My wife and I do reasonably well, haven't made any big mistakes and we are hoping to pay off our primary residence in 35 years (total, 10 years on first house, 25 more on upgrade house). It's crazy.
COVID and the housing market
- Thread starter mimico_polak
- Start date
A lot of people I talk to say the same thing, I couldn't afford my house if I had to buy it today.
BC is banning short term rentals in May. Tons of properties are now listed for sale as normal rent doesn't cover costs for the inflated prices paid when they expect 50k a year in income. "Investors" are so far unwilling to accept that their condos are worth far less.
This should be good from a housing perspective as thousands of units are now coming back into the dwelling pool.
ricochet.media
This should be good from a housing perspective as thousands of units are now coming back into the dwelling pool.
In Victoria, former Airbnbs are flooding the market — but no one is buying
Dozens of former short-term rentals have gone up for sale since the ban was announced in October, and not one has sold
ricochet.media
Zero chance I could afford my house now. Hell I couldn’t afford it before had I not had to sell the investment property.
I think almost everybody is in the same boat. Any sales in the neighbourhood are to people that have either accumulated a lot of wealth over time or make a lot more than existing residents. Sales in my neighbourhood (and I suspect most others) are running 3-4x prices from 15 years ago. Original owners have hondas, most new owners have fancy eurocars (and probably mortgage payments multiple times original owners).
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I agree, if not for the MIL's contribution we'd never be able to afford to move.
It can cause social problems. The twenty year resident takes a week in Florida vacation while the newcomer speaks of Monaco. Mow your own lawn vs landscaper.
Definitely possible. Some of the legacy owners are coming up on no mortgage. That frees up a ton of cashflow if they want to keep up with the neighbours toys/trips. Obviously, that's not the greatest plan but if you aren't going into debt, whatever floats your boat.
A house around the corner started renovations a years ago and is still not ready to move in.
The story goes the owners were contemplating changes and a friend who did renovations was given the job while the owners rented.
Once Mr Contractor had the place torn apart things went wrong, possibly him getting in over his head. There's a big difference between a rec room or kitchen remake and an exterior rip out.
The job sat for a long time before a new contractor would take over the basket case. It's looking better now but with the market swings who knows the full real costs. Rent, sale prices, interest rates, increased project costs etc
The story goes the owners were contemplating changes and a friend who did renovations was given the job while the owners rented.
Once Mr Contractor had the place torn apart things went wrong, possibly him getting in over his head. There's a big difference between a rec room or kitchen remake and an exterior rip out.
The job sat for a long time before a new contractor would take over the basket case. It's looking better now but with the market swings who knows the full real costs. Rent, sale prices, interest rates, increased project costs etc
Our mortgage of 40 years ago was $450. Freeing that up might finance a Dodge Monaco.
It would be an interesting saving plan to put away the difference between what you are paying and what you should be paying if you bought today.
Savings plan would be bankruptcy for many. It's not a simple calculation as many people are in their second (or more) dwelling so they came in with an inflated net worth from the first property. Most people use the size of the mortgage to determine the dwelling they should look at. If I was buying now, I would be looking at a much smaller house as more mortgage is not reasonable imo (although many people have much higher mortgages and I have no idea how they live with that unless they have much higher family income).
When I was younger, my plan was 200K-250K mortgage so you always have an affordable place to live. When you get close to paying it off, upgrade (mainly due to principal residence appreciating cg tax free). The high transaction cost and effort made me change my plan. One jump and live with the result until I want to downsize in decades.
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The anti-flipping law has requirements. "Just because" isn't good enough if you are at less than 365 days of ownership. There are enough outs thought that most people can probably come up with one they can pretend applies to them. Elderly parents seem plausible. Most have some type of "serious disability or illness".
Residential Property Flipping Rule - Canada.ca
www.canada.ca
"A “flipped property” of a taxpayer is a housing unit located in Canada, that is not already considered to be inventory of the taxpayer and was owned by the taxpayer for less than 365 consecutive days prior to the disposition (12-month holding period) unless the disposition can reasonably be considered to occur due to, or in anticipation of one of the following life events:
The death of the taxpayer or a person related to the taxpayer.
A related person joining the taxpayer’s household or the taxpayer joining a related person’s household (e.g., birth of a child, adoption, care of an elderly parent).
The breakdown of a marriage or common-law partnership of the taxpayer, where the taxpayer has been living separate and apart from their spouse or common-law partner for at least 90 days prior to the disposition.
A threat to the personal safety of the taxpayer or a related person (e.g., the threat of domestic violence).
The taxpayer or a related person is suffering from a serious disability or illness.
An involuntary termination of the employment of the taxpayer or the taxpayer’s spouse or common-law partner.
An eligible relocation of the taxpayer or the taxpayer’s spouse or common-law partner (e.g., generally, a relocation that enables the taxpayer to carry on business, be employed or attend full-time post-secondary education).
The insolvency of the taxpayer (e.g., due to an accumulation of debts).
The destruction or expropriation of the property (e.g., where the property is destroyed due to a natural or man-made disaster).
In the case of a taxpayer who owns a right to acquire a housing unit located in Canada, the 12-month holding period resets once the taxpayer who entered into a purchase and sale agreement secures ownership of the property. "
TIL. Thanks, didnt realize they updated the law. My case was from 2017 so either was different previously or maybe the agents discretion.
We were under a year and moved quickly just because the location wasn't a great fit and we found an attractive property closer. So did not fit under any of the criterias.
Awesome, this combined with their new provincial zoning legislation and interest rates are going to really push their prices back down. May take a few years though.BC is banning short term rentals in May. Tons of properties are now listed for sale as normal rent doesn't cover costs for the inflated prices paid when they expect 50k a year in income. "Investors" are so far unwilling to accept that their condos are worth far less.
This should be good from a housing perspective as thousands of units are now coming back into the dwelling pool.
In Victoria, former Airbnbs are flooding the market — but no one is buying
Dozens of former short-term rentals have gone up for sale since the ban was announced in October, and not one has sold
Condos may happen much faster. Many people are sitting on mountains of debt for "investment" properties. If they can't solve the immediate cashflow situation, they need to dump as many as necessary to solve their cashflow issues. End up with a few hundred thousand on your principal residence loc instead of a few million outstanding with rent payments that don't cover the interest.
I wonder if the Ontario gov't would have the massive balls it would take to enact the same ban here.BC is banning short term rentals in May. Tons of properties are now listed for sale as normal rent doesn't cover costs for the inflated prices paid when they expect 50k a year in income. "Investors" are so far unwilling to accept that their condos are worth far less.
This should be good from a housing perspective as thousands of units are now coming back into the dwelling pool.
In Victoria, former Airbnbs are flooding the market — but no one is buying
Dozens of former short-term rentals have gone up for sale since the ban was announced in October, and not one has sold
Personally I don't think so. Not with the current party, or any of the other options have the balls for it.
Never rule out the hotel lobby (or personal kickbacks). With STR gone, hotels are free to send rates to the moon as demand is barely changed but number of rooms available shrunk significantly.
I'm seeing quite a few Sold Conditional or Sold Conditional Escape Clause coming back on the market very shortly (less than a week) after the conditional sale. Not sure what clause if causing the deals to come apart. For the escape clause sales, the current owner is probably hoping for more money.
Financing!
Although at one point the sellers were including Clauses to escape if they did not find a new home to move into.
Highly likely. It comes apart so fast though that it can't be appraisals. Maybe people sitting on pre-approvals for XXX and then they agree to buy something which requires XXX money and now bank says the number they are willing to fork over is now lower.Financing!
I'm not getting what I expected for my place so start all over. In years gone by there could be more than one conditional sale in the chain.
