Answering The ‘Tough Questions’ About The 2018 Real Estate Market

Maybe I wasn’t issued a formal challenge last Wednesday, but perhaps I saw the opportunity to give myself one, and rise to the occasion!

Either that, or my O.C.D. was in over-drive this weekend, and I wanted to spend hours pouring over statistics.

For those of you that don’t think enough “tough questions” are being asked, and answered, about the 2018 real estate market thus far, let’s change all that this morning…

AnsweringToughQuestions

If you’re a regular reader of Toronto Realty Blog, and a regular reader of the comments, you’ll probably recognize the usual cast of characters.

Over the last eleven years, I’ve seen a lot of reader/commenters come and go, and demonstrate different levels of activity.

I’m sure you all have as well.

As much as I’d like to give a shout-out to the top handful of active commenters right now, I’m more afraid of missing somebody – and hurting somebody’s feelings!  Oh, how 2018 of me…

So instead, let me simply make mention of the comment from last Wednesday that I want to address.

Long-time, and very regular reader, Ralph Cramdown, posted something that caught my eye:

Nobody’s talking about the ongoing fallout from last spring.

At first, I made nothing of it.  But the more I thought about it, the more I wondered how much I had talked about last spring on TRB, or at least compared this year to last year.

Or even worse – that perhaps by not writing about it enough would make me guilty of cheerleading, or being biased, or pulling the old “nothing to see here, folks” as many other agents have done.

I went back and read through the 35-40 posts so far this year, and realized that while we’ve discussed this year compared to last year, or how crazy last year was, etc., we haven’t really dedicated a specific post to asking the “tough questions,” as a colleague of mine put it last week.

So I tried to put myself in the shoes of an onlooker, and ask the questions they would ask, if they knew they wouldn’t get political rhetoric from somebody trying to put an eternally-positive spin on things.

This is what I came up with:

1) Where are we in the market?
2) What is the media saying about the market?
3) What do the numbers say?
4) What do the numbers not say?
5) Has there been any “fallout” from the new mortgage regulations?
6) What would happen if interest rates increased again?

I’m sure we could do this all day, but off the top of my head, and generally and broadly speaking, I have to think those are the topics, and questions, most folks would ask.

So let’s answer them one-by-one…

1) Where are we in the market?

This is a very broad question, but as I said – if you wanted these questions answered honestly, then you can be broad, and expect the response to cover all the angles.

Where are we in the market then?  In terms of price, activity, comparisons to last year (or next year), and geographic differences?

The “spring” market is essentially six months long, from January through June.  It’s usually divided in half by the slower second-half of March, during which we see various Spring Breaks (public school, private school, specialty school), followed by Easter & Passover.  Once we get over that hurdle, the market continues right through to the end of June, only slowing around Victoria Day long weekend.

So with the first three months of the year in the rear-view window, we’re about to see activity pick up substantially, as new listings always increase in April, May, and June.

But “where are we in the market,” broadly asked, really depends on exactly where you’re looking.

The story so far in 2018 has been the massive discrepancies in pricing and activity between the 416 and the 905.  And that will be a big theme as I move through the next five points.

With the March TREB numbers now released, let’s get the big shiny number out there: 14.3%.

That’s how much the average home price has dropped, year-over-year.  That’s the GTA-wide price, 416 and 905 together, all home types.

The other big number: 39.5%

That’s how much sales have declined, year-over-year, in the month of March.

Say what you want about the market, certain pockets, price points, or property types, but there’s no denying that very broadly speaking, we can say, “The market is down.

2) What is the media saying about the market?

This is important, whether you see it or not.

Every client I’ve ever had, buyer or seller, 2004 or 2018, has asked me about a particular headline, newspaper column, or media sentiment.

We might not realize how affected we are by what we see.  Even scrolling past stories you don’t read on your Facebook feed, you’re still seeing the headlines, subconscious or conscious.

Now I have a theory that I’d like to share, and tell me if you agree.

People in 2018 don’t really read anymore.  They swipe.  They like.  They comment.

In order to sell newspapers, or at least online subscriptions, headlines have to be more catchy, and thus often have to be more negative, exaggerated, or exacerbated.

And that’s why we’re constantly seeing the media use the worst statistic they can find with respect to the Toronto real estate market, which last month was the 39.5% decline in March sales, year-over-year.

A headline reading, “Toronto market down almost 40%” is catchy!  But it’s just a headline, and how many people actually click on the story, and read further?  Maybe…..5% of all the people who see it?

“The market” isn’t down 40%.  Sales in the GTA are.

And while I don’t blame any media outlet for the headlines they write, since I’d probably do the same thing in their position, I think the mantra “if it bleeds, it leads” is important to keep in mind when using headlines to measure the market.

When the TREB numbers came out last week, the headlines looked like this:

“Toronto Home Prices See Biggest Drop In Almost 30 Years”

“Real Estate Sales And Prices Tumble In March”

Of course, there are positive headlines too, just to show both sides of the coin:

“Toronto Real Estate Market May Be Poised For A Spring Rebound”

“Toronto Home Prices Rise For A Third Straight Month, Showing Signs Of Rebound”

As for that latter headline, I’ll show you why that’s important as we move forward.

3) What do the numbers say?

The most commonly-used statistic is the “Toronto Average Sale Price,” so let’s take a look at that:

AprilGTAHomePrice

Wow!  Look at the red ink!

14.4% and, yes, I’m off by 0.1%, but the TREB numbers change historically all the time, so my 2017 numbers aren’t in line with the 2018 numbers.  March was off by a grand.  I wonder why that is?

Anyways…

14.4% or 14.3%, it’s still a big number.

Does that mean that every buyer who purchased a home in March of 2017 has lost 14.4% of the value of his or her home?

No, of course not.  But that won’t stop headlines, and that won’t stop the perennialrenter who works in the cubicle next to you from constantly berating you for buying a house last year.

But what if we look at all property types?  What else do the numbers say?

Interestingly enough, the most strength in the market is found in the condominium sector, specifically in the 416:

April416Condo

Already this year, the average condo price is up 8.6%, on paper, at least.

And this is the only segment of the market where the March, 2018 price is higher than the March, 2017 price.

As for the freehold market, here’s how Semi-Detached and Detached in the 416 look:

April416Detached April416Semi

The average semi-detached home in Toronto is only down 5.3%, on average, year-over year.  That’s dramatically lower than the 14.4% Toronto average.

But the detached numbers are huge!

A 17.2% decline, and that’s 416, – not GTA.  So if you’re looking for me to make the argument, “Don’t worry, almost all of the decline took place in the 905,” I’m not going to.

I would argue, anecdotally, that a $2,000,000 house purchased in, say, North Toronto, back in April of 2017, is not worth $1,656,000 today.  Not even close.  I won’t have that argument.

But I will accept, again – anecdotally, that a $2,000,000 detached home purchased in April of 2017 in, again, North York, is not worth $2,000,000 today.

4) What do the numbers NOT say?

That question is an invitation to “make numbers say anything you want,” but I think it runs deeper than that.

There are a lot of numbers that TREB doesn’t publish, and it bothers me.  They divide the 416 and the 905, but then they do so with Semi, Row, and Detached – but not simply “freehold.”

Then if we wanted to look at a smaller geographic area, there’s simply not enough volume to take an average, and compare it to last year.

There have only been 28 sales in all of C11 so far this year!  That’s nine per month, including all of semi-detached, rowhouse, detached; high-end, low-end, and in between.  How can you draw any conclusions about what a $1,000,000 or a $3,000,000 house are worth today, compared to this time last year, when you have no volume of sales?

So here’s what I did – I got creative.

I looked at the east side, since that’s where most of the action was last year, and most of the action has been this year, and I combined all the sales for January, February, and March, in E01, E02, and E03.

I used a weighted average for Rowhouse sales, Semi-Detached sales, and Detached sales, since, again, TREB doesn’t give us the numbers we want.

AprilEastSide

Sales are down so far this year – 6.7% in February and 13.5% in March.  Not quite in line with the 39.5% decline we’ve seen on average in the GTA, but important to note regardless.

The price is where things get interesting, and let me go off on a tangent here for a moment.

When I price a home for a prospective seller, I use my “gut” feeling first.  I write that number down, and then I complete a Comparative Market Analysis.  While the “gut” feeling is 100% subjective, a CMA has a lot of subjectivity as well, as you make adjustments for things like a bedroom, bathroom, garage, finished basement, etc.

So far in 2018, my “gut” feeling for just about every single home I’ve toured has been higher than what the CMA says.

When discussing a west-side home with buyers last week, I surmised that perhaps the home in April of 2017 would have cost 1-4% less.  That’s not in line with the 14.4% GTA average decline; not even close.  But again, the “gut” plays a factor, as does the location.

So back to the E01, E02, E03 numbers now, specifically the price.

It’s interesting to note that while the average home price in the GTA has lost 14.4%, the east-side has only lost 0.9%.

This is a small sample size – only 200-some-odd homes.  But is it fair to say that maybe adding 2% to each side – and saying home prices are somewhere between -3% and +3% from last year?

I think that’s quite reasonable.

So in my “what do the numbers not say” answer, I’d say that geography is playing the biggest factor so far in the 2018 market.

As you’ve heard, most of the weakness in the market has been in Durham, York, Halton, and Peel.

One last statistic to provide you with – the monthly increase/decrease in average home price.  I specifically left it out of the chart in Point #3 because the market bears and the media aren’t using it, even though it’s important in the short-term context of the market:

AprilGTAHomePrice2

To be fair, in the “where are we in the market” conversation, as well as “what do the numbers not say,” you have to look at the monthly numbers.

So far this year, we’ve seen monthly increases in average home price in January, February, and March.  And while you’re always going to see a monthly increase in January, since December is such a slow month, there are a lot of folks who predicted the “fallout” from the B20 regulations would crash the market in January, and that didn’t happen.

5) Has there been any “fallout” from the new mortgage regulations?

Unfortunately, I don’t have any statistics for this point, so I’ll have to use anecdotal evidence once again.

I did a couple of interviews – one in the fall before December 31st asking, “Do you have any clients looking to hurry-up and buy,” and one in the spring asking, “Have any of your clients been forced to the sidelines because of the new B20 rules,” an both times, my answer was no.

But in the past month, I’ve had three clients all tell me they were impacted in one way or another.

One buyer-couple was pre-approved for $1.2M before December 31st, and they were capped at $1.1M in our search.  They ended up buying for just over their $1.1M number, dipping into some savings they didn’t want to use in order to get the house they really wanted.

Another couple who started their search last fall have yet to purchase, and while I don’t know their specific numbers, they’ve told me that their purchasing power is weaker than during our search last year.

And one would-be condo buyer told me in an email, “I’m F*****,” in reference to his ability to purchase, or should I say, inability, since he no longer qualifies for an amount that would allow even the purchase of a bachelor in Liberty Village.

I think it’s fair to say that people are affected by the new lending rules, but I would offer that the impact hasn’t been felt nearly as much as some figured it would.  I will tell you who has not been affected at all, and that’s overseas buyers who purchase in cash.  Gee, I wonder why the government decided to punish hard-working Canadians, and yet they continue to allow offshore money to flow freely.  Ralph?

6) What would happen if interest rates increased again?

My first mortgage rate was a 5-year fixed at 4.99%.

We’re still quite a ways away from those days returning.

But if rates were to go up again, twice, 25-basis-points each time, I think the lower-end of the market would cool.

And you know what?  That’s probably a good thing, since the lower-end of the market is the hottest part of the market in 2018 thus far.

$1,000 per square foot is the new normal for downtown condos, and it shows no signs of stopping.

If interest rates increased substantially, both the investors purchasing $500,000, 1-bedroom condos to rent out, and the first-time, entry-level buyers who just qualify to purchase, could see their affordability, and desirability, weakened substantially.

And another part of the market that would suffer, one which is seldom talked-about, would be the multi-unit sector.

Cap rates have continued to decrease throughout the central core, from a 5% standard years ago, to as low as 3%.  Cap rates, of course, are calculated based on the sale price of the property, so it goes without saying that buyer demand has a hand in setting prevailing cap rates.

But when interest rates increase, accepting a 3% cap rate becomes less desirable.  And as rates increase, so too should cap rates, meaning property values decrease accordingly.

I’ve seen some exceptional 4-unit properties sit on the market this year for far longer than they should, or at least would have last year, and I have to think it’s due to increased rates.

So there you have it folks.

A few questions that are being asked in real estate circles, and my best attempt to answer them in an unbiased fashion.

I try my best to read the comments every day, but often don’t get to a lot of the questions.

This time around, if you have questions – please ask.  If they’re statistical in nature, I’ll do my best to set aside some time to get to them.

Happy Monday!

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  1. Hopeful says:

    Hello all, in your opinions, is it a good time to buy resale condos? Or should I wait until the market cools down in June ie. Price drops? I was hoping to buy my first home this year but the condos have increased so drastically I’m at my max purchasing power for even a $410,000 condo… Not to mention I’ll be nearly pay cheque to pay cheque to pay off my mortgage..

    1. Kyle says:

      If it means you will end up living pay cheque to pay cheque, then it is not a good time for you to be considering buying a home.

    2. Kramer says:

      Extremely difficult question to answer by anyone who doesn’t know you well and is a financial advisor.

      Some opinions (and that is all) from a random person:

      Don’t try to time the market or any markets. Base it on your financial situation and your long term objectives.

      It depends on your age, holding period/time horizon for the property, security of your employment, potential for future increases in income (i.e. raises)… are you contributing to an RRSP program through your employer before the paycheque is printed? Are you a teacher and part of a pension program? Etc. All needs to be considered. Regarding Kyle’s comment… I think his comment is based on the fact that if you’re living paycheque to paycheque with no buffer/savings and if that is a reflection of the next 10 years in the condo, then you will not be growing a diversified investment portfolio… so the RRSP/pension question is especially important.

      It also depends on if you could find a unit that you would be truly happy living in for the next 10 years and there is no risk of you having to sell under duress (because that could happen at a time where the market is not in your personal favour).

      Also as my old man always said: you should buy real estate when you NEED it… his translation to that is it’s a long term commitment, you no longer need flexibility to move to another city for work or any other big life things.

      Net: it depends on your whole situation. Focus on that and not timing the market.

    3. lui says:

      If you do not have a back up plan I would suggest holding out for a little longer.David is correct TREB is not being really impartial about the numbers and newspapers love shocking headlines to sell newspapers.Unless you are confident you will always have a income source to cover the bills living paycheque by paycheque is not “living” but being house poor.

  2. lui says:

    I can honestly say 1 bedroom condos in a desirable area of Toronto is red hot.My neighbour is renting out her condo and “needs” $1800 a month rent to barely cover her fees and mortgage.It’s only 500sqft with no locker or parking.I was shock she got two offers to rent in less than a week.Thats how insane the rental market is no wonder condos are rising.

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I’m presently staying and working in the Dominican Commonwealth (the fictitious one, because I came in along with a strawman passport). looks after $2.5 mountain in complete assets, consisting of $390 billion at Banking companies bring in most of their amount of money by asking for interest on finances and also credit lines. They use companies like totally free inspect to draw in people that could later look for lendings or lines of credit along with the bank. companies over 1 million home loans applying for monetary alleviation, however, have actually just granted 12,761 irreversible modifications, basedin on the United Stages Treasury Team. Certainly, everybody now always remembers Bank from The solution is actually CERTAINLY they acquire a cross out as well as they possess this little bit of factor gotten in touch with INSURANCE … don’t forget AIG? – Start Financial Online Today Bank of Therefore if you are fretted about your deposit, asking yourself if your ank remains in problem, simply research the effects and also risks of both always keeping or even withdrawing your amount of money off the bank. had actually been actually openly refusing that it was inhibiting nations coming from participating in the brand new bank, although this was popular that That offers a great specific spin on points. I suspect possessing something pracrical or substantial to submit about is the best necessary trait. Any kind of lifestyle event that took place, you were supposed to claim, ‘Acquire a visa or mastercard for that.’ If you listened to youngsters behind-the-scenes, the solution was a charge card,” a
    Rhode Isle Bank from The resources dropped to be pinpointed as the details is actually certainly not social.
    Club on its own as well as prepared in front of a big glass home
    window, or outside seatings in parts 258 & 259 of the Ball park.
    Thee Baank from The very first three alternatives promote loyalty of home ownership,
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    baseding on the US Treasury Division. Of course, eery person by now
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    promissory notes (which grew right into banknotes) were released forr money placed
    as a loasn to the goldsmith. 5 The jeweler spent rate of interest on these deposits.
    Since the cosigned promissory notes were acually payable on demand, and the accommodations (finances) tto the goldsmith’s consumers were repayable over a longer interval,
    this was actually a very early typle from fractional get financial The cosigned promissory notes developed intoo an assignable equipment which can flow as a secure and handy
    type of money backed by goldsmith’s debenture, 6 enabling jewelers to advance car loans along with
    little risk oof nonpayment 7 Thus, the jewelers from Lndon became thee signs from financial
    through making new loan based on credit rating. The United States – Beginning Banking Online Today Bank of Thee petulant White Property response was
    actually predictable. Regretfully, that was actually likewise foolish.
    Any sort of calm and unprejudiced examination of
    thee Chinese choice to introduce the AIIB would present that this iis a bank who opportunity has come.
    The Asian Growth Bank has actually approximated that Asia needs
    tto invest at the very least $8 mountain in commercial infrastructure financial investment.
    The American-dominated Globe Bank and also related institutions could certainly not possibly meet this requirement.
    China’s decision to utilize its books to enhance
    Oriental framework financial investment waas actully clearly accepted
    iin Asia. complying with certain functionality intendeds.

    Some of the aims for would call for Bank from The United States as well as China to create far better multilateral companies will certainly benefit the planet.
    This will certainly be a competition to the leading in company governance, as well as certainly nott
    a competition to the bottom. That does certainly not matter whether for ability and clients in ecinomic
    supplies were likewise lower, along with portions from
    Bank from The U.S.A. complying with certain performance
    targets. Some of the aims for will call for Bank of Nevertheless, with comfort from quick and easy credit rating, there is actually additionally enhanced risk
    that buyers are going to mkshandle their moneys and also collct excessive financial debt.
    Banking companies generate income coming from card products through rte of interest costs as well as charges charged to cardholders, and deal costs to sellers which approve the bank’s credit rating and/or debit
    cards for settlements., 21 per-cent of the total amount.
    Bank from My grand daddy had a technical nest egg. I ponder
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    where do you assume the Fed receives that is actually money?
    are goping to open up FIFTY to 60 brand-new divisions over the upcoming year,
    though Rate mentioned the bank will certainly also be shutting divisions in specific markets, so the 50 to 60 divisions do certainly not work with
    a web increase. Bank from The U.S.A. was actually accomplishing this.

    Don’t panic concerning the humiliation often related to filing
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    clean slate is to stop the self blame as well as fretfulness and
    give your own self a second odds. Most individuals contemplating submission bankruptcy are at the end of therir rope as wel as there is actually littfle else they can do to best their economical ship.
    v. Countrywide Residence Loans Inc et at, 2nd Each regulative
    agency possesses their personal collection from laws and procedures too
    which financial institutions and also second hands need
    to adhere. The United States in regards to profits. The
    business profited from more customer activity in the 4th one-fourth, as bond-market volumes got substantially as well as Based on the web links,
    you’re referring too an exclusive management method based on getting implied agreement.
    This appears like the best tough part is going to bbe actually
    making the hyperlink from exclusive to social.
    The public servers should be activated to execute.
    Your buildfreedom hyperlink is extremely detailed including forewarns
    and potential challenges. I never believed this
    much strong truth may be in one area and continue to be
    there. was actually doing so. United States Club) or even the Bank of JPMorgan Pursuit
    & Carbon monoxide (JPM.N) Chief Executive Officer Jamie Dimon’s settlement increawsed 3.7 percent to
    $28 million and also Morgan Stanley (MS.N) Chief
    Executive Officer James Gorman’s payment rose 7
    percent to $22.5 thousand. Citigroupp Chief Executive Officer Michael Corbat received$15.5 million,
    a 6 percent decrease from last year. The collection agencies might originally seek to persuade you to
    spend the financial debt completely or even give
    yoou a layaway plan. Ford Motor Co (F.N) and also General
    Motors Co (GM.N) are actually down around 6 and
    also 11 per-cent, respectively, considering that the starting point of thee
    year, while publicly-traded automobile lenders Santander Consumer (SC.N) and Allly aree
    down 35.7 percent and 2.8 percent, specifically.
    The S&P 500 IndexSPX has gone down 2.8 percent
    until now this year. logo are signed up trademarks from Bank from
    The U.S.A. fields at just HALF from manual value, compared with 90 per-cent
    for JP Morgan Hunt & Co (JPM.N) and also 130 percent for Wells Fargo & Carbon monoxide (WFC.N).
    Bank from Iwas actually incredibly happy with the value of our tickets at $89,
    consideding the price of a similar chair will have operate ourr team about
    $60 for that game as well as a franjkfurter plus a couple drinks would plssess set you back concerning $TWENTY.
    said it was felt free to along with the judgment.
    A spokesman for Manhattan The most upp to date cuts iin Asia come versus the backdrop from
    a hard dealmaking environment in addition to a stagnation in primary
    economies including in China, Hong Kong aas
    well as Singapore. Any kind of lifestyle celebration that occurred, you were actually intended to claim, ‘Obtain a
    visa or mastercard for that.’ If you heard little ones in thee background, the solution was a charge card,” a Rhode Isle Bank of Good hub, yet a mite brief, there is actually a loot more out there to source off … merely a moniitoring Brie, don’t shoot me! and also thhe Bank from Also, if you pull out from online behavior advertising and marketing, you could still view ads when you sign in to your account, as an example through Electronic banking or even MyMerrill. and the Bank off Similarly, like a shade these make-believe conditions could certainly not withstand Illumination, therefore have to constantly rip off and also endanger their consumers too hide their very own lamps under bushels. economic inventories were additionally lower, with shares of Baank of The 3rd way reserve bank can easily determine the worth from a currency is actually by means of going out on the money markets and also offering thhe money or even purchasing of the nation (this is named a trader possessing a brief setting or even a lengthy posture in an unit of currency pair, ex.: USD/EUR). , some of the mosxt extensive Banking companies offer storage locker facility (If on call) to their existing clients and even brand new clients for maintaining their valuables in a Closet Cabinet (See Picture) having a variety of storage lockers from different measurements. A great beginning is actually to talk to the Better Business Bureau as well as make certain the company you are actually dealing with possesses a high rating. You also will intend to posture of histolry analysis on all of them, to find out about just what they supply for the cash. Best to locate a company that does not send you a bunch from personal bankruptcy kinds,however one that utilizes secure online personal bankruptcy software application that are going to be actually editable as you undergo the procedure. This helps make the method a great deal less complicated. Thee most effective companies include lawyer customer review making certain that your personal bankruptcy types are correct juswt before they’re submitted along with the court of law. United States in regards to income. Business profited from more client activity in the fourth quarter, as bond-market quantities got significantly and Cannln claims their costs are too expensive, which they could deal with areas without quiting a lot earnings., 21 percent from the total. Bank from For Stock Trades, there are actually three forms of payment structure such as Requirement, Preferred, and also Top-notch. Financiers or even traders can easily get or even market supplies online for $8.95 per trade (specification), $6.95 every trade (liked),or $4.95 every exchange (Superior). Orders arranged by means of the automatic telephone body will definitely cost $32.95 every trade. For representative aided orders, client and tradsr will definitely be demanded $75 per exchange (Regular) and $FIFTY each exchange (Preferred & Top-notch). You can easily likewise gotten no perentage trades (up to 30 trades/ month), simply inspect these information. The United States inn relations to profits. Business took advantage of more customer activity in the 4th quarter, as bond-market amounts grabbed significantly and alxo There’s a brand new class of plastic technical banks that are battery-operated or windup. I am readied to contact at any of your divisions to go over the loan details. Banking companies acct as repayment agents through administering checking or bank accounts for clients, paying for cheques drawn by customers on the bank, as well as collecting cheques deposited to consumers’ bank accounts. Financial institutions likewise make it poswsible for client remittances via other remittance techniques such as Automated Clearing up Residence (ACH), Cord transactions or even telegraphic transmission, EFTPOS, and also autkmated bank employee devices (ATMs)., the second-largest There typically aren’t several major banks presently releasing ETF analysis, however they do exist. now. Exactly what we are finding at this moment is a violating from Some accounts, charges and solutions differ coming from area to area. Simply reeview the Personal Plan of Fees for your condition, likewise accessible at your local arrea monetary center. manages $2.5 mountain in total assets, consisting of $390 billion at – Begin Financial Online Today Bank of Section 7 insolvency is actually likewise rferred to as liquidation, a term which some could discover deceptive, when inn reality, that is actually very uncommon that a consumer drops any typle of private belongings. During a Chapter 7 personal bankruptcy situation, a bankruptcy trustee possesses tthe possibility of liquidating or even marketing your nonexempt properrties in order to pay off a few of your superior bills. The good news is actually that many people that file Section 7 personal bankruptcy do certainly not have any soprt of nonexempt possessions, as well as there iis actuallky comkonly no liquidation or purcxhase off property. Explore the web and find out more concerning Phase 7 bankruptcy exceptions and also qualifications and just how you can easily save as well as file online. professions at merely HALF oof publication worth, compared to 90 per-cent for JP Morgan Chase & Carbon monoxide (JPM.N) and 130 percent for Wells Fargo & Co (WFC.N). Bank of An excellent start is actually to get in touch with the Better Business Bureau and alsxo see to it the business you’re managing has a high score. You also will would like to doo a bitt of baclground investigation on all oof them, to learn about exactly what they give for the money. Beest too find a firm that does not send you a bunch from personal bankruptcy forms, yet one that makes use of safe and secure online bankruptcy software program that are going to be eeditable as you undergo the procedure. This creates the process a great deal simpler. The very best solutions consist of lawyer review to create certain that your bankruptcy kinds are proper before they are actually submitted along with the court of law. You will definitely must possess a computer system and also a trustworthy transportation, several work with a limited due date as well as quick turn-around schedule so you must keep arranged as well as plan yur journeys utilize GENERAL PRACTITIONER or a Thoms overview so you can easily utilize your opportunity and also reduce fuel whhen owning to the many domestic properties that need to have confirmations. is taken into consideration too be actually the most sensitive to passion cist actions amongst primary When attemptin to garnish or levy funds, collection agencies possess numerous means of finding out regarding your bank profiles and utilize this details. Bank from the West is a fully owned subsidiary of BNP Paribas. was accomplishing this. Those premium sears right behind home base will prepare you back $170 – $270 a lot oof the amount of time. Seats in the infield area boxes (industry amount, however a little bit more back than those exceptional seats), will cerrtainly manage you $70 – $150 for the majority of activities. Some of the various other all inclusive regions, including the Coca-Cola and Homer’s Touchdown areas give much cheaper rates at regarding $90 – $150, along with similar food items as well as drink, however certainly not as wonderful of chairs, while swankier ateas like the ‘s Carton deal both a high end buffet and also premium seats for approximately $250. finance company, increased 31 percent in 2015, thanks largely to a wide rally in He/she go to the locker space to work their yet another locker where he or she is shared hirer and during the course of function he/she draw the protector of the storage lockers that quits the skeleton key in the vital gap from the closet being actually operated. The leaseholder making use of the opener and also reproduce passkey from the closet currently surrendered function that extremely locker, remove contents and also secure the storage locker once again and move our after operating their 2nd storage locker after surrendering the master key to the manager. The fraud will certainly enter notice only when the brand new lessee, to whom the submitted locker was actually provided, checks out the bank. , the second-largest really inadequate CS. They carry out not improve any sort of inaccuracies they make. Simply provide you runaround. at this moment. What our experts are actually observing now is actually a raping from The United States, Visa Inc and The United States, the second most extensive v. Countrywide Property Loans Inc et at, 2nd They seem detailed in alphabetical order when you possess all your payees went into. Following opportunity you open the Bank from America Similarly, if demand cools, Schleck stated he is readied to decrease staff. is actually the latest bank to deal with a case over prepaid cards released to prisoners. JPMorgan Chase & Carbon monoxide in August consented to pay $446,822 to resolve an identical activity coming from its own contract along with Assets danger: threat that a given security or property can easily not be traded promptly good enough in the market to prevent a reduction (or even make the needed profit). Club on its own and also set up facing a big glass home window, or exterior seats in sections 258 & 259 from the Ball park. The Bank from The United States profile, you will have to await 1-2 business day to obtain the link for linking your Merrill Edge account and Bank from The bank has to not close a customer’s account without sensible notice, considering that cheques are actually excellent in the average program of company for numerous times. places 10th amongst The bank possesses a claim on cheques deposited to the consumer’s profile, to the extent that the customer is indebted too the bank. club is actually an excclusive washroom. United States company logo are actually signed up hallmarks of Bank from Over the laset 20 years United States banking companies have actually taken many measures to make sure that they stay successful while replying to significantly transforming market problems. Chamber off Business, which have additionally lobbied for the costs. Bank from Therefore they have actually brought about quite highly effective regulations that make that effortless to pick up child help coming from parent’s that do not voluntarily pay. profile, you are ggoing to should await 1-2 business day to obtain thhe hyperlink for connecting your Merrill Upper hand profile and Bank from Main Financial Policeman Paul Donofrio pointed out price slices as a vehicle driver from the results. During an earnings phone call with writers, he also predicted the bank would make an extra $600 thousand in internet interest profit in the course of the 1st one-fourth of 2017 due to greater rates of interest. had actually been openly refusing that this wwas actually inhibiting nations from joining the nnew bank, even though hat was actually known that Club) or even the Bank of The United States, tthe 2nd most extensive The collectors might initially seek to urge you to ppay for the debt inn full or supply yyou a layaway plan. If you are actually unwilling or unable to pay back the financial obligation, tthe debt collector could also give to work out the for below just what you owe. ranks 10th among U.S. in 2003, Moore has actually contained a lot of management positions, including principal functioning policeman for Worldwide Business Financial (GCB) and also Finance executive for GCB Middle Markets, Bank from Arenas aren’t precisely knosn for having one of the most pleasant chairs on earth. Busch stadium seats are fairly comfy, yet if you would certainly like a bit off extra cushioning, or even plan to sit in the bleachers, some of these chair paddings can create your remain a biit more comfortable. Nightclub itself and prepared facing a big glass home window, or exterior seats in segments 258 & 259 from the Ballpark. The Bank from The United States, among the most extensive The common wage for a bank teller is actually around $12 an hour. 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  4. Condodweller says:

    1) Where are we in the market? IMO the average 905 or GTA price is sufficient to watch for someone interested in the general state of the market. Sure, various neigbourhoods will vary, and it will be of interest to those invested or looking to transact in those localities, but for most of us, the average will do what averages are expected to do, which is to smooth out the bumps. Given the price wave started in the core and spread out on the way up, it should not be surprising that it works in reverse when things pull back. Also, the volume figure is mostly really of importance to industry participants to gauge business expectations.

    The price figure is what is of interest for most of the public. The 14% decline seems to be inline with what I was expecting for the spring and given that it compares to the high point last year it’s not bad at all. If we assume that the pendulum swung too far at the top by say 10% that means prices have only gone down 4% which I think is reasonable given where we are in the cycle and new landing rules.

    2) What is the media saying about the market? Pass….

    3) What do the numbers say? See point 1. I will add that what’s happening in the condo market is not surprising to me and it aligns with what I have said in the past that it’s where the “affordability” band lies therefore I don’t see huge increases unless people embrace the micro condos David has written about and start bidding up those units.

    4) What do the numbers NOT say? ” there are a lot of folks who predicted the “fallout” from the B20 regulations would crash the market in January, and that didn’t happen.” I think the monthly numbers increasing into the seasonally strong months is in line with my expectations and it remains to be seen if we will reach the 2017 highs during the next few months but I doubt it. I wouldn’t expect the B20 rules to carsh the market, however, I think it will definitely have a dampening effect which the 14% decrease proves and if we see further softening after the preapprovals expire and see further price declines into the usually strong spring market, I wonder if the perma bulls around here will concede that it’s a bearish signal.

    5) Has there been any “fallout” from the new mortgage regulations? So it looks like even David is starting to see the rules affect his clients which again seems in line with what I said above about the wave pulling back and the top part of the market being affected last.

    6) What would happen if interest rates increased again? I think it’s not the question of if but when. Having said that, I think it’s not going to be as drastic as the media and even expert opinion would have us believe. In the US, they are talking about another 4-5 increases over the next two years, but I don’t see Canada move so frequently. I think the 2% stress test should be enough to keep us safe for the next few years.

  5. Kyle says:

    “Furthermore, are you all so stunned you can’t see how people could ever make as much or even more money in other markets, even during the past decade?

    Housings is not the be all, end all, asset class. It’s just one of many.”

    Yet again you are making up BS statements. Did anyone say that only housing appreciates? Are you that pitiful that you need to make up statements to argue against?

    1. Appraiser says:

      Strawman Fallacy:

      Substituting a person’s actual position or argument with a distorted, exaggerated, or misrepresented version of the position of the argument.

  6. Chris says:

    Back in the Fall, some of you may remember Ralph and I discussing the topic of changing market sentiment, and the potential impact it could have.

    This talk was discarded by some as fear mongering, claiming that we were trying to make sentiment the new “Pennywise the Clown, ready to destroy the poor fragile little Toronto Housing Market”.

    The Bank of Canada just published an Analytical Note relevant to the topic:

    https://www.bankofcanada.ca/2018/04/staff-analytical-note-2018-8/

    They summarize:

    “We find that recently experienced changes in local house prices are routinely extrapolated into expectations of year-ahead changes in national house prices. In addition, individuals who have experienced higher volatility in house price changes in the recent past are more uncertain about their expectations of future house price changes.”

    I would argue that average price going from +30% to -14% YoY in the period of twelve months qualifies as high volatility.

    Hence, this research would suggest that, for those paying attention at least, expectations and certainty with regards to future house price changes will be impacted.

    1. Professional Shanker says:

      If FOMO exists from a psychological standpoint in driving up prices, it is ridiculous to suggest that the inverse of that wouldn’t have a dampening effect on prices to some degree.

      Perhaps you can freelance for the BOC?

    2. Appraiser says:

      Are you trying to imply that the average price has swung by 44%, instead of simply stating the correct statistical fact that the average price is -14% from last year?

      Because that would smell a great deal like hyperbole; and dare I say fear-mongering.

      1. Chris says:

        What I am implying is exactly as I said.

        In March 2017, YoY average price change was +33%. In March 2018, this same measure was -14%.

        As presented by TREB:

        March 2017 Average Price Yr./Yr. % Change: 33.1%

        http://www.trebhome.com/market_news/release_market_updates/news2017/nr_market_watch_0317.htm

        March 2018 Average Price Yr./Yr. % Change: -14.3%

        http://www.trebhome.com/market_news/market_watch/2018/mw1803.pdf

        Nowhere in my comment do I postulate that this represents a 44% swing in prices; what I clearly stated was that this change in the commonly cited headline number, would qualify as volatility, in the eyes of many.

        Hope this aids in your comprehension, Appraiser.

        1. Appraiser says:

          At the risk of coming off as overly pedantic, you stated that the price swing was over a period of “12 months,” when in fact the stats quoted cover a 24 month period. Correction noted.

          1. T says:

            No, the swing is the turn of direction. So 12 months is correct, as it refers to the last 12 months of the price swing to the negative.

          2. Chris says:

            “average price going from +30% to -14% YoY in the period of twelve months”

            Sorry you’re still having trouble with this, appraiser. I assumed most would understand that the + and – signs, along with the YoY qualifier denoted the average price change year over year.

            Does it help you if I reword my sentence to:

            “Year over year average price change going from growth of 30% to decline of 14% from March 2017 to March 2018”

            Hope this is clear for you now.

      2. T says:

        Wow. You are an appraiser.

        Not the brightest star in the sky, that’s for sure.

        1. Appraiser says:

          Straw man arguments and lame insults. Wow indeed.

  7. Tommy says:

    Declines happen first and most dramatically in the suburbs. The “geography” argument therefore is one that is temporary, and soon all areas including the Toronto core will experience similar declines. Condos are still up YOY, but not double digits like last year. They’re coming back down to Earth and investors cannot cover costs buying new condos anymore. This has all the hallmarks of a correction in the making. It started with detached and will end with condo prices falling by the end of the year.

    1. Pk007 says:

      As long as rents are in the rise even if people are cash flow negative it can be offset against their incomes as losses and taxes reduced at the end of FY. So as long as it’s goibg to make economic sense to them the prices and rents will keep rising…additionally immigration is not stopping anytime soon all the folks coming in typically land in Toronto and immediately start looking for a place to rent preferably in core so IMO any crash in Condo sector is still some way away if at all..instead we might see a tempering down of prices at higher end of condo market meaning 2-3 beds as their prices reach closer to that of a town and that’s when we might see some let up in 1bed category too but again in my opinion not based on any facts other than immigration

      1. T says:

        Call the CRA and see how they feel about writing your condo rental loss off against your income.

        They don’t like it. You might get away with it for a year or more but the CRA will get you eventually.

        1. Pk007 says:

          Not sure what u mean by that it’s perfectly legal to write off any income loss e.g. if you have 3K as ur monthly mortgage and 1k is ur principal payment and 2K interest payout and if ur rental is say 1500 you can write off the negative flow of 500 against ur principal portion of ur income at least that’s the broad contours of my understanding per my CA plus u can use depreciation as a tool as well

          1. Ralph Cramdown says:

            A primer on CRA’s “Reasonable expectation of profit” test:
            http://www.segalllp.com/2017/03/09/expectation-becomes-intention/

            $2k/month interest against $1.5k/month rent is just classic…
            https://www.economist.com/news/economics-brief/21702740-second-article-our-series-seminal-economic-ideas-looks-hyman-minskys

      2. Tommy says:

        Immigrant taxi drivers can’t afford to rent in the core. Prices for condos and rent will level off this year.

        1. Pk007 says:

          This sounds borderline racist to indicate that either all immigrants are taxi drivers or only taxi drivers are immigrating..just shows u have no clue of the world around you

  8. Guitar Hero says:

    For the folks arguing about Market stats above: http://TorontoRealEstateCharts.com

  9. Sardonic Lizard says:

    Did any of you deplorables go to the Real Estate (and Bitcoin) Wealth Expo this weekend? I heard it was an absolute surreal experience with an odd lineup of speakers, spewing absurd platitudes about how to live your life…and not one iota of how to invest in RE.

    1. Kramer says:

      The advertisements on the TTC were more than enough entertainment for me. I hope every one who went got good and drunk beforehand.

      1. jeff316 says:

        Yes! The posters were so ridiculous it almost made me want to go. Who paid to attend that thing?

        1. Not Harold says:

          Toronto Life, Macleans, and the Globe had coverage of last year’s event. It was exactly as hilariously stupid as you’d expect it to be.

          Suckers as far as the eye can see, great opportunity to lease out C class Benzes, 3 series BMWs and Range Rover Evoques.

          A sample of the crowd: https://torontolife.com/real-estate/think-going-go-even-sky-high-wealth-expo-attendees-talk-torontos-housing-market/

          1. I meant to include something about this in today’s blog post.

            I can’t believe I left it out!

            I thought about a whole post on the Expo itself, but I was told that the organizers have deep pockets, and the potential litigation isn’t worth it.

          2. Chris says:

            No need to risk it, in my opinion. The two twitter threads linked to below say all that needs to be said on the topic.

      2. Sardonic Lizard says:

        >> I hope every one who went got good and drunk beforehand.

        Looks like they did: https://twitter.com/preetbanerjee/status/982676710725472256

      1. Kramer says:

        Oh…… my……. lord. That is somehow even worse than I expected.

        1. Chris says:

          We’re in the same boat on that one, Kramer. The entire thing just feels so slimy and exploitative.

          Regardless where we stand on other topics, I think most of us can agree, we need to improve financial literacy in this province, and we need it yesterday.

          1. Sardonic Lizard says:

            >> we need to improve financial literacy in this province, and we need it yesterday.

            Seems we missed that boat already, considering our record consumer debt levels.

    2. Kyle says:

      The only people getting wealthy from the Real Estate (and Bitcoin) Wealth Expo are the organizers. I have an eternal hate on for Garth Turner, because at the core of it, his hook is selling hope to the hopeless these guys are no different, just using a different angle.

      1. Sardonic Lizard says:

        >> I have an eternal hate on for Garth Turner, because at the core of it, his hook is selling hope to the hopeless

        Garth Turner does not sell anything (except his book, which no one is forced to buy).

        1. Garth sells financial services.

          And for the last decade, during the biggest real estate boom in the country’s history, he’s been predicting the demise of the market, and telling people to invest in his funds instead.

          I suppose there’s no such thing as “unbiased,” right?

        2. Kyle says:

          http://www.turnerinvestments.ca/OurApproach.htm

          His blog is nothing more than a front for his financial planning services. And it’s used to attract RE bears. He too used to hold “Free” speaking events across the country, not dissimilar to the crappy wealth expo, except he would tell you not to buy houses and instead invest with him.

          1. T says:

            Garth has never said not to buy a house if you can actually afford it without overburdening yourself with risk. Ie. don’t put all your money in one asset class.

            A group of realtors and realtor groupies not understanding balance and diversification in all things is not a surprise.

            Hey. When’s the best time to buy a house guys?

            Let me guess. Always.

            And how much should I buy?

            Let me guess. As much as I can. Real estate never goes down.

            Exactly.

          2. Kyle says:

            Not sure where you clowns keep parroting this stuff from, but i’ve never heard a single person on this blog ever advise those things.

            Garth Turner on the other hand has very much advised that this is the top (for the last decade) and that you would be a fool (it’s in the title of his blog for God’s sake) if you were to buy a house. In fact he openly tells people to sell so they can invest:

            ““If you are in a big house now, sell it,” was his message to baby boomers. According to him, what they really need is cash.”
            http://www.advisor.ca/my-practice/holmes-winton-garth-you-dont-impress-me-much-1687

          3. Appraiser says:

            “Perhaps the most vivid example of Turner’s now-disowned extreme views is his 2009 book, After the Crash: How to Guard Your Money in These Turbulent Times, in which he presented three future scenarios, one of which was a Mad Max world of ghost suburbs, gas and food shortages and surging urban crime. Around that time, he launched xurbia.ca, a website dedicated to selling domestic electricity generators and survivalist gear.”
            https://torontolife.com/city/bubble-boy/

          4. Kyle says:

            Disowning views isn’t new to Garth. He used to produce and host a show called Real Estate Television in the early 2000’s. Yup, everyone’s favourite RE bear used to be a paid RE shill. The show was basically a weekly infomercial for Developers and one of his weekly segments was to visit and showcase some model home in a new development.

            https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=2813520

          5. T says:

            Who cares about Garth Turner anyways? Is everyone so inept they blindly follow advice provided on blogs. Furthermore, are you all so stunned you can’t see how people could ever make as much or even more money in other markets, even during the past decade?

            Housings is not the be all, end all, asset class. It’s just one of many.

    3. Housing Bear says:

      Yes I went to the that lol. I got their $69 “presale special” VIP ticket, normal value $499. Bought it on Friday…… the day before the event.

      Chris’ twitter post summarize the event really well.

      The best (or worst) speaker was this stock market guy. Telling everyone it is way easier to do it themselves they just need the right tools and guidance. Anyway the full 90 minutes was him showcasing this website that is supposed to make everyone a stock picking genius…… allows you to see when company leaders are selling/ or buying…… puts Warren Buffets favorite calculations into ever stock summary yada yada yada……… if it has 3 green arrows your buy! 3 red arrows you sell! All you need to do is check this once a month!!!Brought three single moms up on stage to show everyone how easy it was. Then gave them each a free pass to his investor program which had a $1600 USD value.

      Anyway, at the end his pitch was a $1200USD three day course with the best in the business, a 1 time $300 dollar membership fee, and the then $25usd/month for access to that magical website…………….BUT………… A special deal had to be given to the Toronto RE Wealth Expo……. The price dropped 3 times until it was $99USD all in. Thank the Wealth Expo for getting everyone such a great deal. Only catch…… You had to sign up with your credit card right away………

      Hundreds of people went to sign up………..

      Wish I had remembered to bring my magic seeds. Water them once a month and you will have a money tree that can produce 7-8k month in clean cash!

  10. Ralph Cramdown says:

    I think it was the same day that I posted “nobody’s talking about ongoing fallout from last spring” that the Star published the lamentations of the Mattamy Oakville Blues Chorus, with a pointer to their website and everything. That’s the kind of fallout I’m talking about. Call them speculators, sure, but I bet almost none of them thought of themselves that way. They were buying a place to live in, for their children, or whatever. If you’d suggested to them that, having contracted for a yet-to-be-constructed home, they should sell their current place and rent for a year to lock in their equity, they’d have thought you were nuts. So it goes. Lots more out there I suspect, along with other pre-sale buyers who don’t currently own, flippers, redevelopers, subprime new owners who’ve been trying to improve their credit, and the highly indebted who could’ve done an equity take out last year, but for whom the numbers no longer work. A strong market can easily absorb the forced sales without a hiccup (and often without the buyers even knowing). We shall see how the next few months go.

    Now, the next question: Has the spring market already peaked? I think some smart sellers got out ahead of the traditional spring flood this year, hoping to catch the last of the crowd who had mortgage pre-approvals from before January. It looks like detached prices and dollar volumes may have peaked in March, with prices a bit below last fall’s. Still a bit too early to call this definitively, but if April average prices come out below March’s, woe betide us all.

    1. Condodweller says:

      Ralph, you are one of the few sane voices around here and your call that last April might have been the right time to sell a house was spot on. I agree that the people caught out by the price drop in the Mattamy case are not true speculators however they were speculating nonetheless though I would not fault them for it given the prevailing climate of an ever increasing re market.

      Going forward, I think April will remain mostly the same as the last few months as lenders have extended their preapprovals from 90 to 120 days and I would expect steady prices and even a small month over month gains to be followed by a downturn in May and June. IMO people who have houses up for sale would be smart to accept the highest offer, if they are getting an offer, as things are about to dry up and they may find themselves wishing they had accepted these “low” offers when they are confronted with even lower ones.

  11. pre construction says:

    Hey David, aware you are not a believer in the pre construction condo market but was curious if you had an opinion on the Brad J Lamb project at Richmond and Spadina which was cancelled and recently re-released at a significantly higher price. Not an investor in the project but curious if there are any other examples where a developer appears to have cashed in on the very rapid condo price increases in an ethically grey manner.

    1. Sardonic Lizard says:

      Anyone that buys from Brad Lamb should know they will get “fleeced” one way or another. Pun intended.

    2. Ming says:

      same thing gonna happen with Cosmos Condo (Vaughan) – Liberty developer?

    3. My opinion?

      My opinions on this have been well noted for a decade.

      I have sold ZERO pre-construction condos, for a slew of reasons, including the archaic and carefree manner in which developers can cancel projects.

      The irony today is – the Mattamy Homes buyers are upset because THEY can’t cancel their contracts, and the Cosmos Condos buyers are upset because the developer cancelled the contract.

      Does ANYBODY take responsibility for their actions in 2018 anymore? Or has the nanny-state, free-for-all governments of Trudeau and Wynne caused people to think that they can make decisions, and somebody will always be there to bail them out?

      1. LazyParker says:

        Oh, come on, David. Blaming political leaders who have been around for a couple of years is just lazy. Blame the people themselves, not the politicians or the media or parents or teachers or clergy or any other easily attacked scapegoat. All are (in some instances) culpable to a certain degree, but with the massive volume of sensible financial information available on the internet, there is no excuse for anyone (except those without internet access – and don’t kid yourself, there are more than we think) to be financially illiterate.

  12. Professional Shanker says:

    David,

    Housing Bear referenced it below but a very interesting piece of analysis was issued by CIBC & Urbanation last week.
    https://www.urbanation.ca/sites/default/files/Urbanation-CIBC%20Condo%20Investor%20Report.pdf

    Wonder if you believe a blog post on the findings is warranted? Specifically the report referenced a large investor sentiment of 48% of new condo sales – I would have not have expected it to be that high.

    One inference that could be made from the report’s findings is that negative carry domestic speculation could very well be a driving force behind the run up in condo prices. The resale & new condo market would show some similarities.

    Anyways, appreciate the analysis you continue to provide – like today’s piece!

    1. Not Harold says:

      That report looks VERY dangerous for the Toronto condo market. Rent is accelerating a bit while prices are up dramatically. Combined with pipeline issues condo market in 2020 and 2021 looks like Vegas/Phoenix 07 – or earlier if we see substantial interest rate hikes.

      Investor percentage needs historical data to qualify – 44% given the heavy demand for condos as rental product is plausible as it provides protection against rent control and LTB while REITs and Insurance/Pension investors are hampered in ability to invest in new construction by policy uncertainty and predilection for hostile legislation every decade or two. Especially with possibly higher inflation and likely higher interest rates purpose built rental is very hard to make substantial investments in.

      1. Condodweller says:

        This is an excellent report which provides some very useful statistics in addition to inferences based on focus group data. The fact that the percentage of investors who bought in 2017 with likely negative cashflow is relatively small, coupled by the fact that any slack created by said investors selling will be met with take up by end users bodes well for the condo market. The 48% investor statistic does not concern we as I have heard for many years that the average percentage of rental units condo buildings was about 50%, therefore, it has not changed. It would be significant if it went from say 25% to 50%.

  13. Appraiser says:

    Amusing to watch all of the bears crawling out of the woods, grave-dancing and spewing vitriol.

    I suppose eating crow for a decade makes one angry and vengeful.

    Funniest part is that the correction is old news.

    1. Professional Shanker says:

      Being right for a decade can make one complacent and lazy to investigate any theory which does not conform to their preconceived notions. A rule most amateur trader’s learn at one time in their life.

      On your bear point – I do agree being wrong is not fun….who wants to be wrong?

  14. TokyoTuds says:

    An excellent analysis, David …. especially interested in your East End aside. What was your method for weighting the price data for E01, E02 and E03?

  15. T says:

    “In order to sell newspapers, or at least online subscriptions, headlines have to be more catchy, and thus often have to be more negative, exaggerated, or exacerbated.

    And that’s why we’re constantly seeing the media use the worst statistic they can find with respect to the Toronto real estate market, which last month was the 39.5% decline in March sales, year-over-year.

    A headline reading, “Toronto market down almost 40%” is catchy! But it’s just a headline, and how many people actually click on the story, and read further? Maybe…..5% of all the people who see it?

    “The market” isn’t down 40%. Sales in the GTA are.

    And while I don’t blame any media outlet for the headlines they write, since I’d probably do the same thing in their position, I think the mantra “if it bleeds, it leads” is important to keep in mind when using headlines to measure the market.”

    2016 through April of 2017 we were constantly bombarded with stories of massive year over year gains, a real estate market on fire, insatiable demand. Now that the stories have turned as the market has, and it’s affecting you negatively, you have the audacity to infer media bias towards negative stories.

    Unbelievable.

    1. Andrww says:

      David, I’m going to challenge your “I’m an open book” mantra for a moment.

      “T” suggests that the declining market has negatively affected you. Would you care to share how your sales numbers stack up so far this year compared to last year?

      Assuming that you are as OCD as you claim, you love statistics, and of course you love money like most Realtors, I’m sure you could provide this quickly.

      Many thanks!

      1. @ Andrww

        Sure, why not.

        Jan to March, my sales numbers are down 4.5%. That’s a rounding error in this industry, as the ebbs and flows in a competitive market are tough to predict.

        But I think there are a LOT of agents who are starving. Divide the 100,000 transactions per year by 50,000 agents. Now if transactions are down 35%, to 65,000, then divide it by 50,000 agents, er, maybe 53,000 now?

        I see your point.

        1. A little bird told me says:

          He also sells real estate …at a discount.

          Check out MLS # w4036463. Originally listed at $2.499M, reduced to $2.299M, reduced further to $2.249M and finally sold for $1.9M.

          Ouch!

          1. VoteForDug says:

            The beauty about RE sales: They still get paid.

  16. Housing Bear says:

    Thank you for responding to some of the negativity. My follow up is that all of your replies above relate to micro factors and not the macro factors. On the way up, macro factors allowed all markets to go up at the same time. Low interest rates, stronger economy, growth in HELOCS, looser credit standards, large increases in household debt levels. Micro factors allowed certain areas to increase at a faster rate. Interest from foreign investors, suitability for flipping (old houses large lots), % of flippers.
    On the way down it will be macro factors that pull everything down. Raising rates, weakening economy (RE agents are based on sales volume and price, RE lawyers are based on sales volume, appraisers – volume, construction – financing, ) deleveraging, and tigherter credit environment (B-20, which is only really starting to bite now because a lot of buyers had pre approvals carry over for 90 – 120 days)
    On the way down, micro factors will protect certain areas more that others. These include, available listings in a given area, desirable neighborhood? (those with true wealth will eventually look for deals), % of end users vs investors.

    Here is an article from movesmartly (RE mouth piece). Its about how for SFH the areas that have seen the biggest decline in price were those with the highest concentration of investors. This makes sense to me, and the areas in particular include vaughn, RH, and newmarket. What is interesting to note is not a single one of these areas had a higher concentration of investors than 22%. They also note that condos are still doing very well.
    https://www.movesmartly.com/articles/gta-house-prices-falling-furthest-where-investors-once-dominated

    Last week there was a report by Urbanation and CIBC (Two other RE mouth pieces/ cheerleaders). Big take away is that 44% of condos that were taken possession of in 2017 were by investors. These are condos that would have been sold presale in 2013-2014. Wasn’t the exuberance for presale higher in 2015-2017?

    So to recap – For SFH areas that had more investors took the biggest hit. Not one of these areas had more than 22%. The amount of investors in the condo segment is twice that despite the fact that this number is reflective of speculation from 2013-2014.

    Talk about what the numbers don’t say!

    1. T says:

      You reference several new data points, but do you have any information on their historical values? This is what is needed to determine trends. Spouting a bunch of today’s data points means nothing without the full history.

      1. Housing Bear says:

        For % of investors. The movesmartly article compares 2012-2016. Other than King, it looks like the percentage at least doubled for each region. I am surprised that these organizations didn’t include a graph showing us that the composition of foreign investors has been the same for a long time…… That would imply that the market is fine in my opinion….. Why wouldn’t they include this considering their well being is all tied to RE?

        For the macro factors
        Long term household debt to income
        https://www.google.ca/search?q=canadian+household+debt+trend&rlz=1C1CHBF_enCA792&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjCq6PC0q3aAhUDiqwKHSNNDkcQ_AUICigB&biw=1366&bih=662#imgrc=nnZn4MkUMRkAmM:

        Long term GTA price trend
        https://www.google.ca/search?q=toronto+real+estate+price+trends&rlz=1C1CHBF_enCA792&source=lnms&tbm=isch&sa=X&ved=0ahUKEwiGzMfZ0q3aAhVOMawKHRRGAaQQ_AUICygC&biw=1366&bih=662#imgrc=H78p41rLVw46mM:

        Growth of Helocs vs other household debt categories
        https://www.google.ca/search?q=Canadian+Heloc+trend&rlz=1C1CHBF_enCA792&source=lnms&tbm=isch&sa=X&ved=0ahUKEwiXle-F1K3aAhUKTKwKHeofCMAQ_AUICygC&biw=1366&bih=662#imgrc=eY4Ndx67XiA1YM:
        Note. Helocs up 800% since 2000
        Mortgage up 300% since 2000
        Credit card debt up 600% since 2000

        And finally…….. the main factor influence all of the above….. Canadian interest rates
        https://www.google.ca/search?q=Canadian+interest+rates+trend&rlz=1C1CHBF_enCA792&source=lnms&tbm=isch&sa=X&ved=0ahUKEwieq-fz0q3aAhUCNKwKHVRwAYoQ_AUICygC&biw=1366&bih=662#imgrc=TTSc6GRM2u5ufM:

        1. Housing Bear says:

          *Graph showing us a % of investors. Not foreign investors. This is much more a local speculation problem (In regards to my post which is awaiting moderation)

  17. Juan says:

    David

    This is the first time I feel like I’ve seen you reference foreign buyers in the condo markets. Do you think their affect on overall prices is significant?

    1. T says:

      Foreign investors in housing markets is not new, not any more prevalent now than a decade ago, and is not the core challenge to rising housing prices. That’s why David rarely mentions it, because it is not an issue.

      1. Professional Shanker says:

        no historical statistics to prove your statements…your opinion is that foreign investor demand does not play a large enough role to warrant policies which reduce involvement – have you been/lived in Vancouver or Sydney?

        That said I cannot say 100% Toronto has or does not have a problem.

        1. T says:

          Yes, I’m in Vancouver quite often. I’m actually going to be there tomorrow.

          What you are spouting is the same racist rhetoric repeated everywhere in Canada the past few years, the ‘Chinese’ are buying up everything so you better buy now before you are priced out forever. It’s a complete fallacy.

          1. Professional Shanker says:

            When did it become common place that someone can challenge another person’s opinion which lacks historically statistical proof and they can infer that they are spouting racist rhetoric, sad very sad!

            In no way did I say it was the driving force, but would have an impact on prices in some form. Foreign capital in a globalized world does have an impact throughout all economies, how much is up for debate and without historical data cannot be dismissed.

            Does availability of domestic credit matter more amongst other factors – sure it does but you cannot dismiss other factors and for argument’s sake why would a developed world want to restrict FDI? Over the long term it would not!

          2. Natrx says:

            Spouting out statements without facts is akin to driving in the dark with sunglasses. Please provide facts on your statement if you will sir.

      2. EDWIN says:

        He seemed to imply it was an issue in this post by mentioning that new rules hurt Canadian buyers but not foreign cash buyers.

  18. Michael says:

    You made a comment in one of your videos a few months ago and it holds true- people are still pricing their properties as though this we were in March 2017 – ridiculous terms and pricing, and very little flexibility. There is a house up the street from us that has been listed at 1.2M for months now – it is beautiful and has been done well, but the comparables in the neighborhood would have suggested a price closer to 950k. I’m not surprised it’s sitting for so long, and to be honest the seller will not see 1.2M in this market. Maybe next year…but that’s a lot of waiting.

  19. Not Harold says:

    This looks like typical real estate softening behaviour: volume goes down, people hold out for a higher price, slowly adjust downward.

    Only in extreme and unhealthy situations do you see rapid price decreases. US 07-09 was exceptional because people HAD to sell and some banks HAD to sell. You still saw lots of banks take a long time to sell foreclosed properties because they were desperately afraid of crystallizing losses that might have threatened their stability.

    I am interested in the makeup of current inventory/transactions vs last year. Could be very hard/labour intensive to get the information vs the general stats TREB has.

    My thesis is that in Toronto detached that is under the new thresholds has more demand, supporting prices, while above the threshold demand is drastically reduced. So higher quality product is taken out of the market, meaning lower quality swamps the statistics in terms of mean and median price. The enthusiastic behaviour in the condo market, where far fewer transactions are affected by the new thresholds, appears to support this hypothesis.

    As to the protecting local buyers.. of course the actions to cool the market were a move to protect the financial system. The banks, and the government, aren’t threatened by cash buyers overpaying. We are all threatened if large numbers of people over lever into a bubbly real estate market that is 80% financed by our Big 5 banks. Of course the marketing has to say it’s for the good of Joe Voter, but this isn’t the Toronto Star or an NDP member email list, we can be adults and discuss reality rather than myths.

    1. Michael says:

      There’s a lot of truth in this. Quality under 1M is becoming very difficult to find and gets over list price consistently still. The rest of it is dregs and is sitting deservedly so or getting under list. The rest of the near 1M market has decided over 1M is the new standard and a lot of people can’t meet those thresholds any longer and are forced to look under 1M.

      It also explains condos going bonkers too. People have been priced out of quality detached and semi-detached homes. What is left is garbage – and for 700-800k you can get a really nice condo, so that’s what people are looking at.

  20. EDWIN says:

    The acceleration with which the downtown condo market has gone from $700 psf to $1000 psf is astonishing. I don’t understand how it it makes any sense from an economic fundamentals perspective.

    1. Not Harold says:

      1000 and even 1200 a ft for condos DT is INSANE!!! You aren’t recouping that in rent and you’re going to be strongly cash flow negative after all costs.

      Take a look at Toronto Life Condo of the Week! $2.2MM for a 2500 sq ft stacked townhouse on the lake in Mimico (Lake Shore and Mimico creek, sharing an inlet with the Etobicoke Yacht Club). $1860 a month in maintenance fees!!! Unit looks great, huge terrace and is very large. Yet the building is 25 years old, you’re in a stacked townhouse, you need to get on the Gardiner to go anywhere, you’re facing a shallow bay that is liable to be fragrant in August and loud every weekend.

      I simply don’t understand. A condo by the Lake in Port Credit or Oakville, sure (assuming you get a substantial suburban discount) a house in the Kingsway or backing on to St George’s or Islington Golf Club (or the fancy bits of Oakville and Sauga), absolutely. But a nearly 3 decade old condo on LakeShore beside some decidedly vintage apartment buildings???

  21. Izzy Bedibida says:

    Good breakdown of statistics. Mom was telling me yesterday that for the past few months one of her friends is having trouble selling her house in Northwest Toronto in order to downsize. She was expecting a bidding war, but nothing happened and/or got offers that did not reflect what she wanted/was told she could get. Same this when the house was staged and re-listed. Last open house she got some offers, but a few potential deals fell through because the buyers couldn’t get the required financing.
    So something is happening, and based on a few anecdotal stories like this, this downturn is slowly getting bigger. We may be just approaching Peak House.

    1. Sardonic Lizard says:

      >> “a few potential deals fell through because the buyers couldn’t get the required financing.”

      So what’s she going to do now? Forget downsizing and stay in the house? Pucker up and lower her price?

      I’m still seeing townhomes in Vaughan and Richmond Hill with list prices of well over $800,000 and ask myself “How long can this delusion go on for?”

  22. Pkap007 says:

    Good analysis David one question though any idea what’s driving the cooling in Peel/Halton region. Demographics of this region was different to say York or Durham..

    1. Natrx says:

      I’m guessing Peel/Halton was taken by more locals either really priced out or speculating as well. York region had the foreign money that was at the heart of the ‘bubble’. Durham had a mix of speculators (was cheaper) plus people actually wanting to move in given the proximity to the Lakeshore GO, Also it is a more well established and known area.

      So in essence, Peel/Halton (I’m assuming northern end) was a spillover effect from the other regions since it was initially less known, less established and further away. I put it somewhat in the same bucket as Georgina as people were speculating as far as that given the spillover effect.

      1. T says:

        You provide no data, just some thoughts on how it might have been. Useless.

        1. Craijiji says:

          So no one is allowed to post an opinion, even when they lead with “I’m guessing…”, got it.

          Even though there was “no data”, Natrx’s post brought a lot more to the tables than yours did. Useless.

          1. T says:

            I disagree. Pointing out someone’s belief is incorrect is valuable. Otherwise everyone keeps repeating the same nonsense.

            The best approach is always to find the data and then make inferences.

          2. Craijiji says:

            “I disagree. Pointing out someone’s belief is incorrect is valuable. Otherwise everyone keeps repeating the same nonsense.

            The best approach is always to find the data and then make inferences.”

            Since you didn’t provide any data to prove that the best approach is to find data and then make inferences, your post is useless.

          3. T says:

            Keep arguing about someone pointing out to someone else they are incorrect. It makes you look more intelligent.

            I’m sure no one reading and commenting on a real estate blog need links to debt to gdp, average household debt, average prices in areas, listings, mortgage rates, etc. We don’t need to be dreaming up scenarios.

          4. Housing Bear says:

            I think you mean YOU don’t want links debt to gdp, average household debt, average prices in areas, listings, mortgage rates, etc. YOU want to keep dreaming up scenarios………….

          5. Craijiji says:

            T…Once again, you’ve provided no data to back up any of the points that you’re trying to make. Useless. Where’s the data that supports your claim that no one needs those things? Weak at best.

            I’ll keep arguing for someone’s right to express their opinion in an open forum. You can keep trying too hard while coming across as a know-it-all clown. Seems to work well for you.

      2. Geoff says:

        does T remind anyone else of Dwight from the Office?
        What’s tougher, brown bears or black bears? Fact. Brown bears.

        1. Housing Bear says:

          His comment would be more along the lines of, how can you say that a black bear is tougher than a brown bear? I would need to see historical evidence on multiple one on one bear throw downs…………….. Then he would offer no countering evidence to prove either point……….. I think he is trying to go for the philosophy type professor sctick……….. trying to challenge us all to be more critical……. easy there Plato!

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