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Real Estate market |
bombayduck62
Senior Desi
Member since: Jan 09
Posts: 146
Location:
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Real Estate market
Can someone give me a frank opinion on the real estate market in Toronto, I keep hearing conflicting thing on the state of the market. Some people are in denial about the so called bubble and on the other hand we see people forming lines to buy high rise condo apartments and real estate agents holding so called VIP showing & bookings. I might want to invest in the future.
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20-02-12 20:30:26 |
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bhootnath
Senior Desi
Member since: Mar 11
Posts: 737
Location:
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I can give that, what do you want to hear?
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21-02-12 09:59:36 |
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ashedfc
Senior Desi
Member since: Jun 10
Posts: 2156
Location: GTA
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Low hanging fruits are already taken... its the risky ones which are flocking to catch the whatever trend is left. That doesn't mean housing will start falling rightaway (the party can continue for some more time); but you have to see what you are looking for: are you an investor or a speculator..
If you are a speculator (by all means go and place a bet), but be prepared to exit at the first sign of trouble. This is a typical herd mentality: all speculators run for exit when they sense trouble.
What happened to Miami, Las Vegas (or Madrid, or Athens, or any other city in the last couple of years).
One more very important indication is the Baltic Dry Index (it gives you info on the shipping rates: when this index is low; means shipping companies are not getting enough business & trade & commerce is very low)..
Have a look at the 5yr chart.. you will get an idea where the global economy stands...
http://www.bloomberg.com/quote/BDIY:IND/chart/
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21-02-12 16:19:52 |
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Vandematram
Senior Desi
Member since: Nov 08
Posts: 1354
Location: Sunny - Leone
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It's all a joke.
Some said that it is a bubble.
The bankers called it recently as a balloon.
But the problem is that when a bubble pops it sound is limited, while when a fully blown balloon pops it is going to be heard all over the place.
My gut feel is that RE is going to be safe in the longer run in GTA, while in TO it is going to become some what iffy as the city is becoming economically unviable.
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Sunny Leone a true Canadian DESI now back in India !.
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21-02-12 18:56:36 |
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bombayduck62
Senior Desi
Member since: Jan 09
Posts: 146
Location:
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21-02-12 20:38:21 |
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san-hugo
Senior Desi
Member since: Aug 10
Posts: 894
Location:
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Quote:
Originally posted by Vandematram
It's all a joke.
Some said that it is a bubble.
The bankers called it recently as a balloon.
But the problem is that when a bubble pops it sound is limited, while when a fully blown balloon pops it is going to be heard all over the place.
My gut feel is that RE is going to be safe in the longer run in GTA, while in TO it is going to become some what iffy as the city is becoming economically unviable.
nopy nopy ..the bubble bursts suddenly, like the market went from Q2-3 of 2008 to Q4... that was a burst and the balloon? .. in contrary experts say that the balloon goes fiSsss..slowly deflates... so will take time to come down.. generally the stupid speculators bring the market down suddenly but fortunately in GTA (like in NY) and Vanc., the demand of housing including condo is strong and there is no sign of it losing much of the traction..its a strong balloon after all with banks, influx immigrants, renters everywhere, rich middle east pops of students, mushrooming educational institutes, heavy concentration of corporation, onslaught of international events (panam games e.g,), good public transport, travel discouraging highways and some patient RE players conniving together.. its a good good combination around here.., it will take some tens of bad stars coming together to make it sudden burst..but well informed correction will happen for sure in some times...
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21-02-12 20:56:58 |
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rahul_singh23
Senior Desi
Member since: Apr 05
Posts: 989
Location:
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It's your money so educate yourself.
Everything starts from a correction.It takes lot of effort to get out from denial when you are in deep hole.
There are few friends who bought in 2005-2006 in USA and still having negative equity and paying religiously and some in AB/BC who bought in 2007-2008 are in same boat. They still do not agree their decision was financially wrong but you can say all crap like place to live, place for kids, place for toys, place for connection. But 6 figure principal loss or 8-10 years behind mortgage closing is a financially wrong decision. It's not a correction. Some of them can not move even with a good job offer.
You need to do your own research than expecting someone gives black/white ans.
Every bubble starts busting from correction. RE takes long time than stock market to get correct.
Calculate your rent, mortgage interest, CMHC fee, realtor commission, closing cost, lawyer fee, mortgage break conditions, negative equity factor, moving cost and other miscellaneous cost and figure out what works for you. Renting/owning/investing? or doing same in US when RE is so cheap in some part of country?
Are there any other vehicle for you to make more sense like rrsp, resp, tfsa, etf, daily trade or mutual funds?
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Last edited by: rahul_singh23 on 22-02-12 13:03:47 |
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22-02-12 13:00:17 |
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bhootnath
Senior Desi
Member since: Mar 11
Posts: 737
Location:
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As I previously posted, market is currently how you want to see it..if you perceive time to buy then time to buy based on the lines/price increase, global issues etc. if you perceive time to get out then time to get out again based on the lines/price increase, global issues etc. In short the factors that kind of supports the argument, same can be used to against it...ultimately it depends on how much risk can you afford to take and for how long.
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22-02-12 13:13:48 |
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bhootnath
Senior Desi
Member since: Mar 11
Posts: 737
Location:
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Quote:
Originally posted by rahul_singh23
Everything starts from a correction.It takes lot of effort to get out from denial when you are in deep hole.
There are few friends who bought in 2005-2006 in USA and still having negative equity and paying religiously and some in AB/BC who bought in 2007-2008 are in same boat. They still do not agree their decision was financially wrong but you can say all crap like place to live, place for kids, place for toys, place for connection. But 6 figure principal loss or 8-10 years behind mortgage closing is a financially wrong decision. It's not a correction. Some of them can not move even with a good job offer.
You need to do your own research than expecting someone gives black/white ans.
Every bubble starts busting from correction. RE takes long time than stock market to get correct.
Calculate your rent, mortgage interest, CMHC fee, realtor commission, closing cost, lawyer fee, mortgage break conditions, negative equity factor, moving cost and other miscellaneous cost and figure out what works for you. Renting/owning/investing? or doing same in US when RE is so cheap in some part of country?
Are there any other vehicle for you to make more sense like rrsp, resp, tfsa, etf, daily trade or mutual funds?
May be you only have those friends, I have seen my old age superiors who were about to retire lost all their income that they had invested in 401K, Roth IRA all kinds of IRAs. whereas all my friends who bought the new houses in 2006/2007 here in Canada are enjoying the benefits of it..even if markets corrects by 50% they still are comfortable. They have comfortable amount invested in RRSP and some in RESP. They donot want to move because their life is settled and comfortable. I have also seen some of my friends who were in denial of RE rising and instead invested in oil, gold and yeah..silver, stock etc. took huge losses when oil was at around $60 a year and half back..because it is easy to sell those things. People who waited for last couple of years already lost big chunk if they did not buy a property either as primary residence or as an investment. Although it is difficult to say what happens next but the people who are in denial there is never a good time to buy a property. In 2007 when I bought a house, everyone was saying marked is going to go down wait for some time...thanks to God that I did not deter then..otherwise I would still be in a rental condo and waiting for market to correct. After 3 years i.e in 2010 other friend bought a house, even I was kind of one of them to tell him that the market is overpriced, but he took the decision and already enjoying a big rise in price.
I don't know where some folks just brings some graphs..like silver was going to go $100 gold to $5000 and RE just going to hit the rock bottom...
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Last edited by: bhootnath on 22-02-12 13:27:20 |
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22-02-12 13:26:35 |
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web2000
Senior Desi
Member since: May 06
Posts: 840
Location:
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Quote:
Originally posted by bhootnath
Quote:
Originally posted by rahul_singh23
Everything starts from a correction.It takes lot of effort to get out from denial when you are in deep hole.
There are few friends who bought in 2005-2006 in USA and still having negative equity and paying religiously and some in AB/BC who bought in 2007-2008 are in same boat. They still do not agree their decision was financially wrong but you can say all crap like place to live, place for kids, place for toys, place for connection. But 6 figure principal loss or 8-10 years behind mortgage closing is a financially wrong decision. It's not a correction. Some of them can not move even with a good job offer.
You need to do your own research than expecting someone gives black/white ans.
Every bubble starts busting from correction. RE takes long time than stock market to get correct.
Calculate your rent, mortgage interest, CMHC fee, realtor commission, closing cost, lawyer fee, mortgage break conditions, negative equity factor, moving cost and other miscellaneous cost and figure out what works for you. Renting/owning/investing? or doing same in US when RE is so cheap in some part of country?
Are there any other vehicle for you to make more sense like rrsp, resp, tfsa, etf, daily trade or mutual funds?
May be you only have those friends, I have seen my old age superiors who were about to retire lost all their income that they had invested in 401K, Roth IRA all kinds of IRAs. whereas all my friends who bought the new houses in 2006/2007 here in Canada are enjoying the benefits of it..even if markets corrects by 50% they still are comfortable. They have comfortable amount invested in RRSP and some in RESP. They donot want to move because their life is settled and comfortable. I have also seen some of my friends who were in denial of RE rising and instead invested in oil, gold and yeah..silver, stock etc. took huge losses when oil was at around $60 a year and half back..because it is easy to sell those things. People who waited for last couple of years already lost big chunk if they did not buy a property either as primary residence or as an investment. Although it is difficult to say what happens next but the people who are in denial there is never a good time to buy a property. In 2007 when I bought a house, everyone was saying marked is going to go down wait for some time...thanks to God that I did not deter then..otherwise I would still be in a rental condo and waiting for market to correct. After 3 years i.e in 2010 other friend bought a house, even I was kind of one of them to tell him that the market is overpriced, but he took the decision and already enjoying a big rise in price.
I don't know where some folks just brings some graphs..like silver was going to go $100 gold to $5000 and RE just going to hit the rock bottom...
What is the benefit of buying over priced house even if it is for primary residence?
-Correct me if I am wrong and my belief is that over priced house makes you to pay more insurance and more property tax. There may be other expenses also which relate to the price of the house.
-Real estate cycle is long in NA. If it starts booming it will continue to do so for years (Unlike stock market) and once starts declining it will do so for years. It has already seen the boom period and chances of correction cannot be overlooked in future. So if there is a correction of 20% then $500,000 house will reduce to $400,000. Loss of $100,000 is a significant amount and it is equivalent to 10 years of apartment renting.
So whether u buy for primary residence or investment, cost analysis for owning or renting always holds true.
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22-02-12 14:38:07 |
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