[TheRox]

Originally Posted by BavFan_08

Aspiring made some good points but consider this example:

Manhattan.

In the early 90s, properties in Manhattan and the rest of NYC were worthless.

For those youn'gns out there, you may not know this but a 1 bedroom apartment near Times Square sold for $98,000 (in 1990-1991) This was after Real Estate CRASHED both in Canada and the USA. Donald Trump almost went bankrupt? If you do not believe me, check out his autobiography.

Today, That same apartment/condo is over 30-35 years old and is worth nearly $1,000,000. (Even with the slow down in the US economy.)

Why? It's New York City, and the demand out lasts the supply. Simple economics.

Condo investors in Toronto, most of the smart ones at least, are banking on the long term.

IMHO, Short-term flipping has indeed slowed down for now. For a lot of people though condo investing is for the long term.

Also, in Toronto, condo prices have already dropped. In fact new developments are offering lower prices because even the developers realize that there are to many units out there. However, eventually the Condo boom will end. Either we as consumers will stop buying, Toronto becomes the crappiest city to live in or the builders just run out of room to build. The best scenario is the NYC example. No where to build, lots of jobs/opportunity in Toronto, increased immigration. High Demand, Low Supply makes the condo investors of today winners.



Also, Vancouver has historically always been more expensive. Even in the 80s and 90s. The supply has never kept up with demand. In downtown Vancouver, the supply will always be low because from what I can tell (after visiting there so many friggn times) there is hardly any more room to build in the city. Vancouverites, please correct me....

Also, another thing about Vancouver...the city itself doesn't have a big population. The actual City of Vancouver's population is less then Mississaugas. What makes Vancouver the 2nd or 3rd populated city is the surrounding areas (i.e. North Van, West Van, Richmond, Burnaby, Couquitlam (sp?) etc etc.)

The above is based on my research, opinions. if you disagree you disagree or please correct me on anything you feel is incorrect.

^^ THis is just about correct, esp part about Toronto

Those of you trying to "make" money in Toronto and are excited about buying Condos...good luck! Every second person there "owns real estate"...lets see how far this goes.

[TheRox]

Have you considered Sub-Zero or Dacor?

20 000 $ for a fridge...its nice

[MMachines]

My builder didn't let me put upgrades on the mortgage (referencing the part about paying interest on upgraded appliances). All upgrades were paid in cash (cheque, you get the idea) before closing.

[aspiring335]

I don't think I agree. The relevant stats from NYC are the prices BEFORE real estate crashed not after when no-one wanted to buy. I have no doubt that people buying real estate in NYC post-crash made out like gangbusters. But at the same time, the collapse of real estate wiped out millions of people who had bought near the top of the bubble. The reason there were prices that later turned out to be bargains was because people were afraid of real estate and didn't want to buy.

It's only the persistent availability of cheap credit throughout the 2000s that has really juiced the housing market, despite all the myths about it being a product of wealthy foreign investors, etc. We still have cheap credit, but not for ever, and we've also pulled a huge amount of demand forward from the future in Canada in a pretty desperate effort to stave off more economic hardship.

My concern isn't for the savvy real estate investor, but for the poor sap who buys with 5% down, gets cashback to recoup that 5% and has a 35-year amortization. Despite the myth of Canada's conservatism and restraint, these types of buyers make a very large number of those buying new homes and condos. Prices don't even have to fall to put them underwater -- closing costs if they need to sell will do that.

Our banks are in good shape, yes, but partly because all of the risk in the mortgage market has been offloaded to the taxpayer via CMHC. Think we don't have sub-prime in Canada? Well to me, mortgages that need to be underwritten by a federal agency because the buyer has no actual money sound pretty sub-prime and they're only viable if the value of the asset increases rapidly forever.

Does this mean a housing collapse is likely in Canada? I doubt it, but I would be comfortable predicting at least a 15% decline in prices over the next 18-24 months, then at the very least three years of pretty stagnant prices.

It's not different in Toronto, different in Vancouver, different in Calgary, etc. All these markets are driven by basically the same variables, and generally these variables are international and national, not local. A single family house in Kitsilano or Rosedale will probably fare a lot better than a condo in Brampton or Richmond, but history shows that nowhere is immune to these kinds of cycles.

Originally Posted by BavFan_08

Aspiring made some good points but consider this example:

Manhattan.

In the early 90s, properties in Manhattan and the rest of NYC were worthless.

For those youn'gns out there, you may not know this but a 1 bedroom apartment near Times Square sold for $98,000 (in 1990-1991) This was after Real Estate CRASHED both in Canada and the USA. Donald Trump almost went bankrupt? If you do not believe me, check out his autobiography.

Today, That same apartment/condo is over 30-35 years old and is worth nearly $1,000,000. (Even with the slow down in the US economy.)

Why? It's New York City, and the demand out lasts the supply. Simple economics.

Condo investors in Toronto, most of the smart ones at least, are banking on the long term.

IMHO, Short-term flipping has indeed slowed down for now. For a lot of people though condo investing is for the long term.

Also, in Toronto, condo prices have already dropped. In fact new developments are offering lower prices because even the developers realize that there are to many units out there. However, eventually the Condo boom will end. Either we as consumers will stop buying, Toronto becomes the crappiest city to live in or the builders just run out of room to build. The best scenario is the NYC example. No where to build, lots of jobs/opportunity in Toronto, increased immigration. High Demand, Low Supply makes the condo investors of today winners.



Also, Vancouver has historically always been more expensive. Even in the 80s and 90s. The supply has never kept up with demand. In downtown Vancouver, the supply will always be low because from what I can tell (after visiting there so many friggn times) there is hardly any more room to build in the city. Vancouverites, please correct me....

Also, another thing about Vancouver...the city itself doesn't have a big population. The actual City of Vancouver's population is less then Mississaugas. What makes Vancouver the 2nd or 3rd populated city is the surrounding areas (i.e. North Van, West Van, Richmond, Burnaby, Couquitlam (sp?) etc etc.)

The above is based on my research, opinions. if you disagree you disagree or please correct me on anything you feel is incorrect.

[BavFan_08]

Originally Posted by BRAISKI

Some of the things I have been thinking and I don't like is that if I want an upgraded appliance I just don't like the idea of paying interest on that for 25 yrs!

Also a co-worker suggested to check out those scratch and dent places they have a good deal. Esp if the scratch/dent is on the side where no one will ever see it unless you put out the stove/fridge etc...

Yeah...check out Appliance Canada in Vaughan or the Sears Outlet / Warehouse stores...I think Tasco has a warehouse too...

[BRAISKI]

^ Will have to check those places...

For the past few months, I have been cleaning my car almost every week at home. It will be very hard when I move to a condo

[MMachines]

I went to appliance canada when I was looking too.

My old condo had a car wash bay in it, it was easier than a house to wash the car because rain or shine, light or dark, I could do what I wanted. May be something to watch out for.

[BRAISKI]

So I signed on the dotted line...

Looks like mods of the car will be slow or halted. I need to start saving for furniture and home automation

[marakbai]

Tasco is the place to go. Ask for Cerrone. Dude is fair and adjusted our prices before delivery to ensure we got the best of the best re promotions and discounts. Just remember to mail in your rebates! I was too giddy from new house and forgot to do mine :S haha

Where did you end up buying BRAISKI?

[MMachines]

What home automation do you have on mind?

[Undies]

Originally Posted by aspiring335

I don't think I agree. The relevant stats from NYC are the prices BEFORE real estate crashed not after when no-one wanted to buy. I have no doubt that people buying real estate in NYC post-crash made out like gangbusters. But at the same time, the collapse of real estate wiped out millions of people who had bought near the top of the bubble. The reason there were prices that later turned out to be bargains was because people were afraid of real estate and didn't want to buy.

It's only the persistent availability of cheap credit throughout the 2000s that has really juiced the housing market, despite all the myths about it being a product of wealthy foreign investors, etc. We still have cheap credit, but not for ever, and we've also pulled a huge amount of demand forward from the future in Canada in a pretty desperate effort to stave off more economic hardship.

My concern isn't for the savvy real estate investor, but for the poor sap who buys with 5% down, gets cashback to recoup that 5% and has a 35-year amortization. Despite the myth of Canada's conservatism and restraint, these types of buyers make a very large number of those buying new homes and condos. Prices don't even have to fall to put them underwater -- closing costs if they need to sell will do that.

Our banks are in good shape, yes, but partly because all of the risk in the mortgage market has been offloaded to the taxpayer via CMHC. Think we don't have sub-prime in Canada? Well to me, mortgages that need to be underwritten by a federal agency because the buyer has no actual money sound pretty sub-prime and they're only viable if the value of the asset increases rapidly forever.

Does this mean a housing collapse is likely in Canada? I doubt it, but I would be comfortable predicting at least a 15% decline in prices over the next 18-24 months, then at the very least three years of pretty stagnant prices.

It's not different in Toronto, different in Vancouver, different in Calgary, etc. All these markets are driven by basically the same variables, and generally these variables are international and national, not local. A single family house in Kitsilano or Rosedale will probably fare a lot better than a condo in Brampton or Richmond, but history shows that nowhere is immune to these kinds of cycles.

+1

this guy knows what he's talking about.

buy the place to live, not to invest. if you want to invest, i say wait 3-7 years and watch the prices fall and find some prime locaitons to buy your condo as an investment.

[Dr. G]

Buy land not condos

[Undies]

Could a U.S.-style collapse happen here?

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EmailPrint..Tom Fennell, On Monday December 20, 2010, 5:25 pm EST

Home ownership is at the centre of many Canadians' financial retirement plans. That's especially true for baby boomers who are sitting snugly atop a nice wave of real estate inflation.

In fact, the average price of a detached home in Canada has doubled since 2000, and in September was sitting at $331,000. Of course that number pales when compared to Vancouver, where the average price for the same period was $679,000 and in Toronto it was a still-high but a more modest $427,000.

So a lot of people nearing retirement age are hoping the housing market will stay buoyant until they cash out, allowing them to downsize, pay off their debts and still have plenty of money left over.

A lot of American homeowners used to think that way. But from their peak in 2005, U.S. house prices have fallen almost 30 per cent, and they are still trending lower. Things are still so bad in the U.S. that the real estate default rate hit a record high in 2010, with more than three million households receiving foreclosure notices. And it could get even worse in 2011.

But could a U.S.-style collapse really happen here?

Obviously Bank of Canada Governor Mark Carney thinks so, and last week urged politicians and Canada's banking oligarchs to tighten mortgage lending requirements to slow Canada's plunge into debt.

To say the least, our debt numbers do look unsettling. According to Statistics Canada, the Canadian household debt-to-income ratio hit a record high of 148.1 per cent in the third quarter. That is slightly above the 147.2 per cent debt ratio seen in the U.S., according to latest figures from the U.S. Federal Reserve.

Carney also noted that household debt has jumped by seven per cent since the recession bottomed out, compared to a fall of 3.5 per cent in the U.S. And most of the household debt in Canada can be attributed to mortgages, which have grown from $421 billion in 2000 to more than $1 trillion today, a 137 per cent increase in 10 years.

This mountain of debt has left Canadians exposed to a housing-price correction. "Risk reversals, when they happen, can be fierce," warned Carney. "The greater the complacency, the more brutal the reckoning."

By three important measures, according to the International Monetary Fund (IMF), Canadian housing prices are extremely overpriced when compared to U.S. housing prices at their peak in 2005. And by implication, whether it will be "fierce" or not, they are due to correct.

For starters, according to the IMF, Canadian home prices relative to income are 15 per cent above the post-1970 average. This may not sound all that bad until you compare it to the U.S. and the fact that before prices there began to tumble, relative to income they were 11 per cent above the long-term average.

Long-term averages are something that smart investors pay attention to because prices often return to their mean. Just ask anyone who owned tech stocks in 2000 or gold bullion in 1980. In the case of housing, a regression to the mean would imply a return to long-established price trends based on historical levels of appreciation, and according to the IMF Canadian house prices are now selling 60 per cent above their historical average.

That sounds like a scary number, and it probably is when you consider that just before the U.S. housing bubble burst, prices there were tracking 30 per cent above their historical average and have almost fallen back to that level.

After looking at all those numbers the IMF concluded that on a price-to-rent basis, Canada has some of the most expensive real estate in the world.

In October the buy/rent ratio was about 1.85x. This means with average mortgage sizes increasing and becoming more difficult to afford, homeowners pay almost twice what renters pay to put a roof over their heads.

It should be pointed out that at 1.85x it's getting very close to the 2.3x level reached in December 2007 and the 2.5x level reached in 1988, and those highs led to corrections of 13 per cent and 10 per cent, respectively

Those findings are supported by a Royal Bank of Canada study which found that nationally, a typical house eats up 41 per cent of median income today, compared to 49 per cent in Toronto, and 73 per cent in Vancouver.

Just to put those numbers into perspective, according to Statistics Canada, median after-tax income has been growing at around 1.8 per cent annually this decade, well behind the doubling in real estate prices over the same period.

Here's a final bit of analysis that should raise a few eyebrows. The Canada Mortgage and Housing Corporation has insured $773 billion in mortgages and loans, while holding only 1.2 per cent in equity.

But at its worst before it went technically bankrupt, Fannie Mae, the largest mortgage insurer in the U.S, had 1.5 per cent equity in its loan portfolio.

So does this mean the Canadian real estate market is a bubble that is about to burst?

Only history will answer that question, but if you believe long-term trends matter when it comes to investing, odds are that housing prices will return to the mean. If you use past housing corrections as a guide, a correction could shave 30 per cent off their current values.

In the process, it also will also force a lot of baby boomers back to the drawing board to reschedule their retirements.

[Professor///M]

Originally Posted by BRAISKI

I am planning to buy a new condo soon, so I am looking for some suggestions or inputs.

For ppl that bought it used what would you have liked to change if you bought a new condo?

For ppl that bought it brand new, what upgrades did you get and didn't get and which did you regretted?

I am wondering if getting a stainless steel appliance upgrade is really worth it, I personally dont care about it if its painted white/black. But it might good of future value.

But all the faucets I would like it to be brushed nickel or similar that is not shinny stainless steel.

Living room - Laminate/Hardwood
Kitchen - Tiles
Cabinets- ???
Rooms - Carpeted (not sure what type but something not to thick)

I'm not from canada, but you're really just asking personal choice options. I don't think anyone can really convince you either way.

Keep in mind you'll never be upset paying a little more up front for something you really want, you can only regret not getting something in the end. Especially if it requires construction, it's cheaper in the front end than retrofitting it... much like our BMWs.


As for your question of condos/townhomes the real question is utility.

1. How much will you have to pay in monthly maintenance fees?
2. What does that include?
3. Do you need separate condo insurance for the structure?
4. What utilities are not included
5. Are you an owner in the condo association, or just a member?
6. If it is an existing condo association, have they increased their monthly fees ever?
6a. If so why?
7. Who is in charge of the association?
8. Who do you appeal to if there are problems not resolved by the person or agency "in charge"?
(not condo association related)
9. What is the fire barrier between you and your neighbors? What is the insulation rating between the shared wall, and the sound deadening rating?


I'm a condo owner in a small complex (less than 30 units) in the US. It is a nuisance. You're really not saving much by having shared utility fees (plowing, water, sewer, trash removal, etc), and it becomes a struggle of power between neighbors.

I'd look for a stand alone home if you could afford one.

[BRAISKI]

Originally Posted by marakbai

Tasco is the place to go. Ask for Cerrone. Dude is fair and adjusted our prices before delivery to ensure we got the best of the best re promotions and discounts. Just remember to mail in your rebates! I was too giddy from new house and forgot to do mine :S haha

Where did you end up buying BRAISKI?

I end up buying here in Waterloo...

Originally Posted by MovinUp

What home automation do you have on mind?

Well just for the blinds and the living room lighting.

[BRAISKI]

Originally Posted by PAMidge

I'm not from canada, but you're really just asking personal choice options. I don't think anyone can really convince you either way.

Keep in mind you'll never be upset paying a little more up front for something you really want, you can only regret not getting something in the end. Especially if it requires construction, it's cheaper in the front end than retrofitting it... much like our BMWs.


As for your question of condos/townhomes the real question is utility.

1. How much will you have to pay in monthly maintenance fees?
2. What does that include?
3. Do you need separate condo insurance for the structure?
4. What utilities are not included
5. Are you an owner in the condo association, or just a member?
6. If it is an existing condo association, have they increased their monthly fees ever?
6a. If so why?
7. Who is in charge of the association?
8. Who do you appeal to if there are problems not resolved by the person or agency "in charge"?
(not condo association related)
9. What is the fire barrier between you and your neighbors? What is the insulation rating between the shared wall, and the sound deadening rating?


I'm a condo owner in a small complex (less than 30 units) in the US. It is a nuisance. You're really not saving much by having shared utility fees (plowing, water, sewer, trash removal, etc), and it becomes a struggle of power between neighbors.

I'd look for a stand alone home if you could afford one.

Great questions and to be honest I am not really buying a condo to make money. I know it can cost more than living in a house. I might not have much ROI for a condo but its ok. I know some ppl are too concern about how much their property is worth.

However as per my lawyer and mortgage specialist said the area where I got my condo will easily grow at least $15k per year for at least 5 yrs. It may or may not be true...

A coworker of mine she bought a condo similar area last year, after living there for 10 months she sold it for $25k more.

For me these are good signs but then again, not my #1 priority.

I could afford to buy a house (not a $500k cause I am the only one paying for it)) but, I don't see any reason buying a 3 bedroom house + basement for just myself. Its a big waste, I am not going to argue that I will have tons of usable space and its a "better" investment. But right now its not what I am looking for.

Another thing is that I travel for work and every so often I like a mini road trip and or maybe personal travel. With the condo I can just pack and go...

[MOAB]

Originally Posted by BRAISKI

However as per my lawyer and mortgage specialist said the area where I got my condo will easily grow at least $15k per year for at least 5 yrs. It may or may not be true...

I wouldn't take any advice from your lawyer on whether a particular property will appreciate (and I'm a real estate lawyer myself) and don't even get me started about mortgage brokers and real estate agents. They'll say anything to make a sale. Most are frickin dense as hell.

[TheRox]

Originally Posted by MOAB

I wouldn't take any advice from your lawyer on whether a particular property will appreciate (and I'm a real estate lawyer myself) and don't even get me started about mortgage brokers and real estate agents. They'll say anything to make a sale. Most are frickin dense as hell.

It reminds me of people who sell insurance -- anyone who barely has a college degree is out there selling houses and insurance!

[dpwr]

Originally Posted by BRAISKI

Great questions and to be honest I am not really buying a condo to make money. I know it can cost more than living in a house. I might not have much ROI for a condo but its ok. I know some ppl are too concern about how much their property is worth.

However as per my lawyer and mortgage specialist said the area where I got my condo will easily grow at least $15k per year for at least 5 yrs. It may or may not be true...

A coworker of mine she bought a condo similar area last year, after living there for 10 months she sold it for $25k more.

For me these are good signs but then again, not my #1 priority.

I could afford to buy a house (not a $500k cause I am the only one paying for it)) but, I don't see any reason buying a 3 bedroom house + basement for just myself. Its a big waste, I am not going to argue that I will have tons of usable space and its a "better" investment. But right now its not what I am looking for.

Another thing is that I travel for work and every so often I like a mini road trip and or maybe personal travel. With the condo I can just pack and go...

if you travel a lot then condo might be a better way to go, but just because you're by yourself doesn't mean getting actual house is a waste... houses appreciate proportional as well, if you get a condo you most likely will always be in a condo unless down the road you will want to add a ton of money for a house... if you bought condo 4-5 years ago for let's say 150k now it's probably 200-250k, if you bought a house at the same time for 450k it's probably 650-700k (so all figures are not accurate, just an examples), so now that person who sells that condo will have a hard time getting into the house territory, but a guy that got house can easily upgrade... and yes I know mortgages are different for examples just pitching my idea

[w2]

Originally Posted by Undies

buy the place to live, not to invest. if you want to invest, i say wait 3-7 years and watch the prices fall and find some prime locaitons to buy your condo as an investment.

As a capital asset, houses aren't a great long-term investment. Look at the data:

http://canadabubble.com/charts/us-in...ome-price.html

The housing bubble from 2000-2008 is an anomaly, but if you bought a house in 1970 for $25,000 it would have been worth about $125,000 in 2000.

Likewise, the stock market crashes of 2000 and 2008 resulted in poorer than normal performance over the past 10 years, but if you had invested that same $25,000 in the S&P500 in 1970 and reinvested the dividends, it would have been worth $1,500,000 in 2000.

http://www.simplestockinvesting.com/...al-returns.htm

In both cases, the real, inflation-adjusted value of the returns are less impressive than the raw numbers sound, but an investment in stocks provided over 10 times the return. The data is for the US market, but the relative performance of Canadian real estate and equities should be relatively similar.

There are differences between the two: you can't live in your stock portfolio. On the other hand, if a house is your primary residence, you can't sell it without moving to something else, and to make money, you have to move to cheaper accommodations. Also, you don't have to replace the roof on your stock portfolio or carry fire insurance on it.

Buying a rental property is a different matter, but being a landlord is a lot more complicated than being a stockholder.

[BRAISKI]

Bump!
So I finally picked my options

I didn't upgrade any kitchen appliances but I chose black instead of white. However I did an upgrade for the washer and dryer to something better and its also HE. Maybe sometime later I want to upgrade all the appliance with Miele.

Since my living room/kitchen is open concept my kitchen will have hardwood floors.

I didn't do any upgrades to the cabinet just plain flat design I don't like mouldings but upgraded the handles.

Just to wire in a surround sound at the rear is $300!

[12beat]

Good thread.