Real Estate

Merged: GTA RE Bubble Bursting Bearish news and updates

  • Last Updated:
  • Jun 8th, 2017 11:39 am
Sr. Member
Jan 20, 2016
815 posts
205 upvotes
Burlington, ON
licenced wrote:
May 17th, 2017 8:11 pm


It's not unreasonable at this time of year to expect that listings at the back half of the month will slow. It is however unreasonable to expect the sales to multiply in order to compensate.
Sales PRIOR to that point ALREADY compensate slowing in May

YTD SALES numbers across TREB: (Jan-Apr)
2016: 34499
2017: 36909

How it will go over the summer...we'll see

the problem with such highly seasonal and discrete data, that "playing" with start/end point you can get quite whatever you want, even +289% inventory increase (with careful cherry-pick you can get even more...)

to compare apple to apple I'd wait for FULL month report. Not going to draw any conclusion on some inter-month made up data by Zolo? from unverifiable sources
Sr. Member
Jan 30, 2006
849 posts
284 upvotes
asa1973 wrote:
May 17th, 2017 7:01 pm
Actually in terms of income to house price CANADA (NOT GTA, GVR, and other BIG cities) ARE quite cheap relative to USA. There are a LOT of DETACHED houses ~100k in NB, NS, QC...even in ON. And couple of making MINIMAL wage will have 25 hourly ~50k yearly (house is 2x income), while same couple let say in Texas will make 15 hourly (yes, yes, they still have $7 hr minimal wage) ~ 30k yearly and house is 3x year income. Do not forget "free" medical in Canada and ~$400 monthly (5k yearly) medical in USA (if we're talking about low payed job). Also, 100k house in Canada in quite ANY place would be in worse case just boring, but safe as well. In USA - not so lucky. Once you factor "quality" of life (safety, schools, "free" medicine), Canada as a whole could be more favorable than USA. For sure, if compare Toronto with hmm, St.Louis MO, the last one will "win" on a price...

P.s. and this is in local currency, do not include 30% discount CAD to USD

P.s.s. Today CBC post an article about 3M! USD!! paid for...garage in HK, for those ppl Toronto price are peanuts
I haven't seen that but if they reported that it was because it was something extrmely elite and just 1 person in the world bought it

And there are 2 million extremely overpriced low rise properties in GTA
Deal Addict
Feb 29, 2008
4184 posts
504 upvotes
SELL SELL! I TOLD YOU SO SELLLLLL BEFORE IT'S TOO LATE!!!!

Every investor I know is standing pat. I'd say buyers may have a bit more leverage right now and sellers shouldn't be too greedy.
Deal Addict
Jul 3, 2011
3993 posts
1201 upvotes
Thornhill
asa1973 wrote:
May 17th, 2017 9:02 pm
Sales PRIOR to that point ALREADY compensate slowing in May

YTD SALES numbers across TREB: (Jan-Apr)
2016: 34499
2017: 36909

How it will go over the summer...we'll see

the problem with such highly seasonal and discrete data, that "playing" with start/end point you can get quite whatever you want, even +289% inventory increase (with careful cherry-pick you can get even more...)

to compare apple to apple I'd wait for FULL month report. Not going to draw any conclusion on some inter-month made up data by Zolo? from unverifiable sources
I'm not sure what point you're trying to make.

There's this fact - let's use Toronto as the example:

Sales so far this month are down by almost 100
Active listings so far are up 1,157 over the active listings at the end of May 2016

Inventory at the end of May 2016 was 1,535 which replenished the sales between May 1-17 and added an extra 216 in inventory which amounted to adding another 16% of that sales number to inventory.

The sales to active ratio was 1.16:1

Inventory at the end of May 2017 was 2,692 which replenished the May 1-17 sales and added an extra 448 in inventory which amounted to adding another 34% of that sales number to inventory.

That's currently a 2.40:1 ratio.

You'd have to be very optimistic to think that sales in the last 14 days of May would eat up every new listing that comes up plus sell an additional 201 in order to meet that 1.16:1 ratio.

The only way that can happen is with a very large expiry, suspension and termination rate of listings.
Deal Addict
User avatar
Sep 8, 2007
4322 posts
2164 upvotes
Way Out of GTA
licenced wrote:
May 17th, 2017 11:16 pm
I'm not sure what point you're trying to make.

There's this fact - let's use Toronto as the example:

Sales so far this month are down by almost 100
Active listings so far are up 1,157 over the active listings at the end of May 2016

Inventory at the end of May 2016 was 1,535 which replenished the sales between May 1-17 and added an extra 216 in inventory which amounted to adding another 16% of that sales number to inventory.

The sales to active ratio was 1.16:1

Inventory at the end of May 2017 was 2,692 which replenished the May 1-17 sales and added an extra 448 in inventory which amounted to adding another 34% of that sales number to inventory.

That's currently a 2.40:1 ratio.

You'd have to be very optimistic to think that sales in the last 14 days of May would eat up every new listing that comes up plus sell an additional 201 in order to meet that 1.16:1 ratio.

The only way that can happen is with a very large expiry, suspension and termination rate of listings.
Some of us appreciate that you are just giving us the raw data. That it doesn't highlight what the unbridled bulls what to hear.... expect them to be dismissive.

The fact is that the ratio exploded. Expecting prices to hold at previous months highs when bidding wars are failing and buyers have choice (without the multi offer pressure) is a stretch.

Anecdotally just talking to someone who's parents were looking for a place are now thinking maybe wait a bit to see if prices drop. The herd mentality means that those that had to have a house at all costs in Feb/Mar, now if following the herd now wait with everyone else. I encourage those that need a house for a place to live to use the summer blahs to search out a good deal, with reasonable conditions in the offer. Why buy when all the other buyers are acting insane. But this is contrary to the herd which is what people aren't good at doing.
Deal Fanatic
User avatar
Jul 14, 2008
7453 posts
1078 upvotes
Ontario
licenced wrote:
May 17th, 2017 11:16 pm
I'm not sure what point you're trying to make.

There's this fact - let's use Toronto as the example:

Sales so far this month are down by almost 100
Active listings so far are up 1,157 over the active listings at the end of May 2016

Inventory at the end of May 2016 was 1,535 which replenished the sales between May 1-17 and added an extra 216 in inventory which amounted to adding another 16% of that sales number to inventory.

The sales to active ratio was 1.16:1

Inventory at the end of May 2017 was 2,692 which replenished the May 1-17 sales and added an extra 448 in inventory which amounted to adding another 34% of that sales number to inventory.

That's currently a 2.40:1 ratio.

You'd have to be very optimistic to think that sales in the last 14 days of May would eat up every new listing that comes up plus sell an additional 201 in order to meet that 1.16:1 ratio.

The only way that can happen is with a very large expiry, suspension and termination rate of listings.
I have a question, since I am not a RE agent, nor meticulously tracked data in this bull run over the years. Has there been any other months in the current run, even past decade, where similar variances occurred but who's impact was ultimately smoothed out over the following months?

I don't think it's irrational to expect a reaction to the recent measures regardless of whether people think it's going to tank or continue to rise, even at a slower pace.

Thanks
Member
Feb 22, 2011
202 posts
189 upvotes
Toronto
There have been plenty of spikes after new announcements, just as you'd expect. No one is denying there are more listings and fewer sales. The only thing that matters is if this trend persists or not in the coming months. Comparing inventory to last year is a bit misleading because it was a historic low.
Member
Feb 22, 2011
202 posts
189 upvotes
Toronto
licenced wrote:
May 17th, 2017 11:16 pm
Sales so far this month are down by almost 100
Where are you getting this information? From my calculation it is not down. There is a lag in the sales being uploaded, did you check today?
Deal Addict
Jul 3, 2011
3993 posts
1201 upvotes
Thornhill
Yes there were several months in 2007-2008 when this happened.

And I believe you're correct that its the Wynne measures as a whole that's effecting it now. Back in 2007-2008 you might recall there was the talk about Toronto introducing the LTT,
the market became very jittery and lagged. The same happened in 2010 with the talk of the impending HST on new homes and when there was talk of drastic mortgage lending changes.

In this particular instance it seems to be a mild panic sell-off particularly in York region as investors look to unload. A correction because of Wynne's changes was to be expected and how the market proceeds should finally answer the question as to whether foreign buyers and speculators holding empty units is what actually propped up prices or if investor landlords are throwing in the towel. We should know by the time October's numbers are released.

Prices are holding and while it's not possible to say with any degree of certainty until the actual numbers are released f it's because asking prices are closer to market price, it looks like the massive 20-40% gap between list and sales price has closed.

Traditionally sales and prices start to slow mid May. Sales are so far close to last May,.
onlineharvest wrote:
May 18th, 2017 7:36 am
I have a question, since I am not a RE agent, nor meticulously tracked data in this bull run over the years. Has there been any other months in the current run, even past decade, where similar variances occurred but who's impact was ultimately smoothed out over the following months?

I don't think it's irrational to expect a reaction to the recent measures regardless of whether people think it's going to tank or continue to rise, even at a slower pace.

Thanks
Sr. Member
Dec 23, 2010
577 posts
170 upvotes
Ottawa
licenced wrote:
May 18th, 2017 10:41 am
Yes there were several months in 2007-2008 when this happened.

And I believe you're correct that its the Wynne measures as a whole that's effecting it now. Back in 2007-2008 you might recall there was the talk about Toronto introducing the LTT,
the market became very jittery and lagged. The same happened in 2010 with the talk of the impending HST on new homes and when there was talk of drastic mortgage lending changes.

In this particular instance it seems to be a mild panic sell-off particularly in York region as investors look to unload. A correction because of Wynne's changes was to be expected and how the market proceeds should finally answer the question as to whether foreign buyers and speculators holding empty units is what actually propped up prices or if investor landlords are throwing in the towel. We should know by the time October's numbers are released.

Prices are holding and while it's not possible to say with any degree of certainty until the actual numbers are released f it's because asking prices are closer to market price, it looks like the massive 20-40% gap between list and sales price has closed.

Traditionally sales and prices start to slow mid May. Sales are so far close to last May,.
Nobody should be allowed to hold empty real estate without paying for it due to the negative impact on society. We need a vacancy tax now!
Deal Fanatic
Dec 27, 2013
5629 posts
1671 upvotes
Toronto
Applesmack wrote:
May 18th, 2017 8:13 pm
Nobody should be allowed to hold empty real estate without paying for it due to the negative impact on society. We need a vacancy tax now!
i disagree
Deal Addict
Feb 9, 2009
3618 posts
1261 upvotes
Applesmack wrote:
May 18th, 2017 8:13 pm
Nobody should be allowed to hold empty real estate without paying for it due to the negative impact on society. We need a vacancy tax now!
Disagree 100%... if someone pays for a property they should do as they wish as long as the house was paid with legal proceeds(tho hard to track) , this is not communist Cuba. You still have to pay property tax yearly to hold a property , it's not like it's free.

Also it's very hard to monitor this. People can put automotive timers for lights and to control hydro over their smartphone. I feel it would cost more to monitor but let's see how vancouvers program goes.
Sr. Member
Dec 23, 2010
577 posts
170 upvotes
Ottawa
Sanyo wrote:
May 18th, 2017 8:19 pm
Disagree 100%... if someone pays for a property they should do as they wish as long as the house was paid with legal proceeds(tho hard to track) , this is not communist Cuba. You still have to pay property tax yearly to hold a property , it's not like it's free.

Also it's very hard to monitor this. People can put automotive timers for lights and to control hydro over their smartphone. I feel it would cost more to monitor but let's see how vancouvers program goes.
Who is stopping you from doing as you wish? You can leave it empty if you pay the tax. Can't pay the tax? Then don't leave it empty. Taxes are applied on things that are determent to society, such as coal and carbon tax. Vacancy tax would be no different in this logic.

Edit: if you try to evade the tax it is applied per day instead of annually when you are caught. Pretty easy to get caught as well especially if you have a neighbor.
Sr. Member
User avatar
Dec 13, 2016
525 posts
379 upvotes
Applesmack wrote:
May 18th, 2017 8:20 pm
Who is stopping you from doing as you wish? You can leave it empty if you pay the tax. Can't pay the tax? Then don't leave it empty. Taxes are applied on things that are determent to society, such as coal and carbon tax. Vacancy tax would be no different in this logic.

Edit: if you try to evade the tax it is applied per day instead of annually when you are caught. Pretty easy to get caught as well especially if you have a neighbor.
I think there should be a forum tax for every stupid post made on the forum.

Certainly it would also benefit society as a whole.

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