Condo Builders .COM The Toronto Condo Directory -

 
Archives
Toronto Condos and New Condominiums in the City of Toronto

The 2.75% Danger
June 20th 2009 

Toronto’s housing market proved all the experts wrong.  As condo and house prices collapsed around the world, Canadian prices actually increased.  In fact, average housing prices in Canada are now 80% higher than the U.S. and our prices are even substantially higher than the average American prices were at the peak of their market. 

Most people attribute this to our historically low mortgage rates, with variable rates as little as 2.75% and in some cases requiring interest only. (Imagine being able to carry a half million dollar mortgage for about $1,200.00 a month, sounds like Las Vegas a couple of years ago.)  In the meantime, conventional fixed five year mortgages have increased from 4% to 4.5% and they are expected to climb further. 

So why are variable rates so cheap?  Because millions of people are keeping their money in the bank waiting for rates to increase before they’re prepared to lock-in.  The banks have an abundance of short term money and not as much long-term money.  People are investing that money into the stock market and others are buying real estate like condos as an investment.  In the U.S., AAA tax exempt municipal bonds are paying as high as 5.62%.  Corporate bonds are paying even more. 

So even at 4.5%, fixed rate mortgages are a bargain. Eventually, variable rate mortgages will increase as well, and when you finally lock in, rates could be six, seven, or even 8%. If you’re gambler, stay with a variable, but for peace of mind you’re probably better getting a fixed rate mortgage.

Toronto, a great place to live, but as investment?
June 1st 2009

If you’re looking in Toronto for a condominium to live in, then there is no better time to buy than now, but if you are looking for a condo as an investment, there are a lot of other cities which undoubtedly will show a much higher return over time.

Our first pick is Las Vegas.  Both condos and houses have fallen by nearly 60% in Nevada, and in some cases the price decline has been greater.  Vegas is an exciting world class city with some of the best shows, the finest hotels and a slew of Michelin star restaurants.  It’s also a great place to get away from Toronto’s cold winter months.

Speaking about cold, Ft Lauderdale real estate prices are also a bargain along with other parts of Florida like Miami and even Key West.  You can find a 1400 square foot two bedroom two bathroom condo in the Lauderdale area that sold for $140,000 during the boom for less than $40,000.  Maintenance and taxes are fairly high and insurance continues to be more expensive, but spending part of the winter in a tropical climate just can’t be beat.

Spain also has some remarkable values, and condos in Dubai are also selling for half price.

Relative to most of these places,  Toronto condo prices are on the high side with downtown and midtown city prices averaging $400 per square foot with parking.  A high Canadian dollar also makes out-of-country purchases a lot more attractive.

The biggest obstacle is managing out of country properties to maximize their income.  It’s a lot easier renting a condo 15 minutes from where you live than 6 hours by plane each way.  And while the Internet makes management easier, you still need personnel on the ground.  If you do buy out of country and you want income from the property, be prepared to play a local management service rental commissions and a monthly management fee of about 7% of your property’s gross income.  Also, make sure the condo that you buy will allow you to rent the property - many don’t.


Toronto Condo Report
May 2009

Most of the markets that experienced strong appreciation are now in a freefall.  Las Vegas, Nevada is down nearly 60% from 2006.  Miami and Fort Lauderdale Florida are down 55%.  Both Northern and Southern California are experiencing price declines close to 50%.  Redwood City, Menlo Park and even San Jose are seeing price declines from a 2006 peak of $700,000 to a power of sale asking price of $240,000.  We recently saw a two bedroom two bathroom Fort Lauderdale condo that sold for $160,000 in the boom sell for under $40,000.00 just two weeks ago. And don't even ask about Dubai.

And yet, the Toronto real estate market is the healthiest in the world, with one of the smallest property value declines and abundant sales for well priced properties. While it’s officially a buyer’s market, sellers can still receive near “at the top prices” with a good web based marketing campaign.  Even the experts are at a loss as to why the Toronto market is doing so well.   

If you are a seller in this market, have your agent price your property aggressively, at, or slightly below, market value.  Also insist that your agent advertise the property heavily, especially on the web with a specified internet budget. 

If you’re a buyer, research the market and the area. Check both links and click the adds. Smart sellers are using  web dollars to advertise specials. some are making changes on a weekly basis. Interest rates today are great and carrying costs are low, but with huge mounting government debts, interest rates are bound to climb so choose a property for the long run.  The days of a quick flip, spectacular appreciation or even any appreciation are gone.  Find a home that you love and get a long-term mortgage you can easily afford and be prepared to stay put for the next five years. 

2008 Condo Market Roundup 
Dec. 20th, 2008 
 

In the past 12 months the market has changed from sellers to a buyers market. Average Toronto prices have fallen about 8% from $420,000 to about $360,000. Some markets still remain strong (relatively) and other GTA markets are flooded with product, and declining prices. 

What should you do in this market? 

Exactly what you would do in any market, just proceed with a little extra caution. If you want the care-free condo lifestyle and have a property to sell, make your condo offer conditional to the sale of your house. You can also negotiate more then ever, even with builders on new Condominiums. 

This is actually a good time to buy in Toronto and the GTA. Mortgage rate are coming down, there are lots of great condos and houses to choose from, and vendors, both new and resale, are prepared to negotiate. 

Best of luck in 2009.

October/November Condo Update:  Has The U.S. Housing Crash hit Toronto?
Published: Oct. 4th, 2008 
 
Has the U.S. Housing crash reached the greater Toronto Area?  Definitely not!  But the market is weakening.  Average prices in the city of Toronto have slipped from about $420,000 to $390,000, a 6% decline, over the past year.  Where are prices going?  It depends on the economy.  If the U.S. bailout plan works and a recession can be avoided, our economy will be in great shape.  On the other hand, if the U.S. market really tanks, we can expect a real estate price adjustment, perhaps by as much as 20%.  A 20% adjustment means the average selling price of a home in Toronto will fall from about $400,000 to approximately $320,000.  The real question is whether the money supply and mortgage abundance will remain.  If mortgage rates reach historical norms like 10%, then the market could really tank, perhaps by as much as 35% to 40%.

Looking at it another way, if you purchase a Toronto, or GTA condominium, with a seven year mortgage at 6%, you may still have smaller mortgage payments even if prices decline, should the interest rate increase to 10%.  In other words, if you find a home you love, and plan to stay there for the next 7 to 10 years, and you can easily afford the home, you’re probably going to be OK, but don’t spec the market because you might find yourself in the same shape as speculators south of the border. 

Toronto’s new condo market opening up to negotiation!
By Lex Dunkelman
Published: Aug. 29th, 2008 
 

A drive along any Toronto street reveals a crop of new listings, and the condominium market is experiencing an even larger listing surge.  Most developers have been through ups and downs before, and smart Condo Builders are anxious to sell their existing inventory. 

Most Toronto builders don’t lower their prices, but they are often open to free upgrades, mortgage pay downs and even free parking spaces and lockers. 

How do you get these great deals?  Just ask for them.  Submit an offer with all of the options that you want, at a price you’re willing to pay.  Have your lawyer help you to prepare an offer covering what you want.  The best way to get the best deal is not to fall in love with any one condominium development.  Select two or three, and start making offers.  You may be surprised what you’re able to get.

Toronto condominium market continues to remain viable
By Lex Dunkelman
Published: July 13, 2008 

Despite the pledge from Canada’s federal government to tighten up on Canadian sub-prime mortgages, the condo market in Toronto remains healthy.   

There are several factors which have allowed the Toronto market to escape the sub-prime meltdown we have seen in the U.S.  

Toronto remains one of the best destinations for people in other lands looking for a safe haven. Canada’s welcoming immigration policy along with Toronto’s outstanding ethnic diversity, make the city a top choice for people looking for a second home. Toronto is a top destination for people in most Asian countries including China, Pakistan and most Middle Eastern countries.  Wealthy South Americans, Colombians, and Mexicans also find Toronto a hospitable destination. 

The second factor which has kept the Toronto market alive is the flexible lending attitude of Canada’s banks. Canada’s five largest banks continue to welcome, and encourage, residential mortgages, often competing with each other for customers.  In some ways, Canada’s mortgage market resembles the American market before the meltdown.  This has meant that the Canadian market has continued to remain healthy even though housing prices in Canada are substantially above U.S. prices, even at their peak. 

And how long will Toronto’s condo market remain healthy?  Who knows, but if you’re looking for a condominium in a great city, why not buy a condo in Toronto.

 

 

Our newest site: San Francisco along with San Francisco Districts and San Francisco Restaurants

Real Estate Lawyers

Home  | E-Mail Us