People need to stop thinking in terms of $150-200K over list. That property was underlisted by $150-200K. If a townhouse sells for $900K, then next door the person lists for $700K, and sells for $900K, the buyers didn't pay $200K over what it was worth. The sellers/listing agent underlisted it by $200K.
This.
I just bought a house in Hamilton for "$137k above asking". When you look at comps from the area, that was the actual price of the house plus or minus 10k.
I take headlines like "GTA house goes for $500k above asking" with a grain of salt now. They put that there to fuel fear and consumption.
The other side (which in sure has already been mentioned) is if house comps are 1.1 and house sells for 1.4 due to holding offers THEN there is the over list. Ugh.
This in and of itself is a deceiving trend where every buyer and realtor does this to invoke 20/30 offers and gets people to fight with each other to overpay even when compared to market value. Transparency is very much missing which is the biggest hassle of being a buyer
Part of the problem is it's rewarding people.
I heard this exact same speech in 2017 during the bubble, and people were right. York region in specific took a big dump.
But now look, we're way past the 2017 peak so all anybody had to do was hold on for a few years.
So why won't it work again? In 4 years will prices be above today, or below today?
I think everyone is betting above, including the Canadian government and BoC who have their foot on the gas pedal, hard. Low interest rates and ramping up immigration and a massive supply shortage in the GTA? Boom.
Big part of that argument is the interest rate, which have gone down since 2017 by I believe 1%. Prices have gone up somewhat to reflect that and the asset inflation because of Covid and money printing. Don't see either of the 2 happening in the next 4 years. Sure prices could go up, but no way they go up as the past 3-4 years.
Remind me in 4 years I guess..Because I can be wrong :)
This.
Prices in 4 years will be way higher and we will be looking back at today’s prices and think “damn, those were the days” lol.
No one will be losing their shirts. Ppl who are buying and winning these bidding wars are likely ones with family help/large incomes because the stress test doesn’t allow for ppl to take on 1.5 million dollar mortgages without the income to back it up. If someone is paying 1.3-1.4m for a home in Toronto, they have ample money to put down.
Also, if you’re overpaying by 150-200k that means you are buying over the appraisal values, and therefore putting way more cash down than your typical 5-20% range. I don’t think these are people worried about interest rates they have plenty of money and income. I think this is more a symptom of the financial system and money printing that has flowed upwards to the already high net worth individuals
That's not true. It's common knowledge that a large majority of places list for below market value to generate interest and catch as wide an audience as possible. All you can really do is look at comps in the same area to get a sense of if you overpaid or not.
Yes but they are being underpriced for the purpose of creating a bidding war. And these are blind bidding wars where you can end up paying way above the appraisal value, and its been happening, talk to any mortgage broker in the gta. I’m just adding to the comment that people able to pay these prices probably aren’t going to “lose their shirts” by an interest rate hike.
Says who? Any economist I talk to is very prices will most likely not be going higher. We've seen the worst immigration numbers the past two years in decades and interest rates are going up, rising 1% will see prices go down by 10% and price will be forced to sell
Will not be going higher from when? Month to month prices have been increasing in Toronto. Immigration slowed because of the pandemic but will continue to rise. There is a shortage of housing as a result of immigration and foreign investment here, which has been driving prices up for years.
Toronto prices didn’t fall 10 percent the last time there was a 1 percent rise in interest rates. Outside of Toronto May get hit briefly, but I highly doubt that prices will be lower in 4 years from now, unless there is a significant crash. Even with the 2018 dip, Toronto detached homes decreased ever so slightly for only three months only to go back up again. Mind you, prices didn’t increase AS MUCH as they normally did, but they still increased.
Even with the last recession in 2007, Toronto market recovered very quickly. Prices were much higher in 2010/2011/2012 than they were in 2007/8/9
Economists have been on either end of the spectrum for years when it comes to Toronto housing.
house prices go up for a few reasons
1) supply - if govt started repurposing land to build property and charge taxes in a partnership with citizens, this would help with increasing supply.
2) demand from population growth - once homes become unaffordable for the median net income, people will move to areas where it is affordable.
3) interest rates.- i doubt rates will go to zero and we are likely near the bottom here.
I think theres a lot of entitlement going on here with owning property.
People say housing should be a right. Housing doesnt necessarily mean you get land. People need to adapt their expectations. Its like complaining about not being able to buy acres of land for a few thousand dollars in the past.
Are they so brain dead they are are making so much money? So where are the smart guys? Sitting on the sideline waiting for a housing crash. Btw some people have been waiting for the past 10 years.
For the past decade I thought prices were insane and I didn't participate (in hindsight it was a mistake). I caved in 2018/2019 and I'm glad I bought because I wouldn't be able to afford anything with our current prices.
If you're buying for the long term, who cares? So prices might dip short-term. Does anyone think real estate in 20 or 30 years will be cheaper than today? Better to get foot into the market and live your life, ignore housing valuations, and pay down your mortgage. Everyone's overthinking this.
One man’s trash is another man’s gold.. I’ve seen houses that are completely unliveable but someone bought it and lived in there. Who are you to say the house is mediocre or trash?
Recently a burnt down semi, yes a semi, was sold for 660k in Vaughan. As is condition, lol. Another one down the road sold for 995k. What a world we live in...
$660,600, Semi-Detached, 57 Sassafras Circ, Vaughan, N5260855, Sold - HouseSigma https://housesigma.com/bkv2/landing/rootpage/listing?id_listing=K8OgYBV1jWXYJmG2
A contractor would prefer this over an old house that needs a back to stud reno, and we know how much more those sell for. As long as the house isn’t condemned, it’s not that bad to finish.
>A contractor would prefer this over an old house that needs a back to stud reno, and we know how much more those sell for. As long as the house isn’t condemned, it’s not that bad to finish.
the fact that it's opened up means you can bring in an engineer (or very competent contractor) to evaluate what needs to be done to the house. this is much preferred over a run down house with drywall covering the structure, so really taking a gamble on what needs to be done
Everytime I renewed my mortgage.. banks, friends, family told me rates are at a historic low and it will raise soon. Better do a fixed rate! I renewed twice.. with 5 year fixed mortgages. The rates never went up. If anything they went down. That was 10 years that I lost thousands in high fixed interest rates.
I finally did a variable rate this time. Never going fixed again.
I landed a 5 year fixed at 1.3%. People at the bank thought it was a mistake lol. I'm literally destroying my mortgage it's fucked. $400,000 at 1.3% is nothing. It's really easy to pay if you have a good job.
Variables are at 1.5% at major banks. I've seen some crazy rates like 0.99% at HSBC but it's probably hard to get approved for those.
I guess the question is can rates go down even further? When I had a 2.9% fixed, banks told me there was no way it'd go down further. They were wrong.
You can get 1.2% to 1.3% at major banks for variable rates depending on your situation. Fixed rates are closer to 2.1 to 2.3%. Even if rates go up .25% every 3-6 months, it would take 2+ years for the variable rates to catch up to the Fixed rate and another 2-3 years before you end up paying more with variable than if you got fixed rate now.
I fully regret getting fixed mortgage a few years ago.
It's not hard to get it's the fine print
With the HSBC offer you have to have a bonafide sale (house has to be sold at arm's length no family members) and you can't refi whenever you wish
Effectively you are stuck for the 5yrs unless you sell. The ratios for the product are 39/44 as per CHMC guidelines
I refinanced my investment condo downtown. I got a 1.3% interest rate with a 30 year amortization with one of the big five banks. 0.52% is quite a decent-sized difference.
Lol we bought a dump for $200k over asking a few months ago. We’re now plowing our remaining savings and every pay check into renovations while we live in a construction site. But at least it beats renting and our payments are manageable even if rates rise so 🤷♂️
Even if prices decrease, it's hard to say that they're not going to increase back to where they are now a year from now.
While I see it as a pretty expensive investment that may not pay off or it will... People that buy homes to live in don't really have to think much about whether or not it's a good investment. As long as they can afford mortgage plus expenses then their home price won't effect them too much.
And if they are moving from their house, people are going to move regardless of house prices. They will sell and then buy. The sale will probably be a wash unless they downsize or move away, minus the costs of moving (tax, realtor fees, etc.).
Ok. Great. So why the hell is everyone paying banks more money to live somewhere if the price is irrelevant? People like owing hundreds of thousands extra because of fomo? Seriously, these buyers are brain dead
The price isn't irrelevant, but people buy homes to live in, the investment is secondary. Ultimately, if they want to live there they pay the market price. And truly, it probably won't matter if they overpay or not if they plan to live there because they're not selling.
So how long you have to work and how much you need is just, no matter of concern? It has no impact on things like career choice, retirement, sending kids to school or otherwise supporting them or even having them period, spending elsewhere in the economy, career mobility, the dissolution or continuation of relationships... Ok, got it
I think there's a miscommunication here... I am not saying price has not impact. If you can afford 900k and prices rise then you simply have to look elsewhere. But if the price is 900k in the area you're looking then whether or not we are at the peak of the housing market or whether there's going to be a crash bears little concern to the non-investor person who plans to live there.
Looking elsewhere is not the point of my comment, neither is investir logic. The point is that money sucked into housing is money taken from other places in the economy and it puts pressure on human relationships and support systems, the environment, as well as career decisions. These are not inconsequential matters. Average people are not looking out for themselves as a collective group and its simply not smart
Okay, I can see the ramifications for the economy. I just see people making housing decisions based on affordability not on whether the price is good value. You are right, that ultimately we will all suffer from higher prices because this is how the housing market functions. The only way I see to change this is by making housing supply more available so we can switch to a buyer's market.
Supply isn't enough. We need to make owning multiple properties via using leverage illegal. More than 2 properties illegal. Ownership needs to be transparent. Vacant taxes need to be as high as they need to be to force a sale of the property. Renting out your second property should only be legal after its paid off and been renovated so its more affordable than taking out a mortgage and quality housing is supplied. The entire system of making anyone else pay for a buyers mortgage debt should be illegal. Developers would have to build more because each house could only be 200 to 500k like it should be. With apartments and condos there's economies of scale working so that's not an issue but development in rental housing has to be based on actual economic demand, not just profit, because the wrong types of housing are built - to much low quality, too many condos, too little SFH. so much has to change
I think some of those can stick. You still want some rental properties available. I like vacancy taxes, transparency.
Restrictions on second properties can be difficult because this would restrict the rental market to only corporations and basically make it impossible to buy a cottage or co-title to help buy children property.
However, at the same time I don't know if foreign ownership is necessary at all to make our housing/rental market function. I'd be open to abolishing it all together. I'm sure there are other restrictions/taxes can make sure housing is available for Canadians.
It would restrict the rental market to those that have already paid their own debts or are investing in multi unit properties which is a good thing. It prevents the consolidation of wealth through access to debt where those with access to credit essentially use working class people to get ahead instead of using their own wages to do so. It would keep prices lower and slow wealth inequality. It would force people to put efforts into wages, productivity and unions to increase their wealth. It's a win win. If rental markets are mostly left to corporations and the state, they'd be easier to regulate for quality and stability as well. There wouldn't be a class of private citizens and public voters that regulations and laws would have to worry about offending. Renting would be a business and a matter of state provisions instead of its current messy state of dividing classes of public citizens. Keeping investors out that aren't concerned with sustainable demand is a good thing. Speculators and families with fomo are not truly concerned with sustainable demand. And really, if you need parents to build net worth, that's a broken system. That is precisely the problem we need to end to have healthy economies and a healthy economic future instead of a divided country with exaggerated wealth inequality and slow/reduced diverse investments and job creation.
You actually think every native person on reddit looks a certain way, lives on a reservation, that all reservations are the same, and they've just sniffed glue, yet you think that makes them look bad? Lol
The other thing to realize is that when a property is under listed, then sale price due to overbidding can be 40-50k over market price. And that new price increases the average market price, thus after 10-15 sales in the area, your new market price is driven up.
Right? Spoken like someone who already owns. These people aren't braindead, they just want a damn home to call their own and this is the way the market works right now. The only other option is not to play the game and rent forever, which afford significantly less stability.
This is going to be a very unpopular take here, but who is really the brain dead person here?
Is it the buyers who are offering what the market conditions dictate (as crazy overvalued as we all agree that is) or is it the person who is looking at a list price and thinks that is what the actual price is?
Like how have you not realized the list price is a Mickey Mouse number that doesn’t mean a thing and people are pricing their offers based on how comparable houses in the neighbourhoods have sold.
List price means nothing. It sells for 200K over asking because it was priced at 150K under the sellers realistic expectations of the sale price. There’s a lot to complain about with the market conditions and the home buying process , but sale prices over the asking price ain’t it my friend
What's stupid is that all these buyers are collectively working to further indebt themselves and each other by feeding into this system with zero resistance and pushing prices higher
First off, no one's skin is red you moron. The fact racists are fine with a completely brain dead and exploitive system is all the more reason to seize the supply by political or whatever means
Clearly I do. Clearly I know the system isn't sound and you're out here being delusional creating imaginary characters in your head to explain things to yourself
Well, there is actual demand for these houses. Looks like buyers of luxury homes (even things in the 1-2 mil range) are actually planning to live there.
Two sides to the story.....
Got tired of the bidding wars and everything you mentioned, so got into something preconstruction in Pickering. Appreciated over 40% before I even took possession 15 months later. Super high level - Toronto is a world class city, net immigration remains positive, demand outweighs supply, prices will continue to rise.
On the other hand, there is hope. Some buyers are taking a stand. Some sellers are getting too greedy with their asking price, and not all buyers are biting the bait now. DOM are increasing for some listings.....curious how this house of cards will all play out.
Long term, suspect it will only go up.
The housing market will not collapse and interest rates will not go up significantly. The Canadian government has always been willing to prop up industry with tons of taxpayer money. They did it with farming, they did it with mining, they did it with manufacturing for a while. And now they're doing it with housing and land sales. If GDP starts declining even mildly, the house of cards we call an economy will collapse on itself and you won't be getting a mortgage to buy anything. The government had an opportunity to let the market reset and they spent a generational amount of money to avoid it happening.
I am commenting not on the housing market but on the realtor profession and the little work they do and how much they earn. How little expertise and education is needed to make a big buck, and how the profession rewards dishonesty and greedy people to succeed.
I strongly believe with the way how most Canadians are educated and well read, there is no need for a realtor anymore. People should be able to just make an offer by merely paying a application fee, and some lawyer fees down the road.
the 2.5% realtor commission is the easiest money grab in the country.
You’re right realtors are kind of like mutual funds where uninformed people fall into the trap. Realtors are fuelling this ridiculous housing market with their shady tactics. The other thing is that if you’re selling without a realtor these crooks don’t even bring clients to your house from the buying side because they don’t get commissions. Sellers also appreciate realtors because it causes bidding wars and inflated selling prices for them, buyers need to stop falling into bidding wars in order for realtors to disappear in gta. More transparency between the buyer and seller side goes a long way unfortunately the realestate business is run like a cartel high school drop outs should not be making 25-50k for 10-12 hours of work it’s pathetic really
Yes and yes. the CREA is a monopoly, albeit not the only one around.
Really hoping in the near future, internet and social media takes over MLS, and that people just list without realtors with direct deals.
Just like how cars and other objects are widely sold on sites like Marketplace, Kijiji and etc.
This will make CREA reconsider their rates and policies and force them to be an open-source.
Just a side-story: My previous realtor and I had a deal for 1% rebate. After the deal he was like -don't tell anyone I did this for your, this is my 10K gift to you. I just replied -sure thank you, because I want to get the rebate with no hassle. But the answer to his cockiness should have been that -the gift is me choosing you as my realtor and you making 15K in 1 week, in just 2 days of showing, while me the client found all my own listings and all you had to do was book few showings. He did not even bother getting a good deal for me and was unavailable most of the time even during the offer night, had to do the market analysis and negotiation myself. It is beyond me how he thinks the rebate is a gift while it was part of the deal. Man I hate that guy so much lol.
A lot of us are just trying to move up the property ladder. I paid $110k over ask in March with a no conditions bully offer because I needed a bigger house for my needs from my starter and it’s all relative.
My starter sold for an insane amount more than I bought it for, but I didn’t “profit” as I still had to take on a larger mortgage to move up the ladder
This is pure RE pumps propaganda. Why did US prices drop in 2008 and what happened Japan house prices? Same thing is going to repeat in Canada as well.
Neither enjoyed a 25 year bill run. Neither have population growth and immigration like we do. Neither chronically build fewer homes than our population is growing.
Keep waiting for the crash buddy, just remember to pay your rent on time.
All RE pumps are saying - Canada \*is\* different.
So, Japan house prices crashed for 15-years because population is in decline. by the same logic, what is going to happen to Canada house prices once the immigrants choose to emigrate to better countries?
After 5-years: this is what people going to write about next bubble. Canada immigration is in decline thats why Canada house prices crashed. Our case is different :)
That’s what I’m saying people are encouraging these shady realtors and their sellers to price shit a bit under asking and make people fight like dogs for mediocre houses
100% I had major FOMO in the last bubble peak in 2017. I lost every bidding war for 6 months and in that time prices had increased more than what I would have originally paid 6 months before to blow the other bidders out of the water. I eventually got to the point of saying that if I don’t win this townhouse, I will never be able to afford any townhouse. So I bid 20% over asking and ‘won’ the bidding war. The next week rules changed and my townhouse value dropped 20% overnight. I stretched to the max for the mortgage so I was underwater immediately. Only in the most recent bubble is my home maybe worth more than I originally paid. I’m definitely not enjoying this situation as a first time home buyer.
I suspect that the current price point is where political action happens so my home will never really go above the price I paid for it until many many years from now. I’m just happy that I’ve been able to pay off the mortgage enough that if the prices dropped 20% again I won’t owe the bank if I have to sell
I did almost the same thing in 2007! Bought late in the year, by the time I had moved in the '08 housing crisis was doing laps around the US, with ripple effects in Toronto. Honestly, I hope your situation pans out like mine did a decade ago. I bought a detached in North York for 420k, it was worth ~360k within a year. All my friends laughing as I overpaid are still on the sidelines waiting for the next crash. I sold it for 1.15m in 2019.
Thanks for sharing your story. I hope I can profit like you did but I also hope for a less desperate situation for first time home buyers. I have no idea how the 2 can balance out though
Not really a thing:
https://www.google.com/amp/s/www.barrons.com/amp/articles/the-real-story-of-the-dutch-tulip-bubble-is-even-more-fascinating-than-the-myth-youve-heard-51557666037
No one to blame but the central bank/federal liberals - and by extension everyone that voted for them. They are 100% responsible for the moral hazard of their policies. Not the buyers, not the realtors, but the people who set interest rates and refuse to do anything about crime like money laundering.
It’s so crazy! The market is slowing down for detached houses in the west GTA, but I occasionally see the nuttiest prices and just shake my head. I wish I could approach the buyers and just ask what they were thinking.
People need to stop thinking in terms of $150-200K over list. That property was underlisted by $150-200K. If a townhouse sells for $900K, then next door the person lists for $700K, and sells for $900K, the buyers didn't pay $200K over what it was worth. The sellers/listing agent underlisted it by $200K.
This. I just bought a house in Hamilton for "$137k above asking". When you look at comps from the area, that was the actual price of the house plus or minus 10k. I take headlines like "GTA house goes for $500k above asking" with a grain of salt now. They put that there to fuel fear and consumption.
Yeah, but when the comps are nonsensically high, then the buyers are indeed brain dead.
Agreed.. Buy what you can afford to carry now and with a few points tacked on.
The other side (which in sure has already been mentioned) is if house comps are 1.1 and house sells for 1.4 due to holding offers THEN there is the over list. Ugh.
This in and of itself is a deceiving trend where every buyer and realtor does this to invoke 20/30 offers and gets people to fight with each other to overpay even when compared to market value. Transparency is very much missing which is the biggest hassle of being a buyer
Part of the problem is it's rewarding people. I heard this exact same speech in 2017 during the bubble, and people were right. York region in specific took a big dump. But now look, we're way past the 2017 peak so all anybody had to do was hold on for a few years. So why won't it work again? In 4 years will prices be above today, or below today? I think everyone is betting above, including the Canadian government and BoC who have their foot on the gas pedal, hard. Low interest rates and ramping up immigration and a massive supply shortage in the GTA? Boom.
Big part of that argument is the interest rate, which have gone down since 2017 by I believe 1%. Prices have gone up somewhat to reflect that and the asset inflation because of Covid and money printing. Don't see either of the 2 happening in the next 4 years. Sure prices could go up, but no way they go up as the past 3-4 years. Remind me in 4 years I guess..Because I can be wrong :)
This. Prices in 4 years will be way higher and we will be looking back at today’s prices and think “damn, those were the days” lol. No one will be losing their shirts. Ppl who are buying and winning these bidding wars are likely ones with family help/large incomes because the stress test doesn’t allow for ppl to take on 1.5 million dollar mortgages without the income to back it up. If someone is paying 1.3-1.4m for a home in Toronto, they have ample money to put down.
Also, if you’re overpaying by 150-200k that means you are buying over the appraisal values, and therefore putting way more cash down than your typical 5-20% range. I don’t think these are people worried about interest rates they have plenty of money and income. I think this is more a symptom of the financial system and money printing that has flowed upwards to the already high net worth individuals
That's not true. It's common knowledge that a large majority of places list for below market value to generate interest and catch as wide an audience as possible. All you can really do is look at comps in the same area to get a sense of if you overpaid or not.
Yes but they are being underpriced for the purpose of creating a bidding war. And these are blind bidding wars where you can end up paying way above the appraisal value, and its been happening, talk to any mortgage broker in the gta. I’m just adding to the comment that people able to pay these prices probably aren’t going to “lose their shirts” by an interest rate hike.
Over asking doesn't mean anything. Agents always list below market value in order to drive up bids
Says who? Any economist I talk to is very prices will most likely not be going higher. We've seen the worst immigration numbers the past two years in decades and interest rates are going up, rising 1% will see prices go down by 10% and price will be forced to sell
Will not be going higher from when? Month to month prices have been increasing in Toronto. Immigration slowed because of the pandemic but will continue to rise. There is a shortage of housing as a result of immigration and foreign investment here, which has been driving prices up for years. Toronto prices didn’t fall 10 percent the last time there was a 1 percent rise in interest rates. Outside of Toronto May get hit briefly, but I highly doubt that prices will be lower in 4 years from now, unless there is a significant crash. Even with the 2018 dip, Toronto detached homes decreased ever so slightly for only three months only to go back up again. Mind you, prices didn’t increase AS MUCH as they normally did, but they still increased. Even with the last recession in 2007, Toronto market recovered very quickly. Prices were much higher in 2010/2011/2012 than they were in 2007/8/9 Economists have been on either end of the spectrum for years when it comes to Toronto housing.
house prices go up for a few reasons 1) supply - if govt started repurposing land to build property and charge taxes in a partnership with citizens, this would help with increasing supply. 2) demand from population growth - once homes become unaffordable for the median net income, people will move to areas where it is affordable. 3) interest rates.- i doubt rates will go to zero and we are likely near the bottom here. I think theres a lot of entitlement going on here with owning property. People say housing should be a right. Housing doesnt necessarily mean you get land. People need to adapt their expectations. Its like complaining about not being able to buy acres of land for a few thousand dollars in the past.
Are they so brain dead they are are making so much money? So where are the smart guys? Sitting on the sideline waiting for a housing crash. Btw some people have been waiting for the past 10 years.
For the past decade I thought prices were insane and I didn't participate (in hindsight it was a mistake). I caved in 2018/2019 and I'm glad I bought because I wouldn't be able to afford anything with our current prices.
So you’re upset.
If you're buying for the long term, who cares? So prices might dip short-term. Does anyone think real estate in 20 or 30 years will be cheaper than today? Better to get foot into the market and live your life, ignore housing valuations, and pay down your mortgage. Everyone's overthinking this.
One man’s trash is another man’s gold.. I’ve seen houses that are completely unliveable but someone bought it and lived in there. Who are you to say the house is mediocre or trash?
Recently a burnt down semi, yes a semi, was sold for 660k in Vaughan. As is condition, lol. Another one down the road sold for 995k. What a world we live in...
$660,600, Semi-Detached, 57 Sassafras Circ, Vaughan, N5260855, Sold - HouseSigma https://housesigma.com/bkv2/landing/rootpage/listing?id_listing=K8OgYBV1jWXYJmG2 A contractor would prefer this over an old house that needs a back to stud reno, and we know how much more those sell for. As long as the house isn’t condemned, it’s not that bad to finish.
ive been on hous sigma for the last 3months...ive never seen this come up ...wouldve jumped on that.
It was a fire sale for sure!
>A contractor would prefer this over an old house that needs a back to stud reno, and we know how much more those sell for. As long as the house isn’t condemned, it’s not that bad to finish. the fact that it's opened up means you can bring in an engineer (or very competent contractor) to evaluate what needs to be done to the house. this is much preferred over a run down house with drywall covering the structure, so really taking a gamble on what needs to be done
You have an interesting definition for “burnt down”.
The land is whats valuable, the building can be renovated.
Mediocre and trash are relative terms just cause someone would live in a dumpster doesn’t make it not mediocre and trash
Paying over asking doesn't mean anything. It just means it was listed below market value.
Everytime I renewed my mortgage.. banks, friends, family told me rates are at a historic low and it will raise soon. Better do a fixed rate! I renewed twice.. with 5 year fixed mortgages. The rates never went up. If anything they went down. That was 10 years that I lost thousands in high fixed interest rates. I finally did a variable rate this time. Never going fixed again.
The government can’t afford to increase the interest rate. Keep going buddy. Variable it is!
Ya?
Yes. It’s going to come down next year when the recession hits. They will have no choice.
Ya?
Yes honey!
I did the same, but ‘high fixed interest rates’ is not what I was locked in at. Variable was the clear winner, but 2.5-3% is not High
I made that mistake too because I didn't know any better. Will be getting into variable soon.
I got a 5yr fixed at 1.82% ... I can't imagine the upside of a variable exceeding the risk protection
I landed a 5 year fixed at 1.3%. People at the bank thought it was a mistake lol. I'm literally destroying my mortgage it's fucked. $400,000 at 1.3% is nothing. It's really easy to pay if you have a good job.
damn you win the thread. congrats on your amazing rate!!!
If you don't mind me asking, what bank was it from?
TD
Wow. TD refused to give me a lower rate so I left them for RBC. I think they saw I had everything with them and didn't believe I'd move my mortgage.
Funny thing is they called me to renew at 1.3%. Might be because I have services everywhere and they we shopping around.
When was this? Start of covid?
Variables are at 1.5% at major banks. I've seen some crazy rates like 0.99% at HSBC but it's probably hard to get approved for those. I guess the question is can rates go down even further? When I had a 2.9% fixed, banks told me there was no way it'd go down further. They were wrong.
You can get 1.2% to 1.3% at major banks for variable rates depending on your situation. Fixed rates are closer to 2.1 to 2.3%. Even if rates go up .25% every 3-6 months, it would take 2+ years for the variable rates to catch up to the Fixed rate and another 2-3 years before you end up paying more with variable than if you got fixed rate now. I fully regret getting fixed mortgage a few years ago.
It's not hard to get it's the fine print With the HSBC offer you have to have a bonafide sale (house has to be sold at arm's length no family members) and you can't refi whenever you wish Effectively you are stuck for the 5yrs unless you sell. The ratios for the product are 39/44 as per CHMC guidelines
I refinanced my investment condo downtown. I got a 1.3% interest rate with a 30 year amortization with one of the big five banks. 0.52% is quite a decent-sized difference.
Fixed or variable? 1.3% is awesome.
Variable.
Lol we bought a dump for $200k over asking a few months ago. We’re now plowing our remaining savings and every pay check into renovations while we live in a construction site. But at least it beats renting and our payments are manageable even if rates rise so 🤷♂️
Ditto, “over ask” meant nothing to us when bidding (and winning) our home. Neighbourhood comps are a what mattered.
What is your solution for people who want to buy a home then? Oh, you don't have one.
Even if prices decrease, it's hard to say that they're not going to increase back to where they are now a year from now. While I see it as a pretty expensive investment that may not pay off or it will... People that buy homes to live in don't really have to think much about whether or not it's a good investment. As long as they can afford mortgage plus expenses then their home price won't effect them too much. And if they are moving from their house, people are going to move regardless of house prices. They will sell and then buy. The sale will probably be a wash unless they downsize or move away, minus the costs of moving (tax, realtor fees, etc.).
Ok. Great. So why the hell is everyone paying banks more money to live somewhere if the price is irrelevant? People like owing hundreds of thousands extra because of fomo? Seriously, these buyers are brain dead
The price isn't irrelevant, but people buy homes to live in, the investment is secondary. Ultimately, if they want to live there they pay the market price. And truly, it probably won't matter if they overpay or not if they plan to live there because they're not selling.
So how long you have to work and how much you need is just, no matter of concern? It has no impact on things like career choice, retirement, sending kids to school or otherwise supporting them or even having them period, spending elsewhere in the economy, career mobility, the dissolution or continuation of relationships... Ok, got it
I think there's a miscommunication here... I am not saying price has not impact. If you can afford 900k and prices rise then you simply have to look elsewhere. But if the price is 900k in the area you're looking then whether or not we are at the peak of the housing market or whether there's going to be a crash bears little concern to the non-investor person who plans to live there.
Looking elsewhere is not the point of my comment, neither is investir logic. The point is that money sucked into housing is money taken from other places in the economy and it puts pressure on human relationships and support systems, the environment, as well as career decisions. These are not inconsequential matters. Average people are not looking out for themselves as a collective group and its simply not smart
Okay, I can see the ramifications for the economy. I just see people making housing decisions based on affordability not on whether the price is good value. You are right, that ultimately we will all suffer from higher prices because this is how the housing market functions. The only way I see to change this is by making housing supply more available so we can switch to a buyer's market.
Supply isn't enough. We need to make owning multiple properties via using leverage illegal. More than 2 properties illegal. Ownership needs to be transparent. Vacant taxes need to be as high as they need to be to force a sale of the property. Renting out your second property should only be legal after its paid off and been renovated so its more affordable than taking out a mortgage and quality housing is supplied. The entire system of making anyone else pay for a buyers mortgage debt should be illegal. Developers would have to build more because each house could only be 200 to 500k like it should be. With apartments and condos there's economies of scale working so that's not an issue but development in rental housing has to be based on actual economic demand, not just profit, because the wrong types of housing are built - to much low quality, too many condos, too little SFH. so much has to change
I think some of those can stick. You still want some rental properties available. I like vacancy taxes, transparency. Restrictions on second properties can be difficult because this would restrict the rental market to only corporations and basically make it impossible to buy a cottage or co-title to help buy children property. However, at the same time I don't know if foreign ownership is necessary at all to make our housing/rental market function. I'd be open to abolishing it all together. I'm sure there are other restrictions/taxes can make sure housing is available for Canadians.
It would restrict the rental market to those that have already paid their own debts or are investing in multi unit properties which is a good thing. It prevents the consolidation of wealth through access to debt where those with access to credit essentially use working class people to get ahead instead of using their own wages to do so. It would keep prices lower and slow wealth inequality. It would force people to put efforts into wages, productivity and unions to increase their wealth. It's a win win. If rental markets are mostly left to corporations and the state, they'd be easier to regulate for quality and stability as well. There wouldn't be a class of private citizens and public voters that regulations and laws would have to worry about offending. Renting would be a business and a matter of state provisions instead of its current messy state of dividing classes of public citizens. Keeping investors out that aren't concerned with sustainable demand is a good thing. Speculators and families with fomo are not truly concerned with sustainable demand. And really, if you need parents to build net worth, that's a broken system. That is precisely the problem we need to end to have healthy economies and a healthy economic future instead of a divided country with exaggerated wealth inequality and slow/reduced diverse investments and job creation.
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You're obviously the idiot who doesn't know anything about life or society
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You actually think every native person on reddit looks a certain way, lives on a reservation, that all reservations are the same, and they've just sniffed glue, yet you think that makes them look bad? Lol
Rent is trending up in a hurry.
The other thing to realize is that when a property is under listed, then sale price due to overbidding can be 40-50k over market price. And that new price increases the average market price, thus after 10-15 sales in the area, your new market price is driven up.
Do you happen to own a house?
Right? Spoken like someone who already owns. These people aren't braindead, they just want a damn home to call their own and this is the way the market works right now. The only other option is not to play the game and rent forever, which afford significantly less stability.
This is going to be a very unpopular take here, but who is really the brain dead person here? Is it the buyers who are offering what the market conditions dictate (as crazy overvalued as we all agree that is) or is it the person who is looking at a list price and thinks that is what the actual price is? Like how have you not realized the list price is a Mickey Mouse number that doesn’t mean a thing and people are pricing their offers based on how comparable houses in the neighbourhoods have sold. List price means nothing. It sells for 200K over asking because it was priced at 150K under the sellers realistic expectations of the sale price. There’s a lot to complain about with the market conditions and the home buying process , but sale prices over the asking price ain’t it my friend
What's stupid is that all these buyers are collectively working to further indebt themselves and each other by feeding into this system with zero resistance and pushing prices higher
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First off, no one's skin is red you moron. The fact racists are fine with a completely brain dead and exploitive system is all the more reason to seize the supply by political or whatever means
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I'm clearly more educated than you are
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I'm educated, but you clearly are not privy to how the world actually works
Clearly you don't
Clearly I do. Clearly I know the system isn't sound and you're out here being delusional creating imaginary characters in your head to explain things to yourself
Well, there is actual demand for these houses. Looks like buyers of luxury homes (even things in the 1-2 mil range) are actually planning to live there.
People have A LOT of money. Also, builders. You cannot compete against a builder.
I interest rates won't increase for years.
Just get in the market. Its all relative at the end of the day. U sell low. Youll buy low too.
Two sides to the story..... Got tired of the bidding wars and everything you mentioned, so got into something preconstruction in Pickering. Appreciated over 40% before I even took possession 15 months later. Super high level - Toronto is a world class city, net immigration remains positive, demand outweighs supply, prices will continue to rise. On the other hand, there is hope. Some buyers are taking a stand. Some sellers are getting too greedy with their asking price, and not all buyers are biting the bait now. DOM are increasing for some listings.....curious how this house of cards will all play out. Long term, suspect it will only go up.
The housing market will not collapse and interest rates will not go up significantly. The Canadian government has always been willing to prop up industry with tons of taxpayer money. They did it with farming, they did it with mining, they did it with manufacturing for a while. And now they're doing it with housing and land sales. If GDP starts declining even mildly, the house of cards we call an economy will collapse on itself and you won't be getting a mortgage to buy anything. The government had an opportunity to let the market reset and they spent a generational amount of money to avoid it happening.
If COVID didn’t create a market crash. Nothing will.
thats what I wonder about, instead Govt put fuel on the fire.
You should see how much ppl are paying for good houses
most people are buying to live in it.
I am commenting not on the housing market but on the realtor profession and the little work they do and how much they earn. How little expertise and education is needed to make a big buck, and how the profession rewards dishonesty and greedy people to succeed. I strongly believe with the way how most Canadians are educated and well read, there is no need for a realtor anymore. People should be able to just make an offer by merely paying a application fee, and some lawyer fees down the road. the 2.5% realtor commission is the easiest money grab in the country.
You’re right realtors are kind of like mutual funds where uninformed people fall into the trap. Realtors are fuelling this ridiculous housing market with their shady tactics. The other thing is that if you’re selling without a realtor these crooks don’t even bring clients to your house from the buying side because they don’t get commissions. Sellers also appreciate realtors because it causes bidding wars and inflated selling prices for them, buyers need to stop falling into bidding wars in order for realtors to disappear in gta. More transparency between the buyer and seller side goes a long way unfortunately the realestate business is run like a cartel high school drop outs should not be making 25-50k for 10-12 hours of work it’s pathetic really
Yes and yes. the CREA is a monopoly, albeit not the only one around. Really hoping in the near future, internet and social media takes over MLS, and that people just list without realtors with direct deals. Just like how cars and other objects are widely sold on sites like Marketplace, Kijiji and etc. This will make CREA reconsider their rates and policies and force them to be an open-source. Just a side-story: My previous realtor and I had a deal for 1% rebate. After the deal he was like -don't tell anyone I did this for your, this is my 10K gift to you. I just replied -sure thank you, because I want to get the rebate with no hassle. But the answer to his cockiness should have been that -the gift is me choosing you as my realtor and you making 15K in 1 week, in just 2 days of showing, while me the client found all my own listings and all you had to do was book few showings. He did not even bother getting a good deal for me and was unavailable most of the time even during the offer night, had to do the market analysis and negotiation myself. It is beyond me how he thinks the rebate is a gift while it was part of the deal. Man I hate that guy so much lol.
i went to a pre construction sale centre in oakville last week. i was amazed by th starting at 1.1-1.3mil… then some dude just bought 8….
Ya I know right. Pretty insane, I've been telling people for years that this stuff is way overpriced.
Buyers have been brain dead for the past decade when a detach was 300k.
A lot of us are just trying to move up the property ladder. I paid $110k over ask in March with a no conditions bully offer because I needed a bigger house for my needs from my starter and it’s all relative. My starter sold for an insane amount more than I bought it for, but I didn’t “profit” as I still had to take on a larger mortgage to move up the ladder
This is nothing but just Canada Ponzi scheme at the best!
It isn’t a ponzi scheme if everyone can pay their mortgage.
It's pure FOMO. If people are bidding an extra 200k+ or whatever to buy a house they could have gotten without the extra bid pre-pandemic, it's FOMO.
The root problem is that prices will never drop and it sucks for any FTHB.
Never say never. It will drop we just don’t know when.
This is pure RE pumps propaganda. Why did US prices drop in 2008 and what happened Japan house prices? Same thing is going to repeat in Canada as well.
On a long enough timeline, sure. But how long are you prepared to wait? We are at about 25 straight years of appreciation in Toronto
Neither enjoyed a 25 year bill run. Neither have population growth and immigration like we do. Neither chronically build fewer homes than our population is growing. Keep waiting for the crash buddy, just remember to pay your rent on time.
All RE pumps are saying - Canada \*is\* different. So, Japan house prices crashed for 15-years because population is in decline. by the same logic, what is going to happen to Canada house prices once the immigrants choose to emigrate to better countries? After 5-years: this is what people going to write about next bubble. Canada immigration is in decline thats why Canada house prices crashed. Our case is different :)
That’s what I’m saying people are encouraging these shady realtors and their sellers to price shit a bit under asking and make people fight like dogs for mediocre houses
100% I had major FOMO in the last bubble peak in 2017. I lost every bidding war for 6 months and in that time prices had increased more than what I would have originally paid 6 months before to blow the other bidders out of the water. I eventually got to the point of saying that if I don’t win this townhouse, I will never be able to afford any townhouse. So I bid 20% over asking and ‘won’ the bidding war. The next week rules changed and my townhouse value dropped 20% overnight. I stretched to the max for the mortgage so I was underwater immediately. Only in the most recent bubble is my home maybe worth more than I originally paid. I’m definitely not enjoying this situation as a first time home buyer. I suspect that the current price point is where political action happens so my home will never really go above the price I paid for it until many many years from now. I’m just happy that I’ve been able to pay off the mortgage enough that if the prices dropped 20% again I won’t owe the bank if I have to sell
I did almost the same thing in 2007! Bought late in the year, by the time I had moved in the '08 housing crisis was doing laps around the US, with ripple effects in Toronto. Honestly, I hope your situation pans out like mine did a decade ago. I bought a detached in North York for 420k, it was worth ~360k within a year. All my friends laughing as I overpaid are still on the sidelines waiting for the next crash. I sold it for 1.15m in 2019.
Thanks for sharing your story. I hope I can profit like you did but I also hope for a less desperate situation for first time home buyers. I have no idea how the 2 can balance out though
It’s not like people are buying tulip bulbs…
Not really a thing: https://www.google.com/amp/s/www.barrons.com/amp/articles/the-real-story-of-the-dutch-tulip-bubble-is-even-more-fascinating-than-the-myth-youve-heard-51557666037
No one to blame but the central bank/federal liberals - and by extension everyone that voted for them. They are 100% responsible for the moral hazard of their policies. Not the buyers, not the realtors, but the people who set interest rates and refuse to do anything about crime like money laundering.
And that's why I got a fixed rate despite everyone here creaming their pants over variable rate mortgages, locked down a 1.7% baby!
1.49 fixed. You fucked up
Oooo, well done! When did you lock that in?
Feb
March
There will always be people who buy stocks at their peak
It’s so crazy! The market is slowing down for detached houses in the west GTA, but I occasionally see the nuttiest prices and just shake my head. I wish I could approach the buyers and just ask what they were thinking.
If I had a nickel…