Read on Twitter
What's With Toronto Condos?
Hey, I am not in the prediction business but I am in the observation business
Simple facts: downtown Toronto rents are falling steadily and if they continue to fall prices will errode
That's facts and math not prediction
And rents will fall
2/
Hey, I am not in the prediction business but I am in the observation business
Simple facts: downtown Toronto rents are falling steadily and if they continue to fall prices will errode
That's facts and math not prediction
And rents will fall
2/
This is simple stuff all Covid related
1) No foreign students, turns out this was big, rarely talked about and looks like they're gone till Fall 2021
2) No Airbnb, not just no tourists, no sporting events, weddings, proms huge list, Fall 2021 for return but slow even then
3/
1) No foreign students, turns out this was big, rarely talked about and looks like they're gone till Fall 2021
2) No Airbnb, not just no tourists, no sporting events, weddings, proms huge list, Fall 2021 for return but slow even then
3/
3) Too many renters in Hospitality lost their jobs and moved back with parents or doubled with friends: Fall 2021 or never
4) For people with ongoing jobs, downtown offices empty, WFH but HATED cooped up experience, bought Towns or Detached likely NEVER back
4/
4) For people with ongoing jobs, downtown offices empty, WFH but HATED cooped up experience, bought Towns or Detached likely NEVER back
4/
5) Plain old immigration to Toronto (not students but workers) stalled till Fall 2021 soonest
Basically: RENTAL APOCALYPSE, this is frigging bad
Now the simplest economic principles take over, keep dropping rents till someone signs lease
Concept simple but problematic
5/
Basically: RENTAL APOCALYPSE, this is frigging bad
Now the simplest economic principles take over, keep dropping rents till someone signs lease
Concept simple but problematic
5/
Because some investment condos were cash flow negative with top rents already, reduced rents are a disaster
Why is the S**t just hitting the fan now?
3 words: Mortgage Deferral Ended....... Nuff said
As @mortgagejake correctly point out a growing issue is:
6/
Why is the S**t just hitting the fan now?
3 words: Mortgage Deferral Ended....... Nuff said
As @mortgagejake correctly point out a growing issue is:
6/
People who bought houses can't sell their condos at a price that allows the down payment to work on the new purchase, this is a emerging issue but will dissipate quickly, Realtors will make adjustments
Important to remember that these investment properties are a matrix
7/
Important to remember that these investment properties are a matrix
7/
We may think all are doomed but no: we are closing a North Etobicoke 1 BDR condo this week bought pre-sale in early 2015: $244K appraised at $470K today and with low mortgage rates only needs $1185 rent to breakeven
As always location and product but now vintage is key
8/
As always location and product but now vintage is key
8/
If bought 10 years ago and never refinanced PERFECT, bought pre-2015 likely fine, bought resale 2017 and up for investment 80% mortgage: likely No Bueno
And when more and more need to sell: we all know what will happen
Not prediction, not theory: MATH
And when more and more need to sell: we all know what will happen
Not prediction, not theory: MATH
