Is Toronto Realestate Market a Bubble ?
By the way, how do you know when you’re in a bubble?
When prices rocket by double-digit rates in the middle of a recession with rising unemployment, consumer price deflation and a contracting economy.
When the market fuel is emotion, desire, not value.
When prices hit an all-time high and yet 40% of Canadians expect them to keep on increasing – up from just 18% a year ago, says a poll conducted by Maritz Research.
When the number of people taking 35-year amortizations explodes higher. Overall, these loans have doubled as a percentage of all mortgages in two years but that does not tell the true story, since today 5/35 buyers constitute an absolute majority of new originations. Of course, 35-year borrowers pay off virtually no principle for years and years which makes this akin to renting money. No equity means no ability to withstand a market correction.
When some dink pays $103,000 for a 53-year-old bachelor apartment of 355 square feet in a questionable part of Winnipeg. Forget it. She will not be impressed.
When $186 billion in new mortgages is issued in a single year in Canada.
When everybody’s talking about real estate the way they used to about Nortel and day trading.
When condo marketing hypesters can say this, and get away with it , “Line ups and camping out for weeks will once again become commonplace as buyers rush in to invest in this next wave of development in Toronto.”
When the average price of resales homes rises by more than 20% in a single year. Any year. And sure as hell in a year when inflation’s less than 1%.
When pathetic 60-year-old Boomers are getting mortgages so they can buy trophy houses with stone veneer and three garages.
When misguided twentysomethings shoot it out in bidding wars. When unethical realtors allow them to.
And mostly whenever, wherever, you hear ‘buy now, or never.
Consult with an experienced agent to discuss your options
http://www.thetorontorealestate.com