Real Estate

Is this good time to buy real estate in Toronto/GTA?

  • Last Updated:
  • Feb 25th, 2019 3:47 pm
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I think it is a good time to invest. I think this real estate market weakness isn't going to last. This is the buying opportunity, IMO. And I do put my money where my mouth is, as I just bought two pre-cons at around $1,000 a sqf near transit. This is my opinion. Take it or leave it.
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JayLove06 wrote:
Feb 16th, 2019 2:24 pm
This is a really silly and miopic way of looking at things, we need investors. You think investors getting wiped out wouldn’t affect you? It’s just dumb thinking. Investors who INVEST money do not have a right to see a return on that investment? Sorry but that is just not smar thinking.
Investors invest in productive assets such as businesses that follow the law and contribute to society. Unproductive rent-seeking leeches put their money in houses, and are constantly violating the law and complaining about having to follow it. Investors bear risk, and are easily replaced by other investors if their asset prices drop and they exit the market.
Could HAVE, not could OF. What does 'could of' even mean?
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Canadians/Torontonians really need to travel more. All this whining and complaining makes us look really ignorant on a global scale. Look at the world class cities (esp. the Asian ones) like Singapore, Hong Kong, Beijing, Shanghai, NYC, San Francisco etc. You wanted a world class city, you need to take the good with the bad.

People in Asia have gotten used to the fact that high real estate prices are here to stay, and either you get in on it also or be resolved to renting. Real estate has been an investment vehicle since the dawn of time, get over it, even if it means that it separates people from haves and have nots. Welcome to capitalism, which is what built and makes the Western world so great. Is this "fair"? I don't know, but I also don't know what is "fair" since it's a pretty subjective term. Do you also think that Venezuela is more "fair"? Look how that turned out.

And people in NA and the Western world wonder why China/Asian countries are so much more competitive.... Because they don't bitch and whine and act all entitled.
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Sparky9087 wrote:
Feb 16th, 2019 1:58 pm
Sydney prices have fallen 11 percent this past year. UBS is calling for another 5 this year. They aren’t even in a bubble as big as the GTA. We are witnessing the start of a global real estate bubble pop

I’ll be a buyer in 2020/2021. For now my home equity money is sitting in the bank.

Obviously this is my own opinion only. Obviously this is starkly in contrast with the bulls on here. But we need a balanced perspective with both sides. I ran the numbers in my city. Median household income. Calculate take home monthly pay. Calculate mortgage and taxes and today’s prices. The answer is unaffordable homes. There is room to move downside.
Prices could stagnate or decline, but the danger is in believing there is some magic price point at which to enter the market. You say that you'll be a buyer in 2020/2021. Why? What if prices are about the same then as they are today? What if prices have declined by 10% by that time.... will you then decide to wait even longer for it to drop another 30% (this is based on lofty belief that prices in Toronto proper could dip 40%)? It's all arbitrary and playing that game virtually never works. I think the OP is in a great position to buy in 10 months, based on current market trends. But nothing is certain. I don't forsee any immediate reversal in the declining detached market, but I can't predict a cataclysmic drop in prices either. Even if prices were going to drop significantly like they did in the 90s, it could take years. It took 6 years for the last housing bust to hit bottom (and this was after a run-up in prices at a rate far greater than the past few years). Life is too short waiting on the sidelines for a bottom that you're unlikely to nail (i.e. perfectly time) and meanwhile 6 years of equity and home enjoyment has been lost.

If Toronto home prices dropped by 40%, home ownership is only one of the problems residents would be facing. It would mean there is a serious economic implosion.
Last edited by TheSinner on Feb 16th, 2019 2:34 pm, edited 1 time in total.
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Piro21 wrote:
Feb 16th, 2019 2:29 pm
Investors invest in productive assets such as businesses that follow the law and contribute to society. Unproductive rent-seeking leeches put their money in houses, and are constantly violating the law and complaining about having to follow it. Investors bear risk, and are easily replaced by other investors if their asset prices drop and they exit the market.
You do realize that your entire premise is flawed and conflicting right? If housing is not a productive asset (ie. its use is to provide shelter), then why is there a demand for it? Landlords provide shelter in the form of rent to the market. If it's not "contributing to society" or "productive" then there wouldn't be a demand for it, but there is. As a matter of fact, it's providing a basic human need.

Would you also consider restaurants and farmers not contributing to society because they are the ones "hoarding" or "generating food" for the marketplace instead of supplying it at a "reasonable" or "government mandated" price? Do you also believe in socialism and/or communism, and centralized government planning?

Lastly, you do also realize that those "businesses" that you speak of also include REITs and other companies/funds that invest in hard real estate right (ie. Hedge/Mutual Funds/Pension Plans). Do you also think that those companies or funds are not "contributing to society"?
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If by a 40% drop you mean a retreat to 2015, I don't think you're far off. That's entirely possible IMO. But should we be so lucky to see detached prices border on 2015 values again, and if condos eventually follow suit, it would be wise to buy rather than wait for better value.
Last edited by TheSinner on Feb 16th, 2019 2:39 pm, edited 1 time in total.
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CondoMan98 wrote:
Feb 16th, 2019 2:27 pm
I think it is a good time to invest. I think this real estate market weakness isn't going to last. This is the buying opportunity, IMO. And I do put my money where my mouth is, as I just bought two pre-cons at around $1,000 a sqf near transit. This is my opinion. Take it or leave it.
Putting your money where your mouth is would be investing in a detached in the suburbs, since that's what we're talking about here.

Also, anyone that thinks Toronto is a world class city probably thinks the Pan Am games were a world class event Smiling Face With Open Mouth
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rocurs wrote:
Feb 16th, 2019 2:39 pm
Putting your money where your mouth is would be investing in a detached in the suburbs, since that's what we're talking about here.

Also, anyone that thinks Toronto is a world class city probably thinks the Pan-Am games were a world class event Smiling Face With Open Mouth
I don't have the capital to invest in a house in a burbs, but I do own a detached house in North York that is my prime residence. I think purchasing a brand new home from a builder in the suburbs may be stupid if it has a big price tag. But, functional, beaten-down priced houses could be good investments if in good, safe locations. The Golden Horseshoe should do well long-term.
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Piro21 wrote:
Feb 16th, 2019 2:29 pm
Investors invest in productive assets such as businesses that follow the law and contribute to society. Unproductive rent-seeking leeches put their money in houses, and are constantly violating the law and complaining about having to follow it. Investors bear risk, and are easily replaced by other investors if their asset prices drop and they exit the market.
It's two sides of the same coin. Often the only way to get the capital needed to afford real estate in the first place is to operate a business - provide a product or service to society. I ran my business for 5 years before I could buy my first property. Then I continued running it 12 more years while using the profits toward acquiring more properties. Not fun, not easy... the ups and downs of business result in lots of restless nights and anxiety. RE investments are a cake walk by comparison but it's still not a free ride.
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rocurs wrote:
Feb 16th, 2019 2:39 pm
Putting your money where your mouth is would be investing in a detached in the suburbs, since that's what we're talking about here.

Also, anyone that thinks Toronto is a world class city probably thinks the Pan Am games were a world class event Smiling Face With Open Mouth
Toronto isn't a first tier world class city, but probably closer to 2nd or 3rd tier. This is also why Real Estate prices aren't as high as HK/Beijing/NYC which are the tier 1 world class cities. That being said, Toronto is still basically the only financial/jobs hub in Canada which is why over the medium to long term, real estate will still be a good investment as long as you buy and hold and ignore all the noise in between.

Timing the market is a fool's game no matter the asset class (funds/stocks/real estate etc.). It's about time in the market and not timing the market.
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TheSinner wrote:
Feb 16th, 2019 2:31 pm
Prices could stagnate or decline, but the danger is in believing there is some magic price point at which to enter the market. You say that you'll be a buyer in 2020/2021. Why? What if prices are about the same then as they are today? What if prices have declined by 10% by that time.... will you then decide to wait even longer for it to drop another 30% (this is based on lofty belief that prices in Toronto proper could dip 40%)? It's all arbitrary and playing that game virtually never works. I think the OP is in a great position to buy in 10 months, based on current market trends. But nothing is certain. I don't forsee any immediate reversal in the declining detached market, but I can't predict a cataclysmic drop in prices either. Even if prices were going to drop significantly like they did in the 90s, it could take years. It took 6 years for the last housing bust to hit bottom (and this was after a run-up in prices at a rate far greater than the past few years). Life is too short waiting on the sidelines for a bottom that you're unlikely to nail (i.e. perfectly time) and meanwhile 6 years of equity and home enjoyment has been lost.

If Toronto home prices dropped by 40%, home ownership is only one of the problems residents would be facing. It would mean there is a serious economic implosion.
If in 3 years time prices have declined 10% and are stagnant AND the current red flags are gone, I will be a buyer. As of right now there are too many red flags signally acoming recession. Keep in mind recessions still affect home prices. Lost jobs will mean mortgage and tenant defaults. People will move in with their parents and the over supply will push prices down.

Keep in mind too as we move forward more and more boomers will be retiring and downsizing followed by a smaller generation. Detached houses will not be a good investment I don’t think at all.

Chinese capital controls will stifle foreign investment. It’s not 2017. The landscape looks different.
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You're going to suffer from "analysis paralysis" in three years time because there will never be a perfect time to buy. There will always be looming 'red flags' of one sort or another.

Boomers aren't downsizing to any great degree. The overwhelming majority are going to die in their detached homes. In the city, detached houses will retain their premium status. Population growth virtually ensures this.

When recessions hit, you still need to live somewhere... either paying a mortgage or renting. Still better to own... put a tenant in your basement, and get a roommate to help get thru tough times. Get a wife to pay half the remaining bills.
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Oct 16, 2010
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TheSinner wrote:
Feb 16th, 2019 3:55 pm
When recessions hit, you still need to live somewhere... either paying a mortgage or renting. Still better to own... put a tenant in your basement, and get a roommate to help get thru tough times. Get a wife to pay half the remaining bills.
This is the fundamental issue here. There is an implicit undercurrent in some of the posts in this thread that the economy will continue to hum along as well as it has for the next 10+ years without any significant pullback or recession.

No one can predict when it will hit or how large the magnitude will be. But there are a lot of red-flags, much more so than any contraction in past cycles. An alarming portion of our GDP is now tied to the housing market. Corporate and household balance sheets are levered to the hilt. When the crisis hits, the BoC doesn't have enough bullets in the chamber to reign it in sufficiently.
Last edited by attire on Feb 16th, 2019 5:01 pm, edited 1 time in total.
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attire wrote:
Feb 16th, 2019 4:18 pm
This is the fundamental issue here. There is an implicit undercurrent in some of the posts in this thread that the economy will continue to hum along as well as it has for the next 10+ years without any significant pullback or recession.

No one can predict when it will hit or how large the magnitude will be. But there are a lot of red-flags, much more so than any contraction in the cycle. An alarming portion of our GDP is now tied to housing market. Corporate and household balance sheets are levered to the hilt. When the crisis hits, the BoC doesn't have enough bullets in the chamber to reign it in sufficiently.
What make you think our politicians won't bring back the investor PR program when recession hit? Sell our PR status for $ is a easy way out.
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attire wrote:
Feb 16th, 2019 4:18 pm
This is the fundamental issue here. There is an implicit undercurrent in some of the posts in this thread that the economy will continue to hum along as well as it has for the next 10+ years without any significant pullback or recession.

No one can predict when it will hit or how large the magnitude will be. But there are a lot of red-flags, much more so than any contraction in the cycle. An alarming portion of our GDP is now tied to housing market. Corporate and household balance sheets are levered to the hilt. When the crisis hits, the BoC doesn't have enough bullets in the chamber to reign it in sufficiently.
I think it will be very bad. The bank of Canada lowered rates from 4%(where they should be) to 0 to deal with the recession. This cheap money has increased the amount of debt Canadians could bear. Then we went and borrowed. Every central bank did this. Inflated a massive real estate bubble. Now they can’t raise rates for fear of collapsing these housing bubbles. So they let the bubbles keep expanding. Now we are barreling into another recession. This time the bank of Canada has very little they can do to help so this next recession is going to be very bad. Likely will be brought on by all the corporate debt. That will mean corporate bankruptcies. High unemployment and a collapsing housing market.

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