KA1
Senior Member
Once again, a very sensible post, CN Tower. Now you know as to why last purchase was in March 2008.
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Once again, a very sensible post, CN Tower. Now you know as to why last purchase was in March 2008.
daveto
Active Member
Oops, no, I wasn't offended, just joking around.
No, nothing has changed in my outlook. Price derives from supply and demand, and we are seeing the effect of the lowest supply in Toronto's recent history. I'm settled in with a box of figurative popcorn watching the price normalization unfold and I'm absolutely intrigued to see how it plays out.
klb86
Active Member
As someone else said, results are out for the first 2 weeks of May. Condo sales in the 416 are down 12% and prices are only up 1% y/y.
http://www.torontorealestateboard.com/consumer_info/market_news/news2011/pdf/nr_mid_month_0511.pdf
http://www.torontorealestateboard.com/consumer_info/market_news/news2011/pdf/nr_mid_month_0511.pdf
Last edited:
Kenny
Active Member
Any theories on why the inventories are so low? I'm theorizing that people are just tapped out. Everyone who can afford a home has bought a home, and have mostly bought the biggest home they can afford. Not sure why sales are so high considering low inventory, though? Maybe these last buyers are bubblers who have lost patience... they'll run out eventually.
ILuvTO
Active Member
Here is an interesting article from today's Toronto Star:
http://www.moneyville.ca/article/993076--it-s-a-renters-market-as-new-condo-supply-expands?bn=1
It’s a renters market as new condo supply expands
A flood of condominiums in the Greater Toronto Area market means that rent increases have been slowing while prices have been escalating.
High prices and lower-than-expected rents are not a good recipe for investors, who buy an estimated 45 to 60 per cent of all new condominiums in the Toronto market, according to the study by Urbanation Inc. released Tuesday.
“Rents are not keeping up with price inflation in any of the major municipalities in the Toronto area,” said Ben Myers, executive vice president of the market research firm.
Rents for condominiums are up 1.1 per cent annually in the first quarter of 2011 compared with a year earlier. However, values are up by 8.4 per cent for new condominiums and 3.5 per cent for resale condominiums.
“As the price of new condominium projects continue to escalate, the expectation would be that rents in newly registered projects would be higher than projects registered in years prior,” said Myers.
However, rents have barely budged from the $2.26 per square foot level since 2007. The average condominium leased in the first quarter of 2011 was 800 square feet, with an average rent of $1,686.
“With index price appreciation in the new and resale condominium market outpacing index rents, positive monthly returns for investors is being eroded,” said Myers.
That could spell trouble for the still robust GTA condominium market if investors (buyers who don’t intend to occupy their units) decide to pull out because they can’t get the returns in rent they need to justify their investment.
Toronto has the most condo sites being marketed at the same time in North America, buoyed by sales from local and foreign investors. By year’s end, Urbanation is forecasting 16,000 new units to be registered by year’s end, which would be a record.
Still, the overall Canadian real estate market has been healthy, with the Canadian Real Estate Association recently upgrading its forecast for the second time this year.
The national average price for homes sold was $372,544, up 8 per cent in April compared with last year, and the third consecutive month where prices were up by that amount.
Surging sales of multi-million dollar homes, particularly in the Vancouver market which is up an astounding 21 per cent year over year, has been blamed for skewing average prices nationally upward.
Seasonally adjusted national home sales activity was down 4.4 per cent in April from a month earlier. Actual and not seasonally adjusted activity is down 14.7 per cent from a year earlier. Analysts blamed changes to mortgage regulations in March that effectively eliminated most long-term 35-year amortizations for the slower April.
http://www.moneyville.ca/article/993076--it-s-a-renters-market-as-new-condo-supply-expands?bn=1
It’s a renters market as new condo supply expands
A flood of condominiums in the Greater Toronto Area market means that rent increases have been slowing while prices have been escalating.
High prices and lower-than-expected rents are not a good recipe for investors, who buy an estimated 45 to 60 per cent of all new condominiums in the Toronto market, according to the study by Urbanation Inc. released Tuesday.
“Rents are not keeping up with price inflation in any of the major municipalities in the Toronto area,” said Ben Myers, executive vice president of the market research firm.
Rents for condominiums are up 1.1 per cent annually in the first quarter of 2011 compared with a year earlier. However, values are up by 8.4 per cent for new condominiums and 3.5 per cent for resale condominiums.
“As the price of new condominium projects continue to escalate, the expectation would be that rents in newly registered projects would be higher than projects registered in years prior,” said Myers.
However, rents have barely budged from the $2.26 per square foot level since 2007. The average condominium leased in the first quarter of 2011 was 800 square feet, with an average rent of $1,686.
“With index price appreciation in the new and resale condominium market outpacing index rents, positive monthly returns for investors is being eroded,” said Myers.
That could spell trouble for the still robust GTA condominium market if investors (buyers who don’t intend to occupy their units) decide to pull out because they can’t get the returns in rent they need to justify their investment.
Toronto has the most condo sites being marketed at the same time in North America, buoyed by sales from local and foreign investors. By year’s end, Urbanation is forecasting 16,000 new units to be registered by year’s end, which would be a record.
Still, the overall Canadian real estate market has been healthy, with the Canadian Real Estate Association recently upgrading its forecast for the second time this year.
The national average price for homes sold was $372,544, up 8 per cent in April compared with last year, and the third consecutive month where prices were up by that amount.
Surging sales of multi-million dollar homes, particularly in the Vancouver market which is up an astounding 21 per cent year over year, has been blamed for skewing average prices nationally upward.
Seasonally adjusted national home sales activity was down 4.4 per cent in April from a month earlier. Actual and not seasonally adjusted activity is down 14.7 per cent from a year earlier. Analysts blamed changes to mortgage regulations in March that effectively eliminated most long-term 35-year amortizations for the slower April.
ILuvTO
Active Member
interested
Senior Member
Well to quote a very wise man I knew: We have discussed the issues for hours and we are no wiser.
I believe he meant we have gone the full circle. To summarize, I think the last few pages boil down to: Different markets may act differently, esp. the
downtown core: Ka1
DaveTO, CNTower : wonder like I do what happens if / when fundamentals suddenly become important again or is it truly "different here or this time".
Everyone posting presently seems to agree now is not a great time to buy "investment" real estate.
So.... we need Condo George and few others to talk it up again because we are all getting dangerously close to agreeing....God forbid that should happen.
Where will the thread go then?
I believe he meant we have gone the full circle. To summarize, I think the last few pages boil down to: Different markets may act differently, esp. the
downtown core: Ka1
DaveTO, CNTower : wonder like I do what happens if / when fundamentals suddenly become important again or is it truly "different here or this time".
Everyone posting presently seems to agree now is not a great time to buy "investment" real estate.
So.... we need Condo George and few others to talk it up again because we are all getting dangerously close to agreeing....God forbid that should happen.
Where will the thread go then?
interested
Senior Member
From the Star: More of the same.
http://www.moneyville.ca/article/993076--it-s-a-renters-market-as-new-condo-supply-expands?bn=1
A flood of condominiums in the Greater Toronto Area market means that rent increases have been slowing while prices have been escalating.
High prices and lower-than-expected rents are not a good recipe for investors, who buy an estimated 45 to 60 per cent of all new condominiums in the Toronto market, according to the study by Urbanation Inc. released Tuesday.
“Rents are not keeping up with price inflation in any of the major municipalities in the Toronto area,” said Ben Myers, executive vice president of the market research firm.
Rents for condominiums are up 1.1 per cent annually in the first quarter of 2011 compared with a year earlier. However, values are up by 8.4 per cent for new condominiums and 3.5 per cent for resale condominiums.
“As the price of new condominium projects continue to escalate, the expectation would be that rents in newly registered projects would be higher than projects registered in years prior,” said Myers.
However, rents have barely budged from the $2.26 per square foot level since 2007. The average condominium leased in the first quarter of 2011 was 800 square feet, with an average rent of $1,686.
“With index price appreciation in the new and resale condominium market outpacing index rents, positive monthly returns for investors is being eroded,” said Myers.
That could spell trouble for the still robust GTA condominium market if investors (buyers who don’t intend to occupy their units) decide to pull out because they can’t get the returns in rent they need to justify their investment.
Toronto has the most condo sites being marketed at the same time in North America, buoyed by sales from local and foreign investors. By year’s end, Urbanation is forecasting 16,000 new units to be registered by year’s end, which would be a record.
Still, the overall Canadian real estate market has been healthy, with the Canadian Real Estate Association recently upgrading its forecast for the second time this year.
The national average price for homes sold was $372,544, up 8 per cent in April compared with last year, and the third consecutive month where prices were up by that amount.
Surging sales of multi-million dollar homes, particularly in the Vancouver market which is up an astounding 21 per cent year over year, has been blamed for skewing average prices nationally upward.
Seasonally adjusted national home sales activity was down 4.4 per cent in April from a month earlier. Actual and not seasonally adjusted activity is down 14.7 per cent from a year earlier. Analysts blamed changes to mortgage regulations in March that effectively eliminated most long-term 35-year amortizations for the slower April.
The interesting thing is the few comments that are posted. The nay-sayers that the market is over. I would think however that if rents actually became more
affordable with more rentals available in the core then people will make the decision to move downtown as Ka1 says.
I am guessing that King West and the core
as the most sought after locations will hold value and that there may be some distinguishment in rent received to the East side of town which presently pretty
much gets the same rents despite less expensive properties because I believe the condo vacancy in the core is actually quite low.
That said, at some point
one would assume we will get some increase in vacancy rates with everything being built. Of course the big issue all of us need to know is how many net new
condo seekers especially in the core are arriving/month and that will tell us if/when we have an adjustment. I have no idea where that data is if it even exists.
http://www.moneyville.ca/article/993076--it-s-a-renters-market-as-new-condo-supply-expands?bn=1
A flood of condominiums in the Greater Toronto Area market means that rent increases have been slowing while prices have been escalating.
High prices and lower-than-expected rents are not a good recipe for investors, who buy an estimated 45 to 60 per cent of all new condominiums in the Toronto market, according to the study by Urbanation Inc. released Tuesday.
“Rents are not keeping up with price inflation in any of the major municipalities in the Toronto area,” said Ben Myers, executive vice president of the market research firm.
Rents for condominiums are up 1.1 per cent annually in the first quarter of 2011 compared with a year earlier. However, values are up by 8.4 per cent for new condominiums and 3.5 per cent for resale condominiums.
“As the price of new condominium projects continue to escalate, the expectation would be that rents in newly registered projects would be higher than projects registered in years prior,” said Myers.
However, rents have barely budged from the $2.26 per square foot level since 2007. The average condominium leased in the first quarter of 2011 was 800 square feet, with an average rent of $1,686.
“With index price appreciation in the new and resale condominium market outpacing index rents, positive monthly returns for investors is being eroded,” said Myers.
That could spell trouble for the still robust GTA condominium market if investors (buyers who don’t intend to occupy their units) decide to pull out because they can’t get the returns in rent they need to justify their investment.
Toronto has the most condo sites being marketed at the same time in North America, buoyed by sales from local and foreign investors. By year’s end, Urbanation is forecasting 16,000 new units to be registered by year’s end, which would be a record.
Still, the overall Canadian real estate market has been healthy, with the Canadian Real Estate Association recently upgrading its forecast for the second time this year.
The national average price for homes sold was $372,544, up 8 per cent in April compared with last year, and the third consecutive month where prices were up by that amount.
Surging sales of multi-million dollar homes, particularly in the Vancouver market which is up an astounding 21 per cent year over year, has been blamed for skewing average prices nationally upward.
Seasonally adjusted national home sales activity was down 4.4 per cent in April from a month earlier. Actual and not seasonally adjusted activity is down 14.7 per cent from a year earlier. Analysts blamed changes to mortgage regulations in March that effectively eliminated most long-term 35-year amortizations for the slower April.
The interesting thing is the few comments that are posted. The nay-sayers that the market is over. I would think however that if rents actually became more
affordable with more rentals available in the core then people will make the decision to move downtown as Ka1 says.
I am guessing that King West and the core
as the most sought after locations will hold value and that there may be some distinguishment in rent received to the East side of town which presently pretty
much gets the same rents despite less expensive properties because I believe the condo vacancy in the core is actually quite low.
That said, at some point
one would assume we will get some increase in vacancy rates with everything being built. Of course the big issue all of us need to know is how many net new
condo seekers especially in the core are arriving/month and that will tell us if/when we have an adjustment. I have no idea where that data is if it even exists.
redfirm
Active Member
Oh no, can't allow that to happen so I'll play the role of official opposition: Now is the time to buy, both for personal and investment purposes. Prices are cheap in T.O. compared to London, Moscow and NYC. Millions of Chinese people are coming here next week and if you don't buy in the next 48 hrs you'll be priced out forever. Interest rates will never go up. What else? Oh yeah, POL people, POL!
cdr108
Senior Member
what's POL?
redfirm
Active Member
Power of Leverage ... get rich using somebody elses $ ...
TheKingEast
Senior Member
Honestly, I don't think it's been a good time to buy for investment for almost 2 years now. The price per square feet was too high 1.5-2 years ago and it's far too high now. We're seeing a lot of proposed projects...too many. I truly feel new construction is going to crash the market. Way too many condos being built that will be worth less by the time they're built. It just seems like one giant mad dash by builders to jump in and grab a piece of the pie before it's too late.
Just my opinion. Buckle up and enjoy the ride. It's going to be a bumpy one.
Just my opinion. Buckle up and enjoy the ride. It's going to be a bumpy one.
Kenny
Active Member
Just some anecdotal evidence as I've recently shopped around for a 2 bedroom condo to rent downtown. There were almost a glut of new condos to rent in the Liberty Village and Lakeshore areas. If you like either of those two locations, you can get an awesome 950~1150 sq ft pad for $2100~2350 (without haggling). Some of the views of the lake from these suites were incredible. I'm guessing that the suites were priced at around $450~550K.
CN Tower
Banned
With apologies to the residents of LV and Lakeshore, both are fringe neighborhoods with appeal only at the margins. The lack of public transit should dog most renters from these areas.
interested
Senior Member
CN Tower, I agree it is more of a neighbourhood to live and buy into at least as far as LV goes. It is not comparable to the core but I think that may be somewhat
reflected in the price. I will have a small 2 bedroom there of 777 sq.ft. and figured that I would get around $1800 though $1900 seems to be the price received.
Also, depending on how nice/not the place is will dictate prices. In the core that would get $2000 I think. 1000 sq.ft. likely would get $2250. The pricing being asked in LV as you quote may be slightly
aggressive but I believe the discount will be $100-200 for comparable small 2 bedroom units vs. the core.
reflected in the price. I will have a small 2 bedroom there of 777 sq.ft. and figured that I would get around $1800 though $1900 seems to be the price received.
Also, depending on how nice/not the place is will dictate prices. In the core that would get $2000 I think. 1000 sq.ft. likely would get $2250. The pricing being asked in LV as you quote may be slightly
aggressive but I believe the discount will be $100-200 for comparable small 2 bedroom units vs. the core.