Real Estate

Locked: Coronavirus impact on Real Estate

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  • Oct 31st, 2020 11:26 pm
Deal Addict
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Nov 5, 2018
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JayLove06 wrote:
It's really simple. There simply aren't enough houses to house people. Immigrants may be coming here for hosues, but that doesn't mean that's what they will get. Condos are the entry point into the market. People for the most part don't just enter the market buying a $1.5M detach. Universities will start, travel and hospitality will pick up, etc. These people need accomodation. Clubs will start again, sports, etc. The world is not ending.

Urban living will not go away. Maybe condos change a bit but they will still be built in the future and will be sell better than houses. If houses were around the same price of condos, sure...but houses are far higher than condos and many will never be able to afford them. Ever. Many won't even be able to afford to buy condos. The rental market will pick up. We will have travellers, club goesrs, events, master planned communities will go on and planned.

Canadians can complain all they want about immigration. It's happening and it needs to happen. Until Canadians can get off their asses and have more children, we will need immigrants.
I had this same argument with someone the other day. I was saying that the immigration plans should help the housing market, especially condos. And the person I was speaking with replied, “They will want houses. No one wants condos.” And I responded you act like they have a choice.

People talk as if there is unlimited SFH. There are not. There are actually very few in comparison with our apartment and condo supply. And even the multi-family units won’t be enough to satisfy demand.

And I agree as well with the birth rate issue. As long as our birth rate remains low, say HELLO to more immigrants. Will our culture change because of it? I think so. When we add so many new people from so many different backgrounds they will bring their culture, foods, etc. with them. And it enriches the country and makes Canada special. Canada is an immigration country so that will happen.
Called the bottom.
Member
Nov 12, 2019
345 posts
551 upvotes
JayLove06 wrote: It's really simple. There simply aren't enough houses to house people. Immigrants may be coming here for hosues, but that doesn't mean that's what they will get. Condos are the entry point into the market. People for the most part don't just enter the market buying a $1.5M detach. Universities will start, travel and hospitality will pick up, etc. These people need accomodation. Clubs will start again, sports, etc. The world is not ending.

Urban living will not go away. Maybe condos change a bit but they will still be built in the future and will be sell better than houses. If houses were around the same price of condos, sure...but houses are far higher than condos and many will never be able to afford them. Ever. Many won't even be able to afford to buy condos. The rental market will pick up. We will have travellers, club goesrs, events, master planned communities will go on and planned.

Canadians can complain all they want about immigration. It's happening and it needs to happen. Until Canadians can get off their asses and have more children, we will need immigrants.
I agree with you that it's likely that many parts of life will get back to normal after the pandemic. However, there are risks to that hypothesis as I laid out before.

What I was arguing about is whether downtown condos are a good investments at the current price with the the currently known risks (WFH, people's general behavioral changes, etc). All of what you said can be true, but prices may still fall because it was priced to perfection and so far had only dropped slightly in price.
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Feb 29, 2008
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Tarrana & The Ri…
CondoMan98 wrote: My definition of “cheap” is a lot lower than it is now. 20% lower than the top. For end users, it doesn’t really matter. Around here may be good...for all we know this is the bottom. But for me as an investor, to assume the going rate price as my cost basis would make no sense. With current rents, I would be paying out a lot each month for the property.

Admittedly, I am only looking at nicer buildings in the entertainment district, Bay Street Corridor, and Yorkville. I am already heavily invested in precons so for me to jump in, things have to REALLY fall.
OK. I consider deals and cheap to mean 2 different things though. I took a look at current rents today of my properties. I must say I was once in the cheap rent category and in some my rent is about $50-$100 more than the going rate. There are some amazing deals for rentals, especially 2 bedrooms. This is the Super Bowl for renters. This is the time to get that cheap rent and lock in. Spoke to an investor today who was given notice. He's not interested in the low rents and will likely just sit on the property for a year. Will try to rent it out but if he doesn't get his price he'll leave it empty.

Still trying to figure out how many are renting/selling at the same time and how many are renting cheap because they just won't sell at this time. I won't say resale prices are cheap, but there are for sure some deals for end users for sure.

But here's the wild part. We're seeing unprecedented price drops in rentals and some condos and the people who needed this the most likely don't have jobs or job security to take advantage of the deals. Such is life.
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Feb 29, 2008
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Tarrana & The Ri…
RaC1550 wrote: I agree with you that it's likely that many parts of life will get back to normal after the pandemic. However, there are risks to that hypothesis as I laid out before.

What I was arguing about is whether downtown condos are a good investments at the current price with the the currently known risks (WFH, people's general behavioral changes, etc). All of what you said can be true, but prices may still fall because it was priced to perfection and so far had only dropped slightly in price.
investment as primary or as a rental property? It really depends on many factors. You don't like the risk, then you can wait till risk subsides and everyone's buying and you pay more. Some are willing to take the risk on either side. I have no desire to buy anything right now and it has nothing to do with COVID. I had abandoned buying in Toronto or even Ontario for investment pre-COVID. I'm interested outside of the province. I just can't deal with how landlords are treated here.
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Oct 27, 2012
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JayLove06 wrote: Dude it is absolutely ridiculous. I have not heard about any of this nonsense from the people I have spoken to. It is trumped up talk I hear in the media and online. Are people moving to the burbs temporarily? Sure. I get that. But this mass exodus to the burbs for good is some of the most nonsensical stuff I've heard in a while. And frankly what are people going to the burbs for? To lock themselves in their home? There's more to life than living in a big home. You need to actually do things. And while some will be happy sitting at home doing nothing, others want to do more with their lives.

I'm moving to the burbs so I'm not biased here, but I'd move back downtown in a heartbeat.....
Yup. It sounded nice in theory and I moved back to my parents' new place in Oakville for a few weeks during the summer just to test it out. That got boring real quick. Work during the day, go for a run/bike around the area and that was pretty much it. No point getting in the car to go to the gym, get something to eat or a coffee and change things up. No going to a patio for a drink as I'm not drinking and driving. And the list goes on. Nice in theory to have all that additional space, but I just found it incredibly dry as a single young guy that I'd happily give up all that space for downtown living.

And it's also easy to forget that not everyone wants to have the hassle of maintaining a house. Not only are they already in a price bracket that is near unaffordable for many of the professional couples making 200K+ household incomes that are in my social circle, but they also come with tons of other upkeep and maintenance requirements, the last thing some of us need. Many of us are perfectly content with living in a condo for the next 5-10 years.

And I get it's not a binary choice. Maybe we won't be back to 100% + growth like before. But it's also possible we will. People are dying to get back to normal and there's pent-up demand for stuff we used to be able to do.

That's to say that even though I've been a RE bear, I'm comfortable enough with buying in the current environment. There are deals to be had - the asking price is the asking price, but there have been some pretty desperate sellers too from my actual experience. It's nice to actually have the negotiating power again and to have plenty of inventory to choose from. I might not be buying at the bottom, but my plan is to stay for at least 5-10 years. Holding on to fiat currency is not an appealing alternative to me right now.
Last edited by ozzie16 on Oct 31st, 2020 9:11 pm, edited 1 time in total.
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Nov 12, 2019
345 posts
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JayLove06 wrote: investment as primary or as a rental property? It really depends on many factors. You don't like the risk, then you can wait till risk subsides and everyone's buying and you pay more. Some are willing to take the risk on either side. I have no desire to buy anything right now and it has nothing to do with COVID. I had abandoned buying in Toronto or even Ontario for investment pre-COVID. I'm interested outside of the province. I just can't deal with how landlords are treated here.
I was assuming that discussion is about buying as an investment. If you are buying for personal use and not looking at it from a cash flow or capital appreciation perspective, then the considerations are very different and much more personal.
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Nov 12, 2019
345 posts
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ozzie16 wrote: Yup. It sounded nice in theory and I moved back to my parents' new place in Oakville for a few weeks during the summer just to test it out. That got boring real quick. Work during the day, go for a run/bike around the area and that was pretty much it. No point getting in the car to go to the gym, get something to eat or a coffee and change things up. No going to a patio for a drink as I'm not drinking and driving. And the list goes on. Nice in theory to have all that additional space, but I just found it incredibly dry as a single young guy that I'd happily give up all that space for downtown living.

And it's also easy to forget that not everyone wants to have the hassle of maintaining a house. Not only are they already in a price bracket that is near unaffordable for many of the professional couples making 200K+ household incomes that are in my social circle, but they also come with tons of other upkeep and maintenance requirements, the last thing some of us need. Many of us are perfectly content with living in a condo for the next 5-10 years.

And I get it's not a binary choice Maybe we won't be back to 100% + growth like before. But it's also possible we will. People are dying to get back to normal and there's pent-up demand for stuff we used to be able to do.

That's to say that even though I've been a RE bear, I'm comfortable enough with buying in the current environment. There are deals to be had - the asking price is the asking price, but there have been some pretty desperate sellers too from my actual experience. It's nice to actually have the negotiating power again and to have plenty of inventory to choose from. I might not be buying at the bottom, but my plan is to stay for at least 5-10 years. Holding on to fiat currency is not an appealing alternative to me right now.
Be careful about assuming that your anecdotal experience will be representative of the entire population of people living in downtown. Perhaps it is representative of younger folks like yourself. However, from talking to a few real estate agents in smaller cities surrounding the GTA, there is a lot of demand from people living in the downtown core, typically with family looking to move into a house. According to the agents (probably biased) that these families couldn't believe how much it is better outside of the city.

So again, the reality is probably somewhere in the middle. Some will be like yourself, can't wait to go back; others, like the families will be glad to wfh from house in a smaller city.
Sr. Member
Aug 13, 2020
779 posts
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JayLove06 wrote: Dude it is absolutely ridiculous. I have not heard about any of this nonsense from the people I have spoken to. It is trumped up talk I hear in the media and online. Are people moving to the burbs temporarily? Sure. I get that. But this mass exodus to the burbs for good is some of the most nonsensical stuff I've heard in a while. And frankly what are people going to the burbs for? To lock themselves in their home? There's more to life than living in a big home. You need to actually do things. And while some will be happy sitting at home doing nothing, others want to do more with their lives.

I'm moving to the burbs so I'm not biased here, but I'd move back downtown in a heartbeat.....
Imagine when we were students and starting College - if you had an option to complete an year staying at home with parents vs going to campus/staying in a condo or other accommodation - which one will you choose. Universities would have suffered losses this year and will mostly increase intake from next year.
Sports/events etc need to catch up - a lot of these will happen.
Wfh will be more acceptable for sure but that will not alter the desire to be near happening places.
In times of fear there is opportunity. Over the very long term, with work being done from anywhere - the set up of cities/town/villages can be reimagined. But believing that will happen in a year or two is crazy.
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Oct 27, 2012
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Toronto
RaC1550 wrote: Be careful about assuming that your anecdotal experience will be representative of the entire population of people living in downtown. Perhaps it is representative of younger folks like yourself. However, from talking to a few real estate agents in smaller cities surrounding the GTA, there is a lot of demand from people living in the downtown core, typically with family looking to move into a house. According to the agents (probably biased) that these families couldn't believe how much it is better outside of the city.

So again, the reality is probably somewhere in the middle. Some will be like yourself, can't wait to go back; others, like the families will be glad to wfh from house in a smaller city.
We'll see how it pans out moving forward. There definitely has been much talk amongst people I know of moving to a home, but no one is actually going ahead with it because either it's a) too expensive; or b) affordable, but too far out.

Aside from a few exceptions, I am not betting that many employers will move to a permanent WFH model, and if they did, that's likely bad news for many jobs too. At least in our office reopening plan, we are mandated to WFH, but once there's a vaccine, it's contemplated we will return to a blended office/WFH model, while other practice groups (e.g. litigation) would return to the office mostly full-time. Again, more anecdotes, but many of us are looking forward to returning to the office.
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Aug 13, 2020
779 posts
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RaC1550 wrote: Be careful about assuming that your anecdotal experience will be representative of the entire population of people living in downtown. Perhaps it is representative of younger folks like yourself. However, from talking to a few real estate agents in smaller cities surrounding the GTA, there is a lot of demand from people living in the downtown core, typically with family looking to move into a house. According to the agents (probably biased) that these families couldn't believe how much it is better outside of the city.

So again, the reality is probably somewhere in the middle. Some will be like yourself, can't wait to go back; others, like the families will be glad to wfh from house in a smaller city.
Cities were always for the young and their choice will not change. For others it depends, some people like to live in happening places, some like quite places. Some stay because of transit and other factors. Cities are not very happening now but that is clearly short term. Transit may be a longer term trend with wfh. Will be interesting to see how it goes.
Most people go by what they hear people telling them -we moved far from city and life is great. Tomorrow they will hear - so many cool events happening downtown, transit sucks. Decisions and trends change quickly in these times.
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CondoMan98 wrote: Just tons of racist white people bellowing, “WhErE mY cOuNtRy GoNe!?!?”
and with that this thread has run its course
Be kind and civil with one another

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