Quote:
Originally Posted by caltrane74
But what they state in the article is the reason the REIT values are going up, is continuing demand for rental housing. - The hole basis of this thread has been the market for condos will collapse because those looking for rental housing will dry up, leading to investors pulling out to maintain their returns, which in effect causes the entire real estate market in Toronto and Vancouver to sink. The market for housing, both rental housing and real estate is still strong in Canada and nothing is indicating that there will be any sudden drop in prices of construction starts.
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This also means that rentals are going up because nobody can afford to buy. Also REITs are largely in mid + large block apartments and commercial. Large block Apartments have not seen their supply increase in 20+ years.
The purchase market is a different story. How easy can these speculators get out if nobody is is there to scoop up that demand? Its not like a fund you can easily just sell or dump, you need to match a seller-to-buyer. What normally leads to nuclear toxic markets is that speculators, desperate to get out, start dumping their properties way lower then the market would reasonably warrant, this leaves people whom actually own and live in the units looking to sell in a bind as they are forced to price units way lower then their books can handle.
If the housing market is so strong why are large chains such as
Best Buy and
Rona closing stores? These stores fill homes with new gadgets and appliances yet both stores having been taking beatings with their earnings as of late.
Most bubbles almost always end the same you see a rapid "pop" with a sharp dip, then a steady deflate which ALWAYS brings in suckers whom think the floor is a lot closer then it actually is, this may give a slight rise but then the corresponding slow deflate to what ever true market prices are takes place. And just like nobody knows when a sudden jolt to correct the market will happen down the road nobody will be able to see when the floor will hit also, (this is currently going on in the States, a few markets are showing life but this is largely the banks removing these properties to decrease demand on prices).The big question is what will "pop" the bubble, will it simply be consumers tapping out with too much debt, or will the Feds, or BoC intervene and force regulation or jack interest rates .
Nobody knows what will happen or when, but its a fact that the market is in the loony bin and not corresponding to any rational norms. Toronto's Condo market maybe be a cartoon right now but places like Vancouver and BC have A lot of their GDP tied into housing construction and its related industries. They will feel it way more on a macro level versus Toronto.
Its not like you will wake up one day to a headline reading: RE CRASH - Different markets will correspond differently. From a personal standpoint the minute homeowners are over the head with bills and forclourses start to ramp up will be a tale tale sign that a market is about to spill its guts. Like I have noted in a previous post many markets in the Okanagan are starting to set foreclosure records. This is a dirty taboo the media is looking to ignore. The same media which pumped up housing when it was at markets peak are now trying to act like they are forecasting its correction when they we're complicit in selling the kool-aid for Canadians to drink. Anybody in Toronto knows that publications like TheGridTO are nothing more than Real Estate Advertising dumps, they give you 'advice' on RE throughout the paper, while Condo developments fill up full page spreads throughout the paper, its a joke.
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. Aside from the loony Realtors I am looking to actevly meet and talk up people lookign to get into the market. I am going to "play the part" of a presecptive buyrer of course (hey free food and drinks, ill dress up like a clown for a good free meal! 
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