Real Estate

GTA house market

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Deal Addict
Jul 21, 2009
1676 posts
1424 upvotes
Toronto
GTA12345 wrote: Wow, there really are a few examples.

Even ones that sold 2009-2013 haven't kept up in terms of % gains. Are we thinking these are now just out of fashion, too big and too much lot? Or did their price point just get too high for the bulk of the market? So odd.
There are tons of these outliers but the mostly are luxury homes. A few bad deals made by people many years ago are just bad deals and wont’t change the market trends.

Examples:
Deal Fanatic
Jul 30, 2015
5098 posts
4402 upvotes
Toronto, ON
submarine wrote: There are tons of these outliers but the mostly are luxury homes. A few bad deals made by people many years ago are just bad deals and wont’t change the market trends.

Examples:
When people lose this much money does it come out of their pocket or is it somehow rolled into the new mortgage? It is a question I ask where houses are sold for significantly less than what they were bought for.
Deal Fanatic
Jul 30, 2015
5098 posts
4402 upvotes
Toronto, ON
skipper1979 wrote: US has midterm election in fall. No ruling govt can will election with this much inflation,
Now, they want to do something early and fast. Rumors are that Fed is planning to shock the system with 0.5% rate hike and start of QT, which will drain liquidity from system. Boc is also thinking on same lines now.
This is so tricky because of the elections. You can get inflation which is bad but if the stock market goes down from higher rates that is also a bad look. So is less job creation from rate increases. Trudeau doesn't have this problem at home so he may be more willing to play with fire.
Deal Addict
User avatar
Feb 4, 2015
1341 posts
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The wages did not increase that much (if at all)... yet people can afford to buy houses at such high prices!
Deal Addict
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Apr 29, 2010
1625 posts
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GTA
barmadrid wrote: The wages did not increase that much (if at all)... yet people can afford to buy houses at such high prices!
You have to get a new job to “reset” to the current market average

Unless you get stonks in your job, staying more than a couple years (even with promos) is a good way to give your employer a discount

Everyone that switched jobs in the pandemic got a 30-100% raise.
Member
Jan 9, 2012
314 posts
336 upvotes
canoek wrote: This is so tricky because of the elections. You can get inflation which is bad but if the stock market goes down from higher rates that is also a bad look. So is less job creation from rate increases. Trudeau doesn't have this problem at home so he may be more willing to play with fire.
Canada inflation is 30 year high. It will keep printing this numbers for at-least 6 months yoy comparison. He called election last fall because he knew number would look bad in near future. He is not completely off the hook. It is still a minority govt. The the opposition pull the plug in 2nd year which start this fall is still in play.

https://www.cbc.ca/news/business/inflat ... -1.6320085
Last edited by skipper1979 on Jan 25th, 2022 12:00 am, edited 1 time in total.
Deal Addict
Jun 18, 2020
4224 posts
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barmadrid wrote: The wages did not increase that much (if at all)... yet people can afford to buy houses at such high prices!
Remember, not everyone needs to get the increase to keep up with housing, only the buyers do. Just a few houses on each street that sell, that person may have gotten a huge raise. The other 50 owners aren't buying so their wage changes don't matter.

Looking at the incomes of a whole population when a tiny fraction buy in a yr (those few are "making" the new price levels), it isn't really telling us much.
Deal Fanatic
Jul 3, 2011
6517 posts
3798 upvotes
Thornhill
GTA12345 wrote:
Even ones that sold 2009-2013 haven't kept up in terms of % gains. Are we thinking these are now just out of fashion, too big and too much lot? Or did their price point just get too high for the bulk of the market? So odd.
That's a great point.

Here's a chart I did showing the progression in average price for all of the GTA, for condos, fh towns, semis and detached at 6 month intervals since 2016. The intent was to see how quickly affordability was being eroded for move-up buyers. It's pretty stark! For example where by Dec. 2018 the difference in average price for a condo and a semi detached was $145,000 it is now $469,000. It's a reality that the lack in supply is a bottleneck from move-up buyers running up against unaffordability.

Image
Sr. Member
Jan 14, 2008
842 posts
594 upvotes
Toronto
coupled with all the other factors discussed (interest rates, etc) I think constrained supply is the primary reason of the prices going up...

i recall a lot of freehold production builders in the suburbs, like Mattamy, etc used to have many sites and projects selling and available... but these days they are very quiet, even though they own large parcels of land for development, such as in Milton. Even when they do a release, its just of a couple blocks of homes at a time...
further i hear small builders have to go leaps and bounds through red tape to build,

The developers are limiting the supply, letting prices and profits fatten. this supply issue needs to be addressed for prices to adjust
Deal Expert
May 30, 2005
49008 posts
10301 upvotes
Richmond Hill
gc99 wrote: coupled with all the other factors discussed (interest rates, etc) I think constrained supply is the primary reason of the prices going up...

i recall a lot of freehold production builders in the suburbs, like Mattamy, etc used to have many sites and projects selling and available... but these days they are very quiet, even though they own large parcels of land for development, such as in Milton. Even when they do a release, its just of a couple blocks of homes at a time...
further i hear small builders have to go leaps and bounds through red tape to build,

The developers are limiting the supply, letting prices and profits fatten. this supply issue needs to be addressed for prices to adjust
Considering most builders are 1) private 2) bought land many years ago on pennies on the dollar, and 3) carrying costs on their loans are low, there hasn't been much incentive for them to sell, other than to try and time the market. With #3 starting to disappear, it might help with the situation, but #1 and #2 still stand.
Tons of things for sale!
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Deal Addict
Jun 18, 2020
4224 posts
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licenced wrote: That's a great point.

Here's a chart I did showing the progression in average price for all of the GTA, for condos, fh towns, semis and detached at 6 month intervals since 2016. The intent was to see how quickly affordability was being eroded for move-up buyers. It's pretty stark! For example where by Dec. 2018 the difference in average price for a condo and a semi detached was $145,000 it is now $469,000. It's a reality that the lack in supply is a bottleneck from move-up buyers running up against unaffordability.

Image
Very eye opening chart, the gains in semis and towns trailing by not much in $ despite starting points being so different from detached. It is a bit concerning to me, the levels were getting to. End of day, I'm just not sure how much upside is left for some pricier burbs. Jan will have a good chance of seeing Vaughan and Markham detached cross 2m avg, Oakville and RH already there. At one point, will people start to look at what the 2m gets, and ask themselves if it's worth it (assuming they can afford it, and that pool is shrinking fast above 2m).

We all agree most buyers would prefer detached to attached, but at one point if you're looking at 40k per car every few yrs, tens of thousands for a kid(s) to go to uni, vacation desires, etc, the extra 500k become daunting. It's not just about future gains, people gotta live for the next ten/twenty yrs.

I'm no bear, but when you've got a million people in those 4 burbs I mentioned, that's a lot of housing stock to find demand for, if we expect the 2m prices to go up that much more. It's one thing for a C zone in 416 to keep going to 3m, but how many will actually line up to pay 2.5m for 2500 sq ft 40 ft lot with builder finishes?

In that way, maybe the bull run continues for places with averages sub 1.5m detached. For the others higher, I'm not so sure. The Bayview Hill experience makes me wonder if it's a micro market example of what happens when people with money decide Nah, that's just too much for the house.

I dont live in a 2m house, I'm not saying I'd sell if I did. But I'm starting to like my potential for 2022 gains over some friends with the 2m homes.
Sr. Member
Jul 4, 2018
526 posts
468 upvotes
GTA12345 wrote: Very eye opening chart, the gains in semis and towns trailing by not much in $ despite starting points being so different from detached. It is a bit concerning to me, the levels were getting to. End of day, I'm just not sure how much upside is left for some pricier burbs. Jan will have a good chance of seeing Vaughan and Markham detached cross 2m avg, Oakville and RH already there. At one point, will people start to look at what the 2m gets, and ask themselves if it's worth it (assuming they can afford it, and that pool is shrinking fast above 2m).

We all agree most buyers would prefer detached to attached, but at one point if you're looking at 40k per car every few yrs, tens of thousands for a kid(s) to go to uni, vacation desires, etc, the extra 500k become daunting. It's not just about future gains, people gotta live for the next ten/twenty yrs.

I'm no bear, but when you've got a million people in those 4 burbs I mentioned, that's a lot of housing stock to find demand for, if we expect the 2m prices to go up that much more. It's one thing for a C zone in 416 to keep going to 3m, but how many will actually line up to pay 2.5m for 2500 sq ft 40 ft lot with builder finishes?

In that way, maybe the bull run continues for places with averages sub 1.5m detached. For the others higher, I'm not so sure. The Bayview Hill experience makes me wonder if it's a micro market example of what happens when people with money decide Nah, that's just too much for the house.

I dont live in a 2m house, I'm not saying I'd sell if I did. But I'm starting to like my potential for 2022 gains over some friends with the 2m homes.
I think people who buy those 2M are Not first home buyers, mostly upgrading from 1.3M townhomes, and so increases mortgage is 800,000 or $3000 per month

Wages wise many people are switching jobs and getting 30% hike and that would offset above increased mortgage.

People who buy those 1.3M TH must be first home buyers or condo/stack upgrades category


By this pattern, since there are many condo buildings and many immigrants coming in, demand for freehold TH and detached will stay very strong, all the way upto 2M for TH and 3 for detached
Deal Expert
May 30, 2005
49008 posts
10301 upvotes
Richmond Hill
GTA12345 wrote: Very eye opening chart, the gains in semis and towns trailing by not much in $ despite starting points being so different from detached. It is a bit concerning to me, the levels were getting to. End of day, I'm just not sure how much upside is left for some pricier burbs. Jan will have a good chance of seeing Vaughan and Markham detached cross 2m avg, Oakville and RH already there. At one point, will people start to look at what the 2m gets, and ask themselves if it's worth it (assuming they can afford it, and that pool is shrinking fast above 2m).

We all agree most buyers would prefer detached to attached, but at one point if you're looking at 40k per car every few yrs, tens of thousands for a kid(s) to go to uni, vacation desires, etc, the extra 500k become daunting. It's not just about future gains, people gotta live for the next ten/twenty yrs.

I'm no bear, but when you've got a million people in those 4 burbs I mentioned, that's a lot of housing stock to find demand for, if we expect the 2m prices to go up that much more. It's one thing for a C zone in 416 to keep going to 3m, but how many will actually line up to pay 2.5m for 2500 sq ft 40 ft lot with builder finishes?

In that way, maybe the bull run continues for places with averages sub 1.5m detached. For the others higher, I'm not so sure. The Bayview Hill experience makes me wonder if it's a micro market example of what happens when people with money decide Nah, that's just too much for the house.

I dont live in a 2m house, I'm not saying I'd sell if I did. But I'm starting to like my potential for 2022 gains over some friends with the 2m homes.
Price compression has always been happening and will always continue to happen as long as the price does not go up as fast as affordability does. Detached has never been as profitable of an investment as towns or semis - condos are a bit different because of the fees.
Tons of things for sale!
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Jul 3, 2011
6517 posts
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Thornhill
Lavaris1 wrote: Wages wise many people are switching jobs and getting 30% hike and that would offset above increased mortgage.

People who buy those 1.3M TH must be first home buyers or condo/stack upgrades category

By this pattern, since there are many condo buildings and many immigrants coming in, demand for freehold TH and detached will stay very strong, all the way upto 2M for TH and 3 for detached
Nope doesn't compute.

The percentage of people who bought homes for more than $2 million via TRREB's agents in 2021 amounted to a scant 6.4%

To afford a home with a mortgage one's TDS cannot be more than 39%

Testing your statement then, and based on the facts of the chart, if someone was moving up from a town, they'd need to have purchased it in 2016 in order to put $600k down . Allowed TDS maxes at 39%. In order to afford that $1.4 million mortgage today at 1.30=1.40%, it would encompass:

mortgage of $5,500/mth
Taxes of $670/month
Heat of $500/momth
where just to carry these 3 needs a gross annual income of $205,000.

But of course we know TDS also includes credit card debt, car payments - if you just add $400 a month for those, gross income needed now jumps to $217,000 per year.

A 30% increase to get you to that means household income was $167,000

Obviously, since only 6.4% of all purchase were above $2 million, the number making enough to afford such a property is not anywhere big enough to maintain the housing market.

It's still the vast majority (65%) who purchased for less than $1,500,000 obviously the vast majorit just don't make that kind of coin,

I sets of clients trying to move up, some with significant equity and with some hefty pay increases thanks to promotions or switching jobs, yet they've been forced to enlarge the perimter search area, and continually reduce their expectation even after accounting for the growth in their current property and that's because, like the chart shows, the disarity in growth is quite stark.
Sr. Member
Dec 25, 2019
937 posts
1306 upvotes
licenced wrote: That's a great point.

Here's a chart I did showing the progression in average price for all of the GTA, for condos, fh towns, semis and detached at 6 month intervals since 2016. The intent was to see how quickly affordability was being eroded for move-up buyers. It's pretty stark! For example where by Dec. 2018 the difference in average price for a condo and a semi detached was $145,000 it is now $469,000. It's a reality that the lack in supply is a bottleneck from move-up buyers running up against unaffordability.

Image
thats why condo owners are not selling , specially those 2 or 3 bedroom condo/apartment owners dont see any reason to sell . who are selling the ones moving far away or bought their condo 20 years ago and dont have any mortgage to pay . move up to Freehold means 500k extra adding to your mortgage min, even if u paid off ur mortgage long time ago. Market for FTHB is getting tighter and tighter everyday as a result. unless we see significant appreciation (40%) on Condo or Condo Townhouse Market we will continue to see low inventory next couple of years. those ppl who are living in 1 bedroom condos ,once they have kids they are also moving up to 3 bedroom condo or Condo Townhouse which is putting more pressure for FTHB with kids ...
Sr. Member
Nov 8, 2011
838 posts
538 upvotes
Etobicoke
Does anyone here know about the urban towns at Junction (Old Weston and Keele I believe)? The project is called Reunion crossing.
Sr. Member
Apr 7, 2016
921 posts
731 upvotes
Canada
JayLove06 wrote: I’m in a new build townhouse and don’t hear voices or music. Only thing I hear faintly the odd time is footsteps. I’ve heard horror stories about some townhouses where you literally hear everything but a lot of condos are like that too. The building code changed recently when it comes to construction between units so maybe look at a newer townhouse.

The concrete block townhouses are better. Or the poured concrete ones as well.
i am in a newly built detached. When I fart in my masterbed washroom, everyone can hear it till the garage
low quality compared to my previous semi detached
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Deal Expert
Feb 29, 2008
21738 posts
21353 upvotes
Tarrana & The Ri…
VictoryBoyxx wrote: i am in a newly built detached. When I fart in my masterbed washroom, everyone can hear it till the garage
low quality compared to my previous semi detached
Yea, it’s crazy how prices have gone up but quality has gone down. These are all little things that can easily be addressed during construction but builders are cheap. My childhood house was built in the 70s. It’s better built than my current house. We are all getting scammed

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