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That's exactly because of low housing prices at the ealry cityplace years...when you can make a hell lot of return by buying and renting out, who wouldn't??!! Those investors of Cityplace still liive in Toronto, mostly in the GTA.

It happens that Chinese population in Toronto prefers to live in the GTA, but invests in downtown core.

I think a turning point for how much higher housing price can go further, is when carrying cost averages the rental income. That's when investment does not make any sense...we are not there yet.

Toronto Rental Yeilds currently at: 6.17%
Montreal: 8.59%

Beijing: 4.40%
Shanghai: 4.01%
London: 4.49%
new York: 4.57%

Toronto's rental yeilds are still amongst highest in the world, means higher return for investment.
 
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Toronto Rental Yeilds currently at: 6.17%
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That I take as a possible worrisome sign. ie. The market could be peaking. When those yields decline, the investors could leave in droves, causing a possible downward overshoot in terms of Toronto RE pricing.
 
Curious, why is Montreal so high?
 
Thanks for posting those real estate yield rates. However, these yield rates for real estate cannot be easily compared to yield rates on other investments (e.g. stocks) because they ignore (1) the ongoing costs of owning a property (avg 60% of annual gross rents if we include finance costs, vs. annual 1-2% of value for stocks/mutual funds), and (2) the fact that most people use a lot of leverage to buy real estate, and the financing costs over time are sizable (and at risk of rate increases). The yields reported in this report assume that you pay for the property in full, and do not discount the rental rates by other expenses that even a outright owner will have to pay (e.g. taxes, management expenses, etc). They are high.

Another issue to consider is that net rental income is taxed as income at your top rate (you can deduct expenses), while investment returns are generally lower.

This blog series is informative:
http://homefinancefreedom.blogspot.com/2007/09/do-not-confuse-houses-with-housing.html
 
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Real Estate Bubble

In today's Globe and Mail there is a statement from Mr. Flaherty that he does not think there is a bubble in real estate prices and no action is required by the Government at present.

It seems that the condo prices, especially in downtown area, will keep on rising -- at least for sometime to come. Down the road, yesterday's prices will look cheap and today's prices will look reasonable. Tomorrow, there will be a few more real estate millionaires.

Do I read the situation correct?
 
azureray said:
That's exactly because of low housing prices at the ealry cityplace years...when you can make a hell lot of return by buying and renting out, who wouldn't??!! Those investors of Cityplace still liive in Toronto, mostly in the GTA.

It happens that Chinese population in Toronto prefers to live in the GTA, but invests in downtown core.

I think a turning point for how much higher housing price can go further, is when carrying cost averages the rental income. That's when investment does not make any sense...we are not there yet.

Toronto Rental Yeilds currently at: 6.17%
Montreal: 8.59%

Beijing: 4.40%
Shanghai: 4.01%
London: 4.49%
new York: 4.57%

Toronto's rental yeilds are still amongst highest in the world, means higher return for investment.
Click to expand...

Maybe I`m reading incorrectly but the site appears to take the gross rent / purchase price and ignores the costs of operating the unit- taxes, condo fees, insurance, maintenance, etc. In that case the real net income is probably under 4%.

Also examine the source- globalpropertyguide.com? C`mon!

The market is being overrun by asian locusts it appears. They can stick around for weeks, months or years, but as Mr. Buffett is fond of saying, only when the tide goes out do you discover who's been swimming naked.
 
CN Tower said:
Maybe I`m reading incorrectly but the site appears to take the gross rent / purchase price and ignores the costs of operating the unit- taxes, condo fees, insurance, maintenance, etc. In that case the real net income is probably under 4%.

Also examine the source- globalpropertyguide.com? C`mon!

The market is being overrun by asian locusts it appears. They can stick around for weeks, months or years, but as Mr. Buffett is fond of saying, only when the tide goes out do you discover who's been swimming naked.
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also, as Mr. Buffett says ... get worried when everyone else is greedy, get greedy when everyone else is worried.

excluding doom and gloomers who predict a 50% drop, and except for a few individuals who see a minor bubble forming, myself included, i see more greed than worry in the TO and Canadian RE market ... draw your own observations and conclusions.
 
cdr108 said:
also, as Mr. Buffett says ... get worried when everyone else is greedy, get greedy when everyone else is worried.

excluding doom and gloomers who predict a 50% drop, and except for a few individuals who see a minor bubble forming, myself included, i see more greed than worry in the TO and Canadian RE market ... draw your own observations and conclusions.
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But I see 90% of this forum are worried? Am i wrong?

I know a lot of my friends who are currently holding off on entering the market because of the uncertainty and bidding wars...trust me, there aren't that many biddings wars anymore...
 
I see more worry than greed myself. Bidding wars are still relatively common though.
 
i see line ups for pre-construction ......

i'm sure you've all heard and read about X2 and recent St. Nicholas condos.
 
cdr108 said:
i see line ups for pre-construction ......

i'm sure you've all heard and read about X2 and recent St. Nicholas condos.
Click to expand...

Yeah...people go for pre-construction to avoid bidding wars...but I think BOC should force people to make pre-approvals mandatory when they buy pre-constructions, and allow banks to give them fixed rates until closing. That will avoid risky investments on pre-construction.
 
azureray said:
Yeah...people go for pre-construction to avoid bidding wars...but I think BOC should force people to make pre-approvals mandatory when they buy pre-constructions, and allow banks to give them fixed rates until closing. That will avoid risky investments on pre-construction.
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I think that's unreasonable. Why would any bank want to give a locked-in rate for a project that might not be finished until 3 years from now?
 
You know, I've shared my opinion in this thread at various points and it's interesting to see the various opinions. I've altered the force of my opinion on many issues as well. When it comes down to it I certainly can't make a definitive prediction on values but I really see affordability declining after this spring. How that influences prices and inventories remains to be seen, particularly in the downtown Toronto condo market which seems to be the primary interest of readers in this forum. This is further complicated by the fact that there is a genuine rush to invest and own property in the old City of Toronto. To what extent can this phenomenon counteract any weakness in the underlying affordability fundamentals for the properties of interest to readers here?
 
Hi, good fellas, here is another one. You remeber my post about the guy who bought house in King City (King/Younge area)? Funny part is, he told me that RE Agent who found a house for him SELLS?!! her Mansion and moves into rental. LOLThese RE agents are not that stupid after all. Sell now and buy cheaper later?
 
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