 2003
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rjg4235 wrote:
Sep 12th, 2017 1:50 pm
Considering condos are up 20% YoY it seems almost impossible this is true unless all these families bought all those condos 5 months ago.
most bought them in the last 3 years, with the last purchased this last spring i believe. Im not in Toronto so i havent asked them whats up lately, but the jist of it is they're rented out and thats about it.
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Oct 23, 2003
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Sanyo wrote:
Sep 12th, 2017 1:50 pm
A bunch of families huh
Yea, more than a couple, less than a dozen. Bunch. lol
Deal Addict
Feb 22, 2011
1778 posts
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Toronto
Buggy166 wrote:
Sep 12th, 2017 4:39 pm
most bought them in the last 3 years, with the last purchased this last spring i believe. Im not in Toronto so i havent asked them whats up lately, but the jist of it is they're rented out and thats about it.
Sounds like you have absolutely no idea how much equity they have in them then. If they were purchased that long ago they could have 50% equity for all you know, I know the ones I purchased that long ago do.
[OP]
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Dec 5, 2009
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inferiorplanet wrote:
Sep 12th, 2017 2:07 pm
With data out to date, appears unlikely that a Fall bounce-back/ reversal/ march-up in prices will materialize. Mid-month Sept TREB numbers should shed greater light on this...
What data are you referring to?
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Oct 23, 2003
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rjg4235 wrote:
Sep 12th, 2017 4:47 pm
Sounds like you have absolutely no idea how much equity they have in them then. If they were purchased that long ago they could have 50% equity for all you know, I know the ones I purchased that long ago do.
could be, im not their accountant, although the math wouldn't add up based on their work income. One of them purchased a condo in Sauga with $15000 down on a 300k mortgage, which was based off the equity in their principal home. this spring they got another condo, but for 400k or so, also backed by their house mortgage. They basically buy new properties based off the new valuations of their home.

I dont know what expenses a family with 2 kids has, but id imagine they're a lot higher than a single person with an income of 150k+. With renters in the units handling most of the mortgage payload, i cant see 50% in 3 years in their case.

Others who are better off (income in the 200k+ range, no kids) are obviously better positioned, but i dont think their properties would be much above the 30% equity line.

How did yours jump to 50% equity in a couple of years?
Deal Addict
Feb 22, 2011
1778 posts
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Toronto
Buggy166 wrote:
Sep 12th, 2017 5:04 pm
could be, im not their accountant, although the math wouldn't add up based on their work income. One of them purchased a condo in Sauga with $15000 down on a 300k mortgage, which was based off the equity in their principal home. this spring they got another condo, but for 400k or so, also backed by their house mortgage. They basically buy new properties based off the new valuations of their home.

I dont know what expenses a family with 2 kids has, but id imagine they're a lot higher than a single person with an income of 150k+. With renters in the units handling most of the mortgage payload, i cant see 50% in 3 years in their case.

Others who are better off (income in the 200k+ range, no kids) are obviously better positioned, but i dont think their properties would be much above the 30% equity line.

How did yours jump to 50% equity in a couple of years?
I bought it for $218k and similar ones are selling for $450k. Condos are up on average 20% YoY as of today. That is for one year, the appreciation is also compounding so gains from 3 and 2 years ago also increased 20% this past year.

That's not even including mortgage pay down.

edit; I'll add it's actually been 4 years now, but 2-3 years could see similar results. even 15% for 3 years compounded would be 52% increase.
Last edited by rjg4235 on Sep 12th, 2017 5:06 pm, edited 1 time in total.
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Oct 23, 2003
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rjg4235 wrote:
Sep 12th, 2017 5:06 pm
I bought it for $218k and similar ones are selling for $450k. Condos are up on average 20% YoY as of today. That is for one year, the appreciation is also compounding so gains from 3 and 2 years ago also increased 20% this past year.

That's not even including mortgage pay down.
so in that area condos appreciated 110% in 2-3 years? That's a jackpot if i've ever seen one.
Deal Addict
Feb 22, 2011
1778 posts
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Toronto
Buggy166 wrote:
Sep 12th, 2017 5:13 pm
so in that area condos appreciated 110% in 2-3 years? That's a jackpot if i've ever seen one.
I edited my comment to clarify it's been 4 years, but yes over 100%. as I said in the other comment even 3 years of 15% increase compounded would be 52%. To assume someone doesn't have equity because they only bought within 3 years is way off base.
Sr. Member
Feb 9, 2013
941 posts
151 upvotes
Mississauga
Richmond Hill

Average Price Detached House 2016

1/2016 $1,363,303
2/2016 $1,261,164
3/2016 $1,391,159
4/2016 $1,412,443
5/2016 $1,421,704
6/2016 $1,518,320
7/2016 $1,493,404
8/2016 $1,498,547
9/2016 $1,568,093
10/2016 $1,531,618
11/2016 $1,583,703
12/2016 $1,548,876

Average Price Detached House 2017

1/2017 $1,675,392
2/2017 $1,775,279
3/2017 $1,835,719
4/2017 $1,884,611
5/2017 $1,584,327
6/2017 $1,675,661
7/2017 $1,439,065
8/2017 $1,466,884


Image
[OP]
Deal Addict
Dec 5, 2009
4614 posts
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jdu0ng wrote:
Sep 12th, 2017 7:09 pm
Anyone know why this detached was sold for only $0.8M?
http://www.mongohouse.com/soldrecords/5 ... b74de93dbf

I find RH Crosby area sells much lower than other parts of RH. - Reason?


Just down the block in observatory , a townhouse was sold for $0.795M and another was sold for $0.75M:
http://www.mongohouse.com/soldrecords/5 ... 5a6a66f117
Depends , Crosby generally has very small, old houses (e.g. 1000 sq foot bungalows from the 60's). But if you are in the area of Crosby that is in Bayview school district they still get crazy money for what they are. However The house you linked is not in Bayview district to my knowledge , is right beside a busy CN rail line (trains run all hours of the day and night), as well as some public low income housing buildings.
Newbie
Sep 13, 2007
93 posts
6 upvotes
Toronto
fdl wrote:
Sep 12th, 2017 7:14 pm
Depends , Crosby generally has very small, old houses (e.g. 1000 sq foot bungalows from the 60's). But if you are in the area of Crosby that is in Bayview school district they still get crazy money for what they are. However The house you linked is not in Bayview district to my knowledge , is right beside a busy CN rail line (trains run all hours of the day and night), as well as some public low income housing buildings.
that would explain why, thanks
Deal Addict
Jul 14, 2002
1006 posts
322 upvotes
jdu0ng wrote:
Sep 12th, 2017 5:43 pm
Richmond Hill

Average Price Detached House 2016

1/2016 $1,363,303
2/2016 $1,261,164
3/2016 $1,391,159
4/2016 $1,412,443
5/2016 $1,421,704
6/2016 $1,518,320
7/2016 $1,493,404
8/2016 $1,498,547
9/2016 $1,568,093
10/2016 $1,531,618
11/2016 $1,583,703
12/2016 $1,548,876

Average Price Detached House 2017

1/2017 $1,675,392
2/2017 $1,775,279
3/2017 $1,835,719
4/2017 $1,884,611
5/2017 $1,584,327
6/2017 $1,675,661
7/2017 $1,439,065
8/2017 $1,466,884


Image
look at those bull traps!
Newbie
Jun 8, 2017
89 posts
130 upvotes
fdl wrote:
Sep 12th, 2017 5:00 pm
What data are you referring to?
Used the term 'data' loosely. Opinion based on the following data, info, observations, impressions,

new listings and active listing stats for Aug

interest rate hikes in July and Sept

possibility of another hike in Oct or Dec, and a few more in 2018

consumer, mortgage, and HELOC debt at all time highs

increase in bankruptcies (albeit small)

affordability issues, even at 20% off April highs

impression that many sellers waited til after Labour Day to list their properties

opinion that a good chunk of homes for rent are for investment and will be listed for sale sooner rather than later

tightening of credit

anecdotal evidence from mortgage brokers that much harder to find money now, lenders are strict

possibility that stress test will be implemented for those with 20% down this Fall

anecdotal evidence from agents that buyers are still not confident

speculators, domestic and foreign, have left the party


Too many negative catalysts to support a meaningful reversal at this time IMO.

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