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- Thread starter simuls
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interested
Senior Member
Meanwhile, the "vast majority" of units sold in Toronto's downtown core were bought by Asian and Middle Eastern investors who plan to hold the condos for the long term
From the article: this is one big assumption. Let's hope it holds because if the first part of the statement is true, if those same Asian and Middle Eastern investors require their money, have a better place to invest, or simply change their mind about the investment state of Canada, there will be one heck of a price to pay. I would like to see objective figures as everyone quotes statements like this and I have never seen hard evidence. It probably exists and it would be great if someone could post it. Otherwise, it is just an assumption.
Sales of Toronto condos priced over $1 million are up 49 per cent year-over-year,
I hope this is right and probably explains why there are price increases at the high end. We will have to follow and see if the incentives we have been seeing/expecting in the mid range: $550-700/sq. ft. (I know this is crazy to call this mid range but for sake of argument, let's just assume it is) materialize.
CN Tower
Banned
The Truth
Urbanation Press Release Q3-2010
Sales in the Toronto CMA new condominium apartment market reached a total of 3,805 units in Q3-2010, down 24% from Q2-2010 (4,991 sales) and 18% lower from Q3-2009 (4,617 sales).
New sales in Q3-2010 were the lowest third quarter total since 2005, and marked the third consecutive quarterly decline. There are now 275 projects and nearly 70,000 units active in the new market, of which 81% are sold.
Another noteworthy statistic from the third quarter: Completions reached a record level in Q3-2010 with 6,956 units commencing occupancy.
Coming off a record quarterly performance in Q2-2010, the Toronto CMA resale condominium market lost momentum in Q3-2010. The 3,646 resale transactions in the third quarter represented a decrease of 28% from Q2-2010 (5,076 resales), and a 25% annual decline compared to Q3-2009 (4,854 resales). The average resale index price in the Toronto CMA remained essentially unchanged for the second quarter running, increasing 0.4% to $372 psf in Q3-2010. However, compared to one year ago, the average resale index price was 10.1% higher in the third quarter (Q3-2009 - $337 psf).
Urbanation Press Release Q3-2010
Sales in the Toronto CMA new condominium apartment market reached a total of 3,805 units in Q3-2010, down 24% from Q2-2010 (4,991 sales) and 18% lower from Q3-2009 (4,617 sales).
New sales in Q3-2010 were the lowest third quarter total since 2005, and marked the third consecutive quarterly decline. There are now 275 projects and nearly 70,000 units active in the new market, of which 81% are sold.
Another noteworthy statistic from the third quarter: Completions reached a record level in Q3-2010 with 6,956 units commencing occupancy.
Coming off a record quarterly performance in Q2-2010, the Toronto CMA resale condominium market lost momentum in Q3-2010. The 3,646 resale transactions in the third quarter represented a decrease of 28% from Q2-2010 (5,076 resales), and a 25% annual decline compared to Q3-2009 (4,854 resales). The average resale index price in the Toronto CMA remained essentially unchanged for the second quarter running, increasing 0.4% to $372 psf in Q3-2010. However, compared to one year ago, the average resale index price was 10.1% higher in the third quarter (Q3-2009 - $337 psf).
urbandreamer
recession proof
Translation: Prices must drop, and will drop.
interested
Senior Member
Translation: Prices must drop, and will drop.
UD, your last posts were on how things were turning around. What do you actually believe or do you just enjoy fooling around with everyone.
simuls
Senior Member
Thank you CNT. Come on CG, these ytd vs yoy stats are camouflage for a real estate industry that's grasping. New condo sales are in the toilet right now and by the time we reach the end of the year, yoy they will be less than in 2009 and 2009 wasn't a great year. There is waaaaay too much product coming online and if it is indeed investors that are buying, that's not a good sign, but a bad one. No local RE market can be stable with a foreign component that large.
Re/Max is its most recent condo market report says that prices will drop to around 5-600 in the core in a best case scenario - and why? - because rents simply don't justify the prices. These foreign buyers are being suckered by local RE agents if you ask me. If you look at DNA on King West, current asking prices (with the exception of one person who is clearly out of the loop) are around $499-$515/ft. This vs the spring where they were all around $550-$575/ft. So this one building is already seeing a 10% drop in price. It's just a matter of time before the stats catch up.
Re/Max is its most recent condo market report says that prices will drop to around 5-600 in the core in a best case scenario - and why? - because rents simply don't justify the prices. These foreign buyers are being suckered by local RE agents if you ask me. If you look at DNA on King West, current asking prices (with the exception of one person who is clearly out of the loop) are around $499-$515/ft. This vs the spring where they were all around $550-$575/ft. So this one building is already seeing a 10% drop in price. It's just a matter of time before the stats catch up.
interested
Senior Member
Thank you CN Tower. I guess "selective spin by Remax" . Now there is a suprise.
That said, do you have any data which shows differentiation by markets in a location: For eg. Is the luxury market really up from last year. And if so, was it down significantly in 2009 from 2008 and therefore "just back to normal".
What is happening with the mid market. And what is happening with the entry level sales and sales prices.
Please give us data if you can regarding TO and if possible, downtown TO condo markets in particular.
Finally, I will ask you directly if you have access to any information which might confirm or deny the statement that said that the vast majority of condo sales are going to Asian and Middle Eastern investors?
urbandreamer
recession proof
^Just take a look around a "VIP" broker preview, so many Asians and M.E.'s it's not even funny. You know something nuts is going on when zero locals are buying. Look what happened to the Vancouver market....
interested
Senior Member
I agree if it is true. Even so, does not mean an imminent ajustment however it does place the whole market at significant risk. However, I seem to recall a poster saying a number of his friends bought in the past month. Young people. Not sure if they were Asians or M.E.'s but I gather they were people here.
I wonder if we can get some accurate stats on who is buying and at what price point.
urbandreamer
recession proof
Young people buying? It means they were late to the party.
Fools and their money....
Fools and their money....
interested
Senior Member
There sadly with this investment decision we agree.
Kenny
Active Member
I wouldn't be surprised if there was a larger proportion than usual of immigrants and foreigners among recent buyers. There's a stronger belief in the sanctity of real estate as an investment among people with foreign backgrounds.
Also, news of local market changes tends to spread slower among people who don't speak the local language very fluently.
EXgeMMy
Active Member
I remember my friend who lives in Dubai saying a few months before the real estate crash that no locals were touching real estate as it was grossly over priced and it was mainly foreigners buying.
After the crash her rent went from $2800 to $2200 overnight.
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JayBee
Senior Member
I guess you mean me? Yes, they're all local and no, they're not Asian or Middle Eastern.
This is Toronto, we have a large Asian and Middle Eastern population. While I don't doubt that there are a lot of foreign buyers, you can't just take a look at the racial makeup of the people at a broker event and determine that who's foreign and who isn't.
interested
Senior Member
I guess it was you. I remembered the post but not the poster.
My concern is that when I read CN Towers "true stats from the data" vs. the Remax selected stats that the young people you were referring to might not have the benefit of "the whole picture" and are making decisions based on advertorials.
It is difficult to sort out even for those of us with alot of interest and who study this what the exact interpretation of the data should be.
My concern is that the papers to sell copy and to appease their advertising base; the real estate industry to continue their commissions, etc. end up being the "experts" quoted all the time and unfortunately whether intentional or not, the information is often biased in the positive until it becomes undeniable and even then the 1 stat in 10 that is positive will be the one that is brought forth as indicative of the state of affairs.
Young people who saddle themselves with a lot of debt now if there is a major correction will spend alot of time recovering and this is sad. People who bought in the past 5 years (save the last 2 years) have made alot of money on paper and I am sure are telling their younger colleagues to buy since they don't know downturns. It is hard for people who are under 40 to imagine just what 1989 to 1994-6 was like or the recovery. Sure real estate recovered in Toronto but it took abou 13 years to get back to 1989 price. If you were unfortunate enough to have bought in 1988(end) or 1989 and had to sell within the 13 years, you lost money on the value of your home, let alone on all those interest payments on the mortgage you would have been carrying.