Toronto's Real Estate Bubble

  • MaximeValmont

    Status: Forum Member

    Posts: 142
    Joined: 24 Sep 2011
    From: Montreal

     
    Last time I said my opinion on this forum,

    Some people said I don't have the knowledge to give advice.

    So who cares where I take my numbers from?  I obviously don't know what i'm talking about ;)


    Valmont.
    B.Comm,

    M.Sc Finance

    Candidate member at the appraisal institute of Canada.
  • bizaro86

    Status: Forum Member

    Posts: 1,015
    Joined: 29 Jan 2008
    From: Calgary, AB

    MaximeValmont
     
    Last time I said my opinion on this forum,

    Some people said I don't have the knowledge to give advice.

    So who cares where I take my numbers from?  I obviously don't know what i'm talking about ;)

    Valmont.
     

    Nobody in this thread has said you don't know what you're talking about. I don't even disagree with you about prices, but if you have some back arguments or facts to go with your statements that's always appreciated, as then everyone can learn from it. Saying you'll only disclose your "numbers" to someone who'll pay you for them is a bit silly, imo, since why bother saying anything at all then?

    Regards,

    Michael
  • MaximeValmont

    Status: Forum Member

    Posts: 142
    Joined: 24 Sep 2011
    From: Montreal


    In the US,

    From 2000 until mid-2005 the market value of existing homes grew by 50%+ and there was lots of new construction. About 50% of the GDP in 2005 came from Real Estate.


    From about 1997 to  2006, consumers cashed out about 9 Trillion out of their home equity.

    In 2000's , Home equity financed about 3% of ALL personal consumption. In 2006, it was up to 10%.

    By 2005, about 45% of homes purchase were secondary homes.

    Banks repackaged really risky loans and sold them as collaterized debt obligations. Banks and rating agencies really underestimated the risks.

    There was Also lots of "ninja loan"... No jobs, no income no assets? Not a problem, We'll lend you money!!


    I just don't see the same thing in Canada,

    Valmont.
    B.Comm,

    M.Sc Finance

    Candidate member at the appraisal institute of Canada.
  • ThomasBeyer

    Status: REIN™ Member

    Posts: 9,863
    Joined: 30 Aug 2007
    From: Alberta and BC - The Top 2 Places on the Planet to live and invest !

    MaximeValmont
    about 45% of homes purchase were secondary homes.

    .. and all that debt was tax deductible. Funny how in the current US presidential debate no one is talking about that benefit for the wealthy and ultra-wealthy .. and one of the causes of the financial crisis in the US.
    Thomas Beyer, Honorary REIN Member & Member REIN Advisory Board
    President, Prestigious Properties [@facebook .. @twitter]
    T: 403-678-3330 E: tbeyer at prestprop dot com - www.prestprop.com

    >>> Read here how use your RRSP or TFSA for real estate or  here for our latest investment opportunity in Alberta for as little as $20,000 <<<
    >> My book "80 Lessons Learned on the road from $80,000 to $80,000,000" is out: order it on Amazon or as an e-book for Kindle, iTunes or kobo format <<

                                  
  • MaximeValmont

    Status: Forum Member

    Posts: 142
    Joined: 24 Sep 2011
    From: Montreal

    ?? 
    B.Comm,

    M.Sc Finance

    Candidate member at the appraisal institute of Canada.
  • jonathanb

    Status: Forum Member

    Posts: 85
    Joined: 20 Aug 2010
    From: Waterloo

    Thanks Valmont,

    Like i said, i wasn't  trying to start anything-  Just curious as to which numbers :)

    jon
  • biancahamiltonrealtor

    Status: Forum Member

    Posts: 24
    Joined: 3 Aug 2010
    From: Hamilton

    if this does not say toronto bubble i don't know what does;



    oh yeah, i do, the cover of this month's macleans;







    188 COTTINGHAM ST., TORONTO

    Asking: $1.689-million

    Taxes: $7,929.29

    Agent: Doug Heighington (Royal Lepage/ Johnson and Daniel Division)



    http://tiny.cc/7wmfbw



    read the fawning article and see the pic of a ridiculous century semi.



     

    Bianca Marijan - Realtor - www.besthamiltonrealestate.com  
  • Rickson9

    Status: Forum Member

    Posts: 837
    Joined: 27 Oct 2009
    From:

    A "bubble" isn't determined by whether or not an individual likes prices in general, if they can find a deal, what the total indebtedness of the nation is, the unemployment rate, the number of bidding wars, or whatever.  In my opinion a "bubble" is determined to be such by history - nothing else.

    It's pointless thinking about whether we are in a "bubble" (or not).  If an individual can't find an investment that makes financial sense, then it doesn't matter what we are in.
      
  • AndreiAngelkovski

    Status: REIN™ Member

    Posts: 298
    Joined: 18 Sep 2007
    From: Toronto Beaches

    Rickson9
    It's pointless thinking about whether we are in a "bubble" (or not).  If an individual can't find an investment that makes financial sense, then it doesn't matter what we are in.


    Interesting point.  I agree with your statement. 
    Andrei Angelkovski
    Investing in Toronto's Beaches
    www.BeachInvesting.com
    RE/MAX Ultimate Realty Inc
    Cell: 416-885-2010
    Email: andrei.angelkovski@rogers.com
  • MaximeValmont

    Status: Forum Member

    Posts: 142
    Joined: 24 Sep 2011
    From: Montreal

    Rickson9
    It's pointless thinking about whether we are in a "bubble" (or not). 




    Reaaaalllllllyyyyyy 


    Intrinsic Value, You guys should google it.
    B.Comm,

    M.Sc Finance

    Candidate member at the appraisal institute of Canada.
  • Rickson9

    Status: Forum Member

    Posts: 837
    Joined: 27 Oct 2009
    From:

    Not relevant. You should re-google it and then actually re-read it.
      
  • MaximeValmont

    Status: Forum Member

    Posts: 142
    Joined: 24 Sep 2011
    From: Montreal

     Oh ok. I'm all wrong and you are all right of course.


    I'll continue to waste my time thinking about if a market is over-valuated, but thank you.


    Valmont.


    B.Comm,

    M.Sc Finance

    Candidate member at the appraisal institute of Canada.
  • FlaviaRedshaw

    Status: REIN™ Member

    Posts: 6
    Joined: 15 Mar 2012
    From:

    Hi Everyone,

    Here is food for thought.

    http://www.reincanada.com/press-releases-view/articletype/articleview/articleid/219/secrets-of-the-canadian-real-estate-cycle-with-don-r-campbell.aspx


    Interesting to see what you guys are thinking. I do not think that there is a bubble waiting to burst but since house prices in TO have only been increasing since 2000, I have to wonder when it will stop.

    Don Campbell's opinion seems to be that we are in recovery phase...Therefore there would be a boom phase of the real estate cycle ahead of us. I have my doubts since I have not seen a correction of prices.


    Take care,
    Flavia Redshaw

  • Rickson9

    Status: Forum Member

    Posts: 837
    Joined: 27 Oct 2009
    From:

    "We don't see things as they are, we see things as we are."
      
  • ThomasBeyer

    Status: REIN™ Member

    Posts: 9,863
    Joined: 30 Aug 2007
    From: Alberta and BC - The Top 2 Places on the Planet to live and invest !

    I spent a few days in Toronto last week. I haven't been there for two years. Here is an uninformed opinion: Quite a lot of condos downtown. Wow ! Very impressive.

    Many condo towers are very basic and un-inspirational, boring, and full of small 1BR condos. Likely a glut aka bubble in that segment, so only a good investment if you can hold 5 or better 10+ years with sufficient rental income to cover all expenses: condo fees, property taxes, mortgage, R&M, management fees .. Keep in mind also that the advertised condo fees usually go up in year 2 by 20-50% and that some condo towers have questionable construction quality.

    With Ontario's debt at an all time high and climbing, taxes will rise, jobs disappear (both public and private), thus real estate prices will flat line or decline in many areas, but not all. Areas like Beaches, Roncesvalles and other inner city areas not downtown but very close to it will likely do very well, as will areas close to the new LRT/subway/street car lines that are still being debated. So pay close attention to that. Once a new station is approved, buy in a 800 m radius if it fits your criteria because prices will be higher once the station is built (3-12 years from now .. so watch for timelines !)

    Not a slam dunk investment like it used to be, a flat-lining or decline in many areas and great opportunity in pockets that need careful research.

    Related article here on Toronto hospital spending cut backs as it is essentially broke. Perhaps a coalition government with the NDP or the Conservatives in the making ?

    Or here on condos in Toronto losing its investment lustre.

    or here on myreinspace on why Ontario's prices will fall in most (but not all) places.


    Thomas Beyer, Honorary REIN Member & Member REIN Advisory Board
    President, Prestigious Properties [@facebook .. @twitter]
    T: 403-678-3330 E: tbeyer at prestprop dot com - www.prestprop.com

    >>> Read here how use your RRSP or TFSA for real estate or  here for our latest investment opportunity in Alberta for as little as $20,000 <<<
    >> My book "80 Lessons Learned on the road from $80,000 to $80,000,000" is out: order it on Amazon or as an e-book for Kindle, iTunes or kobo format <<

                                  
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