Sunday, 12 May 2013

Toronto Condo Investors Under Water

The Toronto condo bubble is as real as an investor running a negative monthly cash flow on his new 1-bedroom downtown apartment. Scotiabank estimates that between 45%-60% of all new condo sales in Toronto went to investors/speculators over the past few years. Immediately a question pops up in my head: if condo living is the way of the future, then why is it that the majority of people who buy condos never actually live in them?

According to the bank, the average down payment is typically between 5%-15% with leveraged equity being the main source for the down payment. No wonder household debt has reached 165% of income as hairdressers started pulling money out of their homes to subsidize hippie renters downtown. Buy it, rent it, flip it. Oh, and don't forget to throw a couple of hundred bucks each month into your new condo as a part of your carrying cost.

The graph below assumes a 20% down payment so the reality is much worse.

Chart from Scotiabank



The information presented on this website is purely for entertainment purposes and should not be considered as an investment advice or any kind of advice at all. Statistics presented on this site are not guaranteed to be accurate, and there could be errors in the information presented on this site. However authors do try to present information as accurately as possible. The opinions of the authors and commentators are just that, opinions! Please always make up your own mind about things in life, and never take things for granted, including on this site. Hope you have a great day!

Contact Me

You can reach the authors of this site by emailing to: torontocondobubble (at) Authors of this website try to cite all their information sources to the best of their abilities. If for some reason you believe we infringed on your copyright, please email us and we will fix it as soon as possible!

Privacy Policy

Please familiarize yourself with our Privacy Policy