Divided States of America

Currently living in Toronto, I will have to tend to agree with most of Rosie’s assessment. Cranes are everywhere all over the city (and Toronto still has LOTS of room for more construction) erecting new residential condos and there are line-ups for people willing to put 20% down and hoping that prices keep on rising. Basically everything is about leverage when it comes to these purchases right now. A few of my friends all purchased or are in the process of getting a mortgage for a home. Most feel that it doesnt make a difference when they buy it because they view it less as an investment and more of just owning a place to live, which is fine if you dont mind overpaying for it. However, these purchases are mostly for buildings that are at least 1-2 years way from completion and this is the ominous sign that I have been trying to explain to my buddies and is something Rosie highlighted, which is the glut of supply in the pipeline waiting to overwhelm the market once they are built. Also, most of these people in the game right now are speculating and driving the prices higher and in it for the short term. On the other hand, demographically Toronto is a very multi-cultural city and immigrants are coming in droves, especially from Mainland China. These folks have the money as well as the fact that they would rather invest in Canada than in the US due to USD exposure. This may force prices to remain relatively high for a bit longer than Rosie expected. However, this is not sustainable. The job market is improving slightly but still below what they were before the financial meltdown, yet house prices are much higher. Anyhow, I do foresee a better climate to make a purchase next year and beyond and hopefully me and Rosie will both be right