Real Estate

How do people afford 1.5M + Homes in the GTA?

  • Last Updated:
  • Apr 15th, 2020 11:28 am
[OP]
Deal Addict
Feb 28, 2006
3592 posts
218 upvotes
Toronto

How do people afford 1.5M + Homes in the GTA?

I am curious how people afford these homes. Are they all cash deals/outside money? How do they even get a mortgage.

Even assuming people net 100k/year and you don't eat or pay utilities, it's still going to take you 20 years

Does everyone own a Canadian Tire?
...
88 replies
Sr. Member
Oct 13, 2011
761 posts
491 upvotes
Sprite_TM wrote: I am curious how people afford these homes. Are they all cash deals/outside money? How do they even get a mortgage.

Even assuming people net 100k/year and you don't eat or pay utilities, it's still going to take you 20 years

Does everyone own a Canadian Tire?
Trade up crowds, people who already own $1M homes. And those who buys $1M homes are the one who already owns $800k.
Deal Addict
User avatar
Aug 22, 2008
1300 posts
69 upvotes
Toronto
Assuming the buyers actually need a mortgage... Then the only thing that would allow them to buy these homes would be a huge down payment (either saved, or handed down...) or lenders that charge higher interest.
Jr. Member
Aug 22, 2011
150 posts
130 upvotes
NORTH YORK
It's a mix of wealthy immigrants and people who bought when prices were cheap ie. back in the year 2000 you could buy a house for 300,000 and now its worth well over million.
Deal Fanatic
Mar 27, 2004
5338 posts
3255 upvotes
Toronto
This is like asking how do people afford Hermes Bags, Mercedes e63 AMG..patek 5711

There are people that bought homes 25 years ago, that are now worth over 1m. They can just be changing up.
There are also successful business owners.
Immigrants with money, real estate in Toronto is still cheap. ie coming from HKG.
People with high paying jobs..etc
I can go on and on...there is a lot of wealth in Toronto.
Last edited by oasis100 on Apr 12th, 2020 8:31 pm, edited 1 time in total.
Full-time Realtor
Deal Addict
Nov 13, 2013
2550 posts
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Ottawa
Sprite_TM wrote: I am curious how people afford these homes. Are they all cash deals/outside money? How do they even get a mortgage.

Even assuming people net 100k/year and you don't eat or pay utilities, it's still going to take you 20 years

Does everyone own a Canadian Tire?

You need 300k down. A couple who both make $1o0k should be able to easily save this in 5 years if they are saving properly. Naturally this is a small minority most got down payment from parents or made money off their starter home/condo.
Banned
Jul 8, 2017
628 posts
699 upvotes
NA
That 1.5 M house only cost me 600 K to buy in 2009. If you hold 600K in stocks in 2009 your portfolio should be at around 1.4 M today even after the recent haircut of 20%. You can say thanks to all the banks in the world as you savings and wagers are becoming toilet paper after all these money printing in the past decade.
Deal Addict
Mar 2, 2017
1396 posts
2543 upvotes
Toronto
Sprite_TM wrote: I am curious how people afford these homes. Are they all cash deals/outside money? How do they even get a mortgage.

Even assuming people net 100k/year and you don't eat or pay utilities, it's still going to take you 20 years

Does everyone own a Canadian Tire?
I am not sure what your question is really trying to answer. Are you in disbelief that people can be successful and make a good living without owning a Canadian Tire lol? I mean that's not even a high bar income wise.

The common 'influx of rich immigrants' aside, plenty of people who bought even 10 years ago have 3x the equity, couple that with good career trajectory the common thing I see are people in their mid to late 30's now who bought that 320k bungalow in East York in 2010 are now selling it for $1M, household incomes between 250k-300k is common for 2 young professionals with a decade of experience (125k each) and now you are looking at 600-700k mortgage on a 1.5M house with 250k-300k household income. This is your commonly seen profile of "these" people.

Any lawyer/accountant/engineer/consultant/cop+OT/nurse/sales people/Programmers/tech workers/government worker/etc the earning potential is squarely in the 100k-200k range, most skew around 120k-150k. This is the under 40 crowd, the crowd above 40 has been enjoying even larger equity gains/savings/bull stock market, etc

These are the crowds I work with with and commonly see so there is self selection bias here, but I don't think I am very far off ignoring random outliers.
Realtor, Investor, CPA
Deal Guru
Feb 29, 2008
14173 posts
10496 upvotes
Most of those buyers are a combination of good job and move up buyers.

Home prices of tripled/quadrupuled in the last 10-15 years. Imagine selling a house for $1.3M and your mortgage is paid off since you bought it for $400K. You could easily buy a $1.5M home.
Deal Guru
Feb 9, 2009
11005 posts
9484 upvotes
Also a lot of multi generational living now.

Grandparents collecting pensions
Parents near the end of their careers making money
Kids starting out.

All of them earning an income. Either they will decide to go their separate ways (which means high demand for condos or towns/semis) or they will buy a bigger house for everyone to live (Detached).

Lots of this especially with South Asians and East Asian families. Many other also doing it now, especially kids who are not married and do not want to waste money on rent
Deal Addict
Nov 24, 2013
1378 posts
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Toronto
1 million doesn't get you a lot of home these days in the major urban areas of Canada
Deal Addict
User avatar
Mar 30, 2010
3152 posts
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Greater Toronto Area
I made a killing selling hand crafted artisan toilet paper to Oakville soccer moms. Another month of this and I'll finally be able to afford a house on bridal path.
<removed>
Deal Guru
Feb 9, 2009
11005 posts
9484 upvotes
lpin14 wrote: 1 million doesn't get you a lot of home these days in the major urban areas of Canada
Yep I remember forest hill homes in 1998-99 going for $700k, those same homes if renovated are probably well over 5 million now.
Deal Fanatic
Mar 27, 2004
5338 posts
3255 upvotes
Toronto
This is a troll thread.
Full-time Realtor
Member
Feb 7, 2019
226 posts
141 upvotes
1.Timing. Some people purchased their home back in 2010 when it wasn’t that expensive.

2. Some people made lots of money through their work, investments, business.

3. Luck. They have bank mom and dad or they inherit a large amount of money from their relatives.
Deal Fanatic
Mar 27, 2004
5338 posts
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Toronto
broker I work with owns like 15 properties in toronto. he is under 35.

tons of hustlers out there.
Full-time Realtor
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Nov 1, 2001
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Toronto
Peopl who were able to buy houses earlier lucked out. It's tough to play catch up working a regular job. People I know who can afford these homes have inheritance and can buy a house without mortgage. There's other folks, but those are the people I know.
Deal Guru
Feb 9, 2009
11005 posts
9484 upvotes
oasis100 wrote: This is a troll thread.
I thought that too but look at all the bears who cant believe people can afford 1.5 mil homes. They are shocked. They are in awe. This is why most bears cry and complain on here and hope for a huge crash so they can even dip their toes into a condo or small townhouse let alone a 3500 sq ft detached that will never be within their reach, even if they work hard cause they are always market timing and getting it wrong.

If some of these bears had just bought condos even 2-3 years ago they'd be up like 50% or more...
Deal Guru
Feb 9, 2009
11005 posts
9484 upvotes
oasis100 wrote: broker I work with owns like 15 properties in toronto. he is under 35.

tons of hustlers out there.
I wish we could have more posters like this who can tell their stories instead of the usual whining complaining bears who contribute zero to this board, probably zero to society.

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