Came across this article today in TorontoLife - a great read. Our Parkdale reno from hell This was in 2010/2011 and they are quite lucky to have had the property double in value; still leaves them house poor with a ton of money owing vs. income presumably. I imagine there are a lot more of these stories out there with <young> people leveraged to the hilt, relying solely on the appreciation of the property than sound investing strategy. We are living in a new norm.
One has to ask where do two dolts, one working part time and the other on mat leave, figure they are entitled to own a home? When interest rates return to normal, they are all screwed. Bargains will be on every street corner.
Interesting read, but the owners cant be smarter than a sack of hammers. They interviewed 44 contractors, kept a detailed spreadsheet, and didnt go with any of them? yet went with a guy who rode up on a bike, who didnt enjoy wearing socks/ underwear. yeah thats the guy who I want to run my renovation. I wonder if the contractor's saw they weren't reasonable ( budget / expectations / timing /being too involved/ cant make a decision) and purposely raised their prices to account for the headaches a customer like that brings. Every story has two sides.... We're only reading her side.
Explain! I'm in negotiations on a second home for weekend relaxations Sent from my iPhone using Tapatalk
As expected, all of 2017 has been a media blitz of the housing market in the GTA being over inflated. With 10,100+ sales still taken place and prices edged up the media will be out in full force this week that the market will correct. We only have 2 months of inventory in the GTA even though listing are up 42% - plus, the way the RE tracks new listings is funky, and not accurate. If you delist your home, and relist in the same month that is counted as two listings. Though 42% growth in listings in May,mint will take June and July now to get a real read if listings are truly up, and if 9,000+ homes can still trade.
Definitely a buying opportunity right now if you Know what you are looking for. There are plenty of people caught right now that bought last month at a peak , that listed the last 30 days trying to sell and bracing for lower resell. If anyone has the stones - now would be a good opportunity
I'm working a private deal with riparian rights ... still think it's good but looking over my shoulder cause "bubble"... Sent from my iPhone using Tapatalk
I think this market has started a correction. Lots of open houses. The question is how deep it will go.
Last month already recorded that already .... But it's still over 10,000 sales ....too early to say if it's a long term impact. This 5%-10% correction was expected , the million dollar question is how long will it last the other way. Not enough data sets to quantify and predict. Interesting times this summer for sure. I tend to agree with you that prices may dip, and stabilize
During the last 20 years the high home prices have utterly devastated high value Canadian manufacturing. As the cost of shelter rises, labor becomes less competitive because wages need to be higher to maintain the same standard of living. Germany for example imposes controls on how high rents and housing related costs can go in order to keep wages competitive. Low housing costs means a competitive labor force with a high standard of living. Canada is the utter opposite of this model. The delusional Canadians destroyed most of their economy and now believe building utter crap paper houses and communist inspired bauhaus glass towers out of the worst possible materials will somehow make products and services magically appear from credit lines. Ontario is dangerously reliant on imports from other countries to maintain the standard of living because it produces less and less and less. The only way to save Canadas economy at this point is to drive the loonie down to 30-40 cents which will boost nominal prices meaning higher nominal incomes to help pay down the gigantic private debts the loser Canadians are all drowning in. Home developers are generating incomes in Cad dollars but want to buy luxury imports such as exotics etc. The model is simply impossible to sustain. The majority of the Canadian labor force produces absolutely nothing and is able to live well due to the strength of Canadas currency. The adjustment process involves making bondholders take huge losses in real terms so we are now going to see what the artificial capitalist colony known as Canada does. Does it save whats left of its pathetic economy or utterly accept debt deflation so bondholders retain purchasing power? High housing on top of abortion has utterly devastated Canada demographically requiring a perpetual 200k+ annual influx of immigrants, many who quickly realize that the 'Canadian way of life' is nothing more than perpetual debt slavery and long to return home. Immigration to Canada is and will drastically slow over the coming decades. The government knows this hence why it is keen on doing anything it can to perpetuate lies about Canada to attract new labor. Compound interest devastates any economy it has ever been implemented in and we are seeing this unfold in all of the 'anglosaxon' world.
Its not about prices. Huge % of disposable income is now going just to maintain a living space in Canada. This means people have less money to spend on other goods/services which means stagnant sales at business which translates to layoffs and a dead labor market. Business only hires if it sees sales rising but now you have so much income going into the pockets of maybe 0.5% of the population. The theoretical price of a home is whatever the bank is willing to lend. If I ask for 10million and you go to the local bank and they accept, they 'create' the 10 million as an accounting ledger. There is no theoretical limit on this mechanism. So credit is inflationary when it is lent out hence rising prices but deflationary for the rest of its life because you have to repay it with interest. The interest portion hasn't been created yet, so automatically a large portion of the economy is starved of cash. You can see it now with how many Canadians are struggling to get through the month.
The bottom will be when banks aren't dolling out any credit. People do not understand where the 'money' comes from that is buying these houses. Its created as a ledger entry when you take a loan out. There is no theoretical limit on this process!
There is just too much in these posts to even remotely address - but if you think Canadain financial Armageddon is around the corner you are mistaken. The global economy so all about printing money - prices are where there are and they won't be dropping in any major significance to create a fallout. Depending on where you live, if in the GTA - Poerche, Benz and Maserati have plenty of cars on backorder that cannot meet depend. RE has always been a long game in Canada, and Canadians love thier homes over other nations as investments. I agree we have an issue with debt levels never seen, I don't have that crystal ball, but a nuclear financial melt down won't happen for within, that will be external geo-policitcal forces. The banks reports record profits, that bank ledger is pretty healthy, and they won't stop lending , they can't .... Everything is now to big to fail Let's see what the next 3-6 months of slow to flat growth look like before we start throwing babies out with the bath water.
I hope you are right,Big Red. Who wants Armadeddon. But I'm still keeping a little gold on the side just in case.
Smart move. I was in the market late last month to buy in Oakville (gotta keep this relevant to the thread title!), but will be holding out until early autumn at least. I doubt we'll see a crash, but more a period of slow, gradual decrease until we get to a more reasonable level that the market can actually bear. Then it climbs again (see Vancouver). Again though, the BoC is definitely trying to counter that with such absurdly low rates, but can't do that forever, especially if real growth is on the horizon. Speaking of which, I don't think Canada's currency is overvalued, in fact I'd argue it's a bit undervalued, relative to the USD at least. A high-potential mining and energy sector is just starting to get its breath back. It'll be interesting to see what the next six or so months will bring.
Why are you telling us what we already know ad nauseam? The entire Anglo/western world banking system is based on what you are saying ever since there hasn't been any gold to back up the US standard. Yes personal Canadian debt is at an all time high, where isn't it? The World, not just Canada is set up on a system to be slaves to the banks by living off of credit while in a lifetime of debt while they make billions of dollars profit quarterly. While I'm sure we all appreciate your pearls of wisdom it doesn't take an economisist to know if banks decide to raise rates crap hits the fan. But will they and when? This is a monster they created, not one they intend to kill now as they will be killing their quarterly billions profit and the shareholders won't like that coming to an end. Unlike most countries there are pretty strict rules to getting a mortgage here and along with it mandatory mortgage insurance. Even with that mortgage insurance in place to keep the banks feeling safe to raise rates and make people walk from their homes, and then use the insurance payoffs to cover their interest loss it would still be a catastrophe for the banks. At some point the penny will fall, however it's not due to our communistic bend and low moral standings which you refer to. P.S. the whole world is turning socialist, it's not just us.