Comments on: Canada’s housing market is coming unstuck

By: Heather Seitz

Heather Seitz — Mon, 15 Dec 2008 16:52:56 +0000

Throughout the United States there is a growing demand for what are called “office condos.” Office condos are similar to condominium units in that each person owns a unit in an attached development. Office condominium developments give business owners a chance to own their property instead of leasing.

By: Joe327

Joe327 — Thu, 30 Oct 2008 14:00:00 +0000

http://www.marketwirecanada.com/mw/rel_ca.jsp?id=911047&k=toronto%20real%20estate%20board

The above link gives a good synopsis of the current situation in Toronto. The areas which ran up in price the most ie downtown Toronto have seen the largest price decreases and sales drops. It is important to note that this is also where many of the financial service sector people live. With job cuts in that sector rising rapidly few are out house hunting on the weekends.
The periphery which remains affordable (Toronto East for example)continue to do well. However there is a different type of buyer in that area. Most are families that are first home buyers. The sellers of those properties tend to be older retirees that purchased their home for a fraction of what it is currently worth.

I also have a few friends that are sales people for condo developers. Their stories are all the same. The higher end units (Penthouses, large two bedrooms) continue to sell. However the bachelor, one bedroom and two bedroom condo sales market has dropped off a cliff and there is evidence that many of these potential buyers went to the rental market as rents rose 1% YOY and there was a 12% increase (from 3,641 to 4,297)in units rented last month. The rental market is comprised mostly of one and two bedroom units. It is important to note however that landlords are dropping their tenant selection criteria. Credit checks, verified income, and references are no longer required by many landlords. This is largely due to the flood of empty condo units coming online in the downtown core.
From a developers perspective the most important market indicator I've noticed is the change in sentiment from the view that prices will never stop rising to one that prices will never stop falling.
(Let me know if you would like the PDF for the rental analysis)

By: Edward Harrison

Edward Harrison — Thu, 30 Oct 2008 09:08:00 +0000

you probably saw the Nationwide's numbers out today. They were grim and I looked to see how Fionnula would spin them but she was amazingly downbet. She's just angling for a rate cut at this point. She said at least 50 bps.

By: Wag the Dog

Wag the Dog — Thu, 30 Oct 2008 08:42:00 +0000

Let's hope the Canadians did not go as nuts as the Brits on this side of the pond.

By: Edward Harrison

Edward Harrison — Thu, 30 Oct 2008 06:58:00 +0000

Joe, thanks for your on the ground analysis. It's interesting to see Lehman involved in that deal.

How's demand for Condos holding up and how are the resale markets for single family homes and condos doing in Toronto?

Agents I am in touch with seem fairly keen to get demand up, suggesting things look weak for single-family homes as well as Condos.

In real estate, first comes demand falls, then come the price declines.

By: Joe327

Joe327 — Thu, 30 Oct 2008 02:28:00 +0000

I enjoy reading your posts.
I’m an active Real Estate Developer in the Greater Toronto Area. I was lucky enough to sell off most of my holdings in what I call the ‘Great Cash Out’ of ’06-’07. Here in Toronto there is a vast over supply of condos coming online in the next year and its going to get messy. Yonge and Bloor which is the equivalent of Times Square was demolished in the spring to make way for the Bazis Condo. Unfortunately Lehman Bros were an equity partner – Obviously the project is on hold and there is nothing but a pile of rubble there. Primo real estate – One of the first casualties… But certainly not the last.