GTA dips vs Vancouver Dips

[benmacky92]

Looking at the price dips across the two major centres. These Toronto realtors are showing huge dips in showings..

Tweet by a well known realtor, she seems to be not "buy buy buy always good time" unlike like others -

https://twitter.com/i/web/status/1540448429213716484

And then this Vancouver realtor showing 25%+ sales ratios of condos/townhomes across Vancouver: https://www.kenstef.com/blog/condos...ancouver-vs-rest-of-van-may-2022-real-estate/

Then there's a Globe & Mail article saying only one offer (indicating slowdown) with the interest rates blah blah.. https://www.theglobeandmail.com/rea...eller-accepts-only-offer-in-a-slowing-market/

Toronto Sun reporting huge slowdowns: https://torontosun.com/opinion/colu...cooling-markets-but-is-it-too-little-too-late


overall i get impression that GTA is dipping hard, while Vancouver's still sorta maintaining.. would love insight from ppl re: the dips. I'd rather buy in Van (i live here) than Toronto (dad lives there so I guess it can work as investment) but torn - wait it out?

 

[Thomas Beyer]

The bottom is near as rates may have already peaked.

Covid buying - ie ultra low rates, moving away from urban cores and more space - is over thus far less buying.

Many condo projects will get cancelled (due to rising cost but suffer end user prices) thus inventory shortage and higher prices in due time, likely 2024/2025 again.

Prices may drop a little more and then stay flattish through 2023, then modest rise again. I’d say biggest drop is over.

Investors taking a breather so the only buyers right now are folks that actually must move or decided to move due to their job or family situation.

Buy for cashflow then value the next 2-3 years are less relevant.

Flipping hard now but of course highly motivated sellers exist from time to time sone prepared to put pounce on assets that are truly uniquely low due to sellers unique situation , possibly mortgage related !!

Rents will skyrocket therefore, as less inventory and far more demand.

Thomas Beyer, Asset Manager & Improver, Hard Asset Investor & DeFi Asset Hodler, Author, Father, Mentor, Hiker, Kayaker www.prestprop.com

 

[Cory Sperle]

Even if fixed rates have peaked, and most certainly variable rates will likely rise another 200bps a possibility, those that had rate locks are most likely still looking but as those expire its becoming much tougher to qualify for even entry level real estate in most parts of the country for the average income earner.

'Mortgage Related' deals are most certainly to come as many overleveraged in 2020 and 2021

 

[Developer]

Rate hike cycle may soon be over but there is a recession looming and consumer confidence is low. I expect inventory to continue to grow and prices to slide for a while yet. Tough to say how much or to time the market though. Be patient and continue to search for opportunities that fit your criteria. Less competition usually opens up some good opportunities

 

[benmacky92]

Even if fixed rates have peaked, and most certainly variable rates will likely rise another 200bps a possibility, those that had rate locks are most likely still looking but as those expire its becoming much tougher to qualify for even entry level real estate in most parts of the country for the average income earner.

'Mortgage Related' deals are most certainly to come as many overleveraged in 2020 and 2021

So these over leveraged people.. will they list at mass to avoid foreclosure after their 3~5 year term expires? From what I know, even on variable, it's not like the monthly payments just spike up immediately - the % of principle paid off per payment reduces as more goes towards interest.

4 year later - if the planned amoutn of principle paydown is lower, and the amount still owing is still high (high leverage) and the rates have not dropped yet, THEN that's when the monthly payments will sharply rise, no?

 

[benmacky92]

The bottom is near as rates may have already peaked.

Covid buying - ie ultra low rates, moving away from urban cores and more space - is over thus far less buying.

Many condo projects will get cancelled (due to rising cost but suffer end user prices) thus inventory shortage and higher prices in due time, likely 2024/2025 again.

Prices may drop a little more and then stay flattish through 2023, then modest rise again. I’d say biggest drop is over.

Investors taking a breather so the only buyers right now are folks that actually must move or decided to move due to their job or family situation.

Buy for cashflow then value the next 2-3 years are less relevant.

Flipping hard now but of course highly motivated sellers exist from time to time sone prepared to put pounce on assets that are truly uniquely low due to sellers unique situation , possibly mortgage related !!

Rents will skyrocket therefore, as less inventory and far more demand.

Thomas Beyer, Asset Manager & Improver, Hard Asset Investor & DeFi Asset Hodler, Author, Father, Mentor, Hiker, Kayaker www.prestprop.com

I guess the big question is are the rates going even higher in July announcement..

 

[Thomas Beyer]

I guess the big question is are the rates going even higher in July announcement..

Prime rate is, for sure, 75 bps most likely - as previously announced - but all that is already baked into stocks and fixed rate mortgages !

If rate hikes are too steep, too fast, and I’d say they are, AND Ukraine-Russia war lingers, and I’d say that’s highly likely, then rates will NOT go a lot higher if at all !!


Thomas Beyer, Asset Manager & Improver, Hard Asset Investor & DeFi Asset Hodler, Author, Father, Mentor, Hiker, Kayaker www.prestprop.com

 

[Thomas Beyer]

So these over leveraged people.. will they list at mass to avoid foreclosure after their 3~5 year term expires? From what I know, even on variable, it's not like the monthly payments just spike up immediately - the % of principle paid off per payment reduces as more goes towards interest.

4 year later - if the planned amoutn of principle paydown is lower, and the amount still owing is still high (high leverage) and the rates have not dropped yet, THEN that's when the monthly payments will sharply rise, no?

We shall see. Not everyone bought at the peak with extremely high leverage. Prices today are still higher than early 2021.

Buy to hold for at least 5-10 years and you’ll be ok.

Of course the odd pre-sale condo buyer or highly leveraged non-cash flowing investor will get caught naked as the tide goes out.

As such occasionally you will find a highly distressed seller but don’t count on it as a business model.


Thomas Beyer, Asset Manager & Improver, Hard Asset Investor & DeFi Asset Hodler, Author, Father, Mentor, Hiker, Kayaker www.prestprop.com