Sorry to burst your bubble Toronto
When a major realtor releases a “market report” you can be sure the conclusion will be that prices are stable and/or improving (otherwise the report is staying under wraps).
Nevertheless, I would agree that Canadian real estate will continue to be seen by most people as a good place to invest their money, but not necessarily because of any sophisticated economic insights.
- 1. In an increasingly erratic world (in terms of politics, economics and even climate) Canada is regarded as a safe and stable place to live and own property
- 2. There is no longer any such thing as a ‘blue chip’ stock or bond (Nortel? GM? AIG? Bernie and the boys?)
- 3. Banks charge you more in fees than they pay you in interest.
- 4. Whatever happens to the price, properties have a day-to-day practical value -- you can use them or generate revenue.
- 5. Interest rates are likely to stay single-digit for some time, making ownership more sensible than renting (for those that want to own) and carrying costs sustainable (for those who want to be landlords).
- 6. Nobody has yet been able to explain derivatives or why they are sensible investments (except for the middlemen)
I don’t foresee the Toronto market collapsing, even in condos, but all these statistical trends and averages provide highly superficial insights.
One still needs to understand the submarkets very carefully. For the next six months, I expect overall real estate stability, but there are indeed some “bubbles” out there that will inevitably burst. There are also still some serious pockets of opportunity.
Harry Stinson was one of the first Toronto developers to recognize the potential for urban condominiums, to develop residential lofts, and to convert old office and warehouse buildings into residential spaces. His current project is the Stinson School Lofts, an 1894 heritage building in Hamilton, Ont., that he is converting into stylish and affordable lofts.
David Pylyp So lets recap; Prices will be stable, Some locations may be over priced, some are under priced and are an opportunity. Where do you weigh in on the Bubble Trouble?
Feel free to add all your comments.