Housing Market | Page 3 | GTAMotorcycle.com

Housing Market

Brian_S said:
Isn't the whole house appreciation thing only feasible and tangible if you decide to sell and go rent? I know for a fact I wouldn't buy my own house today at these insane price levels ....
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I'm by far no expert on this stuff, but one reason that buying can be useful is that if your house appreciates enough, you can use that appraised value combined with your equity to help you get a mortgage on second property to rent out (like a condo/townhouse investment). My brother does this and has his operating expenses covered on the second home all the while it is appreciating in value. Another thing would be to buy a home that you could rent out a portion of it (like a basement) to help fund the mortgage.

One way to build some equity could be to continue living in Brampton and buy a place and rent it out - then someone else is paying down your mortgage for you - if you could afford to do that. We own and rent out a condo downtown Toronto using this idea which will be paid off in 9 years and will be a good thing for us to have down the road.

On the subject of rising house values, we bought our house 2 years ago in west Mississauga and similar houses in our neighbourhood have recently sold for about $150k more than we paid for ours in only 2 years. That's staggering and I'm not sure I could afford to buy my own house right now.:confused:

The hardest thing of the current market is that for most, they can not save money equal or greater to the rate of housing appreciation - so the prospect of home ownership becomes more difficult as time goes on.

Lastly - if you have not seen this before, it can help you get a sense of the current prices homes are being sold for all across the GTA. You can sign up for an email blast that comes once every few days, letting you know of all the 'sold' prices at Toronto Real Estate Solds: http://tosolds.ca/ The email blast has different links within it sorted by region (ex. Mississauga or Guelph etc). It also shows condos separately. The email links stay good for about 2 weeks and give you the opportunity to view each MLS listing for properties sold. This is a very useful tool.
 
-D- said:
drop the realtors
try selling yourself
there is some service that is kind alike MLS and charges $500 flat fee
If you have time use all the online free sites.
The way I see it, if you are spending $100's on a house then pay for 2 separate home inspectors to really know what you are buying.
Then both parties have the real estate lawyers for the paperwork.
Done!

What does a realtor do? Arrange to show you the house...woooo, they know the key code to the box.
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Some realtors are better than others. Furthermore, on the comfree market, both buyer and seller expect a break. Everyone uses the MLS as a reference to market value, but that market already has the standard 5% commission rate built into it. Sellers then expect to sell their home for the same price and pocket the 5%, while buyers are shopping those sites for 'deals' where they can score a house below MLS market value.

Im not saying not to try it, but be prepared for a) tons of realtors calling you and b) tons of lowballs from buyers who want a deal. Ultimately you're most likely end up having to deal with a buyer's realtor anyway but at least then you might save 2.5% on the listing part of comms.

I agree in principle, the realtor in many cases doesn't do much... but sometimes he does a LOT. For every informed buyer there are 10 new/uninformed ones who could use the expert help of a good realtor familiar with houses, ownership, transactions, and the market itself.
 
Brian_S said:
Isn't the whole house appreciation thing only feasible and tangible if you decide to sell and go rent? I know for a fact I wouldn't buy my own house today at these insane price levels ....
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Its tangible if your goal is to move further away from the city.
 
lator-illa said:
All I know is that the housing market is ridiculous.

I recently bought a bungalow in Scarborough late November of 2015, and the prices in the area has since gone up at least 120k in the last few months! Perhaps I got a steal of a deal as well, but I think overall prices have gone up dramatically. I remember it going up at least 12% in March!
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Prices like that are plain wack. Unless your income is growing just as fast (highly unlikely), this makes it hard for the younger generation to actually be able to buy and afford it in the long run.
 
Ducati911 said:
Prices like that are plain wack. Unless your income is growing just as fast (highly unlikely), this makes it hard for the younger generation to actually be able to buy and afford it in the long run.
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Yes I completely agree with you! I really do believe I lucked out with my house, especially where it's located in Scarborough. Just to put it in perspective, there was a house just a couple houses across from me that was recently put up for sale for 499K. The house was absolute trash...the interior was gutted. I find out from my realtor that the house sold for 608k a week later! I bought my house for less than that and I didn't need to do anything with it! Unbelievable what kind of difference a couple of months make.
 
Well I guess what can be done is destroy the house and rebuild a newer model. But thats only worth it if the area is expensive.

Back in 2000 my dad got his house for 220k new in north brampton. Income was roughly $19 to 20 an hour I believe. Same house sells for now 650k and his income is now $23 an hour. I dont believe this is sustainable at all. But with a growing population and all, housing wont ever come down due to there being demand. How a person will afford to payoff a house at 650k making $23 an hour beats me. Thats like a life debt if you want to also be mega cheap in life..

Being from Generation Y as the older crowd calls us, our options seem limited if our goals to also live life comfortably and have a paid off mortgage without putting 60% of our income into a mortgage for 25 or 30 years amortization. Kinda pisses me off but cant do anything about it.
 
My parents paid $12,000 for a corner lot right in Toronto.
It was a lot of money back then.
You could have bought half of Scarborough for a million or so.

Don't forget that at 7.18% return, an investment will double in ten years.
So your dad's house is actually a little under that at 7.01% return.
 
LePhillou said:
Ikea :)
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I just did an IKEA kitchen (cabinets anyways). It turned out amazing and looks damn near custom, but it cost a hell of a lot more than 6k with appliances, electrical, lighting, and counter even doing a lot of the work myself.
 
Baggsy said:
My parents paid $12,000 for a corner lot right in Toronto.
It was a lot of money back then.
You could have bought half of Scarborough for a million or so.

Don't forget that at 7.18% return, an investment will double in ten years.
So your dad's house is actually a little under that at 7.01% return.
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Didnt know interest was that high.. Wow thats crazy then.
 
Baggsy said:
Don't forget that at 7.18% return, an investment will double in ten years.
So your dad's house is actually a little under that at 7.01% return.
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Gotta take into account capital gains taxes on the investment though. Could be significant for high-income earners.

No capital gains tax for selling a primary residence, no matter how much you make at your day job.

Edit: To further complicate things, real estate has its own set of costs and carrying charges ie. property tax, transfer fees, repairs and renovations, etc. Some are tax-deductible, some not (like mortgage interest on a principal residence). So, it's difficult to compare net returns between an investment and a house.
 
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Ducati911 said:
Didnt know interest was that high.. Wow thats crazy then.
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7.18% is not the interest rate, it's an assumption of what you will make if you put your money into the stock market. You could just as well lose the entire amount as well.

The current interest rate for savings accounts is less than 1%. Hovering around 0.75% - 0.80% for ISA (Investment Savings Accounts).
 
jcbarnar said:
I just did an IKEA kitchen (cabinets anyways). It turned out amazing and looks damn near custom, but it cost a hell of a lot more than 6k with appliances, electrical, lighting, and counter even doing a lot of the work myself.
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My appliances, backsplash, and recent counter upgrades are pretty much around $6000. We are just getting around to resurfacing our cabinets this year and adding a pantry. When all is said and done we will be well over $12000 and that is without doing anything with plumbing or flooring.
 
its different for everyone, 6k wouldn't replace my appliances.
Same with house pricing, you can look at North end hamilton where some houses went from $179k to $300 in two years and they are still finding buyers. One guys over the moon price is the next guys ok deal.
When I first looked at Bronte it was $200k for a pretty nice house, now its 800k for a teardown, and they keep selling. . Wish i had pulled the trigger.
 
House prices in Ft Mcmurray just went from $500k to over an estimate of over $800 to $900 in 24hrs. If they have many left to sell when the fire is clear. Supply and demand.

Prayers to all those displaced by this disaster.
 
We have lived in Orangeville for over 25 years. I commuted to TO for 20 of those years and other than the mileage, I found it to be an easy commute. The volume of traffic coming from the northwest seems to be far less than what is coming from other directions; however, it is beginning to change as more people move up here. You really notice the heavy traffic once you get down to Bovaird Drive in Brampton. My commute would take me just over an hour in the early AM and about 1.5 hours on the return in the PM. There is also a GO bus that can get you down to the GO station in Brampton, should you wish to take transit.

New townhouses in Orangeville can be bought for under 400K and many single family homes are less than 500K. The market up here is just as hot as other places with the added problem of fewer listings. Last time I checked the MLS listings there were less than 70 homes for sale in the entire town. Prices up here have also increased by about 100K in the past year or so.

One of the benefits is that great riding roads are mere minutes from town.
 
Ducati911 said:
Didnt know interest was that high.. Wow thats crazy then.
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We bought our place in 1980 and were lucky to get a 13% mortgage. Two years later mortgages were in the 22% range and people were losing their homes.

When I bought an investment property 20 years ago the rate was about 12%, about 1% a month. Now it's about a quarter of that.

Roughly, at 12% a million dollar mortgage is about $10,000.00 a month. (My price was much less)

At today's rates it's around $2500.00 a month. You can see where people can afford crazy prices. Will higher rates ever come back?
 
crankcall said:
When I first looked at Bronte it was $200k for a pretty nice house, now its 800k for a teardown, and they keep selling. . Wish i had pulled the trigger.
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That must have been quite a while ago. Putting a ceiling of $200 on MLS.ca in Oakville in 12, even in Bronte, would have gotten you a dot free map. Agree with the prices, though. A friend who's retiring this year and is going to sell 'n run has a bungalow on 60x230 @ Bridge+3rd, and is looking at 900-1M. As much as I dislike the loss of the Dairy-Queen-with-the-walk-up-screen-window feel to Aldershot with the gentrification, what's happening in the west end with the older bungalows has me tenting my fingers a la Mr. Burns.
 
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nobbie48 said:
When I bought an investment property 20 years ago the rate was about 12%, about 1% a month. Now it's about a quarter of that.
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I remember those days. That was a heavy incentive to pay off the principal, especially if the interest wasn't tax-deductible.

Nowadays, low interest rates are offset by the huge loan amounts and the high debt service ratios. I can't see anyone paying off their mortgage the same way as previous generations. The new game these days appears to be servicing the interest and banking on the continual appreciation of real estate as if it were a sure thing.

I honestly don't know if RE will ever cool off or correct, but having experienced a crash once in my lifetime I wouldn't enter the Toronto market the way it is right now.
 
Lightcycle said:
I remember those days. That was a heavy incentive to pay off the principal, especially if the interest wasn't tax-deductible.

Nowadays, low interest rates are offset by the huge loan amounts and the high debt service ratios. I can't see anyone paying off their mortgage the same way as previous generations. The new game these days appears to be servicing the interest and banking on the continual appreciation of real estate as if it were a sure thing.

I honestly don't know if RE will ever cool off or correct, but having experienced a crash once in my lifetime I wouldn't enter the Toronto market the way it is right now.
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My brother bought in 1991 two year's later house was worth 25 percent less than he paid for it. Ten years until it was back to the price he paid. TVO had a show on last night, "the super rich and us", it kind of explains what is going on. Foreign investors are driving up housing. The Super rich want 90 percent of us to rent from them. When heads start to roll literally, things will change, until then? It is time to fight back before we are all old and broke.
 
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