slickpete83
Active Member
sometimes things don't work out well for those that don't sell those houses around high rise buildings , just watch this
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Baby, we got a bubble!?
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evandyk
Senior Member
It's really quite disturbing how wealthy anyone has become simply by buying real estate in Toronto prior to seven or eight years ago.
Undead
Senior Member
@Admiral Beez It's called "extend and pretend." The banks are allowing longer amortizations to avoid the bubble popping; too many distressed sales lower prices. At the same time, the Feds released Guidance in their budget encouraging FRFIs to help "keep Canadians in their homes." Everyone now has a perverse incentive to keep things going.
@Samwan low interest rates and excessive immigration have driven prices upward. Zoning, politics and construction costs also played a role.
Unless the government is expropriating you, nobody can force you to be part of an assembly. The property is yours to sell or hold. This results in humorous situations where a 1-2 story detached house has massive towers right next to it. There should be a few examples of houses like this near Yonge and Eglinton and other newly densifying areas.
Having a tower right next to your house likely makes it less appealing to someone who wants the light and space which come with a detached. It also loses its value in developers' eyes if existing towers prevent redevelopment.
However, we've pumped so much money into the economy, and continue pumping so many people into the country, that those values likely aren't likely to drop in the near term.
@gabe I once looked into the numbers behind this. If I remember correctly, the average price to income ratio in the 60s was 4-5. The average industrial job paid $4-5,000 a year. New detacheds in what's today the outer 416 were going for $20,000.
Today, that ratio is 27: $1.8m for the average detached versus $65,000 average individual Toronto income. And the old 5x ratio doesn't get you even a studio anywhere in the 416.
@Samwan low interest rates and excessive immigration have driven prices upward. Zoning, politics and construction costs also played a role.
Unless the government is expropriating you, nobody can force you to be part of an assembly. The property is yours to sell or hold. This results in humorous situations where a 1-2 story detached house has massive towers right next to it. There should be a few examples of houses like this near Yonge and Eglinton and other newly densifying areas.
Having a tower right next to your house likely makes it less appealing to someone who wants the light and space which come with a detached. It also loses its value in developers' eyes if existing towers prevent redevelopment.
However, we've pumped so much money into the economy, and continue pumping so many people into the country, that those values likely aren't likely to drop in the near term.
@gabe I once looked into the numbers behind this. If I remember correctly, the average price to income ratio in the 60s was 4-5. The average industrial job paid $4-5,000 a year. New detacheds in what's today the outer 416 were going for $20,000.
Today, that ratio is 27: $1.8m for the average detached versus $65,000 average individual Toronto income. And the old 5x ratio doesn't get you even a studio anywhere in the 416.
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MisterF
Senior Member
To be fair, it's never been reasonable for single detached homes in a major metropolis to be attainable to the masses. Nor should they be, unless of course you want your city to look like Houston.
I agree with your larger point though. The province and feds seem determined to prop up an increasingly inflated real estate industry to the detriment of the economy and society as a whole.
slickpete83
Active Member
they just stopped building rental buildings... and now people are living like groundhogs in basements with tiny windows lol...
slickpete83
Active Member
lenaitch
Senior Member
Sure it has. "Never" is such an absolute word. My parents bought a detached home in North York in the 1950s on a single, government income (and government wages weren't all that great back then). For that matter, every single relative that I can think of who lived in Toronto lived in a detached home.
Life is unfair, unless you lean to the "from each according to his ability; to each according to his needs" social concept. One website says there are over 846,000 detached houses in Toronto. Are they all "the rich"?
I've owned several SFHs, just not in Toronto.
Undead
Senior Member
I think OP's point was that one must be essentially rich these days to afford a detached house whereas before it used to be well within reach for most of the middle class (even the lower middle class). In fact, the first part of your post suggests exactly that.
The average detached house across the city is $1.8m. That suggests a down payment of 360k (about 2.5 times the average down people make); and an annual income of 400k (4 times the average household) to qualify for that mortgage.
The average detached house across the city is $1.8m. That suggests a down payment of 360k (about 2.5 times the average down people make); and an annual income of 400k (4 times the average household) to qualify for that mortgage.
MisterF
Senior Member
It's something that our society tried to normalize in the last century but it was never sustainable or reasonable in the long run. We'd have to have much lower density and a lot more sprawl for that to work, and even then it doesn't pay for itself. Toronto was also a much smaller city then.
The norm for cities is for most of the population to live in some form of apartment. The dream of the middle class all having detached houses was never realistic.
evandyk
Senior Member
Most people became rich by owning a SFH rather than being rich before buying one, but yeah, anyone who owns one in Toronto is rich.
Admiral Beez
Superstar
I don't consider owning a SFH to be rich. Unless you sell it or use it for collateral to incur debt you can't realize any of that potential richness. It's akin to me saying, anyone with good health is rich because they're walking around with a million dollars or more in organs, https://www.seeker.com/how-much-are-your-body-parts-worth-1792475763.html. Like your home, you need those organs, even that potentially surplus 2nd kidney, valued in the US at $262,000.
What I consider to be rich are those with over $1 million (after subtracting all debt) in investments, property (excluding their own primary residence), cash and capital outside of the potential value of their home. I own my home, and could presumably sell it for over $1 million and move into something smaller (with three bedrooms and parking), but after transfer fees, taxes and realtor commissions I wouldn't find anything in the city for under $800k all in. So, really, I may have $200-$300k in realized wealth from the sale, that's hardly rich.
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evandyk
Senior Member
It's richer than most people!
You'd be surprised. https://www.springfinancial.ca/blog/lifestyle/average-net-worth-by-age-canada (This article indicates that in order to be considered wealthy, your net worth should be at least $1 million).
And richer than doesn't necessarily equate to rich.
And richer than doesn't necessarily equate to rich.
Admiral Beez
Superstar
Unless you're in Bezos or Gates territory, there's always someone richer.
evandyk
Senior Member
Almost anyone who bought a house in Toronto more than 8-10 years ago has a net worth of over a million dollars. Unless they got a line of credit and spent it, which still makes them rich.