Real Estate

Predictions for Fall market

  • Last Updated:
  • Sep 21st, 2020 9:14 am
Member
Aug 22, 2016
352 posts
198 upvotes
callmebob wrote: Given we had a very busy summer (pent up demand, April/May/June shifted to June/July/August), what is the prediction for the Fall season (Sep-Nov)? Similar YoY growth in sales volume, price increases or some softness as people begin returning to work?

Single family homes in the suburbs (GTA- Oakville, Milton, Whitby) have seen very strong demand and high sale/list price ratios, curious to hear if the conventional wisdom is these levels will be maintained or pull back going into the fall season. My view is we continue to see elevated demand and prices with some seasonal adjustment compared to the summer months.

* I don’t think CERB or deferrals ending will have a direct impact on home prices in the suburbs but perhaps the news surrounding this influences overall sentiment over the next few weeks/months to soften demand/prices.
I like the idea of both CERB and deferrals continue for ever.
Deal Addict
Dec 20, 2018
3622 posts
2885 upvotes
Jimmykirky wrote: Maintenance fees will vary but will likely be in the $300-$400 range

Taxes will be low. Not sure how you came up with $380. I see you don’t own property in toronto though so it makes sense.
$380 a month is $4560 per year. No condo in Toronto pays that in taxes. Maybe a 2000 sq ft one does. A 1 bedroom will be $2500 at most.
Row townhomes(freehold) with 1800 sq for are $4500 annually.


Cap rate doesn’t include mtg.
But youre welcome to do the cash on cash and cash flow calculation.
I own two condos in Toronto. City of Toronto mill rate is 0.599% of assessed values. New condos will have assessed values as sale price, the reason your taxes seem low is most likely because the assessment has not caught up to market rate (4year phased catch up from 2016 mpac assessment)

0.6% of 650k is $3600 a year , so $325 a month already.

Straight from city of Toronto

https://www.toronto.ca/services-payment ... -and-fees/
Example
Estimated taxes on a residential property with an Assessed Value of $703,232
Estimated property tax = Assessed Value x Total Tax Rate
= $703,232 x 0.599704%
= $4,217.31 (includes municipal, city building fund levy and education taxes)

You said a 600 sqft condo, at a conservative 0.70/sqft (which is already what builder's use as first year estimate now) that's $420/mth already

You seem to have no clue how taxes or maintenance fee work
Banned
May 3, 2020
77 posts
71 upvotes
StatsGuy wrote: I own two condos in Toronto. City of Toronto mill rate is 0.599% of assessed values. New condos will have assessed values as sale price, the reason your taxes seem low is most likely because the assessment has not caught up to market rate (4year phased catch up from 2016 mpac assessment)

0.6% of 650k is $3600 a year , so $325 a month already.

Straight from city of Toronto

https://www.toronto.ca/services-payment ... -and-fees/



You said a 600 sqft condo, at a conservative 0.70/sqft (which is already what builder's use as first year estimate now) that's $420/mth already

You seem to have no clue how taxes or maintenance fee work
Do you actually own one or just play that you own two on the Internet?

Cause I actually own two condos as well and a semi detached and a row house and a detached...

One of them is 620 sq ft and the maintenance fees are $375
And the taxes are $2400.

By the way when I bought the condo my taxes weren’t assed at the purchase price value—- edit I just read your post again u said “new”. I took to mean newly purchased.

It’s interesting that even though u own two condos u would quote the city of Toronto website.

I get how the mil rate works except that everyone knows that no one is paying $3600 in taxes for a one bedroom. So the fact that you’re just reading the website and applying it like a cookie cutter to al condos shows your ignorancez
Deal Guru
Feb 29, 2008
12236 posts
7352 upvotes
Jimmykirky wrote: Maintenance fees will vary but will likely be in the $300-$400 range

Taxes will be low. Not sure how you came up with $380. I see you don’t own property in toronto though so it makes sense.
$380 a month is $4560 per year. No condo in Toronto pays that in taxes. Maybe a 2000 sq ft one does. A 1 bedroom will be $2500 at most.
Row townhomes(freehold) with 1800 sq for are $4500 annually.


Cap rate doesn’t include mtg.
But youre welcome to do the cash on cash and cash flow calculation.
Sometimes I wonder about some of these responses. Are people speaking from experience or what they think is right?

I agree with you. Maintenance fees and taxes on 1 beds is low. Maintenance fees only get crazy in older buildings and/or larger units. My 1000sf primary downtown is 700/month.
Member
Sep 25, 2009
266 posts
93 upvotes
Good condition and correctly priced detaches will still sell like hotcakes.

Condo market will stagnate and slowly drop in price as there is no sign of return to work for most people that work downtown GTA (including my SO and myself). Most students are also not returning to downtown for school, and tourism is definitely done for foreseeable future.

The longer white collars wfh, the more the push will be to continue or have a hybrid model. The 2hour commutes no longer make sense as production is the same. People in power will try get their people down in the office as they likely own some form of investments, but the case to do so will be tough. This is just my opinion and from my own interactions.

Watch very closely at how CIBC acts in next 3-4 months as they announced layoffs in January and also they have 1 of their 2 office towers completing this year right at Union Station.
Deal Addict
Jul 3, 2007
2666 posts
2803 upvotes
Toronto
markets almost always slow in the fall and winter..... dont think this year will be any different

but I see more pain for condos and detached should remain steady....

CERB ending and deferrals will have an impact no doubt....
Deal Fanatic
Feb 22, 2011
7251 posts
7665 upvotes
Toronto
masterhapposai wrote: Why would starter houses sell hot? I see the recent sales on them, but can it last? Condos are usually lagging indicators of the house market, i.e condos go up after houses go up and so on. So the way I see it, houses should be going down first, but they aren't this year because the listing count is lower (no one wants to sell their house at a loss or low growth rate).

Are you saying the listing count for houses is so low its driving bid wars and that will continue through Fall?
Houses are way more in demand with more people WFH, want space and area for kids to play and an office.

Starter houses because they are more affordable. Much easier to sell a $1m house with a backyard than a $2-3m one.

I don't see condos getting hot again until office completely reopen but even that is up in the air, it's hard to tell right now. Might take a few years.
Deal Guru
Feb 29, 2008
12236 posts
7352 upvotes
light2 wrote: Good condition and correctly priced detaches will still sell like hotcakes.

Condo market will stagnate and slowly drop in price as there is no sign of return to work for most people that work downtown GTA (including my SO and myself). Most students are also not returning to downtown for school, and tourism is definitely done for foreseeable future.

The longer white collars wfh, the more the push will be to continue or have a hybrid model. The 2hour commutes no longer make sense as production is the same. People in power will try get their people down in the office as they likely own some form of investments, but the case to do so will be tough. This is just my opinion and from my own interactions.

Watch very closely at how CIBC acts in next 3-4 months as they announced layoffs in January and also they have 1 of their 2 office towers completing this year right at Union Station.
You do not know that. There is no way in hell companies will allow full time WFH. Also, not all companies are flying high with this model. They are just dealing with it. It's a temporary solution, not a long term one. A lot of companies are just waiting. WFH does not work from them but they're holding on until they can't anymore and will just start laying people off.

You really think CIBC is going to abandon those 2 massive office towers because of a short term issue? Not a chance.
Banned
May 3, 2020
77 posts
71 upvotes
JayLove06 wrote: Sometimes I wonder about some of these responses. Are people speaking from experience or what they think is right?

I agree with you. Maintenance fees and taxes on 1 beds is low. Maintenance fees only get crazy in older buildings and/or larger units. My 1000sf primary downtown is 700/month.
What I’m confused about is that others have said they own condos too. Well if they do not sure how you can sit there and tell me that 1 bedroom 600 sq ft units are paying $3600 in taxes. That simply isn’t happening because MPac is not assessing 1 bedrooms at $600k and that won’t happen any time soon.

Anyway in my example I used conservative rental amount.
My 620 sq for unit is rented for $2350.
Which is a 1 bed 1 den 2 bathrooms 1 parking They are currently selling for $650-700k

So I low balled the rent to $2k and and used slightl lower maintenance fees to account for averages in the city.

If I use my own rental
$28200 - $4500 maintenance - $2400 taxes - $600 insurance = 20700/675,000 = 3.06% cap rate.

So like I dunno what more there is to cherry pick.
Banned
May 3, 2020
77 posts
71 upvotes
light2 wrote: Good condition and correctly priced detaches will still sell like hotcakes.

Condo market will stagnate and slowly drop in price as there is no sign of return to work for most people that work downtown GTA (including my SO and myself). Most students are also not returning to downtown for school, and tourism is definitely done for foreseeable future.

The longer white collars wfh, the more the push will be to continue or have a hybrid model. The 2hour commutes no longer make sense as production is the same. People in power will try get their people down in the office as they likely own some form of investments, but the case to do so will be tough. This is just my opinion and from my own interactions.

Watch very closely at how CIBC acts in next 3-4 months as they announced layoffs in January and also they have 1 of their 2 office towers completing this year right at Union Station.
This is nothing new. White collar jobs we’re moving to hybrid models long ago. All the major banks are moving the bulk of their workers into “eco system” offices where there is no assigned seating. Cibc square is no exception and it was build with fluid interactions in mind.

Actually most work spaces are fairly “socially” distanced to begin with.
The biggest issue for officer towers is the elevators. Not the space inside.


But anyway yeah it will be interesting to pan out. Work from home is great but the reality there is no replacement for collaboration in person. Projects take longer to complete, culture is lost, networking is no longer there. These all impact the long term productivity of a work force.
Newbie
Jul 23, 2020
82 posts
56 upvotes
Depending on how the pandemic situation goes in this month. If no more lock downs and more re openings, betting that real estate investors and speculators that held off due to uncertainty will rejoin the market more so for freeholds should see record gains.
Deal Addict
Jul 3, 2007
2666 posts
2803 upvotes
Toronto
ricodeals wrote: Depending on how the pandemic situation goes in this month. If no more lock downs and more re openings, betting that real estate investors and speculators that held off due to uncertainty will rejoin the market more so for freeholds should see record gains.
would be absolutely idiotic to have any more lockdowns.....i dont care if the cases hit 500 a month , thats still nothing for a whole province....

the hospitals never came close to capacity .....
Jr. Member
Sep 13, 2007
148 posts
183 upvotes
toronto
No point in predicting. Use simple rules of RE investing - if you are looking to live in it, buy if most of your "must have" features are present AND you can afford it. If you are buying for investment purposes, don't fall for FOMO.
Deal Addict
User avatar
Nov 5, 2018
1426 posts
2073 upvotes
Toronto
als98 wrote: No point in predicting. Use simple rules of RE investing - if you are looking to live in it, buy if most of your "must have" features are present AND you can afford it. If you are buying for investment purposes, don't fall for FOMO.
Exactly. NEVER buy into hype.
I do not need approval, I do not need friends. I do what I want.
Newbie
Sep 20, 2010
9 posts
8 upvotes
Jimmykirky wrote: This is nothing new. White collar jobs we’re moving to hybrid models long ago. All the major banks are moving the bulk of their workers into “eco system” offices where there is no assigned seating. Cibc square is no exception and it was build with fluid interactions in mind.

Actually most work spaces are fairly “socially” distanced to begin with.
The biggest issue for officer towers is the elevators. Not the space inside.


But anyway yeah it will be interesting to pan out. Work from home is great but the reality there is no replacement for collaboration in person. Projects take longer to complete, culture is lost, networking is no longer there. These all impact the long term productivity of a work force.
Both my daughter and I (management) work for big 5 banks in downtown head office. My wife is an executive and works for one of the top 2 insurance companies and my daughter for a top 4 accounting firm. All downtown Toronto. All of us are working from home, no one has been given a timeline as to when we will be going back. I've pretty much been told that no chance for it in 2020 and we will revisit in 2021. Same for the rest of my family.

In fact, pre COVID, we had to book desks and were wfh at least 1 day a week. Post COVID, I don't see how desk sharing will work and once we do go back (if ever) I anticipate we will be wfh at least 2 or 3 days a week. I think one of the challenges especially for the taller buildings will be getting staff into the building and to their floors especially with the limited # of elevators and social distancing requirements. Line up for temperature checks before you enter the building, line ups for the elevators and have to do that before work, during lunch, and after work. So, logistically, there is a lot to think about. So, I think we are going to be wfh for the immediate future and more.

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