Stability of Downtown Toronto Condo Market?

[bayview]

Graphic presentation

http://www.theworld.org/wp-content/u...using_full.jpg

[ddkay]

It still amazes me how they fit 3 bedrooms in 800 sq ft

[sharbit]

Has inventory been rising in Toronto? I've never wanted to live there so I don't watch the numbers but that's usually a good barometer on the health of things. However as HaroldCrup said by the time this flashes a warning sign you won't be able to sell anyways because you'll be part of that elevated inventory.

You'll also want to look at revenue vs cost as if you were just buying the property and if the numbers still make sense (ie if it cashflows). Finally, consider the tax liability when you sell as a percentage of the price.

[Berubeland]

All anyone can say is that the according to statistics such as multiples of income, average salary, units under construction, the Toronto condo market doesn't look good for longterm capital gains.

One thing I like to do is to break down any gains into units of work. For example my condo gained 100K in value, should I sell and lock in those values?

How long do you have to work at your job to make that kind of money. If the person would be making $50,000 per year that would mean saving 2 full years worth of work or funding 2 years of retirement and that's not even accounting for the fact that it would take a lot longer to save that kind of money.

Other factors are how much do you enjoy being a landlord? Is it even something you want to do?

The housing market in Canada reminds me of a casino at the moment. The numbers for continuing prices are against you but in spite of that you just won a jackpot. Do you walk away from the table? or give your windfall back to the house? Maybe you're on a winning streak, maybe not.

[Sampson]

The housing market in Canada reminds me of a casino at the moment. The numbers for continuing prices are against you but in spite of that you just won a jackpot.

Again, I wouldn't say this holds true in all of Canada. I know the forum and Canada is a little Ontario-Quebec centric simply due to the population distribution, but there are plenty of markets here in Alberta that are not nearly as crazy as you would expect, especially considering the much higher median incomes and more reasonable housing affordability metrics.

[phrenk]

Article from the Financial Post. Year-over-year drop of 20% in condo sales, with prices slowly creeping downwards.

http://business.financialpost.com/20...ry-group-says/

[marina628]

Real estate is a good portfolio booster if you have time and money .We have investments but put 35% down and bought with long term goals 10-15 years to pay the properties off and then to use that to supplement our incomes when we retire.Having said all that ,IMO the Toronto condos will always be too pricy and too risky for me to consider for investment.We did have a property there 15 years ago but that was for our personal use and of course prices were 50% or less of what it is today.

[Sherlock]

What do you guys think about condos in Markham? There are very few condos there, and Markham is growing. There is a new one going up called the Fontana (see http://www.fontanamarkham.com ) prices from the mid 200s, and there are a large number of tech companies nearby (the IBM lab alone has something like 3000 people working there), so a good pool of well-paid renters.

[Cal]

RE im Markham is and has been on the high end in regards to other comparables the same distance from the city core. Agreed, it has a good pool of renters as well. The market there seems relatively stable.

[Cruiser]

I look at it this way...

1) Current rental vacancy rates are 1.4%. The condos being built are in such demand because there is no rental stock being built downtown. There will always be students needing to rent, and there are many affluent people sending their sons/daughters to University. They want the comfort of knowing that they are not living in a bad neighbourhood, so they will pay to rent a condo. Honestly, in the last 4 years, I have only had one week where my bachelor rental unit is vacant. Last time, it took me 10hrs from posting to rental...and it makes over $400/mth. Until this really changes...I will be keeping my rental unit.

2) My primary residence is also a condo. This one I am a little bit more worried about...but again, things are relative. If I have to sell low, then likely whatever I am buying will also have decreased. In the end...I am not sure it will matter. Personally, I am more concerned about the maintenance fees in this building which seem to increase 7% yearly and are now more than my bi-weekly mortgage payment.