bran
New Member
Funny how this thread has been alive since 2009, yet every month people are 100% sure that the bubble is going to pop
|
|
|
- Thread starter simuls
- Start date
steveintoronto
Superstar
It might indicate that prices *are* based on fundamentals, whether you like those fundamentals or not, they're certainly enduring.
Subscription article from Globe and Mail, so will only quote the first paragraph. (the whole article is probably available on Press Reader if you Google)
https://www.theglobeandmail.com/inv...s-roaring-housing-market-is-a-global-anomaly/
bran
New Member
Perhaps, definetly a lot better to do proper research than to look at the current price and think "man this is too high, must be a bubble"
steveintoronto
Superstar
I'm loathe to post more than a paragraph of the Globe's subscriber copy, but here's one of the studies the article is based on:
https://www.bis.org/publ/work726.htm
The pdf is here free of charge:
https://www.bis.org/publ/work726.pdf
bran
New Member
Oh ya for sure, I wasn't saying it wasn't real research. Just referring to people I've talked to in the past while in general who say "man prices are so high, must be a bubble"
steveintoronto
Superstar
Indeed, and a lot of research supports your intuition.
Something a lot of people were stating in UK forums at the height of their 'housing bubble' over a decade ago (it's still intact) is "Every bubble eventually pops". It became lore, and next to none had checked the research or the history to realize that *many if not most don't*! More deflate in a controlled way than 'pop'. An example I often referenced to them, since Brits tend to relate to Aussie's more than Cdns, is that the Australian housing market 'bubble' of two decades ago not only slowly deflated, it did so at the rate of inflation. Prices stood still for close to a decade while 'value of investment' deflated at the rate of inflation. Most of Canada (Toronto is a prime example) is doing very similar. The market is in a time of stability, albeit on a plateau, and demand alone underpins it staying there.
Affordability is another issue, but that's another discussion.
bran
New Member
Ya affordability sucks, definetly a negative factor
Admiral Beez
Superstar
I'm tending to agree. My neighbour in prime Cabbagetown had his semi on the market for over a month at about $980K and after multiple open houses finally got a single offer. 2-3 years ago he would have got over a million. I think the LTT, new mortgage stress test rules and rising interest rates are slowing the market. Plus, as the Boomers get older, there's less money to fund your kids' housing dreams.
Admiral Beez
Superstar
Hmm... I have TD insurance on my house, and a TD LoC against the house, with maybe $10K on it. I wonder if I pay off the $10K or remove the property connection if I'll reduce my insurance rate? I already got a significant discount by moving from Cooperators to TD as my wife gets a TD group rate through her employer.
Ex-Montreal Girl
Active Member
I think a few things are happening:
(1) I note that condo apartment prices, especially in the 416, keep rising, some months many many points above SF homes and towns. That could be a function of supply as well as affordability, i.e. where younger generations can't afford the dream home and are settling for starter homes in the sky. Or it could also be a product of the Boomer downsizing wave. Or both. And/or something else. But whatever the reasons, demand continues.
(2) I think a lot of "kids" really don't want houses and all that comes with them, lawns, shoveling, raking, cleaning eavestroughs etc. Many of them grew up in the burbs and, once they have a taste of downtown living or commuting to university, want no part of spending the weekend looking for new sprinklers at Home Depot and weekdays on the DVP. As long as they have sufficient space for strollers and all the other baby equipment, and there are playgrounds, schools, daycares, transit, bike paths, car shares and/or Ubers nearby, they are happy in apartments. Many don't even cook. They buy ready made food or go out. I recently had a conversation with a lawyer in his 30s who grew up in Mississauga and he and his wife (also a professional) live near Liberty Village with a baby and a toddler. They have no intention of buying anything else, at least not in the near term They can both take the streetcar or walk to work, there's a condo playground with lots of other kids downstairs (no driving around for playdates) and daycare close by. Are they typical? I dunno but I do know that, in some friends' building (to which they downsized from Riverdale as well) near the St. Lawrence Market, I ride up the elevator with many children and strollers. So I suspect their numbers are growing -- and will continue to do so as long as more bigger-than-a-shoebox condos are built. But then, I have been saying this ever since I signed up for this forum.
(3) That whole picket fence, two-car garage thing no longer is. It's a creature of a later 20th century past that we, as a society, can no longer afford for many reasons -- although, perhaps among larger immigrant families, it's still a dream. For example, millennials are not as into car ownership as Boomers were. They want to be as close to "where the action is" as possible. They are envionmentally-conscious and want as small a carbon footprint as possible.
(4) There is no bubble because, as steveintoronto above notes, the fundamentals are there. Toronto is growing and it keeps growing. It's crazy. You can only live so far away from the city in a suburb and work in the city. The commutes are nightmarish and getting worse by the year. That's why centrally-located condo apartments are climbing, physically and financially.
(5) The esteemed Admiral Beez notes that "as the Boomers get older, there's less money to fund your kids' housing dreams." If I am correctly interpreting that, I disagree -- at least for the present. The huge Riverdale Victorian we bought in 1985 sold again a few years ago for much more above a million. The downsized Riverdale house we sold in 2012 is now worth a solid 20-30% more than we sold it for. The value of the condo apartment we are now in, based on sales over the past two years, has increased a stupefying 60% over six years. But it is large, solidly built as it is a vintage building and in very walkable, TTC-able, bike-able etc. location. I know that the sales (and there is a very low turnover BTW) over the past three years have all consisted of downsizing Boomers who, like us, wanted space and location, location, location. Units are snapped up without even getting on MLS, the demand is that high. If those people are all selling houses in the surrounding areas (Riverdale, the Beach, Rosedale etc.) then chances are, if they are mortgage-free when they sell, they are getting more than enough to buy into the building and subsidize their kids. All this said, I recognize that ours may be a unique building in a unique location. That plus I believe that Riverdale, Leslieville and prime Beaches are areas that really never corrected for very long. In other words, prices hiccuped in the early 90s but, over the long term, trended up and up and up.
So Baby, unless the bubonic plague hits us, or there is a total environmental or infrastructure collapse, there ain't no bubbles gonna burst at least not for certain sectors.
(1) I note that condo apartment prices, especially in the 416, keep rising, some months many many points above SF homes and towns. That could be a function of supply as well as affordability, i.e. where younger generations can't afford the dream home and are settling for starter homes in the sky. Or it could also be a product of the Boomer downsizing wave. Or both. And/or something else. But whatever the reasons, demand continues.
(2) I think a lot of "kids" really don't want houses and all that comes with them, lawns, shoveling, raking, cleaning eavestroughs etc. Many of them grew up in the burbs and, once they have a taste of downtown living or commuting to university, want no part of spending the weekend looking for new sprinklers at Home Depot and weekdays on the DVP. As long as they have sufficient space for strollers and all the other baby equipment, and there are playgrounds, schools, daycares, transit, bike paths, car shares and/or Ubers nearby, they are happy in apartments. Many don't even cook. They buy ready made food or go out. I recently had a conversation with a lawyer in his 30s who grew up in Mississauga and he and his wife (also a professional) live near Liberty Village with a baby and a toddler. They have no intention of buying anything else, at least not in the near term They can both take the streetcar or walk to work, there's a condo playground with lots of other kids downstairs (no driving around for playdates) and daycare close by. Are they typical? I dunno but I do know that, in some friends' building (to which they downsized from Riverdale as well) near the St. Lawrence Market, I ride up the elevator with many children and strollers. So I suspect their numbers are growing -- and will continue to do so as long as more bigger-than-a-shoebox condos are built. But then, I have been saying this ever since I signed up for this forum.
(3) That whole picket fence, two-car garage thing no longer is. It's a creature of a later 20th century past that we, as a society, can no longer afford for many reasons -- although, perhaps among larger immigrant families, it's still a dream. For example, millennials are not as into car ownership as Boomers were. They want to be as close to "where the action is" as possible. They are envionmentally-conscious and want as small a carbon footprint as possible.
(4) There is no bubble because, as steveintoronto above notes, the fundamentals are there. Toronto is growing and it keeps growing. It's crazy. You can only live so far away from the city in a suburb and work in the city. The commutes are nightmarish and getting worse by the year. That's why centrally-located condo apartments are climbing, physically and financially.
(5) The esteemed Admiral Beez notes that "as the Boomers get older, there's less money to fund your kids' housing dreams." If I am correctly interpreting that, I disagree -- at least for the present. The huge Riverdale Victorian we bought in 1985 sold again a few years ago for much more above a million. The downsized Riverdale house we sold in 2012 is now worth a solid 20-30% more than we sold it for. The value of the condo apartment we are now in, based on sales over the past two years, has increased a stupefying 60% over six years. But it is large, solidly built as it is a vintage building and in very walkable, TTC-able, bike-able etc. location. I know that the sales (and there is a very low turnover BTW) over the past three years have all consisted of downsizing Boomers who, like us, wanted space and location, location, location. Units are snapped up without even getting on MLS, the demand is that high. If those people are all selling houses in the surrounding areas (Riverdale, the Beach, Rosedale etc.) then chances are, if they are mortgage-free when they sell, they are getting more than enough to buy into the building and subsidize their kids. All this said, I recognize that ours may be a unique building in a unique location. That plus I believe that Riverdale, Leslieville and prime Beaches are areas that really never corrected for very long. In other words, prices hiccuped in the early 90s but, over the long term, trended up and up and up.
So Baby, unless the bubonic plague hits us, or there is a total environmental or infrastructure collapse, there ain't no bubbles gonna burst at least not for certain sectors.
christiesplits
Senior Member
New Zealand bans sales of homes to foreigners
https://www.bbc.com/news/world-asia-45199034?ocid=socialflow_twitter
Sound familiar?
https://www.bbc.com/news/world-asia-45199034?ocid=socialflow_twitter
Sound familiar?
salsa
Senior Member
Time for another round of "are we in a bubble or not"...
Toronto, Vancouver among biggest property bubbles in the world, UBS says
Thoughts?
Toronto, Vancouver among biggest property bubbles in the world, UBS says
https://www.cbc.ca/news/business/toronto-vancouver-housing-bubble-1.4842272
Thoughts?
mettle
Active Member
they've been saying that for a long while about hk. interesting enough, prices there might be dropping.
steveintoronto
Superstar
You'd have to define "bubble". There's quite a few definitions out there, and for one of the most popular understandings "All bubbles must burst". Except most don't.
steveintoronto
Superstar
You just made my point. Ditto Oz house prices. Oz in fact was being used as a case in teaching economics of the Market going "sideways" for almost a decade last "crash". With Inflation, that meant static prices were slowly receding in terms of buying power.
https://www.smartcompany.com.au/ind...redicting-australian-house-prices-will-crash/