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Poster has a point. Toronto real-estate has been said to be on the verge of collapse since 2004. It keeps growing at insane rates .. we're talking around 10% pe

Poster has a point. Toronto real-estate has been said to be on the verge of collapse since 2004. It keeps growing at insane rates .. we're talking around 10% per annum (don't recall the actual figure). Also, this is despite a ton of construction .. we're talking near-China level cranes here ... any open space near subway lines turns into condos. Lots of stories of people flipping pre-construction units, waiting in line for days to put a deposit down on new construction, etc. I think Toronto is closer to Hong Kong when it comes to the real-estate game. Oh .. and for your viewing pleasure: https://www.youtube.com/watch?v=PT3YdJm6y3Y https://www.youtube.com/watch?v=PT3YdJm6y3Y

mikeash 10y ago
Great video! I don't doubt Toronto is crazy, just saying that these other ones get attention to. Well, SF does, anyway.
CountSessine 10y ago
Lots of stories of people flipping pre-construction units, waiting in line for days to put a deposit down on new construction This has to be one of the strangest complaints, along with shadow flipping, that's come out of the real-estate debacle here in Vancouver. Builders need to achieve 100% or near 100% sell-through on units in a project. Doing that through a pre-sell is hard, so they've traditionally offered a small discount on pre-sells. Buyers have typically been ok with committing themselves to a pre-sell because of the discount. Everyone's needs are satisfied. If a pre-sell buyer decides to flip the property immediately, what harm is there in that? Is it that you didn't get the discount? This has exactly no impact at all on the steady-state market price of property; it's just a matter of who the builder decides to give this small one-time discount to. Worse, it's a distraction from the real reason that real estate has become so expensive in Vancouver and Toronto, which is foreign investment. The BC government imposed a foreign investor tax here and the market is now in a slow-motion collapse; I've been watching about 2 dozen detached houses on realtor.ca and none of them have sold. Some have already dropped their asking price by about 100k-200k and they're still on offer. If you want a real solution to housing prices, kick out the foreign speculators.
- guardiangod 10y ago
  If a pre-sell buyer decides to flip the property immediately, what harm is there in that http://www2.jurock.com/articles/columnist.asp?id=9370 http://www2.jurock.com/articles/columnist.asp?id=9370 But in 2008, worldwide financial markets tanked and with it condo markets in Vancouver. By December 2008, some 200 presale unit owners were offering their contracts on Craigslist - often at a loss. (On March 20, 2012 there were just 39.) When that did not work, many simply did not complete the deal and lost their deposit. Some lost not only their deposit, but where the price of the unit had fallen they were sued by the developer for the difference (developers won in many cases). Needless to say, developers once burned have now tightened up the contracts. Buyers must realize that developers get their financing on the basis of pre-sales and rightfully expect and deserve all pre-sales in their development to complete. Also, you then have issues with insider buying/selling etc. It's just not worth the hassle for the developers. http://globalnews.ca/news/2823397/vancouver-pre-sale-condo-market-impossible-says-vancouver-realtor/ http://globalnews.ca/news/2823397/vancouver-pre-sale-condo-m...
  - CountSessine 10y ago
    I don't quite understand; this column simply re-iterates what I said. Needless to say, developers once burned have now tightened up the contracts. Buyers must realize that developers get their financing on the basis of pre-sales and rightfully expect and deserve all pre-sales in their development to complete. So, the pre-sale game changed. But probably for the better. Builders offer the 'pre-sale discount' because they're trading return for security; they need to sell-through on the units they're building. If a bunch of the pre-sell buyers then flake-out and decide not to pay, the builders are in a hole. The point that I'm making is that this has no effect on the trajectory of prices; its merely a small discount on the market price for those units. Pretending that this is a key driver of prevailing market prices doesn't help anyone; if the market wasn't already rising feverishly then 'shadow-flipping' and 'pre-sale flipping' would carry more risk and you'd lose money as often as you made it.
    - trapperkeeper79 10y ago

mikeash 10y ago

Great video! I don't doubt Toronto is crazy, just saying that these other ones get attention to. Well, SF does, anyway.

CountSessine 10y ago

Lots of stories of people flipping pre-construction units, waiting in line for days to put a deposit down on new construction This has to be one of the strangest complaints, along with shadow flipping, that's come out of the real-estate debacle here in Vancouver. Builders need to achieve 100% or near 100% sell-through on units in a project. Doing that through a pre-sell is hard, so they've traditionally offered a small discount on pre-sells. Buyers have typically been ok with committing themselves to a pre-sell because of the discount. Everyone's needs are satisfied. If a pre-sell buyer decides to flip the property immediately, what harm is there in that? Is it that you didn't get the discount? This has exactly no impact at all on the steady-state market price of property; it's just a matter of who the builder decides to give this small one-time discount to. Worse, it's a distraction from the real reason that real estate has become so expensive in Vancouver and Toronto, which is foreign investment. The BC government imposed a foreign investor tax here and the market is now in a slow-motion collapse; I've been watching about 2 dozen detached houses on realtor.ca and none of them have sold. Some have already dropped their asking price by about 100k-200k and they're still on offer. If you want a real solution to housing prices, kick out the foreign speculators.

guardiangod 10y ago
If a pre-sell buyer decides to flip the property immediately, what harm is there in that http://www2.jurock.com/articles/columnist.asp?id=9370 http://www2.jurock.com/articles/columnist.asp?id=9370 But in 2008, worldwide financial markets tanked and with it condo markets in Vancouver. By December 2008, some 200 presale unit owners were offering their contracts on Craigslist - often at a loss. (On March 20, 2012 there were just 39.) When that did not work, many simply did not complete the deal and lost their deposit. Some lost not only their deposit, but where the price of the unit had fallen they were sued by the developer for the difference (developers won in many cases). Needless to say, developers once burned have now tightened up the contracts. Buyers must realize that developers get their financing on the basis of pre-sales and rightfully expect and deserve all pre-sales in their development to complete. Also, you then have issues with insider buying/selling etc. It's just not worth the hassle for the developers. http://globalnews.ca/news/2823397/vancouver-pre-sale-condo-market-impossible-says-vancouver-realtor/ http://globalnews.ca/news/2823397/vancouver-pre-sale-condo-m...
- CountSessine 10y ago
  I don't quite understand; this column simply re-iterates what I said. Needless to say, developers once burned have now tightened up the contracts. Buyers must realize that developers get their financing on the basis of pre-sales and rightfully expect and deserve all pre-sales in their development to complete. So, the pre-sale game changed. But probably for the better. Builders offer the 'pre-sale discount' because they're trading return for security; they need to sell-through on the units they're building. If a bunch of the pre-sell buyers then flake-out and decide not to pay, the builders are in a hole. The point that I'm making is that this has no effect on the trajectory of prices; its merely a small discount on the market price for those units. Pretending that this is a key driver of prevailing market prices doesn't help anyone; if the market wasn't already rising feverishly then 'shadow-flipping' and 'pre-sale flipping' would carry more risk and you'd lose money as often as you made it.
  - trapperkeeper79 10y ago