Real Estate

Locked: When will we know that TO/GTA real estate has bottomed?

  • Last Updated:
  • Mar 16th, 2018 10:50 am
Deal Fanatic
May 31, 2007
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rjg4235 wrote:
Jan 12th, 2018 1:50 pm
I never said you should buy it though. I said it's hard to imagine the prices would plummet given the rent they get. What do you think is going to happen rent drops? Or do you think you will be able to buy one of these places for $350k and rent it for $2500?

Also $550k with $100k down (which is actually impossible because you need 20% minimum but whatever) and a 30 year mortgage is like $1800 a month mortgage. How you get to it being $1000 negative is magical.
Condo prices are dropping. Something is going on because 416 average is down to 519k , remember it peeked at 578k in april.

The rent cheque + expenses won't make up for that and clearly high rent is not helping enough to keep average price from falling.
Deal Addict
Feb 22, 2011
3761 posts
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Toronto
Jungle wrote:
Jan 12th, 2018 2:37 pm
Condo prices are dropping. Something is going on because 416 average is down to 519k , remember it peeked at 578k in april.

The rent cheque + expenses won't make up for that and clearly high rent is not helping enough to keep average price from falling.
You might be right, I don't really care what the average price is though, it's not like I own an ETF of all condos in Toronto. When I look at specific buildings they are all up, I can't really find any examples that are down. Average changing can be a bunch of things. Maybe those $2m ones aren't selling anymore.

Here's an example that I am familiar with. 1 bedroom in March was $430k;
https://www.mongohouse.com/soldrecords/ ... 238458cb5e

Identical unit, 1 floor lower went for $470k, it's actually 9% higher than a nicer unit sold at "peak";
https://www.mongohouse.com/soldrecords/ ... 9c6391b5f7

Here is another place I am familiar with, hard to find comparable because there are many different types of units but here are two identical side by side ones;

$370k in March;
https://www.mongohouse.com/soldrecords/ ... 1fe8f1f428

$400k in November;
https://www.mongohouse.com/soldrecords/ ... 562fd212fd
Last edited by rjg4235 on Jan 12th, 2018 2:40 pm, edited 2 times in total.
Deal Fanatic
May 31, 2007
5000 posts
2105 upvotes
rjg4235 wrote:
Jan 12th, 2018 2:40 pm
You might be right, I don't really care what the average price is though, it's not like I own an ETF of all condos in Toronto. When I look at specific buildings they are all up, I can't really find any examples that are down. Average changing can be a bunch of things. Maybe those $2m ones aren't selling anymore.
Yeah it will be interesting to see what happens, I m fully expecting a wash out for condos because I believe they became entry level of re market ( due to detach being so high in price) so first time buyer/ amateur /investor capped the most with ofsi and interest rates going up so fast.

Then dilution of more buildings, thousands of new units expected, even Brad Lamb trying to use fear to sell. Developers trying to catch high tide before it goes.
Deal Fanatic
May 31, 2007
5000 posts
2105 upvotes
rjg4235 wrote:
Jan 12th, 2018 2:40 pm
You might be right, I don't really care what the average price is though, it's not like I own an ETF of all condos in Toronto. When I look at specific buildings they are all up, I can't really find any examples that are down. Average changing can be a bunch of things. Maybe those $2m ones aren't selling anymore.

Here's an example that I am familiar with. 1 bedroom in March was $430k;
https://www.mongohouse.com/soldrecords/ ... 238458cb5e

Identical unit, 1 floor lower went for $470k, it's actually 9% higher than a nicer unit sold at "peak";
https://www.mongohouse.com/soldrecords/ ... 9c6391b5f7

Here is another place I am familiar with, hard to find comparable because there are many different types of units but here are two identical side by side ones;

$370k in March;
https://www.mongohouse.com/soldrecords/ ... 1fe8f1f428

$400k in November;
https://www.mongohouse.com/soldrecords/ ... 562fd212fd
Interesting the first one has property tax of $2229 vs $1984 for the second.

The second ones are more like townhouse / semi which we know have been strong while detach declines.
Deal Addict
Feb 22, 2011
3761 posts
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Toronto
Jungle wrote:
Jan 12th, 2018 3:55 pm
Interesting the first one has property tax of $2229 vs $1984 for the second.

The second ones are more like townhouse / semi which we know have been strong while detach declines.
I am 100% sure the second one with the property tax at $1984 is wrong. These people post it as an older rate and then play dumb when it closes.
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Jun 26, 2005
8073 posts
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Toronto
rjg4235 wrote:
Jan 12th, 2018 2:40 pm
You might be right, I don't really care what the average price is though, it's not like I own an ETF of all condos in Toronto. When I look at specific buildings they are all up, I can't really find any examples that are down. Average changing can be a bunch of things. Maybe those $2m ones aren't selling anymore.

Here's an example that I am familiar with. 1 bedroom in March was $430k;
https://www.mongohouse.com/soldrecords/ ... 238458cb5e

Identical unit, 1 floor lower went for $470k, it's actually 9% higher than a nicer unit sold at "peak";
https://www.mongohouse.com/soldrecords/ ... 9c6391b5f7

Here is another place I am familiar with, hard to find comparable because there are many different types of units but here are two identical side by side ones;

$370k in March;
https://www.mongohouse.com/soldrecords/ ... 1fe8f1f428

$400k in November;
https://www.mongohouse.com/soldrecords/ ... 562fd212fd
Well said. No one (except the govern) should care about an average price.

From my real estate friend, condo prices are going up and bidding wars are here for them. its logical, detached houses are all over $1 mill, townhouses are close to $1 mill, who the heck has that much money?

So next they go down to condos. There are a LOT more middle income families vs. high income. So the demand for "affordable" housing is much much higher.

10 yrs ago, I bought my 2 bedroom condo for $245,000. That's TWO bedroom in North York. Market price now is $500,000 or more.

To the OPs question, it has already bottomed and is going back up now.

It all depends on the type (detached, townhouse, condo) and location. Any good location prices never really dropped much because its location.

If you are looking at condos, its even worse now because the prices went up so much during last year, it pushed people to buy condos (as I mentioned above).

I was looking at a Yonge & downtown condo, 1 bedroom, was listed for $650,000. Give it a few years, its gonna be over 1 million. Unbelieveable
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Feb 22, 2011
3761 posts
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rfdrfd wrote:
Jan 12th, 2018 4:07 pm
Well said. No one (except the govern) should care about an average price.

From my real estate friend, condo prices are going up and bidding wars are here for them. its logical, detached houses are all over $1 mill, townhouses are close to $1 mill, who the heck has that much money?

So next they go down to condos. There are a LOT more middle income families vs. high income. So the demand for "affordable" housing is much much higher.

10 yrs ago, I bought my 2 bedroom condo for $245,000. That's TWO bedroom in North York. Market price now is $500,000 or more.

To the OPs question, it has already bottomed and is going back up now.

It all depends on the type (detached, townhouse, condo) and location. Any good location prices never really dropped much because its location.

If you are looking at condos, its even worse now because the prices went up so much during last year, it pushed people to buy condos (as I mentioned above).

I was looking at a Yonge & downtown condo, 1 bedroom, was listed for $650,000. Give it a few years, its gonna be over 1 million. Unbelieveable
I can't find the figures right now I will look later but there is a realtor with an MBA CPA who posts great stats. One that is very relevant right now is the difference in price between condos and detached. Historically they were much closer in price, it is only the last few years that it really started to separate. This is a big part of the reason why I am not worried about the condo market. I can see the more expensive property types stagnating while condos catch up. People aren't going to give up and resign to renting just because they qualify for less now. Maybe those looking for a semi settle for a condo town, those looking for a condo town settle for a condo.
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Jun 26, 2005
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Jungle wrote:
Jan 12th, 2018 2:47 pm
Yeah it will be interesting to see what happens, I m fully expecting a wash out for condos because I believe they became entry level of re market ( due to detach being so high in price) so first time buyer/ amateur /investor capped the most with ofsi and interest rates going up so fast.

Then dilution of more buildings, thousands of new units expected, even Brad Lamb trying to use fear to sell. Developers trying to catch high tide before it goes.
Don't believe the "dilution" factor in Toronto. 10 years ago when I bought my condo at North York, 10+ other condos were being built. Everyone was telling me I spent too much and prices will drop, too much supply.

They were dead wrong. There isn't enough supply, and especially people can't afford townhouses or detached houses now, MORE demand will be for condos.
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Jun 26, 2005
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Agreed. Because Toronto is an excellent location, just like Vancouver, any type of property will rise in value. The only difference is the speed (rate) of rising:

Detached: rocket ship
Townhouse: Car
Condo: Boat

Depending on your current financial situation, will dictate which vehicle you can climb aboard.

My friend living in a small house in Scarborough said their neighbour last year sold for $980,000. Who would have believed Scarborough could sell for 1 million??
rjg4235 wrote:
Jan 12th, 2018 4:09 pm
I can't find the figures right now I will look later but there is a realtor with an MBA CPA who posts great stats. One that is very relevant right now is the difference in price between condos and detached. Historically they were much closer in price, it is only the last few years that it really started to separate. This is a big part of the reason why I am not worried about the condo market. I can see the more expensive property types stagnating while condos catch up. People aren't going to give up and resign to renting just because they qualify for less now. Maybe those looking for a semi settle for a condo town, those looking for a condo town settle for a condo.
Deal Addict
Feb 22, 2011
3761 posts
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Toronto
rfdrfd wrote:
Jan 12th, 2018 4:11 pm
Don't believe the "dilution" factor in Toronto. 10 years ago when I bought my condo at North York, 10+ other condos were being built. Everyone was telling me I spent too much and prices will drop, too much supply.

They were dead wrong. There isn't enough supply, and especially people can't afford townhouses or detached houses now, MORE demand will be for condos.
Don't even try to help these people, they are beyond it.

They fall for the same story every single year, for the last 20 years.

Here is a nice article from 5 years ago saying do not buy a condo, it's about to crash. Prices are up 50% since;

"3) There is an unprecedented supply of new condos in the pipeline, with a record number of units set to complete in 2013"
https://www.theglobeandmail.com/globe-i ... le8440509/
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Dec 17, 2009
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rjg4235 wrote:
Jan 12th, 2018 2:40 pm
You might be right, I don't really care what the average price is though, it's not like I own an ETF of all condos in Toronto. When I look at specific buildings they are all up, I can't really find any examples that are down. Average changing can be a bunch of things. Maybe those $2m ones aren't selling anymore.
I don't know why but that made me chuckle.
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rjg4235 wrote:
Jan 12th, 2018 4:17 pm
Don't even try to help these people, they are beyond it.

They fall for the same story every single year, for the last 20 years.

Here is a nice article from 5 years ago saying do not buy a condo, it's about to crash. Prices are up 50% since;

"3) There is an unprecedented supply of new condos in the pipeline, with a record number of units set to complete in 2013"
https://www.theglobeandmail.com/globe-i ... le8440509/
True. Excellent article find. I'm gonna pdf that one!

My realtor is 57 yrs old(?) And he said he's read sooo many bank or experts in the past many years saying housing markets are heading for a big crash , bubble here and there. None of them have come true. While prices has quadtripled and more. So even if there's a crash, prices will still be unaffordable for the average Canadian.

He says the same thing. Can't help his clients that keep saying it's too expensive, let me wait and see. He has clients like that and have been renting for 5 years now still waiting. That client is simply paying for someone's mortgage.
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Jun 19, 2017
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rfdrfd wrote:
Jan 13th, 2018 7:26 pm
True. Excellent article find. I'm gonna pdf that one!

My realtor is 57 yrs old(?) And he said he's read sooo many bank or experts in the past many years saying housing markets are heading for a big crash , bubble here and there. None of them have come true. While prices has quadtripled and more. So even if there's a crash, prices will still be unaffordable for the average Canadian.

He says the same thing. Can't help his clients that keep saying it's too expensive, let me wait and see. He has clients like that and have been renting for 5 years now still waiting. That client is simply paying for someone's mortgage.
For many years now we've seen easy credit and declining interest rates coupled with a good economy. Those have been the most significant price drivers in the recent past. So now rather than extrapolating the past into the future, how would the RE market handle rising rates, or a recession. What's the downside?

Deploying new capital into real estate doesn't look very attractive to me at this moment...particularly given the amount of leverage required at this point in the cycle.
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May 2, 2017
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Gov't :Never
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Oct 21, 2014
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Qrewpt wrote:
Jan 13th, 2018 11:15 pm
Deploying new capital into real estate doesn't look very attractive to me at this moment...particularly given the amount of leverage required at this point in the cycle.
I remember that same argument said right to her face when my Mom spent $79,000 on a townhome in Oakville in the 90s. She made it work, and she still loves living there to this day.

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