# how to short GTA residential real estate market?



## rookie (Mar 19, 2010)

i mean, apart from selling the only principle residence that i have, what other options do i have? i do not want to be inconvenienced enough to sell my home and go renting as rents are still expensive. however, the home prices, i think, have reached dizzying levels and definitely are due for a correction if not an outright crash. i would like to start betting small amounts against this booming market.


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## Four Pillars (Apr 5, 2009)

I don't think you can do this directly, but perhaps you can short/buy puts on companies/sectors that are heavily dependent on housing sales.

Home construction companies, mortgage companies etc.


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## HaroldCrump (Jun 10, 2009)

Didn't we have the exact same thread a month or so ago?


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## Sampson (Apr 3, 2009)

Weird is our desire to get rich.

Shorting residential real estate can't be straight forward, yet there are numerous threads already about this.


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## m3s (Apr 3, 2010)

Sell your house to one of the many many RE investors like montrealer and a lease to rent at the same time. Win-win


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## HaroldCrump (Jun 10, 2009)

This is the other thread I meant:
http://www.canadianmoneyforum.com/showthread.php?t=8870


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## Causalien (Apr 4, 2009)

I want to short the condo market by becoming the "leaky window wall insulation" repairman. Any idea how to get apprentiship on that?


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## m3s (Apr 3, 2010)

Causalien said:


> I want to short the condo market by becoming the "leaky window wall insulation" repairman. Any idea how to get apprentiship on that?


The guy who originally designed/installed those windows already has that contract


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## rookie (Mar 19, 2010)

HaroldCrump said:


> This is the other thread I meant:
> http://www.canadianmoneyforum.com/showthread.php?t=8870


oops. thanks harold. missed that thread.


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## HaroldCrump (Jun 10, 2009)

I suppose you guys already saw this:

http://ca.news.yahoo.com/torontos-glass-condos-face-short-lifespan-experts-114359149.html

What a laugh...esp. for those that bought into these, at hefty premiums.


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## Cal (Jun 17, 2009)

The potential expenses for these condos will devastate many condo owners. I assume that they will have no choice to do the improvements as/when recommended. I assume they will be paid for through the condo maintenance fees and such, that every condo owner has to pay.


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## ddkay (Nov 20, 2010)

Hah between 5 (!) and 15 years, well it's certainly true of CityPlace, those buildings are falling apart before they open. The comparison to FCP is unfair though, FCP is 35 years old and the super light and thermal efficient cladding that exists today wasn't available in 1975. Almost nothing is guaranteed to last that long (35 years), so building envelope repairs etc are supposed to be built in to budget projections. 

Obviously condos are stretching their budget way more than hotels/office space, I'd also wager most management are short sighted and sweeping problems under the rug (sorry to be cynical again).


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## rookie (Mar 19, 2010)

could this mean a boom to a traditional bricks and mortar condos nearby? people fleeing from the glass condos need somewhere else to go...


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## andrewf (Mar 1, 2010)

I doubt it. Many of those places tend to have other problems stemming from their advanced age. It might shift the new-build market back toward more traditional construction.


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## Mall Guy (Sep 14, 2011)

Smart condo boards/manager need to start building this into their reserve fund early. Are Reserve Fund Studies mandatory in Ontario ? I know they are in other parts of the country.


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## ddkay (Nov 20, 2010)

yeah it's built into our condo act here too, check this out, from a 2003 study, almost half (probably over half today) of buildings from the 1970s were in poor condition and only 7% had a stable reserve fund http://www.dcnonl.com/article/id35746


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## Dmoney (Apr 28, 2011)

ddkay said:


> Hah between 5 (!) and 15 years, well it's certainly true of CityPlace, those buildings are falling apart before they open. The comparison to FCP is unfair though, FCP is 35 years old and the super light and thermal efficient cladding that exists today wasn't available in 1975. Almost nothing is guaranteed to last that long (35 years), so building envelope repairs etc are supposed to be built in to budget projections.
> 
> Obviously condos are stretching their budget way more than hotels/office space, I'd also wager most management are short sighted and sweeping problems under the rug (sorry to be cynical again).


How bad is City Place? I'm living there now (renting) and from the outset maintained that I would never buy here. The people living here all seem like people in a frat house and I've suspected the construction is not up to par.

First hand, I haven't really seen anything too suspect with respect to construction but have heard from others.

Also, where in the downtown core are there better-made condos?


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## ddkay (Nov 20, 2010)

CityPlace has had bad rep since they've kept extremely high rent to own ratios. With so many renters, mostly party-goers, a lot of floors get trashed, carpets need to be replaced today but don't because the original engineers never counted a 5 year life cycle in their reserve study. If they do turn this place around there is a lot of work, see this recent write up http://www.thegridto.com/life/real-estate/is-cityplace-toronto’s-next-ghetto/

Construction quality I would say is average at best, below average for the horror stories (gaps in hardwood floors, no sound proofing, bad insulation). A lot of the upper floors there suffer stack effect from flawed ventilation design. Other buildings have had worse though glass balconies failing due to summer heat (ahem Festival Tower, Murano, 1 Bedford). There is a lot of sloppiness happening all around.

Most condos in the Bay St Corridor are ok, you just have to be very careful and comb over every little detail.

If there was even an easy way to do it, shorting RE is like shorting anything else, you can be right, but be right too early and you will get hurt.


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