(I realize that everyone much prefers positive and good news stories. But I learned the hard way that it is also important to understand and cover our "downside". Thus, please excuse my cautionary perspectives. I still believe that assets with real value, "intrinsic assets", are where we should hold our net worth. Property and gold bars are examples of these intrinsic assets that will always have value- not like shares in corporations.)

TREB "MARKET WATCH" REPORT BIASED

Astute property owners and investors should be wary about the consistently positive spin put on Toronto real estate statistics by TREB and the media.

Their latest Market Watch Report for June 2012 claims that unit sales dropped 5.4% from June 2011 to June 2012.  They didn't report that unit sales dropped 11.5% from May to June 2012!

Similarly, they reported that prices rose 7.3% vs. June of 2011, but neglected to say prices slipped 1.5% from May to June. The Toronto Real Estate Board's "experts" led you to believe that the Toronto real estate market is nicely improving.

In fact, the opposite has begun to happen.

They also didn't highlight to the public that both Active Listings and New Listings are up 13%. This significant increase in inventory will help reduce prices further for July and August.

Traditionally, by October and November prices recover to the Spring levels, but if they don't this year, then 2013 will likely be the beginning of the expected Canadian real estate price deflation.

From the perspectives of a Buyer or Seller or Investor in the Toronto real estate market, it is important to discern the real market trends a few months ahead of what you will learn from the real estate boards, major franchisors and the media. Whether or not you make a bit of money on paper from short-term market fluctuations, the best strategies in real estate are to play the longer term trends.

History shows that government market interventions almost always just postpone the longer term trends that are driven by widely accepted public beliefs, opinions and attitudes. Most people on the planet realize that the global monetary system presently is very similar to a "Ponzi-Scheme". Excess leverage by governments and bankers make homeowners' mortgage and debt leveraging appear to be frugal behaviour.

Going forward in Canada, our present circumstances may lead to a big surge in property listings as senior baby-boomers try to cash in during this market peak. They may then stoke the rental markets as they hold off buying their smaller winter and summer properties until 2015-2016, (when the global monetary re-structuring could begin to actually occur?)

These are uncertain times, so smart homeowners are locking in the cheapest mortgages possible. Home operating budgets should be reviewed quarterly to help you build up significant savings for a "rainy day". 

I firmly believe Canada and Canadians are likley the least vulnerable to the overseas and American financial crises. Nevertheless, a bit of "downside" protection for our families is only prudent. No one should be over-extended going into 2013.

Warm regards,

Jim