I'm not an expert, but Toronto's condo market looks to be out of control

[BeyondGeography]

Just visited Toronto for fun and, apart from having a wonderful time in your beautiful city (including some really fortunate weather yesterday afternoon), I couldn't help but notice how much residential building was going on. One pricey glass box after another. Things look really overheated; the tell for me was we were traveling by car north out of the city and even neighborhoods way out of the center are getting the full-on branded condo treatment. Then you have the glass boxes closer to town sitting on top of some real marginal patches that won't be gentrified anytime soon; just too much ground to cover.

A little research suggests it was a no-shit-Sherlock moment for me:

http://www.torontocondobubble.com/

Seems to be a giant waste in the making. Dumb money that keeps doubling down until a hole gets blown in the sky. I would love to be wrong.

[Joe Shlabotnik]

1. I'm no expert either,

Last edited Fri Oct 17, 2014, 07:00 PM - Edit history (1)

but experts have been saying for years that its a huge bubble, (well, except for the experts that have a vested interest in growing that bubble). Whats worse is that Canada's federal mortgage insurance commitment is growing and growing, and we also now have a 'bail in' provision for next time the market crashes.

[riverbendviewgal]

2. Perhaps it will but there may be problems before it does

or it will be the cause of the bubble burst.
this is 4 days ago from the Toronto Star . BTW, I love Toronto.. it is truly the Little Apple as compared to NYC's Big Apple. I would hate to see this happen. (buildings crumble)

While Toronto's housing boom rolls on, some of the housing itself is falling apart.

Canada's biggest city has more than 100,000 units under construction as developers and investors seek to cash in on condo prices that are up 25.7 per cent in the city over the past five years. The trouble is, many buildings are so poorly constructed that some residents fear that the money-spinners of today could become the slums of the future.

Glass panels have been falling off newly built Toronto condos, including the luxury Shangri-La and Trump towers and a dozen or more lesser-known buildings across the city. New buildings suffer from water leaks and poor insulation, making them ill-suited to Canadian weather.
http://www.cbc.ca/news/canada/toronto/fears-that-shoddy-toronto-condos-could-become-future-slums-1.2796979

[BeyondGeography]

3. New York has been ruined by housing prices

And, as a former resident, I don't care what anyone says. Toronto has qualities that have long ago disappeared from Manhattan. Something like the St. Lawrence Market just couldn't exist in Manhattan. Once it got "hot," the rent for each stall would go through the roof. Then the space would be converted to lofts or just torn down to make way for a tower. We'd mess up the waterfront something awful, too. Public walkways when private developers could build right out to the water and (as a way to further jack up prices) protect the tender feelings of their pampered resident/owners? Never.

[alcina]

4. It's not just condos

The average price of a single home is close to a million dollars Canadian.
http://www.thestar.com/business/real_estate/2014/05/06/single_home_prices_in_toronto_shoot_up_13_to_965000.html

I have a friend in commercial real estate who keeps telling me that if interest rates go up, a lot of people will be forced to sell. Of course, he's been saying that for 10 years. He also said with the price of land being what it is, there really is nowhere to go but up.

But while I've always been a fan of infill housing, this is getting ridiculous. The extent of the vertical development sometimes makes me feel like I'm living on the Bladerunner set. Every time I'm in the downtown core, I find another corner where I can no longer see the sky. And it's not like these are attractive buildings. Plummeting windows and other shoddy workmanship aside, most of these things are god-awful blights on the world of architecture.

Not too long ago, I commented to my partner that the 20-year-old condo down the street from us now seemed like a nice building. I remember when it first went up, and at the time everyone thought it was hideous. But compared to the recent monstrosities, the 1990s architecture seems almost classical.

I do not anticipate any of these newer monuments to Mammon will age as well.

[Saviolo]

5. This city is out of control in lots of ways

Developers own this town. To hear the Ford Brothers describe it, all those cranes in the air means that Toronto is in an era of unprecedented prosperity. It's all baloney. And the developers are all shady, too. I'm certain that a huge chunk of the fires that occur in heritage buildings in highly desirable areas are less than accidental.