Condo Market Shows Signs of Strain

"Is the Greater Toronto Area condominuium market poised for a correction?"

Click below to read full article. Very very interesting. A MUST READ!!


http://www.moneyville.ca/article/884199--strong-gta-condo-market-shows-signs-of-strain


Jonathan's Opinion:

Simple economics does state that when demand of any product is low, and supply of that same product is high, in order for that product to sell, the price must be lowered to the point that demand begins to increase again.

If the article is correct in stating that 36,000 new units will all come to market next year, or shortly, there will undoubtedly be an excess of supply, and if sellers want to sell their condos, they MUST reduce their prices because of all the competition.

Hypothetically, if none of these condos go for sale, then there will not be a correction in prices. The fact is that most condo buyers are speculators (people who buy pre-construction, at a good price, in order to sell once the building is up, and has appreciated in value).

In most cases this is the ideal situtation, and a great way to make a quick buck, however, just think if everyone of the 36,000 unit owners are thinking the same thing, and selling at the same time. I would definitely agree that they would have a hard time seling for a profit, uness there are 36,000 buyers out there just waiting...that, I sincerely doubt.