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Toronto Condo Market - Too Hot or Just Right?
Canada Real Estate Examiner

One of the hottest topics in the country continues to be, surprisingly, what’s going to happen in the Toronto condo market. Put ten people in a room and depending on whether they are analysts, sellers, buyers, realtors or just interested bystanders, you are bound to get ten different opinions.

In fact, the discussion has turned from simple analysis to what now sounds like all parties interested in winning an exchange (or even making the discussion personal) vs clarifying the reality and standing on fact. Starting to sound a lot like the US political debates, isn’t it?

 

Over our 20 years of studying and analyzing the Canadian real estate market, we’ve seen trend come and go - but it is always occurs right before a tumultuous time in the market. Why? Because people who make their living in the market get very emotional when markets turn, they understandably are trying to protect their livelihood. Sadly, emotional arguments aren't productive for those who are looking for real direction and insight.

This type of argument is called Ad Hominen
“An argument based on the failings of an adversary rather than on the merits of the case; a logical fallacy that involves a personal attack”

This ‘Age of Protest’ we have just entered will show up in all aspects of life. It will become increasingly difficult to get development permits, new factories built. Discussions on just about all topic will move from debate to outright argument and name calling. We are already seeing this trend occur in the blog-o-sphere, politics and in some sections of the media, where even economic discussions and disagreements turn personal very quickly. Facts become secondary. This is not the first time in history we have seen this trend escalate (in the 1980’s it was rampant – yet without the internet to fuel it).

Good news is. for the strategic investor, this lack of civil discourse can prove to provide an opportunity. By staying out of the fray we can rise above the rumours, innuendo and attack and see the numbers and facts as they should be. By paying close attention to where the Toronto Condo market is positioned in the Canadian Real Estate Cycle - and investor can begin to see that the market is about to enter an slump phase.

When it comes to the Toronto condo market, the facts are beginning to get hidden by all the rhetoric.  A strategic investor quickly begins to tire of the incessant polar ends of the debate and brings the focus back to reality – the drivers and influencers that support or move a market. They look at long term supply and demand issues, obvious lifestyle trends, costs vs. yields, income levels vs. sale prices, investor volume vs. end-users (homeowners).

They take these and other factors to have an educated look at whether they believe that their money will work hard for them in the market or work harder somewhere else. They really don’t care about the arguments, they don’t get emotionally entrenched in a position; smart investors look for places to make their money work hard, providing them yield with high rental demand and possible long-term capital gain. They also understand that the polar ends of an argument are never right. The actual result always ends up being somewhere in between.

Posted: Thursday, June 14, 2012 12:18 PM by Sutton Realty

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