Real Estate

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

  • Last Updated:
  • Oct 22nd, 2017 12:21 pm
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Deal Addict
Jan 20, 2016
1214 posts
437 upvotes
Burlington, ON
hank755 wrote:
Oct 11th, 2017 3:05 pm
Does anyone know why the West GTA is performing better than the East GTA? They look like they're going in opposite directions. There is an almost 18% spread between Mississauga and Whitby.

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Besides the probable DIFFERENT sales mix?

IMO Mississauga (and West in general) traditionally was higher priced and has higher demand than East. Even within Toronto Etobicoke trumps the Scarborough.

As well making "analysis" over 1 month for market where people buy for YEARS it's a bit of profanation. You could derive some tendency over monitoring same kind of properties in some specific hood on such short time horizon, but compare monthly average to average is as good as tossing a coin
Deal Addict
Feb 22, 2011
1676 posts
1475 upvotes
Toronto
hank755 wrote:
Oct 11th, 2017 3:05 pm
Does anyone know why the West GTA is performing better than the East GTA? They look like they're going in opposite directions. There is an almost 18% spread between Mississauga and Whitby.
I was wondering the same. If you look at Whitby on Zolo and look at the house type breakdown even though the average is down YoY each category is up. Houses up 5%, Towns up 8% and Condo up 9%. The only way that the average can be down if all are up is if there is a sales mix change. What I suspect is that the huge developments all through out Durham are really hurting the resale of bigger houses. So the average looks down because it only factors in resale. There are a ton of new developments in Durham atm.
Sr. Member
Sep 24, 2006
635 posts
38 upvotes
I think I found it. Detached sales were down a whopping 44% in Ajax in the prior period as compared to townhomes up 2%.

But why would new houses affect resales so much? You have to wait at least a year or two (or longer) for the house to get built while a resale home can be moved into within months. Also, there are a lot of new builds going up in Brampton area and that area seems to be bouncing back from an average price standpoint.
rjg4235 wrote:
Oct 11th, 2017 3:22 pm
I was wondering the same. If you look at Whitby on Zolo and look at the house type breakdown even though the average is down YoY each category is up. Houses up 5%, Towns up 8% and Condo up 9%. The only way that the average can be down if all are up is if there is a sales mix change. What I suspect is that the huge developments all through out Durham are really hurting the resale of bigger houses. So the average looks down because it only factors in resale. There are a ton of new developments in Durham atm.
Deal Addict
Feb 22, 2011
1676 posts
1475 upvotes
Toronto
hank755 wrote:
Oct 11th, 2017 3:36 pm
I think I found it. Detached sales were down a whopping 44% in Ajax in the prior period as compared to townhomes up 2%.

But why would new houses affect resales so much? You have to wait at least a year or two (or longer) for the house to get built while a resale home can be moved into within months. Also, there are a lot of new builds going up in Brampton area and that area seems to be bouncing back from an average price standpoint.
It was just a theory, not really sure to be honest. I think it could impact it, many will be done in a year and it seems there are a lot more in the east. Most of the houses are in the $1m range so it would be pulling buyers from the higher side while cheap side still sells.

Another thing is Durham could be more tied to Toronto. Less people moving there because of work/lifestyle and more because they can't afford Toronto. So with news of Toronto down there would be less incentive to go out that way.
Deal Addict
Feb 9, 2009
4364 posts
2115 upvotes
hank755 wrote:
Oct 11th, 2017 3:05 pm
Does anyone know why the West GTA is performing better than the East GTA? They look like they're going in opposite directions. There is an almost 18% spread between Mississauga and Whitby.

Image
West side = best side Face With Tears Of Joy
Member
Mar 20, 2017
209 posts
221 upvotes
hank755 wrote:
Oct 11th, 2017 3:05 pm
Does anyone know why the West GTA is performing better than the East GTA? They look like they're going in opposite directions. There is an almost 18% spread between Mississauga and Whitby.
I disagree with guys comparing the level of life quality on West vs East.
IMHO, the main reason of prices differences is spillover effect. We had a massive spillover effect on Spring 2017 and most GTA homes were almost as desirable as Toronto 416 homes.
Now we literally have no spillover effect at all. All growth is concentrated in Toronto, while suburbs are not performing well in comparison with 416.
It does not mean that suburbs are bad investments. It just means that right now situation is not in favor of those people who expect spillovers.
Also it means that market will likely grow, because its no longer a question of affordability. Spillovers are always caused by affordability crisises.
[OP]
Deal Addict
Dec 5, 2009
4540 posts
2378 upvotes
GalvToronto wrote:
Oct 11th, 2017 6:43 pm
I disagree with guys comparing the level of life quality on West vs East.
IMHO, the main reason of prices differences is spillover effect. We had a massive spillover effect on Spring 2017 and most GTA homes were almost as desirable as Toronto 416 homes.
Now we literally have no spillover effect at all. All growth is concentrated in Toronto, while suburbs are not performing well in comparison with 416.
It does not mean that suburbs are bad investments. It just means that right now situation is not in favor of those people who expect spillovers.
Also it means that market will likely grow, because its no longer a question of affordability. Spillovers are always caused by affordability crisises.
We like generalizations but the GTA is huge and Not all suburbs are the same. For example, some have higher avg prices that Toronto. You can go further and see that areas of Toronto are drastically different as well. Toronto Central obviously leads the way, but prices in Toronto east and Toronto West are significantly less. And then drilling down even further into a neighbourhood by neighbourhood comparison will tell yet another story.
Member
Jul 25, 2005
433 posts
126 upvotes
GalvToronto wrote:
Oct 11th, 2017 2:30 pm
1)Average price for 416 detached houses in August 2017: $1191k
2)Average price for 416 detached houses in September 2017: $1355k

It grew 164k in a single month and keeps growing more in October.
DO YOU FEEL CHILL IN THE AIR? ITS HOW YOUR AMERICAN DREAM IS FREEZING DOWN:)
Benchmark Prices for Single Family Detached:
Apr 2017 $1,042,100
May 2017 $1,049,500
Jun 2017 $1,027,200
Jul 2017 $963,900
Aug 2017 $936,100
Sept 2017 $930,500

Nice try though, better luck next time....
Member
Mar 20, 2017
209 posts
221 upvotes
Avi44 wrote:
Oct 11th, 2017 8:52 pm
Benchmark Prices for Single Family Detached:
Apr 2017 $1,042,100
May 2017 $1,049,500
Jun 2017 $1,027,200
Jul 2017 $963,900
Aug 2017 $936,100
Sept 2017 $930,500

Nice try though, better luck next time....
It is for those who does not understand how benchmark is calculated.
Benchmark is always delayed and unreasonably changes data due to last 3 months performance.
Therefore, you are trying to hide extra growth of September by price decreasing in May-August.
Try more, I like to see extraordinary detached houses growth and everyone saying that we are falling down. It makes me feel some relaxation knowing that government cannot think about any cooling measures.

Even Scott Ingram says BS this time about selling more expensive houses. His example that we have +8 extra expensive houses that moved prices 164k up is BS.
8 super expensive houses only could move avg price 14k up, not 164k.

Wanna see true picture? Go to zolo, you will see that 3bedroom houses are driving the market. Not super expensive.
Member
Jul 25, 2005
433 posts
126 upvotes
GalvToronto wrote:
Oct 11th, 2017 9:52 pm
It is for those who does not understand how benchmark is calculated.
Benchmark is always delayed and unreasonably changes data due to last 3 months performance.
Therefore, you are trying to hide extra growth of September by price decreasing in May-August.
Try more, I like to see extraordinary detached houses growth and everyone saying that we are falling down. It makes me feel some relaxation knowing that government cannot think about any cooling measures.

Even Scott Ingram says BS this time about selling more expensive houses. His example that we have +8 extra expensive houses that moved prices 164k up is BS.
8 super expensive houses only could move avg price 14k up, not 164k.

Wanna see true picture? Go to zolo, you will see that 3bedroom houses are driving the market. Not super expensive.
Please explain how the benchmark is calculated and why it is always delayed.
Member
Mar 20, 2017
209 posts
221 upvotes
By the way, MLS shows current avg price for 416 zone as $859k today.
It means we are up $50k last 10 days.

While in 2016 we only had +$6k growth during the WHOLE October.
Time to get some popcorn and listen those bears and crash-talkers:)
Member
Jul 25, 2005
433 posts
126 upvotes
GalvToronto wrote:
Oct 11th, 2017 10:11 pm
We are discussing Toronto here, not Vancouver. You could at least do your homework with this link
http://www.trebhome.com/market_news/rel ... t_0212.htm
I am not paid to educate u, sorry.
Did you even read the article you posted? What does it say about averages?
"The MLS® HPI approach provides a less volatile measure of price than averages and medians, which can swing dramatically in response to changes in the mix of home sales from one time period to the next."
Thank you for proving my point. Next time try to post a link that doesn't go against your main argument. LOL.
Member
Mar 20, 2017
209 posts
221 upvotes
Avi44 wrote:
Oct 11th, 2017 10:18 pm
Did you even read the article you posted? What does it say about averages? Thank you for proving my point. Next time try to post a link that doesn't go against your main argument. LOL.
You do not understand the essential things in statistics, that's why your are sure that if something is not explicitly mentioned on their site - then it is not true.
As I said, I love the way it goes.

Just feel it. FEEL IT!!!
1)Avg price increased $164k for 416 detached houses in September.
2)Avg price increased another 50k just in first 10 days of October
3)And we still have highly aggressive fanatics on this forum who are completely sure that it actually keeps falling

AHAHAHA, I LOVE IT!

P.S. Just check next month how HPI changes and remember my words.

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