Vancouver and Toronto condo markets to face 15% decline?

[mockingjay404]

I would never invest in Metro Toronto Real Estate now if I were an investor (not flipping, but speculating). There's a glut of condos coming on the market, and I'm not convinced there's a market for them all. Houses are FAR FAR FAR too expensive in the core and difficult to predict if it will appreciate. I would be looking to Oakville or Burlington (or even Milton) as stable ground for investments.

if it's a house (as opposed to a condo) and you're actually gonna live there 20-25 years... i can't see how you would possibly go wrong

with everything that's happening in the world today, it's pretty clear Canada (and by extension, T.O.) is the place to be for the next 20-30+ years.

[danfromwaterloo]

Europe going bankrupt would mean China returning to circa 1975 living standards. Pray for it not happening, buddy.

Europe going bankrupt would decimate the globe. Nobody would escape. It would be like opening a black hole - everything would get sucked in and we'd see a depression the likes of which the globe has never ever seen. 2008 was essentially caused by the collapse of the US economy. The Eurozone has a higher GDP than the US. It going bankrupt would be beyond catastrophic. It would result in an economic end-of-days.

[cheapgeek]

And who are the families buying these homes? In case you haven't noticed, wages have been stagnating for 4 years now. Who is the guy making all this money that is driving up house/condo prices?

Just regular people young singles and young families and foreign investors. They keep selling condos over night so there are plenty of people who can afford these places. In my opinion thy are doing the smart thing why rent when you can own.
Someone in the thread mentioned Europe going bust. I agree we will get a wave of immigrants from Europe and increase prices further.

[danfromwaterloo]

if it's a house (as opposed to a condo) and you're actually gonna live there 20-25 years... i can't see how you would possibly go wrong

with everything that's happening in the world today, it's pretty clear Canada (and by extension, T.O.) is the place to be for the next 20-30+ years.

Sorry, I meant as an "investor". I don't consider my home an investment, even though it acts precisely like one. I consider it my home. I mean those people who buy houses on the thought that it will go up in value while they rent it out. An "investment" property.

[BananaHunter]

I'm one of those people that don't believe in a major crash. I think the market will be stagnant for the next decade. Prices will rise but at a very slow rate.

Wages have little to do with housing prices. People have to save money to buy a house. Housing is a necessity unlike other goods. They can eat out less/buy less iphones if their wages stagnant but they still have to live somewhere. There's also no law saying housing prices must be pegged to average salaries for the same reason gas prices aren't pegged to salaries. People WANT low prices but that desire doesn't translate into reality. To further weaken the wage argument, I'd add that there are people making $40k a year that can buy real estate by being thrifty. If you're earning $70k and your salary is stagnant, I don't see how this affects your ability to buy a house. You'd just have to set aside more money in savings. Right now Canadians are spending far too much on non-necessities. Furthermore, Canada is still an immigrant country. Indeed many buyers are foreigners. Real estate prices is more tied to immigration policies than wages for sure. I don't deny wages have an effect on real estate market. I'm saying the impact is insignificant and certainly not a major factor if the market does indeed crash.

If it crashes, it's due to economics 101: Supply and demand. Demand is a function of population, not wage.

With the uncertain economic climate, I don't see the government raising interest rates anytime soon.

There's a thread in the finance section about this topic. You can see certain people have been claiming for a crash for several years now. Nope, it hasn't happened but they can't be proved wrong because there's always tomorrow. The real question is not IF, but WHEN. Markets crash. It doesn't take any skill to say it'll crash at some point. It'll take a lot of skill (and luck) to correctly say when it'll crash.

[NorthYorker]

Housing is a necessity unlike other goods.

Shelter is a necessity, not housing. And one does not have to travel farther than Brampton to see that an average Canadian suburban house can shelter 30 people

2008 was essentially caused by the collapse of the US economy.

I would not call 2008 "a collapse". Just bad hiccup. American bankrupcy would have been much more catastrophic...

[Buggy166]

Housing is a necessity unlike other goods.

but ownership is not.

[Buggy166]

i think you are confusing a RE "crash" with the crash that you had on the 401 with a black TSX.

what?

[Buggy166]

http://www.globalpropertyguide.com/N.../Price-History
Says prices went up in 2009

http://www.cmhc-schl.gc.ca/en/corp/n...a/jufa_026.cfm
says prices increased from 2009-2011


did you mean 2008?

spring/summer 09 prices were on the back end of a 10-15% dip. end of 09 prices were going up so yes the articles are correct. the dip started at the end of 08.

[rems]

spring/summer 09 prices were on the back end of a 10-15% dip. end of 09 prices were going up so yes the articles are correct. the dip started at the end of 08.

The CMHC article does not coincide with what you're saying. They say the decrease was until the 4th quarter of 2008. If it continued until spring 09, it would have included Q1 2009 in that period od decrease.

[Kohanz]

why rent when you can own.

Whenever someone utters this horrible oversimplification, I cringe. It's on par with "renting is like throwing away your money". Saying something like this reveals that you don't understand the financial tradeoff of renting vs. owning at all.

[gizmo8]

Whenever someone utters this horrible oversimplification, I cringe. It's on par with "renting is like throwing away your money". Saying something like this reveals that you don't understand the financial tradeoff of renting vs. owning at all.

bro if you keep on telling yourself that you really missed a window of investment the last 5 years where house prices has gone up almost %25....if your renting what kind of returns are you getting?...

[DearSummer]

bro if you keep on telling yourself that you really missed a window of investment the last 5 years where house prices has gone up almost %25....if your renting what kind of returns are you getting?...

Way to prove Kohanz's point...

[stuntman]

bro if you keep on telling yourself that you really missed a window of investment the last 5 years where house prices has gone up almost %25....if your renting what kind of returns are you getting?...

non-financial:
Time: by renting he is unburdened by all the BS that goes with owning a place.
Freedom: it is pretty easy to move if you are renting

Financial:
Risk: no financial gain but no financial risk either. There is always the possibility of losing money.
liquid capital: The money can be used for other lifestyle things. Travel, maybe working less, other lifestyle choices.
saving money: maybe they are getting a good deal on rent and financially it might be a better choice than renting even if they just put their money in the bank or some other investment.
costs of home maintenance: it costs.

Like they said...

[cyder]

anyone have any idea if td studied any other markets? I googled but cant seem to find the original report

nm i found it, it only talks about van/to
http://www.td.com/document/PDF/econo...ng_markets.pdf