 Wolfie00My dog is an elitistPremium
join:2005-03-12
kudos:4 | reply to CanadianRip
Re: Average house price in TO: $606,600 You're partly right, interest rates are a huge part of the demand factor. But not all of it -- prime was a monthly average of about 4.4% in Jan 2005 and 3.0% last month and as high as 6.1% in the intervening period, yet prices still rose more than 50%. It also doesn't explain the discrepancy between GTA and elsewhere. I think there's an intrinsic demand that is driving up GTA prices faster than most other places except possibly Vancouver.
As for locking in a mortgage, that has to be determined by everyone's individual circumstances. I never believed in it and have always done well with a variable rate. Not a believer in giving away money to the banks -- they have enough already! I don't think we're ever going to see rates like we had in the late 70's and early 80's. |
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peterboroPremium
join:2006-11-03
Peterborough, ON | reply to CanadianRip
The deck of cards analogy implies a devalued real estate asset which in most , if not all, Canadian markets will not happen.
The Florida and Nevada markets sans interest rate hikes is a good example of this. |
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| reply to Wolfie00
said by Wolfie00:You're partly right, interest rates are a huge part of the demand factor. But not all of it -- prime was a monthly average of about 4.4% in Jan 2005 and 3.0% last month and as high as 6.1% in the intervening period, yet prices still rose more than 50%. It also doesn't explain the discrepancy between GTA and elsewhere. I think there's an intrinsic demand that is driving up GTA prices faster than most other places except possibly Vancouver. So two things:
1) This thread is about Toronto and not Vancouver. Vancouver's challenges has plenty to do with foreign speculation.
2) Prime rate does not directly insert itself into the Mortgage market. While prime lending rate is a factor, an additional factor is the default rate. Either numbers moving can impact both simultaneously or independently.
As for thinking we have 80's interest rates behind us? I see nothing that prevents that. If we start to see European defaults, all bets are off on anything. We're either going to see the financial system collapse or we'll see significant inflation with the intention of resetting the wealth distribution from old to young.
Crony Capitalism has never avoided these systemic shocks, and it never will.
EDIT: Another key indicator that's forgotten but was previously alluded to is Income to Debt. It's hit record highs. Not a good economic signal. |
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peterboroPremium
join:2006-11-03
Peterborough, ON | reply to Wolfie00
said by Wolfie00: I never believed in it and have always done well with a variable rate. I'm rocking a .75% off prime on a property right now and have shortened the amortization in half this term. The recent BMO 5 year rate does look tempting though. |
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peterboroPremium
join:2006-11-03
Peterborough, ON | reply to CanadianRip
said by CanadianRip: As for thinking we have 80's interest rates behind us? I see nothing that prevents that. Having been there done that it would throw so many for a loop. I just can't see the financial system and capitalism itself survive a shock like that. |
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| said by peterboro:Having been there done that it would throw so many for a loop. I just can't see the financial system and capitalism itself survive a shock like that. It survived S&L, it survived the US Housing Market bubble. It will survive Europe going to hell, which I don't see how they're going to avoid.
Every time shit is about to hit the fan, there's always the people that say it can't happen. Of course it CAN happen. It's smarter to hedge to stay exposed.
If you stay on variable given you can do a ten year for 3.75% today you're going to feel extremely stupid at some point in the ten 10 years.
As much as housing can go down, it's always relative to interest rate. End of the day the house is worth what the monthly payment is, and unless you're a cash investor everything else is meaningless to the average home-owner. |
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| reply to donoreo
said by donoreo:We did discuss moving nearby, but then made jokes about Burlington being the wife swapping capitol 
Do tell. |
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Eug
join:2007-04-14
Toronto, ON | reply to peterboro
A 20% drop would be a "Meh!" All I can say is I'm happy I bought in 1999, and then again in 2007, in the city of Toronto.
Prices have gone up 24% from 2007 to 2011 (or 5.5% per year), so even if prices drop by 20% this year, I'll just be back where I started with this current house.
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Everything Apple |
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 GonePremium
join:2011-01-24
Fort Erie, ON
kudos:1 | reply to urbanriot
Re: Average house price in TO: $606,600 said by urbanriot:Guess why I don't buy a $600,000 home in Toronto? Because it costs a lot. Yea, I'm a genius. You know why Gone probably lives in Fort Erie? Housing costs are 1/4 of Toronto's and property taxes are lowwww. He's also a genius. You know how many people I run into that are from the GTA that are just shocked at how cheap real estate is down here? 2000 sq ft homes with two car garages and a swimming pool for $200,000. You can't beat it. They're half of even what you'd pay in St. Catharines or Niagara Falls. We're thinking of moving to a larger home once the baby is born and we'll have no issues affording it, because we can get everything we need for raising a family for ~$200,000 and our income can easily handle that with lots of room to spare. We couldn't do that in St. Catharines or the Falls, no way.
The problem, of course, is that you have to live in Fort Erie. Real estate in cheaper in Welland and Port Colborne, but those cities suffer from huge huge property tax issues and... well... while one can say it doesn't get any worse than Fort Erie, trust me when I say it does.  |
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Wolfie00My dog is an elitistPremium
join:2005-03-12
kudos:4 | reply to CanadianRip
said by CanadianRip:This thread is about Toronto and not Vancouver. Vancouver's challenges has plenty to do with foreign speculation.
Don't know about "foreign" per se, but much of Toronto's continuing demand is due to new immigrants, many of them wealthy. Some prime North York neighbourhoods are almost entirely Asian, and so is much of Markham. It's as much of a factor in Toronto as Vancouver, but it has minimal effect on real estate in the rest of the country, thus accounting for a good deal of the divergence. |
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Eug
join:2007-04-14
Toronto, ON | reply to Gone
said by Gone:The problem, of course, is that you have to live in Fort Erie. Aye, there's the rub. After moving away from my parent's home in Regina, I've lived in Montreal, Saskatoon, Vancouver, and now Toronto. Strangely enough, while I really like Vancouver, it actually feels a bit small to me.
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Everything Apple |
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| reply to Wolfie00
said by Wolfie00:Don't know about "foreign" per se, but much of Toronto's continuing demand is due to new immigrants, many of them wealthy. Some prime North York neighbourhoods are almost entirely Asian, and so is much of Markham. It's as much of a factor in Toronto as Vancouver, but it has minimal effect on real estate in the rest of the country, thus accounting for a good deal of the divergence. Absolutely, but do you feel that's really a new factor? Have immigration rates changed radically? As far as I understand between births/immigration population growth in Canada has been fairly stable. |
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GonePremium
join:2011-01-24
Fort Erie, ON
kudos:1 | reply to Eug
said by Eug:Aye, there's the rub. You find that when living in Fort Erie, you do far more things in Buffalo than you do anywhere else and as a result Fort Erie isn't quite in the middle of nowhere as somewhere else would be. It's weird though, as I can see the second largest downtown skyline in New York State and a metro area of well over a million people from my front yard, and yet it feels so far away due to the border. |
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| reply to Gone
said by Gone:said by urbanriot:Guess why I don't buy a $600,000 home in Toronto? Because it costs a lot. Yea, I'm a genius. You know why Gone probably lives in Fort Erie? Housing costs are 1/4 of Toronto's and property taxes are lowwww. He's also a genius. You know how many people I run into that are from the GTA that are just shocked at how cheap real estate is down here? 2000 sq ft homes with two car garages and a swimming pool for $200,000. You can't beat it. They're half of even what you'd pay in St. Catharines or Niagara Falls. We're thinking of moving to a larger home once the baby is born and we'll have no issues affording it, because we can get everything we need for raising a family for ~$200,000 and our income can easily handle that with lots of room to spare. We couldn't do that in St. Catharines or the Falls, no way. The problem, of course, is that you have to live in Fort Erie. Your are correct. People forget or dont know how "Chinse" people are buying the houses in Toronto. They have money and buy houses with no conditions attached. Just submit the offer clearly stating no condition attached and do you want Cash or Cheque? That's reality. Another reality is Grow-Op houses sold for more than listed price which is about 250,000/-. Having contact with broker I know that there are at least 4 Cash/No-Condition offers for each sale. The deal is closed within 2-4 days.
Accept it. Chinese people have lot of Cash. They buy houses like the way frenzies at Walmart. Both true. |
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GonePremium
join:2011-01-24
Fort Erie, ON
kudos:1 | reply to CanadianRip
said by CanadianRip:Absolutely, but do you feel that's really a new factor? Have immigration rates changed radically? As far as I understand between births/immigration population growth in Canada has been fairly stable. Immigration rates haven't changed. What's changed is the amount of wealth among people in South and Southeast Asia who come to Canada. Instead of being penniless looking for a better life, they come here with bags of money looking for an opportunity to multiply those bags of money. Real estate prices, as a result, reflect that new reality. |
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| said by Gone:Immigration rates haven't changed. What's changed is the amount of wealth among people in South and Southeast Asia who come to Canada. Instead of being penniless looking for a better life, they come here with bags of money looking for an opportunity to multiply those bags of money. Real estate prices, as a result, reflect that new reality. That's actually a really good point I hadn't considered. We only import the rich now. |
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GonePremium
join:2011-01-24
Fort Erie, ON
kudos:1 | That's not true at all. We accept plenty of refugees, just not from those parts of the world. The immigrants who come from those parts of the world already have money, those who don't are able to find work back home and therefore had no reason to leave like they did in the past.
It's a completely different dynamic from where it was a few decades ago. |
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Eug
join:2007-04-14
Toronto, ON | reply to Gone
said by Gone:said by Eug:Aye, there's the rub. You find that when living in Fort Erie, you do far more things in Buffalo than you do anywhere else and as a result Fort Erie isn't quite in the middle of nowhere as somewhere else would be. It's weird though, as I can see the second largest downtown skyline in New York State and a metro area of well over a million people from my front yard, and yet it feels so far away due to the border. Buffalo feels like the middle of nowhere to me. I like urban living, and Buffalo doesn't really offer that IMO. But then again, like I said, sometimes even Vancouver felt small to me.
BTW, I don't actually live in the centre of Toronto. I live in Scarborough. However, I live close enough that anything downtown isn't an effort to get to. I live a 20 minute drive from downtown on weekends, and 30 minutes during busy traffic. I chose my house that way actually. It had to be within 30 minutes of work and 30 minutes of downtown.
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Everything Apple |
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| reply to donoreo
Quite frankly I'm more interested to see what happens when MPAC rolls around to everyone's house and re-asses them.
I know a lot of people in my neighbourhood that have been here for decades who's homes are probably worth multimillion amounts. They can barely afford the property taxes now, I could just imagine once they start seeing their first annual $24,000 tax bill.
I feel bad for them, many of the vulnerable people are seniors. Who don't like the idea of a reverse mortgage or moving. They just want to leave their final days in peace and leave their home and assets to their children.
I can see their point, but at the same token - they're sitting on a windfall. They should just mortgage the property and pay the taxes. |
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| reply to donoreo
Housing prices being what they are is the reason why the condo market is exploding right now.
For a third of the value of a house in Toronto, you can get a fairly luxurious condo suite with all of the high-end facilities you can imagine on the ground floor.
Of course, buying one before all the investors do is another story. A few have even been sold sold out before construction work was completed - all by investors. |
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