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Mortgage Broker News | 07 Dec 2012, 08:39 AM Agree 0
Those constantly multiplying construction cranes marring the downtown Toronto office window view could be harbingers of “severe economic shocks” for Canadians, according to the latest report from the Bank of Canada which raised warnings of overbuilding in the condo sector.
  • Ron Price | 08 Dec 2012, 05:52 AM Agree 0
    Finally overbuilding condos has been sited as the 'real' problem with the real estate market. My view is that the Feds were overzealous with four rounds of mortgage rule tightening, taking a sludge hammer to the overall market, not just new construction, not just investors, but first time buyers, self employees and all but killing high ratio refinancing. The result, private money is now back with a vengeance as the only solution for many.
    If the Feds had addressed the new condo sector only by putting in new measures to curtain or prevent 'speculation' by investors, and perhaps even gone so far as to allow owner occupancy only, the whole real estate market would not have been adversely and unnecessarily affected.
    Now it may be too late to address the condo problem, and no matter what the Feds do, I believe the writer of the article may have hit the nail on the pun intended, in that a domino affect may well occur and damage the overall real estate market and the economy.
    I hope I live long enough to see the day where our federal government policy makers address micro problems with micro solutions, not micro with macro.
  • Ed Novak, Real Estate Broker | 08 Dec 2012, 06:14 AM Agree 0
    When there was a ridiculous over-building of subdivisions, it was OK, but since its condos, its not. Total number of housing units (condos plus houses) hasn't changed all that much. The lack of buildable land is shrinking and becoming exceedingly expensive. Therefore, there is a natural tendency for builders to go up and for square footages to shrink. In the ever tighter and more congested cities, people will have to learn to live with less. Look at Europe and the far east. That is also becoming our reality. So, let's stop making up reasons to create panic and publishing negative news in order to have a self-fullfiling prophecy.

    In as far as the prices of new condos going up, let's not blame the builders. Everyone realizes that the land and construction costs have gone up, but very few people acknowledge that the local governments have had a huge impact as well. The development charges, permits, appeals, taxes (in liu of green space), etc have driven the prices up more than anything else. Let's thank our politicians for that.

    Yes, the number of condo sales have gone down and the prices are flat. What would you expect from constantly negative media? The money is still cheap. Rents (downtown Toronto) are up and there is a shortage of decent condos to rent. I say, give it a few months, and assuming that interest rates remain relatively low, the public will break through the mental barrier of what is now considered as "high prices" and will go back to buying, selling and investing. Mark my words.
  • Omer Quenneville | 11 Dec 2012, 05:08 AM Agree 0
    Unemployment is down and immigration is high. From what i hear things are still good in the suburbs, Perhaps this has more to do with the land transfer tax, poor city planning and a shift in the market to the outer areas.
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