Ridiculous

[sagsal]

I think there are a lot of factors as to why the Toronto RE market is so resilient:

1. There are a large number of public sector employers in the city and this provides obviously stable incomes - fairly recession proof jobs in addition to the Banks who have had limited layoffs

2. Lots of wealth in the city and there has been, and it continues, a significant transfer of wealth over the last few years

3. With a city fairly stable in employment, and basically the epicentre of the Canadian economy, you have lots of two income homes and a strong desire to be upwardly mobile and able to afford it.

4. Lets not forget rates are still very low and as I understand Property taxes in Toronto are less than elsewhere.

Just a few thoughts

[sprocket1200]

funny that no one has mentioned that people are relying on their LOCs and CCs. debt levels are increasing, it won't last forever...

[MoneyMaker]

I think there are a lot of factors as to why the Toronto RE market is so resilient:

1. There are a large number of public sector employers in the city and this provides obviously stable incomes - fairly recession proof jobs in addition to the Banks who have had limited layoffs

2. Lots of wealth in the city and there has been, and it continues, a significant transfer of wealth over the last few years

3. With a city fairly stable in employment, and basically the epicentre of the Canadian economy, you have lots of two income homes and a strong desire to be upwardly mobile and able to afford it.

4. Lets not forget rates are still very low and as I understand Property taxes in Toronto are less than elsewhere.

Just a few thoughts

How about the averaging house costing more than the average household income?

If I recall, Toronto has amongst one of the highest unemployment rates in the country with manufacturing and auto sector decimated.

[sagsal]

Ontario has one of the highest unemployment rates not toronto

Haven't too many car plants here...

[MoneyMaker]

Ontario has one of the highest unemployment rates not toronto

Haven't too many car plants here...

OTTAWA — The national unemployment rate was 8.7 per cent in August. Statistics Canada also released seasonally adjusted, three-month moving average unemployment rates for major cities but cautions the figures may fluctuate widely because they are based on small statistical samples. (Previous month in brackets.)

Major Cities:
- Toronto 10.1 (10.0)
- Montreal 9.6 (9.6)
- Edmonton 7.3 (7.0)
- Vancouver 7.3 (7.0)
- Calgary 7.1 (6.9)
- Ottawa 5.2 (6.0)

Others:
- St. John's, N.L. 8.2 (8.1)
- Halifax 6.4 (6.0)
- Saint John, N.B. 5.2 (5.0)

- Quebec 5.1 (4.8)
- Saguenay, Que. 9.3 (9.8)
- Trois-Rivieres, Que. 8.6 (8.3)
- Sherbrooke, Que. 7.6 (8.5)
- Gatineau, Que. 5.8 (5.4)

- Winnipeg 5.8 (5.3)
- Regina 4.1 (3.2)
- Saskatoon 4.5 (4.7)
- Abbotsford, B.C. 9.0 (9.0)
- Victoria 5.7 (6.1)

Ontario:
- Kingston, Ont. 6.8 (7.2)
- Hamilton 8.7 (8.2)
- Thunder Bay, Ont. 8.7 (8.5)
- Oshawa, Ont. 9.9 (9.7)
- Kitchener, Ont. 9.9 (9.9)
- St. Catharines-Niagara, Ont. 9.9 (10.5)
- Toronto 10.1 (10.0)
- Sudbury, Ont. 10.6 (9.8)
- London, Ont. 11.1 (10.9)
- Windsor, Ont. 14.8 (15.2)

[MoneyMaker]

Source: Sept 4/09 - http://www.lfpress.ca/newsstand/News.../10747971.html

[mork]

Garth Turner is usually right about things. Everyone really should check him out.

I hope you are joking. I used to read Garth's syndicated column years ago for entertainment (not advice). As best as I can tell from reading his thoughts for years is that he has almost always been WRONG.

What he is good at is writing..

[Berubeland]

Supposedly a RE agent said that he could fetch $300K for the place. Assuming that he can, I think that's ridiculous.

There is no way an investor for that property can use the condo to make their money back. If a buyer put 25% down that would be $75K carrying a $225K mortgage.

RBC gives a prime + 0.3% mortgage on a 5 yr closed which comes out to 2.5%. With a 25 yr amort this will come out to $1,000 per month.

Condo fees are $300 p mo., property taxes are $200 p mo., and he can slap on some insurance for $30.

So his total fixed expenses are $1530 p mo. Rent in the area is $1200 (lower if you want to be competative and ensure fewer vacancies). This buyer would be bleeding cash every month unless they put a lot bigger down payment and neuter their ROI.

If rates moved the wrong way, there would be trouble.

I don't see it. Not something I would do anyway.

This is what I have been seeing for years now as "Real Estate Investment" advisement mantra. Just a few months ago I saw Brad Lamb touting this same crapola on his show and it drives me crazy. It is 100% pure speculation that they are doing. The whole thing is a Ponzi scheme because even though we KNOW THAT REAL ESTATE MARKETS TANK that is left right out of the equation.

I can't tell you how many condo owners I speak to are paying monthly to rent a nice condo to tenants.

[MoneyMaker]

funny that no one has mentioned that people are relying on their LOCs and CCs. debt levels are increasing, it won't last forever...

great stat on that.. "The average debt held by Canadian families rose faster than average family income — six times faster from 1990 to 2008. "

[iherald]

I hope you are joking. I used to read Garth's syndicated column years ago for entertainment (not advice). As best as I can tell from reading his thoughts for years is that he has almost always been WRONG.

What he is good at is writing..

Garth Turner wrong? That's silly, he said these things and it was shown to be correct....

In a Canoe "Money" chat room back on Sept. 27, 2000, Turner assured participants that the stock market was undergoing a mini-correction, that the Dow would hit 30,000 by 2006, and that "Nortel [then trading at $96.60] is a wonderful company and, given the recent decline, I think it is a strong 'buy.'" That day, the TSE closed at 10,250.

Or in 1999 when he wrote

Inflation is rising and some are even suggesting that the governments are manipulating the figures to keep the figures lower than they actually are.

Actually I think he is still saying that one.

But my three favourties (all from his 1999 book New Rules for the New Age)

“The Canadian Peso: A steady slide over the last 15 years. There is little reason to believe this trend will stop, increasing the argument for putting more of your wealth into something more stable, like the U.S. dollar.”

and

“Stocks will be higher in a decade than they are today. Between 1990 and 2000 the Dow went up 500%. Do you really think that between 2000 and 2010 it will go down?”

and finally

“By 2005 Ford will dominate in a way that it has not since the Depression-era 1930.”

This is not to say that Garth is wrong about real estate. It is to show that when you make predictions you are likely to be wrong pretty often. So to take any person's predictions as the gospel isn't too wise. That said, watch out for 2012!