COVID and the housing market

Looks like housing starts are taking a big poo in Ontario and BC....and cranking in some other provinces.

www.blogto.com

Ontario real estate downturn continues as developers drop new projects

The rebound of the housing market in the GTA and Ontario at large has been slower-going that realtors and other stakeholders were expecting, and with…
www.blogto.com www.blogto.com

But the big downturn in the most populous provinces still shows about 13% drop across all sectors.

That can't be good for the rest of the markets.
 
mimico_polak said:
Looks like housing starts are taking a big poo in Ontario and BC....and cranking in some other provinces.

www.blogto.com

Ontario real estate downturn continues as developers drop new projects

The rebound of the housing market in the GTA and Ontario at large has been slower-going that realtors and other stakeholders were expecting, and with…
www.blogto.com www.blogto.com

But the big downturn in the most populous provinces still shows about 13% drop across all sectors.

That can't be good for the rest of the markets.
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And Peterborough politicians jacked up dc's by close to 50%. I'm sure that's going to spur a building boom. /s
 
Im half expecting the federal government to undo the changes to immigration, temporary foreign worker and international student levels.
Dont know how much of a financial beating the housing market and Universities /colleges can take.
 
mimico_polak said:
This article states Municipal development charges have gone up 933% within the last 15 years...

www.blogto.com

Toronto tower cancelled as condo sales remain at rock bottom lows

Developers have been scrambling to draw attention to the dire state of Ontario's new condo market, in which many projects have been postponed, fully …
www.blogto.com www.blogto.com
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They wanted in on the boom. To justify higher DC's you, you need to show higher costs. Why build municipal infrastructure for $10M when you can build it for 100M, pass that along and siphon off a cut? If that works, why not $1B?

EDIT:
Metrolinx bike path is the perfect example of this. $75M/km to build a bike path. It was shocking they said it with a straight face. Toronto would normally just pay and use it to justify a DC increase. 50 years ago, Giuseppe in his bulldozer would have that banged out in a week and on to the next job.
 
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POWERMAN said:
Im half expecting the federal government to undo the changes to immigration, temporary foreign worker and international student levels.
Dont know how much of a financial beating the housing market and Universities /colleges can take.
Click to expand...
The colleges are already taking a beating. I mean 'colleges', not colleges / universities that are legit with legit programs.

As for immigration and TFW...do you really think most of them are going to leave.

Asylum seeker applications are at record highs for a reason.
 
POWERMAN said:
Im half expecting the federal government to undo the changes to immigration, temporary foreign worker and international student levels.
Dont know how much of a financial beating the housing market and Universities /colleges can take.
Click to expand...
Imo, the colleges and housing aren't "taking a beating". Education got addicted to very profitable students. They didn't care if the "education" they were providing was pretty useless as long as they got their cut. I find that morally offensive. Students were using it as a path to residency and buying property as a non-foreign buyer. I also hate that. If you aren't making enough money in Canada to support your purchase, you are a foreign buyer.

As for houses, propping up the market by selling to rich kids or renting to four people in a studio apartment does nobody any favors. Less people coming in, less housing needed, the rocket climbs slower (but you can't make more land so those with land continue to climb, I'm not convinced about toronto condos long-term as you can easily make hundreds of thousands more and cost of resale units can be roughly dictated by cost to build new ones).
 
GreyGhost said:
Imo, the colleges and housing aren't "taking a beating". Education got addicted to very profitable students. They didn't care if the "education" they were providing was pretty useless as long as they got their cut. I find that morally offensive. Students were using it as a path to residency and buying property as a non-foreign buyer. I also hate that. If you aren't making enough money in Canada to support your purchase, you are a foreign buyer.

As for houses, propping up the market by selling to rich kids or renting to four people in a studio apartment does nobody any favors. Less people coming in, less housing needed, the rocket climbs slower (but you can't make more land so those with land continue to climb, I'm not convinced about toronto condos long-term as you can easily make hundreds of thousands more and cost of resale units can be roughly dictated by cost to build new ones).
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The issue with condos is that they're all now geared toward investors. 300sqft units geared toward AirBNB rental, not to live in.

It can't be much more expensive to build 1x700sqft unit compared to 2x300sqft units.

But selling 1 700sqft unit = 600-700k, whereas 2x300sqft units = 500k x 2.

There's a very valid reason why condos are built small, tight, and squeeze as many as you can...and it's not for the benefit of the end user.
 
mimico_polak said:
The issue with condos is that they're all now geared toward investors. 300sqft units geared toward AirBNB rental, not to live in.

It can't be much more expensive to build 1x700sqft unit compared to 2x300sqft units.

But selling 1 700sqft unit = 600-700k, whereas 2x300sqft units = 500k x 2.

There's a very valid reason why condos are built small, tight, and squeeze as many as you can...and it's not for the benefit of the end user.
Click to expand...
It's an affordability issue. Cost to build and therefore sales price is $/sq ft. For example, the Riv just bailed and isn't going forward. They were selling for ~$1300/sq ft +80K for parking +7K for locker and had up to 3 bed units (328 to 1175 sq ft). Ime, as condos add bedrooms they get worse as rooms shrink to comical sizes (bedrooms that cant fit beds for instance). $1M for 770 sq ft with $500/mo condo fee (rapidly climbing to closer to $1000 I suspect) is nuts.

The problem is people want something like 750 sq ft two bed for <600K as a place they could live comfortably and possibly afford. The reality is that doesn't exist. Toronto DC for a 2 bed is $114K. Add in permit fees, connection fees, approval fees, park fees etc and without land or a building you are probably pushing $200k/unit (that's 266/sq ft in this theoretical unit). Construction cost is ~$275/sq ft (206k). Land is about $125/buildable sq ft (100K). Parking is roughly break even @80K(lower floors cost more than they sell for, upper floors may break even), That puts as at $586K cost. That doesn't include construction financing at 20% (DC's due at issue of building permit, unit sales won't be closed for years after), profit, risk, etc. I don't think I'd be interested in taking on that headache and liability without a sale price close to 1M. Hell, if I invest 600k for the three years it took to build the project, I'd be at close to 1M and that is entirely passive. If the project runs a few years long, my passive investment will make way way more than the building.

Here are some floor plans for the riv. I haven't checked these ones but often marketing plans have furniture scaled down so proportions look like queen beds with two side tables but in reality you are lucky to fit a double with one side table.
www.danplowman.com

The Riv By Broccolini | New Toronto Area Builds

The Riv is an upcoming development by Broccolini in the Regent Park neighbourhood of Toronto. Future location: River Street & Queen Street. Discover luxury condo living with Don River views. Learn more with The Dan Plowman Team.
www.danplowman.com www.danplowman.com
 
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mimico_polak said:
Looks like housing starts are taking a big poo in Ontario and BC....and cranking in some other provinces.

www.blogto.com

Ontario real estate downturn continues as developers drop new projects

The rebound of the housing market in the GTA and Ontario at large has been slower-going that realtors and other stakeholders were expecting, and with…
www.blogto.com www.blogto.com

But the big downturn in the most populous provinces still shows about 13% drop across all sectors.

That can't be good for the rest of the markets.
Click to expand...
I recently did a Zoocasa search for single family resales in the hood and found prices to be down 15-20% from the happy days. Very few sold in a few days.
 
nobbie48 said:
I recently did a Zoocasa search for single family resales in the hood and found prices to be down 15-20% from the happy days. Very few sold in a few days.
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Many buyers sellers are stuck with covid prices in their minds. We have a bunch of houses nearby hanging out for months with no action. Another house listed and sold in a couple days. He bought it for a good price four years ago and passed that deal along. He made 300K in four years and takes his money and runs. His neighbour wants to make 400k in three years and it's not working.
 
GreyGhost said:
Many buyers are stuck with covid prices in their minds. We have a bunch of houses nearby hanging out for months with no action. Another house listed and sold in a couple days. He bought it for a good price four years ago and passed that deal along. He made 300K in four years and takes his money and runs. His neighbour wants to make 400k in three years and it's not working.
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I'll assume you mean Sellers.

We have a handful of houses in our areas that have sat for months. Sold conditional, then the 'For Sale' sign comes back up again because it didn't close.

Then there are some houses that go in an instant.
 
POWERMAN said:
Im half expecting the federal government to undo the changes to immigration, temporary foreign worker and international student levels.
Dont know how much of a financial beating the housing market and Universities /colleges can take.
Click to expand...
The one thing we have learned from history is that people don't learn from history.

We have been through these things before and survived. That comes with the warning seen on investment performance reports, "not guaranteed to repeat."

Canada's reputation with foreign students is on a par with Nigerian royalty scams. TFWs are an indicator of the decline in native born worker attitudes and corporate investor greed.
 
nobbie48 said:
Canada's reputation with foreign students is on a par with Nigerian royalty scams. TFWs are an indicator of the decline in native born worker attitudes and corporate investor greed.
Click to expand...
Partly but it's also broken business models being propped up. Tim Hortons is not popular because they have good coffee. It's popular because they have cheap coffee. Take away cheap labour and you lose cheap coffee. That would be the end of them as while they are trying to crank up prices, everything they do sucks. They don't seem capable of reinventing themselves as anything other that cheap coffee that people routinely buy on their way to work. If prices go up, their customers can't afford daily stops, TH is done for.
 
GreyGhost said:
Partly but it's also broken business models being propped up. Tim Hortons is not popular because they have good coffee. It's popular because they have cheap coffee. Take away cheap labour and you lose cheap coffee. That would be the end of them as while they are trying to crank up prices, everything they do sucks. They don't seem capable of reinventing themselves as anything other that cheap coffee that people routinely buy on their way to work. If prices go up, their customers can't afford daily stops, TH is done for.
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The served fresh from frozen was the big hole in the hull. When the stores had actual bakers there was more variety and sometimes you got the muffin that had a little more volume. The flashy piece of paper that attempted to disguise the smaller frozen muffin got noticed.

A couple of stores in the Hamilton / Burlington area had oat cakes. Not now. I actually enjoyed their breakfast oatmeal.
 
mimico_polak said:
Interesting comparison of development charges over time...

View attachment 71329
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And that doesn't include connection fees, zoning amendment fees, site plan fees, building permit fees, inspection fees, parkland fees, and the list goes on.

Now, at the beginning, I think they had it wrong as well. They were too low and the existing tax base was subsidizing new development. Hazel really got the ponzi-scheme cooking with DC's propping up municipal finances and needing an ever increasing DC cashflow (more per dwelling and more dwellings per year) to keep property tax artificially low. Other municipalities learned from her.
 
GreyGhost said:
They wanted in on the boom. To justify higher DC's you, you need to show higher costs. Why build municipal infrastructure for $10M when you can build it for 100M, pass that along and siphon off a cut? If that works, why not $1B?

EDIT:
Metrolinx bike path is the perfect example of this. $75M/km to build a bike path. It was shocking they said it with a straight face. Toronto would normally just pay and use it to justify a DC increase. 50 years ago, Giuseppe in his bulldozer would have that banged out in a week and on to the next job.
Click to expand...
This is exactly the problem. The folks that do the planning for public infrastructure like to build use peoples money to build architectural masterpieces. This didn't happen 20 years ago because cities didn't collect massive development charges.

My community doesn't need another magnificent $100M ice rink with a Starbucks, 2000 never-used seats, massive windows, douglas fir show beams and hand-quarried stone facias.

How about 2 or 3 $10M utilitarian sports complexes like the ones we everyone built before 2000?
 
My builder aquaintance here in Oakville says buying a knockdown vs empty lot can save well over a hundred grand with hookups and fees . The flattening part is cheap .


Sent from my iPhone using GTAMotorcycle.com
 
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