Check the maintenance fees on those older buildings. Go over the financials with a fine tooth comb. Set aside some money in case of special assessment.
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COVID and the housing market
- Thread starter mimico_polak
- Start date
Check the maintenance fees on those older buildings. Go over the financials with a fine tooth comb. Set aside some money in case of special assessment.
Sometimes there's a reason. Just because it says 500K on the sticker doesn't mean you aren't staring down monthly maintenance fees of four figures and a six figure unfunded liability.Either this or another 400k for a new one
One would hope that there are records of when major building elements were replaced / rebuilt. Don't bet on finding the information.
Older condos that were well built and maintained can be good deals. Many are a lot larger than the new stuff.
A big concern IMO is whether the bulk of the units are owner occupied. A building with a high percentage of rentals can have tight maintenance budgets to maximize rental returns. Eventually the building rots out.
Some good points but one hard part is what to charge and secondly, how to collect.
Necessity is the mother of _______________
If your fam is in the industry, ask to give you a shout if they have any leads. The best time to do this was last year with so many renos. Now, there is some purse tightening happening but I like the handy man idea for the evenings and weekend. Just remember this: "The safest place for a ship is at port, but a ship is not made to sit at a port." Just do it!
...And cracked windshields. Never seen so many.I didn't care for Edmonton, felt like Mississauga with pick up trucks
I think most suburbs of major Canadian cities feel somewhat like Mississauga, but Sauga trumps them all in terms of sheer scale (>800K population). We like park space, Mississauga has plenty of nice parks, Edmonton has the River Valley.
In downtown Toronto, during Covid, both working from home, we'd go for walks as one would after being cramped in a one bedroom condo all day. Daily, along Esplanade to Distillery and back, or to the waterfront - an urban walk. Yearning for a bit more green space, it's a 10-15 minute drive to Corktown Common, Cherry Beach or Leslie Spit/Tommy Thompson Park. More space, 20 minute drive to Woodbine Beach, 25-30 minute drive to Sunnybrook Park. All places we loved very much and enjoyed spending time in.
One of my favourite spots within a 20 minute walk of home was the big parking lot north of Distillery that is now turning into a condo - because it was just open space - for kids to ride bicycles, learn to skateboard or skate, new motorcyclists would go there to practice drills (saw a cool looking Svartpilen there a few times)...
In Edmonton, the River Valley runs through town NE to SW so it's accessible no matter where you live. For us, as nature lovers, that's huge and fast becoming one of the things we like most about this place. Last weekend, exploring the park closest to our apartment and really just impressed by the size of it...
If someone is desperate and determined to own a house on a modest income they have to become financially mean.
At today's gas prices a drive to a park 10 kms away could cost $5.00 plus parking. Add a pair of Timmies and it's $20 for a walk in a park. Do it once a week and it comes up over a thousand dollars a year.
Do you drive 4 extra miles because peanut butter is cheaper elsewhere.
In a small condo there isn't usually storage space to allow stocking up on stuff when it's on sale.
Eventually you get ahead and then you hit the 40 year "Kids or no kids" wall and it starts all over again.
Live like a hermit and you can get ahead but one day you wake up with grey hair, no friends, no memories, no hobbies......................but you have a house.
Interesting point , we go out every friday night with a group for cocktails and dinner, during covid we met around a campfire for drinks and take out, now we are 'back open' , its easily $200 every friday . Everything has gone up, we arn't crying poor but we rethink 6 couples taking 6 cars to drive to a buttertart festival.
I do wonder what gas/ expenses/ dragging kids will do to day trips to Niagara and driving to Owen Sound because the fish is 4 hrs fresher?
And moving to Cambridge to save $400K on the house, now you burn a 60K car every five yrs and 8K in gas? this will have to become part of the equation.
I do wonder what gas/ expenses/ dragging kids will do to day trips to Niagara and driving to Owen Sound because the fish is 4 hrs fresher?
And moving to Cambridge to save $400K on the house, now you burn a 60K car every five yrs and 8K in gas? this will have to become part of the equation.
My wife was working at 427 / Burnhamthorpe and a coworker came in on a Monday morning happlily announcing they bought a house in Cambridge on the weekend.
They took posession and it became: Up at 4:30 AM to feed, get the kids to the babysitter and then face weekday traffic to drop the wife off at 427 / Burnhamthorpe so hubby can get to his 8:00 AM start. Pick up wife at 5:00 PM and then the kids at the sitter at 6:30 PM and home for dinner. Eat, wash dishes, tuck the kids in and hit the sack to be ready for the same thing the next day.
Never judge the traffic on a weekend visit and never judge the noise level of a neighbourhood on a weekday.
They moved back within a year.
That's not it .....the housing bubble does serious damage to the public fabric opening the have/have not gap and putting heavy stress on those on fixed incomes or lower incomes and on the government programs supporting fixed and poverty incomes.
Monetization of shelter with little or no controls is a horror show.
There are consequences.
Glad to be gone.
I agree with you 100%. My only point is that if the housing market takes a solid poo in a short amount of time, our entire economy is pooched.
Many of those that could not afford to buy in, will STILL not be able to afford to buy in, because rates will definitely go up, their jobs may be in jeopardy, and we're none the better.
IMHO (and uneducated on the matter) a soft landing / correction is the best course of action to make it affordable.
Plus, put in heavy taxes / penalties / whatever on speculative flipping/investing.
I'm also a big fan of the capital gains tax on any property but only as follows:
Live in a house:
- <1 year - 70%
- 1-2 years - 50%
- 2-3 years - 30%
- 3-5 years - 20%
- >5 years - 0%
Make the mortgage interest a write-off if you implement a capital gains tax on primary residence. This is to prevent those that buy a house, live in it for a year and a day, and then sell it.
I have nothing against flippers that do it properly, fix it, and pay tax on their profits.
While it happens, I don't think many people have to move houses often within a 5 year span.
I keep hearing the 'Taxpayer Association' or whatever chirping on the radio about a federal study on capital gains tax for housing...I haven't read the study, or the purpose of it...but I already have many people I know crying foul about capital gain tax on primary residence.
Mad Mike
Well-known member
I lived in Edmonton for a couple of summers as a kid. It was the first and only time I've seen it snow in August.
I think if the housing market takes a dump, it will only be temporary. There is plenty of money around, all corrections shake out the dumb money and draw in smart money. Those who simply chased rising house prices will panic or be forced by lenders to liquidate creating a surge in supply. New buyers hold off waiting for the bottom of the market, building starts to fall off, and smart money starts snaping up the 'deals'.
A few years later it all bounces back, investors make a tidy profit and the market is left in a worse situation.
Over the long term if the supply problem doesn't get fixed, the price problem won't either.
If you want to narrow the gap between haves and have nots, slow the increase in dwelling prices and put a huge dent in flipping, cg tax on primary residence is an obvious place to look.
I see what you are trying to do with your schedule but I dont think it will work as you hope. Current GTA single family homes are climbing by >100k/year. That means in your schedule, approximate tax paid if sold in period 1 through 5 would be 17.5k, 25k, 25k, 25k, 0k. It can make it worthwhile to hold it empty until the next period starts (works out that almost all gains are tax free as schedule almost created a fixed tax burden instead of percentage based assuming constant increases).
Throw in an exemption if the sale is due to a job transfer of more than XX kms?
There's lots of exemptions. Even now, if you sell within a year from what I understand the CRA can come calling and ask 'why should you be exempt?'.
CRA doesn't have the resources to track everyone...so it'll never be perfect. And as @GreyGhost and @Mad Mike have pointed out, there is a lot more to it than my simple scenario.
Interest rates will do a few things.... they have been the main player all along BTW...
We have done the math here a few times now and today's monthly mortgage payments indexed to inflation and average incomes are roughly double long term historical averages back to the 70s, the difference today is dual income is the norm for most home buyers. Low rates mean higher sale prices. In late 2008 my four year fixed was 5.19% but house prices were a blip very low, interest a blip high due to banking crisis, even in Canada--BTW we are ~4.09% for the same mortgage today.
Above also impacts how much the bank will give a buyer.
"Flippers" need low rates for a many reasons. The non-corporate ones that take advantage of gains exemptions usually pull a mortgage and they have to pay interest until it is sold, hits profits if rates go up. Even businesses ones are impacted but they paid higher rates normally to start. The impact on housing prices while not immediate will be impacted for their buyers if the rates "stay high" (likely will for a while, stay high as in recent history not totally historical high rates). Slows buying, again hold for longer. I expect most flippers to pull way back on purchases in the next few months.
Expect the first price drops to hit areas away from Toronto first as supply > demand with rates increasing banks will get stingy on purchase price.
GTA may not drop a huge amount, I do expect a drop, as supply < demand and developers will slow down as building costs are still high but there is a much bigger sales risk (less supply). Condos will be interesting for this reason as well.
Food for thought for those looking in the market. It would suck to have just bought a couple hours from Toronto if the rates keep going up...
We have done the math here a few times now and today's monthly mortgage payments indexed to inflation and average incomes are roughly double long term historical averages back to the 70s, the difference today is dual income is the norm for most home buyers. Low rates mean higher sale prices. In late 2008 my four year fixed was 5.19% but house prices were a blip very low, interest a blip high due to banking crisis, even in Canada--BTW we are ~4.09% for the same mortgage today.
Above also impacts how much the bank will give a buyer.
"Flippers" need low rates for a many reasons. The non-corporate ones that take advantage of gains exemptions usually pull a mortgage and they have to pay interest until it is sold, hits profits if rates go up. Even businesses ones are impacted but they paid higher rates normally to start. The impact on housing prices while not immediate will be impacted for their buyers if the rates "stay high" (likely will for a while, stay high as in recent history not totally historical high rates). Slows buying, again hold for longer. I expect most flippers to pull way back on purchases in the next few months.
Expect the first price drops to hit areas away from Toronto first as supply > demand with rates increasing banks will get stingy on purchase price.
GTA may not drop a huge amount, I do expect a drop, as supply < demand and developers will slow down as building costs are still high but there is a much bigger sales risk (less supply). Condos will be interesting for this reason as well.
Food for thought for those looking in the market. It would suck to have just bought a couple hours from Toronto if the rates keep going up...
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