so on a million dollar home in toronto the actual house is 200k and the land is 800k for the luxury of living in a traffic nightmare?
lmao
never under estimate the stupidity of the herd
Canada's housing bubble?
- Thread starter stinkynuts
- Start date
lmao
never under estimate the stupidity of the herd
You may not realise it if you never get out of your car but there is more to toronto than just driving. There are many people who love the downtown lifestyle and work and play downtown. Just walking around at night feeling the vibe can be enjoyable.
I know there are people who don't like crowds and would never walk in the "big city". I have neighbour's near my farm who have never been to toronto in their entire life but can tell me (and often do) what is wrong with toronto. I always wonder why they spend so much thought and energy on a place they have been. I also feel sad for them that they are limiting themselves in this way.
I like cities because I love being with people. I have been in new York for the thanksgiving parade more than a few times- the streets are so packed that it's hard to move but the vibe is so upbeat- people out with their kids and family- everyone having a great time- talking to complete strangers.
But I also love the country. The quiet stillness, walking through the woods with my dogs, canoeing on a silent lake, trapping rabbits for dinner, picking apples from our orchard, planting vegetables, shooting the occasional deer and butchering them for the table, watching the dogs enjoy the liver, talking with my neighbour's and riding our horses in the early morning.
So there is no "stupidity of the herd" as you said. It's people doing what they want and living the life they want which may not match your desires. The price of land is high because more people disagree with your choice of lifestyle than agree with it
You may be right but I know plenty of thirty year old professionals who live downtown who don't own cars
Toronto house prices in 1915 and in 2014-15.
http://www.thestar.com/news/gta/2015/06/04/if-only-you-had-bought-these-toronto-houses-in-1915.html
Query: Was $3,000 annually a good salary back in 1915? If true, then a house was worth one year's salary in 1915 and there was no income tax in 1915.
http://www.thestar.com/news/gta/2015/06/04/if-only-you-had-bought-these-toronto-houses-in-1915.html
Query: Was $3,000 annually a good salary back in 1915? If true, then a house was worth one year's salary in 1915 and there was no income tax in 1915.
Yes, $3,000 was a really good salary in 1915. It appears the average salary was $800.
You can disagree whether we're in a housing bubble, that's opinion. But whether there's been painful corrections before in Canada, there have been (the last one being in the early 90s, which is why some argue we're overdue). So your statement is factually untrue.
As long as interest rates are low in this 2.5 - 3% range, there will be no bubble bursting. At worst, prices stabilize.
What will kill prices is if some reason interest rates skyrocket to 5, 6, 10+% like the 80s. In that case that $500k mortgage at 3% ($15k/yr interest... excluding payments for principle pay off) which is manageable turns into $25k, $30k, $50k interest per year. That is not affordable for most people unless someone or a couple makes tons of money. If that happens, suddenly people can't afford mnthly payments and then they dump and move to something cheaper. Prices have increased a lot i 10 years, so even a spike back to 6% like around 2006 would be killer for many people.
As long as there's demand, low interest rates and wages that are stable, prices will rise and eventually stabilize.
The whole housing bubble has been promoted for 10+ years. Anyone who got influenced by fearmongers (all those banking analysts and mortgage brokers trying to sell or convert your mortgage) has lost big time. The best bet has beern a variable rate which for at least 10 years has had a better rate than fixed terms by probably at least 0.50%. My variable rate is about 2% for 5 years. Anyone who's paid fixed term rates has lost out on probably paying $10,000+ of extra interest charges in the past 10 years for nothing. While I've paid 2-3% variable rate for a long time, people I know locking in at fixed rates are paying around 4% since they locked in years ago before all these new 2.5% or 3% fixed terms came about. So unfortunately for them, they're paying a solid 1% more per year which can be big money if their mortgage is $200-300k. Every year is another $2-3k in extra interest they are paying. Ouch.
It's been so long, I can't remember the last time (if ever) a fixed rate was better than a variable rate.
If I remember correctly, GTA and most major Canadian metros have growing populations. So as long as there's demand, prices will increase. Most new developments are cramped townhouses and condos, which helps the price of large family homes as the demand for them is high, but hardly any new developments are big homes. So that just makes existing family homes hike up in prices even more.
What will kill prices is if some reason interest rates skyrocket to 5, 6, 10+% like the 80s. In that case that $500k mortgage at 3% ($15k/yr interest... excluding payments for principle pay off) which is manageable turns into $25k, $30k, $50k interest per year. That is not affordable for most people unless someone or a couple makes tons of money. If that happens, suddenly people can't afford mnthly payments and then they dump and move to something cheaper. Prices have increased a lot i 10 years, so even a spike back to 6% like around 2006 would be killer for many people.
As long as there's demand, low interest rates and wages that are stable, prices will rise and eventually stabilize.
The whole housing bubble has been promoted for 10+ years. Anyone who got influenced by fearmongers (all those banking analysts and mortgage brokers trying to sell or convert your mortgage) has lost big time. The best bet has beern a variable rate which for at least 10 years has had a better rate than fixed terms by probably at least 0.50%. My variable rate is about 2% for 5 years. Anyone who's paid fixed term rates has lost out on probably paying $10,000+ of extra interest charges in the past 10 years for nothing. While I've paid 2-3% variable rate for a long time, people I know locking in at fixed rates are paying around 4% since they locked in years ago before all these new 2.5% or 3% fixed terms came about. So unfortunately for them, they're paying a solid 1% more per year which can be big money if their mortgage is $200-300k. Every year is another $2-3k in extra interest they are paying. Ouch.
It's been so long, I can't remember the last time (if ever) a fixed rate was better than a variable rate.
If I remember correctly, GTA and most major Canadian metros have growing populations. So as long as there's demand, prices will increase. Most new developments are cramped townhouses and condos, which helps the price of large family homes as the demand for them is high, but hardly any new developments are big homes. So that just makes existing family homes hike up in prices even more.
Possibly.
But about 8-9 years ago, mortgage prime kept increasing. From about 4% it increase to 6%. Two whole percent, yet nothing happened. This was before the global crisis of 2008-2009. The global crisis didn't really affect Canada either. So it shows Canada's housing market is resilient. Then that 6% mortgage prime kept dropping and dropping plateauing to 3% in 2010 and plateaued there for years. And then (contrary to every analyst out there), interest rates dropped again, where mortgage prime is now 2.85%. Anyone who has a variable rate from years back is only paying about 2%. I know a guy whose paying 1.85% because that lucky ass got a var rate of mortgage prime - 1%.
With bottom of the barrel rates like this where the normal rate is around 2.5 - 3%, there is no trouble.
A house in Toronto in 1915 cost $3,700 (inflation adjusted is $74,400) and that same house to-day is worth $850,000. Over the long term the house appreciated 23 fold although I'm sure there were "bumps" along the way.
Toronto proper is not the issue. This is the 4rth largest city in n.america and for the 416 to be $1M+ is reasonable.
The problem is when you have 3000 sq ft homes in Mississauga going for 750-800k. People with 155k pre-tax income getting qualified and buying those homes. THAT is the bubble and THAT is the problem.
http://www.theglobeandmail.com/glob...ances/house-poor-couple-debt/article24370722/
Repeat in Brampton, Ajax and all the other suburbs with family incomes less than 200k (before tax) and you start seeing how house poor they are and just ONE negative life event away from foreclosure.
Why do some like chocolate and others vanilla? Some like blondes, others like brunettes?
Why do some people fail to accept that not all people like the same things and then insult them for their preferences? Even if one can't understand others' preferences, it takes someone extremely narrow minded (and that's being polite) to not even realize people are entitled to their personal preferences.
Who lives in traffic? We just walk or bike around our compact downtown neighbourhoods; it's you 'burbanites who chose to sacrifice your comfort and well-being to the demands of your cars and who are now trapped and imprisoned in them every time you want to go anywhere. You are the traffic nightmare.
Mind you, we would be happier if you'd wise up and leave your cars in their houses — y'know the ones with the double-wide overhead doors across the front and the little people access for the keeper down the side — and just come downtown by yourselves. Your damn parked and abandoned cars both litter the landscape and obstruct the roads we people need to use, and that's a real nightmare.
Sharing usually means less individual expense. Transit, taxis and delivery services are other forms of sharing. And some folks prefer to have servants do the schlepping rather than be their own low-cost manual labour in unrewarding tasks like driving parcels around.
To be fair, I've lived in both suburbs and cramped urban areas. Both have pros and cons.
Personally, I like the burbs. Quieter, more spacious, less people, taxis and ugly street car everywhere. And for a lot less money, you get a bigger better home and bigger yards.
And in the burbs, you rarely see homeless people stumbling around and asking for money.
The reason that any correction has been put off is because the precarious position families have been in for years has been supported by low interest rate and easy access to credit. The second one or both of these is no longer the case, the domino effect will be devastating.
Those that deny we are in a bubble because it has not corrected yet are merely cherry-picking facts. Taken as a whole, nobody can walk away unconcerned. That's why every single public and private unbiased institution that analyzes real estate in Canada is at the very least somewhat concerned. The only ones that aren't generally have a dog in the fight (ie. Real Estate Boards etc.). I often refer to a favourite movie of mine, Dante's Peak. The arguments in favour of "no worrying" are strikingly similar.
Interesting Fact: All those regions you mention experienced a correction in the double-digits in the early 90s. Fact: Because of this historical fact, any statement that in Canada "bubbles never burst" has been negated. Whether anyone thinks a correction is coming or not is pure speculation on either part of the argument, even from analysts. But what can't be denied is that there HAVE been corrections.
I can and I did.
If you haven't lived here then you don't know anything about it.
As ffor cancer- I had lung cancer last year. Thanks
