COVID and the housing market | Page 113 | GTAMotorcycle.com

COVID and the housing market

Evoex said:
They go hand in hand. Mortgage on that f’in baller property gets passed down to the renter.
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I agree. You fix one of the issues and the other naturally corrects. I just think the focus is on the wrong side.

The way I see it you have two groups (not counting current homeowners in this)

A. Potential buyers. This group may be priced out currently but they have down payment money in the bank, job security, probably dual income somewhere in the range of $120,000-180,000. Might not own a house but life is pretty decent. If one of those things is missing IMO they aren’t ready to be home buyers (strong single income is fine). If someone is able to actually consider home ownership I consider them to be fortunate even if they can’t actually accomplish it. They’ve done pretty good for themselves. Would still feel frustrating though I get it.

B. Stuck as life long renters. This group might be single parents, health issues, previous bad decisions, limited education, came out of troubled households, immigrants. Bunch of different reasons could of put them in this spot, not necessarily their own fault.

Group A has options. They can relocate. Buy a rental property in a cheaper market with a property manager to build equity. Invest in themselves to earn more.

Group B is just flat out stuck. By the time they pay current rental rates and put food on the table they are probably already behind. They can’t risk change. To get out of that rut takes a special effort.

I’m concerned about B group. I hate what they have to live through. If A wants to protest honestly I’m just shrugging my shoulders but if they want to include B or push the B agenda to the front then I can get behind that.

I’m not interested in people that have money in the bank protesting because that can’t buy property in some of the best cities in one of the best countries in the world.

Zero mention of rent on that site organizing the protest, apparently that group isn’t interested in helping the group below them. I don’t like that.

Edit. I’m biased on some of this stuff and I could be way wrong. Just my thoughts.
 
Evoex said:
Market correction for everyone.
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Between my house and condo I'd say they're worth about 800-900k in todays market. About 4 times what I actually paid. (house '93 condo 2012)
I would gladly forego much of that equity if it meant my kids could afford a home.
 
timtune said:
Between my house and condo I'd say they're worth about 800-900k in todays market. About 4 times what I actually paid. (house '93 condo 2012)
I would gladly forego much of that equity if it meant my kids could afford a home.
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Your kids may be able to because of bank of dad. (Eg. You sell the condo and give up the increased equity to boost your kids). A random kid whose parents havent been sitting on real estate for the past decade is not likely to be a buyer.
 
bigpoppa said:
I dont think ya'll understand, no normal/regular first time buyers are buying in today's market.
None. Zip. Nada.

(1)Everyone buying in todays market is either on his 3rd property, (2)or someone who entered the market many years ago and just sold his old house , and is flush with cash, or(3) flips professionally for a living, or (4)is bringing cash from china from dubious sources.

Average joe first time buyers are completely priced out of the market.

Any seemingly new first time buyers likely fall under subsection (2) (aka parents sold their house and gave kids a leg up with the down payment/mortgage)
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TLDR:
Are we talking strictly GTA?
Because a kid at work and his fiancee saved up $150k and bought a townhouse in Bradford.

You may have to change your expectations, but it's doable.

That being said, I cried about house prices when I bought a few decades ago.
Now I'm relieved that I don't have to do it in today's market.

(By "kid" I mean 30 year old)


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Joe Bass said:
TLDR:
Are we talking strictly GTA?
Because a kid at work and his fiancee saved up $150k and bought a townhouse in Bradford.

You may have to change your expectations, but it's doable.

That being said, I cried about house prices when I bought a few decades ago.
Now I'm relieved that I don't have to do it in today's market.

(By "kid" I mean 30 year old)


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what year was this?

They could have also bought a new one and this way avoided all the bidding war nonsense
 
bigpoppa said:
what year was this?

They could have also bought a new one and this way avoided all the bidding war nonsense
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2 months ago
Move in next week

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Scuba Steve said:
My parents gave me 10 percent to buy my first house and I intend to do the same for my kids when it is time. I bought the cheapest house that was livable on the market at the time and expect the same.

Sent using a thumb maybe 2
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A friend keeps hammering into his kids that they live in a 40k house. That was the initial downpayment. Since then, they have been paying rent to themselves, no additional "investment" required as you need to pay to live somewhere. Four property ladder jumps along the way and they are in a ~2M house. He's glossed over some expenses along the way but in general, he is correct. He is contemplating a long distance move which would require renting until he can find a place to buy. His rent will be double his mortgage payment and the house will be substantially worse.
 
I haven't crunched the long term numbers but what if the government offered options A and B. Non-reversible for life.

Option A. The present capital gains rules stand.

Option B. The mortgage interest becomes a tax deduction but any gain in property value becomes taxable.

Look at a $750K starter home with $250 K down. Does the tax savings of $800-900 a month make a change in the market? Roughly a $10K a year taxable income reduction and tax kick back vs the potential untaxed gain on a $750 K starter.

re the down payment. Marry, live in a basement apartment , cheap honeymoon, no car or vacations for 3-4 years.

Are the mega weddings money makers or do the parents just shell out for the glamour. Money is made to the point of armed guards but is there a payout for the parents who could have given the kids the money instead?
 
nobbie48 said:
I haven't crunched the long term numbers but what if the government offered options A and B. Non-reversible for life.

Option A. The present capital gains rules stand.

Option B. The mortgage interest becomes a tax deduction but any gain in property value becomes taxable.

Look at a $750K starter home with $250 K down. Does the tax savings of $800-900 a month make a change in the market? Roughly a $10K a year taxable income reduction and tax kick back vs the potential untaxed gain on a $750 K starter.

re the down payment. Marry, live in a basement apartment , cheap honeymoon, no car or vacations for 3-4 years.

Are the mega weddings money makers or do the parents just shell out for the glamour. Money is made to the point of armed guards but is there a payout for the parents who could have given the kids the money instead?
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At current interest rates and house appreciation rates, A is miles ahead. Interest is <3%, prices are increasing by >10%. If interest rates were 18% and prices increasing by 2%, B would be the winner. Picking A or B could be the most expensive lottery ticket you ever purchase.
 
GreyGhost said:
Your kids may be able to because of bank of dad. (Eg. You sell the condo and give up the increased equity to boost your kids). A random kid whose parents havent been sitting on real estate for the past decade is not likely to be a buyer.
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You would think. Squeeze and I agree we'll give each one 50K (from condo equity) but even with some of their own savings it's still very much an uphill battle. For sure they'll have a better chance than kids w/o BOD but it will be tough.
 
nobbie48 said:
I haven't crunched the long term numbers but what if the government offered options A and B. Non-reversible for life.

Option A. The present capital gains rules stand.

Option B. The mortgage interest becomes a tax deduction but any gain in property value becomes taxable.

Look at a $750K starter home with $250 K down. Does the tax savings of $800-900 a month make a change in the market? Roughly a $10K a year taxable income reduction and tax kick back vs the potential untaxed gain on a $750 K starter.

re the down payment. Marry, live in a basement apartment , cheap honeymoon, no car or vacations for 3-4 years.

Are the mega weddings money makers or do the parents just shell out for the glamour. Money is made to the point of armed guards but is there a payout for the parents who could have given the kids the money instead?
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There is already chatter about cap gains going from 50% to 75%. JT is broker than broke.
Hope I can flog my condo before it jumps AND it will.
 
Laws of supply and demand apply here. Lots of demand and little growth in supply.
The feds are considering some type of cap gains tax on primary residences. They will deny it but they asked CMHC to look into it for them. Estimated govt revenue about 78 billion a year. Peanuts with the way they spend.
If that comes in, and they are always starved for your money to give away, get ready. If it happens and I'm about to sell, that tax will be added to the price.

Pops
 
Pops said:
Laws of supply and demand apply here. Lots of demand and little growth in supply.
The feds are considering some type of cap gains tax on primary residences. They will deny it but they asked CMHC to look into it for them. Estimated govt revenue about 78 billion a year. Peanuts with the way they spend.
If that comes in, and they are always starved for your money to give away, get ready. If it happens and I'm about to sell, that tax will be added to the price.

Pops
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Great but the seller doesn't really set the price it will sell for whatever current market will bear.

Sent using a thumb maybe 2
 
"if" a capital gains tax of 50%-75% comes in on a primary residence, they will be creating a very bleak future for the elderly and the families that sell the house to bankroll long term care.
I'll be selling this McMansion and buying a much less expensive dig. I like to travel and entertain and my friends will gather at a table I set anywhere.
Yes its a lot of gov't revenue possible , but they don't add much value with money I give them now .
 
crankcall said:
"if" a capital gains tax of 50%-75% comes in on a primary residence, they will be creating a very bleak future for the elderly and the families that sell the house to bankroll long term care.
I'll be selling this McMansion and buying a much less expensive dig. I like to travel and entertain and my friends will gather at a table I set anywhere.
Yes its a lot of gov't revenue possible , but they don't add much value with money I give them now .
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I have no problem with it for flippers but I've made well over a million on my prime residence over many decades. It would mean paying taxes on $750 K which would mean about $375 K to Justin. A third of that gain has been in the last two years. If the price bench mark is set at the tax announcement it wouldn't be as drastic. Whatever they do it will be the thin edge of the wedge for down the road.

A lot of people only have their home equity to cover themselves when they need a seniors home. They scrimped to build equity and the government takes it away. Not everyone has posh pensions. CPP and OAS isn't enough.

I know some people that feel they don't owe their kids a cent but many have worked all their lives to pay for a gift to their offspring, the gift being an estate of value. In principle it's little different from working overtime to buy your kid a new bike and someone steals it.

Even if they only went after the flippers and came in hard it could hurt innocent people.

IE. The flipper tax rates goes to 75% October 1 so all the flippers dump their properties and prices drop. John Doe who takes delivery of his new home finds that the sale of his old place won't give him enough to make the move work. The percentages have to be worked in gradually, say 5% per year for five years, giving people time to adjust.

I would have a lesser problem with it if it did some good in the world. How much has it cost us in dollars and bodies to get nowhere in Afghanistan? We seem to have little ROI with humanitarian efforts as well.
 
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The problem with any capital gains tax on primary residences is how and when.... in other-words mom and pop bought the house in 1970 for 30K, it is now worth 1M and they sell a week after the new rules, will they pay tax on 970K or on the perceived value it increased in the week after the new rules came in or something in between. Some people will fear monger the worst case, some with say don't worry best case.... we don't know until we know.

We can also think about this globally, and today's prices are really just a sign the GTHA and Canada has joined the big boy pants crowd price wise. Try to buy in Manhattan, London, Paris..... etc.


Another thought, tax revenue wise maybe we should increase HST. A large portion of the population (hated by some here.... the boomers) will be dropping their income as they retire but they will continue to spend..... Queue the usual GTAM crowd that want zero tax and no services and think that will work...
 
backmarkerducati said:
The problem with any capital gains tax on primary residences is how and when.... in other-words mom and pop bought the house in 1970 for 30K, it is now worth 1M and they sell a week after the new rules, will they pay tax on 970K or on the perceived value it increased in the week after the new rules came in or something in between. Some people will fear monger the worst case, some with say don't worry best case.... we don't know until we know.

We can also think about this globally, and today's prices are really just a sign the GTHA and Canada has joined the big boy pants crowd price wise. Try to buy in Manhattan, London, Paris..... etc.


Another thought, tax revenue wise maybe we should increase HST. A large portion of the population (hated by some here.... the boomers) will be dropping their income as they retire but they will continue to spend..... Queue the usual GTAM crowd that want zero tax and no services and think that will work.
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We can adjust and fiddle taxes until doomsday comes. The government will always need more and big money will always pay less.

The system is financial incest at its worst.

IMO any new taxes that have been considered have been pre-spent the way a lot of people spend next weeks paycheque before they get it.
 
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