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COVID and the housing market
- Thread starter mimico_polak
- Start date
People in the US think their housing market is overheated. Average price in the US is $514k CAD, here its $678 CAD. Take home pay is higher down south and they can write off mortgage interest.
Home ownership here has become something only the upper-middle class and above can afford.
House flippers, foreign investors, local speculators and especially, government are to blame.
Risk takers have been rewarded nicely, savers and risk averse people continue to be punished.
When people who have average jobs can acquire several properties but people born a generation later and who make the same money cant even afford one, we have a problem.
When year over year average house prices are rising at a greater rate than salaries, we have a problem.
This will not end well for Canadians who will be working longer to pay off these mortgages, many renters will never retire and surely this cant be good for birth rates either. I know several couples in their 30s who want to have children but are delaying or possibly not having them at all.
Who wants to raise a family in a condo or in a rented basement. Even if they move an hour away, housing is still $$ (Hamilton is 31% higher than one year ago) and its not that easy to have two people quit and find new jobs elsewhere. Mush easier to do that in the US.
Whats going on here is a disaster and the government needs to step in and make changes, eliminate foreign ownership and heavily tax or restrict house flipping and speculation. The more people spend on housing the less they have for other parts of the economy.
Home ownership here has become something only the upper-middle class and above can afford.
House flippers, foreign investors, local speculators and especially, government are to blame.
Risk takers have been rewarded nicely, savers and risk averse people continue to be punished.
When people who have average jobs can acquire several properties but people born a generation later and who make the same money cant even afford one, we have a problem.
When year over year average house prices are rising at a greater rate than salaries, we have a problem.
This will not end well for Canadians who will be working longer to pay off these mortgages, many renters will never retire and surely this cant be good for birth rates either. I know several couples in their 30s who want to have children but are delaying or possibly not having them at all.
Who wants to raise a family in a condo or in a rented basement. Even if they move an hour away, housing is still $$ (Hamilton is 31% higher than one year ago) and its not that easy to have two people quit and find new jobs elsewhere. Mush easier to do that in the US.
Whats going on here is a disaster and the government needs to step in and make changes, eliminate foreign ownership and heavily tax or restrict house flipping and speculation. The more people spend on housing the less they have for other parts of the economy.
Somewhere I read that Hamilton was the worst in Canada for affordability. The prices may be a tad lower than TO or Vancouver but the incomes are lower.
I hadn't thought of the last bit. "We can buy a house but then can't go out for dinner, buy new clothes, replace furniture, take vacations, give to charities, help our kids with college or uni, improve fitness activities etc.
Politicians aren't at the low end of the wage totem pole and it's unlikely their friends are either. Capital gains are not being dealt with in a way that is equitable to most citizens. I wouldn't hold my breath on a speedy resolution to the problem.
Under taxed capital gains without added value is a rip off.
Comparing housing prices in a city to wages in a city is no longer a great metric imo. You need to look at wages within commuting distance as very very few people live and work in the same city anymore within the greater gta (excluding the temporary work from home blip). Ideally you would adjust for the length of commute(maybe 10% cheaper for every 20 km?) but that gets complicated.
Or canadian real estate is viewed as a safe place to store wealth. The government wants to say that foreign investment was immaterial while intentionally ostriching to the reality. I know one subdivision of ~$2M homes where almost every sale in the past decade has been to an international student at the local private school. They get written up as domestic purchases in the gov't stats. I don't like it, but it is pretty obvious that house prices have completely detached from income/gdp/productivity and they have become a commodity.
bigpoppa
Well-known member
money goes to wherever the return is highest, in this case, they've decided something essential(housing) is an investment where its impossible to lose money
The side effect is unless your already in the market or have rich parents, its impossible to get ahead and buy a home
Another side effect is there is 0 investment in other things(productive ****...you know..building things, creating things, solving problems,
businesses, services etc)
every investment, no matter how good it seems, carries risk
Risk is a good, and an essential part of the game, but real estate, like certain companies, has become "too big to fail"
Life is full of ups and downs, just like business cycles,
life and death, part of the natural ethos, removing risk is like removing death, results in unnatural zombification(aka Ontario housing market)
Removing risk from the equation is bad.
Friend in 'old' Bronte had a rep from the Sam Mcdadi group ( big real estate sales group) ring her door bell last week with a unsolicited offer of 1.5m , she said she thought 1.6 was a better starting point . Two days later a different real estate group has offered her 1.8m , she can live rent free in the house for 1 yr while she plans her move.
The house is a 1950's doublebrick craphole, it is a knock down, and the offer is 1.8m , no fees. Welcome to Bronte
The house is a 1950's doublebrick craphole, it is a knock down, and the offer is 1.8m , no fees. Welcome to Bronte
Robbo
Well-known member
Clearly somebody wanted that property.
The wife and I were talking about this kind of situation just last week.
The house next door sold for $100k over asking.
Ours is a bigger home with a pool.
If a decent unsolicited offer came our way, we’d sell up and move out of Oakville no problem
.Sent from my iPhone using Tapatalk
bigpoppa
Well-known member
thats the thing with mania bubbles, I've also seen dumps sell for 100 over asking
Its not logical
Interesting. I’ve always wanted a slightly bigger backyard and a double car garage.If a decent unsolicited offer came our way, we’d sell up and move out of Oakville no problem.
I’ve always liked the bigger lots in the Streetsville area.
It would take a pretty sweet offer to get me thinking about leaving though. We have great neighbours and that can be tough to find.
Is there a quick way to find out current value without bugging my real estate agent?
The last real estate mania (prior to foreign home buyers tax) we had informal offers that startled us. We had small kids and weren't ready to move yet so we said no. Ended up selling two years later for hundreds of thousands less.
Catch 22: If you call them they'll start calling you. There is a site somewhere that shows the actual selling prices and you can do a comparison. IIRC you've done a ton of renovations. While that would make it sell faster there might not be a lot of payback.
The hard part is to find a modest sized house on a large property. They tend to get flattened for a monster house.
If I was crazy enough to go in that direction I'd be tempted to build a bungalow and if, when moving on, top it to a two story, having the framework built in.
Yeah we did do a fairly big renovation. I would call my agent but he lives in Barrie and I don’t want to trouble him to drive down to assess the place, especially because I’m not serious and more just kicking tires. He’s a good guy and never bugs me!
Modest house on a big lot is exactly what I would want! But it seems the market is so whack right now, I don’t even want to be a part of it.
I'd give him a call and just tell them you're not seriously, but just curious. They'll be able to give you a ballpark for sure.
Next problem is you're not going to have to try and buy in this mania...so that could always cause it's own issues if you get outbid multiple times after you sell your house. Unless you can carry both, then hope the mania keeps on keeping on after you bought, and hope to sell fast and high.
Does Zoocasa do anything?
An auctioneer silenced a critic, complaining of high prices, by saying "It's worth what I get for it."
It isn't like the good old days when prices and expectations were stable. Remember when you offered a bit low when buying and asked a bit high when selling? Now you have no idea of what financial gap you will be facing.
If the present price increases continue you buy now with a long closing and your place goes up enough to keep or reduce you mortgage. If the market crashes you better have some reserves.
The only glimmer of hope is that interest rates seem to be holding low. The government has little choice in that matter. Raising them would kill industry.
After having a decent sized property I don't want to ever go back to a postage stamp. We currently have approx 2 acres of I could find something decent in the 10 plus acre range I would be all over it.
Sent from my Chesterfield using my thumbs
Sent from my Chesterfield using my thumbs
I prefer having private land to explore and use as I see fit. My wife grew up in the city and wants to be surrounded by people. I see the advantages to both. I think a reasonable compromise for us would be a subdivision house and a garage and cabin on a larger property nearby. Obviously more expensive but could fulfill both of our desires. Having neighbours wander by and the kids riding bikes around together is nice and something I didn't have growing up.
As a theoretical exercise tonight a friend was asking me about how much it would take to sell our house. WIth all of these stories of insanity, it's not a bad idea to have thought that through before a random real-estate agent rings your doorbell. We have a nice subdivision house and the numbers were pretty crazy. We bought it a little over two years ago and realistically could get 40% more now (and potentially close to 75% depending on the buyers that showed up). As we have no interest in moving for at least 15 years and probably more and would need to find somewhere else to live (rent is ok short-term but I cant rent long-term) that puts the number to make me move now at close to triple our purchase price. Even at that number my wife thinks she would not be willing to do it.
Regardless of whether its your house, car or bike, the selling price has to be enough to get you a serious upgrade. If you don't come away with an improvement in your life why move or trade toys. Why sell something you know and get something similar that may have snags?
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