Toronto: A City of Permanent Renters Unless You're Really Lucky
December 12, 2014 9:18 AM Subscribe
“It’s all we think about every day — that if we had just bought a house back when we first started looking, we would have overpaid, but at least we would have been in a house."
Melissa Hart, of the currently defunct FML Listings (which chronicles the insanity of Toronto housing prices), being interviewed by the Toronto Star about probably never being able to afford a home in the city she calls home.
And it looks as though already inflated house prices will jump again in the GTA.
Melissa Hart, of the currently defunct FML Listings (which chronicles the insanity of Toronto housing prices), being interviewed by the Toronto Star about probably never being able to afford a home in the city she calls home.
And it looks as though already inflated house prices will jump again in the GTA.
Well....
A typical prospective homeowner could generate more than 50 percent in additional wealth over the next decade by renting and investing instead of buying a home, a new report finds. [Based on 20 U.S. cities, but still.]
posted by dhartung at 9:23 AM on December 12, 2014 [11 favorites]
A typical prospective homeowner could generate more than 50 percent in additional wealth over the next decade by renting and investing instead of buying a home, a new report finds. [Based on 20 U.S. cities, but still.]
posted by dhartung at 9:23 AM on December 12, 2014 [11 favorites]
Buying a home is now twice as affordable as renting
posted by stbalbach at 9:25 AM on December 12, 2014 [2 favorites]
posted by stbalbach at 9:25 AM on December 12, 2014 [2 favorites]
Yup. This is one of the big reasons we left T.O. (along with many other young families we know). Why would I work my butt off to pay some crazy mortgage and cram my family into a 500 sq ft shoebox in the sky?
posted by thelaze at 9:25 AM on December 12, 2014 [2 favorites]
posted by thelaze at 9:25 AM on December 12, 2014 [2 favorites]
I continue to be amazed by the housing prices in Toronto; they really are quite something. Every time I buy the Saturday Star I am struck by how many full page ads there are of the never-ending wave of condos being constructed. And I really don't have anything against condos, but the prices and sizing for what you get is nuts.
posted by Kitteh at 9:28 AM on December 12, 2014 [1 favorite]
posted by Kitteh at 9:28 AM on December 12, 2014 [1 favorite]
That's great, stbalbach, now who's going to give me a loan for a $500,000 condo on my $40K/yr salary with my $10K in student loans?
Sorry, that's needlessly aggressive of me to say. I'm just being slowly priced out of my rental market because many units are being converted into "luxury" condos that I can't afford, so the whole "Just buy a place!" kind of hits a sore spot.
posted by maryr at 9:30 AM on December 12, 2014 [15 favorites]
Sorry, that's needlessly aggressive of me to say. I'm just being slowly priced out of my rental market because many units are being converted into "luxury" condos that I can't afford, so the whole "Just buy a place!" kind of hits a sore spot.
posted by maryr at 9:30 AM on December 12, 2014 [15 favorites]
The price is what the market will bear. That's not "hyperinflation."
As someone who's happily renting, I'm not so sure it's as bad as she makes it out to be.
Also, if you look her up, she's the Star's go to for whiny real estate quotes. Suck it up and move elsewhere, or rent if you want to stay in the neighbourhood. Geez.
posted by mandolin conspiracy at 9:31 AM on December 12, 2014 [1 favorite]
As someone who's happily renting, I'm not so sure it's as bad as she makes it out to be.
Also, if you look her up, she's the Star's go to for whiny real estate quotes. Suck it up and move elsewhere, or rent if you want to stay in the neighbourhood. Geez.
posted by mandolin conspiracy at 9:31 AM on December 12, 2014 [1 favorite]
We sold a house in a place where buying was clearly better than renting (assuming you stayed long enough, etc) and bought in a place where it seemed right on the edge between buying and renting. Any more expensive and I would not have seen a path to owning, and that is as a DINK couple with ok jobs. There are a lot of urban places that I see as entirely out of reach for owning, though I could easily rent there. I don't understand those markets at all or how people make it work without family money.
posted by Dip Flash at 9:31 AM on December 12, 2014 [3 favorites]
posted by Dip Flash at 9:31 AM on December 12, 2014 [3 favorites]
Also using American market data to talk about the affordability of a Canadian city is dodgy at best.
posted by Lemurrhea at 9:32 AM on December 12, 2014 [9 favorites]
posted by Lemurrhea at 9:32 AM on December 12, 2014 [9 favorites]
I know lemmings don't really run over cliffs, but it's the picture that pops into my mind when I read shit like this. Anybody that can do basic maths will understand that buying in TO is a sucker bet, but they still want to. Cognitive dissonance writ large, aided and abetted by that wretched rag The Star - a paper that will rapidly cease to exist as soon as the bubble pops and they lose all the revenue from RE advertising.
posted by Mary Ellen Carter at 9:33 AM on December 12, 2014
posted by Mary Ellen Carter at 9:33 AM on December 12, 2014
It's pretty straightforward, though. There are many people who want to own property in Toronto, and as a result, prices go up.
My wife and I sold and bought homes in September. What we got for our 650 square foot condo seemed obscene; What we paid for our 1800 square foot house seemed obscene. But in each case, there were a number of people who were also interested in purchasing the property. In fact, every property we were interested in as we search ended up in a multiple offer situation. As long as there is demand, I don't see any reason why his trend will let up.
People are willing to pay the prices because they want the convenience of living in the city.
P.S. dhartung, that doesn't apply to Toronto, at least not for the past few decades. Toronto has not had the problems that the 20 US cities in that study have had. I made 166% on my condo in 7 years. No way I would have been able to make that much by renting and investing.
posted by DrLickies at 9:35 AM on December 12, 2014 [4 favorites]
My wife and I sold and bought homes in September. What we got for our 650 square foot condo seemed obscene; What we paid for our 1800 square foot house seemed obscene. But in each case, there were a number of people who were also interested in purchasing the property. In fact, every property we were interested in as we search ended up in a multiple offer situation. As long as there is demand, I don't see any reason why his trend will let up.
People are willing to pay the prices because they want the convenience of living in the city.
P.S. dhartung, that doesn't apply to Toronto, at least not for the past few decades. Toronto has not had the problems that the 20 US cities in that study have had. I made 166% on my condo in 7 years. No way I would have been able to make that much by renting and investing.
posted by DrLickies at 9:35 AM on December 12, 2014 [4 favorites]
My wife and I moved to Leslieville 14 years ago, just before they started opening fancy brunch places and olive oil stores (seriously, a store that sells nothing but olive oil). IIRC there were houses selling for under $300,000, which at the time seemed like a lot of money (because I was making $12/hour and we didn't have two nickels to rub together) but now seems ludicrously cheap. We're still renting the same place because even though I've got a pretty good-paying job and we've got more than enough for a decent down payment...well, you know.
On one hand I hope the bubble will pop some day so we could think about buying a house, but on the other I kind of feel like if a Toronto real estate crash ever happens it will herald the end times, economically-speaking.
posted by The Card Cheat at 9:36 AM on December 12, 2014 [2 favorites]
On one hand I hope the bubble will pop some day so we could think about buying a house, but on the other I kind of feel like if a Toronto real estate crash ever happens it will herald the end times, economically-speaking.
posted by The Card Cheat at 9:36 AM on December 12, 2014 [2 favorites]
how people make it work without family money.
The value of monetary gifts from parents or other family members for down payments has been trending upwards.
From Toronto Life: The Bank of Mom and Dad: confessions of a propped up generation
posted by Kabanos at 9:37 AM on December 12, 2014 [5 favorites]
The value of monetary gifts from parents or other family members for down payments has been trending upwards.
From Toronto Life: The Bank of Mom and Dad: confessions of a propped up generation
posted by Kabanos at 9:37 AM on December 12, 2014 [5 favorites]
My husband works outside of Toronto. A few years ago, I said "if you want to move out there, we will - it's way more affordable."
For a variety of reasons, we made the call to stay downtown. We accept that we are renting a decent-sized (by our standards) condo in a neighbourhood we like, and will continue to do so for the foreseeable future. Because that's the decision we made. The market is what it is, and we know where we fit in.
But part of the reason we're not seeing a bubble that's going to pop is that Canadian banks are highly conservative and cautious in their approach to mortgage lending. That's probably why the subject of that Star article can't get approved for more than $600K.
posted by mandolin conspiracy at 9:40 AM on December 12, 2014 [2 favorites]
For a variety of reasons, we made the call to stay downtown. We accept that we are renting a decent-sized (by our standards) condo in a neighbourhood we like, and will continue to do so for the foreseeable future. Because that's the decision we made. The market is what it is, and we know where we fit in.
But part of the reason we're not seeing a bubble that's going to pop is that Canadian banks are highly conservative and cautious in their approach to mortgage lending. That's probably why the subject of that Star article can't get approved for more than $600K.
posted by mandolin conspiracy at 9:40 AM on December 12, 2014 [2 favorites]
People have been saying that buying a house in Toronto is a sucker's bet for as long as I've lived here, but the prices keep going up and up and up (aside from one tiny blip in 2009 and even that was enough to make people crap their pants).
posted by The Card Cheat at 9:44 AM on December 12, 2014
posted by The Card Cheat at 9:44 AM on December 12, 2014
We live in Kingston, which is a nice little city situated two hours and change from Montreal and Toronto, and about an hour and a half from Ottawa. We're thinking about buying in the new year but even in a place like this, the asking price for a house can be weirdly off-kilter. (Also, the rents here turned out to be higher than we were expecting.)
Moving to Toronto was a possibility there for a while (and may be yet one day) but I am under no illusions about our ability to ever purchase a home there.
posted by Kitteh at 9:44 AM on December 12, 2014 [2 favorites]
Moving to Toronto was a possibility there for a while (and may be yet one day) but I am under no illusions about our ability to ever purchase a home there.
posted by Kitteh at 9:44 AM on December 12, 2014 [2 favorites]
I haven't lived there for almost 20 years, and I was a student living in a series of mostly crappy apartments, but still...I never thought I'd see the words "Kingston" and "high rents" in the same sentence.
posted by The Card Cheat at 9:48 AM on December 12, 2014 [3 favorites]
posted by The Card Cheat at 9:48 AM on December 12, 2014 [3 favorites]
I know that the housing market in Toronto is nuts. In 2004 I bought a modest house in the west end of Toronto that has appreciated pretty decently on paper. I'm not looking to sell right now, but similar houses on my street sell near-instantly, and I get a couple of calls or form letters every month from real estate agents on behalf of clients who want to live in a nothing-special house like mine.
So if the housing market collapses so catastrophically that the value of my house is halved, that will be pretty damn upsetting for me and a bunch of other home owners, but my house started out relatively cheap enough and I've paid enough to principal so far that I won't be underwater on my mortgage.
OTOH, as The Card Cheat says, if the market corrects that sharply, I suspect that all of us, owners and renters, will be in pretty dire economic straits. I'm crossing my fingers that predictions of a soft landing are accurate.
posted by maudlin at 9:52 AM on December 12, 2014
So if the housing market collapses so catastrophically that the value of my house is halved, that will be pretty damn upsetting for me and a bunch of other home owners, but my house started out relatively cheap enough and I've paid enough to principal so far that I won't be underwater on my mortgage.
OTOH, as The Card Cheat says, if the market corrects that sharply, I suspect that all of us, owners and renters, will be in pretty dire economic straits. I'm crossing my fingers that predictions of a soft landing are accurate.
posted by maudlin at 9:52 AM on December 12, 2014
Ha! Well, the student apartment pricing is just the same, I'd wager, but landlords around here have definitely figured out that if you're a professional couple with no kids, you want something nicer, but by god, you're gonna pay for it.
posted by Kitteh at 9:53 AM on December 12, 2014
posted by Kitteh at 9:53 AM on December 12, 2014
mandolin conspiracy: "The price is what the market will bear. That's not "hyperinflation." "
Look, the price of a head of cabbage is 50,000,000M. I know it was 25 ¢ a while ago. That's not my fault, it's just that the market demands 50,000,000 Marks for a cabbage now. That's capitalism. If you don't like it, go somewhere else where cabbages are cheaper. No, I don't know where that is.
posted by boo_radley at 9:54 AM on December 12, 2014 [30 favorites]
Look, the price of a head of cabbage is 50,000,000M. I know it was 25 ¢ a while ago. That's not my fault, it's just that the market demands 50,000,000 Marks for a cabbage now. That's capitalism. If you don't like it, go somewhere else where cabbages are cheaper. No, I don't know where that is.
posted by boo_radley at 9:54 AM on December 12, 2014 [30 favorites]
Sure, living in Toronto is expensive, but on the other hand it's so easy to get aroun...*starts crying*
posted by The Card Cheat at 9:56 AM on December 12, 2014 [19 favorites]
posted by The Card Cheat at 9:56 AM on December 12, 2014 [19 favorites]
Yeah, saying "supply and demand" is pretty much equivalent to saying "it's God's will" these days.
posted by Steely-eyed Missile Man at 9:56 AM on December 12, 2014 [21 favorites]
posted by Steely-eyed Missile Man at 9:56 AM on December 12, 2014 [21 favorites]
As someone who's happily renting, I'm not so sure it's as bad as she makes it out to be.
On Wednesday our landlord came over unannounced with her work crew to clean the gutters. The only reason we found out about it is because she scrawled a note on the back of an envelope (of our unread mail), otherwise we would have thought that someone broke in, moved around some stuff in one of the bedrooms, and thoughtful cleaned some leaves off the back porch.
We had to move unexpectedly last November because our previous landlord sold the house in which we were living. I hate moving. It's exhausting and expensive.
Our doorknobs keep falling off of basically every door on the first floor and all but two on the second floor and we can't change them because it's not our house. I don't want to ask our landlord about this because she's basically a loon.
There are some lightbulbs I'd like to change but I can't because they're kind of tricky (outside, over the stove) and if I fuck it up that becomes a serious problem because it's not my space.
Someday we'd like to have kids. Kids draw on walls and break stuff. I'd like that to be just a regular headache and not a crazy landlord headache.
There are lots of things we can't do in our own home because it's not actually ours. I like where we live and renting has been a good choice for us for years but the dream of actually owning your own space, knowing it won't be sold out from under you, being able to paint and change doorknobs and fuck it up by accident with DIY projects you haven't thought out properly and mark your kids' heights on the walls and stuff isn't some bonkers thing to want. If the options are living in a space that doesn't belong to you, which generations of renters have treated badly and where you can't make a permanent mark and where the person who owns it isn't really invested in it looking its best but the alternative it is a really long commute that's arduous and expensive and takes away time you could be spending with friends and family it's not crazy to feel like it would be nice if, as a reasonable person who works hard, you could just own a space that belongs to you in a real way.
posted by Mrs. Pterodactyl at 10:00 AM on December 12, 2014 [14 favorites]
On Wednesday our landlord came over unannounced with her work crew to clean the gutters. The only reason we found out about it is because she scrawled a note on the back of an envelope (of our unread mail), otherwise we would have thought that someone broke in, moved around some stuff in one of the bedrooms, and thoughtful cleaned some leaves off the back porch.
We had to move unexpectedly last November because our previous landlord sold the house in which we were living. I hate moving. It's exhausting and expensive.
Our doorknobs keep falling off of basically every door on the first floor and all but two on the second floor and we can't change them because it's not our house. I don't want to ask our landlord about this because she's basically a loon.
There are some lightbulbs I'd like to change but I can't because they're kind of tricky (outside, over the stove) and if I fuck it up that becomes a serious problem because it's not my space.
Someday we'd like to have kids. Kids draw on walls and break stuff. I'd like that to be just a regular headache and not a crazy landlord headache.
There are lots of things we can't do in our own home because it's not actually ours. I like where we live and renting has been a good choice for us for years but the dream of actually owning your own space, knowing it won't be sold out from under you, being able to paint and change doorknobs and fuck it up by accident with DIY projects you haven't thought out properly and mark your kids' heights on the walls and stuff isn't some bonkers thing to want. If the options are living in a space that doesn't belong to you, which generations of renters have treated badly and where you can't make a permanent mark and where the person who owns it isn't really invested in it looking its best but the alternative it is a really long commute that's arduous and expensive and takes away time you could be spending with friends and family it's not crazy to feel like it would be nice if, as a reasonable person who works hard, you could just own a space that belongs to you in a real way.
posted by Mrs. Pterodactyl at 10:00 AM on December 12, 2014 [14 favorites]
So... those of you who poo-poo the supply and demand argument... Do you have an alternative theory? It seems pretty obvious to me, but maybe I'm missing something. When I listed my condo, I asked for $x. There were 4 bidders, and the best offer was 10% more than what I asked for. What, other than supply and demand, is at work here?
posted by DrLickies at 10:02 AM on December 12, 2014 [1 favorite]
posted by DrLickies at 10:02 AM on December 12, 2014 [1 favorite]
If you don't like it, go somewhere else where cabbages are cheaper. No, I don't know where that is.
... Cabbagetown?
posted by sfenders at 10:02 AM on December 12, 2014 [15 favorites]
... Cabbagetown?
posted by sfenders at 10:02 AM on December 12, 2014 [15 favorites]
I mean, legally, our landlord can come over pretty much any time she wants without giving us notice. We like sitting around in jammies and stuff and being relaxed in our own space but there's always the specter of authorized intrusion and it would just be nice to feel like we're actually really settled.
posted by Mrs. Pterodactyl at 10:02 AM on December 12, 2014 [1 favorite]
posted by Mrs. Pterodactyl at 10:02 AM on December 12, 2014 [1 favorite]
Renter apologists: have you ever been kicked out of your rental? I have. Fuck that noise. The feeling that as long as I make my payments I can't be kicked out of my house is very valuable for some people.
posted by MisantropicPainforest at 10:02 AM on December 12, 2014 [8 favorites]
posted by MisantropicPainforest at 10:02 AM on December 12, 2014 [8 favorites]
DrLickies,
It is supply and demand, but that tell us nothing at all.
posted by MisantropicPainforest at 10:03 AM on December 12, 2014 [2 favorites]
It is supply and demand, but that tell us nothing at all.
posted by MisantropicPainforest at 10:03 AM on December 12, 2014 [2 favorites]
"Look, the price of a head of cabbage is 50,000,000M. I know it was 25 ¢ a while ago. That's not my fault, it's just that the market demands 50,000,000 Marks for a cabbage now. That's capitalism. If you don't like it, go somewhere else where cabbages are cheaper. No, I don't know where that is."
Yes, that's hyperinflation. If you applied that example to the situation at hand then a $500,000 house would've cost pennies before. Except that's not the case.
posted by I-baLL at 10:04 AM on December 12, 2014 [1 favorite]
Yes, that's hyperinflation. If you applied that example to the situation at hand then a $500,000 house would've cost pennies before. Except that's not the case.
posted by I-baLL at 10:04 AM on December 12, 2014 [1 favorite]
Renting a condo seems so much better than buying one if buying a condo requires you to pay monthly maintenance and taxes that end up costing as much as rent.
posted by I-baLL at 10:05 AM on December 12, 2014 [1 favorite]
posted by I-baLL at 10:05 AM on December 12, 2014 [1 favorite]
Our landlord is awesome and we are ideal tenants, so it's been a mutually beneficial relationship the whole time, which is a big part of the reason we've been here for 14 years...but I live in continual fear of the day when he decides to cash his chips in and sell this place for ten million dollars or whatever it's worth by now.
posted by The Card Cheat at 10:06 AM on December 12, 2014 [2 favorites]
posted by The Card Cheat at 10:06 AM on December 12, 2014 [2 favorites]
Toronto Real Estate Board charts for 2014.
I can't link to specific charts, but there's one there showing average prices with a consistent upward slope since 1995 (apart from a dip in 2008/09).
The chart at the bottom shows that the monthly cost of home ownership is indeed on the rise, but still nowhere near where it was in the '80s.
posted by Kabanos at 10:11 AM on December 12, 2014
I can't link to specific charts, but there's one there showing average prices with a consistent upward slope since 1995 (apart from a dip in 2008/09).
The chart at the bottom shows that the monthly cost of home ownership is indeed on the rise, but still nowhere near where it was in the '80s.
posted by Kabanos at 10:11 AM on December 12, 2014
Renter apologists: have you ever been kicked out of your rental? I have. Fuck that noise. The feeling that as long as I make my payments I can't be kicked out of my house is very valuable for some people.
Sure. But as a renter, I can also decide to move without the titanic hassle of selling a house. There are trade-offs.
But this isn't a thread about renting versus buying per se -- it's about the specific vagaries of renting vs buying in Toronto, which is a different (and sounds like problematic) thing.
posted by Celsius1414 at 10:11 AM on December 12, 2014 [1 favorite]
Sure. But as a renter, I can also decide to move without the titanic hassle of selling a house. There are trade-offs.
But this isn't a thread about renting versus buying per se -- it's about the specific vagaries of renting vs buying in Toronto, which is a different (and sounds like problematic) thing.
posted by Celsius1414 at 10:11 AM on December 12, 2014 [1 favorite]
The trouble is that Toronto is becoming Manhattan, which isn't inherently so bad, except there's no infrastructure to get people into the city from less expensive outlying areas.
Houses in Scarborough are probably not as crazy but if you had to get from there to downtown Toronto every day or - heaven forbid - to, say, Yonge & Bloor, ugh, what a nightmare.
These prices would be sustainable if Toronto had actual infrastructure to help support the people living there.
posted by GuyZero at 10:13 AM on December 12, 2014 [8 favorites]
Houses in Scarborough are probably not as crazy but if you had to get from there to downtown Toronto every day or - heaven forbid - to, say, Yonge & Bloor, ugh, what a nightmare.
These prices would be sustainable if Toronto had actual infrastructure to help support the people living there.
posted by GuyZero at 10:13 AM on December 12, 2014 [8 favorites]
I can also decide to move without the titanic hassle of selling a house.
I sold my house in Toronto in a week and made a 100% return on investment. Which was tax-free. I would have had to pack all my stuff either way.
Soooo... what hassle exactly?
posted by GuyZero at 10:14 AM on December 12, 2014 [4 favorites]
I sold my house in Toronto in a week and made a 100% return on investment. Which was tax-free. I would have had to pack all my stuff either way.
Soooo... what hassle exactly?
posted by GuyZero at 10:14 AM on December 12, 2014 [4 favorites]
My point being - there may be trade-offs but they're pretty minor and on the balance renters are mostly getting screwed.
posted by GuyZero at 10:15 AM on December 12, 2014
posted by GuyZero at 10:15 AM on December 12, 2014
But part of the reason we're not seeing a bubble that's going to pop is that Canadian banks are highly conservative and cautious in their approach to mortgage lending. That's probably why the subject of that Star article can't get approved for more than $600K.
.... Seriously? Since we don't know anything about the family's situation, let's assume they're average. The median "couple family" income in Toronto from Statscan is about $80,000. The median family in Toronto can't even afford the average condo there, let alone a house -- yet they somehow keep selling like hotcakes? And this is supposed to be evidence of Canadian banks' mythical tighter lending standards?
As somebody who watched all this happen in Florida from 2005-2010 I just have to shake my head at you guys.
posted by junco at 10:17 AM on December 12, 2014 [13 favorites]
.... Seriously? Since we don't know anything about the family's situation, let's assume they're average. The median "couple family" income in Toronto from Statscan is about $80,000. The median family in Toronto can't even afford the average condo there, let alone a house -- yet they somehow keep selling like hotcakes? And this is supposed to be evidence of Canadian banks' mythical tighter lending standards?
As somebody who watched all this happen in Florida from 2005-2010 I just have to shake my head at you guys.
posted by junco at 10:17 AM on December 12, 2014 [13 favorites]
Average Price for a Toronto House: $587,505
Average Price for a Calgary House: $465,047
Average Price for a Vancouver House: $819,336
These are average prices. (Source) For our international friends:
$1 CAD = $0.87 USD right now, or $1 CAD = £0.55
posted by blue_beetle at 10:18 AM on December 12, 2014 [1 favorite]
Average Price for a Calgary House: $465,047
Average Price for a Vancouver House: $819,336
These are average prices. (Source) For our international friends:
$1 CAD = $0.87 USD right now, or $1 CAD = £0.55
posted by blue_beetle at 10:18 AM on December 12, 2014 [1 favorite]
It's not just transportation, it's everything. Daycare, doctors, schools, hospitals, you name it, there isn't enough of it for the number of people who live downtown.
posted by The Card Cheat at 10:18 AM on December 12, 2014 [2 favorites]
posted by The Card Cheat at 10:18 AM on December 12, 2014 [2 favorites]
Yeah, Toronto is certainly bad but the stock refrain for the past 20 years is that it has nothing on Vancouver where a "starter home" for those who can afford it is now a 1-bedroom high-rise condo unit. This is why Vancouverites are so reluctant to leave - it's not that it's so incredibly nice (although it is nice) but because they know they'll never be able to return to owning a house there.
posted by GuyZero at 10:19 AM on December 12, 2014
posted by GuyZero at 10:19 AM on December 12, 2014
This is why Vancouverites are so reluctant to leave - it's not that it's so incredibly nice (although it is nice) but because they know they'll never be able to return to owning a house there.
So a housing market where people know that they wouldn't or couldn't buy their own current house for what they think it's worth, and also (from upthread) are terrified of price declines / interest rate increases. Sounds very rational. It must be different there, this time.
posted by junco at 10:22 AM on December 12, 2014 [7 favorites]
So a housing market where people know that they wouldn't or couldn't buy their own current house for what they think it's worth, and also (from upthread) are terrified of price declines / interest rate increases. Sounds very rational. It must be different there, this time.
posted by junco at 10:22 AM on December 12, 2014 [7 favorites]
Yeah, when my ex and I bought our condo in Southern California we bought at close to the bottom of the market... she had only had a job for a bit, and I didn't even have a job yet, just a "promise" of one, and we (and our credit union) took a risk anyway because prices were going up by $10,000/month(!). (This was a new house, and the builder was setting the prices...)
Because we just happened to be at the right place in our lives (barely), we were able to buy the house, get a 15-year-loan, pay most of it off, then when we divorced I was able to afford to buy her out with just my salary. If just one more year had passed before we bought it would have collapsed that chain of events at some point.
As it is, I pay the same amount monthly for my mortgage and association fees for an 1,800 sq. ft. condo that people are paying in rent for little apartments in the same area. Even though teachers get a lot of breaks when it comes to buying a house, not to mention being low risk for the banks because of our job security, I know a lot of people who just can't afford it.
posted by Huck500 at 10:23 AM on December 12, 2014 [1 favorite]
Because we just happened to be at the right place in our lives (barely), we were able to buy the house, get a 15-year-loan, pay most of it off, then when we divorced I was able to afford to buy her out with just my salary. If just one more year had passed before we bought it would have collapsed that chain of events at some point.
As it is, I pay the same amount monthly for my mortgage and association fees for an 1,800 sq. ft. condo that people are paying in rent for little apartments in the same area. Even though teachers get a lot of breaks when it comes to buying a house, not to mention being low risk for the banks because of our job security, I know a lot of people who just can't afford it.
posted by Huck500 at 10:23 AM on December 12, 2014 [1 favorite]
The other stock answer about Vancouver that's now being floated around Silicon Valley is "Asian money."
There are a lot of wealthy people in China, Singapore, Hong Kong, etc who have money to invest and they put some of it into North American real estate. Specifically, hot west coast residential markets.
I've never seen any actual quantification of this but it happens to some non-zero extent and probably contributes to the irrationality of the market. These buyers have large amounts of cash and don't really care how much they pay as long as it looks like there will be some return on investment.
But it's possible that those people are just noise and the market has just moved into tulip-bulb irrationality, yes.
posted by GuyZero at 10:25 AM on December 12, 2014 [1 favorite]
There are a lot of wealthy people in China, Singapore, Hong Kong, etc who have money to invest and they put some of it into North American real estate. Specifically, hot west coast residential markets.
I've never seen any actual quantification of this but it happens to some non-zero extent and probably contributes to the irrationality of the market. These buyers have large amounts of cash and don't really care how much they pay as long as it looks like there will be some return on investment.
But it's possible that those people are just noise and the market has just moved into tulip-bulb irrationality, yes.
posted by GuyZero at 10:25 AM on December 12, 2014 [1 favorite]
Look, the price of a head of cabbage is 50,000,000M. I know it was 25 ¢ a while ago. That's not my fault, it's just that the market demands 50,000,000 Marks for a cabbage now. That's capitalism. If you don't like it, go somewhere else where cabbages are cheaper. No, I don't know where that is.
While I am not complaining (I am a renter and will be for a while mostly because we made the choice that my wife would stay home with the kids), the fundamental challenge here in Canada (and I think it is the same in Britain) is that the real estate market drives the economy. Real estate drove the American economy in the last decade, and we saw what happened. Places like Imperial County that have the highest unemployment rates in the States also had the large number of people work in construction.
It's hard to say if real estate will continue to power the economy. The Bank of Canada just said that Canada's residential real estate market is overvalued by 10-30% (!!!) but the only thing it seems that will rein in the bubble is a rise in interest rates, which won't happen any time soon thanks to the oil meltdown.
The problem with our post-2008 slow growth economy has been there is little opportunity to build wealth besides in one's home. I guess you could say we're in the end game of the crisis of capitalism that began around 1980 or so, when wages and so on stagnated.
posted by Nevin at 10:28 AM on December 12, 2014
While I am not complaining (I am a renter and will be for a while mostly because we made the choice that my wife would stay home with the kids), the fundamental challenge here in Canada (and I think it is the same in Britain) is that the real estate market drives the economy. Real estate drove the American economy in the last decade, and we saw what happened. Places like Imperial County that have the highest unemployment rates in the States also had the large number of people work in construction.
It's hard to say if real estate will continue to power the economy. The Bank of Canada just said that Canada's residential real estate market is overvalued by 10-30% (!!!) but the only thing it seems that will rein in the bubble is a rise in interest rates, which won't happen any time soon thanks to the oil meltdown.
The problem with our post-2008 slow growth economy has been there is little opportunity to build wealth besides in one's home. I guess you could say we're in the end game of the crisis of capitalism that began around 1980 or so, when wages and so on stagnated.
posted by Nevin at 10:28 AM on December 12, 2014
> [Toronto] prices would be sustainable if Toronto had actual infrastructure to help support the people living there.
Amen to that. But... the infrastructure will (hopefully) come
> The other stock answer about Vancouver that's now being floated around Silicon Valley is "Asian money."
There is some truth in there, and it applies to Toronto as well - alot of foreign money is coming into real estate. An immigrant exec told me maybe 20 years ago that Toronto was a better bet for his money than Vancouver. Several of the houses in our (til recently) affordable part of Toronto have been bought by recent immigrants, some as residences, some as income properties.
The demand is there...
Future affordability will maybe come from more infill, low and mid-rise construction.
posted by Artful Codger at 10:32 AM on December 12, 2014
Amen to that. But... the infrastructure will (hopefully) come
> The other stock answer about Vancouver that's now being floated around Silicon Valley is "Asian money."
There is some truth in there, and it applies to Toronto as well - alot of foreign money is coming into real estate. An immigrant exec told me maybe 20 years ago that Toronto was a better bet for his money than Vancouver. Several of the houses in our (til recently) affordable part of Toronto have been bought by recent immigrants, some as residences, some as income properties.
The demand is there...
Future affordability will maybe come from more infill, low and mid-rise construction.
posted by Artful Codger at 10:32 AM on December 12, 2014
But it's possible that those people are just noise and the market has just moved into tulip-bulb irrationality, yes.
"Vancouver" (the whole Lower Mainland from Hope to Delta) is geographically constrained. There is a finite amount of land, the place is spectacular, and there is little room left to build. Of course real estate is going to cost a lot there.
posted by Nevin at 10:32 AM on December 12, 2014 [1 favorite]
"Vancouver" (the whole Lower Mainland from Hope to Delta) is geographically constrained. There is a finite amount of land, the place is spectacular, and there is little room left to build. Of course real estate is going to cost a lot there.
posted by Nevin at 10:32 AM on December 12, 2014 [1 favorite]
The prices for Vancouver homes look a lot like Toronto's if you start to only consider townhouses rather than detached houses. Not saying that isn't high, but its the $2M+ houses on the west side that are pushing the averages up.
posted by quaking fajita at 10:33 AM on December 12, 2014 [1 favorite]
posted by quaking fajita at 10:33 AM on December 12, 2014 [1 favorite]
I mean, legally, our landlord can come over pretty much any time she wants without giving us notice.
Nope. Unless it's an emergency or you give consent, she has to give you 24 hours notice to enter your unit. That's the law in Ontario.
Living in Toronto, I've had good landlords and bad landlords and indifferent landlords. I know it's frustrating when you feel uncomfortable in your own home because you feel uncomfortable with your landlord, but they have to agree to give up certain rights to you in return for your rental income every month.
posted by thecjm at 10:35 AM on December 12, 2014 [1 favorite]
Nope. Unless it's an emergency or you give consent, she has to give you 24 hours notice to enter your unit. That's the law in Ontario.
Living in Toronto, I've had good landlords and bad landlords and indifferent landlords. I know it's frustrating when you feel uncomfortable in your own home because you feel uncomfortable with your landlord, but they have to agree to give up certain rights to you in return for your rental income every month.
posted by thecjm at 10:35 AM on December 12, 2014 [1 favorite]
Renter apologists: have you ever been kicked out of your rental? I have. Fuck that noise. The feeling that as long as I make my payments I can't be kicked out of my house is very valuable for some people.
Yep, just last year - got kicked out of our last rental (In Riverdale! Beautiful Victorian semi! Sweet rent!) where we had lived for five year and yeah, the move was exhausting and expensive.
All I'm saying is that renting isn't the end of the world, and I would like to be part of the landed class someday. I'm just saying it's not making our life horrible right now.
posted by mandolin conspiracy at 10:37 AM on December 12, 2014
Yep, just last year - got kicked out of our last rental (In Riverdale! Beautiful Victorian semi! Sweet rent!) where we had lived for five year and yeah, the move was exhausting and expensive.
All I'm saying is that renting isn't the end of the world, and I would like to be part of the landed class someday. I'm just saying it's not making our life horrible right now.
posted by mandolin conspiracy at 10:37 AM on December 12, 2014
Nope. Unless it's an emergency or you give consent, she has to give you 24 hours notice to enter your unit. That's the law in Ontario.
I think the poster you're replying to lives in the US, where in a lot of jurisdictions there aren't any of those communist "tenant protection laws" that y'all have got in Canada and it is in fact perfectly legal to just go in anytime they want and evict you for whatever reason and raise your rent by 200%.
posted by junco at 10:39 AM on December 12, 2014
I think the poster you're replying to lives in the US, where in a lot of jurisdictions there aren't any of those communist "tenant protection laws" that y'all have got in Canada and it is in fact perfectly legal to just go in anytime they want and evict you for whatever reason and raise your rent by 200%.
posted by junco at 10:39 AM on December 12, 2014
This is why Vancouverites are so reluctant to leave - it's not that it's so incredibly nice (although it is nice) but because they know they'll never be able to return to owning a house there.
And where else are you going to go? There are just a few cities in Canada that have truly vibrant job markets, and generally speaking there are two kinds of jobs: high-paying technical (software, engineering, finance, law) and low-paying service (admin, creative).
Victoria, where I live, has very low unemployment, but unless you build ships or work in aerospace, or write code, it is very competitive, since, like Vancouver, everyone with soft skills (marketers, project managers, creatives) wants to live here. I suspect other smaller Canadian cities are the same.
I envy Americans because there are so many cities to choose from, and, with 330 million people, a massive job market (when the economy is firing on all cylinders). And a lower cost of living.
posted by Nevin at 10:39 AM on December 12, 2014 [2 favorites]
And where else are you going to go? There are just a few cities in Canada that have truly vibrant job markets, and generally speaking there are two kinds of jobs: high-paying technical (software, engineering, finance, law) and low-paying service (admin, creative).
Victoria, where I live, has very low unemployment, but unless you build ships or work in aerospace, or write code, it is very competitive, since, like Vancouver, everyone with soft skills (marketers, project managers, creatives) wants to live here. I suspect other smaller Canadian cities are the same.
I envy Americans because there are so many cities to choose from, and, with 330 million people, a massive job market (when the economy is firing on all cylinders). And a lower cost of living.
posted by Nevin at 10:39 AM on December 12, 2014 [2 favorites]
And this is supposed to be evidence of Canadian banks' mythical tighter lending standards?
As somebody who watched all this happen in Florida from 2005-2010 I just have to shake my head at you guys.
Wasn't trying to say there might not be a bit of a bubble in pricing (nor be a smug Canadian, because I'm not one) - but to the extent there may be, it's not powered by things like, say, NINJA loans, so that's kind of an apples and oranges comparison vs. Florida in 2005-2010. It's simply not possible here to get that kind of mortgage with that kind of income (or lack thereof) as you could in the US in the runup to the subprime meltdown. UK had the same problem, so it's not a "ah, silly Americans" issue. It was just bad lending policy. We could just as easily fall prey at some point if too many people who aren't in a good position to keep up on their mortages decide to get one because they can.
Not everyone who can get a mortgage here should be taking one out. So yeah, possibly into bubble territory on that front.
posted by mandolin conspiracy at 10:45 AM on December 12, 2014 [1 favorite]
As somebody who watched all this happen in Florida from 2005-2010 I just have to shake my head at you guys.
Wasn't trying to say there might not be a bit of a bubble in pricing (nor be a smug Canadian, because I'm not one) - but to the extent there may be, it's not powered by things like, say, NINJA loans, so that's kind of an apples and oranges comparison vs. Florida in 2005-2010. It's simply not possible here to get that kind of mortgage with that kind of income (or lack thereof) as you could in the US in the runup to the subprime meltdown. UK had the same problem, so it's not a "ah, silly Americans" issue. It was just bad lending policy. We could just as easily fall prey at some point if too many people who aren't in a good position to keep up on their mortages decide to get one because they can.
Not everyone who can get a mortgage here should be taking one out. So yeah, possibly into bubble territory on that front.
posted by mandolin conspiracy at 10:45 AM on December 12, 2014 [1 favorite]
Did the tulip crash happen because lenders stupidly gave loans to people who couldn't afford tulips?
posted by Bentobox Humperdinck at 10:48 AM on December 12, 2014
posted by Bentobox Humperdinck at 10:48 AM on December 12, 2014
No, but the 2008 financial crisis happened because too many mortgage were given to people who were guaranteed to default when their principle-only payments reset to high interest rates they couldn't carry.
Those mortgages had, in the meantime, been bundled up, securitized and sold off as opaque or just poorly scrutinized mortgage bonds, and some of the financial institutions who packaged and sold said securities in turn took a short position against them.
posted by mandolin conspiracy at 10:54 AM on December 12, 2014 [3 favorites]
Those mortgages had, in the meantime, been bundled up, securitized and sold off as opaque or just poorly scrutinized mortgage bonds, and some of the financial institutions who packaged and sold said securities in turn took a short position against them.
posted by mandolin conspiracy at 10:54 AM on December 12, 2014 [3 favorites]
There are a bunch of fundamental differences between Canadian mortgage lenders and circa 2007 US mortgage lenders that make it unlikely for there to be a repeat of the US crash in Canada. This includes not having NINJA loans in Canada and the fact that most mortgages in Canada are only 5 years long (or shorter) so that borrowers who are having issues get discovered before everything melts down. US mortgages are the insanest loan you could possibly get - one approval for a loan with a fixed interest rate for 30 years? It is literally too good to be true.
That said housing prices are outpacing inflation and every other economic growth metric which is unsustainable. So eventually there needs to be some sort of correction.
Or, quite possibly, everyone is analyzing the situation wrong and it's just keep going up, perhaps simply slower than before.
posted by GuyZero at 10:59 AM on December 12, 2014
That said housing prices are outpacing inflation and every other economic growth metric which is unsustainable. So eventually there needs to be some sort of correction.
Or, quite possibly, everyone is analyzing the situation wrong and it's just keep going up, perhaps simply slower than before.
posted by GuyZero at 10:59 AM on December 12, 2014
The Greater Fool blog is a good counterbalance.
posted by wenat at 11:00 AM on December 12, 2014 [2 favorites]
posted by wenat at 11:00 AM on December 12, 2014 [2 favorites]
Wasn't trying to say there might not be a bit of a bubble in pricing (nor be a smug Canadian, because I'm not one) - but to the extent there may be, it's not powered by things like, say, NINJA loans, so that's kind of an apples and oranges comparison vs. Florida in 2005-2010.
Sorry, I didn't mean to imply that I thought you were making a point about the US specifically. It's just that I hear a lot from my Canadian friends that Canada's banks are harder to get a loan from and that therefore there isn't a bubble, but they always ignore things like the until-recent availability of 40-year, 5% down mortgages, the percentage of CHMC-insured mortgages, the percentage of owners spending >30% of their income on mortgage payments (which I can't find the survey right now, but IIRC this was similar to the figure in the US at the height of the bubble).
No, but the 2008 financial crisis happened because too many mortgage were given to people who were guaranteed to default when their principle-only payments reset to high interest rates they couldn't carry.
It's worth noting that many of the people getting these loans did so because they didn't qualify for the traditional 20% down, 30-year fixed mortgage, a product that doesn't exist in Canada, where interest rates reset every five years (typically) anyway.
posted by junco at 11:01 AM on December 12, 2014 [3 favorites]
Sorry, I didn't mean to imply that I thought you were making a point about the US specifically. It's just that I hear a lot from my Canadian friends that Canada's banks are harder to get a loan from and that therefore there isn't a bubble, but they always ignore things like the until-recent availability of 40-year, 5% down mortgages, the percentage of CHMC-insured mortgages, the percentage of owners spending >30% of their income on mortgage payments (which I can't find the survey right now, but IIRC this was similar to the figure in the US at the height of the bubble).
No, but the 2008 financial crisis happened because too many mortgage were given to people who were guaranteed to default when their principle-only payments reset to high interest rates they couldn't carry.
It's worth noting that many of the people getting these loans did so because they didn't qualify for the traditional 20% down, 30-year fixed mortgage, a product that doesn't exist in Canada, where interest rates reset every five years (typically) anyway.
posted by junco at 11:01 AM on December 12, 2014 [3 favorites]
We bought our house in Leslieville in 2002 for under $300,000. Ever since then I've been hearing that the real estate bubble was about to burst, or that the interest rates were finally going to readjust upwards, etc, etc. It hasn't happened yet. Almost all the little old ladies are gone from our neighbourhood and these houses have been gutted and renovated. They are now being bought by young couples for $650,000 to $900,000. Babies and toddlers are appearing everywhere. I have no idea how they are doing it financially and it's none of my business. I just know that we bought our house to live in for the rest of our lives, so we'll see how it all ends.
posted by ThatCanadianGirl at 11:03 AM on December 12, 2014 [3 favorites]
posted by ThatCanadianGirl at 11:03 AM on December 12, 2014 [3 favorites]
I made 166% on my condo in 7 years. No way I would have been able to make that much by renting and investing.
I'm always a bit unsure of what people mean when they talk about returns. Is that a straight 166% IRR on your total principal? Or the house is now worth 166% of what it was when you bought it? Is that net of mortgage interest and maintenance?
For comparison, over the 7 years from Jan 1, 2007 to Dec 31, 2013 the S&P had a nominal CAGR of about 50%.
posted by Skorgu at 11:05 AM on December 12, 2014 [2 favorites]
I'm always a bit unsure of what people mean when they talk about returns. Is that a straight 166% IRR on your total principal? Or the house is now worth 166% of what it was when you bought it? Is that net of mortgage interest and maintenance?
For comparison, over the 7 years from Jan 1, 2007 to Dec 31, 2013 the S&P had a nominal CAGR of about 50%.
posted by Skorgu at 11:05 AM on December 12, 2014 [2 favorites]
they always ignore things like the until-recent availability of 40-year, 5% down mortgages
Fair point. I have a friend whose sister took out one of those before they kiboshed them, and as a finance dude he was horrified.
posted by mandolin conspiracy at 11:06 AM on December 12, 2014
Fair point. I have a friend whose sister took out one of those before they kiboshed them, and as a finance dude he was horrified.
posted by mandolin conspiracy at 11:06 AM on December 12, 2014
Fair point. I have a friend whose sister took out one of those before they kiboshed them, and as a finance dude he was horrified.
Free 30% increase in interest paid over the life of a loan!
I'm not religious but god dammit, compound interest is the tool of the devil.
posted by Talez at 11:16 AM on December 12, 2014 [1 favorite]
Free 30% increase in interest paid over the life of a loan!
I'm not religious but god dammit, compound interest is the tool of the devil.
posted by Talez at 11:16 AM on December 12, 2014 [1 favorite]
They are now being bought by young couples for $650,000 to $900,000. Babies and toddlers are appearing everywhere. I have no idea how they are doing it financially and it's none of my business.
The way you worded that suggests that you do know that they can't actually afford it. How many "young couples," even in Toronto, make $200k-300k a year and have $180,000 for a down payment? Meanwhile, the average Canadian household owes debt equal to 164% of their annual income (it was 130% in the USA in 2007).
posted by junco at 11:18 AM on December 12, 2014 [5 favorites]
The way you worded that suggests that you do know that they can't actually afford it. How many "young couples," even in Toronto, make $200k-300k a year and have $180,000 for a down payment? Meanwhile, the average Canadian household owes debt equal to 164% of their annual income (it was 130% in the USA in 2007).
posted by junco at 11:18 AM on December 12, 2014 [5 favorites]
The rental stock in Toronto is really not geared towards families. I say this as someone who is not into "big families" or anything, but I nearly lost my mind several times living with just my husband in a 2-bedroom apartment. I can't even imagine adding a child to that. But there's not a lot of good options if you do want more space/family, and none of the "condelisks" they keep slapping up are built with a view towards family dwelling. We ended up leaving the city, which is a bit heartbreaking and such a cliche. But boy do I envy my friends who bought in Toronto a few years ago. One bought a house off Ossington in 2005 for $4ook (at the time both the location and the price seemed egregious to me). Well, joke's on me! Her house could easily go for over a million now, and she's in the coolest neighbourhood. Not that I'm bitter or anything!
posted by Mrs. Rattery at 11:23 AM on December 12, 2014
posted by Mrs. Rattery at 11:23 AM on December 12, 2014
I made 166% on my condo in 7 years.
Is that a straight 166% IRR on your total principal? Or the house is now worth 166% of what it was when you bought it?
I was just rereading that comment again and wondering the same thing myself. I'm guessing it's the latter, since by coincidence my house over the same period (7 years) is now worth just about 166% of the purchase price (based on very recent comparables).
posted by Kabanos at 11:27 AM on December 12, 2014
Is that a straight 166% IRR on your total principal? Or the house is now worth 166% of what it was when you bought it?
I was just rereading that comment again and wondering the same thing myself. I'm guessing it's the latter, since by coincidence my house over the same period (7 years) is now worth just about 166% of the purchase price (based on very recent comparables).
posted by Kabanos at 11:27 AM on December 12, 2014
The way you worded that suggests that you do know that they can't actually afford it.
Heavens no. I don't presume to know anything about their financial situation. Having said that, when I say "young couples" I'm comparing them to my own age. These are mostly people in their thirties. In some cases it's their first house, in other cases they sold a house or condo to move here.
posted by ThatCanadianGirl at 11:33 AM on December 12, 2014
Heavens no. I don't presume to know anything about their financial situation. Having said that, when I say "young couples" I'm comparing them to my own age. These are mostly people in their thirties. In some cases it's their first house, in other cases they sold a house or condo to move here.
posted by ThatCanadianGirl at 11:33 AM on December 12, 2014
I'm always a bit unsure of what people mean when they talk about returns. Is that a straight 166% IRR on your total principal? Or the house is now worth 166% of what it was when you bought it? Is that net of mortgage interest and maintenance?
I don't know what numbers that commenter was using, but more generally when talking about this people almost always give a very simple calculation of "the selling price was X percent of the purchase price," while usually omitting everything from the mortgage origination cost, interest payments, and the fees involved in selling the property, not to mention things like maintenance and upgrades or the impact of inflation. Done that way home ownership looks better financially than it does when you include more factors, but I've very rarely heard someone factor other costs in.
posted by Dip Flash at 11:40 AM on December 12, 2014 [2 favorites]
I don't know what numbers that commenter was using, but more generally when talking about this people almost always give a very simple calculation of "the selling price was X percent of the purchase price," while usually omitting everything from the mortgage origination cost, interest payments, and the fees involved in selling the property, not to mention things like maintenance and upgrades or the impact of inflation. Done that way home ownership looks better financially than it does when you include more factors, but I've very rarely heard someone factor other costs in.
posted by Dip Flash at 11:40 AM on December 12, 2014 [2 favorites]
It's pretty straightforward, though. There are many people who want to own property in Toronto, and as a result, prices go up.
If these people do not have money to trade for a home, prices do not go up.
The issue is that interest rates are low enough, and lending standards lax enough, that it's all too easy for Torontonians and Canadians to make promises to pay back money they might never actually earn.
posted by one more dead town's last parade at 11:42 AM on December 12, 2014 [2 favorites]
If these people do not have money to trade for a home, prices do not go up.
The issue is that interest rates are low enough, and lending standards lax enough, that it's all too easy for Torontonians and Canadians to make promises to pay back money they might never actually earn.
posted by one more dead town's last parade at 11:42 AM on December 12, 2014 [2 favorites]
While Toronto prices are high, the problem with this woman is that she wants to live in Riverdale. That's just not happening for under $800,000. I live near Dufferin and St. Clair and there are still a lot of 3 bedroom semis with backyards and garages going for 550. I don't have my choice of fancy shops outside my door, but the neighbourhood is dramatically different from when I moved here 7 years ago. At the time would I have preferred Trinity Bellwoods or Little Italy? Sure, but that was well outside my price range. I moved here because that was what I could afford and I don't regret it for a second. (although I'd still really love to live near Kensington Market)
posted by trigger at 11:46 AM on December 12, 2014 [2 favorites]
posted by trigger at 11:46 AM on December 12, 2014 [2 favorites]
trigger: While Toronto prices are high, the problem with this woman is that she wants to live in Riverdale.
Within easy walking distance of Pop Tate's Choklit Shoppe, no doubt.
posted by dr_dank at 11:56 AM on December 12, 2014 [1 favorite]
Within easy walking distance of Pop Tate's Choklit Shoppe, no doubt.
posted by dr_dank at 11:56 AM on December 12, 2014 [1 favorite]
It makes me really sad that in my parents' neighbourhood of North York, they're knocking down all of the perfectly nice 50s-era split-levels/bungalows and replacing them all with 5-bed, 5-bath monstrosities and asking for $2 mill. Bleh.
posted by Rora at 12:02 PM on December 12, 2014 [4 favorites]
posted by Rora at 12:02 PM on December 12, 2014 [4 favorites]
Heavens no. I don't presume to know anything about their financial situation.
It's a statistical argument. The absolute number of families who make 2-3x the Canadian mean for all two-earner families (as must be the hypothetical 30-something couple who can actually afford to buy in Toronto) is far too small to sustain these house prices without a massive increase in debt (which is exactly what is happening). The average house is only affordable for someone in the top 5% or so of the income distribution.
According to the Toronto Real Estate board about 80,000 detached houses were sold in the Toronto area in 2013, the average price of which was around $800,000. According to Statscan there were about 640,000 Canadian families who made $200,000 or more in 2012. So unless over 12% of the 2% of highest-income families in all of Canada bought a house in Toronto in 2013, a lot of the people buying couldn't afford it.
posted by junco at 12:04 PM on December 12, 2014 [4 favorites]
It's a statistical argument. The absolute number of families who make 2-3x the Canadian mean for all two-earner families (as must be the hypothetical 30-something couple who can actually afford to buy in Toronto) is far too small to sustain these house prices without a massive increase in debt (which is exactly what is happening). The average house is only affordable for someone in the top 5% or so of the income distribution.
According to the Toronto Real Estate board about 80,000 detached houses were sold in the Toronto area in 2013, the average price of which was around $800,000. According to Statscan there were about 640,000 Canadian families who made $200,000 or more in 2012. So unless over 12% of the 2% of highest-income families in all of Canada bought a house in Toronto in 2013, a lot of the people buying couldn't afford it.
posted by junco at 12:04 PM on December 12, 2014 [4 favorites]
the only thing it seems that will rein in the bubble is a rise in interest rates, which won't happen any time soon thanks to the oil meltdown
Unless it's done to counteract the inflationary pressure put on Canada by the falling loonie. (Especially since lower oil will help an already strengthening U.S. economy, which may force the Fed to take its foot off the gas a little bit, which is just going to make the loonie fall farther if the Bank of Canada doesn't follow suit.)
posted by one more dead town's last parade at 12:07 PM on December 12, 2014 [1 favorite]
Unless it's done to counteract the inflationary pressure put on Canada by the falling loonie. (Especially since lower oil will help an already strengthening U.S. economy, which may force the Fed to take its foot off the gas a little bit, which is just going to make the loonie fall farther if the Bank of Canada doesn't follow suit.)
posted by one more dead town's last parade at 12:07 PM on December 12, 2014 [1 favorite]
The average house is only affordable for someone in the top 5% or so of the income distribution.
Or who have a more average income but have access to enough family support to bridge that gap. There are a lot of younger middle class people who get downpayment funds and/or periodic cash infusions from their parents (and who are probably borrowing at high levels on top of that, of course).
posted by Dip Flash at 12:10 PM on December 12, 2014
Or who have a more average income but have access to enough family support to bridge that gap. There are a lot of younger middle class people who get downpayment funds and/or periodic cash infusions from their parents (and who are probably borrowing at high levels on top of that, of course).
posted by Dip Flash at 12:10 PM on December 12, 2014
Or who have a more average income but have access to enough family support to bridge that gap. There are a lot of younger middle class people who get downpayment funds and/or periodic cash infusions from their parents (and who are probably borrowing at high levels on top of that, of course).
Right. When I say can afford I don't mean they can make the monthly payment right now (during a time of historically-low interest rates), I'm using the traditional metric of ~3-3.5x annual income. And I don't want it to sound like I'm picking on Canadians -- this is happening in a lot of other places right now (UK, Australia) -- it just drives me up the wall that instead of learning from what happened to us in the US you're doubling down.
posted by junco at 12:13 PM on December 12, 2014 [2 favorites]
Right. When I say can afford I don't mean they can make the monthly payment right now (during a time of historically-low interest rates), I'm using the traditional metric of ~3-3.5x annual income. And I don't want it to sound like I'm picking on Canadians -- this is happening in a lot of other places right now (UK, Australia) -- it just drives me up the wall that instead of learning from what happened to us in the US you're doubling down.
posted by junco at 12:13 PM on December 12, 2014 [2 favorites]
"Vancouver" (the whole Lower Mainland from Hope to Delta) is geographically constrained.
It is, but we could easily build more housing on the land we have. The political constraints on housing supply are far more important than the geographic ones (building new housing further and further away from amenities isn't really a solution, even if we could do that).
It's illegal to build apartments on about 80% of the residential land in Vancouver, only single-family homes and (some) duplexes are allowed. Other municipalities are even worse.
posted by ripley_ at 12:13 PM on December 12, 2014 [1 favorite]
It is, but we could easily build more housing on the land we have. The political constraints on housing supply are far more important than the geographic ones (building new housing further and further away from amenities isn't really a solution, even if we could do that).
It's illegal to build apartments on about 80% of the residential land in Vancouver, only single-family homes and (some) duplexes are allowed. Other municipalities are even worse.
posted by ripley_ at 12:13 PM on December 12, 2014 [1 favorite]
Economist David Madani has been sounding the alarm for at least a couple of years and predicts a significant haircut and the GreaterFool.ca mentioned above has been out there for even longer. It's important to note that there's a bunch of big differences between the US and Canadian mortgage systems, including Canadians don't get to write of their mortgage interest off and their interest rate is re-assessed every 5 years, not locked in like in the US. Who is borrowing all this cash is also quite different - nearly half of recent home buyers in Canada are first timers- in the US it's around 20%.
The pressure of falling oil prices and increasing interest rates (these will not be divorced from worldwide trends) will be certain to upset the housing market and it appears the tumble has started with housing starts in the oil patch down dramatically.
As far as the driver behind the price increase - Ross Kay claims it's boomers trading up in the following argument:
The pressure of falling oil prices and increasing interest rates (these will not be divorced from worldwide trends) will be certain to upset the housing market and it appears the tumble has started with housing starts in the oil patch down dramatically.
As far as the driver behind the price increase - Ross Kay claims it's boomers trading up in the following argument:
“The only question I have not answered right now is whether this contraction will cause a correction or crash in housing prices. The greatest risk over the last six years is with Boomers over 55 who purchased larger or more expensive homes while exchanging more modest properties to make it happen. The greatest concentration in average selling price growth has been concentrated in this specific segment of the market.posted by zenon at 12:14 PM on December 12, 2014 [1 favorite]
but the only thing it seems that will rein in the bubble is a rise in interest rates, which won't happen any time soon thanks to the oil meltdown.
Or property taxes. Admittedly a tax increase is less likely than interest rate hike, sadly.
Toronto's property taxes are completely fucked. Mostly because of provincial government rules/meddling, to be sure, but it is a huge problem. Here's the chart of mill rates. Note that mufti-residential pays 2.5x what "new" mufti-residential has to pay. Does anybody wonder why St. James Town looks the way it does now? Commercial pays 4x what residential pays. Does anybody wonder why the only commercial left is walmart and shoppers and restaurant after restaurant?
How does Toronto have property taxes at 0.72% while we also have rotting infrastructure and the TTC? Because as real estate prices rise, the property tax mill rate goes down equivalently to keep the net revenue gathered equal year over year. No other form of taxation is restricted in this way. Revenue collected by every other form of taxation grows with the economy.
posted by Chuckles at 12:16 PM on December 12, 2014 [3 favorites]
Or property taxes. Admittedly a tax increase is less likely than interest rate hike, sadly.
Toronto's property taxes are completely fucked. Mostly because of provincial government rules/meddling, to be sure, but it is a huge problem. Here's the chart of mill rates. Note that mufti-residential pays 2.5x what "new" mufti-residential has to pay. Does anybody wonder why St. James Town looks the way it does now? Commercial pays 4x what residential pays. Does anybody wonder why the only commercial left is walmart and shoppers and restaurant after restaurant?
How does Toronto have property taxes at 0.72% while we also have rotting infrastructure and the TTC? Because as real estate prices rise, the property tax mill rate goes down equivalently to keep the net revenue gathered equal year over year. No other form of taxation is restricted in this way. Revenue collected by every other form of taxation grows with the economy.
posted by Chuckles at 12:16 PM on December 12, 2014 [3 favorites]
junco, only about one in six or eight of the houses in my neighbourhood are detached homes. We have loads of semi-detached and a few sets of row houses. Large chunks of Toronto are the same. Factoring only detached homes into your calculation is going to throw off your results.
posted by ThatCanadianGirl at 12:19 PM on December 12, 2014 [1 favorite]
posted by ThatCanadianGirl at 12:19 PM on December 12, 2014 [1 favorite]
Here's the chart of mill rates. Note that mufti-residential pays 2.5x what "new" mufti-residential has to pay.
That is fascinating, thanks. Do you know why (either the stated reason or the actual reason) older multi-residential is taxed so much more than single-family and new multi-residential?
posted by ripley_ at 12:26 PM on December 12, 2014
That is fascinating, thanks. Do you know why (either the stated reason or the actual reason) older multi-residential is taxed so much more than single-family and new multi-residential?
posted by ripley_ at 12:26 PM on December 12, 2014
Factoring only detached homes into your calculation is going to throw off your results.
Semi-detached houses only accounted for 10% of sales in October 2013 in the Toronto area (vs. 50% for detached homes), and the average price was $635,000 (according to the Star, in August). I don't think that makes a meaningful difference. According to that same Star article, the average cost of a condo was $380,000. Only about4%10% of Canadian households make over $150,000 a year.
posted by junco at 12:33 PM on December 12, 2014 [2 favorites]
Semi-detached houses only accounted for 10% of sales in October 2013 in the Toronto area (vs. 50% for detached homes), and the average price was $635,000 (according to the Star, in August). I don't think that makes a meaningful difference. According to that same Star article, the average cost of a condo was $380,000. Only about
posted by junco at 12:33 PM on December 12, 2014 [2 favorites]
>the only thing it seems that will rein in the bubble is a rise in interest rates, which won't happen any time soon thanks to the oil meltdown
Unless it's done to counteract the inflationary pressure put on Canada by the falling loonie.
I thought devaluing the loonie (in the short term) was part of the plan? It sure helps exporters, who include oil producers. Falling oil prices are mitigated by a weak loonie.
posted by Nevin at 12:33 PM on December 12, 2014
Unless it's done to counteract the inflationary pressure put on Canada by the falling loonie.
I thought devaluing the loonie (in the short term) was part of the plan? It sure helps exporters, who include oil producers. Falling oil prices are mitigated by a weak loonie.
posted by Nevin at 12:33 PM on December 12, 2014
Do you know why (either the stated reason or the actual reason) older multi-residential is taxed so much more than single-family and new multi-residential?
Politics, I've always assumed.
I think the revenue collected from residental property taxes remains constant because of seniors and others who bought their homes back when they were cheaper, and wouldn't be able to afford property taxes based on the newly revised value of their homes. It's not good politically, and quite possibly morally, to kick seniors out of homes after they worked hard to pay off their mortgages.
posted by tallmiddleagedgeek at 12:34 PM on December 12, 2014
Politics, I've always assumed.
I think the revenue collected from residental property taxes remains constant because of seniors and others who bought their homes back when they were cheaper, and wouldn't be able to afford property taxes based on the newly revised value of their homes. It's not good politically, and quite possibly morally, to kick seniors out of homes after they worked hard to pay off their mortgages.
posted by tallmiddleagedgeek at 12:34 PM on December 12, 2014
I thought devaluing the loonie (in the short term) was part of the plan? It sure helps exporters, who include oil producers. Falling oil prices are mitigated by a weak loonie.
A falling loonie means more inflation, which is at odds with saying that rate hikes won't happen anytime soon.
posted by one more dead town's last parade at 12:36 PM on December 12, 2014 [2 favorites]
A falling loonie means more inflation, which is at odds with saying that rate hikes won't happen anytime soon.
posted by one more dead town's last parade at 12:36 PM on December 12, 2014 [2 favorites]
As someone who hightailed it out of Manhattan last year after 6 years of paying exorbitant rent to live in a UES shithole, I can't help but feel some form of schadenfreude when reading these comments. Yeah, the sushi sucks from my quaint Midwest city but my condo sure as hell doesn't.
posted by gagglezoomer at 12:36 PM on December 12, 2014 [2 favorites]
posted by gagglezoomer at 12:36 PM on December 12, 2014 [2 favorites]
Only about 4% of Canadian households make over $150,000 a year.
Not sure where you're getting that from, but StatsCan says it was 9.9% in 2011. (edit: oops, I see you corrected it)
It's not good politically, and quite possibly morally, to kick seniors out of homes after they worked hard to pay off their mortgages.
It's not kicking them out - people who own their homes can use their equity to pay taxes. I'd argue that it's morally much worse to keep taxes low for people who own hugely valuable assets. No arguments about the political appeal though.
posted by ripley_ at 12:52 PM on December 12, 2014 [1 favorite]
Not sure where you're getting that from, but StatsCan says it was 9.9% in 2011. (edit: oops, I see you corrected it)
It's not good politically, and quite possibly morally, to kick seniors out of homes after they worked hard to pay off their mortgages.
It's not kicking them out - people who own their homes can use their equity to pay taxes. I'd argue that it's morally much worse to keep taxes low for people who own hugely valuable assets. No arguments about the political appeal though.
posted by ripley_ at 12:52 PM on December 12, 2014 [1 favorite]
It's illegal to build apartments on about 80% of the residential land in Vancouver, only single-family homes and (some) duplexes are allowed.
I've often wondered what would happen if we switched zoning for most down town neighbourhoods to 4-storey max height and allowed commercial properties on the main floors of the main roads.
Hm. If only there were some place that Toronto urban planners could visit, maybe a few hours up the 401.
posted by bonehead at 12:59 PM on December 12, 2014
I've often wondered what would happen if we switched zoning for most down town neighbourhoods to 4-storey max height and allowed commercial properties on the main floors of the main roads.
Hm. If only there were some place that Toronto urban planners could visit, maybe a few hours up the 401.
posted by bonehead at 12:59 PM on December 12, 2014
Regarding "supply and demand," housing is a highly-regulated market and in North America, prices are artificially driven up by zoning restrictions that, at best, propagate out-dated housing rules intended for a different era (i.e., before modern HVAC) or, at worst, protect the already-owning class who don't want the value of their scarce commodity (livable square footage) to drop by there being more of it available. (Now, the tricky bit here is that prices are ALSO driven up by zoning and building regulations that keep toxic waste dumps out of downtown Toronto and make buildings minimally earthquake proof so they don't tip over in a gusty wind, which are GOOD restrictions on housing stock.)
It's really tough to talk about "supply and demand" because housing is SO OBVIOUSLY a market where "pure" supply and demand are not at work. Supply is naturally restricted by availability of land, time of commute, etc., but ALSO tightly and artificially restricted specifically to prevent prices from falling. That is like the #1 goal of urban officials in North America: Don't Let Property Values Fall. If you do, they'll elect someone else who won't allow microapartments to be built that drive down your home's value by making apartments less-scarce.
posted by Eyebrows McGee at 1:00 PM on December 12, 2014 [8 favorites]
It's really tough to talk about "supply and demand" because housing is SO OBVIOUSLY a market where "pure" supply and demand are not at work. Supply is naturally restricted by availability of land, time of commute, etc., but ALSO tightly and artificially restricted specifically to prevent prices from falling. That is like the #1 goal of urban officials in North America: Don't Let Property Values Fall. If you do, they'll elect someone else who won't allow microapartments to be built that drive down your home's value by making apartments less-scarce.
posted by Eyebrows McGee at 1:00 PM on December 12, 2014 [8 favorites]
I live in Toronto and have opinions on this issue so forgive me for the length of this.
As far as I'm concerned there are two factors causing this:
1. As per the article we have 125,000 people coming to the GTA each year. This is 125,000 more people who need a place to live.
2. People see housing as an investment, and at this point the only good investment, and are purchasing multiple properties as a result. This is what is fuelling the condo building in the area.
All levels of government need to do what we can to get the people in 1. a place to live while reduce the effect that the people in 2. have on the market. If they could also somehow make other places in Ontario worth living in to reduce migration to Toronto that would be nice as well.
The Toronto land transfer tax is great because for people who plan on living in the property, the lower property taxes in Toronto end up paying for the extra upfront tax in something like 4 years. Investors and real estate agents hate it, but it is probably the only way the city is using all the investment in real estate to the actual advantage of the city's residents. Actually, governments should just do the opposite of what property speculators/developers and TREB/OREA want as a rule of thumb.
With respect to the mill rate going down to compensate for increasing house prices I am not sure if the alternative makes any sense. My mom's house value has tripled as per MPAC since she purchased it 15 years ago. I don't know what the rationale would be for her property taxes to triple as a result. The city's budget probably hasn't tripled in that time so why should her taxes? The city collects a certain amount each year. How much they need is a political decision. Once they have worked out what they need the mill rate is adjusted accordingly to get that amount. If council has the good sense and strong will to increase the budget so that it is as big as it should be then the taxes will go up accordingly, but it still won't be anywhere near as high as property values have appreciated.
The CRA could also be doing more to keep things in check. They are getting better on new construction flipping as a lot of investors are now getting letters from the CRA asking for the return of HST rebates, but we don't see very many letters saying that they are going to treat the profits as business income instead of capital gains.
A lot of people are also using money from foreign sources. This is either straight up foreigners plunking their money in Canadian real estate or people who are working abroad (in say the Middle East) and then using those funds to purchase a home in Canada. Either way there is scope for the CRA to give these people a closer look to see how they and their properties should be taxed.
Then you have people who make significant unreported income. An example would be a taxi driver who has to use a mortgage broker to buy their house because even though they are making a pretty good living, their stated income is really low because they get a lot of cash. If someone has just purchased a house for $800,000 and their tax returns say their income is $75,000 per year then you know something is up. Either there is additional employment or business income that isn't being reported or the property is being rented out and the rental income isn't being reported. But I've never seen something like this happen to a client.
If I ran the CRA I would open up a Toronto real estate branch and just have it self-fund to grow as the additional revenue came in. It would probably take up an entire building within 2 years.
Building standards for condominiums should be looked at as well. No one involved in the condo construction process is looking more than 7 years into the future (and that is only because builders are required to warrant major structural defects up to that time). The investors are for the most part looking to flip the unit before closing, or at most hold onto it for a year or two. What these buildings will look like in 10-15 years is worrying, especially when we are seeing windows fall off million dollar condos like Shangri-La which are barely 2 years old. Update the building code for condominiums in particular and add longer Tarion warranty coverage. Also, the Tarion warranties should make it crystal clear what the net price people will be paying at closing. The latest versions are better as they list everything in Schedule B, but the whole thing is still bullshit. "Oh, you just paid for a house, hooking up your electricity isn't included in that". The builder can itemize it however they want on the final statement of adjustments but if the agreement says $500,000 then that should be the final price the purchaser pays.
Occupancy standards need to be addressed. Housing that is zoned single-family is being occupied by multiple families or having parts of it rented out. To a degree I think this is a better use of the existing housing stock, but if you are looking to buy a house for your family alone and some other buyer is actually two/three families or going to put 3 rental units in the basement then you just may be out-bid for it. Add more areas that are zoned to allow duplexes/triplexes and then be strict on the remaining single-family areas.
The banks have actually gotten pretty good about who they lend to in the last few years. Most of the marginal borrowers are now going to B-Lenders. They probably have a lot of iffy loans on their books at present, but once the 5 year terms on those come up the banks can just not renew and then the borrowers will have to go somewhere else (although if they'be been paying for 5 years then maybe they aren't so iffy). If Home Trust (for example) goes down because they gave too many marginal loans I don't know if anyone beside its investors would shed a tear.
posted by any portmanteau in a storm at 1:05 PM on December 12, 2014 [8 favorites]
As far as I'm concerned there are two factors causing this:
1. As per the article we have 125,000 people coming to the GTA each year. This is 125,000 more people who need a place to live.
2. People see housing as an investment, and at this point the only good investment, and are purchasing multiple properties as a result. This is what is fuelling the condo building in the area.
All levels of government need to do what we can to get the people in 1. a place to live while reduce the effect that the people in 2. have on the market. If they could also somehow make other places in Ontario worth living in to reduce migration to Toronto that would be nice as well.
The Toronto land transfer tax is great because for people who plan on living in the property, the lower property taxes in Toronto end up paying for the extra upfront tax in something like 4 years. Investors and real estate agents hate it, but it is probably the only way the city is using all the investment in real estate to the actual advantage of the city's residents. Actually, governments should just do the opposite of what property speculators/developers and TREB/OREA want as a rule of thumb.
With respect to the mill rate going down to compensate for increasing house prices I am not sure if the alternative makes any sense. My mom's house value has tripled as per MPAC since she purchased it 15 years ago. I don't know what the rationale would be for her property taxes to triple as a result. The city's budget probably hasn't tripled in that time so why should her taxes? The city collects a certain amount each year. How much they need is a political decision. Once they have worked out what they need the mill rate is adjusted accordingly to get that amount. If council has the good sense and strong will to increase the budget so that it is as big as it should be then the taxes will go up accordingly, but it still won't be anywhere near as high as property values have appreciated.
The CRA could also be doing more to keep things in check. They are getting better on new construction flipping as a lot of investors are now getting letters from the CRA asking for the return of HST rebates, but we don't see very many letters saying that they are going to treat the profits as business income instead of capital gains.
A lot of people are also using money from foreign sources. This is either straight up foreigners plunking their money in Canadian real estate or people who are working abroad (in say the Middle East) and then using those funds to purchase a home in Canada. Either way there is scope for the CRA to give these people a closer look to see how they and their properties should be taxed.
Then you have people who make significant unreported income. An example would be a taxi driver who has to use a mortgage broker to buy their house because even though they are making a pretty good living, their stated income is really low because they get a lot of cash. If someone has just purchased a house for $800,000 and their tax returns say their income is $75,000 per year then you know something is up. Either there is additional employment or business income that isn't being reported or the property is being rented out and the rental income isn't being reported. But I've never seen something like this happen to a client.
If I ran the CRA I would open up a Toronto real estate branch and just have it self-fund to grow as the additional revenue came in. It would probably take up an entire building within 2 years.
Building standards for condominiums should be looked at as well. No one involved in the condo construction process is looking more than 7 years into the future (and that is only because builders are required to warrant major structural defects up to that time). The investors are for the most part looking to flip the unit before closing, or at most hold onto it for a year or two. What these buildings will look like in 10-15 years is worrying, especially when we are seeing windows fall off million dollar condos like Shangri-La which are barely 2 years old. Update the building code for condominiums in particular and add longer Tarion warranty coverage. Also, the Tarion warranties should make it crystal clear what the net price people will be paying at closing. The latest versions are better as they list everything in Schedule B, but the whole thing is still bullshit. "Oh, you just paid for a house, hooking up your electricity isn't included in that". The builder can itemize it however they want on the final statement of adjustments but if the agreement says $500,000 then that should be the final price the purchaser pays.
Occupancy standards need to be addressed. Housing that is zoned single-family is being occupied by multiple families or having parts of it rented out. To a degree I think this is a better use of the existing housing stock, but if you are looking to buy a house for your family alone and some other buyer is actually two/three families or going to put 3 rental units in the basement then you just may be out-bid for it. Add more areas that are zoned to allow duplexes/triplexes and then be strict on the remaining single-family areas.
The banks have actually gotten pretty good about who they lend to in the last few years. Most of the marginal borrowers are now going to B-Lenders. They probably have a lot of iffy loans on their books at present, but once the 5 year terms on those come up the banks can just not renew and then the borrowers will have to go somewhere else (although if they'be been paying for 5 years then maybe they aren't so iffy). If Home Trust (for example) goes down because they gave too many marginal loans I don't know if anyone beside its investors would shed a tear.
posted by any portmanteau in a storm at 1:05 PM on December 12, 2014 [8 favorites]
The flip side of granny losing her home due to rising property taxes is California's Prop 13 which has been a complete shitshow.
posted by GuyZero at 1:05 PM on December 12, 2014 [4 favorites]
posted by GuyZero at 1:05 PM on December 12, 2014 [4 favorites]
Maybe I'm just in an exceptionally bad mood today, but I hate this fucking city and I have no idea why people are willing to pay so goddamn much to live here.
I grew up in Vancouver and I would love to move back for so many reasons, but in a lot of ways it's even worse and just financially insane to consider right now. One thing I'm really sick of hearing is how if you can't afford to live somewhere, you should just leave. I just want to go home and not have to kill myself to do it.
At least the constant chorus of "just work in the oil patch" has died down as of late. I was especially sick of that refrain. Canada is a depraved place to be so full of people cheerfully selling their souls and burning down the future to afford granite countertops and spacious garages.
posted by [expletive deleted] at 1:07 PM on December 12, 2014 [8 favorites]
I grew up in Vancouver and I would love to move back for so many reasons, but in a lot of ways it's even worse and just financially insane to consider right now. One thing I'm really sick of hearing is how if you can't afford to live somewhere, you should just leave. I just want to go home and not have to kill myself to do it.
At least the constant chorus of "just work in the oil patch" has died down as of late. I was especially sick of that refrain. Canada is a depraved place to be so full of people cheerfully selling their souls and burning down the future to afford granite countertops and spacious garages.
posted by [expletive deleted] at 1:07 PM on December 12, 2014 [8 favorites]
Does Toronto not have a property tax freeze/reduction/exemption for owner-occupied homes whose owners are senior citizens? That way you can tax speculators without hitting granny.
posted by Eyebrows McGee at 1:15 PM on December 12, 2014
posted by Eyebrows McGee at 1:15 PM on December 12, 2014
"Go work in the oil patch" is the only option for someone who could not get into university (and increasingly is for university grads too). With the death of resource industries elsewhere, fishing, forestry and agriculture all depopulating in the last generation, manufacturing cratering in Quebec and Ontario, there have to be blue-ish collar jobs somewhere. The oil patch has been that answer for many. Let's not turn this into class warfare.
posted by bonehead at 1:16 PM on December 12, 2014 [1 favorite]
posted by bonehead at 1:16 PM on December 12, 2014 [1 favorite]
As per the article we have 125,000 people coming to the GTA each year. This is 125,000 more people who need a place to live.
Houses are not priced in people. They are priced in dollars. People who show up without dollars are not pushing housing prices upward.
A lot of people are also using money from foreign sources.
It's doubtful that there are enough such people to move the market. It's far more likely that the bulk of the runup of the past decade has been due to it being way too easy to get way too much mortgage.
posted by one more dead town's last parade at 1:25 PM on December 12, 2014 [2 favorites]
Houses are not priced in people. They are priced in dollars. People who show up without dollars are not pushing housing prices upward.
A lot of people are also using money from foreign sources.
It's doubtful that there are enough such people to move the market. It's far more likely that the bulk of the runup of the past decade has been due to it being way too easy to get way too much mortgage.
posted by one more dead town's last parade at 1:25 PM on December 12, 2014 [2 favorites]
There actually is tax relief for low-income seniors in Toronto:
Tax and Water Relief
posted by any portmanteau in a storm at 1:25 PM on December 12, 2014
Tax and Water Relief
posted by any portmanteau in a storm at 1:25 PM on December 12, 2014
Does Toronto not have a property tax freeze/reduction/exemption for owner-occupied homes whose owners are senior citizens? That way you can tax speculators without hitting granny.
Of course it does. This doesn't apply of course, if you are flush with other retirement savings and/or have a massive pension. Rich people love to use the boogeyman of granny being kicked out of her home, but it's not very congruent with reality. Instead, you have semi-retired divorcees too attached to their million-dollar mcmansions who prefer anti-tax outrage and complaints about your lazy children who spent themselves thousands of dollars in debt to move across the country to look after your sorry ass while you spend away your retirement savings to preserve the delusion that you can pay off the mortgage as a semi-retired hairdresser on the house you bought in cash, insisting on living alone in this cavernous monument to your own stubborn stupidity. Not that I'm bitter or anything.
posted by [expletive deleted] at 1:32 PM on December 12, 2014 [3 favorites]
Of course it does. This doesn't apply of course, if you are flush with other retirement savings and/or have a massive pension. Rich people love to use the boogeyman of granny being kicked out of her home, but it's not very congruent with reality. Instead, you have semi-retired divorcees too attached to their million-dollar mcmansions who prefer anti-tax outrage and complaints about your lazy children who spent themselves thousands of dollars in debt to move across the country to look after your sorry ass while you spend away your retirement savings to preserve the delusion that you can pay off the mortgage as a semi-retired hairdresser on the house you bought in cash, insisting on living alone in this cavernous monument to your own stubborn stupidity. Not that I'm bitter or anything.
posted by [expletive deleted] at 1:32 PM on December 12, 2014 [3 favorites]
A lot of people are also using money from foreign sources.
It's doubtful that there are enough such people to move the market. It's far more likely that the bulk of the runup of the past decade has been due to it being way too easy to get way too much mortgage.
In the condo segment there are definitely enough to move the market and at least 3 of the bigger agents I know go abroad to sell pre-construction condos to investors.
posted by any portmanteau in a storm at 1:41 PM on December 12, 2014 [1 favorite]
It's doubtful that there are enough such people to move the market. It's far more likely that the bulk of the runup of the past decade has been due to it being way too easy to get way too much mortgage.
In the condo segment there are definitely enough to move the market and at least 3 of the bigger agents I know go abroad to sell pre-construction condos to investors.
posted by any portmanteau in a storm at 1:41 PM on December 12, 2014 [1 favorite]
There are existing programs to aid people who are being inflated taxed out of their houses. Also remember the downward pressure on house prices a reasonable property tax would have.
I remember looking into the reason for the "new" vs. "old" multi-res issue. Here is a good article at Torontoist. The comments, and the rate, reminded me that this particular issue is actually being addressed. It used to be that "old" multi-res was paying the commercial rate, 4x higher, and bringing it down to 2.5x is a big improvement. I fear it is a bit late.. Old construction apartment owners don't strike me, en-mass, as being the most upstanding citizens.. the term slum-lord comes to mind :) Not to mention the new construction multi-res should be facing corresponding increases until they get to the same level. For one, condo dwellers hardly vote so they are low hanging fruit, for another multi-res puts huge pressure on infrastructure.
Of course developers fund municipal campaigns, and the provincial government has always been about pushing hard for development at any cost--Ontario Municipal Board and all that jazz. That's got to be where the difference came from in the first place.
I think we should calculate the property tax value of roads. Or, let's make it a bit more reasonable, just take the property tax value of roads that are wider than 2 lanes, except expressways, and add that to the accounted cost of building/maintaining car infrastructure. That would be fun :)
posted by Chuckles at 1:45 PM on December 12, 2014
I remember looking into the reason for the "new" vs. "old" multi-res issue. Here is a good article at Torontoist. The comments, and the rate, reminded me that this particular issue is actually being addressed. It used to be that "old" multi-res was paying the commercial rate, 4x higher, and bringing it down to 2.5x is a big improvement. I fear it is a bit late.. Old construction apartment owners don't strike me, en-mass, as being the most upstanding citizens.. the term slum-lord comes to mind :) Not to mention the new construction multi-res should be facing corresponding increases until they get to the same level. For one, condo dwellers hardly vote so they are low hanging fruit, for another multi-res puts huge pressure on infrastructure.
Of course developers fund municipal campaigns, and the provincial government has always been about pushing hard for development at any cost--Ontario Municipal Board and all that jazz. That's got to be where the difference came from in the first place.
I think we should calculate the property tax value of roads. Or, let's make it a bit more reasonable, just take the property tax value of roads that are wider than 2 lanes, except expressways, and add that to the accounted cost of building/maintaining car infrastructure. That would be fun :)
posted by Chuckles at 1:45 PM on December 12, 2014
In the condo segment there are definitely enough to move the market
What evidence supports this claim?
posted by one more dead town's last parade at 1:49 PM on December 12, 2014
What evidence supports this claim?
posted by one more dead town's last parade at 1:49 PM on December 12, 2014
The comments, and the rate, reminded me that this particular issue is actually being addressed. It used to be that "old" multi-res was paying the commercial rate, 4x higher, and bringing it down to 2.5x is a big improvement.
Yikes.
I still find it horrendous that people who can afford a single-family house are being taxed less than apartment and condo dwellers. I'm more curious about that difference than the one between old and new multifamily.
posted by ripley_ at 1:57 PM on December 12, 2014
Yikes.
I still find it horrendous that people who can afford a single-family house are being taxed less than apartment and condo dwellers. I'm more curious about that difference than the one between old and new multifamily.
posted by ripley_ at 1:57 PM on December 12, 2014
Substantial foreign investment in Toronto condos is very widely agreed upon. I'm not sure there is much hard evidence though.
Anyway, in looking at that last graph from the Toronto Real Estate Board, the affordability index one.. Well, if I squint, I feel like I can see signs of inflation. In particular, the slope of the curve around 2005-7 is much steeper than the curve from 2012-2014. The average price has been increasing at about the same rate for the last 12 years though (except for the 2008 'correction'). That seems like a sign of something.
posted by Chuckles at 1:59 PM on December 12, 2014
Anyway, in looking at that last graph from the Toronto Real Estate Board, the affordability index one.. Well, if I squint, I feel like I can see signs of inflation. In particular, the slope of the curve around 2005-7 is much steeper than the curve from 2012-2014. The average price has been increasing at about the same rate for the last 12 years though (except for the 2008 'correction'). That seems like a sign of something.
posted by Chuckles at 1:59 PM on December 12, 2014
...if you are looking to buy a house for your family alone and some other buyer is actually two/three families or going to put 3 rental units in the basement then you just may be out-bid for it. Add more areas that are zoned to allow duplexes/triplexes and then be strict on the remaining single-family areas.
Splitting scarce real estate across multiple families instead of just one is a feature, not a bug.
I also find it incredibly bizarre that you want to strictly reserve some areas for the few people who can afford a single-family house in Toronto.
posted by ripley_ at 2:02 PM on December 12, 2014
Splitting scarce real estate across multiple families instead of just one is a feature, not a bug.
I also find it incredibly bizarre that you want to strictly reserve some areas for the few people who can afford a single-family house in Toronto.
posted by ripley_ at 2:02 PM on December 12, 2014
I can't agree ripley_, I think multi-res puts more pressure on infrastructure. Not 4x more, mind, but more. I mean it is a massively complex calculation, and I'm just winging it. We at least have to consider the various factors. And even if I turn out to be right about cost pressure, you could still make a pretty good argument that multi-res deserves a subsidy :)
posted by Chuckles at 2:03 PM on December 12, 2014
posted by Chuckles at 2:03 PM on December 12, 2014
It puts more pressure on infrastructure because it houses more people. Per household, which is more relevant, it puts much less pressure on infrastructure - it's more energy efficient and it's generally much easier to provide services when people aren't widely spread out.
It makes sense that the inhabitants of a building with 10 units collectively pay more than a household in a single-family dwelling. It doesn't make sense that families with equally-valued homes pay less if their home happens to be detached from others.
posted by ripley_ at 2:09 PM on December 12, 2014 [2 favorites]
It makes sense that the inhabitants of a building with 10 units collectively pay more than a household in a single-family dwelling. It doesn't make sense that families with equally-valued homes pay less if their home happens to be detached from others.
posted by ripley_ at 2:09 PM on December 12, 2014 [2 favorites]
ripley, condos are charged at the same rate as houses. Multi-residential would be for apartment buildings. I don't know where a legal duplex/triplex would fit into this.
posted by any portmanteau in a storm at 2:11 PM on December 12, 2014
posted by any portmanteau in a storm at 2:11 PM on December 12, 2014
Interesting, thanks - although that's also pretty awful given that it's generally more wealthy people who own.
posted by ripley_ at 2:14 PM on December 12, 2014
posted by ripley_ at 2:14 PM on December 12, 2014
Ontario property classes. So 6 units still isn't multi-res. That's why the converted house I live in has 6 units, I think :) However, there is still lots of grey area. What about townhouses and row houses? What about rooming houses (which is actually brought up in that link, but without much of an answer)?
posted by Chuckles at 2:27 PM on December 12, 2014
posted by Chuckles at 2:27 PM on December 12, 2014
Average Price for a Toronto House: $587,505
Average salary is apparently CAD$72k so this is better than where I live in semi-rural England where average salary is less than a tenth of average property price, which includes flats etc. And a lot better than London.
posted by biffa at 2:54 PM on December 12, 2014
Average salary is apparently CAD$72k so this is better than where I live in semi-rural England where average salary is less than a tenth of average property price, which includes flats etc. And a lot better than London.
posted by biffa at 2:54 PM on December 12, 2014
Chuckles: "I can't agree ripley_, I think multi-res puts more pressure on infrastructure. Not 4x more, mind, but more. I mean it is a massively complex calculation, and I'm just winging it."
Local governments are actually really good at this calculation! (Although really bad at making logical decisions based on it, since developers will pay for the expensive install and the maintenance in 15 years will be someone else's problem while the new tax revenue appears now!) The most expensive forms of infrastructure, both to install and to maintain, are water, sewer, and road/sidewalk. (You can break out road and sidewalk individually but let's just go with "paved people moving access.") The farther apart buildings are, the more pipes you have to run (underground) and pipes COST A LOT. Close-together buildings, with more family units in them, require a lot less pipe and a lot less road. They require MORE water capacity and more sewer capacity, but putting and maintaining one mile of big pipe is a lot less expensive than putting in and maintaining ten miles of small pipe. (The road calculations are pretty complex -- you have higher road use which deteriorates the road faster, but fewer miles of road, and people in high-density areas tend to own fewer cars and drive less -- but it still typically comes out in favor of high-density areas.)
My city had a dust-up over this a few years back when we got ordered by the EPA to do a really expensive sewer remediation project and it was rolled into property taxes, and people in the wealthy part of town with $300,000 houses were going, "Why do we have to pay $21 towards this when all the bad sewers are in the older part of town and those folks with $100,000 houses are only paying $7?" and demanded a cost breakout and basically since they live in big-ass houses on big-ass lots, it actually is costing like $42/rich person house to maintain the sewers in that part of town every year and only like $6 to maintain the sewers in the older parts of town, because even though the older sewers need more work, 200 feet of pipe serves 30 households instead of 6 households.
High-density housing does put more demand on schools and public transit and things, but only if you're not growing those services as the housing gets more dense.
Here's a Canadian report from last year on the hidden costs of sprawl, with lots of links to infrastructure cost reports (from all over the world but particularly North America). And here's a report from 1998 that outlines in excruciating detail (see especially part 1) what variables affect the cost of sewage service (spoiler: it's mostly housing and job density. Higher density is cheaper.). One particular thing the executive summary notes is that: "Lack of density and economy of scale variables in CDOW's rate structure likely exacerbates regional income disparities, as it can cause communities with lower per capita incomes and higher poverty rates to subsidize service to communities with higher incomes and lower poverty rates." That is, the slums end up subsidizing the McMansions.
(I literally commented earlier today on Facebook that it's a sign of creeping middle age that I get so excited about sewer infrastructure. BUT LOOK IT'S USEFUL!)
posted by Eyebrows McGee at 3:39 PM on December 12, 2014 [12 favorites]
Local governments are actually really good at this calculation! (Although really bad at making logical decisions based on it, since developers will pay for the expensive install and the maintenance in 15 years will be someone else's problem while the new tax revenue appears now!) The most expensive forms of infrastructure, both to install and to maintain, are water, sewer, and road/sidewalk. (You can break out road and sidewalk individually but let's just go with "paved people moving access.") The farther apart buildings are, the more pipes you have to run (underground) and pipes COST A LOT. Close-together buildings, with more family units in them, require a lot less pipe and a lot less road. They require MORE water capacity and more sewer capacity, but putting and maintaining one mile of big pipe is a lot less expensive than putting in and maintaining ten miles of small pipe. (The road calculations are pretty complex -- you have higher road use which deteriorates the road faster, but fewer miles of road, and people in high-density areas tend to own fewer cars and drive less -- but it still typically comes out in favor of high-density areas.)
My city had a dust-up over this a few years back when we got ordered by the EPA to do a really expensive sewer remediation project and it was rolled into property taxes, and people in the wealthy part of town with $300,000 houses were going, "Why do we have to pay $21 towards this when all the bad sewers are in the older part of town and those folks with $100,000 houses are only paying $7?" and demanded a cost breakout and basically since they live in big-ass houses on big-ass lots, it actually is costing like $42/rich person house to maintain the sewers in that part of town every year and only like $6 to maintain the sewers in the older parts of town, because even though the older sewers need more work, 200 feet of pipe serves 30 households instead of 6 households.
High-density housing does put more demand on schools and public transit and things, but only if you're not growing those services as the housing gets more dense.
Here's a Canadian report from last year on the hidden costs of sprawl, with lots of links to infrastructure cost reports (from all over the world but particularly North America). And here's a report from 1998 that outlines in excruciating detail (see especially part 1) what variables affect the cost of sewage service (spoiler: it's mostly housing and job density. Higher density is cheaper.). One particular thing the executive summary notes is that: "Lack of density and economy of scale variables in CDOW's rate structure likely exacerbates regional income disparities, as it can cause communities with lower per capita incomes and higher poverty rates to subsidize service to communities with higher incomes and lower poverty rates." That is, the slums end up subsidizing the McMansions.
(I literally commented earlier today on Facebook that it's a sign of creeping middle age that I get so excited about sewer infrastructure. BUT LOOK IT'S USEFUL!)
posted by Eyebrows McGee at 3:39 PM on December 12, 2014 [12 favorites]
Canada didn't have a housing bubble burst in 2008. They are overdue.
posted by 3.2.3 at 3:40 PM on December 12, 2014
posted by 3.2.3 at 3:40 PM on December 12, 2014
Speaking of infrastructure, the mayors of Metro Vancouver came together this week and bet everything on the hope that their constituents are at least as united and forward-thinking as their contemporaries in Los Angeles, if not many other cities. Hopefully that is the case and hopefully John Tory can avoid breaking Toronto any further than it already is.
*Fingers crossed for 2015*
posted by Seiten Taisei at 3:41 PM on December 12, 2014
*Fingers crossed for 2015*
posted by Seiten Taisei at 3:41 PM on December 12, 2014
Average salary is apparently CAD$72k so this is better than where I live in semi-rural England where average salary is less than a tenth of average property price, which includes flats etc. And a lot better than London.
That's the average family income (includes multiple salaries). The median for just single parent families is $40k, and for non-family persons 20k, according to Statistics Canada.
posted by rodlymight at 4:04 PM on December 12, 2014
That's the average family income (includes multiple salaries). The median for just single parent families is $40k, and for non-family persons 20k, according to Statistics Canada.
posted by rodlymight at 4:04 PM on December 12, 2014
Toronto real estate had a big bubble and crash in 1989. I've been expecting the next big crash for years now, and I've been wrong, so far. People just wanna live in Tranna.
posted by ovvl at 5:03 PM on December 12, 2014
posted by ovvl at 5:03 PM on December 12, 2014
When my good lady wife and I got married we rented an apartment in downtown Toronto. It was fun. Then we decided to look for a place to buy. Not fun. So we looked to the east suburbs, where a liveable house could be bought for less than a Toronto crackhouse.
All good.
I do miss living in urban hipsterville central, but having some space is nice. And Toronto's recent issues with governance ensures that it will be terminally undersiable to live in for decades to come.
posted by Jessica Savitch's Coke Spoon at 5:54 PM on December 12, 2014
All good.
I do miss living in urban hipsterville central, but having some space is nice. And Toronto's recent issues with governance ensures that it will be terminally undersiable to live in for decades to come.
posted by Jessica Savitch's Coke Spoon at 5:54 PM on December 12, 2014
We bought a house we love in Toronto in a "hot" area at a price that at the time (a year ago) seemed monstrous but this year would buy you (maybe!) a semi or a junker of a detached house. It truly boggles the mind. My heart goes out to people who simply cannot afford to live here.
One our friends, a nurse, came over and marvelled that we were the only friends she knew who actually owned a home. We are all in our mid 30s. It's a strange new world...
posted by The Hyacinth Girl at 6:48 PM on December 12, 2014
One our friends, a nurse, came over and marvelled that we were the only friends she knew who actually owned a home. We are all in our mid 30s. It's a strange new world...
posted by The Hyacinth Girl at 6:48 PM on December 12, 2014
I feel like there's a medium to small-sized Ontario town out there that could strike it big if they just un-car-prioritized their (beautiful, heritage building lined) downtown. I don't hate Toronto as much as [ed], but am definitely not a super social person and don't really make the best of living in the big city. My work isn't that location dependent, so why not move out?
Basically, I love being able to get around mostly by bike, and every Ontario town is shit to bike in. What Trinity-Spadina lacks in actual infrastructure, it makes up in numbers on-the-street.
I spent a few months in Kitchener-Waterloo and found the daily run-about experience scary, alienating, and kind of depressing. So much urban potential sacrificed to 1970s car-centric street planning.
Small towns wouldn't have to break the bank to do it - they'd just have to make a cultural, political decision to go Dutch. Something like Stratford did in the 50s. Have good municipal internet (fiber?) and safe bike infrastructure and honestly, you would have suburban telecommuting hipsters (like me) there in droves. Good walkable retirement community potential too.
posted by anthill at 6:58 PM on December 12, 2014 [4 favorites]
Basically, I love being able to get around mostly by bike, and every Ontario town is shit to bike in. What Trinity-Spadina lacks in actual infrastructure, it makes up in numbers on-the-street.
I spent a few months in Kitchener-Waterloo and found the daily run-about experience scary, alienating, and kind of depressing. So much urban potential sacrificed to 1970s car-centric street planning.
Small towns wouldn't have to break the bank to do it - they'd just have to make a cultural, political decision to go Dutch. Something like Stratford did in the 50s. Have good municipal internet (fiber?) and safe bike infrastructure and honestly, you would have suburban telecommuting hipsters (like me) there in droves. Good walkable retirement community potential too.
posted by anthill at 6:58 PM on December 12, 2014 [4 favorites]
Agree with anthill. There's plenty of people who choose to live in the most expensive parts of Toronto not because they think it's a global city, but simply because they like being able to, you know, walk to a fucking coffee shop or bike to a restaurant or park without having to do it on a 4 lane divided road. The vast, VAST majority of suburban Ontario is in my view absolutely horrific in terms of planning. As anthill says, it's the consequence of decades of car-centric planning. And as more and more people reject it, the sliver of Toronto where you can actually have a car-free walkable life becomes more and more expensive, and that pushes up the prices in the rest of Toronto as well as people get forced further and further away from the core.
Of course there are many other factors too, but this is a big one. I love Toronto (though I'm not there at the moment), but I don't think there's a salary you could pay me that would make me want to live in Windsor, or Kitchener, or Guelph, or Oshawa, or any of those places. Prices are high in Toronto because people are thinking "i would genuinely rather live in a shoebox condo than live a life of driving from one place to another and eating out only in big box malls."
And who can blame them?
There may be a price correction elsewhere, but I think people waiting for a crash in Toronto are going to be waiting an awfully long time unless interest rates rise to the level they were in the 80s. It's just like in the US - there was a price crash in many markets, but not in core urban areas like Boston, NYC, SF, etc. Those places had minor price corrections, but no crash, and prices are already back beyond what they were at that time.
So long as Toronto remains a place of high demand, prices will remain correspondingly high. Yes, people are paying too much for shitty places, but it's only because the alternative is so fucking depressing for many people.
posted by modernnomad at 7:43 PM on December 12, 2014 [10 favorites]
Of course there are many other factors too, but this is a big one. I love Toronto (though I'm not there at the moment), but I don't think there's a salary you could pay me that would make me want to live in Windsor, or Kitchener, or Guelph, or Oshawa, or any of those places. Prices are high in Toronto because people are thinking "i would genuinely rather live in a shoebox condo than live a life of driving from one place to another and eating out only in big box malls."
And who can blame them?
There may be a price correction elsewhere, but I think people waiting for a crash in Toronto are going to be waiting an awfully long time unless interest rates rise to the level they were in the 80s. It's just like in the US - there was a price crash in many markets, but not in core urban areas like Boston, NYC, SF, etc. Those places had minor price corrections, but no crash, and prices are already back beyond what they were at that time.
So long as Toronto remains a place of high demand, prices will remain correspondingly high. Yes, people are paying too much for shitty places, but it's only because the alternative is so fucking depressing for many people.
posted by modernnomad at 7:43 PM on December 12, 2014 [10 favorites]
I have a number of friends in Vancouver who are resigned to renting mostly crappy places because they can't conceive of leaving the city. I know someone who's paying $3,000 a month in rent. I can't even imagine. I bought a house in the Fraser Valley a few years back and pay about a third of of that for my mortgage. My commute is actually quicker than when I lived in the city. I miss Vancouver a lot, but I just commute in when there's something I need to do. Plus, I've discovered lots of beautiful places and things to do in the Valley. It's hard to move away from somewhere you want to be, but sometimes it's really worth it. Most of my Toronto friends left TO years ago for houses in the surrounding areas, and they've never looked back.
posted by peterdarbyshire at 7:59 PM on December 12, 2014
posted by peterdarbyshire at 7:59 PM on December 12, 2014
We're getting all fancy-like out in the east end. Omigosh there's one o them fancy STARBUCKS openin up at Kennedy and Lawrence, eh.
posted by scruss at 6:59 AM on December 13, 2014
posted by scruss at 6:59 AM on December 13, 2014
> Of course there are many other factors too, but this is a big one. I love Toronto (though I'm not there at the moment), but I don't think there's a salary you could pay me that would make me want to live in Windsor, or Kitchener, or Guelph, or Oshawa, or any of those places. Prices are high in Toronto because people are thinking "i would genuinely rather live in a shoebox condo than live a life of driving from one place to another and eating out only in big box malls."
I hear you, but on the other hand whenever I visit my family in Sarnia (which is selling itself as a retirement destination to GTA seniors sick of gridlock with a website named I Hate Traffic) it's nice to be able to plan a trip somewhere without having to perform Toronto-style mental arithmetic to calculate my ETA:
a reasonable amount of time + worst-case scenario allowance + 15 additional minutes, just to be safe
posted by The Card Cheat at 7:04 AM on December 13, 2014 [1 favorite]
I hear you, but on the other hand whenever I visit my family in Sarnia (which is selling itself as a retirement destination to GTA seniors sick of gridlock with a website named I Hate Traffic) it's nice to be able to plan a trip somewhere without having to perform Toronto-style mental arithmetic to calculate my ETA:
a reasonable amount of time + worst-case scenario allowance + 15 additional minutes, just to be safe
posted by The Card Cheat at 7:04 AM on December 13, 2014 [1 favorite]
Indeed, Toronto has perhaps the worst public transit system of a city its size when compared to all other OECD states... and yet, despite the ridiculous gridlock that causes for people who don't live in the core, it's still seen as a more desirable (and thus more expensive) place to live than the surrounding areas.... again, i love Toronto, but I'm far from convinced that excessive housing prices there are a reflection only of Toronto's absolute desirability.. it's much more a reflection (in my view) of Toronto's relative desirability compared to the god-awfulness that surrounds it.
posted by modernnomad at 7:21 AM on December 13, 2014
posted by modernnomad at 7:21 AM on December 13, 2014
So long as Toronto remains a place of high demand, prices will remain correspondingly high.
Demand in the form of wanting something means nothing in terms of real demand, i.e., wanting something and having the money to pay for it.
Real-estate prices decoupled themselves from actual incomes about ten years ago. This won't last forever. Do you really think that the price-to-income ratio will get back to normal by means of everyone's salaries doubling? (And if so, can I get a job where you work?)
In other words: if you think housing prices will keep outpacing income, who do you think will actually have any money to buy Toronto's houses at today's (real-dollar) prices?
posted by one more dead town's last parade at 9:41 AM on December 13, 2014 [2 favorites]
Demand in the form of wanting something means nothing in terms of real demand, i.e., wanting something and having the money to pay for it.
Real-estate prices decoupled themselves from actual incomes about ten years ago. This won't last forever. Do you really think that the price-to-income ratio will get back to normal by means of everyone's salaries doubling? (And if so, can I get a job where you work?)
In other words: if you think housing prices will keep outpacing income, who do you think will actually have any money to buy Toronto's houses at today's (real-dollar) prices?
posted by one more dead town's last parade at 9:41 AM on December 13, 2014 [2 favorites]
GuyZero: "I've never seen any actual quantification of this but it happens to some non-zero extent and probably contributes to the irrationality of the market."
Ironically thinking about putting together a Supercar index: the number of $80k+ cars situated in the local INTO building parking lot.
My problem with the 'Asian money' explanation is that even if you own a house as an investment, renting it out is more profitable, so it shouldn't spike rents.
posted by pwnguin at 6:02 PM on December 13, 2014
Ironically thinking about putting together a Supercar index: the number of $80k+ cars situated in the local INTO building parking lot.
My problem with the 'Asian money' explanation is that even if you own a house as an investment, renting it out is more profitable, so it shouldn't spike rents.
posted by pwnguin at 6:02 PM on December 13, 2014
National Post: Vancouver being transformed by new wave of brash, rich Asians looking for safe place to ‘park their cash’
posted by Kabanos at 6:11 PM on December 13, 2014
posted by Kabanos at 6:11 PM on December 13, 2014
I'm a little uncomfortable with the "Asian money" explanation. It's a dog whistle, and it's borderline racist.
Undoubtedly Hongers and other Asians have had a profound influence on Vancouver over the last 30 years - look at the dense, glassy green downtown Vancouver skyline, which resembles Hong Kong's skyline so much.
And there are undoubtedly offshore investors from Taiwan, Hong Kong and Mainland China that are helping push up the price of real estate in Vancouver.
But there are home-grown real estate investors that are pushing up the price of real estate, plus phenomenal population growth over the past ten years.
The City of Vancouver has increased by 100,000 people over the last decade. Surely that population growth (and not all of those folks are "Chinese") helps account for the upward trend in real estate prices?
Here's what the Census says:
1996 // 514,008 // +9.0%
2001 // 545,671 // +6.2%
2006 // 578,041 // +5.9%
2011 // 603,502 // +4.4%
posted by Nevin at 5:37 PM on December 14, 2014 [2 favorites]
Undoubtedly Hongers and other Asians have had a profound influence on Vancouver over the last 30 years - look at the dense, glassy green downtown Vancouver skyline, which resembles Hong Kong's skyline so much.
And there are undoubtedly offshore investors from Taiwan, Hong Kong and Mainland China that are helping push up the price of real estate in Vancouver.
But there are home-grown real estate investors that are pushing up the price of real estate, plus phenomenal population growth over the past ten years.
The City of Vancouver has increased by 100,000 people over the last decade. Surely that population growth (and not all of those folks are "Chinese") helps account for the upward trend in real estate prices?
Here's what the Census says:
1996 // 514,008 // +9.0%
2001 // 545,671 // +6.2%
2006 // 578,041 // +5.9%
2011 // 603,502 // +4.4%
posted by Nevin at 5:37 PM on December 14, 2014 [2 favorites]
"Helps," sure, but you have to do more work than that to show how much it helps, which is crucial. Between 2001 and 2011, the city's population grew by 10.6%. How much did prices go up in that same interval, adjusted for inflation?
posted by Steely-eyed Missile Man at 10:23 AM on December 15, 2014
posted by Steely-eyed Missile Man at 10:23 AM on December 15, 2014
Average Price for a Toronto House: $587,505
Average Price for a Calgary House: $465,047
Average Price for a Vancouver House: $819,336
I know average is used a lot but really it is not the best measure of home prices. Median is much more appropriate (it is not skewed by extremely high prices):
Median Toronto: 453,900
Median Calgary: 392,400
Median Vancouver: 670,300
(Source)
posted by LizBoBiz at 10:31 AM on December 15, 2014
Average Price for a Calgary House: $465,047
Average Price for a Vancouver House: $819,336
I know average is used a lot but really it is not the best measure of home prices. Median is much more appropriate (it is not skewed by extremely high prices):
Median Toronto: 453,900
Median Calgary: 392,400
Median Vancouver: 670,300
(Source)
posted by LizBoBiz at 10:31 AM on December 15, 2014
Median Toronto: 453,900
That's 6.37 times median household income. Relative to the historical average of 3.5 times income, the median price is 82% above where it ought to be.
posted by one more dead town's last parade at 10:47 AM on December 15, 2014
That's 6.37 times median household income. Relative to the historical average of 3.5 times income, the median price is 82% above where it ought to be.
posted by one more dead town's last parade at 10:47 AM on December 15, 2014
It's a dog whistle, and it's borderline racist.
Possibly. It's also possibly true. It can be both.
The real question is whether whatever number of outside investors exist actually move the market.
The City of Vancouver has increased by 100,000 people over the last decade. Surely that population growth (and not all of those folks are "Chinese") helps account for the upward trend in real estate prices?
Definitely. But it's a bit of a chicken-and-egg situation. San Francisco has seen very little population growth - 60k people since 2000. Why so much less than Vancouver? Because very little new housing has been built within city limits. So to some extent new residents can only drive up prices in so far as housing is built to house them.
And as I mentioned about Toronto, Vancouver's problem is also infrastructure. Driving across Vancouver is completely crazy. it's Toronto minus the highways.
posted by GuyZero at 12:47 PM on December 15, 2014
Possibly. It's also possibly true. It can be both.
The real question is whether whatever number of outside investors exist actually move the market.
The City of Vancouver has increased by 100,000 people over the last decade. Surely that population growth (and not all of those folks are "Chinese") helps account for the upward trend in real estate prices?
Definitely. But it's a bit of a chicken-and-egg situation. San Francisco has seen very little population growth - 60k people since 2000. Why so much less than Vancouver? Because very little new housing has been built within city limits. So to some extent new residents can only drive up prices in so far as housing is built to house them.
And as I mentioned about Toronto, Vancouver's problem is also infrastructure. Driving across Vancouver is completely crazy. it's Toronto minus the highways.
posted by GuyZero at 12:47 PM on December 15, 2014
Substantial foreign investment in Toronto condos is very widely agreed upon. I'm not sure there is much hard evidence though.
Apparently there's a reason for that.
posted by one more dead town's last parade at 3:42 PM on December 16, 2014
Apparently there's a reason for that.
posted by one more dead town's last parade at 3:42 PM on December 16, 2014
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posted by maryr at 9:22 AM on December 12, 2014 [4 favorites]