Real Estate Cheat Sheet: a new report sees no sign of a bubble burst in 2013
Last week, local real estate observers looked back on the cooldown that took hold of the city’s housing market in 2012. This week, Royal LePage looked ahead to 2013 with a report predicting what the year will bring for buyers and sellers across Canada. Below, we break down the highlights for Toronto’s housing market.
• There will be no bursting bubble: The report echoes the increasingly common view that Toronto won’t suffer a market meltdown. The “fears of a sharp or drawn out collapse are unwarranted,” reads the report, which goes on to explain that the current slowdown is a modest correction due to the fact that home prices have risen more quickly than income for the past three years.
• However, prices won’t rise very much either: The real estate agency predicts that prices for homes will flatten out, with the average price across all categories rising just one per cent to $503,000 from 2012’s $498,000. The more modest sales activity in the second half of 2012 will continue through the first half of 2013, but should improve by the end of the year as employment levels improve.
• The coming year will be good for buyers: Phil Soper, Royal LePage’s president, noted in an accompanying release that the power will shift to the buyers this spring, with more choice for house hunters and more stable prices. That said, in Toronto, there will still be steady demand for single-family homes.
• Royal LePage House Price Survey and Market Survey Forecast [Royal LePage]
6 thoughts on “Real Estate Cheat Sheet: a new report sees no sign of a bubble burst in 2013”
ahaha, seriously? so the folks that sell the houses say everything is fine. This is just willful blindness and regurgitating an unbalanced press release is not journalism. Toronto’s market may hang on longer than most, but thinking it’ll just skip over the city is just too ridiculous to ignore. You can do so much better, why bother with garbage like this.
OK, so if you are shut out of the market [cant afford it] or are afraid, stay out… Save your money. Average Mortgage in Toronto is 270K
a) Population growth continues
b) inside the 416 is a FINITE area
c) Population growth continues
d) Rates are low
Forecast for population in the next 25 years takes the Toronto GTA over 8 million.
You do the math; Push your money in your mattress at 1% per year. Or Buy something and build equity while you live in it. And have money pay for your retirement / comfort.
Population growth continues; Family babies, seniors, school, hospitals, financial, Jobs education, SAFE HAVEN and a never ending desire to own your own home.
If you don’t want to buy and feel prices may drop SIT down and watch for 10 years
What will you say in 2023?
Real Estate in Toronto
Putting money in your mattess would be -2% per year since inflation will devalue it. However, investing it in a balanced portfolio will get you around 7% per year.
Telling people housing is a safe haven is irresponsible. There are real risks associated with it and pretending they don’t exist doesn’t make them go away. I would go as far as to say housing is a high risk investment. Buying a house puts you in a very illiquid position and the cost to liquidate is also very high with realtor fees and land transfer taxes taking quite a chunk out of any gains you may get.
Buying a house, for most people, also puts most of their wealth into one asset class. Any investor will tell you that is a terrible idea.
Do you own a house? I see
Telling people that getting 7% in a “balanced” portfolio is as irresponsible, friend. There are (more) risks involved in buying equities in companies where you do not know what’s going on behind the scenes or numbers. Homes are where we raise our families, meet our friends, enjoy our time and grow. Homes shoudl be seen as that first and THEN secondly as investments. Those who do that will (and have) always always made ahead. Not to mention your balanced portfolio is subject to capital gains (homes are not) and the amount you’re investing is much much lower. Example start with $50K and make 7% vs start with $500K and make 4%. Which is greater? I understand your position but you’re looking at a home strictly as an investment and not your roof over your head.
Buying is more expensive than renting. In the long term renters will be ahead even though they are investing less. In your example a downpayment on the $500k house would be $100K, so that is a more reasonable start than $50k.
Your assumption that houses increase at 4% is outrageous. What about the interest that you are paying? Interest rates will go up this year. 4% is greater than Canadian wage growth so if real estate goes up that much year over year we are in a bubble.
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