Buying New house in Toronto (price decline trend)

[lyndon3009]

Prices are definitely down across the board. Some areas (e.g., suburbs, high immigrant neighborhoods, etc.) have been hit much harder than others, with price drops of 30% from last year. Regardless, market activity is down right across the board and houses are taking MUCH longer to move.

I expect an interest rate hike next month from BoC, and at least a couple more in the next 9 months. With half of the outstanding mortgages up for renewal this year, this will put a lot of extra financial pressure on people who have large mortgages. As a result, I think that the worst is yet to come, and 2019 will present a lot of interesting buying opportunities in Toronto.

I agree with this comment. I am in the market for a detached house in Toronto and I think the next two rate hikes will slash many buyers purchasing power.

Also with the ongoing trade war against China I have a feeling that many Chinese buyers are rushing to get their money our of China and invest in somewhere safer. But in the longer run, many of them in my view would not be able to spend extravagantly as before.

Bring on 2019!

 

[Copingwithlife]

Prices are definitely down across the board. Some areas (e.g., suburbs, high immigrant neighborhoods, etc.) have been hit much harder than others, with price drops of 30% from last year. Regardless, market activity is down right across the board and houses are taking MUCH longer to move.

I expect an interest rate hike next month from BoC, and at least a couple more in the next 9 months. With half of the outstanding mortgages up for renewal this year, this will put a lot of extra financial pressure on people who have large mortgages. As a result, I think that the worst is yet to come, and 2019 will present a lot of interesting buying opportunities in Toronto.

Not everywhere in the city . I live in Central Toronto East, street behind me for example, house went up for sale 2 days ago, sold 2 days later a little bit over asking . Think it went for $1.4 million .My building , a condo, low rise , nothing fancy , converted factory into loft . 1 bedroom, 598 sq feet , asking $599k, sold $749k , time on market , three days . Oh and if you want the parking spot , that’s a extra $50k
Those that bought in 10 years ago when those same units went for $220k, laughing

 

[steaky]

I agree with this comment. I am in the market for a detached house in Toronto and I think the next two rate hikes will slash many buyers purchasing power.

Also with the ongoing trade war against China I have a feeling that many Chinese buyers are rushing to get their money our of China and invest in somewhere safer. But in the longer run, many of them in my view would not be able to spend extravagantly as before.

Bring on 2019!

Even before the trade war, Chinese buyers have been buying properties in Canada. It's just the vacancy tax that makes you feel they are not able to spend extragantly as before.

 

[Vitesze]

Even before the trade war, Chinese buyers have been buying properties in Canada. It's just the vacancy tax that makes you feel they are not able to spend extragantly as before.

I used to rent a 1BR suite in a house originally built as a 3BR in 2011. Sold in 2013 for $900K. Sold again in 2015 for $1.4M. Owner of property lives in China, and had one of his friends? act as the landlord. A total of 8 people lived in this house - Garage was renovated into a 1BR suite - Living room was renovated into another 1BR suite. Landlord lived upstairs and shared his living space with 2 other renters.

Renters were 2 singles, me+partner and another couple+child.

Crazy

 

[canuck78]

I used to rent a 1BR suite in a house originally built as a 3BR in 2011. Sold in 2013 for $900K. Sold again in 2015 for $1.4M. Owner of property lives in China, and had one of his friends? act as the landlord. A total of 8 people lived in this house - Garage was renovated into a 1BR suite - Living room was renovated into another 1BR suite. Landlord lived upstairs and shared his living space with 2 other renters.

Renters were 2 singles, me+partner and another couple+child.

Crazy

Guessing you Iive in Vancouver. Lots of real estate games being played and a lot of sketchy things going on. Seems like the poor Canadian citizen that is not involved in the real estate business, who declares their income and who is just trying to live is always the one who loses. Vancouver will be the one that loses in the end when they can no longer find nurses, teachers, etc. that are willing to live in a box to live in Vancouver and move away.

 

[Vitesze]

Guessing you Iive in Vancouver. Lots of real estate games being played and a lot of sketchy things going on. Seems like the poor Canadian citizen that is not involved in the real estate business, who declares their income and who is just trying to live is always the one who loses. Vancouver will be the one that loses in the end when they can no longer find nurses, teachers, etc. that are willing to live in a box to live in Vancouver and move away.

Yup Vancouver! Forgot to mention it. Any industry that has low-wages is doing pretty bad right now because employers can't find employees anymore who are willing to put up with conditions like these. Our employer had a Habitat for Humanities (building housing for low-income families) team building event a while ago. One of the families scheduled to move in these houses were living in an 800sqft 1BR with 2 adults + 4 kids (!).

Unfortunately, the power here still very much lies with the substantial portion of the population that comfortably live in their single-family home (bought at right time, inherited or living for a long time) and will absolutely block any attempt for densification. Vancouver is the only 1M+ city I know of in the world where you have entire neighbourhoods of single-family housing practically in a 5m walking distance of the Downtown area.

 

[YVR123]

I used to rent a 1BR suite in a house originally built as a 3BR in 2011. Sold in 2013 for $900K. Sold again in 2015 for $1.4M. Owner of property lives in China, and had one of his friends? act as the landlord. A total of 8 people lived in this house - Garage was renovated into a 1BR suite - Living room was renovated into another 1BR suite. Landlord lived upstairs and shared his living space with 2 other renters.

Renters were 2 singles, me+partner and another couple+child.

Crazy

That is crazy....

@_@

 

[steaky]

Guessing you Iive in Vancouver. Lots of real estate games being played and a lot of sketchy things going on. Seems like the poor Canadian citizen that is not involved in the real estate business, who declares their income and who is just trying to live is always the one who loses. Vancouver will be the one that loses in the end when they can no longer find nurses, teachers, etc. that are willing to live in a box to live in Vancouver and move away.

The poor Canadian citizen has his/her involvement by occupy and pay rent to the landlord.

Also, why didn't they buy in the right time instead of spending money, for example, on weeds?

 

[steaky]

That is crazy....

@_@

Not difficult to imagine after seen some single detached homes in Vancouver with at least three separate hydro meters.

 

[lyndon3009]

Not difficult to imagine after seen some single detached homes in Vancouver with at least three separate hydro meters.

Toronto isn't very far behind. Last week I visited a townhouse in the Weston area and there were 16 tenants living. You heard me right, a townhouse of 16 tenants.

It is not because I want/need to buy a house in Toronto soon that I am hoping the bubble will burst. It is more that this situation is killing Toronto in the long run.

 

[lyndon3009]

The poor Canadian citizen has his/her involvement by occupy and pay rent to the landlord.

Also, why didn't they buy in the right time instead of spending money, for example, on weeds?

It's hard sometimes to understand the choice people make in their lives.

For example I know a French girl working for an "insurance company" in Mississauga. Compare to the common situation for many young people in France, I guess she earns a decent amount of money here. She is renting a bedroom close to Toronto downtown and commute by bus to work everyday. When I asked her why wouldn't she rent in Mississauga to lower her rent and save on commuting time/cost, she told be Mississauga would be too isolating for her..

I am only 32 years old but I can't understand what's going through the minds of some people who are just a few years younger than me. Spending their last dimes, unable to build up any significant equity but somehow thinking they are part of all the "big things" happening here in Toronto.

 

[Vitesze]

The poor Canadian citizen has his/her involvement by occupy and pay rent to the landlord.

Also, why didn't they buy in the right time instead of spending money, for example, on weeds?

Because:
(1) It's a matter of take it, or leave . If you don't agree to see place right away and sign the lease almost on the spot, the landlord can find at least 10 other people willing to. Besides, not many places in BC other than the Metro Vancouver area actually have any jobs.
(2) Most of the older generation (i.e. 35yo+) did. For millenials though, house prices have been at a very unaffordable level for a long time now.

To be clear, this doesn't pertain to me - I moved here willingly, and don't really have any right to complain about anything. I can definitely see the issue though for local people for whom Vancouver is part of their identity but who can barely even get by.

For example I know a French girl working for an "insurance company" in Mississauga. Compare to the common situation for many young people in France, I guess she earns a decent amount of money here. She is renting a bedroom close to Toronto downtown and commute by bus to work everyday. When I asked her why wouldn't she rent in Mississauga to lower her rent and save on commuting time/cost, she told be Mississauga would be too isolating for her.

You're correct about this not making sense and there indeed is a significant portion of people deciding to live in the most unaffordable of places just because (in Vancouver we have Kitsilano which is crazy expensive but huge groups of millenials live there). The older generation though (not referring to you) doesn't always realize that everywhere is expensive - I live in a suburb arguably in a less-desired neighbourhood but until a month ago I was still spending 40% of my take-home income (45K) on a 600sqft 1BR. No car, one-way 1h commute to work by bus. Many people I know would spend even more than that.

There's some more affordable cities in Canada (e.g. Edmonton, Calgary, Winnipeg) but most immigrants either are on an employer-specific work permit, or don't have an established network yet and for them the big cities are their best bet for a job. I think a lot of young people would take a job and live in a low-COL area if that was actually an option to them.

 

[YVR123]

Not difficult to imagine after seen some single detached homes in Vancouver with at least three separate hydro meters.

But you would expect 3 actual living space for 3 meters. (e.g. laneway house, basement suite and the main house)
This is a 3 bedroom house with a garage... with 8 ppl...

 

[YVR123]

Toronto isn't very far behind. Last week I visited a townhouse in the Weston area and there were 16 tenants living. You heard me right, a townhouse of 16 tenants.

It is not because I want/need to buy a house in Toronto soon that I am hoping the bubble will burst. It is more that this situation is killing Toronto in the long run.

This is not safe for 16 people living in one townhouse.... How would they fit there even with sleeping bags?

 

[Vitesze]

But you would expect 3 actual living space for 3 meters. (e.g. laneway house, basement suite and the main house)
This is a 3 bedroom house with a garage... with 8 ppl...

I was the one living in the garage. The wall literally still had the design/paint of the garage door on it but it was fixed in place. Most power outlets were on the ceiling. It's very much legal to rent your house out like this in Vancouver. Probably because if it were illegal, Vancouver would nowhere be able to house enough people for it's jobs (there's already a worker shortage in several industries here).

Several of my co-workers who are older and have houses, are renting out part of their house (to just 1 or 2 people), and their mortgage gets paid by the tenant essentially without having to do anything.