Tara Perkins – The Globe and Mail

An effort to get more information about the influence of some speculators in Toronto’s condo market has collapsed after developers refused to take part, leaving policy makers in the dark.

Comment: Awesome, thank you builders! Time for people to stop guessing about speculators in the market. There are not that many, and they don’t matter that much. Stop trying to make something – and something negative at that – out of nothing.

Urbanation Inc., a data-research firm, has pulled the plug on a survey that it had tried to conduct, with the support of Canada Mortgage and Housing Corp., to quantify how many “assignments” are taking place in the market.

An assignment is when a buyer who has bought a condo in a building that’s not yet finished, or registered, assigns their right to buy the unit to someone else.

Comment: And assignments do not mean speculators or flippers. Remember, some of these people bought their condos on opening week, 3 years ago, maybe even more. Their life has changed. Maybe they got married, had a child, changed jobs, moved, etc. Just because someone sells their condo does not mean they are a flipper looking for profit.

Urbanation officially called off the study Tuesday, after the vast majority of developers who were asked for information did not give it. The study could have shed light on an aspect of the condo market that economists and policy makers have been worried about, as they have sought to get a handle on just how overheated the market might be and what risks it might pose to home buyers and the greater economy.

“There aren’t any good numbers on the amount of properties being used for investment purposes,” said Toronto-Dominion Bank chief economist Craig Alexander. “It’s very hard to assess risk in the market when you don’t have insight on that.”

Comment: Yet every wonk out there is happy to give their opinion on the risk level. They all claim we are at Def-Con 4 these days. And they are saying all of this with NO data.

Urbanation had sent a letter to developers in August, notifying them that it would be conducting this “very important data collection exercise” with the support of CMHC.

Ben Myers, executive vice-president at Urbanation, said he sent the survey to more than 100 developers that had launched condo projects in the past five years, asking them for either the percentage of units or an exact number of units that had been assigned before the condo buildings were registered. “We wanted to know what’s happening with this shadow market; there’s no real way to track it,” he said.

He said that one person he spoke to, outside of the developer community, speculated that “because some of the people assigning units are not paying capital gains taxes on that, developers may not want the government looking into that any further.”

Comment: Right… this is new. Now the tin-foil-hat folks are claiming that Toronto condo developers are in cahoots with investors to help them cheat the government out of tax revenues? Nice.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto Realtor with Century 21 Regal Realty. He did not
write these articles, he just reproduces them here for people who are
interested in Toronto real estate. He does not work for any builders.
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