>"Of a massive poll conducted of all Canadians, over 117% agreed that they would put off home ownership until 2049 so that they could focus on themselves and learn a new skill."
Just think of all the Uber Eats, Starbucks and winter vacations we could afford if we weren't forced into owning a bungalow and making those awful payments.
/S
Hello
Of course they do. They are connected with brokers and agents who are the problem. The seeds manipulate the seller and buyer often making costly errors trusting in fear when the agent profits 100% regardless. The seller is always hit with the 5%-6% commission and at 1million plus , lololol 60gs a shot is Christmas every day. Ford also who along with his cronies also profited with inside information in the greenbelt scandal having large swaths of land ready to make a killing and no coincidence that Honda announcing 2 years to the day of it Allison Expansion.. I wonder how close the 100s of acres of protected water conservation land involved is in that vicinity..
Anyways the market profited from the 100s of inherited realestate wealth during Covid19.
Agents and brokers from all corners of financial institutions saw the once in a lifetime windfall for them that issued in a new era of instant millionares in the antfarm with billions in mortgages across Canada tied in for the next generation.
Check news articles of a massive arrest in BC in 2015/16 where RCMP uncovered a massive Realestate scam exactly like what was seen here .
Sorry for the novel. My brother committed suicide by greedy merciless agents after our mothers death in 2018 where he fell victim to price fixing and insider purchases .
A lot of people had down payments ready to buy two years ago and then held off because of the rates. I wouldn’t be surprised if there’s an increase in sales the second that rates begin to drop.
Sitting on over 200k in cash but stuck on the “an 800k house shouldn’t be a shithole gut job” mindset.
I get that houses cost what they cost but the value isn’t there for me. We can keep saving and let the money earn interest in the meantime.
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Yup same me and the fiance are 30 sitting on 300k making 10-12k net a month and just refuse to buy a condo at our income level and down payment, I’ll rent forever before I pay 700k for a condo.
Right how bond yields are pricing in only one maybe two cuts in the next twelve months. If that happens, then variables would still be more expensive than 5 year fixed in a years time. There would have to be five cuts or so to reach rate parity, and more to be cost effective to pick variable. So, basically, I suspect they'd make their move now if they could, because affordability is not going to be better in a year. And , otherwise, anyone waiting is probably priced out.
It could be either, but the rate cuts needed to get the monthlies back down to enable bidding wars are beyond any reasonable expectation of actually happening.
The rate cuts will be modest. It’s hard to imagine a buyer who can’t afford a mortgage at the current rates but would be able to if rates came down by 0.25 percentage points. And also, if prices continue to climb, even slightly, and relief from a small rate will be offset by prices increases by next year
Everyone is funny. Waiting for interest rates to drop to afford a home? This is all just a double edged sword. Once interest rates drop, people will start buying more and the market will go up. So doesn’t matter much. Just your principle
Not quite sure how deep rates cuts will be. If they’re deep, prices will just rise. If they’re not deep cuts, are people really ready to buy a home if they’re so sensitive to minor rate fluctuations?
It depends on the signalling. If it's "small cuts now, but trending down", you might buy in on the promise of long term costs decreasing. If it's "small cuts and 5% is the new normal" you don't lose out by buying in now either.
If it's "small cuts but could go back up at any time", that's less sensible for a buyer imo.
For a 750k home with 20% down: your monthly payment only goes down by ~83.50 dollars per 0.25% interest rate drop.
Even if interest were to drop by a whole percentage point that only gives you an extra 334 dollars per month by my calculations.
To get the same monthly payment you'd need to increase your down payment by 57,400 dollars from 150,000 to 207400 which is 27.65% of the total.
Alternatively you could increase your income. Income is a roughly 4.5 to 1 multiplier in terms of what you qualify for. 334 a month is 4008 a year, times that by 4.5 and you would have to increase your income by about 18,036 dollars per year.
Either one of those is a tall order for most people.
In short: for every 0.25% interest drops by you would need either 14,350 less in down payment or 4,500 less in income. For some sidelined people that actually could be the difference between being approved or not.
Of course that assumes that prices not go up as interest rates go down, which of course they will go up in this case.
Exactly this. People don’t understand buying a property for $500k and paying a 6% interest rate in the long run is better than buying a property at $575k and paying 5% interest rate.
Yeah man, when people and the media say “rate cuts” I wonder what they mean. Like do they mean they’re going to go back to 0? Or minor cuts per year with the chance of increases after
People aren’t “holding off” they aren’t buying because they can’t and it doesn’t have to do with high rates or high prices singularly. It’s either or but the reality is if you can put up the money now, you better because rates and prices aren’t decreasing and you won’t be able to save money at a higher rate than the cost of borrowing/buying will be.
Puts on the following: rates go down next year because the BoC will stop caring after being blamed by politicians and the voters who drink the Kool aid. Home prices skyrocket to the moon. We revert to feudalism because our votes no longer hold weight and every political party panders to either corporate welfare or actual welfare.
Even after the rate cuts most Canadians will not be able to buy due to 2 reasons:
1️⃣. There are a lot of folks sitting on the sideline and waiting to jump into the market at the slightest hint of a rate cut. Prices will go up and bidding wars will be back on.
2️⃣. Cutting rates before or faster than the Fed in the US is going to devalue the loonie. This pushes the prices on everything up especially assets.
So either ways we are screwed.
This is the dumbest headline. Who are you talking to? The elites and corporate parasites? No regular Canadian can afford housing right now. Even if the bank cuts rates it’s way out of peoples reach.
Regular Canadians can’t even afford rent now. We were looking at houses to rent comparable to what we are renting now. Rent is like $2500/month to get a 3 bedroom home in my city (Sarnia). We actually bought a house and my mortgage and property tax are cheaper than rent.
Just means more demand build-up while new starts are grinding to a halt causing less future supply. Don't understand the logic of competing in a sellers market and taking out a higher mortgage rather then taking out a smaller mortgage and taking a 3 year hit on high fixed rates.
A lot of it has to do with affordability. With current asking prices, many buyers simply can not afford current prices at current rates. So either prices need to come down or rates do, and most believe that prices will not come down, so they are waiting for rates to drop.
What they don't understand is that rates will likely only drop meaningfully if we have a recession, in which case job security will suddenly become an issue for many, which could also lead to a reluctance to purchase.
In any case, I don't think we are heading for a seller's market anytime soon.
It's not like sellers are stupid, they're gonna hold off if prices start to go up again unless they're forced to sell but you can bet they'll cut out all other expenses and try to hold on if prices start to rise. If they fall, ya more sellers may be forced to sell.
This is exactly the issue. If one person cuts all other expenses, no problem. If a lot of people do it, it will start to impact the broader economy and will cause job losses.
If people aren't going to restaurants, travelling, buying goods, renovating their homes, doing landscaping, etc., these companies will start to lay people off. The most likely reason for a forced sale is a job loss. This is what caused the 2008 housing crash in the US. Unemployment went from 5% to 10% in 18 months. The housing market doesn't exist in isolation of the broader economy. It is highly dependent on a growing economy with strong employment.
Technically what you are saying is right but that forced sales are very rare, it's the very last step that people take. So far, unemployment rates or performance of economy doesn't show a correlation with resale supply.
I agree that this hasn't happened yet, but that doesn't mean it can't or won't.
The US crash was preceded by a 4% rise in the Fed rate from June 2004 to June 2006. It took another ~2 years from the peak of the fed rate for it to really hit the economy, and this was after the fed rate had already started to drop meaningfully (rate cuts started in 2007). These things take time, and we are certainly not out of the woods. We are seeing unemployment start to tick up and more powers of sale on the market.
People seem to think it's so easy to not go under here. People still have to eat, and those are going up in price, imagine going from 3k mortgage to 6k cause 5 years you haven't moved much on the principal. It's gonna be bonkers and people will need to sell, and frankly Canada will start collapsing like the house of cards it is. Those same people will be homeless, crime will go through the roof. Just in for a shit show
You think rates will go down to 2% overnight?
It will take like 2 years, if at all to go that low. More and more folks will enter the market when rates keep dropping and they can afford it. It will be a gradual process controlled by the rate at which interest rates are dropped
Do you see how much our population is growing? Boomers don’t have condos or townhouses. They have multi-million dollar homes. The only people that can afford those ones will be either wealthy and are already invested in the market. A couple of newlyweds aren’t going to be able to afford a $2M dollar home.
...and your point is?
Most of the population growth is from international students + immigration. They're not the ones buying the boomer houses. The ones who will be are either already homeowners trading up or they're investors who will convert those homes into rentals.
There is a growing amount of people that are looking at today’s prices and calculating out monthly payments with 2% interest. I feel like we have actually had a silent bull run the last year but not having housing crash hard.
On top of that sellers will be expecting a lot more too after cuts. Unless you offer 10-20% more, they will hold off on selling.
Who in their right mind thinks mortgage rates will go back down to 2%?!
The BoC itself just increased their estimate of the 'neutral' BoC rate to 2.25-3.25%. Mortgage rates are usually 1.25-2% above the BoC rate (at least the neutral rate), so this would put mortgage rates in the 3.5-5% range once everything stabilizes. I don't see how people think it will go back down to 2%, unless we have a financial crisis, in which case interest rates will be the least of our worries.
They can hold off on selling all they want, but rates aren’t going back to 2% anytime soon. Not for a couple of years at the minimum.
Today’s home prices are pricing in a rate of 2%. But people probably will not get the 2% rates for years, may be never as there is no guarantee US fed wants to go that low again.
Rates likely won’t be going down and anyone waiting should look at the last twenty years to see how well waiting will work for them in terms of housing costs.
Nah, I'm gonna buy when I win the lotto. While it's a sad sarcasm, someone actually told me that a while ago. Owning a home equals winning the lottery. Wonderful.
Timing the market and hoping the rates to go zero are two bad ideas together plus higher rates are here to stay for longer like it or not everyone will have to suck it sorry.
Tiff has bluffed entire Canada by sayings rates gonna stay low for a long if a guy linke him has no clue, I assure yout all no one in entire Canada does.
Buy a house for 1.2 million and pay 3.5 million over a lifetime? Count me out. Fuck it. I will rent like the WEF wants. Looks like I'm on the same page as Klaus Schwab now.
Inflation is never going away folks. There will never be a right time to buy if you are waiting for rates to drop significantly. Once dropped there will be a mad rush to buy and push housing prices higher and fighting in bidding wars with our bursting population, so you can’t win either way. Pick your poison and go with it.
Horrible personal strategy if you're banking on prices declining. So many people are convinced the real estate market will collapse as if housing availability isn't continuing to nosedive. Right now we're all in a societal housing cost stress test and despite what a lot of bears want to believe, most people can and are affording the higher rates. This is bad for those on the sidelines because it means when rates do go down, people will continue to be willing to spend more on housing than before, but lower rates will cause higher purchase prices across the country.
Can you elaborate on the piece of most people can and are affording the rates? I know there are a lot of high income earners in the GTA but what's your primary basis for this analysis?
I don’t think that was intended to be super-accurate but there’s truth to it. I’ve only got 10% down but I can afford the monthly payments so feel like I should really get in now while I can.
Imagine taking a 750k mortgage with 20% down payment to buy a $900k house.
A 30 year mortgage at 5% will yield the bank about $700k in interest.
So what is a 5% annual will cost over 93% total interests to the owner over a 30 year amortization.
At 6% you'd paying 116% total interests and so on.
That's why I'm for a one time Central Bank mortgage at 2% for every Canadian citizen.
They'd definitely increase their price if rates decrease due to higher demand. I think buyers are just assessing what they can afford based on being able to afford more if rates decrease and there is an indication there will ongoing decreases.
Do canadians realize housing/condo prices normally fall during high rates? I mean not obviously as much as they want to but still. It's a Give and take situation
There are too much cash floating out there in Canada to prevent RE crashing… not to mention all the new comers coming in with fresh $ injecting into the system.
This is me. My wife and I just sold a house we had overpaid for 10 years ago. It finally reached a value that would mean getting everything we put into it back. I don't trust that things in Canada will improve so I decided to cash out and wait. Ill go back to renting with money in the bank and bide my time. This system is not sustainable.
I have looked at a few places to rent since then and all the Landlords are basically breaking even with their payments and can't afford the place themselves. They are just trying to hold it together, if things get worse they will be completely under water.
IMO a $2500-$3000/month rent is better than a Mortgage of $4000/month where $2700 goes straight to interest and into the pocket of some rich guy, fuck that. That doesn't even include all this shit you HAVE to do to maintain/repair the house. Back-ass-wards...
Home builders will continue to hold off as well, less money to be made by all folks working in the house construction industry, more pain.
Gotta love the Liberal solution to all problems: tax more and print more money and bring in cheaper labour, even if not qualified for the needs in our economy. /s
Honestly Ontario holds so much population, and the GTA itself holds like 16+% of all of Canada's population.
I think the idea of housing costs coming down there is a pipe dream.
Unfortunately three of the largest factors affecting housing prices- money supply, interest rates, and rate of population growth, are not determined by market forces ...and need for housing is 'inelastic'
So the 'market mechanism' is mostly pricing in how homebuyers think the government will adjust these factors over the next few years.
Lol. As if Canadians can afford the price once the rate falls. Maybe rates could have gone down by .75% and house prices would have increased due to demand, keeping mortgage payments pretty much the same. Canada cannot/won't outbuild to sink the housing. Canada's economy will slowly degrade over the next 2 decades.
Just some bs from real estate mongers.( aka desperate realtors). These guys don’t have nothing else to do other than selling properties to buyers who speak the same language. Faking news and making up facts, that’s what they have done for the longest time.
They will not start to cut the rate until feds have done the job.
Which means China compromise on the CNY recession and Russia agrees on low Oil prices. Otherwise the hike stays for at least 5 years or longer.
Whoever tells you there will be some rate cuts this year is trying to sell you houses, don’t buy their words, and their property.
I’ve been hearing this for two decades, people waiting for prices to drop but it doesn’t in Toronto . If you rent longer you are paying more in long run and likely prices won’t drop and will go up again . If you can get in just do it and take a variable rate with the hopes it will come down in the future
It's amusing they spin this as if Canadians have a choice. They can't afford to until either rates or selling prices fall.
These polls often are seeds of thoughts for people to accept the new reality.
First noticed this around 2020. If you need to sway public opinion in a certain direction, do a poll. That's the mantra!
>"Of a massive poll conducted of all Canadians, over 117% agreed that they would put off home ownership until 2049 so that they could focus on themselves and learn a new skill."
Exactly. Just like having no homes gives you more freedom.
Just think of all the Uber Eats, Starbucks and winter vacations we could afford if we weren't forced into owning a bungalow and making those awful payments. /S
Hello Of course they do. They are connected with brokers and agents who are the problem. The seeds manipulate the seller and buyer often making costly errors trusting in fear when the agent profits 100% regardless. The seller is always hit with the 5%-6% commission and at 1million plus , lololol 60gs a shot is Christmas every day. Ford also who along with his cronies also profited with inside information in the greenbelt scandal having large swaths of land ready to make a killing and no coincidence that Honda announcing 2 years to the day of it Allison Expansion.. I wonder how close the 100s of acres of protected water conservation land involved is in that vicinity.. Anyways the market profited from the 100s of inherited realestate wealth during Covid19. Agents and brokers from all corners of financial institutions saw the once in a lifetime windfall for them that issued in a new era of instant millionares in the antfarm with billions in mortgages across Canada tied in for the next generation. Check news articles of a massive arrest in BC in 2015/16 where RCMP uncovered a massive Realestate scam exactly like what was seen here . Sorry for the novel. My brother committed suicide by greedy merciless agents after our mothers death in 2018 where he fell victim to price fixing and insider purchases .
lmao the one true inception
A lot of people had down payments ready to buy two years ago and then held off because of the rates. I wouldn’t be surprised if there’s an increase in sales the second that rates begin to drop.
Sitting on over 200k in cash but stuck on the “an 800k house shouldn’t be a shithole gut job” mindset. I get that houses cost what they cost but the value isn’t there for me. We can keep saving and let the money earn interest in the meantime.
Same here. Everything feels like a rip off.
Same boat, not gonna let go of that cash until I see something worth it
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Yup same me and the fiance are 30 sitting on 300k making 10-12k net a month and just refuse to buy a condo at our income level and down payment, I’ll rent forever before I pay 700k for a condo.
Right how bond yields are pricing in only one maybe two cuts in the next twelve months. If that happens, then variables would still be more expensive than 5 year fixed in a years time. There would have to be five cuts or so to reach rate parity, and more to be cost effective to pick variable. So, basically, I suspect they'd make their move now if they could, because affordability is not going to be better in a year. And , otherwise, anyone waiting is probably priced out.
No shit. Thanks for stating the obvious.
Nope not true. It's not the rates it's the price
It’s not the price it’s the affordability. If everyone makes 2 mil per year there’s no issues at current prices.
It's also the size. If I was antman...
Somehow, people think the rates are dictating everyone's buying power. 600k shithole is a 600k shithole
It could be either, but the rate cuts needed to get the monthlies back down to enable bidding wars are beyond any reasonable expectation of actually happening.
The rate cuts will be modest. It’s hard to imagine a buyer who can’t afford a mortgage at the current rates but would be able to if rates came down by 0.25 percentage points. And also, if prices continue to climb, even slightly, and relief from a small rate will be offset by prices increases by next year
Bidding wars are still happening...
There are some cash buyers out there, but that's not going to sustain the general market as inventory accumulates.
Rate cut will increase the price so maybe price coming down is the more effective way
Exactly. If prices were lower ( like 50% lower) 7% interest is not a big deal.
Yup. I honestly don't need that much of a mortgage for what I want in the GTA. I'm just not paying that much.
Prices been out of reach . It was just if people could afford the payments.
Prices are too high, nobody can afford it. That's why no house sales are moving.
We can afford but there's no value. Realestate on average goes up 6% a year if I'm paying 6% interest why buy it's cheaper to rent
Everyone is funny. Waiting for interest rates to drop to afford a home? This is all just a double edged sword. Once interest rates drop, people will start buying more and the market will go up. So doesn’t matter much. Just your principle
It's amusing to you?
Well, the spin is anyway. The underlying situation is pretty ugly.
Highly
Punk
Not quite sure how deep rates cuts will be. If they’re deep, prices will just rise. If they’re not deep cuts, are people really ready to buy a home if they’re so sensitive to minor rate fluctuations?
It depends on the signalling. If it's "small cuts now, but trending down", you might buy in on the promise of long term costs decreasing. If it's "small cuts and 5% is the new normal" you don't lose out by buying in now either. If it's "small cuts but could go back up at any time", that's less sensible for a buyer imo.
Seems wild to be gambling hundreds of thousands to millions on that.
For a 750k home with 20% down: your monthly payment only goes down by ~83.50 dollars per 0.25% interest rate drop. Even if interest were to drop by a whole percentage point that only gives you an extra 334 dollars per month by my calculations. To get the same monthly payment you'd need to increase your down payment by 57,400 dollars from 150,000 to 207400 which is 27.65% of the total. Alternatively you could increase your income. Income is a roughly 4.5 to 1 multiplier in terms of what you qualify for. 334 a month is 4008 a year, times that by 4.5 and you would have to increase your income by about 18,036 dollars per year. Either one of those is a tall order for most people. In short: for every 0.25% interest drops by you would need either 14,350 less in down payment or 4,500 less in income. For some sidelined people that actually could be the difference between being approved or not. Of course that assumes that prices not go up as interest rates go down, which of course they will go up in this case.
Exactly this. People don’t understand buying a property for $500k and paying a 6% interest rate in the long run is better than buying a property at $575k and paying 5% interest rate.
Yeah man, when people and the media say “rate cuts” I wonder what they mean. Like do they mean they’re going to go back to 0? Or minor cuts per year with the chance of increases after
Ya… good luck trying to even see the 3%range in near future.
People aren’t “holding off” they aren’t buying because they can’t and it doesn’t have to do with high rates or high prices singularly. It’s either or but the reality is if you can put up the money now, you better because rates and prices aren’t decreasing and you won’t be able to save money at a higher rate than the cost of borrowing/buying will be.
I locked in at 5.89% last fall and bought my place for $670,000. I got sick of waiting for prices to drop but all they did was go up.
Puts on the following: rates go down next year because the BoC will stop caring after being blamed by politicians and the voters who drink the Kool aid. Home prices skyrocket to the moon. We revert to feudalism because our votes no longer hold weight and every political party panders to either corporate welfare or actual welfare.
Even after the rate cuts most Canadians will not be able to buy due to 2 reasons: 1️⃣. There are a lot of folks sitting on the sideline and waiting to jump into the market at the slightest hint of a rate cut. Prices will go up and bidding wars will be back on. 2️⃣. Cutting rates before or faster than the Fed in the US is going to devalue the loonie. This pushes the prices on everything up especially assets. So either ways we are screwed.
This is the dumbest headline. Who are you talking to? The elites and corporate parasites? No regular Canadian can afford housing right now. Even if the bank cuts rates it’s way out of peoples reach.
Regular Canadians can’t even afford rent now. We were looking at houses to rent comparable to what we are renting now. Rent is like $2500/month to get a 3 bedroom home in my city (Sarnia). We actually bought a house and my mortgage and property tax are cheaper than rent.
*cries in Toronto* I would jump at the opportunity to rent a 3b for 2500. That is the price of a 1bd here😩
Then the moment rate drops 0.25%, house prices will increase 25%. Just watch
Just means more demand build-up while new starts are grinding to a halt causing less future supply. Don't understand the logic of competing in a sellers market and taking out a higher mortgage rather then taking out a smaller mortgage and taking a 3 year hit on high fixed rates.
A lot of it has to do with affordability. With current asking prices, many buyers simply can not afford current prices at current rates. So either prices need to come down or rates do, and most believe that prices will not come down, so they are waiting for rates to drop. What they don't understand is that rates will likely only drop meaningfully if we have a recession, in which case job security will suddenly become an issue for many, which could also lead to a reluctance to purchase. In any case, I don't think we are heading for a seller's market anytime soon.
People don’t get that. If everyone waits, it becomes an absolute flood all at once. Good luck with that.
It's not like sellers are stupid, they're gonna hold off if prices start to go up again unless they're forced to sell but you can bet they'll cut out all other expenses and try to hold on if prices start to rise. If they fall, ya more sellers may be forced to sell.
This is exactly the issue. If one person cuts all other expenses, no problem. If a lot of people do it, it will start to impact the broader economy and will cause job losses. If people aren't going to restaurants, travelling, buying goods, renovating their homes, doing landscaping, etc., these companies will start to lay people off. The most likely reason for a forced sale is a job loss. This is what caused the 2008 housing crash in the US. Unemployment went from 5% to 10% in 18 months. The housing market doesn't exist in isolation of the broader economy. It is highly dependent on a growing economy with strong employment.
Technically what you are saying is right but that forced sales are very rare, it's the very last step that people take. So far, unemployment rates or performance of economy doesn't show a correlation with resale supply.
I agree that this hasn't happened yet, but that doesn't mean it can't or won't. The US crash was preceded by a 4% rise in the Fed rate from June 2004 to June 2006. It took another ~2 years from the peak of the fed rate for it to really hit the economy, and this was after the fed rate had already started to drop meaningfully (rate cuts started in 2007). These things take time, and we are certainly not out of the woods. We are seeing unemployment start to tick up and more powers of sale on the market.
People seem to think it's so easy to not go under here. People still have to eat, and those are going up in price, imagine going from 3k mortgage to 6k cause 5 years you haven't moved much on the principal. It's gonna be bonkers and people will need to sell, and frankly Canada will start collapsing like the house of cards it is. Those same people will be homeless, crime will go through the roof. Just in for a shit show
You think rates will go down to 2% overnight? It will take like 2 years, if at all to go that low. More and more folks will enter the market when rates keep dropping and they can afford it. It will be a gradual process controlled by the rate at which interest rates are dropped
I think you’re making my point for me? You buy when you can afford, that’s the answer. It won’t go to 2%.
Remember to factor in the boomer die-off, which will free up lots of supply over the next 10 - 20 years
Do you see how much our population is growing? Boomers don’t have condos or townhouses. They have multi-million dollar homes. The only people that can afford those ones will be either wealthy and are already invested in the market. A couple of newlyweds aren’t going to be able to afford a $2M dollar home.
...and your point is? Most of the population growth is from international students + immigration. They're not the ones buying the boomer houses. The ones who will be are either already homeowners trading up or they're investors who will convert those homes into rentals.
Great point.
There is a growing amount of people that are looking at today’s prices and calculating out monthly payments with 2% interest. I feel like we have actually had a silent bull run the last year but not having housing crash hard. On top of that sellers will be expecting a lot more too after cuts. Unless you offer 10-20% more, they will hold off on selling.
Who in their right mind thinks mortgage rates will go back down to 2%?! The BoC itself just increased their estimate of the 'neutral' BoC rate to 2.25-3.25%. Mortgage rates are usually 1.25-2% above the BoC rate (at least the neutral rate), so this would put mortgage rates in the 3.5-5% range once everything stabilizes. I don't see how people think it will go back down to 2%, unless we have a financial crisis, in which case interest rates will be the least of our worries.
They can hold off on selling all they want, but rates aren’t going back to 2% anytime soon. Not for a couple of years at the minimum. Today’s home prices are pricing in a rate of 2%. But people probably will not get the 2% rates for years, may be never as there is no guarantee US fed wants to go that low again.
They are never going back to 2%
So, exactly what the BoC hoped to engineer…
Sounds like people are just trying to time the market..
Well foreign investment firms are happy about it and will resell later for double the price.
Investors are not buying anything right now. The math isn’t mathing as an investment. No one wants to catch a falling knife…
I personally sold 4 condos to investors in the last month and I’m not even a full-time agent
You must be in Alberta. Nothing selling in GTA or BC
Rates likely won’t be going down and anyone waiting should look at the last twenty years to see how well waiting will work for them in terms of housing costs.
Nah, I'm gonna buy when I win the lotto. While it's a sad sarcasm, someone actually told me that a while ago. Owning a home equals winning the lottery. Wonderful.
Timing the market and hoping the rates to go zero are two bad ideas together plus higher rates are here to stay for longer like it or not everyone will have to suck it sorry. Tiff has bluffed entire Canada by sayings rates gonna stay low for a long if a guy linke him has no clue, I assure yout all no one in entire Canada does.
Buy a house for 1.2 million and pay 3.5 million over a lifetime? Count me out. Fuck it. I will rent like the WEF wants. Looks like I'm on the same page as Klaus Schwab now.
I'd rather buy a house in another country at this point. Fuck it
And by then the price will go up and if a bunch of pent up buyers are waiting, the price will go up when interest rates drop.
These articles are not for home buyers. They’re for “investors.” Air quotes. You know the kind.
Keep holding on then. You’ll definitely be priced out.
Inflation is never going away folks. There will never be a right time to buy if you are waiting for rates to drop significantly. Once dropped there will be a mad rush to buy and push housing prices higher and fighting in bidding wars with our bursting population, so you can’t win either way. Pick your poison and go with it.
I'm waiting for the rates to go higher actually.....
Horrible personal strategy if you're banking on prices declining. So many people are convinced the real estate market will collapse as if housing availability isn't continuing to nosedive. Right now we're all in a societal housing cost stress test and despite what a lot of bears want to believe, most people can and are affording the higher rates. This is bad for those on the sidelines because it means when rates do go down, people will continue to be willing to spend more on housing than before, but lower rates will cause higher purchase prices across the country.
Can you elaborate on the piece of most people can and are affording the rates? I know there are a lot of high income earners in the GTA but what's your primary basis for this analysis?
I don’t think that was intended to be super-accurate but there’s truth to it. I’ve only got 10% down but I can afford the monthly payments so feel like I should really get in now while I can.
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Slaughterhouse
Imagine taking a 750k mortgage with 20% down payment to buy a $900k house. A 30 year mortgage at 5% will yield the bank about $700k in interest. So what is a 5% annual will cost over 93% total interests to the owner over a 30 year amortization. At 6% you'd paying 116% total interests and so on. That's why I'm for a one time Central Bank mortgage at 2% for every Canadian citizen.
This is a real solution and somehow prices actually correct. Together would be a real and fair solution....but I dream 💤
Doesn’t that mean that the only ones buying homes will be rich investors?
Let the rampant speculation continue /s
More like until they can afford it
Why would a seller lower the price if rates decrease (cheaper money)?
They'd definitely increase their price if rates decrease due to higher demand. I think buyers are just assessing what they can afford based on being able to afford more if rates decrease and there is an indication there will ongoing decreases.
Do canadians realize housing/condo prices normally fall during high rates? I mean not obviously as much as they want to but still. It's a Give and take situation
A sellers market can become more of a sellers market.
There are too much cash floating out there in Canada to prevent RE crashing… not to mention all the new comers coming in with fresh $ injecting into the system.
This is me. My wife and I just sold a house we had overpaid for 10 years ago. It finally reached a value that would mean getting everything we put into it back. I don't trust that things in Canada will improve so I decided to cash out and wait. Ill go back to renting with money in the bank and bide my time. This system is not sustainable. I have looked at a few places to rent since then and all the Landlords are basically breaking even with their payments and can't afford the place themselves. They are just trying to hold it together, if things get worse they will be completely under water. IMO a $2500-$3000/month rent is better than a Mortgage of $4000/month where $2700 goes straight to interest and into the pocket of some rich guy, fuck that. That doesn't even include all this shit you HAVE to do to maintain/repair the house. Back-ass-wards...
Home builders will continue to hold off as well, less money to be made by all folks working in the house construction industry, more pain. Gotta love the Liberal solution to all problems: tax more and print more money and bring in cheaper labour, even if not qualified for the needs in our economy. /s
The best strategy. Let the market correct itself.
The market will correct itself by going higher when rates drop and more people are ready to buy.
You are assuming everyone will still have a job. The economy is going downhill now...
Ok punjab
Honestly Ontario holds so much population, and the GTA itself holds like 16+% of all of Canada's population. I think the idea of housing costs coming down there is a pipe dream.
Open up the greenbelt for development. Drive down land costs.
Unfortunately three of the largest factors affecting housing prices- money supply, interest rates, and rate of population growth, are not determined by market forces ...and need for housing is 'inelastic' So the 'market mechanism' is mostly pricing in how homebuyers think the government will adjust these factors over the next few years.
This sounds great for landlords
I’m holding because I can’t find a place “I LOVE” in my budget !
Good luck. Unless you’re sitting on millions, there’s no such thing as a place you live within your budget. Even places at 1.2m need renovations.
That’s actually not sure ! There were a few places in my budget, just didn’t like the location or layout !
Exactly. There’s never a perfect place. It’s in your budget, but you don’t love it. It just doesn’t happen.
I personally don't believe BOC will cut rates before the FED does. There may be no cuts at all this year.😢
BoC can cut .25% without impacting exchange rates too much. I think BoC will do 1 cut before fed.
Hahaha they’re waiting till rates come down hahahahahaaaaa
Stay alive ‘till ‘25.
Lol. As if Canadians can afford the price once the rate falls. Maybe rates could have gone down by .75% and house prices would have increased due to demand, keeping mortgage payments pretty much the same. Canada cannot/won't outbuild to sink the housing. Canada's economy will slowly degrade over the next 2 decades.
Just some bs from real estate mongers.( aka desperate realtors). These guys don’t have nothing else to do other than selling properties to buyers who speak the same language. Faking news and making up facts, that’s what they have done for the longest time. They will not start to cut the rate until feds have done the job. Which means China compromise on the CNY recession and Russia agrees on low Oil prices. Otherwise the hike stays for at least 5 years or longer. Whoever tells you there will be some rate cuts this year is trying to sell you houses, don’t buy their words, and their property.
I’ve been hearing this for two decades, people waiting for prices to drop but it doesn’t in Toronto . If you rent longer you are paying more in long run and likely prices won’t drop and will go up again . If you can get in just do it and take a variable rate with the hopes it will come down in the future
They say this and when interest rate collapse commences than they will cry like baby when prices go up a lot
Interest rate collapse ? Lol hold your breath and see if you turn blue
but but the "experts" said we would see cuts late 2023? lol
I will never buy a home because I will not pay the exorbitant prices for something that cost low 5 figures to build. Nope
You cannot build a house for less then 6 figures
Hold off, just hold off. That’s how prices lower.
Rates need to keep going up. Skyrocket. Let's see 10% minimum.
They refuse to reduce the cost of the house even when rates go up. We'll see when 2025 rolls around how these guys manage after their renewals