Average price of detached home in Toronto nears $1M…
30 Replies to “What Could Possibly Go Wrong?”
But I thought Ontario’s economy was in a rut? I guess not, bring on 4 more years of the liberals! Must be nice everyone making $250k a year in Ontario.
In all seriousness, there will be financial mushroom clouds when the fuse finally hits that market. Vancouver and other cities will be the secondary explosions.
Guess we are incapable of learning from US mistakes. No way in the world you can claim those prices are healthy.
Yep, a million dollar home in Toronto and on that home pay less municipal taxes in the big stink than we do on a modest $200.000.00 home here in Woodstock, Ontario.
And the corrupt Toronto pols are shit scared of raising their municipal taxes and are ready to open mind numbing CASINOS for stupid old white haired folks to mitigate higher taxes on the Million dollar Toronto homes.
Bastards!!
Geez!
Oh it is. I live down in the SWON, and prices are in the sub-250k range for a brand new home(20yr+ places are going as low as sub 120k in areas where a park, and two schools are within 1km). And new subdivisions have been drying up with people not buying new homes at all. There was recently a huge spree of buying when CHMC announced it was changing the rules again, but on average around here a house is on the market for 6 months and as long as 18 months.
I would send some tulips to city hall to congratulate them, but I’m too cheap!
Totally unrelated – First day city council sits without Rob Ford today and they’re voting on pay raises for themselves.
Is the average person in Toronto pulling in a salary of over five million dollars or something because those home prices just seem a tad too high?
Indeed!
There is no justification fer this other than inflation gone stupid. It is unsustainable. Hongcouver woulda collapsed long past except fer flight capital from Asia.
Jay is stating the obvious….this is a bubble that MUST burst and the fallout zone will extend Canada-wide.
So? The average price of a 2 bed,600 sqft apartment in Vancouver is $399,999. You don’t even want to know what a HOUSE is “worth”!!
Did any one expect less from the plotting thieves on this sad excuse for a city hall?
And this is a bad thing because? Housing prices are way to high because a gebermint interference,but idjits will “pay” whatever.
Anyone who’d pay that price to live in a societal cesspool deserves what they get.
Eli:
Pardon my ignorance, but what is SWON?
Two words. ‘Interest’ and ‘Rate’. As soon as the US and then Canada stop holding the bank rate to artificially low levels there will be a lot of very unhappy people and a whole lot of ‘availability’. A two or three point increase in the rate will be catastrophic for many homeowners.
SWON = Southwestern Ontario. More or less Woodstock to Windsor.
Interest rates aren’t going up until after Oct, 2015.
Obviously …. the universe needs a larger center! 🙂
We have a few cities like that in America. One of them
is San Francisco. Middle class suburban homes that were
selling for a few tens of thousands decades are fetching
a million dollars+ these days.
The first thing you do is impose communist style rent
controls, and then lobby against any future development.
The price of housing follows the law of supply and demand.
If you kill future development, you end up with cops,
firemen, electricians, plumbers, etc. having to commute
50-60 miles because they cannot afford to live in the
communities they service.
This is all about buying a home and holding on to it for
several decades, while denying affordable housing to the
“Little People.” This is the liberal tactic of saying
“I’ve got mine, SCREW YOU!”
A city run by a conservative alcoholic and crack addict is booming,
whilst cities run by liberals have descended into wastelands of poverty, crime and ruin.
Consider the ripple effect:
We are 3hrs north of the COTU with lovely waterfont homes on several lakes. Buddy and Honey are ready to retire, can sell their humble home in COTU for 700 plus, and grab modest waterfront bungalow in our city and not hesitate to pay 400, plus, and have fun money left over. For the last few years the price of a local modest bungalow has jumped. Now we are in a slow market. Only ones moving to our city are the retirees from Toronto, and our young are leaving because there are no jobs.
Excellent point DO
Unsustainable? Try disastrous. No one will want to or can afford this. One might see urban sprawl or flight. Smaller towns might see a boom.
Crappy old Hamilton Ontario -is- seeing a boom. The crappiest part of town, James North down by the bay and the rail yard, has been gentrified by starving artists and tuned into a proper, interesting little neighborhood. All the dirtbags, drug addicts and bums have migrated away because the housing prices rose. Its happening all over the city.
Where did all these artists and energetic house fixer types come from? TORONTO. Why? Because a crappy loft costs $1,500+++ a month anywhere in 416 area code, and studio space is unavailable. Also the little boutiques that sell artist’s work are all gone, replaced by other things that can pay the over-the-top rents on those spaces. We’re talking $50/square foot and up for disgusting little retail spaces that haven’t been renovated in thirty to forty years. They just paint ’em, stick a cash register in the corner and pray the roof doesn’t collapse.
Because why? Because a little tiny busted-@ss house in the Annex or Old Chinatown costs $800,000, is why. I happen to know (because I quoted a paint job there once) that one building which shall remain un-named at Yonge St. and Bloor is a horrifying, falling down wreck. It has post-and-tube electrical wiring in it from the 1920’s. It has cast iron drains so old they are solid rust. It has lead water pipe. The roof leaks. Chronically.
It is worth $15 million dollars last I checked.
Economic reality check, even with the street traffic at Yonge and Bloor, there exists no possible legal retail business which could support the interest payments on $15 million bucks and still turn a profit, given the retail space of the building.
What’s the Liberal government of Ontario doing? Building windmills in rural counties and jacking up the cost of electricity to FIVE TIMES its normal price. Why are they still in power? Toronto voters. Who’s going to vote for them again? Toronto voters.
How long can this last? I don’t know. I can’t believe its lasted this long. It should have blown up in 2008. But if you’re starting anything I wouldn’t take out a lease longer than five years, my friends.
Do not forget the Provincial Liberals imposed growth management policies in the GTA – “The Growth Plan for the Greater Golder Horseshoe” in 2006. Limit the areas for future growth, impose high density devt in new subdivisions (limiting new single detached) plus keep adding new residents. The demand for single detached is outpacing supply, therefore prices increase. Of course, the Liberals told us in 2006 that basic economics do not apply in Ontario and the price of housing would not increase.
Reason #95,1987 for a purge at Queens Park.
Jay (and others) must learn to recognize that Toronto and Vancouver are not just quantitatively different, but qualitatively different, from other Canadian cities. Both cities offer cosmopolitan lifestyles, easy air access to the rest of the world without numerous connections, great restaurants and shopping, etc., all while being distinctly safer. Both are magnets for well-heeled buyers from around the world, and Toronto prices are in line (and in fact, at the low end) of prices in similar cities around the world. World Housing Affordability (If you follow this link, table ES-3 is probably the quickest way to get the picture)
People are buying Toronto real estate because they see it as a good investment in times when interest rates are low, rents are high, and investment opportunities elsewhere (stocks, bonds) are stagnant and/or of dubious quality.
C’mon, Phantom – the reason that the Stollery’s building is worth %15 million is some developer is waiting for the huge condo across the street to be finished before he buys that property and builds another new massive condo, from which he will make many times $15 million. You’re not normally this disingenuous.
You just proved my and other’s point, ” they see it as a good investment in times when interest rates are low, rents are high, and investment opportunities elsewhere (stocks, bonds) are stagnant” .
As soon as interest rates go up, not only will buyers with massive debt go under, but all those international investors will race to sell as they see their investments waiver and other investments like bonds become more attractive. That is if those investors in China and elsewhere don’t rush to convert to cash when their county’s economic bubbles bursts.
The crash will come, just because the sun is out today, doesn’t mean rain will never come.
Jay,
That’s a double edged sword… as interest rates go up, less people can qualify for a mortgage and therefore more people have to rent. This increases demand in the rental market therefore rents should still trend go up, unless there is a net migration away from Toronto and Canada.
As long as the buyers are not over-leveraged (big if) and are getting a positive cashflow they should be able to weather the storm of High Interest Rates if and when they come.
I don’t know Toronto’s rental market very well but I am assuming that it is still a landlords market and vacancy rates are at historic lows and the monthly rent is also high enough to support the high cost of housing there.
Its not Stollery’s, its in the same block though.
Just moves the decimal point though, doesn’t it? What kind of rabbit warren do you need to put up to make a profit when the land you’re building on cost a hundred million bucks? Do the math, its scary.
You want to see the end-point of all this, check out Tokyo. Where hot bunking is a way of life, not something sailors do on submarines. Guys can’t afford their own room, they rent them for eight hours at a stretch and store all their stuff in a locker. A really -small- locker.
Forgive me if I seem provincial, but that’s not the kind of thing I want to see in Canada.
C-miner, where do you think I learned it?
I often argue with a liberal neighbor. His only source on
economics is the talking heads on MSNBC, my sources are
Thomas Sowell, Walter Williams, F.A. Hayek and Milton
Friedman.
Whenever we argue on the subject of global warming, he has
Rachel Maddow and Ed Schultz. I actually read articles
written by climate scientists.
We have facts on our side. Liberals have emotions.
But I thought Ontario’s economy was in a rut? I guess not, bring on 4 more years of the liberals! Must be nice everyone making $250k a year in Ontario.
In all seriousness, there will be financial mushroom clouds when the fuse finally hits that market. Vancouver and other cities will be the secondary explosions.
Guess we are incapable of learning from US mistakes. No way in the world you can claim those prices are healthy.
Yep, a million dollar home in Toronto and on that home pay less municipal taxes in the big stink than we do on a modest $200.000.00 home here in Woodstock, Ontario.
And the corrupt Toronto pols are shit scared of raising their municipal taxes and are ready to open mind numbing CASINOS for stupid old white haired folks to mitigate higher taxes on the Million dollar Toronto homes.
Bastards!!
Geez!
Oh it is. I live down in the SWON, and prices are in the sub-250k range for a brand new home(20yr+ places are going as low as sub 120k in areas where a park, and two schools are within 1km). And new subdivisions have been drying up with people not buying new homes at all. There was recently a huge spree of buying when CHMC announced it was changing the rules again, but on average around here a house is on the market for 6 months and as long as 18 months.
I would send some tulips to city hall to congratulate them, but I’m too cheap!
Totally unrelated – First day city council sits without Rob Ford today and they’re voting on pay raises for themselves.
The land transfer tax which is estimated to have cost over $2 billion in reduced economic activity was brought in by Adam Vaughan, one of Trudeau’s hand-picked star candidates.
http://www.sunnewsnetwork.ca/sunnews/straighttalk/archives/2014/05/20140505-163935.html
Is the average person in Toronto pulling in a salary of over five million dollars or something because those home prices just seem a tad too high?
Indeed!
There is no justification fer this other than inflation gone stupid. It is unsustainable. Hongcouver woulda collapsed long past except fer flight capital from Asia.
Jay is stating the obvious….this is a bubble that MUST burst and the fallout zone will extend Canada-wide.
So? The average price of a 2 bed,600 sqft apartment in Vancouver is $399,999. You don’t even want to know what a HOUSE is “worth”!!
Did any one expect less from the plotting thieves on this sad excuse for a city hall?
And this is a bad thing because? Housing prices are way to high because a gebermint interference,but idjits will “pay” whatever.
Anyone who’d pay that price to live in a societal cesspool deserves what they get.
Eli:
Pardon my ignorance, but what is SWON?
Two words. ‘Interest’ and ‘Rate’. As soon as the US and then Canada stop holding the bank rate to artificially low levels there will be a lot of very unhappy people and a whole lot of ‘availability’. A two or three point increase in the rate will be catastrophic for many homeowners.
SWON = Southwestern Ontario. More or less Woodstock to Windsor.
Interest rates aren’t going up until after Oct, 2015.
Obviously …. the universe needs a larger center! 🙂
We have a few cities like that in America. One of them
is San Francisco. Middle class suburban homes that were
selling for a few tens of thousands decades are fetching
a million dollars+ these days.
The first thing you do is impose communist style rent
controls, and then lobby against any future development.
The price of housing follows the law of supply and demand.
If you kill future development, you end up with cops,
firemen, electricians, plumbers, etc. having to commute
50-60 miles because they cannot afford to live in the
communities they service.
This is all about buying a home and holding on to it for
several decades, while denying affordable housing to the
“Little People.” This is the liberal tactic of saying
“I’ve got mine, SCREW YOU!”
A city run by a conservative alcoholic and crack addict is booming,
whilst cities run by liberals have descended into wastelands of poverty, crime and ruin.
Consider the ripple effect:
We are 3hrs north of the COTU with lovely waterfont homes on several lakes. Buddy and Honey are ready to retire, can sell their humble home in COTU for 700 plus, and grab modest waterfront bungalow in our city and not hesitate to pay 400, plus, and have fun money left over. For the last few years the price of a local modest bungalow has jumped. Now we are in a slow market. Only ones moving to our city are the retirees from Toronto, and our young are leaving because there are no jobs.
Excellent point DO
Unsustainable? Try disastrous. No one will want to or can afford this. One might see urban sprawl or flight. Smaller towns might see a boom.
Leonard Jones nails it. Thomas Sowell pounds in the nails.
http://townhall.com/columnists/thomassowell/2014/04/22/the-high-cost-of-liberalism-n1827188/page/full
Crappy old Hamilton Ontario -is- seeing a boom. The crappiest part of town, James North down by the bay and the rail yard, has been gentrified by starving artists and tuned into a proper, interesting little neighborhood. All the dirtbags, drug addicts and bums have migrated away because the housing prices rose. Its happening all over the city.
Where did all these artists and energetic house fixer types come from? TORONTO. Why? Because a crappy loft costs $1,500+++ a month anywhere in 416 area code, and studio space is unavailable. Also the little boutiques that sell artist’s work are all gone, replaced by other things that can pay the over-the-top rents on those spaces. We’re talking $50/square foot and up for disgusting little retail spaces that haven’t been renovated in thirty to forty years. They just paint ’em, stick a cash register in the corner and pray the roof doesn’t collapse.
Because why? Because a little tiny busted-@ss house in the Annex or Old Chinatown costs $800,000, is why. I happen to know (because I quoted a paint job there once) that one building which shall remain un-named at Yonge St. and Bloor is a horrifying, falling down wreck. It has post-and-tube electrical wiring in it from the 1920’s. It has cast iron drains so old they are solid rust. It has lead water pipe. The roof leaks. Chronically.
It is worth $15 million dollars last I checked.
Economic reality check, even with the street traffic at Yonge and Bloor, there exists no possible legal retail business which could support the interest payments on $15 million bucks and still turn a profit, given the retail space of the building.
What’s the Liberal government of Ontario doing? Building windmills in rural counties and jacking up the cost of electricity to FIVE TIMES its normal price. Why are they still in power? Toronto voters. Who’s going to vote for them again? Toronto voters.
How long can this last? I don’t know. I can’t believe its lasted this long. It should have blown up in 2008. But if you’re starting anything I wouldn’t take out a lease longer than five years, my friends.
Do not forget the Provincial Liberals imposed growth management policies in the GTA – “The Growth Plan for the Greater Golder Horseshoe” in 2006. Limit the areas for future growth, impose high density devt in new subdivisions (limiting new single detached) plus keep adding new residents. The demand for single detached is outpacing supply, therefore prices increase. Of course, the Liberals told us in 2006 that basic economics do not apply in Ontario and the price of housing would not increase.
Reason #95,1987 for a purge at Queens Park.
Jay (and others) must learn to recognize that Toronto and Vancouver are not just quantitatively different, but qualitatively different, from other Canadian cities. Both cities offer cosmopolitan lifestyles, easy air access to the rest of the world without numerous connections, great restaurants and shopping, etc., all while being distinctly safer. Both are magnets for well-heeled buyers from around the world, and Toronto prices are in line (and in fact, at the low end) of prices in similar cities around the world. World Housing Affordability (If you follow this link, table ES-3 is probably the quickest way to get the picture)
People are buying Toronto real estate because they see it as a good investment in times when interest rates are low, rents are high, and investment opportunities elsewhere (stocks, bonds) are stagnant and/or of dubious quality.
C’mon, Phantom – the reason that the Stollery’s building is worth %15 million is some developer is waiting for the huge condo across the street to be finished before he buys that property and builds another new massive condo, from which he will make many times $15 million. You’re not normally this disingenuous.
You just proved my and other’s point, ” they see it as a good investment in times when interest rates are low, rents are high, and investment opportunities elsewhere (stocks, bonds) are stagnant” .
As soon as interest rates go up, not only will buyers with massive debt go under, but all those international investors will race to sell as they see their investments waiver and other investments like bonds become more attractive. That is if those investors in China and elsewhere don’t rush to convert to cash when their county’s economic bubbles bursts.
The crash will come, just because the sun is out today, doesn’t mean rain will never come.
Jay,
That’s a double edged sword… as interest rates go up, less people can qualify for a mortgage and therefore more people have to rent. This increases demand in the rental market therefore rents should still trend go up, unless there is a net migration away from Toronto and Canada.
As long as the buyers are not over-leveraged (big if) and are getting a positive cashflow they should be able to weather the storm of High Interest Rates if and when they come.
I don’t know Toronto’s rental market very well but I am assuming that it is still a landlords market and vacancy rates are at historic lows and the monthly rent is also high enough to support the high cost of housing there.
Its not Stollery’s, its in the same block though.
Just moves the decimal point though, doesn’t it? What kind of rabbit warren do you need to put up to make a profit when the land you’re building on cost a hundred million bucks? Do the math, its scary.
You want to see the end-point of all this, check out Tokyo. Where hot bunking is a way of life, not something sailors do on submarines. Guys can’t afford their own room, they rent them for eight hours at a stretch and store all their stuff in a locker. A really -small- locker.
Forgive me if I seem provincial, but that’s not the kind of thing I want to see in Canada.
C-miner, where do you think I learned it?
I often argue with a liberal neighbor. His only source on
economics is the talking heads on MSNBC, my sources are
Thomas Sowell, Walter Williams, F.A. Hayek and Milton
Friedman.
Whenever we argue on the subject of global warming, he has
Rachel Maddow and Ed Schultz. I actually read articles
written by climate scientists.
We have facts on our side. Liberals have emotions.