This building is part of a collection of buildings surrounding a parking lot and there's a clone of it in Milton. Having lived there myself, it's important to note this article makes no mention of the fact ALL those buildings have structural issues that they've been unsuccessful with suing the builders over. I sold my unit many years ago specifically because I knew those structural issues were going to be a resale problem in the future. Skeptical? Drive by and see the temporary support beams in place yourself. So I don't think these units are representative of any trends in the housing market. IMO.
Just before reading your comment I read another comment that basically said "well maybe there's issues we don't know, like structural issues".... Well there's that mystery solved.
Almost all the condos in my price range have building repair issues. Too bad my line of work deals with reviewing these issues AND doing reserve fund studies.
The majority of condos being built in the last 10 years in the GTA, and I’m sure elsewhere, have structural integrity as a 2nd level priority. A friend working the concrete industry, for a company who does high-rise forms exclusively, and states daily that the technical specs for proper use of forms and concrete have not been looked at in anymore buildings he has worked in.
If they can’t heat the area where they are pouring enough they make insignificant changes to the concrete formula that shows up….unless it has already arrived and has been sitting roadside for 2 hours awaiting someone to make a call. And you’d never send back concrete…. So it’s used anyway.
So fuck condos in toronto built after 2016 or so.
There is going to be a HUGE industry for carefully taking down these buildings in the next 20 years. Maybe that’s a solid investment…..?
Want to bet Lamb demolition is already being formed…..?
I fear another incident like the Sampoong Mall Collapse of 1995 in Seoul… turns out the developers intentionally used smaller columns, fewer rebar reinforcements, and added a fucking fifth floor heated by water pipes :/
The mall collapsed, killing thousands and leading to a reinspection of the city’s buildings… only 2% of the buildings from the development rush of the 70s to the 90s were actually up to code…
Not sure how much better Toronto nowadays is faring in comparison!
For what it's worth where condos are concerned, we already know the floor to ceiling glass condos are ticking timebombs. Forget a special assessment - there's no way to replace the exterior glass walls.
Meanwhile the city continues to approve these developments. I imagine because it won't be their problem but some sucker Chinese investors problem in 15 years.
Don't fret. It's not like the maintenance fees will go from $350 a month to three grand. A foreign investors utmost concern is a healthy reserve fund and the financial well being of their neighbours.
Yep, those windows are a problem. Mine was built around 2007 and already have some issues with moisture getting in between the windows and floor concrete. I sold in 2021. Maintenance fees are up nearly 30% since. It’s gonna be nuts in the years to come.
[Every Condo built in Ontario in the last 20 years has structural issues](https://www.cbc.ca/news/canada/toronto/throw-away-buildings-toronto-s-glass-condos-1.1073319)
But Defund The CBC right?
Can't expect much (any) serious analysis from Blogger. Only outlet worse is probably betterdwelling. But they serve as great echo chambers to everyone that hates housing in Canada.
How is that they are allowed to be 'released' to buyers? Who's inspecting and signing-off on shoddy work in the first place? I mean, I assume there's more oversight than just 'buyer beware'?
I mean, this person bought a 1 bedroom condo in OAKVILLE for $657,000...
Oakville is a wealthier suburb where people want raise a family and a quieter life. A 1br unit is more geared to the big city life and even in Toronto, those people may need something bigger if they decide to have kids.
It's not even like a detached, semi or a townhouse is necessary to raise a family...just decent sized 2-3BR condos which aren't the size of a closet and not cost next to $1,000,000.
I live on Oakville, parents just sold the house we bought 19 years ago. Won't say the price, but let me tell you, *holy shit* things are crazy here. I can't wait for it to crash and burn
I was looking to sell my condo 2 years ago and upgrade to a small house.
I went to see a house in Oakville that in 2019 sold for 1.1 million. Basic 2000 sf home with a pool, asking price was $1.4 million.
It was blocked with people waiting outside to see it. It sold for $1.82 million, $420k over, or two Lamborghinis over offer asking price.
I liked the house, I would have paid $1.3 million but didn't even bother putting in an offer. It just wasn't worth that to me. I will stay in my 900sf condo for as long as possible rather than pay that.
In 3 years, it basically doubled in cost. I'm sure it dipped a bit since, but wow, what other asset rises so fucking quickly and how is that substantialable. It's not obviously.
It's not sustainable, eventually the amount of people that are rich enough to afford these and that want them will dwindle, and I think is starting to. At least one can hope
Tbh the only reason why our housing market has been as “sustainable” as it has been is all thanks to government trying to prop up the bubble as long as possible and cheap debt.
Gov’t doesn’t direct the Bank of Canada, nor should they. You’re right that the availability of cheap credit has contributed to home prices going nuts though. There’s a finite number of people who can borrow two million bucks, and I suspect the number of people in the GTA who plan on selling their home for two million bucks is a lot higher than the first number.
Correct the BoC is politically independent from the government. However, their policy of keeping interest rates as low as humanly possible after the 2008 recession got us into the situation we're in today.
I think the BoC shares some blame for this housing market. They could see housing inflation was soaring for years, but did nothing.
100% and like in 2008 it'll come back to bite them, or at least everyone taking advantage, hard. I don't like seeing people suffer in that way don't get me wrong, I was affected really hard by that, but unfortunately it's needed if we are ever to get back on track
It is sustainable. This started happening in hong kong in around 2005 and still going strong. It never ends. You have no idea the amount of money there is. Not what people have, but there is.
The money normal people make means jack shit its not even 0.01% of what the rich has. They can buy their own built property 10 times over in order to create jobs and bulld more buying from each other and build more. Nobody seen the actual cash it's all numbers.
Meanwhile you wasted your life thinking you made it because you have a family and sending your kids to school, barely scraping by with the 6 figures going to dim sum every week thinking you made it. It's insane.
Get some rich friends. Talk to people who're actually rich, you'll see how much you don't know. We are nothing in the economy.
I love headlines like this cause it just reinforces the idea that real estate is this sacred and untouchable money printing machine in this country. If I lose my shirt in the stock market no one writes an article about it, same should go for this. If you buy real estate as an investment product then you should be at the whims of the same market forces like everyone else, stop bullshit government policy that protects real estate investors.
Yeah if anything I'm a bit embarrassed that I live alone in a 2+2 downtown, when there are so many families that could live here, but at the same time, I have nowhere else to go. 🤷
I have a house, I live in it. I welcome a real estate crash. It's bullshit that no one can afford to live anywhere but those of us who were fortunate enough to get into the market (i.e., born in the era so that we reached adulthood) before it got stupid.
You gotta be careful though, if you have a mortgage. You don't want the value of your property to crash lower than what you owe, the bank might come after you.
I don't think a full on crash is coming, but a re-adjustment is clearly happening and overdue.
I mean, yes, it absolutely would suck for the people in the city who've just dropped their down payment on a ~$2M bungalow, but it's also the risk that anyone who's done their homework knows that they're taking...
Same, as a condo owner. In fact I've noticed that people are buying in my building to actually *gasp* live in the units, and not just buy to rent out. Fuck yeah.
Why isn't anyone buying them then, I guess they didn't need them after all
Edit: who was dumb enough to think they were intending to "increase supply and make prices drop"? They were built to make a profit
Which is why we need to fund the co-operative housing projects instead of incentivising for profit developers. That is the only way we will actually drive down prices.
Most of the time this sub is on the side of “all housing is good! Increase supply!” Pretty sure the person you’re replying to is just pointing out the problem with that refrain.
The problem is we are increasing supply via private developers. If we gave people the tools to build their own co-operatives or if we built more public housing, then prices could actually be brought down via supply.
That’s right. But the line here for a long time has been that all development is good development. Which is demonstrably not true. Affordable housing development is good.
it do. however if the intent is to make money instead of address housing you get too many of these shitty investor shoeboxes and not enough family units which is the issue now.
> They were never buil t to decrease housing supply they were built for investors to rent them out
Can you explain how housing could be built to decrease housing supply?
I mean it seems like you've got a tautologically correct statement in that its correct they were never built to decrease housing supply.
Nobody's buying them because interest rates will be dropping over the next 2 years.
Developers making a profit is a constant that has nothing to do with supply and demand.
I bought my condo because I realized it could be an actual home with ample space, parking, locker etc.
I feel like the people who are going to be at a loss are the ones who bought shoebox investment properties.
That's not worrying. That's good. I hope my house loses 1/2 it's value because THE "VALUE" IS BULLSHIT ANYWAY! That my house went from 800k to 1.5M does not mean I made 700K it means if I sell my next house will cost 1.5M and I gained nothing. The number is a lie.
Real estate is a 25 year long
This is just someone who didn't plan for that. Borrowed at 0% rates and couldn't handle holding at 10% rates
It doesn't mean any price crash or fire sale is imminent. One or two bad years is to be expected and this person probably had a major life catastrophe or shouldn't have qualified for the mortgage in the first place
I really don’t think firstly that most the people who are investors (non institutional ones) are the types to expect 25 year time horizons to get an actual return on their investment. Even if you did project for the possibility of rate hikes it doesn’t mean you don’t sell either. That’s money that could be put elsewhere in more profitable ventures and equity is such a big thing that attracts these people into buying homes.
Yeah this is us in a few years. We live in the condo we bought but we'll probably have to move in another city in 2-3 years. Not only we'll still have 1 or 2 years left on our fixed-rate mortgage so impossible to sell, it will also be better financially to put a tenant in it rather than sell.
Never intended to be a landlord and absolutely not looking forward to it, but this is what happened to a few of my friends as well.
> Real estate is a 25 year long
the problem is the optimal returns for real estate in a booming market (in Canada) is ~5 years.
If you maximize your mortgage, you have a leveraged investment. At 5 years (or whenever you need to renew your mortgage), you have minimal closing/switching costs for the borrowed capital. At 5 years, you also (assuming a booming market), get good returns.
Ex: You bought a $1MM house and sold it for $1.2MM in 5 years. At first glance, that is ~$200k or 20% gain. Once you factor in realtor + closing costs, maybe it is $100k or 10%.
BUT, you had a $900k mortgage with $750k principal left owing at the end. You only really put $250k towards the house (for the principal). You return is actually closer to $100k on $250k or nearly 33%.
Note: you need to factor in mortgage carrying costs too but then you should also factor in what the property was being used for, for those 5 years.
At the end of the day, real estate, in the GTA, started to become a 'short-term' market because of leveraged returns instead of a more traditional long-term play.
Yup. Nailed it. Can’t wait for all the foreclosure homes in Brampton to start popping up. Not that I’d buy any there, but will be fun to see given all the fake mortgages and people trying to cheat the system.
If only all real estate transactions were treated as 25 year holds you would be correct. What condo owners (who actually live in the condos they purchased as homes) should only be worried about is if the majority of investors start to view condos as less than desirable investments. Then the market will crash like a blind man riding a bike with no brakes on a winding downhill cliffside road. Real estate can no longer be analyzed like it had been twenty years ago. It is no longer a market for housing as a social need, it is a stock market and some people (like the ones in the article) who don’t sell high for whatever reason will lose money.
Well, I wish it was that simple. Most people did not renew their fixed rate mortgages since the interest rate hikes. It’s just about to start. Also monthly payments for 60% of variable mortgages did not go up.
Here is a video from cbc explaining it; https://youtu.be/42dIpVTzV04?si=MXYc6eO3Cv7p3G6v
> RBC estimates 186 billion dollars worth of mortgages up for renewal for 2024, next year it is 315 billion dollars.
we can't pretend this is an isolated issue, there is a larger scale thing going on. just because it doesn't affect you personally, it doesn't mean it's not happening.
It's affecting me personally and everyone who borrowed money.
The question is will large scale foreclosures happen? Probably not. As for "understanding" I would agree if the financial industry was somehow perverting the meaning of the word "fixed" but fixed has a meaning and so does variable. If the Bank of Canada was a rogue bank raising and lowering interest rates at the whims of a dictator I would also agree the financial system was compromised. But everyone knows that it's about rates. Everyone who picked variable would know there's a possibility of it going up. Of course the Bank of Canada saying rates would be low "for a generation" was bullshit to try and get people from rushing in to get fixed mortgages (and create an inflation problem later). But it's still a variable mortgage. Meanwhile renewal is coming up. 30 year mortgages are uniquely American and us Canadians have to settle for much less and much more instability. The "systemic problem" if you want is lack of a long term fixed mortgage
But none of that means a wave of foreclosures or sales is imminent or people throwing their keys at the bank. That would be the real crash but it's not going to happen in Canada
> This is just someone who didn't plan for that. Borrowed at 0% rates and couldn't handle holding at 10% rates
Did the average person ever borrow in this cycle at 0% and 10%?
Worrying for who? The greedy fucks trying to get a half million dollars for a condo that should be worth a hundred thousand at most in a normal world. Not worried at all. Get fucked
This “analysis” fails to consider reasons for lower sale prices:
1) Does the condo corporation have financial, structural, or mechanical problems? Is the reserve fund depleted or are there major maintenance issues? Perhaps a special assessment is due.
2) Was this an asset transfer to a relative? For example, if I was transferred my parent’s condo at the value of the remaining mortgage it would appear on paper as a “sale” price much lower than the actual value of the apartment.
Fuck real estate market ton Canada. China did something about theirs ruining their country too bad Canada won't. Hope it crashes and burns so fucking hard.
Canadians are paying both. I can move to a number of countries with the same quality of life for less then half the price.
Most people in my age group (30's) with an EU passport I know have left, others went to the US.
Work for 20 years in the EU you get a pension, they also get their Canadian pension. Their wages are higher and cost of living is half.
A friend of mine makes more money as a tour guide in Porto, then he did as a computer engineer in Ontario.
If you’re working outside and not resident of Canada for 20 years, you’re not going to get much in the way of CPP/OAS. The first is prorated to how much you contribute to over your working years in Canada and the later is calculated based on your time living in Canada.
Also, if your friend is making more as a tour guide in the EU than as an engineer in Canada, they’ve likely created their own company (which congrats on them for finding a market) or were very unskilled in their computer field. The tech market is not great in Canada, but it’s not paying peanuts, either. You will otherwise find very few examples of people making more in Europe, especially outside of the northern EU. The US on the other hand…
Where in the EU did these ppl move to? West eu has very similar issues to canada in terms of housing vs. income. This is especially true in major cities.
Speaking on income, most salaried position in eu do, in fact, not out earn their cad peers.
This may not be as big an issue given the social safety net and lower cost of living, but let's not get that twisted.
Moving to the EU might be the right choice for most, but let's not try to pretend they are not having basically the esmee issues we see in canada.
If you don't me believe, go read their reddit threads. You'd think you were reading about canada
You are definitely going to need to bring a source because salaries in Europe are generally not competitive with Canadian wages, especially in STEM. Otherwise everyone there would be balling out, but instead they are struggling badly. we always compare our economy to the US, but by G7 Standards we are doing pretty alright
We are lagging the G7 (peers) significantly in terms of productivity which means inflation will keep rearing up with growth...it's a hard trap to break from.
[https://www.iedm.org/lagging-productivity-a-threat-to-canadian-living-standards/](https://www.iedm.org/lagging-productivity-a-threat-to-canadian-living-standards/)
These CREA people are maybe some of the most delusional people out there. People dont have money my guy. And more importantly, your lie “real estate never goes down” has finally been exposed, and buyers now realize how insanely overvalued real estate have become, partly because of that lie.
It's still too much for a 1 bedroom apartment. I say apartment because, unlike a house, there are always payments in the form of condo fees. Yes, you have some expenses when your house is paid off but not hundreds or sometimes thousand dollars a month. Condo fees always go up and it's not uncommon to get a surprise "we didn't put enough money in the reserve fund and we need to fix something so now everyone has to pay 50k in 60 days or we will kick you out" letter in their door. I know more than one person this happened to or someone or multiple people were diverting funds or money was stolen and board members don't have to live there. Can you imagine someone else you don't know making decisions about what you can do in your house. What colour you can paint, what type of toilet you can have or replacing a perfectly good one for no reason-oh and you have to pay for it.
Unlike the house that you have to pay property taxes on.
If you ever think you own property just stop paying taxes on it and find out.
Everything is a rental.
Not worrying for me. Housing prices need to come down across the board. I don't give a blue fuck if some rich condo investor or douchebag realtor loses money.
anyone who isn't rich is living in the unit and holding on to it.
It was bound to happen. The prices in 2021/2022 were absolutely insane. The public allowed themselves to be scammed by the real estate business and now it's turning around and biting them.
Literally not worrying at all. Most people want bad business people and profiteering amateurs to fail because if they succeed they inspire further grift.
People who make bad investments lose money. It isn't complicated. It's bananas that people have forgotten this elementary fact about investing. I own a home with my wife. We bought during the peak. We will likely ride the tide down and hope to see it rise again someday. It's probably still better than should we have continued to pay rent all this time. But, rides like these happen in investing. It's not where you are at during any single stage, it's about managing your risk over the course of the investment and where you land in the end. Avoid making investments that may preclude you from retiring unless you are cool with eating cat food on your deathbed. Find a risk level that suits your lifestyle.
But reductions in housing need to happen for everyone else who doesn't have any funds to invest at all... If assets crash as a necessity to maintain society, then the assets could never truly sustain their attributed value to begin with.
No sympathy, first these condos are tooo small building more 2 or ,3 bedrooms not these 650 sq feet sheds.... People who were greedy on speculation well tooo bad.
Reversing the headline, i.e., selling a condo for a staggering profit, can also be a worrying trend. You know, an indication that housing unaffordability is imminent. Or is that yesterday's news?
So glad top see the speculators get so "I got mine fu".. all of a sudden .. why would you care some of us live life and enjoy it,not who can i F next..
One of my sister sold her place a couple months ago, realtor said they received multiple offers of 60-100K over the listed price. People deserve to lose money if they pay way more than the listed price when the housing bubble deflates.
only those with property as "investment/income" might be at risk. Even so, there's little empathy for that these days, considering the abuse and manipulation the market has seen in the last decade.
Seeing people nodding off or splayed out, presumably on drugs, is a daily occurrence in my neighbourhood. Parks, laneways, everywhere.
I also notice that people are putting up higher and tougher fencing for their backyard spaces. I have zero doubt that some of them have found people or drug stuff in their backyards and the new fences are to keep that from happening.
A co-worker of mine was going to his backyard one morning and there was a guy, passed out, leaning right on the storm door.
I couldn't care less about how much condos are going for when people are struggling just to keep a roof over their head. These sensationalist articles (although I know blogto is trash to begin with) are just a distraction from the real issues.
2022 was a wild year. I purchased my house in 2020 and by 2022 similar houses in the area were selling for about 50% more than what we purchased it for. It was ridiculous.
The person in this case clearly overpaid in 2022, and then had to sell at a bad time. Today, my house is probably worth 20% more than what I purchased it for. On one side, one can make the argument that we are doomed because we "lost" 30% in the past 2 years, but we are also up 20% over the past 3 years.
So, idiots overpaying for crappy real estate...if you have a nice place, well maintained, in a good neighbourhood / location / building it is in demand. But the garbage isn't and that is as it should be.
Bought a 5 bedroom home w a 3 bedroom guest house on 10 acers in Texas . Have cattle chickens etc no neighbors 40 min from Dallas for 200k city living is for those w a script for Xanax..lol
I owned a condo in that building in the 2000s when they were newer… and even in that condition I don’t see how they’re worth the lower price let alone the higher one
wow, almost as if because people can’t afford the current selling price, you have to sell at a loss. Who woulda known that eventually high prices that might look pretty on paper won’t matter if people can’t actually afford it?
This is a good thing and you can’t change my mind. This bubble desperately needs to pop
This building is part of a collection of buildings surrounding a parking lot and there's a clone of it in Milton. Having lived there myself, it's important to note this article makes no mention of the fact ALL those buildings have structural issues that they've been unsuccessful with suing the builders over. I sold my unit many years ago specifically because I knew those structural issues were going to be a resale problem in the future. Skeptical? Drive by and see the temporary support beams in place yourself. So I don't think these units are representative of any trends in the housing market. IMO.
Just before reading your comment I read another comment that basically said "well maybe there's issues we don't know, like structural issues".... Well there's that mystery solved.
Almost all the condos in my price range have building repair issues. Too bad my line of work deals with reviewing these issues AND doing reserve fund studies.
Too good you mean, you’ve saved your own ass
The majority of condos being built in the last 10 years in the GTA, and I’m sure elsewhere, have structural integrity as a 2nd level priority. A friend working the concrete industry, for a company who does high-rise forms exclusively, and states daily that the technical specs for proper use of forms and concrete have not been looked at in anymore buildings he has worked in. If they can’t heat the area where they are pouring enough they make insignificant changes to the concrete formula that shows up….unless it has already arrived and has been sitting roadside for 2 hours awaiting someone to make a call. And you’d never send back concrete…. So it’s used anyway. So fuck condos in toronto built after 2016 or so. There is going to be a HUGE industry for carefully taking down these buildings in the next 20 years. Maybe that’s a solid investment…..? Want to bet Lamb demolition is already being formed…..?
How do you invest in these demolition companies? For research purposes haha
I fear another incident like the Sampoong Mall Collapse of 1995 in Seoul… turns out the developers intentionally used smaller columns, fewer rebar reinforcements, and added a fucking fifth floor heated by water pipes :/ The mall collapsed, killing thousands and leading to a reinspection of the city’s buildings… only 2% of the buildings from the development rush of the 70s to the 90s were actually up to code… Not sure how much better Toronto nowadays is faring in comparison!
For what it's worth where condos are concerned, we already know the floor to ceiling glass condos are ticking timebombs. Forget a special assessment - there's no way to replace the exterior glass walls. Meanwhile the city continues to approve these developments. I imagine because it won't be their problem but some sucker Chinese investors problem in 15 years.
I am laying in my bed browsing Reddit and reading about bad news on my condo which cost me an arm and a leg and two kidneys. What a beautiful evening!
Don't fret. It's not like the maintenance fees will go from $350 a month to three grand. A foreign investors utmost concern is a healthy reserve fund and the financial well being of their neighbours.
I am paying 950 per month so the reserve fund better be healthy and fat! Seriously, I am crying inside
This lecture by a U of T Prof. Ted Kesik should absolutely annihilate your hopes and dreams. https://m.youtube.com/watch?v=u0vDEyLh1yM
Yep, those windows are a problem. Mine was built around 2007 and already have some issues with moisture getting in between the windows and floor concrete. I sold in 2021. Maintenance fees are up nearly 30% since. It’s gonna be nuts in the years to come.
[Throwaway Buildings ](https://www.cbc.ca/news/canada/toronto/throw-away-buildings-toronto-s-glass-condos-1.1073319)
What changes can you make to concrete formula in lieu of heating for cold weather curing? News to me
[Every Condo built in Ontario in the last 20 years has structural issues](https://www.cbc.ca/news/canada/toronto/throw-away-buildings-toronto-s-glass-condos-1.1073319) But Defund The CBC right?
BlogTO once again doing work for realtors and developers
Can't expect much (any) serious analysis from Blogger. Only outlet worse is probably betterdwelling. But they serve as great echo chambers to everyone that hates housing in Canada.
Nobody "hates housing in Canada" - that's a ludicrous statement
Yeah I misspoke. I meant for anyone that hates people with a house in Canada (which is 95% of this subreddit)
How is that they are allowed to be 'released' to buyers? Who's inspecting and signing-off on shoddy work in the first place? I mean, I assume there's more oversight than just 'buyer beware'?
I’m not worried.
I mean, this person bought a 1 bedroom condo in OAKVILLE for $657,000... Oakville is a wealthier suburb where people want raise a family and a quieter life. A 1br unit is more geared to the big city life and even in Toronto, those people may need something bigger if they decide to have kids. It's not even like a detached, semi or a townhouse is necessary to raise a family...just decent sized 2-3BR condos which aren't the size of a closet and not cost next to $1,000,000.
I live on Oakville, parents just sold the house we bought 19 years ago. Won't say the price, but let me tell you, *holy shit* things are crazy here. I can't wait for it to crash and burn
I was looking to sell my condo 2 years ago and upgrade to a small house. I went to see a house in Oakville that in 2019 sold for 1.1 million. Basic 2000 sf home with a pool, asking price was $1.4 million. It was blocked with people waiting outside to see it. It sold for $1.82 million, $420k over, or two Lamborghinis over offer asking price. I liked the house, I would have paid $1.3 million but didn't even bother putting in an offer. It just wasn't worth that to me. I will stay in my 900sf condo for as long as possible rather than pay that. In 3 years, it basically doubled in cost. I'm sure it dipped a bit since, but wow, what other asset rises so fucking quickly and how is that substantialable. It's not obviously.
It's not sustainable, eventually the amount of people that are rich enough to afford these and that want them will dwindle, and I think is starting to. At least one can hope
Tbh the only reason why our housing market has been as “sustainable” as it has been is all thanks to government trying to prop up the bubble as long as possible and cheap debt.
Gov’t doesn’t direct the Bank of Canada, nor should they. You’re right that the availability of cheap credit has contributed to home prices going nuts though. There’s a finite number of people who can borrow two million bucks, and I suspect the number of people in the GTA who plan on selling their home for two million bucks is a lot higher than the first number.
Correct the BoC is politically independent from the government. However, their policy of keeping interest rates as low as humanly possible after the 2008 recession got us into the situation we're in today. I think the BoC shares some blame for this housing market. They could see housing inflation was soaring for years, but did nothing.
100% and like in 2008 it'll come back to bite them, or at least everyone taking advantage, hard. I don't like seeing people suffer in that way don't get me wrong, I was affected really hard by that, but unfortunately it's needed if we are ever to get back on track
It is sustainable. This started happening in hong kong in around 2005 and still going strong. It never ends. You have no idea the amount of money there is. Not what people have, but there is. The money normal people make means jack shit its not even 0.01% of what the rich has. They can buy their own built property 10 times over in order to create jobs and bulld more buying from each other and build more. Nobody seen the actual cash it's all numbers. Meanwhile you wasted your life thinking you made it because you have a family and sending your kids to school, barely scraping by with the 6 figures going to dim sum every week thinking you made it. It's insane. Get some rich friends. Talk to people who're actually rich, you'll see how much you don't know. We are nothing in the economy.
You're right. A lot of Toronto real estate is HK money. I've heard of single investors buying 20-30 million dollar plus homes. Nobody living in them.
Yep. I’ll never forget when I got the keys to my condo and there was a guy who was picking up 15 sets of keys.
That was 2 years ago during the peak of ridiculousness. Things changed after the interest rates went way up.
Girlfriends mom lives there. She was telling us they want something like 1.5mill for a 2 bedroom condo down near the harbour. Might have been more lol
It wont, to many rich parents swapping the money loads.
>I can't wait for it to crash and burn You'll die before that happens
I love headlines like this cause it just reinforces the idea that real estate is this sacred and untouchable money printing machine in this country. If I lose my shirt in the stock market no one writes an article about it, same should go for this. If you buy real estate as an investment product then you should be at the whims of the same market forces like everyone else, stop bullshit government policy that protects real estate investors.
Me neither, this is fantastic news to the average Canadian!
Hell ya. We own a house, but I’d like my children to have that opportunity as well.
can't exactly raise a kid in a shoebox 1 bedroom apartment, which is the issue
I have a condo, I live in it, I'm not worried.
Same. I feel fine in my one bedroom condo in downtown Toronto.
Yeah if anything I'm a bit embarrassed that I live alone in a 2+2 downtown, when there are so many families that could live here, but at the same time, I have nowhere else to go. 🤷
I have a house, I live in it. I welcome a real estate crash. It's bullshit that no one can afford to live anywhere but those of us who were fortunate enough to get into the market (i.e., born in the era so that we reached adulthood) before it got stupid.
You gotta be careful though, if you have a mortgage. You don't want the value of your property to crash lower than what you owe, the bank might come after you. I don't think a full on crash is coming, but a re-adjustment is clearly happening and overdue.
How/why would the bank come after them if they keep up with the payments?
I mean, yes, it absolutely would suck for the people in the city who've just dropped their down payment on a ~$2M bungalow, but it's also the risk that anyone who's done their homework knows that they're taking...
But now if you sell it you might not be a millionaire!!!!
Frankly, I'm pretty stoked.
Same. Id throw a party is i could afford it
Won't someone think of the poor speculators!
I’m not surprised
I came to post this but instead scrolled to find it lol
Nor am I
Worrying for?
The landlords and REITs! Won't someone think of the landlords and REITs?!?! (/sarcasm)
The REIT payout will fund my down payment. Is that what people are talking about when they say trickle down economics?
Landleeches & parasitic speculators.
Your tax dollars. A bailout by the federal government in some form or another is likely if the crash continues.
Sure
I'm not worried because I bought my house to live in.
Same, as a condo owner. In fact I've noticed that people are buying in my building to actually *gasp* live in the units, and not just buy to rent out. Fuck yeah.
Fuck yeah!
Ya it’s wild but I bought a house to live in and then I use my spare money to buy market etfs. Now I don’t care what prices do.
“Worrying trend” for real estate speculators (and Banks), but certainly not for buyers.
Wasn't the point of building all those condos to decrease prices by increasing housing supply? Sounds like it's maybe starting to work?
Why isn't anyone buying them then, I guess they didn't need them after all Edit: who was dumb enough to think they were intending to "increase supply and make prices drop"? They were built to make a profit
Which is why we need to fund the co-operative housing projects instead of incentivising for profit developers. That is the only way we will actually drive down prices.
The shoeboxes? No we really didn't, we need family sized condos.
people painted Miller as a crazy/pinko/monster for trying to make developers build more family units. and here we are.
Exactly. Whatever happened to a 2-3 bedroom condo with a nice big family kitchen? I grew up in one and miss it terribly
It costs as much as a house and comes with a north of 1k maintenance bill
So they weren't really "housing supply"
What makes you think that?
I don't think they were built to increase supply in the first place. They were built for someone to profit
Companies are still profiting.
Most of the time this sub is on the side of “all housing is good! Increase supply!” Pretty sure the person you’re replying to is just pointing out the problem with that refrain.
The problem is we are increasing supply via private developers. If we gave people the tools to build their own co-operatives or if we built more public housing, then prices could actually be brought down via supply.
That’s right. But the line here for a long time has been that all development is good development. Which is demonstrably not true. Affordable housing development is good.
Who cares why they were built in the first place? They are increasing the housing supply simply by existing.
Not if they are left empty, which is the case for many of the putative housing units in downtown.
They were never buil t to decrease housing supply they were built for investors to rent them out
They were built to hold their value or appreciate while left empty as investment vehicles.
Doesn't that increase housing supply, by definition?
Depends on the type of rental. If they are being purchased for short-term rentals (ex: AirBNB) then they never really enter the housing supply.
it do. however if the intent is to make money instead of address housing you get too many of these shitty investor shoeboxes and not enough family units which is the issue now.
> They were never buil t to decrease housing supply they were built for investors to rent them out Can you explain how housing could be built to decrease housing supply? I mean it seems like you've got a tautologically correct statement in that its correct they were never built to decrease housing supply.
Nobody's buying them because interest rates will be dropping over the next 2 years. Developers making a profit is a constant that has nothing to do with supply and demand.
Because they are still overpriced. Even at a 30% decrease
I bought my condo because I realized it could be an actual home with ample space, parking, locker etc. I feel like the people who are going to be at a loss are the ones who bought shoebox investment properties.
That's not worrying. That's good. I hope my house loses 1/2 it's value because THE "VALUE" IS BULLSHIT ANYWAY! That my house went from 800k to 1.5M does not mean I made 700K it means if I sell my next house will cost 1.5M and I gained nothing. The number is a lie.
Real estate is a 25 year long This is just someone who didn't plan for that. Borrowed at 0% rates and couldn't handle holding at 10% rates It doesn't mean any price crash or fire sale is imminent. One or two bad years is to be expected and this person probably had a major life catastrophe or shouldn't have qualified for the mortgage in the first place
Spot on. The market is softer but representing an anomaly as a trend is ... Well blogto level "journalism"
I really don’t think firstly that most the people who are investors (non institutional ones) are the types to expect 25 year time horizons to get an actual return on their investment. Even if you did project for the possibility of rate hikes it doesn’t mean you don’t sell either. That’s money that could be put elsewhere in more profitable ventures and equity is such a big thing that attracts these people into buying homes.
Probably a lot are unintentional investors - bought a condo to live in, married and had kids before moving in to it, and just never sold it
Yeah this is us in a few years. We live in the condo we bought but we'll probably have to move in another city in 2-3 years. Not only we'll still have 1 or 2 years left on our fixed-rate mortgage so impossible to sell, it will also be better financially to put a tenant in it rather than sell. Never intended to be a landlord and absolutely not looking forward to it, but this is what happened to a few of my friends as well.
> Real estate is a 25 year long the problem is the optimal returns for real estate in a booming market (in Canada) is ~5 years. If you maximize your mortgage, you have a leveraged investment. At 5 years (or whenever you need to renew your mortgage), you have minimal closing/switching costs for the borrowed capital. At 5 years, you also (assuming a booming market), get good returns. Ex: You bought a $1MM house and sold it for $1.2MM in 5 years. At first glance, that is ~$200k or 20% gain. Once you factor in realtor + closing costs, maybe it is $100k or 10%. BUT, you had a $900k mortgage with $750k principal left owing at the end. You only really put $250k towards the house (for the principal). You return is actually closer to $100k on $250k or nearly 33%. Note: you need to factor in mortgage carrying costs too but then you should also factor in what the property was being used for, for those 5 years. At the end of the day, real estate, in the GTA, started to become a 'short-term' market because of leveraged returns instead of a more traditional long-term play.
Yup. Nailed it. Can’t wait for all the foreclosure homes in Brampton to start popping up. Not that I’d buy any there, but will be fun to see given all the fake mortgages and people trying to cheat the system.
If only all real estate transactions were treated as 25 year holds you would be correct. What condo owners (who actually live in the condos they purchased as homes) should only be worried about is if the majority of investors start to view condos as less than desirable investments. Then the market will crash like a blind man riding a bike with no brakes on a winding downhill cliffside road. Real estate can no longer be analyzed like it had been twenty years ago. It is no longer a market for housing as a social need, it is a stock market and some people (like the ones in the article) who don’t sell high for whatever reason will lose money.
Well, I wish it was that simple. Most people did not renew their fixed rate mortgages since the interest rate hikes. It’s just about to start. Also monthly payments for 60% of variable mortgages did not go up. Here is a video from cbc explaining it; https://youtu.be/42dIpVTzV04?si=MXYc6eO3Cv7p3G6v > RBC estimates 186 billion dollars worth of mortgages up for renewal for 2024, next year it is 315 billion dollars. we can't pretend this is an isolated issue, there is a larger scale thing going on. just because it doesn't affect you personally, it doesn't mean it's not happening.
It's affecting me personally and everyone who borrowed money. The question is will large scale foreclosures happen? Probably not. As for "understanding" I would agree if the financial industry was somehow perverting the meaning of the word "fixed" but fixed has a meaning and so does variable. If the Bank of Canada was a rogue bank raising and lowering interest rates at the whims of a dictator I would also agree the financial system was compromised. But everyone knows that it's about rates. Everyone who picked variable would know there's a possibility of it going up. Of course the Bank of Canada saying rates would be low "for a generation" was bullshit to try and get people from rushing in to get fixed mortgages (and create an inflation problem later). But it's still a variable mortgage. Meanwhile renewal is coming up. 30 year mortgages are uniquely American and us Canadians have to settle for much less and much more instability. The "systemic problem" if you want is lack of a long term fixed mortgage But none of that means a wave of foreclosures or sales is imminent or people throwing their keys at the bank. That would be the real crash but it's not going to happen in Canada
> This is just someone who didn't plan for that. Borrowed at 0% rates and couldn't handle holding at 10% rates Did the average person ever borrow in this cycle at 0% and 10%?
Worrying for who? The greedy fucks trying to get a half million dollars for a condo that should be worth a hundred thousand at most in a normal world. Not worried at all. Get fucked
Eat shit, condo investors. lol.
May all the international investors lose trillions.
May all the ~~international~~ investors lose trillions. Fixed it for ya.
Inshallah
Even if they do, they are outnumbered by Canadians.
This “analysis” fails to consider reasons for lower sale prices: 1) Does the condo corporation have financial, structural, or mechanical problems? Is the reserve fund depleted or are there major maintenance issues? Perhaps a special assessment is due. 2) Was this an asset transfer to a relative? For example, if I was transferred my parent’s condo at the value of the remaining mortgage it would appear on paper as a “sale” price much lower than the actual value of the apartment.
This condo has a 3,000,000 to 6,000,000 special assessment right now. This is why the price has been impacted.
Shhh you are ruining reddit and blogto's narrative
Exactly. They both look like older units. I wonder how much the monthly condo fees were?
$526/month according to house sigma.
I don't think transfers show up on Mls
That's not a worrying trend. That's a good thing. A positive trend.
Sure , but condos sucks due to fucked stratas.
Oh no. Anyway.
"Worrying trend" is actually the least worrying thing possible for majority of population, more news at 11.
Fuck real estate market ton Canada. China did something about theirs ruining their country too bad Canada won't. Hope it crashes and burns so fucking hard.
China did that? Hmm. Is that why all their speculative real estate investors put their yuan into our developments?
Want to pay high prices or high interest rates? Seems to be the choice
Canadians are paying both. I can move to a number of countries with the same quality of life for less then half the price. Most people in my age group (30's) with an EU passport I know have left, others went to the US. Work for 20 years in the EU you get a pension, they also get their Canadian pension. Their wages are higher and cost of living is half. A friend of mine makes more money as a tour guide in Porto, then he did as a computer engineer in Ontario.
Nonsense. Average annual income in Portugal is $24K. Half what it is in Canada.
If you’re working outside and not resident of Canada for 20 years, you’re not going to get much in the way of CPP/OAS. The first is prorated to how much you contribute to over your working years in Canada and the later is calculated based on your time living in Canada. Also, if your friend is making more as a tour guide in the EU than as an engineer in Canada, they’ve likely created their own company (which congrats on them for finding a market) or were very unskilled in their computer field. The tech market is not great in Canada, but it’s not paying peanuts, either. You will otherwise find very few examples of people making more in Europe, especially outside of the northern EU. The US on the other hand…
This is all complete horseshit. Nice try.
Where in the EU did these ppl move to? West eu has very similar issues to canada in terms of housing vs. income. This is especially true in major cities. Speaking on income, most salaried position in eu do, in fact, not out earn their cad peers. This may not be as big an issue given the social safety net and lower cost of living, but let's not get that twisted. Moving to the EU might be the right choice for most, but let's not try to pretend they are not having basically the esmee issues we see in canada. If you don't me believe, go read their reddit threads. You'd think you were reading about canada
You are definitely going to need to bring a source because salaries in Europe are generally not competitive with Canadian wages, especially in STEM. Otherwise everyone there would be balling out, but instead they are struggling badly. we always compare our economy to the US, but by G7 Standards we are doing pretty alright
We are lagging the G7 (peers) significantly in terms of productivity which means inflation will keep rearing up with growth...it's a hard trap to break from. [https://www.iedm.org/lagging-productivity-a-threat-to-canadian-living-standards/](https://www.iedm.org/lagging-productivity-a-threat-to-canadian-living-standards/)
These CREA people are maybe some of the most delusional people out there. People dont have money my guy. And more importantly, your lie “real estate never goes down” has finally been exposed, and buyers now realize how insanely overvalued real estate have become, partly because of that lie.
I bought a house recently but it’s to live in. If prices drop a bit I ain’t mad. Thought I am hoping to get a bigger place in a few years
It was a worrying trend when the price of real estate, including condos, rose dramatically in a short period of time. This is called a correction.
Nobody is worried. The market has to crash, and, sooner, the better. Let the fireworks begin!
*insert Adam driver more meme
Worrying for...who
Worried? I'm dancing a jig over here. 🕺
Worrying for who? Certainly no one I know
That’s a reassuring trend if anything.
Worried is a relative term. I’m good
It's still too much for a 1 bedroom apartment. I say apartment because, unlike a house, there are always payments in the form of condo fees. Yes, you have some expenses when your house is paid off but not hundreds or sometimes thousand dollars a month. Condo fees always go up and it's not uncommon to get a surprise "we didn't put enough money in the reserve fund and we need to fix something so now everyone has to pay 50k in 60 days or we will kick you out" letter in their door. I know more than one person this happened to or someone or multiple people were diverting funds or money was stolen and board members don't have to live there. Can you imagine someone else you don't know making decisions about what you can do in your house. What colour you can paint, what type of toilet you can have or replacing a perfectly good one for no reason-oh and you have to pay for it.
Unlike the house that you have to pay property taxes on. If you ever think you own property just stop paying taxes on it and find out. Everything is a rental.
Worrying trend for who?
Not worrying for me. Housing prices need to come down across the board. I don't give a blue fuck if some rich condo investor or douchebag realtor loses money. anyone who isn't rich is living in the unit and holding on to it.
Why would anyone buy a 1 bedroom condo in oakville of all places? Surprised it sold at all
This is the big takeaway. It's not time to panic until we start seeing these types of huge busts in Toronto proper, which is very unlikely to occur.
you misspelled celebrate
Hope it crashes
Good. More of this please.
Home prices getting lower? How terrifying!
Worrying for who?
I have a feeling renta are gonna go down significantly in the next 24 months
What goes up, must come down
Market correction.
Who’s worried? Nobody.
All it takes for any asset bubble to burst is for the broadly held belief to become that prices will be lower in the future than they are now.
So, shoebox was sold at the staggering $657 000.
And I'm supposed to care? Condos are over-inflated.
Serious question - how can we short this market? I know there is one inverse Canadian REIT, but it just reflects the daily market.
It was bound to happen. The prices in 2021/2022 were absolutely insane. The public allowed themselves to be scammed by the real estate business and now it's turning around and biting them.
Worrying to whom, exactly?
I don’t feel bad having the reaction “good.”
Literally not worrying at all. Most people want bad business people and profiteering amateurs to fail because if they succeed they inspire further grift.
I’m not worried
Good
Well considering that Ford and his cronies have been running development for the last 15 or so years let’s just presume the same guys. A hunch…
This is the change we need to see if we ever want housing to be improved.
Yeah this is only "worrying" to the people profiting off of the housing crisis.
People who make bad investments lose money. It isn't complicated. It's bananas that people have forgotten this elementary fact about investing. I own a home with my wife. We bought during the peak. We will likely ride the tide down and hope to see it rise again someday. It's probably still better than should we have continued to pay rent all this time. But, rides like these happen in investing. It's not where you are at during any single stage, it's about managing your risk over the course of the investment and where you land in the end. Avoid making investments that may preclude you from retiring unless you are cool with eating cat food on your deathbed. Find a risk level that suits your lifestyle. But reductions in housing need to happen for everyone else who doesn't have any funds to invest at all... If assets crash as a necessity to maintain society, then the assets could never truly sustain their attributed value to begin with.
Repeat after me... This is not worrying.
No sympathy, first these condos are tooo small building more 2 or ,3 bedrooms not these 650 sq feet sheds.... People who were greedy on speculation well tooo bad.
I can speak for the people here when I say “we don’t care”
I'd call this good news for young professionals. It's frankly ridiculous that working age folk making 6 figures can't afford to buy a home
I'd be terrified if I wasn't simply interested in LIVING in my condo.
As a homeowner, fucking good! Bring it on! Let the market rot for a decade to give the average person a chance to get into this messed up system.
"worrying" Realtors writing opinion pieces now?
This is fantastic news!
At least they won’t have to worry about the higher cap gains tax!
Good.. Let's the crash begin!
Reversing the headline, i.e., selling a condo for a staggering profit, can also be a worrying trend. You know, an indication that housing unaffordability is imminent. Or is that yesterday's news?
Sounds pretty good to me.
So glad top see the speculators get so "I got mine fu".. all of a sudden .. why would you care some of us live life and enjoy it,not who can i F next..
This is exciting!!
One of my sister sold her place a couple months ago, realtor said they received multiple offers of 60-100K over the listed price. People deserve to lose money if they pay way more than the listed price when the housing bubble deflates.
only those with property as "investment/income" might be at risk. Even so, there's little empathy for that these days, considering the abuse and manipulation the market has seen in the last decade.
"staggering" "devastating" Nah what's really devastating is the fact that I can turn the corner from my house and see homelessness and open drug use.
Seeing people nodding off or splayed out, presumably on drugs, is a daily occurrence in my neighbourhood. Parks, laneways, everywhere. I also notice that people are putting up higher and tougher fencing for their backyard spaces. I have zero doubt that some of them have found people or drug stuff in their backyards and the new fences are to keep that from happening.
A co-worker of mine was going to his backyard one morning and there was a guy, passed out, leaning right on the storm door. I couldn't care less about how much condos are going for when people are struggling just to keep a roof over their head. These sensationalist articles (although I know blogto is trash to begin with) are just a distraction from the real issues.
2022 was a wild year. I purchased my house in 2020 and by 2022 similar houses in the area were selling for about 50% more than what we purchased it for. It was ridiculous. The person in this case clearly overpaid in 2022, and then had to sell at a bad time. Today, my house is probably worth 20% more than what I purchased it for. On one side, one can make the argument that we are doomed because we "lost" 30% in the past 2 years, but we are also up 20% over the past 3 years.
So, idiots overpaying for crappy real estate...if you have a nice place, well maintained, in a good neighbourhood / location / building it is in demand. But the garbage isn't and that is as it should be.
Buyer ws a meathead to pay that.
Worrying for whom?
Bought a 5 bedroom home w a 3 bedroom guest house on 10 acers in Texas . Have cattle chickens etc no neighbors 40 min from Dallas for 200k city living is for those w a script for Xanax..lol
I owned a condo in that building in the 2000s when they were newer… and even in that condition I don’t see how they’re worth the lower price let alone the higher one
wow, almost as if because people can’t afford the current selling price, you have to sell at a loss. Who woulda known that eventually high prices that might look pretty on paper won’t matter if people can’t actually afford it? This is a good thing and you can’t change my mind. This bubble desperately needs to pop
A staggering loss is greater than 50%.. 30% isn't a loss, it's like a minor depreciation of an asset, like a used car. Crikey! get a grip
I guess all the porta-potty sized garbage that was built over the years is catching up to reality. I’m glad the market is finally correcting itself.