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Torrez

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Brandsdale said:
is our real esate network responsible for this? I ask cause I keep hearing the issue about bidding wars in toronto and how they can sometimes be shady and under the table.


Miami, MTL and New York being cheaper than us definitely a surprise to me tho:ohhh:

A dude I knew from Brampton up and moved to Brooklyn over a year ago with a media business he started and he seems to be doing well:ld:


I truly am lost on how Toronto is this expensive. I get that we glowed up in the past few years in travel and tourism, but a pandemmy hit and its like we're unphased in the housing department
Click to expand...

It definitely is not only the forces of supply and demand that are influencing the housing prices. The bidding process and anonymity of MLS data has something to do with it. My understanding is people have no idea what others are bidding, it is blind bidding. Which in a hot market can yield the results you are seeing because you only need one bidder with enough cash to outbid everyone at their upper limit which could be $100k - $500k or more over the normal asking price. You have that happen for 10 years straight and housing prices in every neighbourhood gets inflated.

This most likely won't stop either. The money that goes into the government's pockets from housing sales is a big part of our GDP. Something like 10% of all of Canada's GDP comes from housing, in 2017 it was 13%, I think I saw somewhere that it is 15 percent now. It is our largest contributor to our GDP. For perspective that is 2 times as much as the United States.

Political parties at the municipal, provincial, and federal level often make promises for a variety of things which requires them to spend money. If you are them, you won't commit political suicide by saying we don't have the money because we will get rid of the bidding process and actually have the Bank of Canada put in measures to suppress the housing market. If you did, you obviously would have less money to spend, unless you raise taxes. If you didn't get the money from elsewhere, you would end up cutting programs, or not doing maintenance in your cities, etc. Whatever it is you cut spending on, someone will be mad. You would also have homeowners whose home values would go down as the market would cool off, they would have less equity.

I saw someone comment on this on a Canadian Real Estate area of reddit once, this was their explanation as to why you won't see the prices go down, and the market won't fail.

"Canadian housing market is too big to fail, regardless of wages. The first thing the Canadian government did during COVID-19 was to save the housing market.

  1. Canadians own housing and they don't want to see price come down. Majority of Canadian households in desirable cities are homeowners, and have their nest eggs invested in housing. Falling home prices sets everyone back from retirement, and they carry that displeasure to the polls during elections.

  2. Homeowners feel wealthier when home prices go up, they go spend money in retail, food services, personal services, technology, etc. Those sectors then hire more people, and they increase their spending and the cycle continues. If the music stops, renters are often the first to lose their jobs.

  3. Housing is now #1 GDP contributor at 15% of Canada's GDP. Over time the economy has morphed to depend on housing as a driver of growth. A collapse on 15% of GDP would send shockwaves down all unrelated sectors, and again renters might end up first to lose their jobs. To visualize this to people who don't have an economics background, for every $100 that you earn in Canada, $15 of it was created through the real estate industry to get to you, which you wouldn't have earned if not for real estate.

  4. Housing collapse will destroy the banking system, which is built on collateral assets such as housing. If home prices crater and homeowners are underwater, all Canadian banks would end up with negative equity (liabilities > assets) and everyone stops lending to each other. Bankruptcies and unemployment soar. It's ugly. The government would then have to spend massively more to bail out banks in addition to reviving a collapsed economy. That's what happened in 2008 before they started flooding the market with money to prop up banks in the US.

  5. Local policies kowtowing to voters have resorted to perverted NIMBY policies to slow the supply of new homes. Majority of City of Vancouver's land mass is zoned low density to maintain neighborhood characteristics. Voters go up in arms to protest whenever this zoning status is threatened. Vancouver city councillors voted in May to reduce building permits to supply new homes in Vancouver by half source.
This is why short of serious incompetence and negligence, no political will is ever strong enough to shake Canadian housing market. Real estate is not a strictly free market because of the emotional, social, economic, and political upheaval its unravel could cause. This is also why every recession will see wealth inequality widen.

The first thing the Canadian government did during COVID-19 was to save the housing market. Low interest rates, reduced stress testing thresholds, deferrals, giving homeowners money to pay mortgages, etc. It's never going to stop until the threat to housing is removed."

​
 
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Torrez said:
It definitely is not only the forces of supply and demand that are influencing the housing prices. The bidding process and anonymity of MLS data has something to do with it. My understanding is people have no idea what others are bidding, it is blind bidding. Which in a hot market can yield the results you are seeing because you only need one bidder with enough cash to outbid everyone at their upper limit which could be $100k - $500k or more over the normal asking price. You have that happen for 10 years straight and housing prices in every neighbourhood gets inflated.

This most likely won't stop either. The money that goes into the government's pockets from housing sales is a big part of our GDP. Something like 10% of all of Canada's GDP comes from housing, in 2017 it was 13%, I think I saw somewhere that it is 15 percent now. It is our largest contributor to our GDP. For perspective that is 2 times as much as the United States.

Political parties at the municipal, provincial, and federal level often make promises for a variety of things which requires them to spend money. If you are them, you won't commit political suicide by saying we don't have the money because we will get rid of the bidding process and actually have the Bank of Canada put in measures to suppress the housing market. If you did, you obviously would have less money to spend, unless you raise taxes. If you didn't get the money from elsewhere, you would end up cutting programs, or not doing maintenance in your cities, etc. Whatever it is you cut spending on, someone will be mad. You would also have homeowners whose home values would go down as the market would cool off, they would have less equity.

I saw someone comment on this on a Canadian Real Estate area of reddit once, this was their explanation as to why you won't see the prices go down, and the market won't fail.

"Canadian housing market is too big to fail, regardless of wages. The first thing the Canadian government did during COVID-19 was to save the housing market.

  1. Canadians own housing and they don't want to see price come down. Majority of Canadian households in desirable cities are homeowners, and have their nest eggs invested in housing. Falling home prices sets everyone back from retirement, and they carry that displeasure to the polls during elections.

  2. Homeowners feel wealthier when home prices go up, they go spend money in retail, food services, personal services, technology, etc. Those sectors then hire more people, and they increase their spending and the cycle continues. If the music stops, renters are often the first to lose their jobs.

  3. Housing is now #1 GDP contributor at 15% of Canada's GDP. Over time the economy has morphed to depend on housing as a driver of growth. A collapse on 15% of GDP would send shockwaves down all unrelated sectors, and again renters might end up first to lose their jobs. To visualize this to people who don't have an economics background, for every $100 that you earn in Canada, $15 of it was created through the real estate industry to get to you, which you wouldn't have earned if not for real estate.

  4. Housing collapse will destroy the banking system, which is built on collateral assets such as housing. If home prices crater and homeowners are underwater, all Canadian banks would end up with negative equity (liabilities > assets) and everyone stops lending to each other. Bankruptcies and unemployment soar. It's ugly. The government would then have to spend massively more to bail out banks in addition to reviving a collapsed economy. That's what happened in 2008 before they started flooding the market with money to prop up banks in the US.

  5. Local policies kowtowing to voters have resorted to perverted NIMBY policies to slow the supply of new homes. Majority of City of Vancouver's land mass is zoned low density to maintain neighborhood characteristics. Voters go up in arms to protest whenever this zoning status is threatened. Vancouver city councillors voted in May to reduce building permits to supply new homes in Vancouver by half source.
This is why short of serious incompetence and negligence, no political will is ever strong enough to shake Canadian housing market. Real estate is not a strictly free market because of the emotional, social, economic, and political upheaval its unravel could cause. This is also why every recession will see wealth inequality widen.

The first thing the Canadian government did during COVID-19 was to save the housing market. Low interest rates, reduced stress testing thresholds, deferrals, giving homeowners money to pay mortgages, etc. It's never going to stop until the threat to housing is removed."

​
Click to expand...


These bidding stuff may not even be legit, I wouldn't be shocked if you looked closely real estate agents are working with other real estate agents to blind bid. I remember back in my wicked days on eBay I'd have a friend bid on my items to drive up the cost.

The thing is its great for homeowners now but what about everyone else? You can make 100k a year and only qualify for a mortgage that can't even buy a condo.
 
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TradePascalSiakam said:
These bidding stuff may not even be legit, I wouldn't be shocked if you looked closely real estate agents are working with other real estate agents to blind bid. I remember back in my wicked days on eBay I'd have a friend bid on my items to drive up the cost.

The thing is its great for homeowners now but what about everyone else? You can make 100k a year and only qualify for a mortgage that can't even buy a condo.
Click to expand...

Yeah, I can see definitely some agents having fake bids put in, another reason to get rid of the blind bidding process entirely, there should be a move for transparency about the process.
 
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Torrez said:
Yeah, I can see definitely some agents having fake bids put in, another reason to get rid of the blind bidding process entirely.
Click to expand...

My sister and her husband made over 600k on their house in two years just sold last week and they live in the middle of nowhere :russ:

There is no way this is normal

I remember working crummy jobs in my twenties and working with people who made like min wage and just above min wage and they had houses.

now?

I just played around with the TD mortgage calculator
Annual Salary of 120,000
Downpayment of 80,000
No expenses

Good news! You may be able to buy a home priced up to $693,000 :mjlol:

Imagine making 120k a year and have 80,000 for a downpayment and all you can afford is a house in like london ontario or a 1bdrm condo in toronto that you're paying like 2,500 a month for plus condo fees.
 
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TradePascalSiakam said:
It's not even worth it coming to Toronto as an immigrant anymore.
Click to expand...

Yep, it doesn't make any sense. You come here and immediately your expenses will be tough to handle with just rent. When my parents came here houses were like $20-$40k, and salaries were like $2-4K. Salaries were about 10% the cost of a house, and salaries went up over the coming decades, so you could pay off the house quickly. Now, what is the average salary for a single person $35k, and the average home in Toronto is what 800k-1Mill. Salaries are about 4% of the cost a house now.
 
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Torrez said:
Yep, it doesn't make any sense. You come here and immediately your expenses will be tough to handle with just rent. When my parents came here houses were like $20-$40k, and salaries were like $2-4K. Salaries were about 10% the cost of a house, and salaries went up over the coming decades, so you could pay off the house quickly. Now, what is the average salary for a single person $35k, and the average home in Toronto is what 800k-1Mill. Salaries are about 4% of the cost a house now.
Click to expand...

I mean you come here and even to just rent a private room just a private room you're looking at 900 a month. Basement apartments go for like 1,400 now, one bdrms even at jane and finch 1,535 a month :picard:, and im sure once the lrt is completed they will go up

jnf.jpg


The old rule of thumb was to buy a house 3-4 times your salary now? :mjlol:
 
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TradePascalSiakam said:
These bidding stuff may not even be legit, I wouldn't be shocked if you looked closely real estate agents are working with other real estate agents to blind bid. I remember back in my wicked days on eBay I'd have a friend bid on my items to drive up the cost.

The thing is its great for homeowners now but what about everyone else? You can make 100k a year and only qualify for a mortgage that can't even buy a condo.
Click to expand...

:dwillhuh:
 
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