ACCORDING TO SOME "EXPERTS",
Even with the market
slowing, Canada is unlikely to experience a
“U.S.-style” housing
crash"!
SOME INDICATIONS TO REAL ESTATE PRACTIONERS THAT THE REAL ESTATE MARKET MAY BE IN FOR A SLOW DOWN:
"When
you hear about a homeowner who thinks his neighbour got too much money when he
sold his house, you know there’s something going on."
"A
handful of homes in desirable neighbourhoods that take a few extra days to
sell."
“One
day the phone just stops ringing,” -“Then you’re in the slowdown.".
THE CONDO MARKET in TORONTO
- The city’s once insatiable demand for living in 650 sq.-ft. glass boxes has evaporated overnight.
- Condo sales are down by 30 per cent, while prices have fallen by 4.5 per cent.
- Some proposed projects have been put on hold.
- There are currently 147 high-rises under construction according to research firm Emporis. That’s the most in North America, including New York.
- When completed, 56,336 new living spaces will be added to the city’s housing inventory.
- Most of the projects are conceived and marketed based on a cookie-cutter formula: minimalist decor; “lifestyle” amenities ranging from yoga studios to juice bars; and attention-grabbing flourishes,
PROBLEMS FOR CONDO SPECULATORS:
- The concern is that the market is being driven by speculators, not families.
- Many condo purchasers buy off a floor plan—often borrowing against an existing property—and then sell or rent their unit once it’s completed several years later.
- Many condo owners who rent their properties are realizing returns of less than four per cent.
- If rental rates fall as more units come on the market—it is estimated that there are at least 5,000 too many condo units being built in downtown Toronto—those same investors will soon be losing money, prompting them to sell.
“Being a landlord is already a negative cash
proposition at today’s prices,” and it could be that bust in the condo sector
may have a “trickle
up” effect by reducing demand for starter homes"
-As recently as last spring, bidding wars were common in many Canadian cities, when houses sold for well over the asking price.
-The peak may have been reached in March when one Toronto bungalow made headlines after selling for $1.1 million, more than $420,000 above the list price.
David Madani, an economist who has been predicting a drop in housing prices of up to 25 per cent in Canada, warns:
-“Bubbles inherently contain the seeds of their own undoing,”
-“They’re driven by overconfidence and expectations that house prices will keep going up. But at some point it just pops.”
WHO IS MOST AT RISK?
- The homeowners most at risk are those who are overextended.
- Of the $570 billion in mortgages that the CMHC insures, about half are borrowers with less than 20 per cent equity in their homes.
***HOMEOWNERS***
YOU NEED TO REALISTICALLY ASSESS YOUR CURRENT
REAL ESTATE SITUATION IN ORDER TO MAKE THE BEST DECISION FOR YOUR FINANCIAL
WELFARE!
when you call
me, you speak to me!
not a team member or assistant!
PATRICIA KATZ, *BROKER
office/pager: 416-966-0300
pkatz@trebnet.com
Sutton Group-Associates Realty Inc., Brokerage
358 Davenport Rd.,
Toronto, ON M5R 1K6
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