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So why is North York so Expensive? And Scarborough so cheap?

Eug said:
This brings back memories as to when I was looking for a home. I didn't actually like much of The Beach because the houses tend to be crammed in together, and lots of them have no private parking. Plus my friends who lived there complained about the constant traffic and lack of street parking in the summer. They eventually moved out of The Beach. The nicest part The Beach that I wanted to buy in wasn't actually part of The Beach. It's Fallingbrook, which is actually in Scarborough. Bigger lots, bigger homes, quieter, and lots of private parking.

Unfortunately, it was also very expensive, more so than most of The Beach. While we could afford parts of Fallingbrook, what we wanted in terms of lot size and home size was a little beyond what we wanted to spend, so we looked west to the Scarborough Bluffs instead, right close to where that article is talking about. Very nice, but adds 10 minutes to my commute compared to Fallingbrook.

I'm glad we got in there before the big rush. That article does validate what I had believed though, that the area was quite undervalued when we bought into it. I'm not so sure it's undervalued now though, if prices are jumping up that fast.

It's true about transit though. Transit in most of the Bluffs is terrible. For us it wasn't an issue though, since we're car dependent anyway. Even when we lived downtown, we were car dependent, since we don't actually work downtown. Ironically, we work in North York.
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Yup, totally agree. I had a real estate agent in to see my house in the spring and he explained that the Bluffs is seeing far higher increases in prices relative to the Beaches because people are being priced out of that hood and the Bluffs is a fairly good compromise for people.

A few of my neighbours are actually former Beach residents, they were sick and tired of the lack of parking and the inconvenience it causes, so they moved out here.

As for transit, TTC is sort of horrible in the area, but GO is heaven. I'm 30 minutes door to door for work, but I obviously work near Union making this location more than ideal for me - for now. And the TTC may get better depending on the route they choose for the silly Scarborough subway.
 
^^^ It's true what you say about TTC vs. GO, but the thing I always hated about GO is the lack of frequency of the trains. I'm 2.7 km from the local GO station so a bit too far to walk regularly, but close enough to drive in a couple minutes, if I'm willing to pay the parking fee.

However, that frequency disadvantage could change in the future if Tory's SmartTrack plan actually gets implemented.
 
Eug said:
^^^ It's true what you say about TTC vs. GO, but the thing I always hated about GO is the lack of frequency of the trains. I'm 2.7 km from the local GO station so a bit too far to walk regularly, but close enough to drive in a couple minutes, if I'm willing to pay the parking fee.

However, that frequency disadvantage could change in the future if Tory's SmartTrack plan actually gets implemented.
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There is no parking fee at Scarborough GO. At least not yet. At half hour freq it's fine for me, was a bit challenging 4+ years ago. I'm about the same distance (~ 2.5km) but I drive there too most of the time. In spring and fall during comfortable temps I'll walk. Not doing it in the humidity or freezing temps.

It'll be a while, but GO's RER will also increase freq.
 
Responding to the Original Poster

Its all about location location, and location. Then there`s the demographics in the surrounding neighborhood and the community that you live in, can also have an impact on the pricing of Real Estate. Not to mention as well, that Real Estate Agents have access to a tool that`s called `MLS`and they can see whats price range of the houses in a certain area, something called a Price Comparison Chart that shows the surrounding properties and how much were they sold for.

That`s pretty much it about the pricing difference of North York and Scarborough. You`ll get the same result if you compared with Richmond Hill and Agincourt properties.
 
Scarborough is more expensive compared to before because everything has become more expensive, but North York is still more expensive relative to Scarborough.
 
Housing prices in Willowdale and Don Mills are strikingly high. There doesn't seem to be much of a difference between there and say, North Toronto/Leaside.

Right now the least expensive SFH areas of Toronto seem to be in the old borough of York and in Rexdale.
 
Housing in Toronto is going to crash at the rate its going, it would be better if government would get its act together and take action today to avoid the worst scenario later.

1) Install a foreign buyer's tax, maybe even more significant than what we see in Vancouver. Foreign buyers are purchasing these homes in the GTA, especially now that they cannot afford Vancouver.

2) Interest rates need to increase. Money is just too cheap to borrow right now. When mortgages are selling for between 5% for prime buyers at its cheapest up toward 10% for sub prime, housing prices will be in check.

Until then, anything else is window dressing and Toronto will eventually crash and burn when no locals can afford to live here.
 
TheOneAbove said:
Housing in Toronto is going to crash at the rate its going, it would be better if government would get its act together and take action today to avoid the worst scenario later.

1) Install a foreign buyer's tax, maybe even more significant than what we see in Vancouver. Foreign buyers are purchasing these homes in the GTA, especially now that they cannot afford Vancouver.

2) Interest rates need to increase. Money is just too cheap to borrow right now. When mortgages are selling for between 5% for prime buyers at its cheapest up toward 10% for sub prime, housing prices will be in check.

Until then, anything else is window dressing and Toronto will eventually crash and burn when no locals can afford to live here.
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Do you have numbers to support this? And you want a more significant tax than Vancouver? If we're going to make these sweeping changes, I need to see data that supports these changes.

Slapping a tax may just make things worse. People aren't selling their homes. A tax wouldn't change anything. Here's what would change things, re-work/removal of land tansfer tax. MORE new housing, higher interest rates and a higher unemployment. I'm not against a foreigh tax, but I need to see the numbers. Even with a tax I feel like nothing would change.

Rates are ridiculously low. It is giving people who shouldn't even be in the market a chance at home ownership.
 
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TheKingEast said:
Slapping a tax may just make things worse. People aren't selling their homes. A tax wouldn't change anything. Here's what would change things, re-work/removal of land tansfer tax.
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It would be interesting to model it after capital gains for some situations. Perhaps if you sell a primary home and immediately purchase another primary residence within the same municipality then the land transfer tax might be reduced. So, land transfer tax would apply primarily to land assembly, first time buyers (unless they qualify for existing discounts), investment property purchases, foreigners, and people moving long distances.

Actually, as a starter perhaps the primary residence LTT discount might only apply if the new property is of lower value than what was sold; encourage elderly to downsize from their family home which they're struggling to pay property taxes on into something more right-sized for their income/lifestyle.
 
TheKingEast said:
Do you have numbers to support this? And you want a more significant tax than Vancouver? If we're going to make these sweeping changes, I need to see data that supports these changes.

Slapping a tax may just make things worse. People aren't selling their homes. A tax wouldn't change anything. Here's what would change things, re-work/removal of land tansfer tax. MORE new housing, higher interest rates and a higher unemployment. I'm not against a foreigh tax, but I need to see the numbers. Even with a tax I feel like nothing would change.

Rates are ridiculously low. It is giving people who shouldn't even be in the market a chance at home ownership.
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This is kind of a chicken or the egg argument. Is perpetually market-driven hyper capitalization of mortgages what is keeping people out of their homes - money so cheap you can over-borrow in the hundreds and hundreds of thousands, or would it be better to introduce interest rates that put actual value in the dollar and tighten the amount the market can offer homes for sale since money all of a sudden would have more value?

I would vote that putting more value in the dollar at this juncture of the housing market would be far better than continuing to devalue the dollar by making loans so cheap that people can over-borrow. Stress tests aren't doing the job, but fairer interest rates would give the market a chance at correcting itself before its too late.

In terms of the first topic, if you want to know where the money is coming from, you'll have to do more digging. I certainly cannot provide you with all the answers. But if you take per capita income from a postal code, and you multiply that gross income by .3 (30%, the average standard people say you couldn't go over for spending on housing), and you see that more than 50% of mortgages in a postal code (or other locality metric) are out of reach for that local population, then where do you suggest all this untraceable money is flowing from? Anecdotally - which means nothing, I know - but anecdotally I have a friend in Scarborough where a Japanese buyer dumped his investment into a barely basic home, jacked up the price to $800,000 and now rents it out as an investment property. Toronto is quickly becoming a city where elites around the world are dumping investments in and extracting wealth from this city. The locals pay the price.

If you look at postal code after postal code in Toronto, so much of these mortgages don't meet the standards for local buyers and have pushed locals out. There's a problem that needs addressing, one that is far larger than a message like this can resolve.
 
TheOneAbove said:
This is kind of a chicken or the egg argument. Is perpetually market-driven hyper capitalization of mortgages what is keeping people out of their homes - money so cheap you can over-borrow in the hundreds and hundreds of thousands, or would it be better to introduce interest rates that put actual value in the dollar and tighten the amount the market can offer homes for sale since money all of a sudden would have more value?

I would vote that putting more value in the dollar at this juncture of the housing market would be far better than continuing to devalue the dollar by making loans so cheap that people can over-borrow. Stress tests aren't doing the job, but fairer interest rates would give the market a chance at correcting itself before its too late.

In terms of the first topic, if you want to know where the money is coming from, you'll have to do more digging. I certainly cannot provide you with all the answers. But if you take per capita income from a postal code, and you multiply that gross income by .3 (30%, the average standard people say you couldn't go over for spending on housing), and you see that more than 50% of mortgages in a postal code (or other locality metric) are out of reach for that local population, then where do you suggest all this untraceable money is flowing from? Anecdotally - which means nothing, I know - but anecdotally I have a friend in Scarborough where a Japanese buyer dumped his investment into a barely basic home, jacked up the price to $800,000 and now rents it out as an investment property. Toronto is quickly becoming a city where elites around the world are dumping investments in and extracting wealth from this city. The locals pay the price.

If you look at postal code after postal code in Toronto, so much of these mortgages don't meet the standards for local buyers and have pushed locals out. There's a problem that needs addressing, one that is far larger than a message like this can resolve.
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It's funny, your anecdotal evidence is different than mine. I have many friends and family in the business from mortgage agents to real estate agents to those working in the big 5 banks to the 2nd tier banks. All I hear about are Canadians purchasing homes. I hear about salaries, I hear about debt, etc.

I think there is a decent amount of foreign investment, I just think it's overblown. Prices are high for many reasons and to me foreign investment is just a boogeyman. People are priced out and need to be mad at someone and it's the foreigner. The media simply isn't doing a good enough job at covering this story.

As for your post, that's a pretty basic conclusion to me. I don't know too many people who are buying now that follow the 30% principle. That is an outdated principle and I don't think that's a good enough measure to determine how much foreign ownership is fuelling the market. I don't think it's that easy.
 
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