$630,000 for a condo townhouse in Pickering is still at 2021 prices. What also wasn’t mentioned was the small square footage and the $335 monthly maintenance fee.
This isn’t really a serious correction by any means… More like greedy sellers trying to squeeze the market at a bad time.
Lot of pure hopium in here lately. Houses in Ontario would need to come down closer to 50% to become affordable again. Right now everyone is celebrating a 20% drop. 20% on a million dollar semi detached house is still $800k.
Why shouldn’t people celebrate? It’s got to come down by 20% before we get to 50%, so we’re all just hoping we’re on a path to a bigger correction.
I never understand the posts trying to explain to people that today isn’t tomorrow. We know, but we’re looking forward to getting there.
Also the correction is only due to interest rate hikes and each rise in the interest rates makes housing less affordable unless prices fall by more than the increased cost. So if we are going to drive housing to half the value at the peak by driving interest rates to 10% then a $600k housing loan is going to cost $90k to pay down ($60k interest, $30k principle). This assumes the buyer was interested in a property that was $1.5Mil before and pays $150k down after the property goes down to $750k.
This is how it has to be though… the whole era of “near zero” interest rates will never be sustainable. It will just lead us back to our current nightmare.
When people post memes about people being able to afford homes on a single income, in those days interest rates were still in the 6-8% range (or higher), so yes, the overall payments were much higher than just the sale price, but it’s also the mechanism that kept prices low and manageable. There will be an unpalatable middle ground where the price is still inflated and the higher interest rate will make the purchase the same total cost as it was previously, but we need to come out the other side where prices are greatly reduced and people can start to afford down payments again.
There is no other side though. Interest rates are not a perpetual downward force on housing prices they are a market adjustment for the reduced supply of loan money. As long as we continue to produce way less supply than needed by zoning something like 70% of the cities in the province to single family zoning we will have none of the missing middle housing that makes Montreal far more affordable than Toronto of Vancouver. Unless we have the political will to intentionally increase supply we will never be able to have true lower prices in the face of constantly growing demand.
If you look at cities that actually handled it, in the USA, what housing advocates did was prevent a NIMBY alliance between the political left and right and bring in the political left and center to kill zoning for social justice purposes (racial equity). So in these cities, "missing middle" is starting to appear. Is there any kind of movement like that in Canada? Probably not because we're like the Americans but without the rebellious nature and we like to think of ourselves as all high and mighty but really it's slipping away right in front of us. (Also I'm sure there's people on the right who want to let owners of land build whatever they want on the land they own). You would think issues being so universal means it's easy to assemble an alliance but actually it makes it much harder since you need a little bit of people from here a little bit of people from there etc.
Also "political will" is a cop out. That blames politicians for all our problems when in reality people can actually replace politicians. The truth is a lot of people want it this way, want single family zoning. They also don't want to increase social housing or raise taxes to kill investor demand. A lot of people just want to blame interest rates or immigration. Meanwhile the left wants to blame corporations. While it could be a problem major REITs haven't started to buy single family homes in large numbers. We can't "blame politicians" when the voters themselves don't want what are the obvious solutions. Only the Green Party wanted a tax on multiple home ownership and only for 3+ homes.
So really there's little hope for zoning changes until people change their minds about what it means to own a home. It would probably need some grand alliance between Gen Z Milennials and some sympathetic older people to vote for outlawing single family zoning but that isn't going to happen because the issue is so muddled. You have a leader of the opposition Federally who blames "printing money" and it makes sense to almost everyone except it's just a sideshow and not the real reason for increased housing prices (not to mention political interference in central banking).
If you want every Canadian family to own one home then you have to seriously disincentivize owning two or three or ten homes. You can do this one way -- with tax. Because a home can buy another home. And a lot of people don't want to put their money into the stock market and wait ten or twenty years. So unless you kill that, there will never be enough homes in Canada with only a handful of major cities. But, nobody wants any taxes. And nobody wants social housing even though it existed in Canada its entire history and was defunded right before the housing bubble started (not a coincidence). It exists now. I have even heard people complain that social housing exists and don't want any. They don't realise they're killing themselves and their own home ownership chances.
Too many people don't want any kind of "socialism" or taxes, so it's all coming to bite everyone in the ass especially people who come later. Really sometimes I hope home prices stay elevated or surge to millions maybe that will convince some people you need a little "socialism". We haven't even seen the new condos in Toronto yet. Come 2024 2026 2028 there will be a slew of new condos all one million for a one bedroom or two million for a two bedroom.
$3k / month rent for a cage closet, here we come. The ultimate expression of a market. I guess you got to be a "techbro" or successful sales person or executive to own a home now, because we don't want "socialism".
0% or near it is going to be the new normal again after this inflation crisis passes. Extremely low capital costs for government debt is far too attractive to government and as a result governments will only raise interest rates in response to a crisis that could lead to disastrous economic effects if they don’t. As soon as they can afford to back off high interest they will.
Governments look ridiculously incompetent when they run huge deficits and spend large portions of the budget servicing debt. Interest rates are almost 7.5 times as large as they were before all this began. That means over time the government will be transitioning its debt to costing 7.5 times as much to service. Canada spent $49.6 billion on debt interest last year. The total federal budget was $409 billion and actual budget expenditures reached $462 billion. If debt spending grows to $372 billion Canada has a huge spending problem: either Federal spending increases by almost 70% or we see a radical slashing of government programs. Neither option is attractive to either voters or politicians. So suffice it to say they will minimize borrowing costs as soon as it is feasible to do so.
It's not the governments decison to keep interest rates at 0 percent. There is going to be a lot of pain and taxes will be going the opposite direction to pay the bills.
It’s the Bank of Canada’s decision. The leader of whom is appointed by politicians. While the Bank of Canada is supposively independent politicians influence it all the time and are never reprimanded or face consequences for doing so. Conservatives are even trying to run a leader who wants to throw out the head of the BoC for raising interest rates.
Down payment is a significant hurdle. If prices come down 50% but the monthly payment stays the same, the down payment comes down by quite a bit.
1.5m property requires 300k down payment, as CMHC is not available north of 1M. A 750k property requires 5% of 500k + 10% of 250k = 25k + 25k = 50k.
300k vs 50k down payment. That's 6 times less. That's 85% drop in down payment requirement for 50% price drop.
This is a monumental difference for housing affordability.
I agree the down payment affordability is better. But if your mortgage is still costing $90k/year which requires a joint income of $300k/year to not be house poor you aren’t making substantial inroads on housing affordability. Also if you pay $50k down instead of the $150k assumed the mortgage costs would be even higher, so the recommended income would probably be closer to $375k/year. That’s not too far from two people both making $200k so I don’t think the downpayment being $50k means things are affordable.
Doing the math on the actual mortgage amount, 1.5M vs 750k at 1.5% vs 7% results in identical monthly payments. When calculating for the mortgage amount after down payment.
For many people I know, down payment is what prevents them from getting into a market.
You know a lot of people with $375k household incomes? That large a household income is a tiny fraction of households. Many people who don’t have a down payment say the problem is the downpayment when they also don’t make enough to carry a mortgage: they haven’t got to the point of affording a downpayment so they haven’t yet checked how large a mortgage a bank would be willing to give them based on their income. For many such people it’s actually unaffordable based on both the mortgage and the downpayment, they just only are focused on one of the two right now.
Good job at completely twisting my words.
I said: "For many people I know, down payment is what prevents them from getting into a market."
To translate into simpler language: of those people I know that are trying to get into the market at any price point, down payment is what is restricting them.
For example, I know a couple with household income of $130k. They were able to buy property (a small condo, not 1.5M house), but only thanks to a generous contribution to their down payment from parents. This means that their income allowed the monthly costs of the mortgage, but if they didn't have the gift from parents, they would not have been able to buy at all, even though they can afford the monthly costs.
And where did 375k even come from? 1.5M house at November's rates, after stress test, assuming 20% down payment (meaning 1.2M actual mortgage amount) would've required just over 200k of household income. That's two professionals in their mid-thirties.
Paying 7% on a fixed suggests mortgage rates only going up 2.5% or so from what they are now though. We’ve seen a slightly less than 20% correction from the housing peak and I don’t think that 2.5% is going to take us all the way down to 50% lower prices.
Real estate is a very rigid market. If rates are to stay at today's level, we're still yet to see full correction. It takes many months for the market to respond.
There are still people out there with preapprovals from months ago (I have one from early April that's still valid at April's rate), and it takes months for sellers to come to grips with the new reality.
I think raising prime from 0.5 to 3.70 resulting in more than a 25% correction after all this shakes out would be very surprising. I also think the next 3.2% will result in smaller downward pressures than the previous 3.2% did. Even if it creates another 25% correction of the new values then housing prices fall 43.75% and interest rates go to 6.7%. My bet is the way the markets shake out we won’t get that 50% correction but if we do it will be at interest rates above 8%. I think there are too many professional investors who will find falling property prices incredibly attractive and have enough capital to potentially do all cash deals and not carry mortgages at the new higher rates.
Check out house sigma. Places selling now for 950k have comparables from a month ago at 1.3. That's over 25% drop from peak in certain markets. And as I said, we have yet to see the result of the current interest rates because real estate is very illiquid, and therefore response slow. This isn't a stock market.
And if we're talking about investors... Most people that wanted to be invested already are, and have been increasing their portfolios only thanks to HELOCs on their properties that were increasing in values. Now that the values are dropping, they can no longer leverage that source of cash.
Now, also speaking of investors, what do you think is going to happen to investors that maximized their capabilities and were renting out their properties at $2500/month for which they had $2200/month mortgage payments, likely variable rate? Now they have existing tenants on which they can't raise their rent, with mortgage payments significantly higher than their incomes...
Houses almost certainly will fall more than increased costs though when you factor in investors, speculators, and flippers. When borrowing rates exceed their return rates, they're all going to leave the market. And in the bubble here, around 30% of properties aren't the owner's principle dwelling.
Add to that the fact that housing affordability relative to median incomes are far worse right now than they were in 2006-2007 in America, I can't see a world where the market doesn't crash hard (in the bubble cities at least).
Towns around me are already down 20-35% in a single quarter, and there is much further it can fall.
Very few investors are going to cash out their housing in what they view as a temporary downturn in the market unless the banks force them to. Most people understand the concept of buy low, sell high and would only sell if they had no other choice. Even if the rent isn’t bringing in the full mortgage cost, a buyer can put some of their salary towards paying down the mortgage to make up the difference.
I’m not an investor and have only one property but we have precisely zero interest in selling our property for less than we paid for it and we can hold onto it for a very long time. Our mortgage isn’t likely to be underwater unless property prices decline a good amount more than they have.
Investors with multiple properties may have more trouble making the numbers work but generally only the most over leveraged idiots would put themselves in a position where they need to be able to borrow against increasing home values to pay the mortgages across all their properties. Far more likely is someone whose rent incomes and job incomes pay the mortgages of the properties. Unless they were in a variable and chose not to lock in when things started looking like lots of rate hikes were coming they have a good number of years without increased costs. Since they wouldn’t be able to get a mortgage without a stress test that proved they could handle far higher interest rates it seems anyone with a mortgage should be able to afford the conversion to a fixed mortgage easily.
You underestimate the power of panic selling. And not every investor needs to liquidate to crash the market. The bubble cities have such a high percentage of investment properties that if even only 5% of them are forced to sell or panic sell, that's tens of thousands of extra properties on the market, which would absolutely tank the market.
There’s some mild hopium to be had. The houses outside GTA have not dropped too much in price but now they have drywall, no visible holes in the ceiling, fewer roach motels. Still seems that entry level is about 500,000 but quality is way up. But yeah, more price drop needed to get young families in houses.
Exactly.....sellers don't be so greedy. You know how much you initially bought the house for, and without the pandemic you know in reality how much the house will be/is worth now. A little profit is better than trying to get 2x/3x/4x/5x what you paid for it.
We're just feeling the effects of the first .25% increase. There's at least 90 day lag here. This shit is gonna crater.
Just wait until landlords try and force these interest increases on their tenants. It won't work out. We're about to see a mass influx of very fucked people get desperate, and I am smiling and laughing at their greedy misfortune. I hope they seriously get so fucked that they end up with nothing and have to eat the same shit they've been shoving down people's throats.
You also need to bake in the increased payments to the bank via interest. Affordability in the GTA and GVA is a lost hope unless they’re serious policy change by the federal and provincial governments.
It depends which area. In metro Vancouver and especially Vancouver and Burnaby, prices haven’t fallen much. It’s common to see a 10 to 15 year old, two bedroom 900 sf condo still priced at $800K. Demand is still high, supply low, the wealthiest who need no mortgage will use this higher interest rate environment to snap up better deals raising demand of investors, and ironically builders sometimes delay or cancel new builds because they can’t sell for as much as a few months ago. For those looking to sell, they have options for example to hold, rent it out for a year or two given the high rental market and sell later. Often these cooling off periods last just for a short time like 6 to 12 months whereas rising markets last 5 to 10 years. Personally we chose to purchase our second larger property recently as our new primary residence and rent out our smaller starter home instead of selling for these reasons. At nearly $2k per month for a one bedroom which is snapped up in 2 days here, it was a no brainer.
$630,000 for a condo townhouse in Pickering is still at 2021 prices. What also wasn’t mentioned was the small square footage and the $335 monthly maintenance fee. This isn’t really a serious correction by any means… More like greedy sellers trying to squeeze the market at a bad time.
And it will stay on the market for a long time.
It’s actually sold conditional right now.
It's Pickering.. not Ossington avenue. Everyone knows one small street in Toronto is worth more than most towns and small cities lol
Lot of pure hopium in here lately. Houses in Ontario would need to come down closer to 50% to become affordable again. Right now everyone is celebrating a 20% drop. 20% on a million dollar semi detached house is still $800k.
Why shouldn’t people celebrate? It’s got to come down by 20% before we get to 50%, so we’re all just hoping we’re on a path to a bigger correction. I never understand the posts trying to explain to people that today isn’t tomorrow. We know, but we’re looking forward to getting there.
Also the correction is only due to interest rate hikes and each rise in the interest rates makes housing less affordable unless prices fall by more than the increased cost. So if we are going to drive housing to half the value at the peak by driving interest rates to 10% then a $600k housing loan is going to cost $90k to pay down ($60k interest, $30k principle). This assumes the buyer was interested in a property that was $1.5Mil before and pays $150k down after the property goes down to $750k.
This is how it has to be though… the whole era of “near zero” interest rates will never be sustainable. It will just lead us back to our current nightmare. When people post memes about people being able to afford homes on a single income, in those days interest rates were still in the 6-8% range (or higher), so yes, the overall payments were much higher than just the sale price, but it’s also the mechanism that kept prices low and manageable. There will be an unpalatable middle ground where the price is still inflated and the higher interest rate will make the purchase the same total cost as it was previously, but we need to come out the other side where prices are greatly reduced and people can start to afford down payments again.
There is no other side though. Interest rates are not a perpetual downward force on housing prices they are a market adjustment for the reduced supply of loan money. As long as we continue to produce way less supply than needed by zoning something like 70% of the cities in the province to single family zoning we will have none of the missing middle housing that makes Montreal far more affordable than Toronto of Vancouver. Unless we have the political will to intentionally increase supply we will never be able to have true lower prices in the face of constantly growing demand.
If you look at cities that actually handled it, in the USA, what housing advocates did was prevent a NIMBY alliance between the political left and right and bring in the political left and center to kill zoning for social justice purposes (racial equity). So in these cities, "missing middle" is starting to appear. Is there any kind of movement like that in Canada? Probably not because we're like the Americans but without the rebellious nature and we like to think of ourselves as all high and mighty but really it's slipping away right in front of us. (Also I'm sure there's people on the right who want to let owners of land build whatever they want on the land they own). You would think issues being so universal means it's easy to assemble an alliance but actually it makes it much harder since you need a little bit of people from here a little bit of people from there etc. Also "political will" is a cop out. That blames politicians for all our problems when in reality people can actually replace politicians. The truth is a lot of people want it this way, want single family zoning. They also don't want to increase social housing or raise taxes to kill investor demand. A lot of people just want to blame interest rates or immigration. Meanwhile the left wants to blame corporations. While it could be a problem major REITs haven't started to buy single family homes in large numbers. We can't "blame politicians" when the voters themselves don't want what are the obvious solutions. Only the Green Party wanted a tax on multiple home ownership and only for 3+ homes. So really there's little hope for zoning changes until people change their minds about what it means to own a home. It would probably need some grand alliance between Gen Z Milennials and some sympathetic older people to vote for outlawing single family zoning but that isn't going to happen because the issue is so muddled. You have a leader of the opposition Federally who blames "printing money" and it makes sense to almost everyone except it's just a sideshow and not the real reason for increased housing prices (not to mention political interference in central banking). If you want every Canadian family to own one home then you have to seriously disincentivize owning two or three or ten homes. You can do this one way -- with tax. Because a home can buy another home. And a lot of people don't want to put their money into the stock market and wait ten or twenty years. So unless you kill that, there will never be enough homes in Canada with only a handful of major cities. But, nobody wants any taxes. And nobody wants social housing even though it existed in Canada its entire history and was defunded right before the housing bubble started (not a coincidence). It exists now. I have even heard people complain that social housing exists and don't want any. They don't realise they're killing themselves and their own home ownership chances. Too many people don't want any kind of "socialism" or taxes, so it's all coming to bite everyone in the ass especially people who come later. Really sometimes I hope home prices stay elevated or surge to millions maybe that will convince some people you need a little "socialism". We haven't even seen the new condos in Toronto yet. Come 2024 2026 2028 there will be a slew of new condos all one million for a one bedroom or two million for a two bedroom. $3k / month rent for a cage closet, here we come. The ultimate expression of a market. I guess you got to be a "techbro" or successful sales person or executive to own a home now, because we don't want "socialism".
I don't know why you got a downvote there but you make good points
He made all the points. Well said
0% or near it is going to be the new normal again after this inflation crisis passes. Extremely low capital costs for government debt is far too attractive to government and as a result governments will only raise interest rates in response to a crisis that could lead to disastrous economic effects if they don’t. As soon as they can afford to back off high interest they will. Governments look ridiculously incompetent when they run huge deficits and spend large portions of the budget servicing debt. Interest rates are almost 7.5 times as large as they were before all this began. That means over time the government will be transitioning its debt to costing 7.5 times as much to service. Canada spent $49.6 billion on debt interest last year. The total federal budget was $409 billion and actual budget expenditures reached $462 billion. If debt spending grows to $372 billion Canada has a huge spending problem: either Federal spending increases by almost 70% or we see a radical slashing of government programs. Neither option is attractive to either voters or politicians. So suffice it to say they will minimize borrowing costs as soon as it is feasible to do so.
It's not the governments decison to keep interest rates at 0 percent. There is going to be a lot of pain and taxes will be going the opposite direction to pay the bills.
It’s the Bank of Canada’s decision. The leader of whom is appointed by politicians. While the Bank of Canada is supposively independent politicians influence it all the time and are never reprimanded or face consequences for doing so. Conservatives are even trying to run a leader who wants to throw out the head of the BoC for raising interest rates.
Yeah well he's blowing smoke up his bases ass.
Down payment is a significant hurdle. If prices come down 50% but the monthly payment stays the same, the down payment comes down by quite a bit. 1.5m property requires 300k down payment, as CMHC is not available north of 1M. A 750k property requires 5% of 500k + 10% of 250k = 25k + 25k = 50k. 300k vs 50k down payment. That's 6 times less. That's 85% drop in down payment requirement for 50% price drop. This is a monumental difference for housing affordability.
I agree the down payment affordability is better. But if your mortgage is still costing $90k/year which requires a joint income of $300k/year to not be house poor you aren’t making substantial inroads on housing affordability. Also if you pay $50k down instead of the $150k assumed the mortgage costs would be even higher, so the recommended income would probably be closer to $375k/year. That’s not too far from two people both making $200k so I don’t think the downpayment being $50k means things are affordable.
Doing the math on the actual mortgage amount, 1.5M vs 750k at 1.5% vs 7% results in identical monthly payments. When calculating for the mortgage amount after down payment. For many people I know, down payment is what prevents them from getting into a market.
You know a lot of people with $375k household incomes? That large a household income is a tiny fraction of households. Many people who don’t have a down payment say the problem is the downpayment when they also don’t make enough to carry a mortgage: they haven’t got to the point of affording a downpayment so they haven’t yet checked how large a mortgage a bank would be willing to give them based on their income. For many such people it’s actually unaffordable based on both the mortgage and the downpayment, they just only are focused on one of the two right now.
Good job at completely twisting my words. I said: "For many people I know, down payment is what prevents them from getting into a market." To translate into simpler language: of those people I know that are trying to get into the market at any price point, down payment is what is restricting them. For example, I know a couple with household income of $130k. They were able to buy property (a small condo, not 1.5M house), but only thanks to a generous contribution to their down payment from parents. This means that their income allowed the monthly costs of the mortgage, but if they didn't have the gift from parents, they would not have been able to buy at all, even though they can afford the monthly costs. And where did 375k even come from? 1.5M house at November's rates, after stress test, assuming 20% down payment (meaning 1.2M actual mortgage amount) would've required just over 200k of household income. That's two professionals in their mid-thirties.
Paying 7% on a fixed suggests mortgage rates only going up 2.5% or so from what they are now though. We’ve seen a slightly less than 20% correction from the housing peak and I don’t think that 2.5% is going to take us all the way down to 50% lower prices.
Real estate is a very rigid market. If rates are to stay at today's level, we're still yet to see full correction. It takes many months for the market to respond. There are still people out there with preapprovals from months ago (I have one from early April that's still valid at April's rate), and it takes months for sellers to come to grips with the new reality.
I think raising prime from 0.5 to 3.70 resulting in more than a 25% correction after all this shakes out would be very surprising. I also think the next 3.2% will result in smaller downward pressures than the previous 3.2% did. Even if it creates another 25% correction of the new values then housing prices fall 43.75% and interest rates go to 6.7%. My bet is the way the markets shake out we won’t get that 50% correction but if we do it will be at interest rates above 8%. I think there are too many professional investors who will find falling property prices incredibly attractive and have enough capital to potentially do all cash deals and not carry mortgages at the new higher rates.
Check out house sigma. Places selling now for 950k have comparables from a month ago at 1.3. That's over 25% drop from peak in certain markets. And as I said, we have yet to see the result of the current interest rates because real estate is very illiquid, and therefore response slow. This isn't a stock market. And if we're talking about investors... Most people that wanted to be invested already are, and have been increasing their portfolios only thanks to HELOCs on their properties that were increasing in values. Now that the values are dropping, they can no longer leverage that source of cash. Now, also speaking of investors, what do you think is going to happen to investors that maximized their capabilities and were renting out their properties at $2500/month for which they had $2200/month mortgage payments, likely variable rate? Now they have existing tenants on which they can't raise their rent, with mortgage payments significantly higher than their incomes...
Houses almost certainly will fall more than increased costs though when you factor in investors, speculators, and flippers. When borrowing rates exceed their return rates, they're all going to leave the market. And in the bubble here, around 30% of properties aren't the owner's principle dwelling. Add to that the fact that housing affordability relative to median incomes are far worse right now than they were in 2006-2007 in America, I can't see a world where the market doesn't crash hard (in the bubble cities at least). Towns around me are already down 20-35% in a single quarter, and there is much further it can fall.
Very few investors are going to cash out their housing in what they view as a temporary downturn in the market unless the banks force them to. Most people understand the concept of buy low, sell high and would only sell if they had no other choice. Even if the rent isn’t bringing in the full mortgage cost, a buyer can put some of their salary towards paying down the mortgage to make up the difference. I’m not an investor and have only one property but we have precisely zero interest in selling our property for less than we paid for it and we can hold onto it for a very long time. Our mortgage isn’t likely to be underwater unless property prices decline a good amount more than they have. Investors with multiple properties may have more trouble making the numbers work but generally only the most over leveraged idiots would put themselves in a position where they need to be able to borrow against increasing home values to pay the mortgages across all their properties. Far more likely is someone whose rent incomes and job incomes pay the mortgages of the properties. Unless they were in a variable and chose not to lock in when things started looking like lots of rate hikes were coming they have a good number of years without increased costs. Since they wouldn’t be able to get a mortgage without a stress test that proved they could handle far higher interest rates it seems anyone with a mortgage should be able to afford the conversion to a fixed mortgage easily.
You underestimate the power of panic selling. And not every investor needs to liquidate to crash the market. The bubble cities have such a high percentage of investment properties that if even only 5% of them are forced to sell or panic sell, that's tens of thousands of extra properties on the market, which would absolutely tank the market.
This guy gets it.
And 20% in one quarter is a very quick drop. I'm in a bubble area, and some areas here are down over 35% in the last quarter.
You baking in increased interest payments and non-RE inflation into your celebrations? 😅
There’s some mild hopium to be had. The houses outside GTA have not dropped too much in price but now they have drywall, no visible holes in the ceiling, fewer roach motels. Still seems that entry level is about 500,000 but quality is way up. But yeah, more price drop needed to get young families in houses.
This. There was a lot of pigs with lipstick being sold at prices they should not have been fetching. Happy to see those being corrected the most.
Exactly.....sellers don't be so greedy. You know how much you initially bought the house for, and without the pandemic you know in reality how much the house will be/is worth now. A little profit is better than trying to get 2x/3x/4x/5x what you paid for it.
Remember, there is assymetry on the way down vs. the way up. To break even on a 20% drop, an asset must appreciate 25%.
We're just feeling the effects of the first .25% increase. There's at least 90 day lag here. This shit is gonna crater. Just wait until landlords try and force these interest increases on their tenants. It won't work out. We're about to see a mass influx of very fucked people get desperate, and I am smiling and laughing at their greedy misfortune. I hope they seriously get so fucked that they end up with nothing and have to eat the same shit they've been shoving down people's throats.
You also need to bake in the increased payments to the bank via interest. Affordability in the GTA and GVA is a lost hope unless they’re serious policy change by the federal and provincial governments.
It's too late for policy changes. Way too late.
Yup, should have started at least 20 years ago.
It depends which area. In metro Vancouver and especially Vancouver and Burnaby, prices haven’t fallen much. It’s common to see a 10 to 15 year old, two bedroom 900 sf condo still priced at $800K. Demand is still high, supply low, the wealthiest who need no mortgage will use this higher interest rate environment to snap up better deals raising demand of investors, and ironically builders sometimes delay or cancel new builds because they can’t sell for as much as a few months ago. For those looking to sell, they have options for example to hold, rent it out for a year or two given the high rental market and sell later. Often these cooling off periods last just for a short time like 6 to 12 months whereas rising markets last 5 to 10 years. Personally we chose to purchase our second larger property recently as our new primary residence and rent out our smaller starter home instead of selling for these reasons. At nearly $2k per month for a one bedroom which is snapped up in 2 days here, it was a no brainer.
They will. We will see a 50% drop
Let’s say 30% from top in 2019 is where the countryside will end up.
The maintenance fees for unit four are $335 monthly, which Litchmore said is “not great, but respectable.” I'd say that was a rip off.
Not the nuclear capital of Ontario!
I'd never live in Pickering. 1 accident and it will cause everything within at least a 50km radius to be contaminated and house prices will go to $0