COVID and the housing market | Page 249 | GTAMotorcycle.com

COVID and the housing market

On the cottage front, I do not see how any sane annalist would think they will go up medium term if things continue with inflation, interest rates, stock market drop and possible recession. Of course if much of the above all of a sudden reverses all bets are off.

Short term there may be a peak as people sitting on the fence on buying think they need to get in before interest rates peak any higher. We actually also saw this in the housing market the first few months of this year (panic buying of sorts to lock in the rates). Once it all sets in don't expect the same. Boomers retiring may jump the prices short term but then there will also be estate sales etc. in the same context.

Not where I would be investing hoping to make money. Some real estate guys are really pumping it we know that is not for anyone's but theirs benefit.
 
backmarkerducati said:
On the cottage front, I do not see how any sane annalist would think they will go up medium term if things continue with inflation, interest rates, stock market drop and possible recession. Of course if much of the above all of a sudden reverses all bets are off.

Short term there may be a peak as people sitting on the fence on buying think they need to get in before interest rates peak any higher. We actually also saw this in the housing market the first few months of this year (panic buying of sorts to lock in the rates). Once it all sets in don't expect the same. Boomers retiring may jump the prices short term but then there will also be estate sales etc. in the same context.

Not where I would be investing hoping to make money. Some real estate guys are really pumping it we know that is not for anyone's but theirs benefit.
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The "close" cottages like muskoka will continue to fly imo as their target market has very high income and are less affected by economic swings (going from 500k to 450k is a hell of a lot easier than going from 100k to 50k) and they have huge expenses they can easily dump (don't do three 20k+ vacations a year for instance). The cottages many hours away who knows. Those were stretch goals for GTA people and are going to stay far too high for most locals to get them again.

The inlaws cottage neighbour near Haliburton sold last year for 1.4. Since then there have been hundreds in renovations. Buyers are mid 30's with kids. Inlaws bought their similar cottage ~15 years ago for 2xx. wtf, both in the appreciation and that a couple in their mid thirties can buy a second property for that much (and a huge wtf for then being able to spend hundreds more).
 
GreyGhost said:
The "close" cottages like muskoka will continue to fly imo as their target market has very high income and are less affected by economic swings (going from 500k to 450k is a hell of a lot easier than going from 100k to 50k) and they have huge expenses they can easily dump (don't do three 20k+ vacations a year for instance). The cottages many hours away who knows. Those were stretch goals for GTA people and are going to stay far too high for most locals to get them again.

The inlaws cottage neighbour near Haliburton sold last year for 1.4. Since then there have been hundreds in renovations. Buyers are mid 30's with kids. Inlaws bought their similar cottage ~15 years ago for 2xx. wtf, both in the appreciation and that a couple in their mid thirties can buy a second property for that much (and a huge wtf for then being able to spend hundreds more).
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Like GTHA housing prices.... location, location, location...when it comes to drops. I expect some price drop in prime Muskoka and other lake front property, not enough for a panic sell-off and they will still go for premium prices out of most if not all of our reach here (for the reasons you pointed out). The farther you get from the prime locations the greater the drop, specially for those just in at seven figures!

As for people spending recently, it is for many of the same reasons the guy delivering pizza to our house has a better car than we do.... spoiler, it is not because he is better with his money. In the end it is not most (normal working) people's primary housing, so once the crunch sets in and they cannot afford all of it and the LOC is screwed.... interest rate is way up a renewal, many in the same boat, in a recession any potential cottage rental income will also drop.... boomers estate sales... (nothing against boomers, just age), it has all happened before.
 
backmarkerducati said:
Like GTHA housing prices.... location, location, location...when it comes to drops. I expect some price drop in prime Muskoka and other lake front property, not enough for a panic sell-off and they will still go for premium prices out of most if not all of our reach here (for the reasons you pointed out). The farther you get from the prime locations the greater the drop, specially for those just in at seven figures!

As for people spending recently, it is for many of the same reasons the guy delivering pizza to our house has a better car than we do.... spoiler, it is not because he is better with his money. In the end it is not most (normal working) people's primary housing, so once the crunch sets in and they cannot afford all of it and the LOC is screwed.... interest rate is way up a renewal, many in the same boat, in a recession any potential cottage rental income will also drop.... boomers estate sales... (nothing against boomers, just age), it has all happened before.
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By the time the general public sees the potential the fruit is likely already over-ripe. They pay through the nose for waterfront that is more swamp front.

One of the hard parts about giving life advice to younger people is that the young haven't seen the cycles. Recessions and booms can work for you but it takes faith. Faith is dependent on experience and experience is dependent on age.
 
GreyGhost said:
Damn. I've never had a three figure mortgage payment, yet alone two. Hell, my property tax alone has always been three figures.
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I just stumbled across the building receipt for our renovation of 30+ years ago. Move kitchen to a different level, enlarge dining room, expand hallway, new windows in kitchen and DR, patio door, new stair.

$30.00. No engineer's stamp or survey. HVAC, plumbing and electric were extra.
 
nobbie48 said:
By the time the general public sees the potential the fruit is likely already over-ripe. They pay through the nose for waterfront that is more swamp front.

One of the hard parts about giving life advice to younger people is that the young haven't seen the cycles. Recessions and booms can work for you but it takes faith. Faith is dependent on experience and experience is dependent on age.
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Hmmm 🧐
 
Interesting developments in the hood...

1 house listed for 1.5 and sold for 1.6
1 house 3 doors down from the above listed for 1.3 and sold for 1.2 (a similar one to this house (with no renovations) sold for 1.5 last year, and another bungalow for 1.5 last year also in the insanity (with the horrid paint job I posted).

Both nice houses, the second house is smaller bungalow with decent renos (instead of side split fully done up)

Another house is listing up the street as 'Coming Soon' so no info yet.
 
Georg3__ said:
www.cp24.com

Toronto, Canada and Global Breaking News – CP24

Most recent News News business news stories and video from CP24
www.cp24.com www.cp24.com


Ahh what are new home buyers supposed to dooo
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Buying new pre-build has always been a risk vs rewarded with a lower price compared to completed buildings (or even progress). Even when the general market is flat the prices for units climb as the building gets completed. One of those risks, it never gets built or completed. This is not new.

Might be a "perfect" storm for many developments. Higher interest rates means carrying costs for developers are higher. Also means higher monthly costs for existing buyers which means some cannot close now and longer term lower purchase prices for units not yet sold. Labour shortages mean higher costs. Inflation means higher material costs. etc.
 
backmarkerducati said:
Buying new pre-build has always been a risk vs rewarded with a lower price compared to completed buildings (or even progress). Even when the general market is flat the prices for units climb as the building gets completed. One of those risks, it never gets built or completed. This is not new.

Might be a "perfect" storm for many developments. Higher interest rates means carrying costs for developers are higher. Also means higher monthly costs for existing buyers which means some cannot close now and longer term lower purchase prices for units not yet sold. Labour shortages mean higher costs. Inflation means higher material costs. etc.
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I have no idea if construction loan prices are climbing with bank rate. The last I heard actual numbers, mortgages were in the 2.x range and construction loans were in the 10 to 20% range (closer to 10 for initial draw, over 20 if you needed more money than you expected). Obviously the construction loans were basically detached from bank rate (I suspect some of that was shifting money around to different family LLC's).
 
GreyGhost said:
I have no idea if construction loan prices are climbing with bank rate. The last I heard actual numbers, mortgages were in the 2.x range and construction loans were in the 10 to 20% range (closer to 10 for initial draw, over 20 if you needed more money than you expected). Obviously the construction loans were basically detached from bank rate (I suspect some of that was shifting money around to different family LLC's).
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I just helped my kid arrange a mortgage on a rental property he's buying and a construction LOC on another house he's renovating. 5-year variable conventional mortgage on the rental property is convertible and open @ 2.75%. Construction HELOC, is open @ 4.2%.
 
Mad Mike said:
I just helped my kid arrange a mortgage on a rental property he's buying and a construction LOC on another house he's renovating. 5-year variable conventional mortgage on the rental property is convertible and open @ 2.75%. Construction HELOC, is open @ 4.2%.
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I was referencing projects in the eight to nine figure range. Things change up there. Like I said, not sure how much is best available rate and how much is financial games.
 
GreyGhost said:
I was referencing projects in the eight to nine figure range. Things change up there. Like I said, not sure how much is best available rate and how much is financial games.
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If you're talking about private loans between developers' friends and families -- the rates could be anything as they are not business related. I used to see shenanigans like that all the time -- Don DiPaquali and all his kids, siblings, nieces, and nephews with 20% circular loans to each other's TFSA's.

Small builders are able to get money at 4-5% for convertible construction loans as long as they have some equity in the deals, double that if not.
 
Mad Mike said:
If you're talking about private loans between developers' friends and families -- the rates could be anything as they are not business related. I used to see shenanigans like that all the time -- Don DiPaquali and all his kids, siblings, nieces, and nephews with 20% circular loans to each other's TFSA's.

Small builders are able to get money at 4-5% for convertible construction loans as long as they have some equity in the deals, double that if not.
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In this context it is developers building medium to large condos.
 
Georg3__ said:
www.cp24.com

Toronto, Canada and Global Breaking News – CP24

Most recent News News business news stories and video from CP24
www.cp24.com www.cp24.com


Ahh what are new home buyers supposed to dooo
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Some could take advantage of the builder's bailing out. If the buyer was committed to a $1.3 M place and the developer couldn't get enough sales to break ground the buyer could get their deposit back and take advantage of the lowering prices.
 
nobbie48 said:
Some could take advantage of the builder's bailing out. If the buyer was committed to a $1.3 M place and the developer couldn't get enough sales to break ground the buyer could get their deposit back and take advantage of the lowering prices.
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It depends how long they have been sitting on the deposit. A cancelled condo with a few years at zero percent interest and the buyer is probably screwed. Even with a huge correction, prices probably wont be at levels from two years ago and the buyer missed the stock market run up too.
 
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