Is Toronto’s Condo Market Truly a Bubble waiting to Burst?
The jury’s out on this one. There are a number of reasons why the condo blitz seems to be taking place in the past few years (and will continue to do so for several years to come):
- many more single women are buying condos – they won’t wait for husbands or kids and they have the income to afford it
- corporate investments – businesses are buying the units and turning them over at a nice, tidy profit
- private buyers are doing the same
- immigrant people are buying in Toronto
- international buyers feel safe in Canada
However, # 2 and # 3 don’t send me into a panic. So what they’re turning the units for a profit? I intend to live in my investment one day. It is unlikely i will want to move out once I get settled in. I like permanence. Most of us do. watch toronto’s condo market
Who can predict the real estate market? 6 years ago the U.S. brought us down with that joyous recession, mostly due to the corruption of their real estate market. You do remember those phony, outrageously unrealistic mortgage rates given to people who couldn’t afford to a kleenex to sneeze into, don’t you? Boom, bust and echo, baby. Just so long as you have the finances to survive the bust, there shouldn’t be a problem or a panic. watch family guy – glass house
And before you go hopping up on your soap box about condo fees consider mortgage rates, utilities and land property taxes. How much control does any homeowner have over that? watch family guy – peter turns house into a puppet
Yes there are renters (like me, currently) who are very happy where they are for a number of reasons:
- Usually you won’t be house poor with a decent rent
- you don’t have to sell and hope to make a decent profit when you want to move – move anytime you want
- the building is maintained for you – just like a condo – no work for you, my dear
There are cons to renting of course:
- it’s not an investment…some say it is throwing your money away. I strongly disagree. Throwing money away is visiting the Woodbine Race Track and betting on the horses. Keeping a shelter over your head is not.
- Rent increase is no longer controlled by the regional government…however most building owners aren’t entirely idiotic. Unless they want to chase away their tenants and have trouble acquiring new ones, rent increase will probably remain within a reasonable percentage.
- When renting becomes as expensive as owning, then you are probably foolish not to buy. But only then.
There are always pros and cons to renting and owning. It’s pointless to predict what will be. I live for the here and now. Someone warned me away from purchasing a condo recently. The sage explained that “in ten years there will be such a condo boom it will be impossible to sell your unit.” Who says I will want to? I might be dead by then. watch how to buy a house: how to buy a condo
There is no such thing as a risk-free investment. Even your “safe” mutual funds where you don’t “put all your eggs in one basket” (hello Wealthy Barber) can crash at any time. NOTHING is guaranteed. If you’re considering a condo just now, stop worrying about something that may never happen and grab a hold of Nike’s motto: JUST DO IT. watch Polka dot door
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