Don't forget that Pension funds invest for the realllly long term and they have lots of liquidity and they often pay cash, Thus they often get really good discount. If I get a really really good price I would buy a building in an overvaluated market anytime.

There are lots of international students to buy condos and houses in Toronto with no mortgage. I can see this is big demand but nobody can tell the extract numbers.

yys2000

There are lots of international students to buy condos and houses in Toronto with no mortgage.

Not THAT many .. maybe a few dozen among a few thousand condos for sale.

Likely, prices will come down in many areas such as downtown condos and suburban houses or cities with weakening economics, but may rise along the new LRT lines and for single family houses in the greenbelt, as they are not making any more of them.

More on likely FALLing prices in Ontario here: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-23645-Why_Ontario_real_estate_prices_will_FALL_to_2014_except_in_some_very_select_pockets.html

Thus, chose your location and property very very carefully in GTA. Single family houses (with legal or illegal suites inside them) probably make the most sense within the green belt, especially in high demand areas like Roncesvalles or Beaches, or within walking distance to new LRT lines.

http://business.financialpost.com/2012/04/17/why-torontos-overheated-housing-market-is-unsustainable/

Rickson9,

Still want to argue with me about this topic??

;)

Valmont

Unfortunately you're still losing :(

Anything more 'precise'? And by 'precise' I mean a date that we can all mark down in our calendars? Anything? ;)

Still waiting...

Every year for the last couple I've posted a prediction contest in January. I'd love to have you participate this year Maxime, it's highly objective. Regards, Michael

Rickson9, If you stopped being a keybord-warrior and actually worked in the Real Estate industry, you would have noticed that Toronto is going down since a few months.



A supply and demand curve, and a tiny bit of common sense is all you need,



Sincerly,



Valmont.

You misread. Read this: You said that you are able to give precise predictions. Still waiting. Anything more 'precise'? And by 'precise' I mean a date that we can all mark down in our calendars? Anything? I'll just assume that you've given up and accepted that you were mistaken if you haven't answered by the next post. Good luck!

Right now. Look the numbers ;)

Hi Michael:
I'll be there in January but here's my (3) "two bit prediction" now for mid to late 2013.

Nominal Canadian 10Y Bond Yields will either stay "as is" around 175~185 basis points or will decrease further.
http://www.bloomberg.com/quote/GCAN10YR:IND

Real 10Y Yields (Nominal minus Inflation) will compress to "Negative" 50 basis points from the current (-30bp).
http://www.bloomberg.com/quote/GCDGIN10:IND

Cap Rates will compress further.

Darr

Hi Michael:
I'll be there in January but here's my (3) "two bit prediction" now for mid to late 2013.

Nominal Canadian 10Y Bond Yields will either stay "as is" around 175~185 basis points or will decrease further.
http://www.bloomberg.com/quote/GCAN10YR:IND

Real 10Y Yields (Nominal minus Inflation) will compress to "Negative" 50 basis points from the current (-30bp).
http://www.bloomberg.com/quote/GCDGIN10:IND

Cap Rates will compress further.

 

I'll look forward to your prediction in January! Your current predictions are certainly against consensus/conventional wisdom that rates have nowhere to go but up. Would you like to write me an inflation linked mortgage for a real yield of 1%? ;)

Regards,

Michael

In addition to date-stamped predictions, I think it would be educational if one would also add how they plan to make money off their prediction. Otherwise it's all just mental masturbation.

Hey Micheal
If everyone is on the same side of the boat, I stand a better chance of staying dry on the other side.
I see you remembered our discussion about the inflation linked mortgage inquiry. I'm not into writing OTC products unless I choose the inflation benchmark and it won't be the highly manipulated CPI. Maybe perhaps using either Bullion or the RICI®-A  ;)

Darr

Hey Micheal
If everyone is on the same side of the boat, I stand a better chance of staying dry on the other side.
I see you remembered our discussion about the inflation linked mortgage inquiry. I'm not into writing OTC products unless I choose the inflation benchmark and it won't be the highly manipulated CPI. Maybe perhaps using either Bullion or the RICI®-A  ;)

 

An excellent point in your boat analogy, although I think it's always wise to avoid being contrarian for the sake of being contrarian. The trouble I have with a "lower for longer" thesis is that the risk-reward is asymetric. Borrowing short/lending long in hopes of rates staying low has a low potential upside in this rate environment, but a high level of exposure to a rate shock. Even if that shock is unlikely, the consequences are significant.

Which is why I was kidding about borrowing money with a floating principal value. Although it's kind of an interesting exercise, it's not a good fit for my situation. I do actually think you could create a synthetic product similar to a gold denominated mortgage fairly easily, with a combination of a regular fixed income product where some of the coupon is diverted to paying the net debit for options on futures.

Regards,

Michael