housing news from Toronto

[Spartacus]

with the usual caveats of "one data point does not a series make"

http://news.google.ca/news/url?sa=t&...TorontoNewHome

IMHO the number of condos being built in Toronto is ridiculous.

unfortunately I have not been to many (any, actually) other fair-sized cities lately to compare, so take that observation with a grain of salt.

[LargoWinch]

Re: housing news from Toronto

with the usual caveats of "one data point does not a series make"

http://news.google.ca/news/url?sa=t&...TorontoNewHome

IMHO the number of condos being built in Toronto is ridiculous.

unfortunately I have not been to many (any, actually) other fair-sized cities lately to compare, so take that observation with a grain of salt.

Spartacus, I thought it takes up to a two full years for Canada to "import" ideas generated in the U.S.A.? ;)

For my part, I am sitting on the balcony (rented place) with my popcorn (sorry Tim Hortons coffee) and watching patiently all these poor "investors" with their $400K/565sqf condos on King St. with 2.75% variable mortgage.


Cracks are everywhere, but no one seems to care:
A Whole Lot of Nothing - Toronto Life - June 2009


Alternatively, if you have time for some Utube-watching regarding the average Canadian financial savvy (hint: next to none), let me propose the following document:

Debt Trap: Canada-Style

[flintlock]

Re: housing news from Toronto

Sounds possibly like more Real Estate rah-rah to me. Sales are typically up this time of year for one thing. They state they came close to breaking sales records. Well is that because of more demand or is it because desperate sellers finally capitulated? We've heard these type stories before only to see them picked apart later. I hope its genuine good news but I really doubt it. Not unless people are getting smart and leaving the US for other places, Canada being very convenient.

[MulaMan]

Re: housing news from Toronto

Are you feeling luckly? flip some Toronto condos.

Toronto's last condo bust was in the 70s, people buying 2-3 rental condos to get "cash flow" positive and retire, they then found out about holding 2-3 empty condo mortgages and what is was like to be "cash flow" negative.

The new growth areas outside of Toronto look just like Riverside, CA - zero lot crappy track homes starting at only $750,000.

If anyone has any insight on how to specifically short Toronto / Southern Ontario real estate, then I'd be very thankful and take a look.

[pmmeaney]

Re: housing news from Toronto

There's a gigantic Ford plant that builds light trucks just west of Toronto. I don't see that being an engine for growth in the near term.

Paul

[ThePythonicCow]

Re: housing news from Toronto

Alternatively, if you have time for some Utube-watching regarding the average Canadian financial savvy (hint: next to none), let me propose the following document:

Debt Trap: Canada-Style

I just watched all 5 segments of that YouTube video on the Canadian consumer and debt.

Depressing.

We are in more than just the collapse of a Debt Bubble.

The fundamental basis of a healthy economy is a balance of consumption and production, with excess production "saved" as an accumulation of property (land, cows, shelter, tools, factories, roads, whatever, ...) that is owned without encumberance by the saver, be that an individual, a corporation, a church or a government.

Through hard work, inventions, good fortune or careful investment of "savings" in production improvements, a society can raise its productivity, thereby becoming wealthier.

This seems to be largely destroyed in the last few decades by a world wide financial parasite. A good part of the means of production has been moved to places with lower labor costs. This should have resulted in lower incomes and a reduced standard of living for the countries, such as Canada and America, losing productive capacity. But it didn't. The continued, even increasing, consumption was required to fuel the expansion of the debt bubble and resulting increased bank profits.

The banks glady stepped in, offering loans for the production of excess capacity in one place, and for continued excess consumption in another place. They collected coming and going. The natural feedback loop of a healthy economy was gravely weakened.

Now factories in China go idle, and debt in "advanced" countries goes unpaid.

Human civilization is ill. My neighbors and relatives are still carrying on their lives as if it will be ok soon enough. When treating drug addicts or such, one never knows when the shock of recognition at the seriousness of their plight will trigger a meaningful reassesment and the commencement of meaningful recovery. But in recalcitrant cases, the shock required is usually great, such as threatening the life of ones self or ones child.

It seems to me that human civilization will need at least one such dramatic shock before we get real about the seriousness of our plight.

[ironlady]

Re: housing news from Toronto

I am happy someone else is posting what is going on here in Canada. I was in marketing and advertising for over 25 years. When I advised businesses on a marketing plan, I always used the Fianancial summary of markets. These stats showed household income by age catagory. When this bubble started, I said to everyone I know, this is STATISTICALLY IMPOSSIBLE to have real estate this high. The average household income in Canada and Toronto is less than $80,000.(two or more incomes per household) You cannot service the property taxes alone on this income with prices of condos in the $500,000 range and our interest is not deductible!From what I have read it is the 40 year amortization that has fueled this and our interest is NOT locked in for that 40 years. Our mortgage rates were always variable (6-months-5 years) with only recently could we lock in for max of 10 years.
"Even though CMHC is a different beast compared with the struggling Fannie Mae and Freddie Mac and, for the time being, not under the same financial pressure, questions are nevertheless being asked about the role of the Crown corporation in light of the U.S. housing crisis. Some cite its part in driving people who otherwise couldn't afford a home to buying real estate by offering insurance on mortgages with 40-year amortizations or zero down." (2008 article)

http://www.nationalpost.com/story.html?id=664863

In my area in Ontario, I am watching foreclosure signs on doors. When I investigated who was posting the signs, I was told CMHC.

Only a matter of time......

[LargoWinch]

Re: housing news from Toronto

The average household income in Canada and Toronto is less than $80,000.(two or more incomes per household) .

That is true ironlady, but perhaps median household income is more relevant?


Unfortunately, the picture is a lot grimmer that way:

In 2005, median household income in Toronto was $52,833 [bold is mine], a drop of 4.7% compared to its 2000 level of $55,421 (in 2005 dollars). Over the past 15 years, median household income after adjusting for inflation declined by 10%.

Could the difference between "average" and "median" be due to: (?)

... Over the same period, households with income over $100,000 in the rest of the Greater Toronto Aera (RGTA) grew from 28.7% to 34.6%.

See attached 2006 census (the most recent, as they appear every four years I believe i.e. next census will be published in 2010 based on 2009 data).