I was walking in Toronto yesterday and I started thinking about Prem’s 2011 Fairfax Letter:
“Canada has benefitted greatly from the commodity boom and our housing sector, particularly in Toronto and Vancouver, has gone up very significantly. As George Athanassakos, Chair of the Ben Graham Centre for Value Investing at the Richard Ivey School of Business, said in his recent article in the Globe and Mail, this time is not different for Canada’s housing bubble. There are more condos in construction in Toronto than in the 12 major cities in the U.S. combined, including New York and Los Angeles!! Caveat emptor if you own many houses or condos in Canada.”
Count the cranes here, this is just one part of Toronto shot from an existing condo on the waterfront (I counted 7 but it gets blurry in the top right).
If you walk around Toronto, you are bombarded by the sight of Condo ads. This sidewalk ad was from the corner of Peter & Adelaide st West. No payments for 6 months, no closing costs and only a 5% down payment, it sounds like a cheesy car ad. I’m not sure if this is a sign of desperation by developers to move units but it’s eerily similar to the adjustable rate mortgages made famous by the US housing bubble.