Toronto`s Real Estate Bubble
- Thread starter AndreiAngelkovski
- Start date
if this does not say toronto bubble i don't know what does;
oh yeah, i do, the cover of this month's macleans;
188 COTTINGHAM ST., TORONTO
Asking: $1.689-million
Taxes: $7,929.29
Agent: Doug Heighington (Royal Lepage/ Johnson and Daniel Division)
oh yeah, i do, the cover of this month's macleans;
188 COTTINGHAM ST., TORONTO
Asking: $1.689-million
Taxes: $7,929.29
Agent: Doug Heighington (Royal Lepage/ Johnson and Daniel Division)
A "bubble" isn't determined by whether or not an individual likes prices in general, if they can find a deal, what the total indebtedness of the nation is, the unemployment rate, the number of bidding wars, or whatever. In my opinion a "bubble" is determined to be such by history - nothing else.
It's pointless thinking about whether we are in a "bubble" (or not). If an individual can't find an investment that makes financial sense, then it doesn't matter what we are in.
It's pointless thinking about whether we are in a "bubble" (or not). If an individual can't find an investment that makes financial sense, then it doesn't matter what we are in.
[quote user=Rickson9]It's pointless thinking about whether we are in a "bubble" (or not). If an individual can't find an investment that makes financial sense, then it doesn't matter what we are in.
Interesting point. I agree with your statement.
Interesting point. I agree with your statement.
[quote user=Rickson9]It's pointless thinking about whether we are in a "bubble" (or not).
Reaaaalllllllyyyyyy
Intrinsic Value, You guys should google it.
Reaaaalllllllyyyyyy
Intrinsic Value, You guys should google it.
Oh ok. I'm all wrong and you are all right of course.
I'll continue to waste my time thinking about if a market is over-valuated, but thank you.
Valmont.
I'll continue to waste my time thinking about if a market is over-valuated, but thank you.
Valmont.
Hi Everyone,
Here is food for thought.
http://www.reincanada.com/press-releases-view/articletype/articleview/articleid/219/secrets-of-the-canadian-real-estate-cycle-with-don-r-campbell.aspx
Interesting to see what you guys are thinking. I do not think that there is a bubble waiting to burst but since house prices in TO have only been increasing since 2000, I have to wonder when it will stop.
Don Campbell's opinion seems to be that we are in recovery phase...Therefore there would be a boom phase of the real estate cycle ahead of us. I have my doubts since I have not seen a correction of prices.
Take care,
Flavia Redshaw
Here is food for thought.
http://www.reincanada.com/press-releases-view/articletype/articleview/articleid/219/secrets-of-the-canadian-real-estate-cycle-with-don-r-campbell.aspx
Interesting to see what you guys are thinking. I do not think that there is a bubble waiting to burst but since house prices in TO have only been increasing since 2000, I have to wonder when it will stop.
Don Campbell's opinion seems to be that we are in recovery phase...Therefore there would be a boom phase of the real estate cycle ahead of us. I have my doubts since I have not seen a correction of prices.
Take care,
Flavia Redshaw
I spent a few days in Toronto last week. I haven't been there for two years. Here is an uninformed opinion: Quite a lot of condos downtown. Wow ! Very impressive.
Many condo towers are very basic and un-inspirational, boring, and full of small 1BR condos. Likely a glut aka bubble in that segment, so only a good investment if you can hold 5 or better 10+ years with sufficient rental income to cover all expenses: condo fees, property taxes, mortgage, R&M, management fees .. Keep in mind also that the advertised condo fees usually go up in year 2 by 20-50% and that some condo towers have questionable construction quality.
With Ontario's debt at an all time high and climbing, taxes will rise, jobs disappear (both public and private), thus real estate prices will flat line or decline in many areas, but not all. Areas like Beaches, Roncesvalles and other inner city areas not downtown but very close to it will likely do very well, as will areas close to the new LRT/subway/street car lines that are still being debated. So pay close attention to that. Once a new station is approved, buy in a 800 m radius if it fits your criteria because prices will be higher once the station is built (3-12 years from now .. so watch for timelines !)
Not a slam dunk investment like it used to be, a flat-lining or decline in many areas and great opportunity in pockets that need careful research.
Related article here on Toronto hospital spending cut backs as it is essentially broke. Perhaps a coalition government with the NDP or the Conservatives in the making ?
Or here on condos in Toronto losing its investment lustre.
or here on myreinspace on why Ontario's prices will fall in most (but not all) places.
Many condo towers are very basic and un-inspirational, boring, and full of small 1BR condos. Likely a glut aka bubble in that segment, so only a good investment if you can hold 5 or better 10+ years with sufficient rental income to cover all expenses: condo fees, property taxes, mortgage, R&M, management fees .. Keep in mind also that the advertised condo fees usually go up in year 2 by 20-50% and that some condo towers have questionable construction quality.
With Ontario's debt at an all time high and climbing, taxes will rise, jobs disappear (both public and private), thus real estate prices will flat line or decline in many areas, but not all. Areas like Beaches, Roncesvalles and other inner city areas not downtown but very close to it will likely do very well, as will areas close to the new LRT/subway/street car lines that are still being debated. So pay close attention to that. Once a new station is approved, buy in a 800 m radius if it fits your criteria because prices will be higher once the station is built (3-12 years from now .. so watch for timelines !)
Not a slam dunk investment like it used to be, a flat-lining or decline in many areas and great opportunity in pockets that need careful research.
Related article here on Toronto hospital spending cut backs as it is essentially broke. Perhaps a coalition government with the NDP or the Conservatives in the making ?
Or here on condos in Toronto losing its investment lustre.
or here on myreinspace on why Ontario's prices will fall in most (but not all) places.
Rickson
Do you have a fan club?
Adam
[quote user=Rickson9]"We don't see things as they are, we see things as we are."
Do you have a fan club?
Adam
[quote user=Rickson9]"We don't see things as they are, we see things as we are."
[quote user=housingrental]Rickson
Do you have a fan club?
Adam
[quote user=Rickson9]"We don't see things as they are, we see things as we are."
The last time he used that quote I looked it up, it's attributed to Anais Nin, who was a, well, she was something anyway. It's quite the story, actually. http://en.wikipedia.org/wiki/Ana%C3%AFs_Nin
Definitely a great quote, something to make you think. I've been really trying to ask myself this year, "What do I believe that isn't true" and question the assumptions I've made in the past. The most valuable ones are the assumptions you've made that you didn't know were assumptions, and the assumptions you've made about yourself.
Regards,
Michael
Do you have a fan club?
Adam
[quote user=Rickson9]"We don't see things as they are, we see things as we are."
The last time he used that quote I looked it up, it's attributed to Anais Nin, who was a, well, she was something anyway. It's quite the story, actually. http://en.wikipedia.org/wiki/Ana%C3%AFs_Nin
Definitely a great quote, something to make you think. I've been really trying to ask myself this year, "What do I believe that isn't true" and question the assumptions I've made in the past. The most valuable ones are the assumptions you've made that you didn't know were assumptions, and the assumptions you've made about yourself.
Regards,
Michael
It is a great Quote indeed..
So you guys really think we can't predict an overvaluated market? Why not?
So you guys really think we can't predict an overvaluated market? Why not?
The term "overvalued" is an adjective.
In general, I ignore the adjectives in a sentence because they hold different meanings for different individuals.
Their kitchen is "gorgeous", they paid "a lot" of money for that property, they got a "great" tenant. The market is "overvalued".
"Overvalued" doesn't mean anything. Overvalued only means something after the fact; after a collapse. Until that point, it's really quite meaningless.
If $10 is "overvalued" what is $11? "Super overvalued"? What is $12? "Super duper overvalued"? What is $13?" "Crazy super duper overvalued"? Where does it end? I'll tell you where it ends - after a collapse. Until then, I forget about the adjectives.
Now, if you're telling me that you can predict the future, then that's a different story.
In general, I ignore the adjectives in a sentence because they hold different meanings for different individuals.
Their kitchen is "gorgeous", they paid "a lot" of money for that property, they got a "great" tenant. The market is "overvalued".
"Overvalued" doesn't mean anything. Overvalued only means something after the fact; after a collapse. Until that point, it's really quite meaningless.
If $10 is "overvalued" what is $11? "Super overvalued"? What is $12? "Super duper overvalued"? What is $13?" "Crazy super duper overvalued"? Where does it end? I'll tell you where it ends - after a collapse. Until then, I forget about the adjectives.
Now, if you're telling me that you can predict the future, then that's a different story.
Yaaaaa I understand what you are saying,
But, 1+1 =2.
Real estate is extremely simple ; it's supply and demand.
With mathematical calculations we can predict the future with good precision.
If there is an over-supply and the demand is not strong enough, how is it even possible for price to go up?
But, 1+1 =2.
Real estate is extremely simple ; it's supply and demand.
With mathematical calculations we can predict the future with good precision.
If there is an over-supply and the demand is not strong enough, how is it even possible for price to go up?
"If $10 is "overvalued" what is $11? "Super overvalued"? What is $12? "Super duper overvalued"? What is $13?" "Crazy super duper overvalued"?
Exactly my friend. I think the problem right now is on the definition of demand.
There is a demand when people can actually pay for something.
99,999% of the population would like a Ferrari, but does that mean that when the company Ferrari is doing market reasearch they put 6 billion people on their demand side? No, this is not the real demand.
It doesn't matter if people are too dumb to realise they won't be able to pay their mortgage soon or not. It does not change anything if they continue to buy for different reasons. When there is no more money, there is no more money, then the demand drops.
Valmont.
Exactly my friend. I think the problem right now is on the definition of demand.
There is a demand when people can actually pay for something.
99,999% of the population would like a Ferrari, but does that mean that when the company Ferrari is doing market reasearch they put 6 billion people on their demand side? No, this is not the real demand.
It doesn't matter if people are too dumb to realise they won't be able to pay their mortgage soon or not. It does not change anything if they continue to buy for different reasons. When there is no more money, there is no more money, then the demand drops.
Valmont.
Hi Maxime
There are too many unknowns for any human to predict the future with good precision - a model is only as good as the creator of the model.
Were you able to predict how real estate (or other markets) behaved with good accuracy between 2000 and 2010?
[quote user=MaximeValmont]
Yaaaaa I understand what you are saying,
But, 1+1 =2.
Real estate is extremely simple ; it's supply and demand.
With mathematical calculations we can predict the future with good precision.
If there is an over-supply and the demand is not strong enough, how is it even possible for price to go up?
There are too many unknowns for any human to predict the future with good precision - a model is only as good as the creator of the model.
Were you able to predict how real estate (or other markets) behaved with good accuracy between 2000 and 2010?
[quote user=MaximeValmont]
Yaaaaa I understand what you are saying,
But, 1+1 =2.
Real estate is extremely simple ; it's supply and demand.
With mathematical calculations we can predict the future with good precision.
If there is an over-supply and the demand is not strong enough, how is it even possible for price to go up?
[quote user=MaximeValmont]
With mathematical calculations we can predict the future with good precision.
1. Please tell me your precise prediciton of the future. I assume that it has specific dates and numbers because of it's precision?
2. What specific wealth-building actions have you taken based on these precise calculations?
Any information appreciated.
With mathematical calculations we can predict the future with good precision.
1. Please tell me your precise prediciton of the future. I assume that it has specific dates and numbers because of it's precision?
2. What specific wealth-building actions have you taken based on these precise calculations?
Any information appreciated.
Funny how this debate went from predicting when an asset is over-valuated to predicting in the future ANY events...
Look, wht do you guys think there are thousands of financial firms around the world right now crunching numbers to try to predict how the market will behave ?
So basically, if we listen to your logic, All these good investor that invested and made a fortune became rich based on LUCK alone.
I really have no idea what you guys are talking about. In my head there is a huge supply and demand curve and from that it's pretty easy to determine what's up if you have good data.
When you flip a coin, the common knowledge is that there is 50% chance it's going to be face. I don't think so. Bring me a phycisist and good equipment and me and that guy will predict how the coin will turn out 100% of the time.
Valmont.
Look, wht do you guys think there are thousands of financial firms around the world right now crunching numbers to try to predict how the market will behave ?
So basically, if we listen to your logic, All these good investor that invested and made a fortune became rich based on LUCK alone.
I really have no idea what you guys are talking about. In my head there is a huge supply and demand curve and from that it's pretty easy to determine what's up if you have good data.
When you flip a coin, the common knowledge is that there is 50% chance it's going to be face. I don't think so. Bring me a phycisist and good equipment and me and that guy will predict how the coin will turn out 100% of the time.
Valmont.
It is impossible to predict with absolute certainty what the outcome of a fair coin flip will be.
The world is full with uncertainty and that is why an entire field of mathematics was spawned. It was created to quantify and qualify this uncertainty and try to understand it further. There is a reason banks employ phD's and named them "quants". They are not fortune tellers and can not predict the future, they can provide a relatively accurate prediction based on a given set of data and assumptions. Just because that prediction did not prove true does not mean that it wasn't the most probable outcome.
Just with any sufficiently complex open-system it is impossible to absolutely predict how it will behave.
The world is full with uncertainty and that is why an entire field of mathematics was spawned. It was created to quantify and qualify this uncertainty and try to understand it further. There is a reason banks employ phD's and named them "quants". They are not fortune tellers and can not predict the future, they can provide a relatively accurate prediction based on a given set of data and assumptions. Just because that prediction did not prove true does not mean that it wasn't the most probable outcome.
Just with any sufficiently complex open-system it is impossible to absolutely predict how it will behave.