Toronto new condo sales drop over 14%, inventory pops even higher better dwelling

Determined by a survey that the CMHC does. Are you having trouble finding a place? Because I have yet to find someone that’s having an issue that isn’t related to cost. Developers won’t build rental units if condo owners are willing to pay a massive premium, and mitigate their PB risk. There’s a lot of information on development cycles, check it out.

Look at Manhattan. When prices reached a certain point, people just left. The net outflow of population was over 1 million people from 2010 to 2015. To top that off, prices are the same price today as they were more than a decade ago once inflation adjusted. They thought it was demand and zoning, and it wasn’t. It was expectations, which died with a disconnect to local incomes.

Those firms are coming to Canada because Torontonians are paid 30% less than their counterparts in the US for the same job.


On top of that, they’re also replacing a lot of the existing employment that’s diminished (i.e. where did Blackberry’s employees go?). There’s also the incentive that Canada allows these companies to engage in transfer pricing, which can’t be easily done in the US. That means the tax benefit to Canadians is almost nil, as opposed to those jobs in the US. Sweet deal, right?

Developer’s aren’t building PBR specifically because previous government decided it was a good idea to attack landlords by limiting rental increase below inflation. This consequently affected the PB business model leading to many cancellations. How do you build a business plan when your costs are projected go higher than 1.8%, but regulations limit you from increasing prices. The developers are in the market to make money, it is not a social obligation by these organizations. That’s the government’s job to build affordable housing. I can certainly say my home carrying costs have gone up more than 1.8% with utilities alone on an yearly basis. The initial investor sell-off coupled with reduced investment into the PB sector lead to a reduction of rental supply. Instead of doing a vacancy tax to free up these supposed ghost homes which would put more supply onto the market and help alleviate pressure on supply, it was deemed a smarter approach to go after the largest and main source of rental supply – private investors. The pains experienced are a direct result of political posturing.

So are you proposing that just because we have incentives for foreign investment, that this is a bad thing? What about the taxes collected from the newly created jobs by these companies? What about the spread effect of their spending into local businesses by both the companies and employees? What about the experience gained from these leading organizations to the local talent pool. If you treat this as a zero sum game, there can be no winners.

Could this not have simply been the result of the worst financial crisis in this generation in 2008? I would assume since NYC was the financial hub of the world, and that many of these jobs disappeared, it may have attributed to this exodus. We are nowhere near where Manhattan is, and when we do get there, this will be an entirely different discussion. I absolutely agree there is plateau when it comes to incomes and prices, but as I alluded above, I believe incomes will actually trend higher with Toronto being a target by the tech industry.