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Toronto real estate plummeting ...
by Philip Preville in Toronto Life:
Attention, homeowners: the starting gun for the Great Real Estate Meltdown of 2008 has now been sounded. It actually went off about a month ago, though you may not have noticed, since it was sounded in dulcet tones, with a prediction that home sales would “drop slightly.” So much for that: sales in March are down 22 per cent over last year.
There are three preferred theories for the drop in sales. Here they are, ranked by the degree to which they are made of wishful fantasy.
April 6, 2008 in Toronto Real Estate Update | Permalink
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Posted by: john | Apr 17, 2008 2:27:41 AM
However, I also heared about other interesting statistics. For instance, listing inventory was down 6.3% over March 2007 to 20,533 houses and condos on the market being offered for sale. That’s the lowest it’s been since March 2003-2004. Now this ‘might’ be partially because of the new City Of Toronto land transfer tax. While the City excludes first-time buyers up to a $400,000 purchase from paying the tax, ALL move-up buyers must pay it. Remember, for a move-up buyer to purchase a $600,000 home, they’re faced with paying $16,200 in land transfer taxes to the City and to the Province - that’s a big number! Another important statistic as to the health of the market is the ratio of sales-to-listings. This indicates how busy the market is and the number of months of inventory we have on hand. For March, that ratio was 32.3%.
Posted by: Toronto real estate agent | Apr 11, 2008 9:49:02 AM
How it is possible that prices on real estate market went up about 11 % and overall sale of houses decline about 27% in Toronto. And now is buyers market?
Posted by: Torontian | Apr 8, 2008 3:54:36 AM
Well said Investor. I read somewhere I can't recall now but it was suggesting that 60% of new condos purchased in Toronto are by speculators, and that between 40-60% of all new mortgages are 40 year terms!! If this isn't Canada's version of "subprime", I don't know what is. The government better step in soon and put a stop to the 40-year mortgages and force lenders to stick to 20/25 (20% down, 25 year terms), otherwise we are going to be just a bubblicious as our neighbour down south.
I vote for sustainable, controlled growth, not irrational exuberance!!
Posted by: Toronto Bear | Apr 7, 2008 5:54:05 PM
Well this article is kind of weak in terms of backing his claims with any significant data, but real estate market is cyclical so eventually it will happen, but he does point out the flaws of real estate agents thinking.
In my opinion Canadian Real Estate market is ready as the introduction of 40 year mortgage is an evidence of detoriating affordability.
Posted by: Investor | Apr 7, 2008 4:29:32 PM
