CTO on greaterfool.ca 22 Oct 2010 10.33pm – “I had a long debate with my nephew this evening. He is convinced that Toronto is the only city in the world worth investing in, and prices here will never drop. He says the condo market $/sqft is the same or less than NYC and that’s cheap for a “world” city like Toronto. He thinks anyone buying outside Toronto is a fool and will not double their money. So many think like him here….they are so smug and self righteous.”
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And if there’s enough people who think like him, he may well be right.
There is a long way for Toronto to catch up the prices in Vancouver.
Since I am used to Vancouver price, I think Toronto numbers still worked out pretty good.
Actually investing IN Toronto is probably the least stupid thing one can do. After all people will still be needing to live somewhere and in an economy that is contracting and energy prices that are rising a downtown abode (of decent size) will probably more resiliant to a downshift in value than other properties.
Having said this, even in the downtown core there will be corrections, not in the least because I expect an ebb and flow will happen:
1. People will start trying to sell the MacMansions and move “closer to work”.
2. As more people are doing this, prices in the core / Condo market will rise while at the same time the MacMansions et. al. in the burbs will get hammered.
3. People will see a “good deal” out in the burbs and the masses will start moving out again.
4. Repeat.
The thing to note though is that in all likelihood with each “wave” the prices will get depressed as people are on the hunt for a good deal.