Toronto Housing Market Sees Biggest Drop In 30 YEARS! – The Bubble Is BURSTING!

Josh Sigurdson talks with author and economic analyst John Sneisen about the crashing Toronto real estate market as house prices drop harder than they have in 30 years.
March sales in Toronto dropped 40% from last year, the lowest since 2009. The average selling price for all homes dropped 14% from a year earlier, the biggest drop since 1991.
Detached home prices dropped the most which is notable as condo sales are the only thing that has gone up. There’s a reason for that. People can’t afford the detached homes anymore, but they are largely downgrading to condos.
The Toronto Real Estate board in a recent report said,
“The share of high-end detached homes selling for over $2 million in March 2018 was half of what was reported in March 2017, further impacting the average selling price.”
To top it all off, active listings went up 103.1% since March of 2017. That is a massive rise in homes for sale, a recipe for disaster.

We’ve been warning about this for a long time. We remember well the euphoria of people in Toronto telling us it would just keep going up forever. The bubble was growing larger and larger. People were looking at their house as an asset. Their eyes became glassy and the hockey stick reached its peak and now we see a massive drop out. We will soon see similar in Vancouver. We reported on BMO’s collateralized debt obligations which many of us remember from 2006 and 2007 before the bubble burst.
Collateralized debt obligations (CDOs) are packages of a bunch of mortgages, mostly bad mortgages with a few good mortgages. The package is rated by the top few good mortgages, often triple A. That is insane.
The level of derivatives manipulating the markets into temporary prosperity will burst the bubble and cause long term pain.

We need to be self sustainable and not fall for the fake speculation.

Stay tuned for more on this story from WAM!

Video edited by Josh Sigurdson

Featuring:
Josh Sigurdson
John Sneisen

Graphics by Bryan Foerster and Josh Sigurdson

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20 thoughts on “Toronto Housing Market Sees Biggest Drop In 30 YEARS! – The Bubble Is BURSTING!”

  1. Video immediately demonetized as "hate speech" upon publishing.

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  2. Meanwhile Vancouver house prices(townhomes anyway) continue to rise. Just goes to show that Vancouver is still the prime destination for offshore money(who pay cash for their homes anyways) The real estate market needs a major correction-but it ain't gonna happen as long as the offshore money continues to flow. Even if it does crash- the market is just that much cheaper for the offshore buyer.

  3. Greed has taken over the housing market, just like everything else. But greed promotes failure, as buyers are in over their heads too quickly, and they may lose their job or get ill. Greed has jacked prices for just about everything beyond what people can afford, as wages are in general, not keeping up. I live in Florida, near St. Petersburg. Wages for most jobs here (service jobs, tech jobs) are pathetic. I have a tenant with years of experience in industry, and she just lost her job. She got another one, but she can't seem to get over $16 an hour, with no benefits. How can someone live on that? Construction jobs (unskilled) run around $10 an hour. People are bunking in together, renting rooms to live in, or living out of their cars. The economy is killing us.

  4. Why is everyone so gung ho on hoping that people's biggest investment crash? Does it bring you pleasure in seeing someone suffer?

    Market is market. Demand and supply. If it's beyond your own financial reach, then either move to a different market or earn / grow more money.

  5. Interestingly, house prices in terms of gold have barely shifted since 1990. The gold price of assets suggests shares and houses are fairly valued given the buckets of money floating around.

    The problem is the fiat money is worth nothing. So far this is constrained to asset markets, but if it hits the real economy there will be a huge inflation spike and jump in wages. Hence the central bank rush to raise rates.

    Sucks if you have run up huge debts over the last decade though – London, Sydney, Toronto.

  6. This is much ado about nothing. The only ones affected by this are the speculators. Those who own their houses outright will not be affected unless they sell during the dip. Those who owns rental properties need not worry because people will always need housing. The worst that can happen to landlords is that they may lower the amount they can charge as rental fees. It's funny how these two immediately attacked the currency in general, and how they paint a doomsday scenario where people have to stockpile on basic food stuffs. Hahaha! You guys are not helping, what you're suggesting will result in hysteria, panic buying and chaos.

  7. FROM TERRY PLEASE GOOGLE , SUSTAINABLE DEVELOPMENT AGENDA21, AND YOU WILL KNOW WHAT IS COMING. STUDY IT.

  8. I just love the morons who said "We're different then the American housing market"…and my response is yeah we're different because our bubble is way bigger than theirs.

  9. Predatory land strategy was devised to create property barons. The astronomical price of shelter comes from robbing present and future generations of their lifetime earnings.

    Over the past several decades a variety of spurious pretexts were employed to place a halt on the further use of land. The price of homes in Vancouver, for example, rose from $12,000 to $3,000,000 from $27,000 to $4,000,000 and from $59,000 to $10,000,000. (A three-bedroom home in Detroit costs $15,000). A home in Vancouver that should cost $230,000 based on earnings level combined with inflation is offered for $5,000,000. Average sales price in Vancouver in 1969: $23,939.

    Citizens are taking the bait.

    If it sounds too good to be true, it likely is.

    While we have abundant land it has been placed off limits for use in housing. Agricultural land on which no crops can grow. Farmhouses of 1000 sq. ft. replaced with 40,000 sq. ft. mansions and land is left fallow. A tiny nine-acre farm recently sold for $9 million. Forest that you can follow for 1000 miles northward and 3000 miles eastward. A mile at the forest edge over a short distance near major cities would eliminate the housing issue permanently. Organized opposition puts a stop to each attempted use of land. Local regulations with unattainable requirements and excessive delays serve as a barrier to prevent new home construction. These have caused home prices to escalate beyond reach. Their true objective is to consolidate ownership and concentrate wealth into fewer hands.

    The property needs of a growing population were ignored and a disproportionate amount was declared parkland and forestland. Those most affected unwittingly tighten the snare on their own demise. A generation that had everything was determined that those that followed afterwards should have nothing. Don’t touch that tree. That all homes and farms with the exception of those on the prairies are on forestland that was cleared is conveniently ignored.

    Homeowners are multi-millionaires, but cash broke. They must slave to retain their homes. If they sell, their heirs become slaves. To realize cash they may borrow on their equity, which means their property must be sold to repay loans and deferred property taxes upon winding-up of their estates. Ownership by individuals is ending.

    Rhetorical question: Where and how is the property tax money from what are now multi-million dollar properties that were formerly in the tens of thousands range, or 180 times their former value, being invested? Civic maintenance costs might have doubled or even tripled during that time, but are not 180 times their former level. Is this excess money being siphoned/gifted out of the country on the pretext of “investing” in the equivalent of “municipals” that return $3 of capital in forty years time for each $100 spent to acquire them turning Canadians into vassals of a foreign state?

    A deliberately created artificial shortage has resulted in a multi-million dollar gulf to home ownership. Foreign purchases, a convenient scapegoat, is a symptom that exacerbates the issue, but is not the source. With no prospect of ever becoming established couples have stopped having children. The sense of fulfillment gained from home improvement and the legacy they will pass on to their heirs is absent when living in an apartment. Consumerism fails to fill this purposeless void so they seek escape in Islam. They serve the corporation, die in debt and building their home is relegated to the afterlife.

    Immigrants unaware of the impossibility of achieving the Canadian dream arrive to fill this gap.

    A few large corporations will end up owning all homes. Astronomical home prices justify corresponding rents. Rent absorbs as much as eighty percent of employment income and now exceeds pension income, serving as an abject reminder that citizens are victims of their own misguided policies formulated without vision.

    Homelessness and drugs decimate the underclass and middle class. (Homeless count in Vancouver: 3605). While the numbers are still low at about 100 deaths per month in Vancouver, for example, they are accelerating. The post-industrial, post-national era is neo-feudalism in which all property is owned by a few wealthy landowners. Rent is their source of income. Government will pay rent for new arrivals, at least for a while. When their benefits expire they are easily replaced from a global pool. Boundaries are redundant.

    Sharia Law is essential in a neo-feudal society comprised of two classes, wealthy landowners that grow richer daily without effort and the remainder that exist to serve their landlords and are separated from them by a multi-million dollar gulf, in order to protect the assets of the former and to keep in check the latter.

    In unending sequence yet another tract of land is “protected” and prevented from use by citizens.

    All of the property on this planet belongs to the chosen few, together with the increase that it yields.

    It is being redeemed.

    Footnotes:

    In 1969 I earned $7284 per annum that was raised to $9180 eighteen months later. A home in Point Grey was on the market for $29,000. An offer of $27,500 was finally accepted. An equivalent home in Winnipeg cost $11,000. Vancouver was an expensive city. Prior to 1972 it was difficult to sell a home and might take two or more years. Then legislation that placed a stop to the use of land turned homes into a commodity and created a virtually monopoly market with monopoly prices.

    (Average sales price of houses in Vancouver in 1969: $23,939.)*

    $27,500/$7284 = 3.8. In 1969 a home cost the equivalent of 3.8 years earnings.
    Today that home is worth $5,000,000 while an equivalent salary is about $60,000.

    Wage rise due to inflation: $60,000/$7284 = 8.2 times.

    Cost of home now in terms of equivalent earnings: $5,000,000/$60,000 = 83.3 times or the equivalent of 83.3 years earnings.

    A price comparison yields: $5,000,000/$27,500 = 181.8 times its former cost.

    The home should cost $60,000 x 3.8 = $228,000.

    With both earnings and inflation taken into consideration $5,000,000/$228,000 = 21.9 times its normal value.

    The market for homes used to be a free market like that for cars and persons at each income level could afford to buy one as homeowners whose income increased moved on to newer, more expensive homes leaving their old homes to be purchased by new entrants.

    * Home prices may be verified from actual transactions for those years at the public library. My example is for Point Grey. A home in East Vancouver cost about $12,000 or less at that time.

  10. Crazy high prices. Where I live (in the USA) you can buy a very nice 3 bedroom, 2 bath home for about $100,000 (and even less).

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