Worst condo sales in a decade in Toronto, August
The number of new condos that sold in the Greater Toronto Area during the month of August 2013 dropped to a mere 633, making it the lowest level for that month in a decade, according to RealNet Canada Inc. That is a 18% drop from the dismal 772 sales in August 2012. And way below the 1,923 sales in August of 2011. Toronto’s condo market is cooling so fast it has policy makers in Ottawa worried that if the condo market collapses, the housing market might go too - and thus dropping Canada into the biggest recession we have seen in decades. (2007-2009 will seem like a minor blip). The Finance Department and Bank of Canada are justifiably concerned. Finance Minister Jim Flaherty expressed concern in 2012 that too many new condo units were being built, a phenomenon that will ultimately lead to a crash - especially since so many were being built on credit borrowed from Canadian banks . The Bank of Canada has said that such a financial crash will pose a threat to the country’s broader economy and possibly even hurt the US economy too as many American investors are amongst those investing in Toronto condos with the intention of flipping them for a profit. Real estate agents, brokers and pundits (myself amongst them) say the warnings have already been having an impact on the market, by causing some buyers to think twice about getting in to the Toronto condo market. But is it enough to prevent a crash by warning people not to invest? Doubtful. Most of the investors are Americans o...