Real Estate

The most scary thing is...

  • Last Updated:
  • Feb 27th, 2018 11:29 am
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[OP]
Member
Feb 13, 2018
495 posts
532 upvotes

The most scary thing is...

it seems there will be no end to this until the house price come down a lot (affordable means a lot lower than it is now)... and when the parties see they can get votes by crashing the RE, they will do it. Evil house speculators, a picture that is getting painted.

Wynne will likely see this as the golden vote-grabbing opportunity and make things worse.

Lower house price is good for econ, people will actually have extra money to spend other than mortgage for life.
34 replies
Deal Guru
Feb 9, 2009
11301 posts
9797 upvotes
And yet we have the biggest growth in what --decades? Housing is fine...

Toronto is expensive... Winnipeg is not. You cant afford it here, leave!
Member
Jun 30, 2009
348 posts
201 upvotes
Calvin140 wrote: US housing crash and Lost Decade(Japan)
Yes but I don’t feel the majority of the US ended up like the lost decade of Japan. Recovery in stocks took about a year. Housing is also on the rise. The US housing market never rocketed like the Canadian one. This wouldn’t be unusual though. There is more opportunity to build in the US (not a lot of protection for green space).
There are definitely people there who never recovered from the crash, but I believe they are a very small minority.
I highly doubt we will see the same temporary level of losses the US saw back in 2008. Still seeing growth in prices in quite a few areas.
Deal Guru
Feb 22, 2011
10476 posts
12999 upvotes
Toronto
The thing is everyone is so mad about it because they want housing. How can you make something affordable that everyone wants? Even these interest rates that everyone is spurning on makes it harder to buy. Stricter lending, makes it harder to buy. Even with prices lower than last April I don't think a first time home buyer is any better off. Condos are still near all time highs and houses are still what $1.3m?
[OP]
Member
Feb 13, 2018
495 posts
532 upvotes
Sanyo wrote: And yet we have the biggest growth in what --decades? Housing is fine...

Toronto is expensive... Winnipeg is not. You cant afford it here, leave!
Don't get too emotional. I think you might need to start to get used to the downtrend. If your mortgage is paid off or carry lots of equity in your house, then there is nothing to worry about.

If you have HELOC, or tiny down payment who bought in last couple years, different story.

btw, one does not have to (and really should not) buy simply because he or she can afford it. I see too many college kids, first things they do after paying off student loans and to get into mortgage loans. It removes lots of flexibility for them, especially when house market normalize.

I see many carry huge mortgage... and face it, those who bought in 20% 30% downpayment last March/April are not underwater.
Deal Guru
Feb 9, 2009
11301 posts
9797 upvotes
rfdchan wrote: Don't get too emotional. I think you might need to start to get used to the downtrend. If your mortgage is paid off or carry lots of equity in your house, then there is nothing to worry about.

If you have HELOC, or tiny down payment who bought in last couple years, different story.

btw, one does not have to (and really should not) buy simply because he or she can afford it. I see too many college kids, first things they do after paying off student loans and to get into mortgage loans. It removes lots of flexibility for them, especially when house market normalize.

I see many carry huge mortgage... and face it, those who bought in 20% 30% downpayment last March/April are not underwater.
30% down is underwater? How many people would that be out of all the homeowners in GTA? How many homes truly went down 30%? Many of the houses in April never closed anyways... and since August prices have been fairly stable... so sorry no one is underwater 30%...
Sr. Member
Jan 4, 2013
578 posts
117 upvotes
TORONTO
That is 416.

If you take a look at the high end suburbs like Richmond hill and Markham, the drop is more than 30%. Looks that most People there got scared.
Sanyo wrote: 30% down is underwater? How many people would that be out of all the homeowners in GTA? How many homes truly went down 30%? Many of the houses in April never closed anyways... and since August prices have been fairly stable... so sorry no one is underwater 30%...
Deal Guru
Feb 9, 2009
11301 posts
9797 upvotes
rjg4235 wrote: The thing is everyone is so mad about it because they want housing. How can you make something affordable that everyone wants? Even these interest rates that everyone is spurning on makes it harder to buy. Stricter lending, makes it harder to buy. Even with prices lower than last April I don't think a first time home buyer is any better off. Condos are still near all time highs and houses are still what $1.3m?
Thats the thing some of these people dont get -- they aren't building as many detached as they used too and so many people want in.

Also, remember that detached homes have continued to get bigger and bigger... so on average houses are being built larger too, which reflects in the prices. In the 70s common sizes of homes were around 1500 sq ft, now they are well over 2000 sq ft (I would say an average home closer to 2200-2300 sq ft these days that are being built) with more fancier bells and whistles like granite countertop, 9 foot ceilings, bigger glass showers/tubs, hardwood floors, etc... more luxury in the homes as well... all reflected in the higher on average prices in some of these areas...
[OP]
Member
Feb 13, 2018
495 posts
532 upvotes
Sanyo wrote: 30% down is underwater? How many people would that be out of all the homeowners in GTA? How many homes truly went down 30%? Many of the houses in April never closed anyways... and since August prices have been fairly stable... so sorry no one is underwater 30%...
no, not underwater by 30%... What I meant is if u put 20 30% downpayment, and bought a house for 1.2m.. now same house might worth 1m, your downpayment is gone. And you can't even sell in this market easily. The employment rate is pretty solid now so we probably won't get a flush down like US yet. But Ontario will take biggest hit if Trump really starts a trade war.
[OP]
Member
Feb 13, 2018
495 posts
532 upvotes
Sanyo wrote: Thats the thing some of these people dont get -- they aren't building as many detached as they used too and so many people want in.

Also, remember that detached homes have continued to get bigger and bigger... so on average houses are being built larger too, which reflects in the prices. In the 70s common sizes of homes were around 1500 sq ft, now they are well over 2000 sq ft (I would say an average home closer to 2200-2300 sq ft these days that are being built) with more fancier bells and whistles like granite countertop, 9 foot ceilings, bigger glass showers/tubs, hardwood floors, etc... more luxury in the homes as well... all reflected in the higher on average prices in some of these areas...
You need to check how many of those detached houses are sitting, many are empty, many are trying to get rented out cheaply. I hope Ontario will follow BC to crack down all those illegal money that is circling around our neighbour-hoods.
Deal Addict
Jan 17, 2006
2204 posts
2312 upvotes
Toronto
rfdchan wrote: You need to check how many of those detached houses are sitting, many are empty, many are trying to get rented out cheaply. I hope Ontario will follow BC to crack down all those illegal money that is circling around our neighbour-hoods.
Chan, welcome to the forum, 1 week old account. Surprisingly your style of writing and effort to convince us that RE is going down and people lost 30% of their houses reminds me some of the perm bears here.
So you know, prices for RE were going up since August MOM, RE in TO area will be just fine.
Banned
Aug 28, 2017
301 posts
366 upvotes
OP....of the 12.5M households in Canada, 8.5M are owned! That is 68.5% that own homes....this is statscan data.

Now tell me..why would any politician want to "crash" the housing market? Wouldn't it make sense to appease the 70% of people who could vote for you, rather than the 30%...

Plus, lets not forget the fact all these politicians also own homes
[OP]
Member
Feb 13, 2018
495 posts
532 upvotes
Rocko24 wrote: OP....of the 12.5M households in Canada, 8.5M are owned! That is 68.5% that own homes....this is statscan data.

Now tell me..why would any politician want to "crash" the housing market? Wouldn't it make sense to appease the 70% of people who could vote for you, rather than the 30%...

Plus, lets not forget the fact all these politicians also own homes
Gov won't be the one that causes the crash. It will be those speculators, over leveraged buyers and illegal money. The recent downtrend really can't be called a crash, it's back to what, few months ago? Back to 4 years ago will need another 30% from here and most home owners won't feel much. Not all house owners want house price to shoot up, they have next generation wanting to buy houses and hate those speculators as well. Will it happen? One one knows. There are many forces working against the market now, that's the fact.

I think the Gov is trying hard to create soft landing rather than hard landing, had they not intervene, hard landing is the only outcome and that would be much worse.
Deal Guru
Feb 9, 2009
11301 posts
9797 upvotes
ilim wrote: Chan, welcome to the forum, 1 week old account. Surprisingly your style of writing and effort to convince us that RE is going down and people lost 30% of their houses reminds me some of the perm bears here.
So you know, prices for RE were going up since August MOM, RE in TO area will be just fine.
Probably some desperate bear who has multiple accounts on here ... lots of new accounts lately opening...
Deal Addict
Apr 10, 2011
2440 posts
2088 upvotes
GVRD
Be grateful you're not in Vancouver.

The only way to bring down house and condo prices here is to put a significant shock into the system to start a steady downward trend, to bring price levels back 3-4 years. That's enough to change the climate here from the "put all your $$$ before you're too late".

They'll never stop the foreign investors here. They have $10-200M parked offshore and have since managed to find ways to be locals through 3rd party family or investor immigration programs.

But will the government do that? NEVER! Why?

- put those recent purchasers under water in their mortgages so they'll need to be bailed out?

- send all those contractors to the unemployment office?

- cause a "I better sell before it goes down more" panic?

They're only trying to flatten the acceleration. Anything else will come the various governments lots of $$$ longterm.

Don't let their little actions and double talk fool you.

The only chance is for the younger generation, who don't have the-bank-of mom and dad, to get really politically ANGRY at the inability for them to NEVER own a home and forever be renters.

Vancouver has other issues too. Every day, people show up in Casinos with literally bags of cash to convert to chips and then reconvert back to cash. All legal. No questions asked.

UPDATE:

I went to convert a few US$ for someone who returned from a trip with leftover US$. At the local foreign conversion store, we can hear the transactions of people at the counter. I happened to hear two in the lineup. They had transactions over a certain $ value and had to give ID and provide their occupation. Their English was not good so both the store person and customer had to speak quite loudly. They gave their occupation as "REAL ESTATE CONSULTANT". Perhaps it was a coincidence that they were both there. Perhaps they were each converting a bunch of cash on a related purchase. The whole city reeks of corruption from an underground foreign investment economy.
Sr. Member
Feb 3, 2015
970 posts
192 upvotes
Toronto
Sanyo wrote: And yet we have the biggest growth in what --decades? Housing is fine...

Toronto is expensive... Winnipeg is not. You cant afford it here, leave!
Growth from people refinanced and being more in debt? That's growth?
Deal Addict
Jul 14, 2002
2594 posts
1213 upvotes
One thing I know is that de-leveraging was not accomplished in Canada during the 2009 economic crisis.
Instead the hole in the balloon was rectified by a bigger pump. How long can it go on? Who knows.... or maybe it should be, nobody cares.
Deal Addict
Dec 27, 2006
1972 posts
950 upvotes
dantey wrote: One thing I know is that de-leveraging was not accomplished in Canada during the 2009 economic crisis.
Instead the hole in the balloon was rectified by a bigger pump. How long can it go on? Who knows.... or maybe it should be, nobody cares.
Bingo

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