RE:RE:RE:RE:Risk assessmentMarner,
There is no correction in the RE market, a few points downturn is nothing after price per sq ft more than doubled. Keep in mind that the condo marker went up so much, at one point price per sq foot for condos was higher than freehold ... insane! Not every downturn is an opportunity - I think that what we noticed late last year is more like a breather between runs. The pressure comes indeed from renters moving our from the Toronto core/downtown area. Plus with the pandemic killing the downltown life, and people realizing they would rather not live in a high density building ... they moved away. Since a large number of condos are owned by investors, yes there has been some downturn. Things are looked up already with all re segments moving up.
If you are to buy a pre-construction condo ... your cash flow will be negative for a while. Plus you want to rent out for at lease one year to get the HST credit back. You also have the extra LTT if in Toronto so keep that in mind.
If you are looking for value, as an investment for family, get in in the market now. I think you will have to hold for a while, market will go up as steady immigration will return and things will eventually return to (a new) normal.
Have been working with RE agents for a long time. The RE market defies logic, but until gov steps in there will be no slowing down. Plus the supply is scarce.
I have been waiting for a RE downturn for many years. Life happened and got a house for my family. Kids came, so we moved up as the family grew. Made efforts at the time but was able to keep both properties againsty my wifes strong opinion against it. At it turns out I was right to keep the property. No downturn yet. Moreover, no downturn in sight.
If you want to do great in the long term ... I would not get into condos. Buy land commercial / residential and hold for as long as you can. Commercial RE - Price per acre in GTA is 1 mil now, no availability to build those huge warehouses that are in high demand. Multi Residential units also ... very hot asset.
If you are interested in commercial RE or residential land to build ... I am interested too. We can the topic to private if there is interest.
Whatever your decision is this is a long game. I don't believe that preconstruction condos returns will ever be they have been in the past 10 years. To buy a condo at 250K and get it appraised at 500K in a year ... not gonna happen anytime soon.
It's about your goals, weight, how long you are OK with your capital locked in and exit strategy.
Marner16 wrote: Heh guys....thanx for the great feedback on the Toronto condo market.
The market for condo's up my way (and everything else) has exploded in the past year. The exodus from Toronto heading north has exaccerbated the silliness. BTW, please don't move to Barrie. The trails and the lake with its clean sandy beaches and lively downtown patio life and the easy access to nearby skiing, golf, and Muskoka are pretty awful. You won't like it.
D2050 correctly pointed out that trying to pick a bottom to any market, and the condo market in particular can be tricky. However, I like things when everyone else hates them. Jim Cramer recently pointed out that when the world looks like it is going to end, buy the other side. Buffet has made his best deals when the tide is out and Brookfield has built its empire feasting when blood is in the water.
I'm not following the Toronto condo market but perusing the headlines tells me that things are tough in the core. At some point, the pendulum will swing.
As always, I'm grateful for the feedback. My Dad used to say "even a bad idea is better than no idea at all".