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  #101  
Old Posted Apr 10, 2012, 11:08 PM
TallBob TallBob is offline
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Just hope when the air gets let out, it isn't a complete implosion. Maybe prices will just trend down for a number of years. That's what's happening in the US. People think the market will rebound soon. It'll be years. Same with Canada. Actually, it would be healthy long-term for Some parts (metro areas) of Canada to see prices retreat 15-20%. It'll give people a chance to possibly enter the market when they could'nt before. And don't forget, their's nothing wrong with renting. (If their's enough stock).
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  #102  
Old Posted Apr 11, 2012, 2:25 AM
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This is really inconsequential anyways... I was just floored at the fact that someones' folks kicked in 30 or 50% of the cost to buy a condo... and we figure that "middle class" people do that for their kids. Wow..
I was a bit in awe of the amount too, but it depends on a lot of things. 30% of a $200,000 condo (certainly not unheard of in most Canadian cities) is $60,000. By the time my folks were in their 50s, they could easily have afforded this by not bumping up their RRSPs for a few years and/or dipping into their savings. And considering my mother didn't work until she was in her 40s, and my father was a generic office shlub... they were pretty firmly middle class.

Of course they'd never have chosen to do this; they always insisted that we pay our own way as adults. It's not that they couldn't have afforded it, it's that they chose not to - which I think is the case with much of the middle class. And remember, our parents (well, depending on exactly how old one is) bought houses for $50-150,000 on average, depending on city. And a lot of boomers were mortgage-free 10 or 20 years ago. A household earning say $70,000 (rough median household income in Canada as of 2009) with no mortgage can easily squirrel away $10,000 a year to help their kids out, if that's their prerogative. We're not talking about half a million dollars for each kid or anything.

I dunno, I guess what I'd really say is that none of us are really free to comment about whether this guy's parents are "middle class" without having a sense of income. Because that's what defines it - NOT how it's spent. I certainly am not shocked to envision a household that makes well under 6 figures being able to come up with a few tens of thousands of dollars, if they don't spend it on much else.
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  #103  
Old Posted Apr 15, 2012, 3:03 PM
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I'd say about half of my wife's friends in Vancouver had sizable chunks of their house price paid for by their parents. This ranged from a downpayment on a condo to the out right purchase of a new 4000 sq foot house in Surrey as a wedding gift. Different income levels but it seemed quite common to get this support, probably because it's more necessary to survive there. I'm a teacher and my wife's a nurse, my parents were teachers and her dad was a fire fighter. Needless to say, we weren't getting a house or downpayment so we left Vancouver to find a higher quality of life than was available to us there.
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  #104  
Old Posted Apr 15, 2012, 6:05 PM
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I dunno, I guess what I'd really say is that none of us are really free to comment about whether this guy's parents are "middle class" without having a sense of income. Because that's what defines it - NOT how it's spent. I certainly am not shocked to envision a household that makes well under 6 figures being able to come up with a few tens of thousands of dollars, if they don't spend it on much else.
I agree, I think there are a fair number of people who have benefitted from family helping them get started. Even in middle class families. It can be in different forms, a gift or zero interest loan for a down-payment or co-signing on a mortgage. I think it depends on the family and cultural values at play. My grandparents helped my parents by loaning the money to pay to come to Canada. When I was growing up, my parents simply deposited the family allowance check (universal benefit at the time) in a bank account that payed for my education. I will probably help my kids out when the time comes. A few tens of thousand when someone is just getting started can have a major impact.
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  #105  
Old Posted Apr 16, 2012, 6:23 PM
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Canada’s red hot condo market could spell doom for sellers

By Liam Lahey | Insight – Fri, 13 Apr, 2012 2:40 PM EDT

Looking to sell your condo? Good luck. A potential glut in multi-unit dwellings may mean a soft resale market in the very near future.

Construction of condominiums and apartments continues at a furious clip -- most notably in Ontario and the Prairies -- according to the latest report on national housing starts from the Canada Mortgage and Housing Corporation (CMHC).

Multiple unit starts in Toronto alone shot up 50.4 per cent in March, while the number of existing condos left unsold also rose sharply.

How will a sharp rise in inventory affect those already in the market? Gregory Klump, chief economist at the Canadian Real Estate Association, doesn't believe the recent uptick will mean much of a drag on resale values.

"Condo starts in Toronto were a big factor supporting starts nationally. The limited supply of single-family homes for sale is supporting condo apartment construction in Toronto; however, the jump in starts for March may ultimately be attributed to warmer weather," he explains. "Later in the year, we'll have to look back to see if it's just a case of March borrowing some starts that would have otherwise been counted in April."

That said, condo apartment prices in general (and prices for other types of housing too), are up from one year ago, but gains have been getting smaller, Klump adds.

The cost of owning a home in Canada does continue to climb and with respect to the boom and bust nature of the condo market, Toronto now reportedly stands as the epicenter for a Canadian housing bubble.

In fact, Canada's biggest banks are reportedly tightening lending standards for condo builders and imposing demands on developers -- such as insisting they raise their equity into new projects and to produce a higher percentage of pre-sold units with significant deposits from customers.

Although many use monthly housing starts as an indication of the 'health' of a real estate market, it must always be analyzed in context, explains Don R. Campbell, a real estate researcher, author, and president of the Real Estate Investment Network.

"Weather and supply play major roles in these numbers, however, even bigger fluctuations are driven by the type of properties being started," he says. "For instance, large condo projects and building permits issued months ago get started in the spring, often times skewing the trend line."

Because national numbers and averages truly don't mean a thing on the 'street level' in specific cities and towns, Campbell says, it is important for people using the CMHC's data to 'peel the onion' further to analyze:
What cities are witnessing the starts?
What types of housing starts have begun in that city?
Is there population and job growth in the region strong enough to absorb those starts?

By looking at these three factors, one can determine, a little more accurately, whether an oversupply (keeping caps on values) or undersupply (putting upward pressure on values) situation will occur over the coming 12 months.

Mathieu Laberge, chief economist, CMHC in Ottawa, says multiple starts (read: condominiums and apartments) may have driven the March increase in terms of overall housing starts but it's too early to know if it'll continue.

"Overall multiples went up eight per cent to 124,100 units and that contributed to the increase of single moderated (homes)," he says. "Most of that increase came in Ontario and the Prairies but that was offset by the decrease in B.C. and Quebec. It's too early to make a call on whether or not this will continue in future starts to see if it's a trend or not."

Pay attention to your region

The path of growth for housing starts in each region is varied, the CMHC report shows. Laberge says potential homebuyers need to zero in on their own specific region to understand what's unfolding.

"Housing markets are local," he says. "If people want to buy a house, they need to know their market and where it's at, what are the determinants and what is the economy for that local market. That helps to assess the overall market for their city."

Rising home prices increase demand for more affordable alternatives, like condos, the CREA's Klump says. As single-family homes in Toronto are in short supply relative to demand, the price of a single-family home in that city is out of reach for many buyers.

"Toronto is seeing homebuyer demand for more affordable alternatives, which is being filled by condo apartment units," he says. "If most of the increase in housing starts was weather-related, then the latest figures from CMHC really aren't telling us anything we didn't already know."

That's a plus for those looking to sell. That said, in places where demand for condos is rising, supply is also responding.

"That's why we're seeing multiple unit buildings making up a larger share of overall housing starts. But for individuals, aggregate figures don't matter," Klump remarks. "Supply and demand conditions can and do vary widely depending on where you are trying to sell."

Looking to sell? Do your homework

If a homeowner is considering a condo as their home and they're looking to sell, it is important for them to do their research, Campbell advises. Not all condo buildings and management are the same and not all markets across the country are the same.

...

http://ca.finance.yahoo.com/blogs/in...184017452.html
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  #106  
Old Posted Apr 16, 2012, 6:54 PM
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I just want this Toronto market to crash already and just get it over with. - I'm looking out for the articles that say the market has crashed. After that we'll know we're good!
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  #107  
Old Posted Apr 16, 2012, 8:43 PM
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http://opinion.financialpost.com/201...oreign-buying/

To tame Toronto’s housing ‘bubble’, ban foreign buying
Diane Francis Apr 13, 2012 – 2:26 PM ET | Last Updated: Apr 16, 2012 2:11 PM ET

Conventional wisdom is that this is the market at work. This is not the market at work. This is manipulation of a government system of open-ended mortgage insurance that is poorly supervised.

Nearly three times’ more condo high-rises are being built in Toronto than are being built in New York City and nearly seven times’ more than in Chicago, according to Bloomberg News.

This development boom, and accompanying price increases, is not about housing to meet a sudden surge in population. It is not about an economic boom. If it was, Calgary and Edmonton would have 128 cranes, like Toronto does, building housing and pushing up all prices. Instead, this is taking place in Toronto and Vancouver where economies are moribund.

What is going on here is a deluge of hot money from abroad that is creating an artificial and potentially dangerous real estate bubble
Conventional wisdom is that this is the market at work. This is not the market at work. This is manipulation of a government system of open-ended mortgage insurance that is poorly supervised. What is going on here is a deluge of hot money from abroad that is creating an artificial and potentially dangerous real estate bubble. This mania happened in several other countries — where it was shut down — and has spread to Canada. Officials here have been urging restraint but that is not the solution. A ban on foreign buying of residences is the only solution.
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  #108  
Old Posted Apr 16, 2012, 8:49 PM
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After Massey Tower and Picasso gets some shovels in the ground, I don't care what happens.
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  #109  
Old Posted Apr 16, 2012, 8:50 PM
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My most anticipated project is 1 York/90 Harbour.

Then the market can crash....
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  #110  
Old Posted Apr 16, 2012, 9:01 PM
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I hope 90 harbour crashes and burns before 90 harbour, but after massey, piccaso, and 50 bloor.
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  #111  
Old Posted Apr 16, 2012, 9:10 PM
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^ Shovels in the ground does not mean much. Those units are still 2-3 years away from being "physically" on the market. As things start to unravel I suspect many projects will be scaled back. If people start fleeing their units and taking front-end hits I don't really know what options developers will have. I don't want to see a gut into proposed structures but I have softened on my views of the current Condo builds. The majority of them aside from a view gems are complete crap and I would rather not see the built but hopefully the quality projects (and of course the High-end ones) will still get the last bit of gas to finish as intended.

And again another article which points to hot foreign money as the culprit but not giving any hard data to how much of the market is begin fueled with foreign dollars. RE boards are pumping the media full of air, they claim its all foreign cash messing things up but won't give data out to support this.

In the article Diane loosely can only tie Student housing to any substantial stats on foreign ownership. This is a whole other bag of worms as its no secret Post-Secondary University's are aggressively targeting Foreign students to pay inflated tutions for program spots. For the foreign buyer pays 15%-35% down, Canadians still only pay 5%. This is the monkey in the room that nobody wants to talk about. Canadians are speculating on RE just as much as International buyers.

Harper could end this tommorow if he wanted to. Take away CMHC insurance from the Banks and the speculative market would come to a complete halt by morning - Banks would adjust the rates overnight.
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  #112  
Old Posted Apr 16, 2012, 9:39 PM
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^Maybe take away CHMC from non owner occupied units.
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  #113  
Old Posted Apr 16, 2012, 9:41 PM
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It's my understanding that to qualify for a CMHC mortgage you have to occupy the dwelling that you are financing.

My first mortgage was CMHC insured (after doing this once I highly recommend doing whatever you need to do to scrape together the 25% you need to qualify for a non-insured mortgage.. CMHC is a pretty big rip-off to the consumer) and I reasonably certain that one of the cavets was that it was to be occupied by the financee. Most spec buyers don't live in their investments.
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  #114  
Old Posted Apr 16, 2012, 9:53 PM
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Is it just me or is every rental in Toronto being priced at $300 more/mo than it's worth? I hate this!!
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  #115  
Old Posted Apr 17, 2012, 3:19 AM
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Originally Posted by caltrane74 View Post
I just want this Toronto market to crash already and just get it over with. - I'm looking out for the articles that say the market has crashed. After that we'll know we're good!
I think the mid-range condo market will tail off but remain steady enough to support a few developments at a time. But it highly depends as long as the Chinese investors are interested in buying, then the game will continue. The high end luxury market will likely crash though. As seen with the slow market right now, causing quite a few projects to be already put on hold.
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  #116  
Old Posted Apr 17, 2012, 3:44 AM
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Too many luxury projects being completed at this time. Prices will remain low for a time. Chinese people put their money in Toronto because their children study here, and they want to live here. A second factor is the rush to downtown living, people just want to be downtown whether the economy is good or bad. Condo sales will continue apace.
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  #117  
Old Posted Apr 17, 2012, 11:46 AM
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Downtown living has its appeal but I am not sold 100% on that. I still think people are still noobs or very naïve to DT living. Many Condo projects are just plopped in junky locations many people still aren't to keen on living smack dab beside the dirty Gardiner, and some locations like the Tridal build on John beside the Power switch unit would be a junky condo to have waking up looking at that mess each day. I personally don't have issues with that as I understand its part of urban living but for many units that face the Gardiner versus the Lake it has shown to hurt re-sell or appreciation values.

In regards to CMHC and non-occupied units how does CMHC go about checking this. The loan is already guaranteed prior to purchase and prior to any ability to figure out if the unit/home is occupied. By that time the mortgage is packaged up and sold off. Abolish CMHC and return the market to where 25% down was the norm.

In regards to rents, yes Toronto rents are inflated but you only get gouged if you agree to pay that price. If you know your numbers you can punch in to true rent-ratio of a property and play hardball with the landlord. In some cases the landlord will balk and wait for somebody else but if the landlord is scrapped for positive cash-flow of any amount they will give in. I got my friend into a swanky unit in 1 King West by this trick exactly, the owner wanted a obscene amount for the unit (which he had troubles selling) my buddy played hardball and got the rent down to a decent 1050 per month. In the many half filled buildings that dot the lakeshore you can have your pickings on deals if you know how to look. Myself I nearly moved into a studio condo for $750 (the seller was trying to rent it for a Grand) but I balked at it since it was way farther from school then I realized (Ryerson to Fort York BLVD). Once these 23K-43K condo units start hitting the market renters overall (hopefully) will start to get the market prices right.
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  #118  
Old Posted Apr 17, 2012, 3:32 PM
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Quote:
In regards to CMHC and non-occupied units how does CMHC go about checking this. The loan is already guaranteed prior to purchase and prior to any ability to figure out if the unit/home is occupied. By that time the mortgage is packaged up and sold off. Abolish CMHC and return the market to where 25% down was the norm.
I don't necessarily think that is a good idea. While I don't believe a CMHC insured mortgage is the best idea for the reasons I stated further upthread, it really is the only way for a lot of first time buyers to get into the market.

The people driving up prices in Toronto and Vancouver are not doing it by financing their properties with insured mortages. I'm sure that the vast majority are either paying cash or putting huge down payments for their investments.
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  #119  
Old Posted Apr 17, 2012, 3:51 PM
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Toronto condo market is unsustainable

Read it here.

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Why Toronto’s overheated housing market is unsustainable

MONTREAL — While Canada’s high-flying housing market continues to stabilize, it’s increasingly evident that one city — Toronto — is a glaring exception.

In sharp contrast to price moderation in most cities and a significant drop in Vancouver, where buyers are being priced out of the country’s costliest market, Toronto buyers are on a spending spree — one that looks as if it won’t end well.

New figures from the Canadian Real Estate Association show prices up by 10.5% in Toronto over the past 12 months, the only major city with a double-digit gain. In contrast, Montreal gained a modest 3.7% and Vancouver is down by 3.1%.

That’s understandable. Andrew calculates that Toronto now has 143 highrise condo projects under construction, more than in any other North American city, with more on the drawing boards.

“Is there enough demand for all those condos? It’s hard to imagine,” he says.

Worse, many purchasers appear to be foreign investors looking for rental properties as a haven from uncertainty in financial markets.
http://business.financialpost.com/20...unsustainable/
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  #120  
Old Posted Apr 17, 2012, 4:26 PM
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I don't know how anybody who's been to downtown Toronto or Vancounver and seen the sheer number of condo construction projects (not including further proposed ones) and not conclude we're in a bubble. My theory is much of the resistence to this idea is from homeowners themselves who resist the notion that they've been dupped into buying overpriced properties, which will soon depreciate by several percentage points.
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