Question about Toronto housing

[springbloom]

Hi guys, I'm not local but I was surfing Realtor.ca for fun and was able to see only 217 houses out of 6247 houses total in the GTA that were 800K and under.
Most of these 217 were in Oshawa and a few in Brampton, aka suburbs. 85% of the houses are asking over 1 million.

Are people really taking a mortgage of 800k+ (20% down) and paying $3500 a month on housing alone ? This is on a median salary of 120K?

Is this the reality or am I missing something?

 

[Darts]

Some buyers on my street double up to buy a house. I guess that is joint ownership.

So, the median income in those cases is actually $240,000.

 

[springbloom]

Something doesn't make sense when you see 85% of the houses in GTA asking 1 million or more. There so many people in the service industry that make probably 60K. Think about all the people that do your haircut, drive your uber, renovate your home, work as movers, construction workers, librarians, teachers, etc. They got families and they;re living in million dollar homes?

 

[Happyhomer]

Just enjoy the windfalls. I sold three residential properties last year to cash in on high values and still have another three that are nicely rented. There are a ton of rich people in Toronto who have heavily invested in real estate created high demand.

 

[springbloom]

Just enjoy the windfalls. I sold three residential properties last year to cash in on high values and still have another three that are nicely rented. There are a ton of rich people in Toronto who have heavily invested in real estate created high demand.

Makes no sense though. How are the buyers approved for such large price tags with salaries of 100-250k ?

 

[Mr.Know-It-All]

Only half of Toronto residents own. The other half rents.

 

[Spunky1]

Not to mention a lot of these houses for sale in the city need to be totally gutted and renovated.
Post war era little bungalows in my old west end area are going for around a million. My old neighbor recently died and her kids had it on the market 2 days later. Sold instantly.
No AC .Fuse box , Knob and tube wiring , Oil furnace and the list goes on ....

 

[eddie kerr]

Only half of Toronto residents own. The other half rents.

Speaking of rents, my friend has a client who rents a house in Leside for $8,000 per month. Also, in Leside you can't find a decent 2 bedroom under $3,000.

 

[Butler1000]

Makes no sense though. How are the buyers approved for such large price tags with salaries of 100-250k ?

2 incomes. There is a lot of money in Toronto. 3 largest tech hub in NA. Banking centre of Canada. Govt seat for Ontario. Foreign cash for safety. Lots more reasons.

Call in the "Manhattanization of Toronto".

 

[springbloom]

2 incomes. There is a lot of money in Toronto. 3 largest tech hub in NA. Banking centre of Canada. Govt seat for Ontario. Foreign cash for safety. Lots more reasons.

Call in the "Manhattanization of Toronto".

With 2 incomes, you're looking at 250k. That's figure is probably on the higher end of the spectrum for the median family. However, 85% of the total inventory is over 1 million. This includes suburbs and low income workers. What gives? Only thing I can think of is high downpayments, like 50% down or something.

 

[Mr.Know-It-All]

With 2 incomes, you're looking at 250k. That's figure is probably on the higher end of the spectrum for the median family. However, 85% of the total inventory is over 1 million. This includes suburbs and low income workers. What gives? Only thing I can think of is high downpayments, like 50% down or something.

I believe that something like one-third of that 85% of inventory is owned by investors.

 

[Darts]

True story. Couple bought a house in High Park for $5,000 in the 1950's. Sold the same house in the 1990's (40 years later) for over $500,000. That is a 100 fold increase.

 

[Butler1000]

With 2 incomes, you're looking at 250k. That's figure is probably on the higher end of the spectrum for the median family. However, 85% of the total inventory is over 1 million. This includes suburbs and low income workers. What gives? Only thing I can think of is high downpayments, like 50% down or something.

Depends. How do people afford to live in San Fran, London, New York, Tokyo, LA etc. Right now Its Toronto. The build boom is continuing. Lots of large condo projects on the way.

Obviously people are doing it, as the inventory continues to move. People make sacrifices, get help from relatives, come in with equity from Condos, can use RRSP savings for down payments as long as its repaid in 15 years.

They add basement apts to help with mortgages, split(especially immigrants) with relatives. Lots if options.

 

[james t kirk]

Don't worry, higher interest rates will slow the real estate insanity currently gripping Canada and Toronto in particular.

The BOC has jacked interest rates by 75 basis points to date and by all accounts you can expect another 50 basis point increase in June (some are saying a full 100 basis points). In either case, more interest rate hikes are coming. Once they jack to a point where real estate prices start to decrease, that will lead to a stampede to the exit gates by all those speculating on real estate in Canada (mainly the Chinese). Then the market will flood with units for sale which will tip the scales firmly in favour of buyers. It won't be pretty.

Those of us old enough to remember 1992 / 1993 will recall that real estate prices in the GTA fell by 40 percent and did not recover fully for 10 years. I fully expect something like a 30 to 40 percent hair cut in real estate prices again.

 

[Frankfooter]

Don't worry, higher interest rates will slow the real estate insanity currently gripping Canada and Toronto in particular.

The BOC has jacked interest rates by 75 basis points to date and by all accounts you can expect another 50 basis point increase in June (some are saying a full 100 basis points). In either case, more interest rate hikes are coming. Once they jack to a point where real estate prices start to decrease, that will lead to a stampede to the exit gates by all those speculating on real estate in Canada (mainly the Chinese). Then the market will flood with units for sale which will tip the scales firmly in favour of buyers. It won't be pretty.

Those of us old enough to remember 1992 / 1993 will recall that real estate prices in the GTA fell by 40 percent and did not recover fully for 10 years. I fully expect something like a 30 to 40 percent hair cut in real estate prices again.

10% interest rates will do that.

If we get that high tons of people will lose their houses, though really, I'm sure that it won't take that much of an interest rate increase when you add in food and energy inflation.

 

[Butler1000]

Don't worry, higher interest rates will slow the real estate insanity currently gripping Canada and Toronto in particular.

The BOC has jacked interest rates by 75 basis points to date and by all accounts you can expect another 50 basis point increase in June (some are saying a full 100 basis points). In either case, more interest rate hikes are coming. Once they jack to a point where real estate prices start to decrease, that will lead to a stampede to the exit gates by all those speculating on real estate in Canada (mainly the Chinese). Then the market will flood with units for sale which will tip the scales firmly in favour of buyers. It won't be pretty.

Those of us old enough to remember 1992 / 1993 will recall that real estate prices in the GTA fell by 40 percent and did not recover fully for 10 years. I fully expect something like a 30 to 40 percent hair cut in real estate prices again.

I don't think it will be that bad. Then there was still open land to build in Toronto. Now with finite inventory and a 2 year immigration backlog about start coming in demand will be there.

Max 20% cut, and a quicker recovery is my worst case prediction.

 

[springbloom]

20% cut is still 1.28 million. Last year it went up 28% right.

 

[Darts]

"Jeff Rubin first caught the attention of financial markets in 1989 with his now-famous call for a 25 per cent decline in Toronto real estate prices."

 

[mdo2886]

Markets in the GTA already starting to show significant weakness and some beginning to crash. Oshawa is down 15% in just a few months.

Just the start of a massive, idiotic Ponzi scheme about to blow up.

 

[james t kirk]

I don't think it will be that bad. Then there was still open land to build in Toronto. Now with finite inventory and a 2 year immigration backlog about start coming in demand will be there.

Max 20% cut, and a quicker recovery is my worst case prediction.

Canada has the second largest land area on the planet.

There is lots of land on which to build a house. The problem is that everyone is concentrating in either Toronto or Vancouver and that needs to stop. If you look at the states, their population is spread out in many population centers. As such, you don't see the same kind of stupidity when it comes to real estate prices. (Well maybe in San Francisco and the Bay area. That is far worse than Toronto.)