Condo Buyers Facing No Win Situation (GTA Condo Real Estate Market Update) 

It's gonna get even worse before it gets better. Nobody wants to pay 800k for 350 sq ft.

😂😂😂😂😂50 % reductions coming y'all, line of credit only goes so far LOL

This is cool for grown-ups to learn a lesson in finance.

It's interesting, for YEARS pre-con buyers were super in the black, they could sell the condo on the day of possession and make a pretty penny. But now it's the other way around and we should feel bad for some reason?

Imagine those 1000s of condos providing housing for 1000s families with reasonable rent. It's gonna stay vacant when they are asking for 3500 rent while the average salary is not even double of that.

Went to visit family in the GTA recently and heard multiple word of mouth stories of friends who bought multiple small condos in satelite cities around Toronto in the last 5 years. All of them are losing gobs of money and hoping to be able to sell and still make a profit. In the wise words of Steve Carrel: 'Hey there's a bubble!'

To purchase a pre-built property, whether at $700,000 or $200,000, hoping to flip it before closing is always a risk. This is no different than buying a stock hoping to sell at a higher price. There's no sure win in life.

Don't feel bad at all for any of those "investors" 😂😂😂

Most of the condo units are small but they are ok for single person. 250-400 sqf is enough for a single person and there are lot of people are single. If the price is between $250k-$350k including a parking spot then people would buy it. However, the current price is way way higher than that.

Pre conn condo buyers....LETS BE REAL 99% OF THESE ARE LINKED DIRECTLY TO THE EQUITY IN THEIR PRIMARY "RESIDENTIAL " HOME....THEY BORROWED $$ FROM HELOC TO BUY THESE NOW IN THE MONTHS AND YEARS TO COME YOU WILL SEE HOW THIS WILL EFFECT EVERTHING HOUSING RELATED.

This guy is smart, articulate, and knows his stuff. I cant believe I subscribed to a channel about a housing market. Sir, branch out into other educational videos 🙂

Absolutely sad state of affairs,. I feel for all those who worked hard saved, made down payments on their condos only to be faced with such a tragic state of affairs based on politics, snow balling BS, and trends, simply ridiculous . Yet the ball park and arenas are full, people get away with not paying rent, no accountability, absolutely shameful.

In order for the prices to really start dropping you will need to see consistent 6 months of inventory for at least 3 months straight. Days on Market creates pressure. So far, the prices are relatively unchanged.

I've began to take issue with the term "Mom & Pop". I think it paints the type of people who drove up these prices, condos in particular, in too positive a light. Call them what they are, speculators. They provide no value to the real estate equation and they all share one common trait, greed. In my experience your typical condo buyer in the last 3 years is not made up of people buying a 2nd property just looking for some additional income. There are so many people out there who don't want to work a typical 9-5 job and have instead chose to over-extend themselves and accumulate residential units as an entrepreneurial business venture. They accumulate units as quickly as the banks (or their parents) allow them and consider it their career. A career where you don't need to wake up before noon and can take vacations on a whim. These speculators think residential real estate is passive with no-risk. They are slowing learning it's neither of those things. There is nothing passive about managing properties, it is only a constant stream of issues I assure you that. The condo market seems to me to be the canary in the coal mine of Canadian Real Estate. Watch out.

Home prices need to come down 20-30%. That’s the only way rent will go down. When some one buys a property for cheap, rent will reflect that

Just can't believe these people actually brought pre construction condos as an investment property. 😮

Santos these pre con condos were sold at very high price. Why because there was so much demand- why so much demand because it's so easy to buy pre con in Canada. Anyone can borrow money, fake pre approval letters easily available. This created demand and honestly people who are genuine buyers whether they are first time buyers or investors are struggling as well because of these speculators. BTW before you close a condo unit there is occupancy fees which seems to be very high thses days since prime is @ 6.95. Buyers should know what else they need or perhaps may have to pay on top of the purchase. price. Things like development charges, hst rebate, lawyer fees land transfer tax etc. To be honest a lot of people should NOT have been sold the condos because of fake pre approval. They were not qualified at first place . This is pure speculation . I love your videos Santos you give good insights on real estate

All news - are good news. Many thanks!👍

Pre covid was already insanly overpriced for average worker in Canada, average incomes should equal average home prices directly in relation, that's how it used to be before Trudolf.

What makes you think the pre-con condo buyers saved the downpayment???? The assumption on this channel is that down payments are saved over years. That is not how it works anymore. Prices are too high. Condo investors BORROW the downpayment. So when they sell the condo at a loss... the debt overhang of the downpayment remains. Even the mom and pop investors or parents of young buyers that want to help out with downpayments are NOT putting cash on the table.. .they are borrowing against their HELOC... So when you are looking at a tenancy as a buy and hold option, you need to include the interest portion of your HELOC in the break even calculation. Often missed in these videos.

The only way real estate will start moving again is if prices drop at least 50% ! That’s a fact

Closing might not be a possibility depending on Bank assessment of the property value. Qualifying at new hire rates, etc. Definitely a conundrum.

Thank you 🙏 for this factual information! 💕👍🏿

Santo, can you please overlay your video with slow playing violin.

now finally the last TORONTO RE bubble bursts and we see who is swimming naked ! YU are all in for a very rude AWAKENING LOLOLOLOL . IT'S ABOUT F-ING TIME !!!!!!!!!

One of the things that I have observed in the condo market in Toronto is that most of the condos are built for investors, and not for tenants to have a place to raise their family/build family. If we just look at the basic principles of generating real estate value would be just people, if they cant see themselves living there then its just room of walls. And empty spaces will don't have any value. One thing that developers should develop and market their properties as livable spaces where people have opportunity to build out their world. One of the reasons that is keeping me away from condo market is that. I can't see myself starting a family in those matchboxes, let alone spend 100s of thousands on downpayment.

No sympathy for even the mom and pop investor trying to make a buck off people who actually wanted to buy it to live in it

There is no way in h**l that you can dump a 750 pre-con for 600. LOL. All those units will be under 350 soon (pre-covid price). Even that is a joke for that crap. Really disgusting trash.

I m facing this now. Bought a condo in Mississauga square one for 650$ 2 bed 1 tiny den 2 full bath 680 sqft. I’m on occupancy closing at the Moment. Trying to rent but seems impossible .occupancy fee is $4200.00 but rental market around $2600 . It’s crazy

So many of the latest condos were never really meant to be lived in by the buyers, so tiny with horrible floor plans. The condos were designed for the flip or rental.

No need to feel sorry for these investors. In the good times, they made tons of money by flipping these condos. They should have known investing (or speculating) in anything can get you profits, and losses.

Keep and rent. Over time the value will go up. Real estate goes up and down. Just weather the storm. I’ve made millions. Been thru this a few times

You have average sold price, but do they specify average selling price for studio, 1 bedroom, 2 bedroom, etc or average price per sqft?

The dilemma of whether to sell at a loss or hold on and hope for a rebound is truly puzzling. That's just the unpredictable nature of investments. Wishing strength to all affected buyers out there!

I think the following will happen. The market will continue to hover around a baseline and seem to be on the verge of cracking, prompting owners to sell before it does. Then the equity firms will step in and buy to prevent it happening. And they'll just sit on it, or if it comes it, keep buying and selling to each other artificially. This will go on until a sufficient number of organic owners will have opted out, expecting a better opportunity on a market correction, at which point the upward trend is decisively resumed, effectively pricing them out. I know, it's completely ludicrous. But that's one way of achieving their stated goal, "You will own nothing and you'll be happy."

Oh well, these 'investors' should have done the math...

Negative Net Worth Individuals

Prices to the moon! buy buy buy!

Mintenance Fee,Hydro, tax, Internet are around $$$ 1000,1200 monthly for a condo of 600 SQF which is quite high already and then you have your mortgage,insurance etc…

Hang on isn't it even worse for presale buyers... The bank surely won't advance a mortgage based on a $750k purchase price when the market value today is $600k, a presale buyer only technically owns the condo once formally closing at the occupying date, right?? In that case if the buyer chooses to close on the purchase, that would mean in addition to their $150,000 deposit having evaporated already, the buyer would ALSO need to come up with an additional payment at closing of $120,000 so that the equity ratio on the mortgage is 80/20 as mandated by lending standards... Is this not how the system works? How many presale buyers have another $120k kicking around in this economy, plus how motivated will the buyer be to pony up more cash to close when their first $150k has already gone bye bye.

you can blame Ford for canceling rent control, developers for building cheap apartments that aren't even designed for people to live in, what incentive does somebody have to rent somewhere where they can have their rent increase anytime, by any amount, which people could barely afford to begin with??

Good Time to Buy Resale Condos... Tons of Supply, Fear and the Media is Pounding the Condo Market Negatively. Condos are not going anywhere... buy now keep for the next 5 years min you will be fine

Don't buy in Toronto.. prices headed much lower...

Matthew is happy months of inventory are going up. He wants to buy a condo downtown

Shouldn’t have played the real estate scam. Womp Womp.

Canada has a govt induced systemic bubble in real estate. Min 50% correction is ideal for the economy in the long run

How to find condos that close soon?

Well Team Sessa, this begs the question, con artist, drugs or simply delusional? that's one more option than what you offered...

wait, so the impossible to get into market cause everything is expensive is actually reverse and condos are cheap, just screwing ppl over who bought precons a few years ago?

Also consider that if you sell and IF you get out alive w profit you face the music of CG inclusion… Hold and you’ve already folded and lost your downpayment. You really gotta hate yourself to even consider “investing” in RE or being a landlord these days.

This issue was addressed by Koran 14000 years ago Borrowing money at interest rate and taking advance payment for your crop before its grown assuming my crop would be same as past years. BOTH RECIPE OF DISASTER IT MIGHT WORK THIS YEAR BUT NOT NECESSARILY NEXT YEAR. Holy Koran "If you borrowing money or giving money doing RIBAH (interest) you are not fighting INTEREST RATES you are fighting me i.e. FIGHTING THE NATURAL LAWS OF CREATOR.

These Precon investors were genius last 5-8 years. You buy lottery ticket dont have to deal with tenant and gauranteed huge return on investment. If you look around youtube that is what many were pumping couple of years ago. When tide is gone you will figure out who was swimming naked. This is strategy is like picking penny on free way. For many years you will be successfully getting left over penny on free way for free and look like genius. One fateful when you are struck by huge truck on freeway you wont be there to enjoy those penny.

To buy

You are calling "speculation" an investment. It was very speculative for buyers to plan to profit from assigning their pre-construction contract. Not wise.

The best time to buy a condo is 5 years from now. The best time to sell a condo is 10 years from now.

To bad. The greed!!!

Real estate is pain

A lot of people are about to get rinsed

He who panics first, panics best.

TL;DR investment decision backfires, cry me a river

Negative cashflow =/= losing money...... buying a gold coin (or bitcoin) is negative cashflow, putting money into your RRSP is negative cashflow..... buying land is negative cashflow.... buying a bond is negative cashflow.... that is not actually a negative. What you are crying about is leverage (which can go badly in stocks just as easy if not easier)...... ps not all condos are dropping, in fact most are still going up.... only the high priced ones are having trouble....... if less high priced units sells that makes the average price drop, but did the low end ever really go down?? nope

We need 1 extra million immigrants asap for the condos to maintain their value, or face losing our retirement money!

Waiting for bad things happen

those who think condo prices will drop are hallucinating especially during election year this (US) and next (Canada) year. price will stay stagnant at most. the money printer never stop, if not stock market money has to go to real estate.

Another flawed video they will not only lose down payment but they also need to pay the difference.

Between government increasing taxes incl. Capital gains and banks raising mortgage rates. Why bother buy anything. Salary taxed, buy necessities and get taxed, save money or invest then get screwed with capital gains. Why bother. I'd rather live in a tent under the Gardner

What is the max pain point for all these folks 30/50/70% drop .. that needs to be reached and this mess will get cleaned up real quick imo .. till then sit back and watch the paint dry lol lucky to have got a sucker at the last blow off top in '21 !!

Prices go back up? hahaha.. really? delusioal no longer...howabout delirious...